An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith (ebook reader with highlighter txt) 📖

manufacturer fixes and realizes itself

in some particular subject or vendible commodity, which lasts for some time

at least after that labour is past. It is, as it were, a certain quantity of

labour stocked and stored up, to be employed, if necessary, upon some other

occasion. That subject, or, what is the same thing, the price of that

subject, can afterwards, if necessary, put into motion a quantity of labour

equal to that which had originally produced it. The labour of the menial

servant, on the contrary, does not fix or realize itself in any particular

subject or vendible commodity. His services generally perish in the very

instant of their performance, and seldom leave any trace of value behind

them, for which an equal quantity of service could afterwards be procured.

 

The labour of some of the most respectable orders in the society is, like

that of menial servants, unproductive of any value, and does not fix or

realize itself in any permanent subject, or vendible commodity, which

endures after that labour is past, and for which an equal quantity of labour

could afterwards be procured. The sovereign, for example, with all the

officers both of justice and war who serve under him, the whole army and

navy, are unproductive labourers. They are the servants of the public, and

are maintained by a part of the annual produce of the industry of other

people. Their service, how honourable, how useful, or how necessary soever,

produces nothing for which an equal quantity of service can afterwards be

procured. The protection, security, and defence, of the commonwealth, the

effect of their labour this year, will not purchase its protection,

security, and defence, for the year to come. In the same class must be

ranked, some both of the gravest and most important, and some of the most

frivolous professions; churchmen, lawyers, physicians, men of letters of all

kinds ; players, buffoons, musicians, opera-singers, opera-dancers, etc.

The labour of the meanest of these has a certain value, regulated by the

very same principles which regulate that of every other sort of labour; and

that of the noblest and most useful, produces nothing which could afterwards

purchase or procure an equal quantity of labour. Like the declamation of the

actor, the harangue of the orator, or the tune of the musician, the work of

all of them perishes in the very instant of its production.

 

Both productive and unproductive labourers, and those who do not labour at

all, are all equally maintained by the annual produce of the land and labour

of the country. This produce, how great soever, can never be infinite, but

must have certain limits. According, therefore, as a smaller or greater

proportion of it is in any one year employed in maintaining unproductive

hands, the more in the one case, and the less in the other, will remain for

the productive, and the next year’s produce will be greater or smaller

accordingly ; the whole annual produce, if we except the spontaneous

productions of the earth, being the effect of productive labour.

 

Though the whole annual produce of the land and labour of every country is

no doubt ultimately destined for supplying the consumption of its

inhabitants, and for procuring a revenue to them; yet when it first comes

either from the ground, or from the hands of the productive labourers, it

naturally divides itself into two parts. One of them, and frequently the

largest, is, in the first place, destined for replacing a capital, or for

renewing the provisions, materials, and finished work, which had been

withdrawn from a capital ; the other for constituting a revenue either to

the owner of this capital, as the profit of his stock, or to some other

person, as the rent of his land. Thus, of the produce of land, one part

replaces the capital of the farmer ; the other pays his profit and the rent

of the landlord ; and thus constitutes a revenue both to the owner of this

capital, as the profits of his stock, and to some other person as the rent

of his land. Of the produce of a great manufactory, in the same manner, one

part, and that always the largest, replaces the capital of the undertaker of

the work ; the other pays his profit, and thus constitutes a revenue to the

owner of this capital.

 

That part of the annual produce of the land and labour of any country which

replaces a capital, never is immediately employed to maintain any but

productive hands. It pays the wages of productive labour only. That which is

immediately destined for constituting a revenue, either as profit or as

rent, may maintain indifferently either productive or unproductive hands.

 

Whatever part of his stock a man employs as a capital, he always expects it

to be replaced to him with a profit. He employs it, therefore, in

maintaining productive hands only ; and after having served in the function

of a capital to him, it constitutes a revenue to them. Whenever he employs

any part of it in maintaining unproductive hands of any kind, that part is

from that moment withdrawn from his capital, and placed in his stock

reserved for immediate consumption.

 

Unproductive labourers, and those who do not labour at all, are all

maintained by revenue; either, first, by that part of the annual produce

which is originally destined for constituting a revenue to some particular

persons, either as the rent of land, or as the profits of stock ; or,

secondly, by that part which, though originally destined for replacing a

capital, and for maintaining productive labourers only, yet when it comes

into their hands, whatever part of it is over and above their necessary

subsistence, may be employed in maintaining indifferently either productive

or unproductive hands. Thus, not only the great landlord or the rich

merchant, but even the common workman, if his wages are considerable, may

maintain a menial servant; or he may sometimes go to a play or a

puppet-show, and so contribute his share towards maintaining one set of

unproductive labourers; or he may pay some taxes, and thus help to maintain

another set, more honourable and useful, indeed, but equally unproductive.

