markitect-main/examples/infospace-with-history/artifacts/sources/book-2-chapter-03.md

---
id: book-2-chapter-03
title: "OF THE ACCUMULATION OF CAPITAL, OR OF PRODUCTIVE AND UNPRODUCTIVE LABOUR."
book: "2"
chapter: 3
artifact_type: content
---

CHAPTER III.
OF THE ACCUMULATION OF CAPITAL, OR OF
PRODUCTIVE AND UNPRODUCTIVE LABOUR.



      There is one sort of labour which adds to the value of the subject upon
      which it is bestowed; there is another which has no such effect. The
      former as it produces a value, may be called productive, the latter,
      unproductive labour. {Some French authors of great learning and ingenuity
      have used those words in a different sense. In the last chapter of the
      fourth book, I shall endeavour to shew that their sense is an improper
      one.} Thus the labour of a manufacturer adds generally to the value of the
      materials which he works upon, that of his own maintenance, and of his
      master’s profit. The labour of a menial servant, on the contrary, adds to
      the value of nothing. Though the manufacturer has his wages advanced to
      him by his master, he in reality costs him no expense, the value of those
      wages being generally restored, together with a profit, in the improved
      value of the subject upon which his labour is bestowed. But the
      maintenance of a menial servant never is restored. A man grows rich by
      employing a multitude of manufacturers; he grows poor by maintaining a
      multitude or menial servants. The labour of the latter, however, has its
      value, and deserves its reward as well as that of the former. But the
      labour of the manufacturer fixes and realizes itself in some particular
      subject or vendible commodity, which lasts for some time at least after
      that labour is past. It is, as it were, a certain quantity of labour
      stocked and stored up, to be employed, if necessary, upon some other
      occasion. That subject, or, what is the same thing, the price of that
      subject, can afterwards, if necessary, put into motion a quantity of
      labour equal to that which had originally produced it. The labour of the
      menial servant, on the contrary, does not fix or realize itself in any
      particular subject or vendible commodity. His services generally perish in
      the very instant of their performance, and seldom leave any trace of value
      behind them, for which an equal quantity of service could afterwards be
      procured.

      The labour of some of the most respectable orders in the society is, like
      that of menial servants, unproductive of any value, and does not fix or
      realize itself in any permanent subject, or vendible commodity, which
      endures after that labour is past, and for which an equal quantity of
      labour could afterwards be procured. The sovereign, for example, with all
      the officers both of justice and war who serve under him, the whole army
      and navy, are unproductive labourers. They are the servants of the public,
      and are maintained by a part of the annual produce of the industry of
      other people. Their service, how honourable, how useful, or how necessary
      soever, produces nothing for which an equal quantity of service can
      afterwards be procured. The protection, security, and defence, of the
      commonwealth, the effect of their labour this year, will not purchase its
      protection, security, and defence, for the year to come. In the same class
      must be ranked, some both of the gravest and most important, and some of
      the most frivolous professions; churchmen, lawyers, physicians, men of
      letters of all kinds; players, buffoons, musicians, opera-singers,
      opera-dancers, etc. The labour of the meanest of these has a certain
      value, regulated by the very same principles which regulate that of every
      other sort of labour; and that of the noblest and most useful, produces
      nothing which could afterwards purchase or procure an equal quantity of
      labour. Like the declamation of the actor, the harangue of the orator, or
      the tune of the musician, the work of all of them perishes in the very
      instant of its production.

      Both productive and unproductive labourers, and those who do not labour at
      all, are all equally maintained by the annual produce of the land and
      labour of the country. This produce, how great soever, can never be
      infinite, but must have certain limits. According, therefore, as a smaller
      or greater proportion of it is in any one year employed in maintaining
      unproductive hands, the more in the one case, and the less in the other,
      will remain for the productive, and the next year’s produce will be
      greater or smaller accordingly; the whole annual produce, if we except the
      spontaneous productions of the earth, being the effect of productive
      labour.

      Though the whole annual produce of the land and labour of every country is
      no doubt ultimately destined for supplying the consumption of its
      inhabitants, and for procuring a revenue to them; yet when it first comes
      either from the ground, or from the hands of the productive labourers, it
      naturally divides itself into two parts. One of them, and frequently the
      largest, is, in the first place, destined for replacing a capital, or for
      renewing the provisions, materials, and finished work, which had been
      withdrawn from a capital; the other for constituting a revenue either to
      the owner of this capital, as the profit of his stock, or to some other
      person, as the rent of his land. Thus, of the produce of land, one part
      replaces the capital of the farmer; the other pays his profit and the rent
      of the landlord; and thus constitutes a revenue both to the owner of this
      capital, as the profits of his stock, and to some other person as the rent
      of his land. Of the produce of a great manufactory, in the same manner,
      one part, and that always the largest, replaces the capital of the
      undertaker of the work; the other pays his profit, and thus constitutes a
      revenue to the owner of this capital.

