A capital may be employed in four different ways: either, first, in procuring
the rude produce annually required for the use and consumption of the society;
or, secondly, in manufacturing and preparing that rude produce for immediate
use and consumption; or, thirdly, in transporting either the rude or manufactured
produce from the places where they abound to those where they are wanted;
or, lastly, in dividing particular portions of either into such small parcels
as suit the occasional demands of those who want them. In the first way are
employed the capitals of all those who undertake the improvement or cultivation
of lands, mines, or fisheries; in the second, those of all master manufacturers;
in the third, those of all wholesale merchants; and in the fourth, those
of all retailers. It is difficult to conceive that a capital should be employed
in any way which may not be classed under some one or other of those four.
Each of these four methods of employing a capital is essentially necessary
either to the existence or extension of the other three, or to the general
conveniency of the society.
Unless a capital was employed in furnishing rude produce to a certain degree
of abundance, neither manufactures nor trade of any kind could exist.
Unless a capital was employed in manufacturing that part of the rude produce
which requires a good deal of preparation before it can be fit for use and
consumption, it either would never be produced, because there could be no
demand for it; or if it was produced spontaneously, it would be of no value
in exchange, and could add nothing to the wealth of the society.
Unless a capital was employed in transporting either the rude or manufactured
produce from the places where it abounds to those where it is wanted, no
more of either could be produced than was necessary for the consumption of
the neighbourhood. The capital of the merchant exchanges the surplus produce
of one place for that of another, and thus encourages the industry and increases
the enjoyments of both.
Unless a capital was employed in breaking and dividing certain portions
either of the rude or manufactured produce into such small parcels as suit
the occasional demands of those who want them, every man would be obliged
to purchase a greater quantity of the goods he wanted than his immediate
occasions required. If there was no such trade as a butcher, for example,
every man would be obliged to purchase a whole ox or a whole sheep at a time.
This would generally be inconvenient to the rich, and much more so to the
poor. If a poor workman was obliged to purchase a month's or six months'
provisions at a time, a great part of the stock which he employs as a capital
in the instruments of his trade, or in the furniture of his shop, and which
yields him a revenue. he would be forced to place in that part of his stock
which is reserved for immediate consumption, and which yields him no revenue.
Nothing can be more convenient for such a person than to be able to purchase
his subsistence from day to day, or even from hour to hour, as he wants it.
He is thereby enabled to employ almost his whole stock as a capital. He is
thus enabled to furnish work to a greater value, and the profit, which he
makes by it in this way, much more than compensates the additional price
which the profit of the retailer imposes upon the goods. The prejudices of
some political writers against shopkeepers and tradesmen are altogether without
foundation. So far is it from being necessary either to tax them or to restrict
their numbers that they can never be multiplied so as to hurt the public,
though they may so as to hurt one another. The quantity of grocery goods,
for example, which can be sold in a particular town is limited by the demand
of that town and its neighbourhood. The capital, therefore, which can be
employed in the grocery trade cannot exceed what is sufficient to purchase
that quantity. If this capital is divided between two different grocers,
their competition will tend to make both of them sell cheaper than if it
were in the hands of one only; and if it were divided among twenty, their
competition would be just so much the greater, and the chance of their combining
together, in order to raise the price, just so much the less. Their competition
might perhaps ruin some of themselves; but to take care of this is the business
of the parties concerned, and it may safely be trusted to their discretion.
It can never hurt either the consumer or the producer; on the contrary, it
must tend to make the retailers both sell cheaper and buy dearer than if
the whole trade was monopolized by one or two persons. Some of them, perhaps,
may sometimes decoy a weak customer to buy what he has no occasion for. This
evil, however, is of too little importance to deserve the public attention,
nor would it necessarily be prevented by restricting their numbers. It is
not the multitude of ale-houses, to give the most suspicious example, that
occasions a general disposition to drunkenness among the common people; but
that disposition arising from other causes necessarily gives employment to
a multitude of ale-houses.
The persons whose capitals are employed in any of those four ways are themselves
productive labourers. Their labour, when properly directed, fixes and realizes
itself in the subject or vendible commodity upon which it is bestowed, and
generally adds to its price the value at least of their own maintenance and
consumption. The profits of the farmer, of the manufacturer, of the merchant,
and retailer, are all drawn from the price of the goods which the two first
produce, and the two last buy and sell. Equal capitals, however, employed
in each of those four different ways, will immediately put into motion very
different quantities of productive labour, and augment, too, in very different
proportions the value of the annual produce of the land and labour of the
society to which they belong.
