of the country. It puts into motion an additional
quantity of industry, which gives an additional
value to the annual produce.
What is annually saved, is as regularly consumed
as what is annually spent, and nearly
in the same time too; but it is consumed by a
different set of people. That portion of his
revenue which a rich man annually spends, is,
in most cases, consumed by idle guests and
menial servants, who leave nothing behind
them in return for their consumption. That
portion which he annually saves, as, for the
sake of the profit, it is immediately employed
as a capital, is consumed in the same manner,
and nearly in the same time too, but by a different
set of people: by labourers, manufacturers,
and artificers, who re-produce, with a
profit, the value of their annual consumption.
His revenue, we shall suppose, is paid him in
money. Had he spent the whole, the food,
clothing, and lodging, which the whole could
have purchased, would have been distributed
among the former set of people. By saving a
part of it, as that part is, for the sake of the
profit, immediately employed as a capital, either
by himself or by some other person, the
food, clothing, and lodging, which may be
purchased with it, are necessarily reserved for
the latter. The consumption is the same, but
the consumers are different.
By what a frugal man annually saves, he
not only affords maintenance to an additional
number of productive hands, for that of the
ensuing year, but like the founder of a public
work-house he establishes, as it were, a perpetual
fund for the maintenance of an equal
number in all times to come. The perpetual
allotment and destination of this fund, indeed,
is not always guarded by any positive law, by
any trust-right or deed of mortmain. It is
always guarded, however, by a very powerful
principle, the plain and evident interest of every
individual to whom any share of it shall
ever belong. No part of it can ever afterwards
be employed to maintain any but productive
hands, without an evident loss to the
person who thus perverts it from its proper
destination.
The prodigal perverts it in this manner:
By not confining his expense within his income,
he encroaches upon his capital. Like
him who perverts the revenues of some pious
foundation to profane purposes, he pays the
wages of idleness with those funds which the
frugality of his forefathers had, as it were,
consecrated to the maintenance of industry.
By diminishing the funds destined for the employment
of productive labour, he necessarily
diminishes, so far as it depends upon him, the
quantity of that labour which adds a value to
the subject upon which it is bestowed, and,
consequently, the value of the annual produce
of the land and labour of the whole country,
the real wealth and revenue of its inhabitants.
If the prodigality of some was not compensated
by the frugality of others, the conduct
of every prodigal, by feeding the idle with the
bread of the industrious, tends not only to
beggar himself, but to impoverish his country.
Though the expense of the prodigal should
be altogether in home made, and no part of it
in foreign commodities, its effect upon the
productive funds of the society would still be
the same. Every year there would still be a
certain quantity of food and clothing, which
ought to have maintained productive, employed
in maintaining unproductive hands. Every
year, therefore, there would still be some
diminution in what would otherwise have been
the value of the annual produce of the land
and labour of the country.
This expense, it may be said, indeed, not
being in foreign goods, and not occasioning
any exportation of gold and silver, the same
quantity of money would remain in the country
as before. But if the quantity of food and
clothing, which were thus consumed by unproductive,
had been distributed among productive
hands, they would have reproduced, together
with a profit, the full value of their consumption.
The same quantity of money would, in
this case, equally have remained in the country,
and there would, besides, have been a reproduction
of an equal value of consumable
goods. There would have been two values
instead of one.
The same quantity of money, besides, cannot
long remain in any country in which the
value of the annual produce diminishes. The
sole use of money is to circulate consumable
goods. By means of it, provisions, materials,
and finished work, are bought and sold, and
distributed to their proper consumers. The
quantity of money, therefore, which can be
annually employed in any country, must be
determined by the value of the consumable
goods annually circulated within it. These
must consist, either in the immediate produce
of the land and labour of the country itself, or
in something which had been purchased with
some part of that produce. Their value,
therefore, must diminish as the value of that
produce diminishes, and along with it the
quantity of money which can be employed in
circulating them. But the money which, by
this annual diminution of produce, is annually
thrown out of domestic circulation, will not
be allowed to lie idle. The interest of whoever
possesses it requires that it should be employed;
but having no employment at home,
it will, in spite of all laws and prohibitions, be
sent abroad, and employed in purchasing consumable
goods, which may be of some use at
home. Its annual exportation will, in this
manner, continue for some time to add something
to the annual consumption of the country
beyond the value of its own annual
produce. What in the days of its prosperity
had been saved from that annual produce, and
employed in purchasing gold and silver will