Two men employ equal capitals—one in agriculture, the other in manufactures. That in agriculture produces a net annual value of 1200l. of which 1000l. is retained for profit, and 200l. is paid for rent; the other in manufactures produces only an annual value of 1000l. Suppose that by importation, the same quantity of corn which cost 1200l. can be obtained for commodities which cost 950l., and that, in consequence, the capital employed in agriculture is diverted to manufactures, where it can produce a value of 1000l., the net revenue of the country will be of less value, it will be reduced from 2200l. to 2000l.; but there will not only be the same quantity of commodities and corn for its own consumption, but also as much addition to that quantity as 50l. would purchase, the difference between the value at which its manufactures were sold to the foreign country, and the value of the corn which was purchased from it.
Now this is precisely the question respecting the advantage of importing, or growing corn; it never can be imported till the quantity obtained from abroad by the employment of a given capital exceeds the quantity which the same capital will enable us to grow at home,—exceeds not only that quantity which falls to the share of the farmer, but also that which is paid as rent to the landlord.
Mr. Malthus says, "It has been justly observed by Adam Smith, that no equal quantity of produc
tive labour employed in manufactures can ever occasion so great a reproduction as in agriculture." If Adam Smith speaks of value, he is correct; but if he speaks of riches, which is the important point, he is mistaken; for he has himself defined riches to consist of the necessaries, conveniences, and enjoyments of human life. One set of necessaries and conveniences admits of no comparison with another set; value in use cannot be measured by any known standard; it is differently estimated by different persons.
ACCUMULATION of capital, effects of, on profits and
interest, 338-353.
Agriculture, effects of improvements in, on rents, 69–73. Im-
portance of them, 72, note. Is affected by the distress pro-
ceeding from sudden revulsions of trade, 311-319. Agri-
cultural improvements, no cause of the increase of rent,
501, 502.
Banks, establishment of, affects the sole power of the state in
coining money, 423, 424. Consequence of the Bank of
England issuing too great a quantity of paper, 424. That
corporation can only be prevented from abusing its
power of issuing paper money, by compelling it to pay its
notes either in gold coin or bullion, 426–430. The as-
sistance given by the Bank of England to commerce, ac-
counted for, 437, 438. See Paper Currency.
Bounties, on the exportation of corn, lower its price to the
foreign consumer, 354-362. Effects of a bounty in rais-
ing the price of corn, illustrated, 362. Though such bounty
may cause a partial degradation in the value of money, yet
such degradation cannot be permanent, 365-368. Boun-
ties on the exportation of manufactures raise their market
but not their natural price, 368-370. The sole effect of
bounty is to divert a portion of capital to an employment
which it would not naturally seek, 371. Evils of such a
system, 371–376. A bounty on the production of corn,
will produce no real effect on the annual produce of the
land and labour of the country, though it would make corn
relatively cheap, and manufactures relatively dear, 380—
384. But the effect of a tax on corn, in order to afford a
fund for a bounty on the production of commodities, would
be to enhance the price of corn, and render commodities
cheap, 385, 386.
Buchanan (Mr.), observations of, on Adam Smith's doctrine of
productive and unproductive labour, 66, note. His examin-
ation of Smith's opinion concerning taxes upon the wages
of labour, 246, 247. Remarks thereon, 247-271. Re-
marks on his opinions respecting bounties on exportation,
372, 373.
Capital, effects of, in a savage or infant state of society, 16, 17,
20, 21, 22. And in a more advanced state of society, 18,
19. The relative value of circulating and fixed capitals con-
sidered, 26-28. Effects of employing machinery and other
durable and fixed capital, 29-35. The unequal durability
of capital, and the unequal rapidity with which it is returned
to its employer, modifies the principle, that value does not
vary with the rise or fall of wages, 36-41. In what cases
capital creates rent, 58-60. The distinction between cir-
culating and fixed capitals difficult to be strictly defined,
162. Impolicy of taxes on capital, 163, 164. Governments
ought to encourage their people in a disposition to increase
their capitals, 166. Considerations on the different modes of
employing it, 55-60. The increase of capital in quantity
and value, productive of a rise in the natural price of wages,
89, 90. Increase of capital in quantity only, productive of
a rise in the market price of wages, ibid. Impolicy of taxes
on the transfer of capital, 167, 168. Effects of a tax on the
profits of capital, 241, 242. Effects of the accumulation of
capital on profits and interest, 338-353. The sole effect
of bounties on exportation, upon capital, is to divert a por-
tion of it to an employment which it would not naturally
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