BOOK I. or in directly. in the place where they are required. The labour of policemen and others who are engaged in protecting industry is productive, because they confer upon commodities the important utility of security. But even the labour of productive labourers is not unfrequently unproductive. Public works have been commenced and abandoned; the labour which was bestowed upon these is of course wasted. A railway was constructed from Chesterford to Newmarket; it was closed almost from the first; there is now no chance of its being reopened, for the company has commenced reselling the land to its original proprietors; and thus the labour of even the most useful workmen may be unproductive. There is also labour which is eminently useful, but which, however, does not directly contribute to the production of wealth. As an example of this, it may be mentioned that, not many years since, the uneducated labourer was considered as efficient as the educated labourer, and employers were heard to regret those days when there were no schools to corrupt the industrial virtues of the workmen. When such opinions were current the labour of the schoolmaster must have been considered entirely unproductive, because it would have been supposed that, even if he did not impede, he certainly did not promote, the efficiency of the labourers, regarded as mere machines for the production of wealth. But now facts are every day coming to light which must impress us with the conviction that the schoolmaster occupies a most important position in the material economy of the nation. Even to manual labourers a properly developed mind is as essential as a well-developed body; and there can be no doubt that he who contributes in any manner to improve either the physical or intellectual condition of the people takes no unimportant part in assisting the nation's wealth. Much labour, therefore, which at first sight may seem unproductive, will appear, on further consideration, to exert an indirect influence upon the production of wealth. Popular notions attach a certain stigma to unproductive labour. No doubt, waste of any kind is to be deplored; but we should not be too prone to regret that so much labour is devoted to provide the pleasures of life, for the happiness of a nation may be in some degree estimated by the time and labour which can be spared for enjoyment: even the labour of those who provide these enjoyments is not altogether unproductive; a man will work with more vigour and efficiency if his mind can be diverted from the routine toil of life. BOOK I. CH. III. labour. From these remarks we are able to deduce a precise Definition definition of productive labour. The definition which is of productive now usually accepted, is as follows:- Productive labour is that which produces utilities fixed and embodied in material objects. According to this definition, the labour of the teacher is unproductive from whose instruction a mechanic acquires his skill. And yet the skill of our workmen ought to be classed as wealth, because the loss of this skill would diminish the wealth of the nation, as much as if she were deprived of a great amount of material wealth. If, however, the skill of the labourer is classified as wealth, we strain the use of the word 'wealth' beyond its usual acceptation; because wealth is always popularly conceived to be something material. We will therefore adopt the following definition :-Productive labour is that which either directly or indirectly produces utilities fixed and embodied in material objects. According to this definition, the labour of the teacher who imparts skill to the mechanic is productive, for by this skill wealth is created-or, in other words, utilities are embodied in material objects, and therefore the labour of the teacher indirectly produces these utilities, and his labour must consequently be classified as productive. The definition, moreover, obviates the necessity of running counter to popular language, for this is undoubtedly done if we denominate as wealth such an immaterial object as the skill of a mechanic. For the purposes of political economy, there is another distinction, as important as that between productive and unproductive labour. Much of that which is produced is destined to be wasted, or to be consumed unproductively. The wants of those who never contribute, either directly or indirectly, to the wealth of the nation must be supplied by the results of productive labour; and hence a portion only of the results of productive labour assists in the formation of new wealth. Consumption, therefore, as well as labour, may be either productive or unproductive. Productive and unpro ductive consump tion. BOOK I. CH. III. Although the entire consumption of unproductive labourers must be unproductive, yet it does not follow that commodities are always consumed productively by productive labourers. For instance, even the poorest labourers in this country purchase some luxuries which they could abstain from, without in the slightest degree diminishing the efficiency of their labour. All such purchases, therefore, even if made by the most productive labourers, denote unproductive consumption. The distinction between productive and unproductive consumption will assume considerable importance in the remarks we are about to make upon capital. WE CHAPTER IV. OF CAPITAL. BOOK I. CH. 1V. E have already explained that capital is as indispensable a requisite of production as either labour or appropriate natural agents. A very little consideration Definition will render it evident that labourers, whilst engaged in of capital. any particular industry, cannot live upon the commodity which their labour is assisting to produce. | The ploughman who tills the soil from which, in the following autumn, the harvest will be gathered, is fed with the wealth which his master has saved; or, in other words, the master pays his labourer's wages from the wealth which he has previously saved. The production of wealth, therefore, cannot proceed unless some of the wealth previously produced has been set aside from immediate consumption. The wealth which has been accumulated with the object of assisting production, is termed capital; and, therefore, the capital of the country is the wealth which is not immediately consumed unproductively, and which may, consequently, be devoted to assist the further production of wealth. This is a wide definition, but it is correct and sufficiently definite until the subject has been more fully elucidated. In the general introductory remarks upon wealth, particular attention was directed to that current fallacy which confounds money with wealth. The student, in obtaining his primary conceptions of capital, is not unfrequently confused by a similar fallacy. Capital, like other wealth, is estimated and expressed in money. Hence the idea is encouraged that capital consists of money, to the exclusion of any other commodity; although, perhaps, adhesion would not often be professed to such a proposition F. M. B Fallacy of confound. ing capital with money. BOOK I. all in actual employment. when stated in plain terms; yet, when the error can be partially concealed in some of the difficulties of complicated questions, it will be found to vitiate many popular opinions which at first sight appear plausible. Capital, let it again be borne in mind, is all that wealth, in whatever shape or form it may exist, which is set aside to assist future production. It is true that if, for instance, you ask a farmer how much capital he has with which to work his farm, he will reply that he has so many thousand pounds, but his capital is not actually in money, and even if it were in money it could not fulfil the functions of capital until the money had been exchanged for various commodities. For why does a farmer require capital to work his farm? He requires capital because implements and stock are wanted, and because he must have money, or some other property in hand which he converts into money, in order to pay the wages of his labourers; although a farmer estimates his capital in money, he obtains the amount of this estimate by ascertaining the pecuniary value of the various items of which his capital is composed. In making this calculation, he takes account of the value of his stock, his implements, and the amount of money which it is necessary for him to keep in hand in order to pay his labourers' wages, and to provide the outlay which is requisite for other purposes. Capital not It has been just stated that the whole capital of any country is the sum of the wealth existing in any shape or form which has been set aside with the object of being devoted to assist future production. Hence it is manifest that the whole capital of the country is not at any particular time actually employed. This may be readily explained by an illustration. Let us consider some commodity, such as wheat, which is produced in our own country, and to simplify the matter we will suppose that all the wheat of one harvest is consumed by the time the next harvest is gathered in. Now it may naturally be asked, What portion of this wheat ought at any time to be regarded as constituting capital? Immediately the harvest is gathered in, the wheat is of course so much wealth, and at that time just so much of the wheat as each individual owner intends to employ productively is capital. But this affords no correct estimate of |