      That part of the annual produce of the land and labour of any country
      which replaces a capital, never is immediately employed to maintain any
      but productive hands. It pays the wages of productive labour only. That
      which is immediately destined for constituting a revenue, either as profit
      or as rent, may maintain indifferently either productive or unproductive
      hands.

      Whatever part of his stock a man employs as a capital, he always expects
      it to be replaced to him with a profit. He employs it, therefore, in
      maintaining productive hands only; and after having served in the function
      of a capital to him, it constitutes a revenue to them. Whenever he employs
      any part of it in maintaining unproductive hands of any kind, that part is
      from that moment withdrawn from his capital, and placed in his stock
      reserved for immediate consumption.

      Unproductive labourers, and those who do not labour at all, are all
      maintained by revenue; either, first, by that part of the annual produce
      which is originally destined for constituting a revenue to some particular
      persons, either as the rent of land, or as the profits of stock; or,
      secondly, by that part which, though originally destined for replacing a
      capital, and for maintaining productive labourers only, yet when it comes
      into their hands, whatever part of it is over and above their necessary
      subsistence, may be employed in maintaining indifferently either
      productive or unproductive hands. Thus, not only the great landlord or the
      rich merchant, but even the common workman, if his wages are considerable,
      may maintain a menial servant; or he may sometimes go to a play or a
      puppet-show, and so contribute his share towards maintaining one set of
      unproductive labourers; or he may pay some taxes, and thus help to
      maintain another set, more honourable and useful, indeed, but equally
      unproductive. No part of the annual produce, however, which had been
      originally destined to replace a capital, is ever directed towards
      maintaining unproductive hands, till after it has put into motion its full
      complement of productive labour, or all that it could put into motion in
      the way in which it was employed. The workman must have earned his wages
      by work done, before he can employ any part of them in this manner. That
      part, too, is generally but a small one. It is his spare revenue only, of
      which productive labourers have seldom a great deal. They generally have
      some, however; and in the payment of taxes, the greatness of their number
      may compensate, in some measure, the smallness of their contribution. The
      rent of land and the profits of stock are everywhere, therefore, the
      principal sources from which unproductive hands derive their subsistence.
      These are the two sorts of revenue of which the owners have generally most
      to spare. They might both maintain indifferently, either productive or
      unproductive hands. They seem, however, to have some predilection for the
      latter. The expense of a great lord feeds generally more idle than
      industrious people. The rich merchant, though with his capital he
      maintains industrious people only, yet by his expense, that is, by the
      employment of his revenue, he feeds commonly the very same sort as the
      great lord.

      The proportion, therefore, between the productive and unproductive hands,
      depends very much in every country upon the proportion between that part
      of the annual produce, which, as soon as it comes either from the ground,
      or from the hands of the productive labourers, is destined for replacing a
      capital, and that which is destined for constituting a revenue, either as
      rent or as profit. This proportion is very different in rich from what it
      is in poor countries.

      Thus, at present, in the opulent countries of Europe, a very large,
      frequently the largest, portion of the produce of the land, is destined
      for replacing the capital of the rich and independent farmer; the other
      for paying his profits, and the rent of the landlord. But anciently,
      during the prevalency of the feudal government, a very small portion of
      the produce was sufficient to replace the capital employed in cultivation.
      It consisted commonly in a few wretched cattle, maintained altogether by
      the spontaneous produce of uncultivated land, and which might, therefore,
      be considered as a part of that spontaneous produce. It generally, too,
      belonged to the landlord, and was by him advanced to the occupiers of the
      land. All the rest of the produce properly belonged to him too, either as
      rent for his land, or as profit upon this paltry capital. The occupiers of
      land were generally bond-men, whose persons and effects were equally his
      property. Those who were not bond-men were tenants at will; and though the
      rent which they paid was often nominally little more than a quit-rent, it
      really amounted to the whole produce of the land. Their lord could at all
      times command their labour in peace and their service in war. Though they
      lived at a distance from his house, they were equally dependent upon him
      as his retainers who lived in it. But the whole produce of the land
      undoubtedly belongs to him, who can dispose of the labour and service of
      all those whom it maintains. In the present state of Europe, the share of
      the landlord seldom exceeds a third, sometimes not a fourth part of the
      whole produce of the land. The rent of land, however, in all the improved
      parts of the country, has been tripled and quadrupled since those ancient
      times; and this third or fourth part of the annual produce is, it seems,
      three or four times greater than the whole had been before. In the
      progress of improvement, rent, though it increases in proportion to the
      extent, diminishes in proportion to the produce of the land.

