V.

confumption; or, thirdly, in transporting either CHA P. 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 those who want them.. In the firft way are employed, the capitals of all thofe who undertake the improvement of cultivation of lands, mines, or fifheries; in the fecond, thofe of all master manufacturers; in the third, thofe of all wholesale 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.

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EACH of those 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 confumption, it either would: never be produced, becaufe 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

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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 such 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 provifions 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 stock 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 ftock as a capital. He is thus enabled,

V.

to furnish work to a greater value, and the profit, CHAP. which he makes by it in this way, much more than compensates the additional price which the profit of the retailer impofes upon the goods, The prejudices of fome political writers against fhopkeepers and tradefmen, are altogether without foundation. So far is it from being neceffary, either to tax them, or to reftrict 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, just fo much the lefs. Their competition might perhaps ruin some 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. II.

E

he

BOOK he has no occafion for. This evil, however, is of too little importance to deserve the public attention, nor would it necessarily be prevented by reftricting their numbers. It is not the multitude of ale-houses, to give the most suspicious 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 alehouses.

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 subject or vendible commodity upon which it is beftowed, and generally adds to its price the value at least 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 society 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

V.

whole value which its employment adds to the CHAP. annual produce of the land and labour of the fociety.

THE capital of the wholesale merchant replaces, together with their profits, the capitals of the farmers and manufacturers of whom he purchases the rude and manufactured produce which he deals in, and thereby enables them to continue their respective trades. It is by this fervice chiefly that he contributes indirectly to fupport the productive labour of the fociety, and to increase the value of its annual produce. His capital employs too the failors and carriers whọ transport his goods from one place to another, and it augments the price of those goods by the value, not only of his profits, but of their wages. This is all the productive labour which it immediately puts into motion, and all the value which it immediately adds to the annual produce. Its operation in both these respects is a good deal fuperior to that of the capital of the retailer.

PART of the capital of the master manufacturer is employed as a fixed capital in the inftruments of his trade, and replaces, together with its profits, that of fome other artificer of whom he purchafes them. Part of his circulating capital is employed in purchafing materials, and replaces, with their profits, the capitals of the farmers and miners of whom he purchases them. But a great part of it is always, either annually, or in a much fhorter period, distributed among the different workmen whom he employs. It augments the value of those materials by their wages, and by their

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