production of other commodities; and the importance of distinguishing between the classes which are reproductive consumers, and those which are not, is manifest. Indeed, it is from a want of accuracy in this very particular that the errors of Mr. Raymond with respect to the accumulation of wealth, have had their origin. By consumption, we mean the destruction of the products of industry-the destruction of value. All will admit that there may be different objects of consumption. Value may be consumed in the satisfying of our wants and the gratification of our desires. This consumption will not be unproductive in the literal sense of the word; as our lives have been sustained, and pleasures have been enjoyed, but neither will it be reproductive. The values annihilated, will not reappear in another form. Such is not the fact with the expenditures of the capitalist and the farmer. A capitalist possesses one hundred thousand dollars; he expends part in buildings and machinery, suitable for manufacturing cotton; and such a part of the remainder of his capital as may be necessary, is disposed of in the purchase of the raw material and the payment of wages. It may be that every dollar has been expended before he has been engaged in business for a month. What then? Is this man really pennyless? By no means. He will receive in a short time his whole capital with profits. What he formerly possessed in gold and silver, will be returned to him in cotton goods; and by selling these, he may again have his capital in money. Every dollar that was expended in machinery, was consumed reproductively; the machines are immediately engaged in the production of values. Every dollar that was laid out for cotton and for labour, was also consumed reproductively. The cotton has value which is consumed in the manufacturing of cotton cloth; and the labour has value which, when consumed in working up the cotton, is realized in the finished article. Suppose the capitalist turns his attention to commerce, and transports his capital to China for a cargo of tea. In this case the whole capital is consumed at once, and will be reproduced in the shape of tea, which may be sold for one hundred thousand dollars, and so much more as will pay expenses and profits. If the capital should be expended in the improvement of land, the return would be expected in the increased value of the plantation. * The language, indeed, even when thus changed, would not be strictly correct, as it is impossible for us to say that any one class alone is engaged in reproduction. The labour of the judge as well as of the farmer-of the cook as well as of the manufacturer, performs a necessary part in all reproduction, and without this part, those immediately engaged could not continue their labour. But it is obvious that this capital may be disposed of in yet another manner. Perhaps the owner wishes to enjoy the luxuries of life, and sets out in the gay world. At the end of a few years, instead of having doubled his capital, as would probably have been the result of reproductive exertion, his whole capital will be consumed, and the capital of the nation will be diminished to the same extent. It may be thought, indeed, that as the tailors, and players and cooks, and other persons employed by the capitalist, have received his property, that therefore, the wealth of the nation is unimpaired. We reply that they gave their labour for what they received. These individuals would have been employed in their respective occupations, or in others, even if the owner of the capital of one hundred thousand dollars had expended it in a different manner-in reproduction; and since they have received only the ordinary rate of wages and profits of capital on their investments, (which they would have received, however this particular capital was disposed of, or else would have turned their attention to more profitable employments,) their wealth is not greater than it would have been in the usual course of things. Since then one individual of the nation is poorer by one hundred thousand dollars, and no other individual has been enriched by his loss, it follows that the nation has been impoverished to the same amount. The capitalist, it is true, has enjoyed his personal gratification; but this is all that has been received by any one. It appears then that there is an entire difference in the two kinds of consumption, when considered as they affect national wealth. Now if Mr. Raymond had said that reproductive consumption is highly beneficial, and that the accumulation of finished products, withheld from consumption, is so much dead capital, useless so long as not appropriated according to the intention of all production—that is, so long as not consumed, we certainly would never have questioned the correctness of his opinions, however we might have doubted their novelty. But when we find our author supporting the expediency of converting valuable products into manure,* and asserting not only that war promotes national wealth, but that it promotes it by preventing accumulation, we are compelled to suspect the accuracy of his information on the subject, and to conclude that having involved himself in a cloud, he mistakes in attributing the indistinctness Doubtless Mr. R. will say that we are "exposing our ignorance," (v. i. p. 180); but the judgment of him who said that Lord Lauderdale wrote a book on political economy, to prove he knew nothing of the subject, happens to coincide with our own; and we are willing to be included with him in our author's censure. with which objects are seen, to the haziness of their own atmosphere. Thus, that "original"* and satisfactory chapter of Say, "Des débouchés," appears to Mr. Raymond the "strangest doctrine of all;" and he ventures to challenge any ingenuous man to say that he understands certain chapters of the "Wealth of Nations"-and why, gentle reader? Because there is great difficulty in comprehending them? No: but because they were not understood by Mr. Raymond himself! ‡ "Sed tamen amoto quæramus seria ludo." We do not wish to make assertions, and dogmatize without other support than may be derived from an unlimited confidence in our own infallibility. We will give the reasons on which our opinions are founded, and our readers may decide for themselves. If, according to our author's own definition, a nation consists of all the individuals who compose it, we presume it must be granted that if any individual of the nation gains, and no other individual loses, it is a national gain. If, for example, a merchant at the end of a year's business, finds his net revenue to be ten thousand dollars, and if this revenue has been acquired at the expense of no other individual of the nation, it cannot but be that the capital of the nation is ten thousand dollars greater than it was a twelvemonth