      In the opulent countries of Europe, great capitals are at present employed
      in trade and manufactures. In the ancient state, the little trade that was
      stirring, and the few homely and coarse manufactures that were carried on,
      required but very small capitals. These, however, must have yielded very
      large profits. The rate of interest was nowhere less than ten per cent.
      and their profits must have been sufficient to afford this great interest.
      At present, the rate of interest, in the improved parts of Europe, is
      nowhere higher than six per cent.; and in some of the most improved, it is
      so low as four, three, and two per cent. Though that part of the revenue
      of the inhabitants which is derived from the profits of stock, is always
      much greater in rich than in poor countries, it is because the stock is
      much greater; in proportion to the stock, the profits are generally much
      less.

      That part of the annual produce, therefore, which, as soon as it comes
      either from the ground, or from the hands of the productive labourers, is
      destined for replacing a capital, is not only much greater in rich than in
      poor countries, but bears a much greater proportion to that which is
      immediately destined for constituting a revenue either as rent or as
      profit. The funds destined for the maintenance of productive labour are
      not only much greater in the former than in the latter, but bear a much
      greater proportion to those which, though they may be employed to maintain
      either productive or unproductive hands, have generally a predilection for
      the latter.

      The proportion between those different funds necessarily determines in
      every country the general character of the inhabitants as to industry or
      idleness. We are more industrious than our forefathers, because, in the
      present times, the funds destined for the maintenance of industry are much
      greater in proportion to those which are likely to be employed in the
      maintenance of idleness, than they were two or three centuries ago. Our
      ancestors were idle for want of a sufficient encouragement to industry. It
      is better, says the proverb, to play for nothing, than to work for
      nothing. In mercantile and manufacturing towns, where the inferior ranks
      of people are chiefly maintained by the employment of capital, they are in
      general industrious, sober, and thriving; as in many English, and in most
      Dutch towns. In those towns which are principally supported by the
      constant or occasional residence of a court, and in which the inferior
      ranks of people are chiefly maintained by the spending of revenue, they
      are in general idle, dissolute, and poor; as at Rome, Versailles,
      Compeigne, and Fontainbleau. If you except Rouen and Bourdeaux, there is
      little trade or industry in any of the parliament towns of France; and the
      inferior ranks of people, being chiefly maintained by the expense of the
      members of the courts of justice, and of those who come to plead before
      them, are in general idle and poor. The great trade of Rouen and Bourdeaux
      seems to be altogether the effect of their situation. Rouen is necessarily
      the entrepot of almost all the goods which are brought either from foreign
      countries, or from the maritime provinces of France, for the consumption
      of the great city of Paris. Bourdeaux is, in the same manner, the entrepot
      of the wines which grow upon the banks of the Garronne, and of the rivers
      which run into it, one of the richest wine countries in the world, and
      which seems to produce the wine fittest for exportation, or best suited to
      the taste of foreign nations. Such advantageous situations necessarily
      attract a great capital by the great employment which they afford it; and
      the employment of this capital is the cause of the industry of those two
      cities. In the other parliament towns of France, very little more capital
      seems to be employed than what is necessary for supplying their own
      consumption; that is, little more than the smallest capital which can be
      employed in them. The same thing may be said of Paris, Madrid, and Vienna.
      Of those three cities, Paris is by far the most industrious, but Paris
      itself is the principal market of all the manufactures established at
      Paris, and its own consumption is the principal object of all the trade
      which it carries on. London, Lisbon, and Copenhagen, are, perhaps, the
      only three cities in Europe, which are both the constant residence of a
      court, and can at the same time be considered as trading cities, or as
      cities which trade not only for their own consumption, but for that of
      other cities and countries. The situation of all the three is extremely
      advantageous, and naturally fits them to be the entrepots of a great part
      of the goods destined for the consumption of distant places. In a city
      where a great revenue is spent, to employ with advantage a capital for any
      other purpose than for supplying the consumption of that city, is probably
      more difficult than in one in which the inferior ranks of people have no
      other maintenance but what they derive from the employment of such a
      capital. The idleness of the greater part of the people who are maintained
      by the expense of revenue, corrupts, it is probable, the industry of those
      who ought to be maintained by the employment of capital, and renders it
      less advantageous to employ a capital there than in other places. There
      was little trade or industry in Edinburgh before the Union. When the
      Scotch parliament was no longer to be assembled in it, when it ceased to
      be the necessary residence of the principal nobility and gentry of
      Scotland, it became a city of some trade and industry. It still continues,
      however, to be the residence of the principal courts of justice in
      Scotland, of the boards of customs and excise, etc. A considerable
      revenue, therefore, still continues to be spent in it. In trade and
      industry, it is much inferior to Glasgow, of which the inhabitants are
      chiefly maintained by the employment of capital. The inhabitants of a
      large village, it has sometimes been observed, after having made
      considerable progress in manufactures, have become idle and poor, in
      consequence of a great lord’s having taken up his residence in their
      neighbourhood.

