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 service chiefly that he contributes
indirectly to support the productive labour of the society, and
to increase the value of its annual produce. His capital employs,
too, the sailors and carriers who 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 superior to
that of the capital of the retailer.
Part of the capital of the master manufacturer is employed
as a fixed capital in the instruments of his trade, and replaces,
together with its profits, that of some other artificer of whom
he purchases them. Part of his circulating capital is employed in
purchasing 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
shorter period, distributed among the different workmen whom he
employs. It augments the value of those materials by their wages,
and by their matters' profits upon the whole stock of wages,
materials, and instruments of trade employed in the business. It
puts immediately into motion, therefore, a much greater quantity
of productive labour, and adds a much greater value to the annual
produce of the land and labour of the society than an equal
capital in the hands of any wholesale merchant.
No equal capital puts into motion a greater quantity of
productive labour than that of the farmer. Not only his labouring
servants, but his labouring cattle, are productive labourers. In
agriculture, too, nature labours along with man; and though her
labour costs no expense, its produce has its value, as well as
that of the most expensive workmen. The most important operations
of agriculture seem intended not so much to increase, though they
do that too, as to direct the fertility of nature towards the
production of the plants most profitable to man. A field
overgrown with briars and brambles may frequently produce as
great a quantity of vegetables as the best cultivated vineyard or
corn field. Planting and tillage frequently regulate more than
they animate the active fertility of nature; and after all their
labour, a great part of the work always remains to be done by
her. The labourers and labouring cattle, therefore, employed in
agriculture, not only occasion, like the workmen in manufactures,
the reproduction of a value equal to their own consumption, or to
the capital which employs them, together with its owners'
profits; but of a much greater value. Over and above the capital
of the farmer and all its profits, they regularly occasion the
reproduction of the rent of the landlord. This rent may be
considered as the produce of those powers of nature, the use of
which the landlord lends to the farmer. It is greater or smaller
according to the supposed extent of those powers, or in other
words, according to the supposed natural or improved fertility of
the land. It is the work of nature which remains after deducting
or compensating everything which can be regarded as the work of
man. It is seldom less than a fourth, and frequently more than a
third of the whole produce. No equal quantity of productive
labour employed in manufactures can ever occasion so great a
reproduction. In them nature does nothing; man does all; and the
reproduction must always be in proportion to the strength of the
agents that occasion it. The capital employed in agriculture,
therefore, not only puts into motion a greater quantity of
productive labour than any equal capital employed in
manufactures, but in proportion, too, to the quantity of
productive labour which it employs, it adds a much greater value
to the annual produce of the land and labour of the country, to
the real wealth and revenue of its inhabitants. Of all the ways
in which a capital can be employed, it is by far the most
advantageous to the society.
The capitals employed in the agriculture and in the retail
trade of any society must always reside within that society.
Their employment is confined almost to a precise spot, to the
farm and to the shop of the retailer. They must generally, too,
though there are some exceptions to this, belong to resident
members of the society.
The capital of a wholesale merchant, on the contrary, seems
to have no fixed or necessary residence anywhere, but may wander
about from place to place, according as it can either buy cheap
or sell dear.
The capital of the manufacturer must no doubt reside where
the manufacture is carried on; but where this shall be is not
always necessarily determined. It may frequently be at a great
distance both from the place where the materials grow, and from
that where the complete manufacture is consumed. Lyons is very
distant both from the places which afford the materials of its
manufactures, and from those which consume them. The people of
fashion in Sicily are clothed in silks made in other countries,
from the materials which their own produces. Part of the wool of
Spain is manufactured in Great Britain, and some part of that
cloth is afterwards sent back to Spain.
Whether the merchant whose capital exports the surplus
produce of any society be a native or a foreigner is of very
little importance. If he is a foreigner, the number of their
productive labourers is necessarily less than if he had been a
native by one man only, and the value of their annual produce by
the profits of that one man. The sailors or carriers whom he
employs may still belong indifferently either to his country or
to their country, or to some third country, in the same manner as
if he had been a native. The capital of a foreigner gives a value
to their surplus produce equally with that of a native by
exchanging it for something for which there is a demand at home.
It as effectually replaces the capital of the person who produces
that surplus, and as effectually enables him to continue his
business; the service by which the capital of a wholesale
merchant chiefly contributes to support the productive labour,
and to augment the value of the annual produce of the society to
which he belongs.
It is of more consequence that the capital of the
manufacturer should reside within the country. It necessarily
puts into motion a greater quantity of productive labour, and
adds a greater value to the annual produce of the land and labour
of the society. It may, however, be very useful to the country,
though it should not reside within it. The capitals of the
British manufacturers who work up the flax and hemp annually
imported from the coasts of the Baltic are surely very useful to
the countries which produce them. Those materials are a part of
the surplus produce of those countries which, unless it was
annually exchanged for something which is in demand there, would
be of no value, and would soon cease to be produced. The
merchants who export it replace the capitals of the people who
produce it, and thereby encourage them to continue the
production; and the British manufacturers replace the capitals of
those merchants.