No part of the annual produce, however, which had been originally destined

to replace a capital, is ever directed towards maintaining unproductive

hands, till after it has put into motion its full complement of productive

labour, or all that it could put into motion in the way in which it was

employed. The workman must have earned his wages by work done, before he can

employ any part of them in this manner. That part, too, is generally but a

small one. It is his spare revenue only, of which productive labourers have

seldom a great deal. They generally have some, however ; and in the payment

of taxes, the greatness of their number may compensate, in some measure, the

smallness of their contribution. The rent of land and the profits of stock

are everywhere, therefore, the principal sources from which unproductive

hands derive their subsistence. These are the two sorts of revenue of which

the owners have generally most to spare. They might both maintain

indifferently, either productive or unproductive hands. They seem, however,

to have some predilection for the latter. The expense of a great lord feeds

generally more idle than industrious people The rich merchant, though with

his capital he maintains industrious people only, yet by his expense, that

is, by the employment of his revenue, he feeds commonly the very same sort

as the great lord.

 

The proportion, therefore, between the productive and unproductive hands,

depends very much in every country upon the proportion between that part of

the annual produce, which, as soon as it comes either from the ground, or

from the hands of the productive labourers, is destined for replacing a

capital, and that which is destined for constituting a revenue, either as

rent or as profit. This proportion is very different in rich from what it is

in poor countries.

 

Thus, at present, in the opulent countries of Europe, a very large,

frequently the largest, portion of the produce of the land, is destined for

replacing the capital of the rich and independent farmer ; the other for

paying his profits, and the rent of the landlord. But anciently, during the

prevalency of the feudal government, a very small portion of the produce was

sufficient to replace the capital employed in cultivation. It consisted

commonly in a few wretched cattle, maintained altogether by the spontaneous

produce of uncultivated land, and which might, therefore, be considered as a

part of that spontaneous produce. It generally, too, belonged to the

landlord, and was by him advanced to the occupiers of the land. All the rest

of the produce properly belonged to him too, either as rent for his land, or

as profit upon this paltry capital. The occupiers of land were generally

bondmen, whose persons and effects were equally his property. Those who were

not bondmen were tenants at will; and though the rent which they paid was

often nominally little more than a quit-rent, it really amounted to the

whole produce of the land. Their lord could at all times command their

labour in peace and their service in war. Though they lived at a distance

from his house, they were equally dependent upon him as his retainers who

lived in it. But the whole produce of the land undoubtedly belongs to him,

who can dispose of the labour and service of all those whom it maintains. In

the present state of Europe, the share of the landlord seldom exceeds a

third, sometimes not a fourth part of the whole produce of the land. The

rent of land, however, in all the improved parts of the country, has been

tripled and quadrupled since those ancient times; and this third or fourth

part of the annual produce is, it seems, three or four times greater than

the whole had been before. In the progress of improvement, rent, though it

increases in proportion to the extent, diminishes in proportion to the

produce of the land.

 

In the opulent countries of Europe, great capitals are at present employed

in trade and manufactures. In the ancient state, the little trade that was

stirring, and the few homely and coarse manufactures that were carried on,

required but very small capitals. These, however, must have yielded very

large profits. The rate of interest was nowhere less than ten per cent. and

their profits must have been sufficient to afford this great interest. At

present, the rate of interest, in the improved parts of Europe, is nowhere

higher than six per cent.; and in some of the most improved, it is so low as

four, three, and two per cent. Though that part of the revenue of the

inhabitants which is derived from the profits of stock, is always much

greater in rich than in poor countries, it is because the stock is much

greater ; in proportion to the stock, the profits are generally much less.

 

That part of the annual produce, therefore, which, as soon as it comes

either from the ground, or from the hands of the productive labourers, is

destined for replacing a capital, is not only much greater in rich than in

poor countries, but bears a much greater proportion to that which is

immediately destined for constituting a revenue either as rent or as profit.

The funds destined for the maintenance of productive labour are not only

much greater in the former than in the latter, but bear a much greater

proportion to those which, though they may be employed to maintain either

productive or unproductive hands, have generally a predilection for the

latter.

 

The proportion between those different funds necessarily determines in every

country the general character of the