Political Economy [43]
were, but the manufacturer had imagined them to be richer, and regulated his production according to an income which does not exist. Income, of which we have seen all the different sources in the second chapter, is a material and consumable thing; it springs from labour; it is destined for enjoyment; it is exactly of the same nature with the advances in wages and raw material laid out by the manufacturer; and money is but the sign and the measure of it. The capital it should replace is also composed of material objects, destined for consumption, and incessantly renewed. Money serves but to represent it, and always forms the smallest part of each merchant's funds. We have supposed the cloth-maker to possess 100,000 l.; but, it half this sum is employed in fixed capitals, it will be sufficient, if his sale amount weekly to 1200 l. to give him, in the shape of interest and profit, 20 per cent. on his circulating capital, and to allow 1000 l weekly, in money, to maintain an annual production of 60,000 l.; so that he never possesses in cash more than the fiftieth part of his circulating capital. An increase of the national capitals is the most powerful encouragement of labour; either because this augmentation presupposes an augmentation of income, and, consequently, of means of consumption; or because these capitals, not being profitable to their proprietor, except as they are employed, each capitalist incessantly endeavours to create new production by their means. In distributing them to his workmen, he gives to those workmen revenue which enables them to purchase and consume the preceding year's production; and he sees those capitals return increased by the revenue, which he is to expect from them in the following year's production. But though he distributes and afterwards recovers them, by means of the circulating medium, which serves for all exchanges, it is not the circulating medium which forms the essential requisite in his operation. The same cloth-maker, labouring each year on an equal quantity, sends 2400 pieces of cloth to the market, which have been valued at 60,000 l. or 25 l. a piece. He exchanges 400 pieces for such objects of consumption as are needed to supply the wants, the enjoyments, the luxuries of himself and family. He exchanges 2000 pieces for the raw materials, and the labour which, within the year, are to re-produce an equal quantity; and thus next year, and every following year, he will have, as before, 2400 pieces to exchange on the same conditions. His capital, equally with his revenue, is actually in cloths, not in money; and the perpetual result of his commerce is to exchange cloth against cloth. If the consumption of cloth is increased, if by this means his trade, in place of comprehending 2400 pieces annually, comprehends 3000, more labour will, no doubt, be ordered by him, and executed by his workmen; but if the money alone is increased, and not the consumption or the income which determines it, labour and production cannot increase. Let us take separately each one of his customers, as he calls them. There is not one of them who does nor levy a greater or a smaller portion of his income in kind, but all may arrange matters so as to receive the whole of it in money. They are not, however, more rich on this account; they will not be at more expense; they will not buy more cloth from him, and this trade will experience no kind of augmentation. What happens to individuals may equally happen to nations. The revenue of a country or the sum total of profits arising from the different kinds of labour, amounted, we shall say, last year, and this year, to fifty millions; but last year the country levied all its profit in goods, in merchandise destined for its consumption; this year, from some mercantile circumstance, some arrangement of exchanges, it has levied the fourth, the third part, in money imported through the frontiers. It is neither richer nor poorer, for this alteration; its consumption will, as formerly, be fifty millions; and with regard to the money imported, apparently its industry