      The proportion between capital and revenue, therefore, seems everywhere to
      regulate the proportion between industry and idleness. Wherever capital
      predominates, industry prevails; wherever revenue, idleness. Every
      increase or diminution of capital, therefore, naturally tends to increase
      or diminish the real quantity of industry, the number of productive hands,
      and consequently the exchangeable value of the annual produce of the land
      and labour of the country, the real wealth and revenue of all its
      inhabitants.

      Capitals are increased by parsimony, and diminished by prodigality and
      misconduct.

      Whatever a person saves from his revenue he adds to his capital, and
      either employs it himself in maintaining an additional number of
      productive hands, or enables some other person to do so, by lending it to
      him for an interest, that is, for a share of the profits. As the capital
      of an individual can be increased only by what he saves from his annual
      revenue or his annual gains, so the capital of a society, which is the
      same with that of all the individuals who compose it, can be increased
      only in the same manner.

      Parsimony, and not industry, is the immediate cause of the increase of
      capital. Industry, indeed, provides the subject which parsimony
      accumulates; but whatever industry might acquire, if parsimony did not
      save and store up, the capital would never be the greater.

      Parsimony, by increasing the fund which is destined for the maintenance of
      productive hands, tends to increase the number of those hands whose labour
      adds to the value of the subject upon which it is bestowed. It tends,
      therefore, to increase the exchangeable value of the annual produce of the
      land and labour of the country. It puts into motion an additional quantity
      of industry, which gives an additional value to the annual produce.

      What is annually saved, is as regularly consumed as what is annually
      spent, and nearly in the same time too: but it is consumed by a different
      set of people. That portion of his revenue which a rich man annually
      spends, is, in most cases, consumed by idle guests and menial servants,
      who leave nothing behind them in return for their consumption. That
      portion which he annually saves, as, for the sake of the profit, it is
      immediately employed as a capital, is consumed in the same manner, and
      nearly in the same time too, but by a different set of people: by
      labourers, manufacturers, and artificers, who reproduce, with a profit,
      the value of their annual consumption. His revenue, we shall suppose, is
      paid him in money. Had he spent the whole, the food, clothing, and
      lodging, which the whole could have purchased, would have been distributed
      among the former set of people. By saving a part of it, as that part is,
      for the sake of the profit, immediately employed as a capital, either by
      himself or by some other person, the food, clothing, and lodging, which
      may be purchased with it, are necessarily reserved for the latter. The
      consumption is the same, but the consumers are different.

      By what a frugal man annually saves, he not only affords maintenance to an
      additional number of productive hands, for that of the ensuing year, but
      like the founder of a public work-house he establishes, as it were, a
      perpetual fund for the maintenance of an equal number in all times to
      come. The perpetual allotment and destination of this fund, indeed, is not
      always guarded by any positive law, by any trust-right or deed of
      mortmain. It is always guarded, however, by a very powerful principle, the
      plain and evident interest of every individual to whom any share of it
      shall ever belong. No part of it can ever afterwards be employed to
      maintain any but productive hands, without an evident loss to the person
      who thus perverts it from its proper destination.

      The prodigal perverts it in this manner: By not confining his expense
      within his income, he encroaches upon his capital. Like him who perverts
      the revenues of some pious foundation to profane purposes, he pays the
      wages of idleness with those funds which the frugality of his forefathers
      had, as it were, consecrated to the maintenance of industry. By
      diminishing the funds destined for the employment of productive labour, he
      necessarily diminishes, so far as it depends upon him, the quantity of
      that labour which adds a value to the subject upon which it is bestowed,
      and, consequently, the value of the annual produce of the land and labour
      of the whole country, the real wealth and revenue of its inhabitants. If
      the prodigality of some were not compensated by the frugality of others,
      the conduct of every prodigal, by feeding the idle with the bread of the
      industrious, would tend not only to beggar himself, but to impoverish his
      country.

      Though the expense of the prodigal should be altogether in home made, and
      no part of it in foreign commodities, its effect upon the productive funds
      of the society would still be the same. Every year there would still be a
      certain quantity of food and clothing, which ought to have maintained
      productive, employed in maintaining unproductive hands. Every year,
      therefore, there would still be some diminution in what would otherwise
      have been the value of the annual produce of the land and labour of the
      country.

      This expense, it may be said, indeed, not being in foreign goods, and not
      occasioning any exportation of gold and silver, the same quantity of money
      would remain in the country as before. But if the quantity of food and
      clothing which were thus consumed by unproductive, had been distributed
      among productive hands, they would have reproduced, together with a
      profit, the full value of their consumption. The same quantity of money
      would, in this case, equally have remained in the country, and there
      would, besides, have been a reproduction of an equal value of consumable
      goods. There would have been two values instead of one.

