Where no return whatever is in view, there indeed is so much loss of national capital; but the loss would be quite as great, were goods, and not money, so exported.

CHAPTER III.

OF THE EFFECT OF PRODUCTIVE CONSUMPTION.

THE nature of productive consumption has been explained above in Book I. The value absorbed by it is what has been called, Capital. The trader, manufacturer, and cultivator, purchase the raw material* and productive agency, which they consume in the preparation of new products; and the immediate effect is precisely the same, as that of unproductive consumption; viz. to create a demand for the objects of their consumption, which operates upon their price, and upon their production; and to cause a destruction of value. But the ultimate effect is different; there is no satisfaction of a human want, and no resulting gratification, except that accruing to the adventurer from the possession of the fresh product the value of which replaces that of the products consumed, and commonly affords him a profit into the bargain.

To this position, that productive consumption does not immediately satisfy any human want, a cursory observer may possibly object, that the wages of labour, though a productive outlay, go to satisfy the wants of the labourer, in food, raiment, and amusement perhaps. But, in this operation, there is a double consump tion; 1. of the capital consumed productively in the purchase of productive agency, wherefrom results no human gratification: 2. of the daily or weekly revenue of the labourer, i. e. of his productive agency, the recompense for which is consumed unproductively by himself and his family, in like manner as the rent of the manufactory, which forms the revenue of the landlord, is by him consumed unproductively. And this does not imply the consumption of the same value twice over, first productively, and afterwards unproductively; for the values consumed are two distinct values resting on bases altogether different. The first, the productive agency of the labourer, is the effect of his muscular

The raw materials of manufacture and commerce are, the products bought with a view to the communication to them of further value. Calicoes are raw material to the calico-printer, and printed calicoes to the dealer who buys them for re-sale or export. In commerce, every act of purchase is an act of consumption; and every act of re-sale, an act of reproduc

tion.

power and skill, which is itself a positive product, bearing value like any other. The second is a portion of capital, given by the adventurer in exchange for that productive agency. After the act of exchange is once completed, the consumption of the value given on either side is contemporaneous, but with a different object in view; the one being intended to create a new product, the other to satisfy the wants of the productive agent and his family. Thus, the object, expended and consumed by the adventurer, is the equivalent he receives for his capital; and that, consumed unproductively by the labourer, is the equivalent for his revenue. The interchange of these two values, by no means makes them one and the same.

So likewise, the intellectual industry of superintendence is reproductively consumed in the concern; and the profits, accruing to the adventurer as its recompense, are consumed unproductively by himself and his family.

In short, this double consumption is precisely anologous to that of the raw material used in the concern. The clothier presents himself to the wool-dealer, with 1000 crowns in his hand; there are, at this moment, two values in existence; on the one side, that of the 1000 crowns, which is the result of previous production, and now forms a part of the capital of the clothier; on the other, the wool constituting a part of the annual product of a grazing farm. These products are interchanged, and each is separately consumed; the capital converted into wool, in a way to produce cloth; the product of the farm, converted into crown-pieces, in the satisfaction of the wants of the farmer, or his landlord.

Since every thing consumed is so much lost, the gain of reproductive consumption is equal, whether proceeding from reduced consumption, or from enlarged production. In China, they make a great saving in the consumption of seed-corn, by following the drilling, in lieu of the broad-cast, method. The effect of this sav. ing is precisely the same, as if the land were, in China, proportionately more productive than in Europe.*

In manufacture, when the raw material used is of no value whatever, it is not to be reckoned as forming any part of the requisite consumption of the concern; thus, the stone used by the limeburner, and the sand employed by the glass-blower, are no part of their respective consumption, wherever they have cost them nothing.

A saving of productive agency, whether of industry, of land, or of capital, is equally real and effectual, as a saving of raw ma terial; and it is practicable in two ways; either by making the same productive means yield more agency; or by obtaining the same result from a smaller quantity of productive means.

One of the suite of Lord Macartney estimated the saving of grain in China, by this method alone, to be equal to the supply of the whole population of Great Britain.

Such savings generally operate in a very short time to the benefit of the community at large; they reduce the charges of production; and, in proportion as the economical process becomes better understood, and more generally practised, the competition of producers brings the price of the product gradually to a level with the charges of production. But, for this very reason, all, who do not learn to economize like their neighbours, must necessarily lose, while others are gaining. Manufacturers have been ruined by hundreds, because they would go to work in a grand style with too costly and complex an apparatus, provided of course at an excessive expense of capital.

Fortunately, in the great majority of cases, self-interest is most sensibly and immediately affected by a loss of this kind; and in the concerns of business, like pain in the human frame, gives timely warning of injuries, that require care and reparation. If the rash or ignorant adventurer in production were not the first to suffer the punishment of his own errors or misconduct, we should find it far more common than it is to dash into improvident speculation; which is quite as fatal to public prosperity, as profusion and extravagance. A merchant, that spends 50,000 fr. in the acquisi tion of 30,000 fr., stands, in respect to his private concerns and to the general wealth of the community, upon exactly the same footing, as a man of fashion, who spends 20,000 fr. in horses, mistresses, gluttony, or ostentation; except, perhaps, that the latter has more pleasure and personal gratification for his money.*

What has been said on this subject in Book I. of this work, makes it needless to enlarge here on the head of productive consumption. I shall, therefore, henceforward direct my reader's attention to the subject of unproductive consumption, its motives, and consequences; premising, that in what I am about to say, the word consumption, used alone, will import unproductive consumption, as it does in common conversation.

