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instead of profit; and an advantageous market a curse instead of a blessing. By inducing them to refuse to profit by the peculiar advantages in climate, soil, or industry, possessed by their neighbours, it has forced them in a great measure to give up their own.

It has for centuries done more, and perhaps for centuries to come will do more, to retard the improvement of Europe than all other causes put together.

3. LABOUR. The word Labour signifies both the act of labouring, and the result of that act. It is used in the first sense when we talk of the wages of labour; in the second when we talk of accumulated labour. When used to express the act of labouring, it may appear to have a precise sense, but it is still subject to some ambiguity. Say's definition* is, “action suivie, dirigée vers un bût.” Storch's, † “ l'action des facultés humaines dirigée vers un bût utile." These definitions include a walk taken for the purposes of health, and even the exertions of an agreeable converser.

The great defect of Adam Smith, and of our own economists in general, is the want of definitions. There is, perhaps, no definition of Labour by any British Economist. If Adam Smith had framed one, he would probably have struck out his celebrated distinction between “productive” and “unproductive” labourers; for it is difficult to conceive any definition of Labour which will admit the epithet “unproductive” to be applied to any of its subdivisions, excepting that of misdirected labour. On the other hand, if Mr. M'Culloch or Mr. Mill had defined Labour, they would scarcely have applied that term to the growth of a tree, or the improvement of wine in a cellar.

* “ Traité,” &c. Tome II. p. 506.
† “Cours,” &c. Liv. I. Chap. iv,

4. CAPITAL. This word, as might have been expected, from the complexity of the notions which it implies, has been used in very different senses.

It is, as usual, undefined by Adam Smith. The general meaning which he attached to it will however appear from his enumeration of its species. He divides it* into Fixed and Circulating: including in the first what the capitalist retains, in the second what he parts with. Fixed Capital he subdivides into–1. Machinery; 2. Shops and other buildings used for trade or manufacture; 3. Improvements of land; 4. Knowledge and skill. Circulating Capital he subdivides into—1. Money; 2. Provisions in the hands of the provision-venders; 3. Unfinished materials of manufacture; 4. Finished work in the hands of the merchant or manufacturer; such as furniture in a cabinet-maker's shop, or trinkets in that of a jeweller.

The following is a list of the definitions adopted by some of the most eminent subsequent economists:

Ricardot-“that part of the wealth of a country which is employed in production; consisting of food, clothing, tools, raw materials, machinery, &c., necessary to give effect to labour.”

Malthus 1–“that portion of the material possessions of a country which is destined to be employed with a view to profit."

Say 8—" accumulation de valeurs soustraites à la consomption improductive." Chap. iii. “ Machinery, necessaries of the workman, materials.”

Storch||—"un fonds de richesses destiné à la production matérielle."

* Book II. Chap. i.
+ “Principles of Political Economy,” p. 89, 3rd edit.
I “Principles,” &c. p. 293.
§ “Traité,” &c. Tome II. p. 454.
11 “ Cours,” &c. Liv. II. Chap. i.

M'Culloch* _“that portion of the produce of industry which can be made directly available to support human existence or facilitate production.”

Millt" something produced, for the purpose of being employed as the mean towards a further production.”

Torrens I—“Those things on which labour has been bestowed, and which are destined, not for the immediate supply of our wants, but to aid us in obtaining other articles of utility.”

It is obvious that few of these definitions exactly coincide. Adam Smith's (as implied in his use of the term ; for he gives no formal definition) excludes the necessaries of the labourer, when in his own possession ; all the rest (and perhaps with better reason) admit them. On the other hand, Adam Smith admits (and in that he seems to be right) those things which are incapable of productive consumption, provided they have not yet reached their con

All the other definitions, except perhaps that of Mr. Malthus, which is ambiguous, are subject to the inconsistency of affirming that a diamond, and the gold in which it is to be set, are Capital while the jeweller keeps them separate, but cease to be so when he has formed them into a ring; almost all of them, also, pointedly exclude knowledge and skill. The most objectionable, perhaps, is that of Mr. M'Culloch, which, while it excludes all the finished contents of a jeweller's shop, would include a racing-stud.

Adam Smith, however, is far from being consistent in his use of the word; thus, in the beginning of his second book he states, that all Capitals are destined for the maintenance of productive labour only. It is difficult to see


• “Principles," &c. p. 92.
† “ Elements,” &c. p. 19, 3rd edit.
I “Production of Wealth,” p. 5.

what labour is maintained by what is to be unproductively consumed.


Adam Smith first divided revenue into Rent, Wages, and Profit; and his division has been generally followed. The following definitions will best show the degree of precision with which these three terms have been employed.


1. Rent. What is paid for the licence to gather the produce of the land.-Book I. Chap. vi.

2. Wages. The price of labour.--Book I. Chap. v.

3. Profit. The revenue derived from stock by the person who manages or employs it.—Book I. Chap. vi.

Say. (Traité d'Economie Politique.) 4ème Edit.

2. Wages.

1. Rent. Le profit résultant du service productif de la terre.— Tome II. p. 169.

Le prix de l'achat d'un service productif industriel.--Tome II. p. 503.

3. Profit. La portion de la valeur produite, retirée par le capitaliste.—Tome I. p. 71, subdivided into intérêt, profit industriel, and profit capital.


(Cours d'Economie Politique.) Paris, 1823.

1. Rent. Le prix qu'on paye pour l'usage d'un fonds de terre.— Tome I.


354. 2. Wages. Le prix du travail.p. 283.

3. Profit. The returns to capital are considered by Storch, under the heads, rente de capital, and profit de l'entrepreneur. The first he divides into loyer, the hire of fixed capital, and intérêt, that of circulating capital. The second he considers as composed of, 1st, remuneration for the use of capital ; 2d, assurance against risk ; 3d, remuneration for trouble.—Liv. III. Chap. ii. viii. xiii. .

SISMONDI. (Nouveau Principes, fc.)

1. Rent. La part de la récolte annuelle du sol qui revient au propriétaire après qu'il a acquitté les frais qui l'ont fait naître ; and he analyzes rent into, 1st, la compensation du travail de la terre; 2d, le prix de monopole; 3d, la mieux valeur que le propriétaire obtient par la comparaison d'une terre de nature supérieure à une terre inférieure ; 4th, le révenu des capitaux qu'il a fixés luimême sur la terre, et ne peut plus en retirer.—Tome I.

p. 280.

2. Wages. Le prix du travail.—p. 91.

3. Profit. La valeur dont l'ouvrage achevé surpasse les avances qui l'ont fait faire. L'avantage qui résulte des travaux passés. Subdivided into intérêt and profit mercantile.—p. 94, 359.

Malthus. (Principles, fc.)

1. Rent. That portion of the value of the whole produce of land which remains to the owner after payment of all the outgoings of cultivation, including average profits on the capital employed. The excess of price above wages and profits.—p. 134.

2. Wages. The remuneration of the labourer for his personal exertions.—p. 240.

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