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Miscellany: Notes On Political Economy: Capital

Miscellany: Notes On Political Economy: Capital image
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There nre some considerations respecting the 8aving of capital which deserve attcntion. Suppose I carry on a farn for a yenr, and mnke $1000 net profit. If I bury this sum in the earth, the nationnl capital will not bc diminished, but will rcmain the same it was last year. Suppose I 8pend the whole on one gfrarid" enterlainmcnt. Then the wholo valué will be destroycd in one day.because thoee lo whom I pay it render an equivalent in services, wines, provisione, &cOr euppose I lay it out in clothcs or furniture: the nalional copital will neither gnhi nor lose any thing. All that ís gaíned is additional comfort to me. Or lastly, suppose 1 buy more toals, hire more men, and improvs more land - in this cnse: I add to the nnlional capital so much more to be employed and return interest next yeat'. Henee we see that every prodigal is public pest and every careful and frugal person a benefactor to society. The tliousand dollars in the hnnds of the piodfgal is destroyed in a moment, while in the hands of a frugal man it is re-invefted, and brings an onnual profit not only to the eaver, but to every one whoec industry is eet in rnotion by it. Herfce also it is pïain that the practice of having rich clothcs, fine furniture and many 6ervants, is very unfavorable to the accumulation of productivo capital. It 6 the interest of every nation to endourage the accumulation of productive capital. In the Turkish empire, every weolthy peraon is afraid t0 4ÉSt hie capital Perniane7Illy. a"d hiigs it ascTIWab possiblo; henee anees much of the weukness of that empire, anti' the misery of the inhabitants. From the preceding considerations, it is evident tbat the poor man who can cali nothing his own is equally interested with his rich neiyhbor in upholding the inviolability of properfy. If therc were no occumulations of capital, h&w could he get.a iivelihoodi PRICE OF ARTICLESi Price current is that price whicb theowner ie aure to obiain for any article. Writers on Poütical Economy ]ny down certain rules Ty which prices rise or fall, bui which cannot be depended upon a ef universal npplication. Tliey eay ihat, othcr tWhga being equal, the greater the supplyfany anide, the less wi!l be'it prlnö: the less ihe supply, the greater theprice: the greater the demnnd tho grenter the price, and the ltss the dernond the less the price. Cost, that is, labor bestowed. is the foundation of price. and from this, for long periods, t wilj not greaily vary; that is, an anide can bc Had for what il co3s to produtíe it; including in this the ordihary profit to the producer. Ar actual reduction in the cost of any article, and consequently in its price, is o bt-nedt to a country to the full amount of the diminution. If wheat costs oue dollar per bushei, and by an irnprovcment in raising. it can be afforded for eeventy-five cents, the whole comrnuniiy is 50 much the richer; because it can be eold for less hy thé farmer, and bought for less by the consumer. Thie is a real variation of price. Butif wheat tlint gold for onc dotlir a month ngo, will sell for only fifty cents novv, while all other producís remain the eame, it is evident that to theselier their price wül be doul)lcd. This is a losa to him, and a gain to the consumer to the same amoünt.Improvaments in manufactures ahvays decrease the price. but add in much greater proportion to the demand. By the art of printing, each copy costa one twentieth of a written one: an equal incrense in demand would be on'.y twonty copies: whíreas the number eold probably exceeds a hundred. An increase in the actual cost of an articlc is always a diminiuion of the national weakh, and is disastrous to tlie consurners. If stockings were one dnliir per pair, ihcre are many who could nol aftbrd to buy them. If they wcre 88 cents per pair, a few more tvould buy. and so on downwards the demand would increase with the diminution of price until the poorest could buy them. In this way it is evident the comfort and happïness of the people would be increased without auy loss to any one, OF IfnUSTRT. When industry is limited to the bnrc coUection of natural producís, it is termed agriculture. When it is employed in compounding, severiiií and fashioning producís, it is cal led nianufaciuring industry. When it is employed in transporting products from place to place, it is called commerce He who labors in one ofthree depariments, is often obliged to labor in the others; and nearly uil products requi e two or there branches of industry. The oro in the mine is worthless uniil converted into steel or iron: these are worthless for cutting until made nto some cutting instrument: and when I wish to make a pen. a knife in Liverpool or Sheffield will be useless to me and must be transportad to my residence. ii purchasing a knife. I pay forall the values which hnve been thus conferred upon it, and for one as willingly as for anoiher. The labor employed ín the change of place óf commodilies, in civilized cjuntries. coniersa very considerable poriion of the valué. Any person can convince himself of this by considering the amountot trUnsportation that has entered into any one anide of dress, furniture or food, nnd of the instruments ihat have produced it. The same truth is also illustrated by the fact. tiiat whole nations, with sntall natural advnntages, like Holland and Venice, have, in a short period. become immensely rich, merely by confering a change of place on the mnrehandizo and productions of foreign nations.The ingenuity of tiiert has been much more succeseful in incrensing the produciiveness of labor in manufactures and commerce, than in airiculture. It ia true that mprovements have betfn made in varioue departmenta of agriculiure; but the increase of productiveness caused by ihem bears no comparison to thnt efiected by rpachrneiy in commerce, and manufactures. It may olso be remarked that agriculiure wil] not admit oi that minute división of labor whichobtnins in other departinents of industry. No man can devote himeelf ciclusively to ploughing, reaping or sowirïg. In the absence of all restraints, the profits of thpso different branthes of industry wil) be neariy on an ejuality: because any great difference of profit will cause a diversion oi capital into ihe more profitable channel.


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