      The same quantity of money, besides, can not long remain in any country in
      which the value of the annual produce diminishes. The sole use of money is
      to circulate consumable goods. By means of it, provisions, materials, and
      finished work, are bought and sold, and distributed to their proper
      consumers. The quantity of money, therefore, which can be annually
      employed in any country, must be determined by the value of the consumable
      goods annually circulated within it. These must consist, either in the
      immediate produce of the land and labour of the country itself, or in
      something which had been purchased with some part of that produce. Their
      value, therefore, must diminish as the value of that produce diminishes,
      and along with it the quantity of money which can be employed in
      circulating them. But the money which, by this annual diminution of
      produce, is annually thrown out of domestic circulation, will not be
      allowed to lie idle. The interest of whoever possesses it requires that it
      should be employed; but having no employment at home, it will, in spite of
      all laws and prohibitions, be sent abroad, and employed in purchasing
      consumable goods, which may be of some use at home. Its annual exportation
      will, in this manner, continue for some time to add something to the
      annual consumption of the country beyond the value of its own annual
      produce. What in the days of its prosperity had been saved from that
      annual produce, and employed in purchasing gold and silver, will
      contribute, for some little time, to support its consumption in adversity.
      The exportation of gold and silver is, in this case, not the cause, but
      the effect of its declension, and may even, for some little time,
      alleviate the misery of that declension.

      The quantity of money, on the contrary, must in every country naturally
      increase as the value of the annual produce increases. The value of the
      consumable goods annually circulated within the society being greater,
      will require a greater quantity of money to circulate them. A part of the
      increased produce, therefore, will naturally be employed in purchasing,
      wherever it is to be had, the additional quantity of gold and silver
      necessary for circulating the rest. The increase of those metals will, in
      this case, be the effect, not the cause, of the public prosperity. Gold
      and silver are purchased everywhere in the same manner. The food,
      clothing, and lodging, the revenue and maintenance, of all those whose
      labour or stock is employed in bringing them from the mine to the market,
      is the price paid for them in Peru as well as in England. The country
      which has this price to pay, will never belong without the quantity of
      those metals which it has occasion for; and no country will ever long
      retain a quantity which it has no occasion for.

      Whatever, therefore, we may imagine the real wealth and revenue of a
      country to consist in, whether in the value of the annual produce of its
      land and labour, as plain reason seems to dictate, or in the quantity of
      the precious metals which circulate within it, as vulgar prejudices
      suppose; in either view of the matter, every prodigal appears to be a
      public enemy, and every frugal man a public benefactor.

      The effects of misconduct are often the same as those of prodigality.
      Every injudicious and unsuccessful project in agriculture, mines,
      fisheries, trade, or manufactures, tends in the same manner to diminish
      the funds destined for the maintenance of productive labour. In every such
      project, though the capital is consumed by productive hands only, yet as,
      by the injudicious manner in which they are employed, they do not
      reproduce the full value of their consumption, there must always be some
      diminution in what would otherwise have been the productive funds of the
      society.

      It can seldom happen, indeed, that the circumstances of a great nation can
      be much affected either by the prodigality or misconduct of individuals;
      the profusion or imprudence of some being always more than compensated by
      the frugality and good conduct of others.

      With regard to profusion, the principle which prompts to expense is the
      passion for present enjoyment; which, though sometimes violent and very
      difficult to be restrained, is in general only momentary and occasional.
      But the principle which prompts to save, is the desire of bettering our
      condition; a desire which, though generally calm and dispassionate, comes
      with us from the womb, and never leaves us till we go into the grave. In
      the whole interval which separates those two moments, there is scarce,
      perhaps, a single instance, in which any man is so perfectly and
      completely satisfied with his situation, as to be without any wish of
      alteration or improvement of any kind. An augmentation of fortune is the
      means by which the greater part of men propose and wish to better their
      condition. It is the means the most vulgar and the most obvious; and the
      most likely way of augmenting their fortune, is to save and accumulate
      some part of what they acquire, either regularly and annually, or upon
      some extraordinary occasion. Though the principle of expense, therefore,
      prevails in almost all men upon some occasions, and in some men upon
      almost all occasions; yet in the greater part of men, taking the whole
      course of their life at an average, the principle of frugality seems not
      only to predominate, but to predominate very greatly.

      With regard to misconduct, the number of prudent and successful
      undertakings is everywhere much greater than that of injudicious and
      unsuccessful ones. After all our complaints of the frequency of
      bankruptcies, the unhappy men who fall into this misfortune, make but a
      very small part of the whole number engaged in trade, and all other sorts
      of business; not much more, perhaps, than one in a thousand. Bankruptcy
      is, perhaps, the greatest and most humiliating calamity which can befal an
      innocent man. The greater part of men, therefore, are sufficiently careful
      to avoid it. Some, indeed, do not avoid it; as some do not avoid the
      gallows.