There is almost insuperable difficulty in estimating with precision the consumption and production of value; and individuals have no other means of knowing, whether their fortune be increased or dimished, except by keeping regular accounts of their receipt and expenditure; indeed, all prudent persons are careful to do so, and it is a duty imposed by law in the case of traders. An adventurer could otherwise scarcely know whether his concern were gainful or losing, and might be involving himself and his creditors in ruin. Besides keeping regular accounts, a prudent manager will make previous esti. mates of the value that will be absorbed in the concern, and of its probable proceeds; the use of which, like that of a plan or design in building, is to give an approximation, though it can afford no certainty.

CHPATER IV.

OF THE EFFECT OF UNPRODUCTIVE CONSUMPTION IN GENERAL.

HAVING just considered the nature and effect of consumption in general, as well as the general effect of productive consumption in particular, it remains only to consider in this, and the following chapters, such consumption as is effected with no other end or object in view, than the mere satisfaction of a want, or the enjoyment of some pleasurable sensation.

Whoever has thoroughly comprehended the nature of consumption and production, as displayed in the preceding pages, will have arrived at the conviction, that no consumption, of the class denominated unproductive, has any ulterior effect, beyond the satisfaction of a want by the destruction of existing value. It is a mere exchange of a portion of existing wealth on the one side, for human gratification on the other, and nothing more. Beyond this, what can be expected?—reproduction? how can the same identical utility be afforded a second time? Wine can not be both drunk and distilled into brandy too. Neither can the object consumed serve to establish a fresh demand, and thus indirectly to stimulate future productive exertion; for it has already been explained that the only effectual demand is created by the possession of wherewithal to purchase,-of something to give in exchange; and what can that be, except a product, which, before the act of exchange and consumption, must have been an item, either of revenue or of capital? The existence and intensity of the demand must invariably depend upon the amount of revenue and of capital, the bare existence of revenue and of capital is all that is necessary for the stimulus of production, which nothing else can stimulate. The choice of one object of consumption necessarily precludes that of another; what is consumed in the shape of silks can not be consumed in the shape of linens or woollens; nor can what has once been devoted to pleasure or amusement, be made productive also of more positive or substantial utility.

Wherefore, the sole object of inquiry, with regard to unproductive consumption, is, the degree of gratification resulting from the act of consumption itself; and this inquiry will, in the remainder of this chapter, be pursued in respect of unproductive consumption in general, after which we shall give in the following chapters, a separate consideration to that of individuals, and that of the public, or community at large. The sole point is, to weigh the loss, occasioned to the consumer by his consumption, against the satisfaction it affords him. The degree of correctness, with

which the balance of loss and gain is struck, will determine whether the consumption be judicious or otherwise; which is a point that next to the actual production of wealth, has the most powerful influence upon the well or ill-being of families and of na

tions.

In this point of view, the most judicious kinds of consumption seems to be:

1. Such as conduce to the satisfaction of positive wants; by which term I mean those, upon the satisfaction of which depends the existence, the health, and the contentment of the generality of mankind; being the very reverse of such, as are generated by refined sensuality, pride and caprice. Thus, the national consumption will, on the whole, be judicious, if it absorb articles rather of convenience than of display; the more linen and the less lace; the more plain and wholesome dishes, and the fewer dainties; the more warm clothing, and the less embroidery, the bet ter. In a nation whose consumption is so directed, the public establishments will be remarkable rather for utility than splendour, its hospitals will be less magnificent than salutary and extensive; its roads well furnished with inns, rather than unnecessarily wide and spacious, and its towns well paved, though with few palaces to attract the gaze of strangers.

The luxury of ostentation affords a much less substantial and solid gratification, than the luxury of comfort, if I may be allowed the expression. Besides, the latter is less costly, that is to say, involves the necessity of a smaller consumption; whereas the former is as insatiable; it spreads from one to another, from the mere proneness to imitation; and the extent to which it may reach, is as absolutely unlimited. (a) "Pride," says Franklin, "is a beggar quite as clamorous as want, but infinitely more insa. tiable."

Taking society in the aggregate, it will be found that, one with another, the gratification of real wants, is more important to the community, than the gratification of artificial ones. The wants of the rich man occasion the production and consumption of an exquisite perfume perhaps, those of the poor man, the production and consumption of a good warm winter cloak; supposing the value to be equal, the diminution of the general wealth is the same

(a) It is strange, that so acute a writer should not have perceived, that the mischief of pure individual vanity can never be very formidable, because the pleasure it affords loses in intensity, in proportion to its diffusion. Indeed, as far as individual consumption is concerned, attacks upon luxury are mere idle declamations; for the productive energies of mankind will always be di rected towards an object, with a force, and in a degree, proportionate to the intensity of the want for it. It is the extravagance of public luxury alone that can ever be formidable; this, as well as public cousumption of every kind, it is always the interest of the community at large to contract, and that of public functionaries to expand, to the utmost. T.