First, then, it will be admitted on all hands that individual fortunes have been more rapidly accumulated in England at thosa times in which the profits in parti cular departments of industry were the highest. This admission is no more, in other words, than the truism, that when a trade is prosperous money is made by it. The next question is, whether a high rate of profit in all departments of in dustry has the same effect in augmenting the sum total of national capital. Poli tical reasoners are too apt to assume a universal analogy between individuals and nations, which is often deceptive, and leads to inaccurate conclusions. In the present instance, if this analogy were al lowed, it would be decisive of the whole question, and would exclude all observa tion of filets. The fact, as stated by Pro fessor Jones, is undeniable, that a fall in the rate of profits is the ordinary accom paniment of increasing population and land and in Holland, in proportion to the population, than in any country in the world, and in those countries the rate of profit is the lowest. The resources of England have been increasing in an ex traordinary manner during the last forty years, as evinced by the productiveness of the property-tax and other imposts, compared with former periods, and as proved by all statistics (Porter's Pro gress of the Nation, sect. vi.) ; and, at the same time, the more evident the wealth of the country has become, the lower has fallen the general rate of profits.
The examination of the causes of profit is reserved for a separate article [Pao trrsj ; but here it may be stated that a fall in the rate of profits is the inevita ble result of enormous accumulations of capital. Capitalists are forced into com petition with each other, and are ulti mately obliged to content themselves with lower profits. But, in the mean time, does the aggregate accumulation of national wealth diminish? This infer ence is contradicted by all the statistics which illustrate the progress and present condition of Great Britain. [CENsus of 1841.] All evidence shows that British ca pital is positively overflowing, and seeking employment in every enterprise at home or abroad. It is true that no statistics can de cide, with arithmetical precision, the com parative rate of increase in the accumula tion of capital at different times ; but so far as outward indications of wealth may be relied on, there are very few who are prepared to deny that -accumulation is now advancing, in the aggregate, at least as rapidly as ever, in proportion to the population of the country.
This fact, it is submitted, is neverthe less consistent with the general proposi tion, that high profits are favourable to accumulation. In calculating the aggre gate savings of a people already rich and populous, it must be borne in mind, first, that the existing generation has inherited the accumulations of many preceding ge nerations; and, secondly, that a large number of persona continually saving small portion of their individual gains, may produce a greater aggregate accu mulation than the ro rtionate With reference to the trs need only be observed, that if the rited capital be not squandered or wasted, its annual interest alone affords the means of enormous accumulation ; while the rent of land, the profits of trade, and the wages of labour, are continually supply ing new funds for further production and accumulation. The second point may be
made clearer by an illustration. Let us suppose one hundred men, each saving 10o/. annually out of their profits. Their aggregate accumulations would amount to 10,000/. But suppose one thousand men, with equal capitals, but unable, on account of a lower rate of profit, to save more than 50/. a year ; their aggregate accumulations would amount to 50,0001. In both cases they would have main tained themselves and their families out of their profits, and have paid the wages of all the labour required in their busi ness ; after which their savings remain available for increased production, and for the employment of a larger quantity of labour. This example falls far short of the circumstances of Great Britain, for the number of small capitalists is even more extraordinary than the enormous capitals possessed by a comparatively small num ber of wealthy men ; and their annual additions to the national capital are of incalculable amount.
The conclusions to which we are led by these inquiries, are—that a high rate of profit is favourable to accumulation ; that rich and populous countries are denied this advantage ; that if they enjoyed it, their capital would continue to increase more rapidly than it does, in fact, in crease ; but that, under ordinarily favour able circumstances, the masses of inherited capital and the aggregate savings of vast numbers of capitalists still facilitate accu mulation in a greater ratio than the increase of population, which a high state of civilization has a 'tendency to check. [PonnuaTiow.
II. The consideration of the application and uses of capital will be disembarrassed of much complexity by explaining, at the outset, the distinction raised by political economists between what is called produc tive and unproductive labour and expen d i tn re Tjp...navl tin• mediately destroyed by the use of them, as food or coals ; others are consumed more slowly, but are ultimately destroyed by use, as clothes or furniture : but what ever is the durability of the thing pro duced, its sole use is the enjoyment of man. A man is rich or poor according to his power of obtaining the various sources of enjoyment which the skill and industry of others produce ; and the aggregate of such permanent sources of enjoyment constitutes the wealth of nations. What ever labour or expenditure, therefore, may be devoted to the increase or conti nuance of those sources of enjoyment, must be deemed productive : and labour and expenditure, which have no such tendency, must be viewed as unpro ductive.