      Great nations are never impoverished by private, though they sometimes are
      by public prodigality and misconduct. The whole, or almost the whole
      public revenue is, in most countries, employed in maintaining unproductive
      hands. Such are the people who compose a numerous and splendid court, a
      great ecclesiastical establishment, great fleets and armies, who in time
      of peace produce nothing, and in time of war acquire nothing which can
      compensate the expense of maintaining them, even while the war lasts. Such
      people, as they themselves produce nothing, are all maintained by the
      produce of other men’s labour. When multiplied, therefore, to an
      unnecessary number, they may in a particular year consume so great a share
      of this produce, as not to leave a sufficiency for maintaining the
      productive labourers, who should reproduce it next year. The next year’s
      produce, therefore, will be less than that of the foregoing; and if the
      same disorder should continue, that of the third year will be still less
      than that of the second. Those unproductive hands who should be maintained
      by a part only of the spare revenue of the people, may consume so great a
      share of their whole revenue, and thereby oblige so great a number to
      encroach upon their capitals, upon the funds destined for the maintenance
      of productive labour, that all the frugality and good conduct of
      individuals may not be able to compensate the waste and degradation of
      produce occasioned by this violent and forced encroachment.

      This frugality and good conduct, however, is, upon most occasions, it
      appears from experience, sufficient to compensate, not only the private
      prodigality and misconduct of individuals, but the public extravagance of
      government. The uniform, constant, and uninterrupted effort of every man
      to better his condition, the principle from which public and national, as
      well as private opulence is originally derived, is frequently powerful
      enough to maintain the natural progress of things towards improvement, in
      spite both of the extravagance of government, and of the greatest errors
      of administration. Like the unknown principle of animal life, it
      frequently restores health and vigour to the constitution, in spite not
      only of the disease, but of the absurd prescriptions of the doctor.

      The annual produce of the land and labour of any nation can be increased
      in its value by no other means, but by increasing either the number of its
      productive labourers, or the productive powers of those labourers who had
      before been employed. The number of its productive labourers, it is
      evident, can never be much increased, but in consequence of an increase of
      capital, or of the funds destined for maintaining them. The productive
      powers of the same number of labourers cannot be increased, but in
      consequence either of some addition and improvement to those machines and
      instruments which facilitate and abridge labour, or of more proper
      division and distribution of employment. In either case, an additional
      capital is almost always required. It is by means of an additional capital
      only, that the undertaker of any work can either provide his workmen with
      better machinery, or make a more proper distribution of employment among
      them. When the work to be done consists of a number of parts, to keep
      every man constantly employed in one way, requires a much greater capital
      than where every man is occasionally employed in every different part of
      the work. When we compare, therefore, the state of a nation at two
      different periods, and find that the annual produce of its land and labour
      is evidently greater at the latter than at the former, that its lands are
      better cultivated, its manufactures more numerous and more flourishing,
      and its trade more extensive; we may be assured that its capital must have
      increased during the interval between those two periods, and that more
      must have been added to it by the good conduct of some, than had been
      taken from it either by the private misconduct of others, or by the public
      extravagance of government. But we shall find this to have been the case
      of almost all nations, in all tolerably quiet and peaceable times, even of
      those who have not enjoyed the most prudent and parsimonious governments.
      To form a right judgment of it, indeed, we must compare the state of the
      country at periods somewhat distant from one another. The progress is
      frequently so gradual, that, at near periods, the improvement is not only
      not sensible, but, from the declension either of certain branches of
      industry, or of certain districts of the country, things which sometimes
      happen, though the country in general is in great prosperity, there
      frequently arises a suspicion, that the riches and industry of the whole
      are decaying.

      The annual produce of the land and labour of England, for example, is
      certainly much greater than it was a little more than a century ago, at
      the restoration of Charles II. Though at present few people, I believe,
      doubt of this, yet during this period five years have seldom passed away,
      in which some book or pamphlet has not been published, written, too, with
      such abilities as to gain some authority with the public, and pretending
      to demonstrate that the wealth of the nation was fast declining; that the
      country was depopulated, agriculture neglected, manufactures decaying, and
      trade undone. Nor have these publications been all party pamphlets, the
      wretched offspring of falsehood and venality. Many of them have been
      written by very candid and very intelligent people, who wrote nothing but
      what they believed, and for no other reason but because they believed it.