The capital of the retailer replaces, together with its profits, that of
the merchant of whom he purchases goods, and thereby enables him to continue
his business. The retailer himself is the only productive labourer whom it
immediately employs. In his profits consists the whole value which its employment
adds to the annual produce of the land and labour of the society.
The capital of the wholesale merchant replaces, together with their profits,
the capitals of the farmers and manufacturers of whom he purchases the rude
and manufactured produce which he deals in, and thereby enables them to continue
their respective trades. It is by this service chiefly that he contributes
indirectly to support the productive labour of the society, and to increase
the value of its annual produce. His capital employs, too, the sailors and
carriers who transport his goods from one place to another, and it augments
the price of those goods by the value, not only of his profits, but of their
wages. This is all the productive labour which it immediately puts into motion,
and all the value which it immediately adds to the annual produce. Its operation
in both these respects is a good deal superior to that of the capital of
the retailer.
Part of the capital of the master manufacturer is employed as a fixed capital
in the instruments of his trade, and replaces, together with its profits,
that of some other artificer of whom he purchases them. Part of his circulating
capital is employed in purchasing materials, and replaces, with their profits,
the capitals of the farmers and miners of whom he purchases them. But a great
part of it is always, either annually, or in a much shorter period, distributed
among the different workmen whom he employs. It augments the value of those
materials by their wages, and by their matters' profits upon the whole stock
of wages, materials, and instruments of trade employed in the business. It
puts immediately into motion, therefore, a much greater quantity of productive
labour, and adds a much greater value to the annual produce of the land and
labour of the society than an equal capital in the hands of any wholesale
merchant.
No equal capital puts into motion a greater quantity of productive labour
than that of the farmer. Not only his labouring servants, but his labouring
cattle, are productive labourers. In agriculture, too, nature labours along
with man; and though her labour costs no expense, its produce has its value,
as well as that of the most expensive workmen. The most important operations
of agriculture seem intended not so much to increase, though they do that
too, as to direct the fertility of nature towards the production of the plants
most profitable to man. A field overgrown with briars and brambles may frequently
produce as great a quantity of vegetables as the best cultivated vineyard
or corn field. Planting and tillage frequently regulate more than they animate
the active fertility of nature; and after all their labour, a great part
of the work always remains to be done by her. The labourers and labouring
cattle, therefore, employed in agriculture, not only occasion, like the workmen
in manufactures, the reproduction of a value equal to their own consumption,
or to the capital which employs them, together with its owners' profits;
but of a much greater value. Over and above the capital of the farmer and
all its profits, they regularly occasion the reproduction of the rent of
the landlord. This rent may be considered as the produce of those powers
of nature, the use of which the landlord lends to the farmer. It is greater
or smaller according to the supposed extent of those powers, or in other
words, according to the supposed natural or improved fertility of the land.
It is the work of nature which remains after deducting or compensating everything
which can be regarded as the work of man. It is seldom less than a fourth,
and frequently more than a third of the whole produce. No equal quantity
of productive labour employed in manufactures can ever occasion so great
a reproduction. In them nature does nothing; man does all; and the reproduction
must always be in proportion to the strength of the agents that occasion
it. The capital employed in agriculture, therefore, not only puts into motion
a greater quantity of productive labour than any equal capital employed in
manufactures, but in proportion, too, to the quantity of productive labour
which it employs, it adds a much greater value to the annual produce of the
land and labour of the country, to the real wealth and revenue of its inhabitants.
Of all the ways in which a capital can be employed, it is by far the most
advantageous to the society.
The capitals employed in the agriculture and in the retail trade of any
society must always reside within that society. Their employment is confined
almost to a precise spot, to the farm and to the shop of the retailer. They
must generally, too, though there are some exceptions to this, belong to
resident members of the society.
The capital of a wholesale merchant, on the contrary, seems to have no fixed
or necessary residence anywhere, but may wander about from place to place,
according as it can either buy cheap or sell dear.
The capital of the manufacturer must no doubt reside where the manufacture
is carried on; but where this shall be is not always necessarily determined.
It may frequently be at a great distance both from the place where the materials
grow, and from that where the complete manufacture is consumed. Lyons is
very distant both from the places which afford the materials of its manufactures,
and from those which consume them. The people of fashion in Sicily are clothed
in silks made in other countries, from the materials which their own produces.
