Accumulation—Productive and unproductive consumption—Use of capital—Credit—Security of property—Production applied to the satisfaction of common wants—Increase of comforts—Relations of capitalist and labourer.

Dr. William Bulleyn, who lived three centuries ago, first gave currency to the saying, that great riches were "like muckhills, a burthen to the land, and offensive to the inhabitants thereof, till their heaps are cast abroad, to the profit of many." The worthy physician belonged to an age when the class called misers extensively prevailed; and when those who lent out money upon interest were denominated usurers. They were generally objects of public obloquy, and their function was not understood. There are plenty of men still amongst us who, in Dr. Bulleyn's view of the matter, are impersonations of the muck that is not spread. The muck-spreaders, according to the old notion, were those whose consumption was always endeavouring to outstrip the production that was going forward around them. The latter is by far the larger class at the present day; the former, the more powerful.

Let us endeavour, somewhat more with reference to practical results than we have already attempted, to look at some of the general principles existing in modern society which determine the existence, and regulate the employment, of capital.

Whatever is saved and accumulated is a saving and accumulation of commodities which have been produced. The value of the accumulation is most conveniently expressed by an equivalent in money; but only a very small part of the accumulation is actually money. A few millions of bullion are sufficient to carry on the transactions of this country. Its accumulations, or capital, which have been considered to amount to twenty-two hundred million pounds sterling, could not be purchased by several times the amount of all the bullion that exists in the world. A great part of what is saved, therefore, is an accumulation of products suitable for consumption. The moment that they are applied to the encouragement of production, they begin to be consumed. They encourage production only as far as they enable the producers to consume while they are in the act of producing. Accumulation, therefore, is no hindrance to consumption. It encourages consumption as much as expenditure of revenue unaccompanied by accumulation. It enables the things consumed to be replaced, instead of being utterly destroyed.

Whatever is consumed by those who are carrying forward the business of production has been called productive consumption. Whatever, on the other hand, is consumed by those who are not engaged in re-producing, has been called unproductive consumption. The difference may be thus illustrated:—A shoemaker, we will say, rents a shop, works up leather and other materials, uses various tools, burns out candles, and is himself fed and clothed while in the act of producing a pair of shoes. This is productive consumption;—for the pair of shoes represents the value of the materials employed in them, the commodities consumed by the shoemaker during their production, and the wear and tear of the tools applied in making them. If the shoes represent a higher value than what has been consumed, in consequence of the productiveness of the labour of the shoemaker, the difference is net produce, which may be saved, and, with other savings, become capital. But further:—The shoemaker, we will suppose, accumulates profits sufficient to enable him to live without making shoes, or applying himself to any other branch of industry. He now uses no materials, he employs no tools, but he consumes for the support and enjoyment of existence, without adding anything to the gross produce of society; this is called unproductive consumption.

The differences, however, between productive and unproductive consumption admit of considerable qualification. We have already described the course of a spendthrift, and of a man of fortune who lives virtuously and economically.[33] Whatever may be the scientific definition, no one can say that these, even viewed from the industrial point, can be classed together as unproductive consumers. Productive consumption, according to the strict definition of the earlier economists, is consumption directly applied to the creation of some material product. But a new element was introduced into the question by Mr. Mill's definition—that labour and expenditure are also productive, "which, without having for their direct object the creation of any useful natural product, or bodily or mental faculty or quality, yet lead indirectly to promote one or other of those ends." On the other hand, unproductive consumption consists of labour and expenditure exerted or incurred "uselessly, or in pure waste, and yielding neither direct enjoyment nor permanent sources of enjoyment."

It has been suggested by Dr. Cooper, an American professor, that the parable of "the ten talents," in St. Matthew's Gospel, points to the employment of capital for future production. "For the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods. And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey. Then he that had received the five talents went and traded with the same, and made them other five talents. And likewise he that had received two, he also gained other two. But he that had received one, went and digged in the earth, and hid his lord's money." The last was the "wicked and slothful," because unprofitable, servant. His was the sin of omission. He ought to have put out the money to "the exchangers," even if he had been afraid to trade with it.