      The annual produce of the land and labour of England, again, was certainly
      much greater at the Restoration than we can suppose it to have been about
      a hundred years before, at the accession of Elizabeth. At this period,
      too, we have all reason to believe, the country was much more advanced in
      improvement, than it had been about a century before, towards the close of
      the dissensions between the houses of York and Lancaster. Even then it
      was, probably, in a better condition than it had been at the Norman
      conquest: and at the Norman conquest, than during the confusion of the
      Saxon heptarchy. Even at this early period, it was certainly a more
      improved country than at the invasion of Julius Caesar, when its
      inhabitants were nearly in the same state with the savages in North
      America.

      In each of those periods, however, there was not only much private and
      public profusion, many expensive and unnecessary wars, great perversion of
      the annual produce from maintaining productive to maintain unproductive
      hands; but sometimes, in the confusion of civil discord, such absolute
      waste and destruction of stock, as might be supposed, not only to retard,
      as it certainly did, the natural accumulation of riches, but to have left
      the country, at the end of the period, poorer than at the beginning. Thus,
      in the happiest and most fortunate period of them all, that which has
      passed since the Restoration, how many disorders and misfortunes have
      occurred, which, could they have been foreseen, not only the
      impoverishment, but the total ruin of the country would have been expected
      from them? The fire and the plague of London, the two Dutch wars, the
      disorders of the revolution, the war in Ireland, the four expensive French
      wars of 1688, 1701, 1742, and 1756, together with the two rebellions of
      1715 and 1745. In the course of the four French wars, the nation has
      contracted more than £145,000,000 of debt, over and above all the other
      extraordinary annual expense which they occasioned; so that the whole
      cannot be computed at less than £200,000,000. So great a share of the
      annual produce of the land and labour of the country, has, since the
      Revolution, been employed upon different occasions, in maintaining an
      extraordinary number of unproductive hands. But had not those wars given
      this particular direction to so large a capital, the greater part of it
      would naturally have been employed in maintaining productive hands, whose
      labour would have replaced, with a profit, the whole value of their
      consumption. The value of the annual produce of the land and labour of the
      country would have been considerably increased by it every year, and every
      years increase would have augmented still more that of the following year.
      More houses would have been built, more lands would have been improved,
      and those which had been improved before would have been better
      cultivated; more manufactures would have been established, and those which
      had been established before would have been more extended; and to what
      height the real wealth and revenue of the country might by this time have
      been raised, it is not perhaps very easy even to imagine.

      But though the profusion of government must undoubtedly have retarded the
      natural progress of England towards wealth and improvement, it has not
      been able to stop it. The annual produce of its land and labour is
      undoubtedly much greater at present than it was either at the Restoration
      or at the Revolution. The capital, therefore, annually employed in
      cultivating this land, and in maintaining this labour, must likewise be
      much greater. In the midst of all the exactions of government, this
      capital has been silently and gradually accumulated by the private
      frugality and good conduct of individuals, by their universal, continual,
      and uninterrupted effort to better their own condition. It is this effort,
      protected by law, and allowed by liberty to exert itself in the manner
      that is most advantageous, which has maintained the progress of England
      towards opulence and improvement in almost all former times, and which, it
      is to be hoped, will do so in all future times. England, however, as it
      has never been blessed with a very parsimonious government, so parsimony
      has at no time been the characteristic virtue of its inhabitants. It is
      the highest impertinence and presumption, therefore, in kings and
      ministers to pretend to watch over the economy of private people, and to
      restrain their expense, either by sumptuary laws, or by prohibiting the
      importation of foreign luxuries. They are themselves always, and without
      any exception, the greatest spendthrifts in the society. Let them look
      well after their own expense, and they may safely trust private people
      with theirs. If their own extravagance does not ruin the state, that of
      the subject never will.

      As frugality increases, and prodigality diminishes, the public capital, so
      the conduct of those whose expense just equals their revenue, without
      either accumulating or encroaching, neither increases nor diminishes it.
      Some modes of expense, however, seem to contribute more to the growth of
      public opulence than others.

      The revenue of an individual may be spent, either in things which are
      consumed immediately, and in which one day’s expense can neither alleviate
      nor support that of another; or it may be spent in things mere durable,
      which can therefore be accumulated, and in which every day’s expense may,
      as he chooses, either alleviate, or support and heighten, the effect of
      that of the following day. A man of fortune, for example, may either spend
      his revenue in a profuse and sumptuous table, and in maintaining a great
      number of menial servants, and a multitude of dogs and horses; or,
      contenting himself with a frugal table, and few attendants, he may lay out
      the greater part of it in adorning his house or his country villa, in
      useful or ornamental buildings, in useful or ornamental furniture, in
      collecting books, statues, pictures; or in things more frivolous, jewels,
      baubles, ingenious trinkets of different kinds; or, what is most trifling
      of all, in amassing a great wardrobe of fine clothes, like the favourite
      and minister of a great prince who died a few years ago. Were two men of
      equal fortune to spend their revenue, the one chiefly in the one way, the
      other in the other, the magnificence of the person whose expense had been
      chiefly in durable commodities, would be continually increasing, every
      day’s expense contributing something to support and heighten the effect of
      that of the following day; that of the other, on the contrary, would be no
      greater at the end of the period than at the beginning. The former too
      would, at the end of the period, be the richer man of the two. He would
      have a stock of goods of some kind or other, which, though it might not be
      worth all that it cost, would always be worth something. No trace or
      vestige of the expense of the latter would remain, and the effects of ten
      or twenty years’ profusion would be as completely annihilated as if they
      had never existed.