before. We admit that other merchants may have suffered loss, even though not by their own countrymen; but this does not affect our argument-which is, that if an individual of a nation gains, and no other individual of the nation loses in consequence, this is a national gain. It is equally true that if one citizen loses, and none of his fellow-citizens gain in consequence, this is a national loss. If this reasoning be correct, we are authorised to say that the aggregate of the net revenues of all the indivduals, will form the net revenue of the nation. We must be understood here as embracing the net revenues of all the individuals; and, in our abstract argument, we may use the terms in relation to those who have lost, as well as those who have gained. The revenue of the former will be negative of the latter positive; and we ascertain the revenue of the nation by striking a balance. In all nations which are advancing in wealth, by simply subtracting the former sum of the losses from the latter sum of the gains, the difference will bé the net revenue of the nation. If then the whole of this net revenue were consumed in the luxuries of life, the productive sources of the nation would remain exactly the same as before * So called by no less a person than Ricardo. + Vol. i. 109. Alas! what cancelling, if Mr. Raymond were the standard of intelligibles in political economy. VOL. V.-No. 9. 7 its existence, supposing the annual loss of fixed capital to be annually repaired; for otherwise the sources of production would be gradually dried up. In this state of things the whole annual revenue is consumed, while the capital of the nation remains stationary, and consequently the population; because an increase of the means of subsistence must necessarily precede an increase of those to be subsisted. But says Mr. Raymond "it may be laid down as a universal rule, that a nation is in the greatest state of prosperity, when the annual consumption just equals the annual production."* A nation then in such circumstances, as those we have described, would be in the best possible condition. We know of no country, at all removed from barbarism, which has so nearly reached this acmé of prosperity, as China; and, perhaps, Spain may advance claims worthy of respect, to a station not far behind; but it has not been customary to envy the happiness of the Chinese or the Spanish. There is another way in which the net revenue of the nation may be disposed of;—it may be added to the capital engaged in production, and thus consumed reproductively. This is what Adam Smith means by accumulation; and if there be any other method of increasing the wealth of a nation, we confess ourselves ignorant of its existence. "What is annually saved, is as regularly consumed as what is annually spent, and nearly in the same time too: but it is consumed by a different set of people. That portion of his revenue which a rich man spends, is, in most cases, consumed by idle guests and menial servants, who leave nothing behind them in return for their consumption. That portion which he annually saves, since for the sake of the profit, it is immediately employed as a capital, is consumed in the same manner, and nearly in the same time too, but by a different set of people, by labourers, manufacturers and artificers, who reproduce with a profit the value of their annual consumption." It is fortunate for mankind that self-interest and the prospect of future enjoyment govern their conduct, and teach what is best to be done. Men know that is their interest to consume the whole of their revenue; (not, however, to convert it into manure or throw it into the ocean); but they are equally well aware that they must consume part of it reproductively, if they wish to advance in wealth. Hence they deny themselves present gratification ;-they are frugal; they will not spend their whole revenue in the pleasures of life, but add part of it to their productive capital. Thus they accumulate wealth. Every year increases their sources of production, and increases them in a progressive ratio. * Vol. i. pp. 122, 123. + Wealth of Nations, vol. i. p. 240. Mr. Raymond is in terror, perhaps, lest accumulation should be earried too far in our country. We have no such fears, and we would refer him to that "strange"* chapter of Say, for proof that demand is limited only by production. In proportion as pro duction increases, the producers have the means of augmenting their consumption—that is, each producer will have extended means of originating a demand for the products of the industry of all others; and the increase of population, consequent upon the greater abundance of subsistence, will soon supply labourers for the working up of any amount of capital. "There cannot then be accumulated in a country any amount of capital which may not be employed productively, until wages rise so high, in consequence of the rise of necessaries, and so little consequently remains for the profits of stock, that the motive for accumulation ceases. While the profits of stock are high, men will have a motive to accumulate. Whilst a man has any wished-for gratication unsupplied, he will have a demand for more commodities; and it will be an effectual demand while he has any new value to offer in exchange for them."+ It will be easy for our readers to form an estimate of Mr. Raymond's speculative opinions generally, from those we have passed in review before them. Such doctrines would, perhaps, have been undeserving of the extended notice we have given them, had they not been made the support of practical maxims certainly not unworthy of the theory. After the just remark of our author, that "all the labour which has hitherto been employed in endeavouring to discover a perpetual motion, has been unproductive,"‡ we had reason for surprise to find him engaged in the construction of something similar in finance. Taxation, according to these new views, is nothing more than a transfer of property from the right hand to the left, or from the left to the right; and thus capital◊ may be transmitted from the producers to the treasury, and thence again to the producers; and from these again to the treasury, and so on to infinity. In likemanner a national debt, which is due to individuals of the nation, has no other effect, while its interest does not exceed the national revenue, than to cause such a part of the annual revenue, as may be necessary, to pass through the public treasury in order to its distribution. A nation, in conformity to this system of Vol. i. p. 109. How differently one of Say's countrymen speaks of his work: De tous les livres composés en Français sur la science economique c'est le plns complet sans contredit; nous croyons pouvoir ajouter, le plus instructif." Chenier, de la Literature Français. p. 81. + Vol. i. p. 72. + Ricardo, p. 301. |