Adam Smith has laid it down as an axiom that the proprietor who encroaches upon his capital by extravagance and waste, is a positive destroyer of the funds destined for the employment of productive labour. No doubt this is, in many respects, true. He, also, has buried his "one talent." But the common opinion of what are called "the money-making classes" of our time goes somewhat further than this. It is said that, amongst "the middle class" of this country, "the life of a man who leaves no property or family provision, of his own acquiring, at his death, is felt to have been a failure."[34] There are many modes in which the life of an industrious, provident, and able man may have been far other than "a failure," even in a commercial point of view, when he leaves his family with no greater money inheritance than that with which he began the world himself. He may have preserved his family, during the years in which he has lived amongst them, in the highest point of efficiency for future production. He may have consumed to the full extent of his income, producing, but accumulating no money capital for reproductive consumption; and, indirectly, but not less certainly, he may have accumulated whilst he has consumed, so as to enable others to consume profitably. If he have had sons, whom he has trained to manhood, bestowing upon them a liberal education; bringing them up, by honest example, in all trustworthiness; and causing them to be diligently instructed in some calling which requires skill and experience—he is an accumulator. If he have had daughters, whom he has brought up in habits of order and frugality—apt for all domestic employments—instructed themselves, and capable of carrying forward the duties of instruction—he has reared those who in the honourable capacity of wife, mother, and mistress of a family, influence the industrial powers of the more direct labourers in no small degree; and, being the great promoters of all social dignity and happiness, create a noble and virtuous nation. By the capital thus spent in enabling his children to be valuable members of society, he has accumulated a fund out of his consumption which may be productive at a future day. He has postponed his money contribution to the general stock; but he has not withheld it altogether. He has not been "the wicked and slothful servant." On the other hand, many a man, whose life, according to the mere capitalist doctrine, has not been "a failure," and who has taught his family to attach only a money-value to every object of creation, bequeaths to the world successors whose rapacity, ignorance, unskilfulness, and improvidence, will be so many charges upon the capital of the nation. The "muckhill" will by them be "cast abroad," but it will be devoted to the mere pursuit of sensual indulgence, losing half its fertilizing power, and too often burning up the soil that its judicious application would stimulate. He that has been weak enough, according to this "middle-class" doctrine, not to believe that the whole business of man is to make "a muckhill," may have spent existence in labours, public or private, for the benefit of his fellow creatures; but his life is "a failure!" The greater part of the clergy, of the bar, of the medical profession, of the men of science and literature, of the defenders of their country, of the resident gentry, of the aristocracy, devote their minds to high duties, and some to heroic exertions, without being inordinately anxious to guard themselves against such "a failure." It would perhaps be well if some of those who believe that all virtue is to be resolved into pounds sterling, were to consider that society demands from "the money-making classes" a more than ordinary contribution—not to indiscriminate benevolence, but to those public instruments of production—educational institutions—improved sanitary arrangements—which are best calculated to diminish the interval between the very rich and the very poor.

Whatever tends to enlighten the great body of the people facilitates individual accumulation. A large portion of the productions of industry, especially amongst the humbler classes of the community, is wasted, in addition to that portion which is enjoyed. Every consumption that is saved by habits of order, by knowing the best way of setting about a thing, by economy in the use of materials, is so much saved of the national capital; and what is saved remains to give new encouragement to the labour of the producer, and to bestow an increase of comforts upon the consumer. Again, the more that professional skill of every sort is based upon real knowledge, the more productive will be the industry of every class of labourers. Above all, sound morals, and pure and simple tastes, are the best preservatives from wasteful expenditure, both in the rich, and in the poor; and he that limits his individual gratification to objects worthy of a rational being, has the best chance of acquiring a sufficiency for his wants, and of laying by something to provide a fund for that productive consumption by which the wants of others are supplied.

With these general remarks upon accumulation and consumption, let us proceed to consider some points connected with the application of capital.

The use of capital consists in its advance. It goes before all operations of labour and trade. It is the power that sets labour and trade in motion; just as the power of wind, or water, or steam, gives movement to wheels and pistons.

Let us briefly see how capital operates upon the three great branches of human industry, namely, upon agriculture, manufactures, and commerce.

