II.

BOOK if the advantages fhould much more than compenfate the difference, every body would buy land, which again would foon raise its ordinary price. When interest was at ten per cent., land was commonly fold for ten and twelve years purchafe. As intereft funk to fix, five, and four per cent., the price of land rofe to twenty, five and twenty, and thirty years purchase. The market rate of intereft is higher in France than in England; and the common price of land is lower. In England it commonly fells at thirty; in France at twenty years purchase.

CHAP.

V.

CHAP. V.

Of the different Employment of Capitals.

TH

HOUGH all capitals are destined for the maintenance of productive labour only, yet the quantity of that labour, which equal capitals are capable of putting into motion, varies extremely according to the diverfity of their employment; as does likewife the value which that employment adds to the annual produce of the land and labour of the country.

A capital may be employed in four different ways: either, firft, in procuring the rude produce annually required for the ufe and confumption of the fociety; or, fecondly, in manufacturing and preparing that rude produce for immediate

ufe

V.

ufe and confumption; or, thirdly, in tranfporting CHAP either the rude or manufactured produce from the places where they abound to those where they are wanted; or, laftly, in dividing particular portions of either into fuch fmall parcels as fuit the occafional demands of thofe who want them. In the firft way are employed the capitals of all those who undertake the improvement or cultivation of lands, mines, or fisheries; in the fecond, thofe of all master manufactures; in the third, thofe of all wholefale merchants; and in the fourth, thofe of all retailers. It is difficult to conceive that a capital fhould be employed in any way which may not be claffed under fome one or other of thofe four.

Each of thofe four methods of employing a capital is effentially neceffary either to the exiftence or extenfion of the other three, or to the general conveniency of the fociety.

Unless a capital was employed in furnishing rude produce to a certain degree of abundance, neither manufactures nor trade of any kind could exist.

Unless a capital was employed in manufacturing that part of the rude produce which requires a good deal of preparation before it can be fit for use and consumption, it either would never be produced, because there could be no demand for it; or if it was produced fpontaneously, it would be of no value in exchange, and could add nothing to the wealth of the fociety,

Unless

BOOK

II.

Unless a capital was employed in transporting, either the rude or manufactured produce, from the places where it abounds to thofe where it is wanted, no more of either could be produced than was neceffary for the confumption of the neighbourhood. The capital of the merchant exchanges the furplus produce of one place for that of another, and thus encourages the induftry and increases the enjoyments of both.

Unless a capital was employed in breaking and dividing certain portions either of the rude or manufactured produce, into fuch small parcels as fuit the occafional demands of those who want them, every man would be obliged to purchase a greater quantity of the goods he wanted, than his immediate occafions required. If there was no fuch trade as a butcher, for example, every man would be obliged to purchase a whole ox or a whole sheep at a time. This would generally be inconvenient to the rich, and much more fo to the poor. If a poor workman was obliged to purchase a month's or fix months provisions at a time, a great part of the stock which he employs as a capital in the inftruments of his trade, or in the furniture of his fhop, and which yields him a revenue, he would be forced to place in that part of his flock which is referved for immediate confumption, and which yields him no revenue. Nothing can be more convenient for fuch a perfon than to be able to purchase his fubfiftence from day to day, or even from hour to hour, as he wants it. He is thereby enabled to employ almost his whole stock as a capital. He is thus enabled

V.

to furnish work to a greater value, and the profit c HAP. which he makes by it in this way, much more than compenfates the additional price which the profit of the retailer impofes upon the goods. The prejudices of fome political writers against fhopkeepers and tradesmen, are altogether without foundation. So far is it from being neceffary, either to tax them, or to restrict their numbers, that they can never be multiplied fo as to hurt the public, though they may fo as to hurt one another. The quantity of grocery goods, for example, which can be fold in a particular town, is limited by the demand of that town and its neighbourhood. The capital, therefore, which can be employed in the grocery trade, cannot exceed what is fufficient to purchase that quantity. If this capital is divided between two different grocers, their competition will tend to make both of them fell cheaper, than if it were in the hands of one only; and if it were divided among twenty, their competition would be juft fo much the greater, and the chance of their combining together, in order to raise the price, juft fo much the lefs. Their competition might perhaps ruin fome of themselves; but to take care of this is the bufinefs of the parties concerned, and it may fafely be trufted to their difcretion. It can never hurt either the confumer, or the producer; on the contrary, it must tend to make the retailers both fell cheaper and buy dearer, than if the whole trade was monopolized by one or two perfons. Some of them, perhaps, may fometimes decoy a weak customer to buy what

VOL. III.

E

he

II.

BOOK he has no occafion for. This evil, however, is of too little importance to deserve the public attention, nor would it neceffarily be prevented by restricting their numbers. It is not the multitude of ale-houses, to give the most fufpicious example, that occafions a general difpofition to drunkenness among the common people; but that difpofition arifing from other caufes neceffarily gives employment to a multitude of ale

houfes.

The perfons whofe capitals are employed in any of those four ways are themselves productive labourers. Their labour, when properly directed, fixes and realizes itself in the fubject or vendible commodity upon which it is bestowed, and generally adds to its price the value at leaft of their own maintenance and confumption. The profits of the farmer, of the manufacturer, of the merchant, and retailer, are all drawn from the price of the goods which the two first produce, and the two laft buy and fell. Equal capitals, however, employed in each of those four different ways, will immediately put into motion very different quantities of productive labour, and augment too in very different proportions the value of the annual produce of the land and labour of the fociety to which they belong.

The capital of the retailer replaces, together with its profits, that of the merchant of whom he purchases goods, and thereby enables him to continue his bufinefs. The retailer himself is the only productive labourer whom it immediately employs. In his profits, confifts the

whole