Part of the wool of Spain is manufactured in Great Britain, and some part
of that cloth is afterwards sent back to Spain.
Whether the merchant whose capital exports the surplus produce of any society
be a native or a foreigner is of very little importance. If he is a foreigner,
the number of their productive labourers is necessarily less than if he had
been a native by one man only, and the value of their annual produce by the
profits of that one man. The sailors or carriers whom he employs may still
belong indifferently either to his country or to their country, or to some
third country, in the same manner as if he had been a native. The capital
of a foreigner gives a value to their surplus produce equally with that of
a native by exchanging it for something for which there is a demand at home.
It as effectually replaces the capital of the person who produces that surplus,
and as effectually enables him to continue his business; the service by which
the capital of a wholesale merchant chiefly contributes to support the productive
labour, and to augment the value of the annual produce of the society to
which he belongs.
It is of more consequence that the capital of the manufacturer should reside
within the country. It necessarily puts into motion a greater quantity of
productive labour, and adds a greater value to the annual produce of the
land and labour of the society. It may, however, be very useful to the country,
though it should not reside within it. The capitals of the British manufacturers
who work up the flax and hemp annually imported from the coasts of the Baltic
are surely very useful to the countries which produce them. Those materials
are a part of the surplus produce of those countries which, unless it was
annually exchanged for something which is in demand there, would be of no
value, and would soon cease to be produced. The merchants who export it replace
the capitals of the people who produce it, and thereby encourage them to
continue the production; and the British manufacturers replace the capitals
of those merchants.
A particular country, in the same manner as a particular person, may frequently
not have capital sufficient both to improve and cultivate all its lands,
to manufacture and prepare their whole rude produce for immediate use and
consumption, and to transport the surplus part either of the rude or manufactured
produce to those distant markets where it can be exchanged for something
for which there is a demand at home. The inhabitants of many different parts
of Great Britain have not capital sufficient to improve and cultivate all
their lands. The wool of the southern counties of Scotland is, a great part
of it, after a long land carriage through very bad roads, manufactured in
Yorkshire, for want of capital to manufacture it at home. There are many
little manufacturing towns in Great Britain, of which the inhabitants have
not capital sufficient to transport the produce of their own industry to
those distant markets where there is demand and consumption for it. If there
are any merchants among them, they are properly only the agents of wealthier
merchants who reside in some of the greater commercial cities.
When the capital of any country is not sufficient for all those three purposes,
in proportion as a greater share of it is employed in agriculture, the greater
will be the quantity of productive labour which it puts into motion within
the country; as will likewise be the value which its employment adds to the
annual produce of the land and labour of the society. After agriculture,
the capital employed in manufactures puts into motion the greatest quantity
of productive labour, and adds the greatest value to the annual produce.
That which is employed in the trade of exportation has the least effect of
any of the three.
The country, indeed, which has not capital sufficient for all those three
purposes has not arrived at that degree of opulence for which it seems naturally
destined. To attempt, however, prematurely and with an insufficient capital
to do all the three is certainly not the shortest way for a society, no more
than it would be for an individual, to acquire a sufficient one. The capital
of all the individuals of a nation has its limits in the same manner as that
of a single individual, and is capable of executing only certain purposes.
The capital of all the individuals of a nation is increased in the same manner
as that of a single individual by their continually accumulating and adding
to it whatever they save out of their revenue. It is likely to increase the
fastest, therefore, when it is employed in the way that affords the greatest
revenue to all the inhabitants of the country, as they will thus be enabled
to make the greatest savings. But the revenue of all the inhabitants of the
country is necessarily in proportion to the value of the annual produce of
their land and labour.
It has been the principal cause of the rapid progress of our American colonies
towards wealth and greatness that almost their whole capitals have hitherto
been employed in agriculture. They have no manufactures, those household
and courser manufactures excepted which necessarily accompany the progress
of agriculture, and which are the work of the women and children in every
private family. The greater part both of the exportation and coasting trade
of America is carried on by the capitals of merchants who reside in Great
Britain. Even the stores and warehouses from which goods are retailed in
some provinces, particularly in Virginia and Maryland, belong many of them
to merchants who reside in the mother country, and afford one of the few
instances of the retail trade of a society being carried on by the capitals
of those who are not resident members of it. Were the Americans, either by
combination or by any other sort of violence, to stop the importation of
European manufactures, and, by thus giving a monopoly to such of their own
countrymen as could manufacture the like goods, divert any considerable part
of their capital into this employment, they would retard instead of accelerating
the further increase in the value of their annual produce, and would obstruct
instead of promoting the progress of their country towards real wealth and
greatness. This would be still more the case were they to attempt, in the
same manner, to monopolize to themselves their whole exportation trade.