A farmer having acquired capital, either by the former savings of himself or his fathers, or by borrowing from the savings of others, takes a certain number of acres of land. He changes his capital of money into other things which are equally capital;—into horses, and cows, and sheep, and agricultural instruments, and seed. He makes an advance in the hope of producing a profit. He therefore sets his horses to work;—he gets milk from his cows;—he shears his sheep;—he fattens his oxen;—and he put his tools into the hands of labourers, to prepare the ground for the reception of his seed. He is paying money away on every side, which he would not do if he did not expect a return, with a profit. By all these operations—by the work of his horses and his labourers—by the increase in number, and the increase in value of his flocks and herds,—and by the harvest after the seed-time,—new produce is created which produces a return of capital, and ought to produce a profit if that capital is properly expended. The hope of profit sets the capital to work, and the capital sets the labour to work. If there were no capital there would be no labour. Capital gives the labourer the power, which he has not in himself, of working for a profit.

A capitalist desires to set up a cotton manufactory. He erects buildings, he purchases machines, he buys cotton-wool, he engages workmen. The annual value of the buildings and of the machines,—that is the interest upon their cost, added to their loss by wear and tear—the price of the raw material, and the wages of the workmen, are all calculated to be paid out of the price at which the cotton thread will be sold. To engage in such large undertakings, in which the returns are slow, there must be great accumulation of capital. To engage in such large undertakings, in which the risk is considerable, there must be abundant enterprise. Without extensive accumulations of capital, which produce enterprise, they could not be engaged in at all.

Capital employed in commerce circulates through the world in a thousand forms; but it all comes back in produce to the country that sends it out. Nations that have no accumulated stock, that is no capital, have no commerce; and where there is no commerce there are no ships and no sailors; and there are no comforts besides those which spring up at the feet of the more fortunate individuals of such nations.

In all these operations of capital upon the enterprises of agriculture, manufactures, and commerce, another power, which is the result of accumulation, is more or less, in most cases, called into action. That power is Credit.

Credit, upon a large scale, arose from the difficulty of transmitting coined money from place to place, and particularly from one country to another; and hence the invention of bills of exchange. A bill of exchange is an order by one person on another, to pay to a specified person, or his order, a sum of money specified, at a certain time and a certain place. It is evident that the bill of exchange travels as much more conveniently than a bag of money, as the bag of money travels more conveniently than the goods which it represents. For instance a box of hardware from Birmingham might be exchanged for a case of wine from Bordeaux, by a direct barter between the tradesman at Birmingham and the tradesman at Bordeaux; but this sort of operation must be a very limited one. Through the agency of merchants, the hardware finds it way to Bordeaux, and the wine to Birmingham, without any direct exchange between either place, or without either having more of the commodity wanted than is required by the market,—that is, the supply proportioned to the demand of each town. Through the division of labour, the merchant who exports the hardware to Bordeaux, and the merchant who imports the wine from Bordeaux, are different people; and there are other people engaged in carrying on other transactions at and with Bordeaux, with whom these merchants come in contact. When, therefore, the merchant at Bordeaux has to pay for the hardware in England, he obtains a bill of exchange from some other merchant who has to receive money from England, for the wine which he has sent there. And thus not only is there no direct barter between the grower of the wine and the manufacturer of the hardware, but the wine and the hardware are each paid for without any direct remittance of coined money from France to England, but by a transfer of the debt due from one person to another in each country. By this transfer, the transaction between the buyer and the seller is at once brought to maturity; and by this operation the buyer and seller are each benefited, because the exchange which each desires is rendered incomparably more easy, because more speedy and complete. The same principle applies to transactions between commercial men in the same country. The order for payment, which stands in the place of coined money in one case, is called a Foreign bill of exchange; in the other an Inland bill of exchange.

