Individuals, it is very clear, in general, increase their capitals by acquiring a larger portion of the common funds.While one man is growing rich, another is becoming poor, and the change produced, seems not so much a creation of wealth, as a passage of it from one hand to another.These transfer have been going on in all ages of the world and have existed equally, in what has been called the advancing, the stationary, and the declining stages of society.Every where this means of acquiring wealth is open to individuals, and they every where avail themselves of it.Let any one in any country in Great Britain for instance, trace backwards for fifteen or twenty years the mutations that have occurred in the fortunes of the persons with whom he is acquainted, and he will find that there are few, whose circumstances are not very much changed from what they then were.
Good conduct, good fortune, and frugality have made many rich who were then poor; imprudence, misfortune, prodigality have made many poor who were then rich.
But while that man has thus been adding house to house, and farm to farm, and this has been giving up one portion of property after another, till he finds all he once possessed in the hands of others, the whole mass of houses, lands and wealth, has undergone but little alteration; the national capital itself, remains, comparatively, but little changed.It is not by thus acquiring wealth previously in the possession of others, that nations enrich themselves.But a very small part of the capital of any community, can, I suspect, be accounted for, by tracing its passage from any other community.Instead of one nation growing rich, and another poor, we rather see many neighboring nations advancing at the same pace towards prosperity and affluence, or declining equally, to misery and want.As individuals seem generally to grow rich by grasping a larger and larger portion of the wealth already in existence, nations do so by the production of wealth that did not previously exist.The two processes differ in this, that the one is an acquisition, the other a creation.
Ex nihil fit.Nothing can spring out of nothing.Every thing that exists must have a cause.As we do not see that individuals increase their wealth by creating new wealth, we do not think of inquiring how the riches of an individual came to exist, but how they came into his possession.
But as ve do not see how nations can increase their wealth, but by creating new wealth, we naturally inquire, what are the causes of the wealth of nations.
Adam Smith asserts, and as I think truly asserts, that these causes are to be found in the improvement of the productive powers of human labor.
Men, and therefore nations, are said to be rich or poor according to the degree in which they can afford to enjoy the necessaries, conveniences, and amusements of human life.But as it is the annual labor of the nation which supplies these necessaries, conveniences and amusements; so as this labor is well or ill directed, the supply it affords must be great or small.
The skill, dexterity, and judgment with which labor is applied; that is, I presume, the facility of the operations which it employs for executing its ends, and the accuracy with which it conducts them, must consequently mainly regulate the amount which it produces.Thus the increase of the skill, dexterity and judgment with which the national labor is applied, furnishes us with a cause for the increased productive powers of that labor, and so for the increase of the national wealth.
This account of matters will be found sufficiently to agree with the ideas which the contemplation of their progress forces on every one.When we are told that an individual this year employs in agriculture double the capital which he employed last year, the conception which most readily presents itself to us is, that he now farms double the land which he then farmed, owns double the number of horses, cattle, farming utensils, etc.
and has double the number of barns and other necessary buildings.When we are told that a country has double the agricultural capital which it had a century ago, we cannot, of course, conceive that its farms are double the extent they then were; neither do we conceive that its farmers have simply double the number of barns and other buildings, of cattle, ploughs, harrows, and other farming utensils, which they then had.We conceive a change in the mode in which its fields are laid out and tilled; in the form and qualities of the stock; in the construction of all the implements of husbandry; in the size and arrangement of the barns and other buildings, and that through these changes the national agricultural labor produces at least double the products it formerly did.It is this change necessarily involved in our conception of the process by which nations increase their capitals, and not necessarily involved in the process by which individuals increase their capitals, that constitutes the difference between them.(6)Though they are thus essentially different, there are nevertheless two points in which they agree.When estimated in gold, silver, or any other instrument of exchange, the sum at which the agricultural property presently possessed by the individual would be rated would be double that at which what was formerly in his possession was rated.The sum, also, at which the present agricultural property of the nation would be rated would be double that at which it was formerly rated.The things, too, that so estimated formed the increase in both, would have been produced by man: they would be his works.But though two things may both be estimated as worth a sum of money, and may both be works of man, it follows not that the principles which have produced them are perfectly similar.The poem of Children Harold cost the publisher a certain sum; so did the paper on which it was printed.