The course of human prosperity, indeed, seems scarce ever to have been of
so long continuance as to enable any great country to acquire capital sufficient
for all those three purposes; unless perhaps, we give credit to the wonderful
accounts of the wealth and cultivation of China, of those of ancient Egypt,
and of the ancient state of Indostan. Even those three countries, the wealthiest,
according to all accounts, that ever were in the world, are chiefly renowned
for their superiority in agriculture and manufactures. They do not appear
to have been eminent for foreign trade. The ancient Egyptians had a superstitious
antipathy to the sea; a superstition nearly of the same kind prevails among
the Indians; and the Chinese have never excelled in foreign commerce. The
greater part of the surplus produce of all those three countries seems to
have been always exported by foreigners, who gave in exchange for it something
else for which they found a demand there, frequently gold and silver.
It is thus that the same capital will in any country put into motion a greater
or smaller quantity of productive labour, and add a greater or smaller value
to the annual produce of its land and labour, according to the different
proportions in which it is employed in agriculture, manufactures, and wholesale
trade. The difference, too, is very great, according to the different sorts
of wholesale trade in which any part of it is employed.
All wholesale trade, all buying in order to sell again by wholesale, may
be reduced to three different sorts. The home trade, the foreign trade of
consumption, and the carrying trade. The home trade is employed in purchasing
in one part of the same country, and selling in another, the produce of the
industry of that country. It comprehends both the inland and the coasting
trade. The foreign trade of consumption is employed in purchasing foreign
goods for home consumption. The carrying trade is employed in transacting
the commerce of foreign countries, or in carrying the surplus produce of
one to another.
The capital which is employed in purchasing in one part of the country in
order to sell in another the produce of the industry of that country, generally
replaces by every such operation two distinct capitals that had both been
employed in the agriculture or manufactures of that country, and thereby
enables them to continue that employment. When it sends out from the residence
of the merchant a certain value of commodities, it generally brings back
in return at least an equal value of other commodities. When both are the
produce of domestic industry, it necessarily replaces by every such operation
two distinct capitals which had both been employed in supporting productive
labour, and thereby enables them to continue that support. The capital which
sends Scotch manufactures to London, and brings back English corn and manufactures
to Edinburgh, necessarily replaces by every such operation, two British capitals
which had both been employed in the agriculture or manufactures of Great
Britain.
The capital employed in purchasing foreign goods for home consumption, when
this purchase is made with the produce of domestic industry, replaces too,
by every such operation, two distinct capitals; but one of them only is employed
in supporting domestic industry. The capital which sends British goods to
Portugal, and brings back Portuguese goods to Great Britain, replaces by
every such operation only one British capital. The other is a Portuguese
one. Though the returns, therefore, of the foreign trade of consumption should
be as quick as those of the home trade, the capital employed in it will give
but one half the encouragement to the industry or productive labour of the
country.
But the returns of the foreign trade of consumption are very seldom so quick
as those of the home trade. The returns of the home trade generally come
in before the end of the year, and sometimes three or four times in the year.
The returns of the foreign trade of consumption seldom come in before the
end of the year, and sometimes not till after two or three years. A capital,
therefore, employed in the home trade will sometimes make twelve operations,
or be sent out and returned twelve times, before a capital employed in the
foreign trade of consumption has made one. If the capitals are equal, therefore,
the one will give four-and-twenty times more encouragement and support to
the industry of the country than the other.
The foreign goods for home consumption may sometimes be purchased, not with
the produce of domestic industry, but with some other foreign goods. These
last, however, must have been purchased either immediately with the produce
of domestic industry, or with something else that had been purchased with
it; for, the case of war and conquest excepted, foreign goods can ever be
acquired but in exchange for something that had been produced at home, either
immediately, or after two or more different exchanges. The effects, therefore,
of a capital employed in such a roundabout foreign trade of consumption,
are, in every respect, the same as those of one employed in the most direct
trade of the same kind, except that the final returns are likely to be still
more distant, as they must depend upon the returns of two or three distinct
foreign trades. If the flax and hemp of Riga are purchased with the tobacco
of Virginia, which had been purchased with British manufactures, the merchant
must wait for the returns of two distinct foreign trades before he can employ
the same capital in re-purchasing a like quantity of British manufactures.