The operation of credit in a country whose industry is in an advanced state of activity, is extended over all its commercial transactions, by the necessity of obtaining circulating capital for the carrying forward the production of any commodity, from its first to its last stages. A manufacturer has a large sum expended in workshops, warehouses, machinery, tools. This is called his plant, or fixed capital. He has capital invested also in the raw material which he intends to convert into some article of utility. He works up his raw material; he makes advances for the labour required in working it up. The article is at length ready for the market. The wholesale dealer, who purchases of the manufacturer, sells to a retailer, who is in the habit of buying upon credit, long or short, because the article remains a certain time in his hands before it reaches the consumer, who ultimately pays for it. From the time when a fleece of wool is taken from the sheep's back in Australia, till it is purchased in the shape of a coat in London, there are extensive outlays in every department, which could not be carried on steadily unless there were facilities of credit from one person concerned in the production to another person concerned in the production,—the whole credit being grounded upon the belief that the debt contracted in so many stages will be repaid by the sale of the cloth to the consumer. The larger operations of this credit are represented by bills of exchange, or engagements to pay at a given date; and these bills being converted into cash by a banker, furnish a constant supply of consumable commodities to all parties concerned in advancing the production, till the produce arrives in the hands of the consumer. To judge of the extent to which credit is carried in this country, it is only necessary to mention, that five millions sterling are daily paid in bills and cheques by the London bankers alone; that the Bank of England alone, in 1853, discounted bills to the amount of twenty-five millions sterling; and that the note circulation of the United Kingdom is about forty millions. Credit, undoubtedly, if conducted upon fair principles, represents some capital actually in existence, and therefore does not really add to the accumulation or capital of the producers. But it enables men in trade at once to have stock and circulating capital—to use even their houses and shops and manufactories and implements; and to give, at the same time, a security to others upon that fixed capital. This process is, as it were, as if they coined that fixed capital. The credit, which is rendered as secure as possible in all its stages by the accumulating securities of the drawer, acceptor, and endorsers of a bill of exchange, brings capital into activity,—it carries it directly to those channels in which it may be profitably employed,—it conducts it to those channels by a systematic mode of payment for its use, which we call interest, or discount;—and it therefore carries forward accumulation to its highest point of productiveness.

If the reader will turn to the passage in our third chapter, where Tanner describes the refusal of the traders to give him credit, he will see how capital, advanced upon credit, sets industry in motion. The Indians had accumulated no store of skins to exchange for the trader's store of guns, ammunition, traps, and blankets. The trader, although he possessed the articles which the Indians wanted, refused to advance them upon the usual credit; and they were consequently as useless to the Indians as if they had remained in a warehouse at Liverpool or Glasgow. When the credit was taken away from the Indians, they could no longer be exchangers. Their own necessities for clothing were too urgent to enable them to turn their attention from that supply to accumulate capital for exchange, after the winter had passed away. They hunted only for themselves. The trader went without his skins, and the Indians without their blankets. Doubtless, the keenness of commercial activity soon saw that this state of things was injurious even to the more powerful party, for the accustomed credit was presently restored to the Indians. It was the only means by which that balance of power could be quickly restored which would enable the parties again to become exchangers. Every exchange presupposes a certain equality in the exchangers; and credit, therefore, from the capitalist to the non-capitalist, must, in many cases, be the first step towards any transaction of mutual profit. If the Indians had adopted the resolution of Tanner, to do without the blankets for the winter, and had substituted the more imperfect clothing of skins,—and if the traders had persevered in their system of refusing credit, that is, of advancing capital,—the exchange of furs must have been suspended, until, by incessant industry, and repeated self-denial, the Indians had become capitalists themselves. They probably, after a long series of laborious accumulations, might have done without the credit—that is, have not consumed the goods which they received before they were in a condition to give their own goods as equivalents; and then, as it usually happens in the exchanges of civilized society, they would have ensured a higher reward for their labour. The credit rendered the labour of the Indians loss severe, inasmuch as it allowed them to work with the aid of the accumulations of others, instead of with their own accumulations. But it doubtless gave the traders advantage, and justly so, in the terms of the exchange. If the Indians had brought their furs to the mart where the dealers had brought their blankets, there would have been exchange of capital for capital. As the Indians had not accumulated any furs, and were only hoping to accumulate, there was, on the part of the white traders, an advance of a present good for a remote equivalent. The traders had doubtless suffered by the casualties which prevented the Indians completing their engagements. They made a sudden, and therefore an unjust, change in their system. The forbearance of the Indians shows their respect for the rights of property, and their consequent appreciation of their own interests. They might, possessing the physical superiority, have seized the blankets and ammunition of the traders. If so, their exchanges would have been at an end; the capital would have gone to stimulate other industry; the Indians would have ripped up the goose with the golden eggs.

