Reflections on the Formation and Distribution of wealth [28]
cultivated islands. If this sea happens to give way, in proportion as it descends, sloping ground, then plains and vallies appear, which cover themselves with productions of every kind. It wants no more than a foot elevation, or falling, to inundate or to restore culture to unmeasurable tracts of land. It is the abundance of capitals that animates enterprize; and a low interest of money is at the same time the effect and a proof of the abundance of capitals.
91. The total Riches of a nation consists, 1. in the clear revenue of all the real estates, multiplied by the rate of the price of land. 2. in the sum of all the moveable riches existing in a nation.
Real estates are equivalent to any capital equal to their annual revenue, multiplied by the current rate at which lands are sold. Thus if we add the revenue of all lands, viz. the clear revenue they render to the proprietor, and to all those that share in the property, as the lord that levies a rent, the curate that levies the tythe, the sovereign that levies the tax; if say I, we should add all these sums, and multiply them by the rate at which lands are sold, we would have the sum of all the wealth of a nation in real estates. To have the whole of a nation's wealth, the moveable riches ought to be joined, which consist in the sum of capitals converted into enterprises of culture, industry, and commerce, which is never lost; as all advances, in any kind of undertaking, must unceasingly return to the undertaker, to be unceasingly converted into enterprises, which without that could not be continued. It would be a gross mistake to confound the immense mass of moveable riches with the mass of money that exists in a state; the latter is a small object in comparison with the other. To convince one's self of this, we need only remember the immense quantity of beasts, utensils, and seed, which constitute the advances of agriculture; the materials, tools, moveables, and merchandises of every kind, that fill up the work-houses, shops, and warehouses of all manufacturers, of all merchants, and of all traders, and it will be plain, that in the totality of riches either real or moveable of a nation, the specie makes but an inconsiderable part: but all riches and money being continually exchangeable, they all represent money, and money represents them all.
92. The sum of lent capitals cannot be understood without a two-fold reckoning.
We must not include in the calculation of the riches of a nation the sum of lent capitals; for the capitals could only be lent either to proprietors of lands, or to undertakers to enhance their value in their enterprizes, since there are but these two kinds of people that can answer for a capital, and discharge the interest: a sum of money lent to people that have neither estate nor industry, would be a dead capital, and not an active one. If the owner of land of 400,000 livres borrows 100,000, his land is charged with a rent that diminishes his revenue by that sum. If he should sell it; out of the 400,000 livres he would receive, 100,000 are the property of the creditor. By these means the capital of the lender would always form, in the calculation of existing riches, a double estimate. The land is always worth 400,000 l. when the proprietor borrows 100,000 l. that does not make 500,000 l. it only follows, that in the 400,000 l. one hundred thousand belongs to the lender, and that there remains no more than 300,000 l. to the borrower. The same double estimate would have place in the calculation, if we should comprehend in the total calculation of capitals, the money lent to an undertaker to be employed in advance for his undertaking; it only results, that that sum, and the part of the profits which represents the interest, belongs to the lender. Let a merchant employ 10,000 livres of his property in his trade, and engross the whole profit, or let him have those 10,000 livres borrowed of another, to whom he pays the interest, and is satisfied with the overplus of profit, and the salary of his industry, it still makes only
91. The total Riches of a nation consists, 1. in the clear revenue of all the real estates, multiplied by the rate of the price of land. 2. in the sum of all the moveable riches existing in a nation.
Real estates are equivalent to any capital equal to their annual revenue, multiplied by the current rate at which lands are sold. Thus if we add the revenue of all lands, viz. the clear revenue they render to the proprietor, and to all those that share in the property, as the lord that levies a rent, the curate that levies the tythe, the sovereign that levies the tax; if say I, we should add all these sums, and multiply them by the rate at which lands are sold, we would have the sum of all the wealth of a nation in real estates. To have the whole of a nation's wealth, the moveable riches ought to be joined, which consist in the sum of capitals converted into enterprises of culture, industry, and commerce, which is never lost; as all advances, in any kind of undertaking, must unceasingly return to the undertaker, to be unceasingly converted into enterprises, which without that could not be continued. It would be a gross mistake to confound the immense mass of moveable riches with the mass of money that exists in a state; the latter is a small object in comparison with the other. To convince one's self of this, we need only remember the immense quantity of beasts, utensils, and seed, which constitute the advances of agriculture; the materials, tools, moveables, and merchandises of every kind, that fill up the work-houses, shops, and warehouses of all manufacturers, of all merchants, and of all traders, and it will be plain, that in the totality of riches either real or moveable of a nation, the specie makes but an inconsiderable part: but all riches and money being continually exchangeable, they all represent money, and money represents them all.
92. The sum of lent capitals cannot be understood without a two-fold reckoning.
We must not include in the calculation of the riches of a nation the sum of lent capitals; for the capitals could only be lent either to proprietors of lands, or to undertakers to enhance their value in their enterprizes, since there are but these two kinds of people that can answer for a capital, and discharge the interest: a sum of money lent to people that have neither estate nor industry, would be a dead capital, and not an active one. If the owner of land of 400,000 livres borrows 100,000, his land is charged with a rent that diminishes his revenue by that sum. If he should sell it; out of the 400,000 livres he would receive, 100,000 are the property of the creditor. By these means the capital of the lender would always form, in the calculation of existing riches, a double estimate. The land is always worth 400,000 l. when the proprietor borrows 100,000 l. that does not make 500,000 l. it only follows, that in the 400,000 l. one hundred thousand belongs to the lender, and that there remains no more than 300,000 l. to the borrower. The same double estimate would have place in the calculation, if we should comprehend in the total calculation of capitals, the money lent to an undertaker to be employed in advance for his undertaking; it only results, that that sum, and the part of the profits which represents the interest, belongs to the lender. Let a merchant employ 10,000 livres of his property in his trade, and engross the whole profit, or let him have those 10,000 livres borrowed of another, to whom he pays the interest, and is satisfied with the overplus of profit, and the salary of his industry, it still makes only