If the tobacco of Virginia had been purchased, not with British manufactures,
but with the sugar and rum of Jamaica which had been purchased with those
manufactures, he must wait for the returns of three. If those two or three
distinct foreign trades should happen to be carried on by two or three distinct
merchants, of whom the second buys the goods imported by the first, and the
third buys those imported by the second, in order to export them again, each
merchant indeed will in this case receive the returns of his own capital
more quickly; but the final returns of the whole capital employed in the
trade will be just as slow as ever. Whether the whole capital employed in
such a round-about trade belong to one merchant or to three can make no difference
with regard to the country, though it may with regard to the particular merchants.
Three times a greater capital must in both cases be employed in order to
exchange a certain value of British manufactures for a certain quantity of
flax and hemp than would have been necessary had the manufactures and the
flax and hemp been directly exchanged for one another. The whole capital
employed, therefore, in such a round-about foreign trade of consumption will
generally give less encouragement and support to the productive labour of
the country than an equal capital employed in a more direct trade of the
same kind.
Whatever be the foreign commodity with which the foreign goods for home
consumption are purchased, it can occasion no essential difference either
in the nature of the trade, or in the encouragement and support which it
can give to the productive labour of the country from which it is carried
on. If they are purchased with the gold of Brazil, for example, or with the
silver of Peru, this gold and silver, like the tobacco of Virginia, must
have been purchased with something that either was the produce of the industry
of the country, or that had been purchased with something else that was so.
So far, therefore, as the productive labour of the country is concerned,
the foreign trade of consumption which is carried on by means of gold and
silver has all the advantages and all the inconveniences of any other equally
round-about foreign trade of consumption, and will replace just as fast or
just as slow the capital which is immediately employed in supporting that
productive labour. It seems even to have one advantage over any other equally
roundabout foreign trade. The transportation of those metals from one place
to another, on account of their small bulk and great value, is less expensive
than that of almost any other foreign goods of equal value. Their freight
is much less, and their insurance not greater; and no goods, besides, are
less liable to suffer by the carriage. An equal quantity of foreign goods,
therefore, may frequently be purchased with a smaller quantity of the produce
of domestic industry, by the intervention of gold and silver, than by that
of any other foreign goods. The demand of the country may frequently, in
this manner, be supplied more completely and at a smaller expense than in
any other. Whether, by the continual exportation of those metals, a trade
of this kind is likely to impoverish the country from which it is carried
on, in any other way, I shall have occasion to examine at great length hereafter.
That part of the capital of any country which is employed in the carrying
trade is altogether withdrawn from supporting the productive labour of that
particular country, to support that of some foreign countries. Though it
may replace by every operation two distinct capitals, yet neither of them
belongs to that particular country. The capital of the Dutch merchant, which
carries the corn of Poland to Portugal, and brings back the fruits and wines
of Portugal to Poland, replaces by every such operation two capitals, neither
of which had been employed in supporting the productive labour of Holland;
but one of them in supporting that of Poland, and the other that of Portugal.
The profits only return regularly to Holland, and constitute the whole addition
which this trade necessarily makes to the annual produce of the land and
labour of that country. When, indeed, the carrying trade of any particular
country is carried on with the ships and sailors of that country, that part
of the capital employed in it which pays the freight is distributed among,
and puts into motion, a certain number of productive labourers of that country.
Almost all nations that have had any considerable share of the carrying trade
have, in fact, carried it on in this manner. The trade itself has probably
derived its name from it, the people of such countries being the carriers
to other countries. It does not, however, seem essential to the nature of
the trade that it should be so. A Dutch merchant may, for example, employ
his capital in transacting the commerce of Poland and Portugal, by carrying
part of the surplus produce of the one to the other, not in Dutch, but in
British bottoms. It may be presumed that he actually does so upon some particular
occasions. It is upon this account, however, that the carrying trade has
been supposed peculiarly advantageous to such a country as Great Britain,
of which the defence and security depend upon the number of its sailors and
shipping. But the same capital may employ as many sailors and shipping, either
in the foreign trade of consumption, or even in the home trade, when carried
on by coasting vessels, as it could in the carrying trade. The number of
sailors and shipping which any particular capital can employ does not depend
upon the nature of the trade, but partly upon the bulk of the goods in proportion
to their value, and partly upon the distance of the ports between which they
are to be carried; chiefly upon the former of those two circumstances. The
coal trade from Newcastle to London, for example, employs more shipping than
all the carrying trade of England, though the ports are at no great distance.
