But the increase of this last may take place in two ways-in energy, and in extent. Labour increases in energy, when the same quantity of labour furnishes a more abundant product; and the two great means of effecting the increase, or of perfecting the productive powers of labour, are the division of labour, and the invention of such machines as shorten and facilitate the manual operations of industry. Labour increases in extent, when the number of those engaged in it augments in proportion to the increasing number of the consumers, which can take place only in consequence of an increase of capitals, and of those branches of business in which they are employed.

Now, to accomplish the increase of labour in both these ways, and to conduct it gradually to the utmost pitch of energy and extent to which it can reach in any nation, considering the situation, the nature, and the peculiarities of its territories, what are the exertions to be made by its government? The subdivision of labour, and the invention and perfecting of machines These two great means of augmenting the energy of labour, advance in proportion to the extent of the market, or, in other words, in proportion to the number of exchanges which can be made, and to the ease and readiness with which these can take place. Let the government, then, direct all its attention to the enlargement of the market, by forming safe and convenient roads, b the circulation of sterling coin, and by securing the faithful fulfilment of contracts; all of which are indispensible measures, at the same time that, when put in practice, they will never fail to attain the desired end. And the nearer a government approaches to perfection in each of these three points, the more certainly will it produce every possible increase of the national market. The first of the three means is, without doubt, the most essential, as no other expedient whatever can possibly supply its place.

The gradual accumulation of capitals is a necessary consequence of the increased productive powers of labour, and it becomes also a cause of still farther increase in these powers; but, in proportion as this accumulation becomes greater and greater, it serves to increase the extent of labour, inasmuch as it multiplies the number of labourers, or the sum of national industry. This increase, however, of the number of hands in the nation employed, will always be regulated by the nature of the business to which the capitals are dedicated.

Under this second head of the increase of the products of labour, the exertions of government are much more easy. In fact, it has only to refrain from doing harm. It is only required of it, that it shall protect the natural liberty of industry; that it shall leave open every channel into which, by its own tendencies, industry may be carried; that government shall abandon it to its own direction, and shall not attempt to point its efforts one way more than another; for private interest, that infallible instinct which guides the exertions of all industry, is infinitely better suited than any legislator to judge of the direction which it will with most advantage follow. Let government, then, renounce alike the system of prohibitions and of bounties; let it no longer attempt to impede the efforts of industry by regulations, or to accelerate her progress by rewards; let it leave in the most perfect freedom the exertions of labour and the employment of capital; let its protecting influence extend only to the removal of such obstacles as avarice or ignorance have raised up to the unlimited liberty of industry and commerce ;-then capitals will naturally develope themselves, by their own movement, in those directions which are at once most agreeable to the private interest of the capitalist, and most favourable to the increase of the national wealth.

METHOD OF FACILITATING THE STUDY OF
DR. SMITH'S WORK.

SUCH are the results of the doctrine of Smith, and the fruits we are to reap from his immortal work. The proofs of the principle upon which his opinions are grounded, and the natural and easy manner in which his deductions flow from it, give it an air of simplicity and truth, which render it no less admirable than convincing. This simplicity, however, to be fully perceived, requires much study and consideration; for it cannot be denied that the Wealth of Nations' exhibits a striking instance of that defect for which English authors have so often been blamed, viz. a want of method, and a neglect, in their scientific works, of those divisions and arrangements which serve to assist the memory of the reader, and to guide his understanding. The author seems to have seized the pen at the moment when he was most elevated with the importance of his subject, and with the extent of his discoveries. He begins, by displaying before the eyes of his reader the innumerable wonders effected by the division of labour; and with this magnificent and impressive picture, he opens his course of instructions. He then goes back, to consider those circumstances which give rise to or limit this division; and is led by his subject to the definition of values-to the laws which regulate them, to the analysis of their several elements, and to the relations subsisting between those of different natures and origin; all of which are preliminary ideas, which ought naturally to have been explained to the reader before exhibting to him the complicated instrument of the multiplication of wealth, or unveiling the prodigies of the most powerful of its resources.

On the other hand, he has often introduced long digressions, which interrupt the thread of his discussion, and, in many cases, completely destroy the connection of its several parts. Of this description is the digression

On the variations in the value of the precious metals during the four last centuries, with a critical examination of the opinions that their value is decreasing-book 1, chap. xi. Upon banks of circulation and paper money-book 2, chap. ii.