It is easy to see that the employment of capital, through the agency of credit, in all the minute channels of advanced commerce, must wholly depend upon the faith which one man has in the stability and the honesty of another; and also upon the certainty of the protection of the laws which establish security of property, to enforce the fulfilment of the contract.

It is necessary to establish this point of the security of property, as one of the rights, and we may add as the greatest right, of industry;—and therefore, at the risk of being thought tedious, we may call attention to the general state of the argument in reply to some who hold that the rights of property, and the rights of labour, are antagonistic.

The value of an article produced is the labour required for its production.

Capital, the accumulation of past labour, represents the entire amount of that labour which is not consumed;—it is the old labour stored up for exchange with new labour.

Those who attach an exclusive value to new labour as distinguished from old labour—or labour as distinguished from capital—say that the new production shall be stimulated by the old production, without allowing the old production to be exchanged against the new;—that is, that the old production shall be an instrument for the reward of new labour, but not a profitable one to its possessor.

The doctrine therefore amounts to this; that labour shall be exchanged with labour, but not with the produce of labour,—or that there shall be no exchange whatever;—for if the present labourers are to have the sole benefit of the capital, the principle of exchange, in which both exchangers benefit, is destroyed. There must be an end of all exchanges when the things to be exchanged are not equally desired by both parties. If the capitalist is to lend or give the capital to the labourer without a profit, or without a perfect freedom which would entitle him to withhold it if no profit could be obtained, the balance is destroyed between capital and labour. Accumulation is then at an end; because the security of the thing accumulated to the accumulator is at an end. The security is at an end, because if the new labour is to have the advantage of the old labour without compensation or exchange, the new labour must take the old labour by force or fraud; for the new cannot proceed without the old;—labour cannot stir without capital. Accumulation, therefore, being at an end, labour for an object beyond the wants of an hour is at an end. Society resolves itself into its first elements.

Strabo, the ancient geographer, has described a tribe amongst whom the title of the priest to the priesthood was acquired by having murdered his predecessor; and consequently the business of the priest in possession was not to discharge the duties of the priesthood, but to watch sword in hand, to defend himself against the new claimant to the office. If the principle were to be recognized, that the accumulation of former labour belongs to the present labourers; and that the best title to the accumulation is to have added nothing towards it, but only to be willing to add,—the title of the labourers in possession would require to be maintained by a constant encounter with new claimants; as the priest of Strabo, who had dispossessed the previous priest, had to dread a similar expulsion from his office, by a new violence.

The course of national misery resulting from national disorders always begins with financial embarrassment; by the destruction of capital, or its withdrawal from all useful works. Capital was circulated only because it could be circulated with security. If the present capitalists were driven away, as some reasoners would imply might easily be done, and the labourers were left to work the tools and steam-engines—to labour in the manufactories, and to inhabit the houses of the present capitalists,—production could not go on an hour, unless the appropriation of the plunder were secured to the individual plunderers.

In speaking of credit, then, we naturally turn to the only foundation upon which credit rests—the security of property. Commercial men, who know how easily credit is destroyed by individual guilt or imprudence, also know how easily it is interrupted, generally by a combination of circumstances over which an individual, apart from a nation, has no control. The instant that any circumstances take place which weaken the general confidence in the security of property, credit is withdrawn. The plant remains—the tools and warehouses stand—the shops are open; but production languishes, labour is suspended. The stocks of consumable commodities for the maintenance of labour may still in part exist, but they do not reach the labourer through the usual channels. Then men say, and say truly, confidence is shaken; the usual relations of society are disturbed. Capital fences itself round with prudence—hesitates to go on accumulating—refuses to put its existence in peril—withdraws in great part from production—

"Spreads its light wings, and in a moment flies."

Within these six years we have had before our eyes a fearful example of the universal evil created by the sudden loss of confidence in the security of property; The revolution of 1848, which overthrew the government of Louis Philippe, was associated with a general belief that the whole fabric of society was about to be shaken in the overthrow of capital. The capital was instantly withdrawn from circulation; there was no exchange; there was no labour. The more immediate sufferers were the workmen themselves; and the mode in which the ruling power relieved them by giving forced employment was wholly unavailing, except as a temporary expedient. After several dreadful months of tumult and bloodshed, a little confidence was restored by the pressure of an armed force; and when at length a government was established that rested upon security of property, it was hailed as the greatest of all blessings, although accompanied with some evils to which Englishmen, especially, cannot shut their eyes. When capital and labour could once more work in a safe union, France quickly developed those great natural resources with which she is blessed; and the ingenuity of her people was again called into activity, to carry forward and perfect those resources by higher and higher exertions of science and skill.