A particular country, in the same manner as a particular
person, may frequently not have capital sufficient both to
improve and cultivate all its lands, to manufacture and prepare
their whole rude produce for immediate use and consumption, and
to transport the surplus part either of the rude or manufactured
produce to those distant markets where it can be exchanged for
something for which there is a demand at home. The inhabitants of
many different parts of Great Britain have not capital sufficient
to improve and cultivate all their lands. The wool of the
southern counties of Scotland is, a great part of it, after a
long land carriage through very bad roads, manufactured in
Yorkshire, for want of capital to manufacture it at home. There
are many little manufacturing towns in Great Britain, of which
the inhabitants have not capital sufficient to transport the
produce of their own industry to those distant markets where
there is demand and consumption for it. If there are any
merchants among them, they are properly only the agents of
wealthier merchants who reside in some of the greater commercial
cities.
When the capital of any country is not sufficient for all
those three purposes, in proportion as a greater share of it is
employed in agriculture, the greater will be the quantity of
productive labour which it puts into motion within the country;
as will likewise be the value which its employment adds to the
annual produce of the land and labour of the society. After
agriculture, the capital employed in manufactures puts into
motion the greatest quantity of productive labour, and adds the
greatest value to the annual produce. That which is employed in
the trade of exportation has the least effect of any of the
three.
The country, indeed, which has not capital sufficient for
all those three purposes has not arrived at that degree of
opulence for which it seems naturally destined. To attempt,
however, prematurely and with an insufficient capital to do all
the three is certainly not the shortest way for a society, no
more than it would be for an individual, to acquire a sufficient
one. The capital of all the individuals of a nation has its
limits in the same manner as that of a single individual, and is
capable of executing only certain purposes. The capital of all
the individuals of a nation is increased in the same manner as
that of a single individual by their continually accumulating and
adding to it whatever they save out of their revenue. It is
likely to increase the fastest, therefore, when it is employed in
the way that affords the greatest revenue to all the inhabitants
of the country, as they will thus be enabled to make the greatest
savings. But the revenue of all the inhabitants of the country is
necessarily in proportion to the value of the annual produce of
their land and labour.
It has been the principal cause of the rapid progress of our
American colonies towards wealth and greatness that almost their
whole capitals have hitherto been employed in agriculture. They
have no manufactures, those household and courser manufactures
excepted which necessarily accompany the progress of agriculture,
and which are the work of the women and children in every private
family. The greater part both of the exportation and coasting
trade of America is carried on by the capitals of merchants who
reside in Great Britain. Even the stores and warehouses from
which goods are retailed in some provinces, particularly in
Virginia and Maryland, belong many of them to merchants who
reside in the mother country, and afford one of the few instances
of the retail trade of a society being carried on by the capitals
of those who are not resident members of it. Were the Americans,
either by combination or by any other sort of violence, to stop
the importation of European manufactures, and, by thus giving a
monopoly to such of their own countrymen as could manufacture the
like goods, divert any considerable part of their capital into
this employment, they would retard instead of accelerating the
further increase in the value of their annual produce, and would
obstruct instead of promoting the progress of their country
towards real wealth and greatness. This would be still more the
case were they to attempt, in the same manner, to monopolize to
themselves their whole exportation trade.
The course of human prosperity, indeed, seems scarce ever to
have been of so long continuance as to enable any great country
to acquire capital sufficient for all those three purposes;
unless perhaps, we give credit to the wonderful accounts of the
wealth and cultivation of China, of those of ancient Egypt, and
of the ancient state of Indostan. Even those three countries, the
wealthiest, according to all accounts, that ever were in the
world, are chiefly renowned for their superiority in agriculture
and manufactures. They do not appear to have been eminent for
foreign trade. The ancient Egyptians had a superstitious
antipathy to the sea; a superstition nearly of the same kind
prevails among the Indians; and the Chinese have never excelled
in foreign commerce. The greater part of the surplus produce of
all those three countries seems to have been always exported by
foreigners, who gave in exchange for it something else for which
they found a demand there, frequently gold and silver.
It is thus that the same capital will in any country put
into motion a greater or smaller quantity of productive labour,
and add a greater or smaller value to the annual produce of its
land and labour, according to the different proportions in which
it is employed in agriculture, manufactures, and wholesale trade.
The difference, too, is very great, according to the different
sorts of wholesale trade in which any part of it is employed.
All wholesale trade, all buying in order to sell again by
wholesale, may be reduced to three different sorts. The home
trade, the foreign trade of consumption, and the carrying trade.
The home trade is employed in purchasing in one part of the same
country, and selling in another, the produce of the industry of
that country. It comprehends both the inland and the coasting
trade. The foreign trade of consumption is employed in purchasing
foreign goods for home consumption. The carrying trade is
employed in transacting the commerce of foreign countries, or in
carrying the surplus produce of one to another.
The capital which is employed in purchasing in one part of