Upon banks of deposit, and particularly that of Amsterdam-book 4, chap. iii.
Upon the advantage of seignorage in the coining of money-book 4, chap. vi.
Upon the commerce of grain, and the laws regarding this trade-book 4, chap. v.

These different treatises, although they are unquestionably the best that have ever been written on the subjects to which they relate, are, however, so introduced, as to distract the reader's attention-to make him lose sight of the principal object of the work-and to lessen the general effect of it as a whole.

To remedy, as far as I am able, these inconveniencies, and to facilitate to beginners the study of the doctrine of Smith, I have thought proper to point out the order which appears to me most agreeable to the natural progress of ideas, and, on this account, best calculated for the purpose of instruction.

I would begin by remarking, that the whole doctrine of Smith, upon the origin, multiplication, and distribution of wealth, is contained in his two first Dooks; and that the three others may be read separately, as so many detach

ed treatises, which, no doubt, confirm and develope his opinions, but do not by any means add to them.

The third book is an historical and political discussion on the progress which wealth would make in a country where labour and industry were left free; and upon the different causes which have tended, in all the countries of Europe, to reverse this progress.

In the fourth book, the author has endeavoured to combat the various systems of political economy which were popular previous to his time; and, in a particular manner, that which is denominated the mercantile system, which has exercised so strong an influence over the financial regulations of the European governments, and particularly over those of England.

In the fifth and last book, he considers the expenses of government; the most equitable and convenient modes of providing for these expenses; and lastly, public debts, and the influence they have over national prosperity.

The three last books may be read and studied in the same order and arrangement in which they were written, without any difficulty, by one who is completely master of the general doctrine contained in the two first.

I regard, then, the two first books, as a complete work, which I would divide into three parts.

The 1st relates to values in particular. It contains their definition; the laws which regulate them; the analysis of the elements which constitute a value, or enter into its composition; and the relations which values of different origin bear to each other.

The 2d part treats of the general mass of national wealth, which is here divided into separate classes, according to its destination or employment. The 3d and last part explains the manner in which the growth and distribution of national wealth takes place.

PART FIRST.-OF VALUES IN PARTICULAR.

THE essential quality which constitutes wealth, and without which it would not be entitled to the name, is its exchangeable value.

Exchangeable value differs from the value of utility-book 1, end of chap. iv. The relation existing between two exchangeable values, when expressed by a value generally agreed upon, is denominated price.

The value generally agreed on among civilized nations, is that of metals Motives to this preference. Origin of money-book 1, chap. iv. Relation between money and the metal in the state of bullion-book 1, chap. v.

The price in money, or nominal price of a thing, differs from its real price, which is its valuation by the quantity of labour expended upon it, or which it represents-ibid.

Laws, according to which the price of wealth is naturally fixed; and those accidental circumstances which occasion the actual to differ from the natural price, and which gave rise to a distinction between the natural and the market price-book 1, chap. vii.

The price of a thing, in most cases, consists of three distinct elements— the wages of the labour, the profit of the master who directs the labour, and the rent of the ground that furnishes the materials on which it is erected There are, however, some descriptions of merchandize in which the rent forms no part of the price; and others, in which the profit forms no partof it; but none, in which it is not formed principally by the wages-book 1, chap. vi.

Of wages. Laws, according to which the natural rate of wages is fixed accidental circumstances which cause them to vary, during a short period, from that natural rate--book 1. chap. viii.

Of the profit of capitals. Laws, by which the natural right of profit is fixed; accidental circumstances which, for a long while, increase or diminish it beyond that rate-book 1, chap. ix.

Labour and capitals tend naturally to diffuse themselves through every species of employment; and, as certain employments are, by their nature, accompanied with inconveniencies and difficulties which do not occur in others, while these, on the contrary, offer some real or imaginary advantages which are peculiar to themselves; wages and profits should rise and fall in proportion to these advantages and disadvantages; thus forming a complete equilibrium between the various kinds of employment. The arbitrary and oppressive policy of Europe, in many instances, opposes the establishment of this equilibrium, which is conformable to the order of nature-book 1, chap. x.