When the great body of the people of a country are so generally educated as to know that it is the interest of the humblest and the poorest that property shall be secure, there will be little occasion for fencing round property with guards, against the secret violence of the midnight robber, or the open daring of the noonday mob. "It is an enlightened moral public sentiment that must spread its wings over our dwellings, and plant a watchman at our doors."[35] A very little insecurity destroys the working of capital. The cloth trade of Verviers, a town in France, was utterly ruined, because the morals of the people in the town were so bad, and the police so ineffectual, that the thefts in the various stages of the manufacture amounted to eight per cent. upon the whole quantity produced. The trade of the place, therefore, was destroyed; and the capital went to encourage labour in places where the rights of property were better respected.

But, generally speaking, the security of property is not so much weakened by plunder, as by those incessant contentions which harass the march of capital and labour; and keep up an irritation between the classes of the capitalists and the labourers, who ought to be united in the most intimate compact for a common good. These irritations most frequently exhibit themselves in the shape of combinations for the advance of wages. We have no hesitation in declaring our opinion that it is the positive duty of the working-man to obtain as high wages as he can extract out of the joint products of capital and labour; and that he has an equal right to unite with other workmen in making as good a bargain as he can, consistently with the rights of others, for his contribution of industry to the business of production. But it is also necessary for us to declare our conviction that, in too many cases, the working men attempt an object which no single exertion, and no union however formidable or complete, can ever accomplish. They attempt to force wages beyond the point at which they could be maintained, with reference to the demand for the article produced;—and if they succeed they extinguish the demand, and therefore extinguish the power of working at any wages. They drive the demand, and therefore the supply, into new channels;—and they thrust out capital from amongst them, to work in other places where it can work with freedom and security. Above all, such combinations, and the resistance which they call up, have a tendency to loosen the bonds of mutual regard which ought to subsist between capitalists and labourers. Their real interests are one and the same.

All men are united in one bond of interests, and rights, and duties; and although each of us have particular interests, the parts which we play in society are so frequently changing, that under one aspect we have each an interest contrary to that which we have under another aspect. It is in this way that we find ourselves suddenly bound closely with those against whom we thought ourselves opposed a moment before; and thus no class can ever be said to be inimical to another class. In the midst, too, of all these instantaneous conflicts and unions, we are all interchangeably related in the double interest of capitalists and consumers,—that is, we have each and all an interest that property shall be respected, and that production shall be carried forward to its utmost point of perfection, so as to make its products accessible to all. The power of production, in its greatest developments of industry, is really addressed to the satisfaction of the commonest wants. If production, as in despotic countries, were principally labouring that some men might wear cloth of gold whilst others went naked, then we should say that production was exclusively for the rich oppressor. But, thank God, the man who exclusively wears "purple and fine linen every day" has ceased to exist. The looms do not work for him alone, but for the great mass of the people. It is to the staple articles of consumption that the capitals of manufactures and commerce address their employment. Their employment depends upon the ability of the great body of the people to purchase what they produce. The courtiers of the fifteenth century in France carried boxes of sugar-plums in their pockets, which they offered to each other as a constant compliment; the courtiers of the next age carried gingerbread in the same way; and lastly, the luxury of snuff drove out the sugar-plums and the gingerbread. But the consumption of tobacco would never have furnished employment to thousands, and a large revenue to the state, if the use of snuff had rested with the courtiers. The producers, consequently, having found the largest, and therefore the most wealthy class of consumers amongst the working men, care little whether the Peer wears a silk or a velvet coat, so that the Peasant has a clean shirt. When capital and labour work with freedom and security, the wants of all are supplied, because there is cheap production. It is a bad state of society where

"One flaunts in rags, one flutters in brocade."

