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La Prosperite des nations: oney considered as a particular...

Louverturefreedomhaiti Says...

La Prosperite des nations:

oney considered as a particular branch of the general stock of the society, or of the expense of maintaining the national capital
IT HAS been shown in the first Book, that the price of the greater part of commodities resolves itself into three parts, of which one pays the wages of the labor, another the profits of the stock, and a third the rent of the land which had been employed in producing and bringing them to market; that there are, indeed, some commodities of which the price is made up of two of those parts only, the wages of labor, and the profits of stock; and a very few in which it consists altogether in one, the wages of labor; but that the price of every commodity necessarily resolves itself into some one, or other, or all of these three parts; every part of it which goes neither to rent nor to wages, being necessarily profit to somebody.

Since this is the case, it has been observed, with regard to every particular commodity, taken separately; it must be so with regard to all the commodities which compose the whole annual produce of the land and labor of every country, taken complexly.

The whole price or exchangeable value of that annual produce, must resolve itself into the same three parts, and be parcelled out among the different inhabitants of the country, either as the wages of their labor, the profits of their stock, or the rent of their land.

But though the whole value of the annual produce of the land and labor of every country is thus divided among and constitutes a revenue to its different inhabitants; yet as in the rent of a private estate we distinguish between the gross rent and the net rent, so may we likewise in the revenue of all the inhabitants of a great country.

The gross rent of a private estate comprehends whatever is paid by the farmer; the net rent, what remains free to the landlord, after deducting the expense of management, of repairs, and all other necessary charges; or what, without hurting his estate, he can afford to place in his stock reserved for immediate consumption, or to spend upon his table, equipage, the ornaments of his house and furniture, his private enjoyments and amusements.

His real wealth is in proportion, not to his gross, but to his net rent.

The gross revenue of all the inhabitants of a great country comprehends the whole annual produce of their land and labor; the net revenue, what remains free to them after deducting the expense of maintaining; first, their fixed; and, secondly, their circulating capital; or what, without encroaching upon their capital, they can place in their stock reserved for immediate consumption, or spend upon their subsistence, conveniences, and amusements.

Their real wealth, too, is in proportion, not to their gross, but to their net revenue.

The whole expense of maintaining the fixed capital, must evidently be excluded from the net revenue of the society.

Neither the materials necessary for supporting their useful machines and instruments of trade, their profitable buildings, etc., nor the produce of the labor necessary for fashioning those materials into the proper form, can ever make any part of it. The price of that labor may, indeed, make a part of it; as the workmen so employed may place the whole value of their wages in their stock reserved for immediate consumption.

But in other sorts of labor, both the price and the produce go to this stock, the price to that of the workmen, the produce to that of other people, whose subsistence, conveniences, and amusements, are augmented by the labor of those workmen.

The intention of the fixed capital is to increase the productive powers of labor, or to enable the same number of laborers to perform a much greater quantity of work. In a farm where all the necessary buildings, fences, drains, communications, etc., are in the most perfect good order, the same number of laborers and laboring cattle will raise a much greater produce, than in one of equal extent and equally good ground, but not furnished with equal conveniences.

In manufactures the same number of hands, assisted with the best machinery, will work up a much greater quantity of goods than with more imperfect instruments of trade.

The expense which is properly laid out upon a fixed capital of any kind, is always repaid with great profit, and increases the annual produce by a much greater value than that of the support which such improvements require.

This support, however, still requires a certain portion of that produce.

A certain quantity of materials, and the labor of a certain number of workmen, both of which might have been immediately employed to augment the food, clothing, and lodging, the subsistence and conveniences of the society, are thus diverted to another employment, highly advantageous, indeed, but still different from this one. It is upon this account that all such improvements in mechanics, as enable the same number of workmen to perform an equal quantity of work with cheaper and simpler machinery than had been usual before, are always regarded as advantageous to every society.

A certain quantity of materials, and the labor of a certain number of workmen, which had before been employed in supporting a more complex and expensive machinery, can afterward be applied to augment the quantity of work which that or any other machinery is useful only for performing.

The undertaker of some great manufactory who employs a thousand a year in the maintenance of his machinery, if h(c) can reduce this expense to five hundred, will naturally employ the other five hundred in purchasing an additional quantity of materials to be wrought up by an additional number of workmen.

The quantity of that work, therefore, which his machinery was useful only for performing, will naturally be augmented, and with it all the advantage and convenience which the society can derive from that work.

The expense of maintaining the fixed capital in a great country, may very properly be compared to that of repairs in a private estate.

The expense of repairs may frequently be necessary for supporting the produce of the estate, and consequently both the gross and the net rent of the landlord.

When by a more proper direction, however, it can be diminished without occasioning any diminution of produce, the gross rent remains at least the same as before, and the net rent is necessarily augmented.

But though the whole expense of maintaining the fixed capital is thus necessarily excluded from the net revenue of the society, it is not the same case with that of maintaining the circulating capital.

Of the four parts of which this latter capital is composed, money, provisions, materials, and finished work, the last three, it has already been observed, are regularly withdrawn from it, and placed either in the fixed capital of the society, or in their stock reserved for immediate consumption.

Whatever portion of those consumable goods is not employed in maintaining the former, goes all to the latter, and makes a part of the net revenue of the society.

The maintenance of those three parts of the circulating capital, therefore, withdraws no portion of the annual produce from the net revenue of the society, besides what is necessary for maintaining the fixed capital.

The circulating capital of a society is in this respect different from that of an individual.

That of an individual is totally excluded from making any part of his net revenue, which must consist altogether in his profits.

But though the circulating capital of every individual makes a part of that of the society to which he belongs, it is not upon that account totally excluded from making a part likewise of their net revenue.

Though the whole goods in a merchant's shop must by no means be placed in his own stock reserved for immediate consumption, they may in that of other people, who, from a revenue derived from other funds, may regularly replace their value to him, together with its profits, without occasioning any diminution either of his capital or of theirs.

Money, therefore, is the only part of the circulating capital of a society, of which the maintenance can occasion any diminution in their net revenue.

The fixed capital, and that part of the circulating capital which consists in money, so far as they affect the revenue of the society, bear a very great resemblance to one

Posted November 13 2023 at 9:09 PM

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