      As the one mode of expense is more favourable than the other to the
      opulence of an individual, so is it likewise to that of a nation. The
      houses, the furniture, the clothing of the rich, in a little time, become
      useful to the inferior and middling ranks of people. They are able to
      purchase them when their superiors grow weary of them; and the general
      accommodation of the whole people is thus gradually improved, when this
      mode of expense becomes universal among men of fortune. In countries which
      have long been rich, you will frequently find the inferior ranks of people
      in possession both of houses and furniture perfectly good and entire, but
      of which neither the one could have been built, nor the other have been
      made for their use. What was formerly a seat of the family of Seymour, is
      now an inn upon the Bath road. The marriage-bed of James I. of Great
      Britain, which his queen brought with her from Denmark, as a present fit
      for a sovereign to make to a sovereign, was, a few years ago, the ornament
      of an alehouse at Dunfermline. In some ancient cities, which either have
      been long stationary, or have gone somewhat to decay, you will sometimes
      scarce find a single house which could have been built for its present
      inhabitants. If you go into those houses, too, you will frequently find
      many excellent, though antiquated pieces of furniture, which are still
      very fit for use, and which could as little have been made for them. Noble
      palaces, magnificent villas, great collections of books, statues,
      pictures, and other curiosities, are frequently both an ornament and an
      honour, not only to the neighbourhood, but to the whole country to which
      they belong. Versailles is an ornament and an honour to France, Stowe and
      Wilton to England. Italy still continues to command some sort of
      veneration, by the number of monuments of this kind which it possesses,
      though the wealth which produced them has decayed, and though the genius
      which planned them seems to be extinguished, perhaps from not having the
      same employment.

      The expense, too, which is laid out in durable commodities, is favourable
      not only to accumulation, but to frugality. If a person should at any time
      exceed in it, he can easily reform without exposing himself to the censure
      of the public. To reduce very much the number of his servants, to reform
      his table from great profusion to great frugality, to lay down his
      equipage after he has once set it up, are changes which cannot escape the
      observation of his neighbours, and which are supposed to imply some
      acknowledgment of preceding bad conduct. Few, therefore, of those who have
      once been so unfortunate as to launch out too far into this sort of
      expense, have afterwards the courage to reform, till ruin and bankruptcy
      oblige them. But if a person has, at any time, been at too great an
      expense in building, in furniture, in books, or pictures, no imprudence
      can be inferred from his changing his conduct. These are things in which
      further expense is frequently rendered unnecessary by former expense; and
      when a person stops short, he appears to do so, not because he has
      exceeded his fortune, but because he has satisfied his fancy.

      The expense, besides, that is laid out in durable commodities, gives
      maintenance, commonly, to a greater number of people than that which is
      employed in the most profuse hospitality. Of two or three hundred weight
      of provisions, which may sometimes be served up at a great festival, one
      half, perhaps, is thrown to the dunghill, and there is always a great deal
      wasted and abused. But if the expense of this entertainment had been
      employed in setting to work masons, carpenters, upholsterers, mechanics,
      etc. a quantity of provisions of equal value would have been distributed
      among a still greater number of people, who would have bought them in
      pennyworths and pound weights, and not have lost or thrown away a single
      ounce of them. In the one way, besides, this expense maintains productive,
      in the other unproductive hands. In the one way, therefore, it increases,
      in the other it does not increase the exchangeable value of the annual
      produce of the land and labour of the country.

      I would not, however, by all this, be understood to mean, that the one
      species of expense always betokens a more liberal or generous spirit than
      the other. When a man of fortune spends his revenue chiefly in
      hospitality, he shares the greater part of it with his friends and
      companions; but when he employs it in purchasing such durable commodities,
      he often spends the whole upon his own person, and gives nothing to any
      body without an equivalent. The latter species of expense, therefore,
      especially when directed towards frivolous objects, the little ornaments
      of dress and furniture, jewels, trinkets, gew-gaws, frequently indicates,
      not only a trifling, but a base and selfish disposition. All that I mean
      is, that the one sort of expense, as it always occasions some accumulation
      of valuable commodities, as it is more favourable to private frugality,
      and, consequently, to the increase of the public capital, and as it
      maintains productive rather than unproductive hands, conduces more than
      the other to the growth of public opulence.