Those who like the brocade may still wear it in a state of things where the rights of industry are understood; but the rags, taking the average condition of the members of society, are banished to the lands from which capital is driven,—while those who labour with skill, and therefore with capital, have decent clothes, comfortable dwellings, wholesome food, abundant fuel, medical aid in sickness, the comfort and amusement of books in health. These goods, we have no hesitation in saying, all depend upon the security of property; and he that would destroy that security by force or fraud is the real destroyer of the comforts of those humbler classes whose rights he pretends to advocate.

The principles which we maintain, that the interests of all men, and of the poorer classes especially, are necessarily advanced in a constantly increasing measure by the increase of capital and skill, have been put so strikingly by a philosophical writer, that we cannot forbear quoting so valuable an authority in support and illustration of our opinions:—

"The advantage conferred by the augmentation of our physical resources, through the medium of increased knowledge and improved art, have this peculiar and remarkable property,—that they are in their nature diffusive, and cannot be enjoyed in any exclusive manner by a few. An eastern despot may extort the riches and monopolize the art of his subjects for his own personal use; he may spread around him an unnatural splendour and luxury, and stand in strange and preposterous contrast with the general penury and discomfort of his people; he may glitter in jewels of gold and raiment of needle-work; but the wonders of well-contrived and executed manufacture which we use daily, and the comforts which have been invented, tried, and improved upon by thousands, in every form of domestic convenience, and for every ordinary purpose of life, can never be enjoyed by him. To produce a state of things in which the physical advantages of civilized life can exist in a high degree, the stimulus of increasing comforts and constantly elevated desires must have been felt by millions; since it is not in the power of a few individuals to create that wide demand for useful and ingenious applications, which alone can lead to great and rapid improvements, unless backed by that arising from the speedy diffusion of the same advantages among the mass of mankind."[36]

In looking back upon all the various circumstances which we have exhibited as necessary for carrying industry to the greatest point of productiveness, we think that we must have established satisfactorily that the two great elements which concur in rendering labour in the highest degree beneficial, are, 1st, the accumulated results of past labour, and 2nd, the contrivances by which manual labour is assisted,—those contrivances being derived from the accumulations of knowledge. Capital and skill, therefore, are essential to the productive power of labour. The different degrees in which each possesses capital and skill make the difference between an English manufacturer and a North American savage; and the less striking gradations in the productive power of the English manufacturer of the present time, and the English manufacturer of five hundred years ago, may be all resolved into the fact that the one has at his command a very large amount of capital and skill, and that the other could only command a very small amount of the same great elements of production.

We think, also, that we have shown that the accumulation of former labour in the shape of tangible wealth, and the accumulation of former labour in the shape of the no less real wealth of knowledge, are processes which go on together, each supporting, directing, and regulating the other. Knowledge is the offspring of some leisure resulting from a more easy supply of the physical wants; and that leisure cannot exist unless capital exists; which allows some men to live upon former accumulations. Capital, therefore, may be said to be the parent of skill, as capital and skill united are the encouragers and directors of profitable labour.

We have shown that the only foundation of accumulation is security of property—we have shown, too, that labour is the most sacred of properties. It results, therefore, that in any state of society in which the laws did not equally protect the capitalist and the labourer as free exchangers, each having the most absolute command over his property, compatible with a due regard to the rights of the other,—in such a state, where there was no real freedom and no real security, there would be very imperfect production; and production being imperfect, all men, the capitalists and the labourers, would be equally destitute, weak, ignorant, and miserable.

It is under these several conditions, all working together with united force, that the entire labour of this country, and indeed of all other countries advanced in civilization, must now be directed. The enormous increase of productiveness which we have exhibited, in so many operations of industry, is chiefly the result of production carried on upon a large scale, and working with every possible application of science. It is in this sense that Knowledge is Power; and skilled labour is a part of that power.

The mode in which the respective proportions of capitalist and labourer are assigned in the division of the products of industry, are called by one Profit, by the other Wages. If we were writing a treatise on Political Economy, we should have to regard Rent as distinct from the profits of capital. But for our purpose this is unnecessary. We proceed, then, to consider the practical relations of Profit and Wages, as they exist amongst us. Unquestionably the only solid foundation for these relations must be equal justice; without which there can be neither permanent prosperity nor increasing intelligence. A medal to our great philosopher, Locke, exhibits Justice and Plenty enthroned together.