To force, therefore, by extraordinary encouragements, a larger share of the
capital of any country into the carrying trade than what would naturally
go to it will not always necessarily increase the shipping of that country.
The capital, therefore, employed in the home trade of any country will generally
give encouragement and support to a greater quantity of productive labour
in that country, and increase the value of its annual produce more than an
equal capital employed in the foreign trade of consumption: and the capital
employed in this latter trade has in both these respects a still greater
advantage over an equal capital employed in the carrying trade. The riches,
and so far as power depends upon riches, the power of every country must
always be in proportion to the value of its annual produce, the fund from
which all taxes must ultimately be paid. But the great object of the political
economy of every country is to increase the riches and power of that country.
It ought, therefore, to give no preference nor superior encouragement to
the foreign trade of consumption above the home trade, nor to the carrying
trade above either of the other two. It ought neither to force nor to allure
into either of those two channels a greater share of the capital of the country
than what would naturally flow into them of its own accord.
When the produce of any particular branch of industry exceeds what the demand
of the country requires, the surplus must be sent abroad and exchanged for
something for which there is a demand at home. Without such exportation a
part of the productive labour of the country must cease, and the value of
its annual produce diminish. The land and labour of Great Britain produce
generally more corn, woollens, and hardware than the demand of the home market
requires. The surplus part of them, therefore, must be sent abroad, and exchanged
for something for which there is a demand at home. It is only by means of
such exportation that this surplus can acquire a value sufficient to compensate
the labour and expense of producing it. The neighbourhood of the sea-coast,
and the banks of all navigable rivers, are advantageous situations for industry,
only because they facilitate the exportation and exchange of such surplus
produce for something else which is more in demand there.
When the foreign goods which are thus purchased with the surplus produce
of domestic industry exceed the demand of the home market, the surplus part
of them must be sent abroad again and exchanged for something more in demand
at home. About ninety-six thousand hogsheads of tobacco are annually purchased
in Virginia and Maryland with a part of the surplus produce of British industry.
But the demand of Great Britain does not require, perhaps, more than fourteen
thousand. If the remaining eighty-two thousand, therefore, could not be sent
abroad and exchanged for something more in demand at home, the importation
of them must cease immediately, and with it the productive labour of all
those inhabitants of Great Britain, who are at present employed in preparing
the goods with which these eighty-two thousand hogsheads are annually purchased.
Those goods, which are part of the produce of the land and labour of Great
Britain, having no market at home, and being deprived of that which they
had abroad, must cease to be produced. The most round-about foreign trade
of consumption, therefore may, upon some occasions, be as necessary for supporting
the productive labour of the country, and the value of its annual produce,
as the most direct.
When the capital stock of any country is increased to such a degree that
it cannot be all employed in supplying the consumption and supporting the
productive labour of that particular country, the surplus part of it naturally
disgorges itself into the carrying trade, and is employed in performing the
same offices to other countries. The carrying trade is the natural effect
and symptom of great national wealth; but it does not seem to be the natural
cause of it. Those statesmen who have been disposed to favour it with particular
encouragements seem to have mistaken the effect and symptom for the cause.
Holland, in proportion to the extent of the land and the number of its inhabitants,
by far the richest country in Europe, has, accordingly, the greatest share
of the carrying trade of Europe. England, perhaps the second richest country
of Europe, is likewise supposed to have a considerable share of it; though
what commonly passes for the carrying trade of England will frequently, perhaps,
be found to be no more than a round-about foreign trade of consumption. Such
are, in a great measure, the trades which carry the goods of the East and
West Indies, and of America, to different European markets. Those goods are
generally purchased either immediately with the produce of British industry,
or with something else which had been purchased with that produce, and the
final returns of those trades are generally used or consumed in Great Britain.
The trade which is carried on in British bottoms between the different ports
of the Mediterranean, and some trade of the same kind carried on by British
merchants between the different ports of India, make, perhaps, the principal
branches of what is properly the carrying trade of Great Britain.
The extent of the home trade and of the capital which can be employed in
it, is necessarily limited by the value of the surplus produce of all those
distant places within the country which have occasion to exchange their respective
productions with another: that of the foreign trade of consumption, by the
value of the surplus produce of the whole country and of what can be purchased
with it: that of the carrying trade by the value of the surplus produce of
all the different countries in the world. Its possible extent, therefore,
is in a manner infinite in comparison of that of the other two, and is capable
of absorbing the greatest capitals.