Of the rent of the ground. The nature of rent: the manner in which it enters into the price of wealth; and according to what principles it in some cases forms an integral part of that price, while in others it does not-book 1, chap. xi.

Division of the rude produce of the earth into two great classes:

1. That produce which is always necessarily disposed of in such a way as to bring a rent to the landed proprietor.

2. That which, according to circumstances, may be disposed of so as to bring, or so as not to bring, a rent.

The produce of the first description is derived from the ground appropriated to furnishing subsistence for man, or for those animals which he uses as for d. The value of the produce of the ground cultivated for the support of man, determines the value of the produce of all other ground proper for this species of culture. This general rule allows of some exceptions. Causes of these exceptions.

The produce of the second class consists of the materials of clothing, lodging, fuel, and the ornaments of dress and furniture. The value of this species of produce depends on that of the first description. Some circumstances render it possible that the produce of the second kind may be disposed of in such a way as to furnish a rent to the landed proprietor. Principles which regulate the proportion of the price of these products, which is formed by the rent-book 1, chap. xi.

Relation between the respective values of the produce of the first class, and those of the produce of the second. Variations which may take place in this relation, and the causes of such variations-ibid.

Relation existing between the values of the two descriptions of rude produce above mentioned, and the values of the produce of manufacture. Variations which may occur in this relation—ibid.

Certain kinds of rude produce, procured from very different sources, are, however, intended for the same kind of consumption; and hence it happens, the value of one determines and limits that of another-ibid

The relations between values of different natures vary according to the state of society. This state is improving, declining, or stationary; that is to say, society is either increasing in wealth, or falling into poverty, or remaining in the same unchanged state of opulence.

Of the effects of these different states of society,

Upon the price of wages-book 1, chap. viii.

Upon the rate of profit-book 1, chap. ix.

Upon the value of the rude produce of the earth, and on that of the produce of manufacture-book 1, chap. xi.

Difference, in this respect, between the various kinds of rude produce, viz. 1. Those which the industry of man cannot multiply: 2. Those which his industry can always multiply in proportion to the demand: 3. Those over which human exertions have only an uncertain or limited influence—ibid.

PART SECOND.-OF STOCK AND ITS EMPLOYMENT.

WEALTH, accumulated in the possession of an individual, is of two descriptions, according to its destination or employment:

1. That reserved for immediate consumption.

2. That employed as capital, for the production of a revenue-book 2, chap. i

Capital is also of two kinds :

1. Fixed capital, which produces a revenue and still remains in the same hands

2. Circulating capital, which yields no revenue unless it be employed in trade-book 2, chap. i.

The whole accumulated wealth of any community may be divided into three parts:

1. The fund appropriated to the immediate consumption of the proprietors of wealth. 2. The fixed capital of the community.

3. Its circulating capital.

The fixed capital of the society consists,

1. Of all machines and instruments of labour;

2. Of all buildings and edifices erected for the purposes of industry;

3. Of every kind of agricultural improvement which can tend to render the soil more productive;

4. Of the talents and skill which certain members of the community have acquired by time and expense.

The circulating capital of a communuity consists,

1. In the money in circulation:

2. In the stock of provisions in the hands both of the producers and of the merchants, and from the sale of which they expect to derive a profit ;

In the materials of lodging, clothing, dress, and ornament, more or less manufac tured, which are in the hands of those who are employed in rendering them fit for use and consumption;

4. In the goods more completely fit for consumption, and preserved in warehouses and shops, by merchants who propose to sell them with a profit-book 2, chap. i.

Of the relation existing between the employment of these two kinds of ital-ibid.

CX the mode in which the capital withdrawn from circulation is disposed of -ibid.

The sources which continually renew the circulating capital as soon as it enters into the fixed capital, or the stock for immediate consumption, are, 1. Lands;

2. Mines and quarries;

3. Fisheries-ibid.

Of the purposes accomplished by circulating coin-book 2, chap. ii; and the expedients which may be resorted to, in order to attain these with less expense, and fewer of those inconveniencies to which money is subjected— ibid.

Of the stock lent at interest; and of those things which regulate the proportion that this kind of stock bears to the whole existing stock of the community. The quantity of stock which may be lent depends in no degree up on the quantity of money in circulation-book 2, chap. iv.