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tion of

Definition of Consumption-Consumption the end of Production Consump-
-Test of Advantageous and Disadvantageous Consumption- Wealth.
Error of Dr. Smith's Opinions with respect to Unproductive
Consumption-Error of those who contend, that to facilitate
Production it is necessary to encourage Consumption-Cause of
Gluts-Consumption of Government-Conclusion.

of Con

We formerly showed, that, by the production of a commodity Definition was not meant the production of matter, for that is exclusively sumption. the prerogative of Omnipotence, but the giving to matter already in existence such a shape as might fit it for ministering to our wants and enjoyments.* In like manner, by consumption is not meant the consumption, or annihilation of matter, for that is equally impossible as its creation, but merely the consumption or annihilation of those qualities which render commodities useful and desirable. To consume the products of art or industry is, therefore, really to deprive the matter of which they consist of the utility, and consequently of the exchangeable value communicated to it by labour. And hence we are not to measure consumption by the magnitude, the weight, or the number of the products consumed, but exclusively by their value. Large consumption is the destruction of large value,however small the bulk in which that value may happen to be compressed.

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tion the end

Consumption, in the sense in which the word is used by Po- Consumplitical Economists, is synonymous with use. We produce com- of Producmodities only that we may be able to use or consume them.† tion.

for its importance, a few further hints will open the subject to the reader in some of its many bearings, and lay down the principles that should govern the practical legislator as well as the theoretical economist in deciding upon them.-E.

**This definition extended a step further, so as to embrace that accumulation of products which we term capital, will throw light on that important subject. It is a common prejudice to regard capital as existing in certain definite forms, such as money, houses, or lands. This definition, however, extends our notion of it to all that possesses value. The material form is something incidental and unimportant, the real capital is immaterial, and, as it were, spiritual, existing in value and use, in its relation to the wants of man and the needs of society. Thus a man's capital may be doubled or diminished to one half its amount, without the alteration of one particle of the matter of that in which it consisted, a position which is illustrated in every rise and fall of property-as, for instance, city lots and houses doubling in value by increase of inhabitants,-farms, by facility of intercourse, or, on the other hand, houses without chance of tenants, or ships of freight.—E.

f As an exception to this assertion might be started by an unpractised reader, the case of articles produced for sale. The answer is, that the language of our author is general and scientific,-having reference, not to individuals, but to man in general. To him, consumption is the sole object of production and the sole application of products.

In regard of the foreign exchanges which one country makes with another, there may appear some doubt as to the true method of stating them, in estimating its production and consumption. The clearest and simplest light in which they can be placed is to rank all exportation as consumption, and all importation as reproduction. The merchant consumes his exports and reproduces his imports. Among the just and striking analogies which arise on viewing the subject in this light, are the following:

1. Commerce appears under a new character, it becomes a species of manufacture, which consuming reproductively the surplus of the annual yield of the country, reproduces it under a new and more valuable form,-by a

tion of Wealth.

Consump Consumption is the great end and object of all human industry. Production is merely a means to attain an end. No one would produce were it not that he might afterward consume. All the products of art and industry are destined to be consumed, or made use of; and when a commodity is brought into a state fit to be used, if its consumption be deferred a loss is incurred. All products are intended either to satisfy the immediate wants, or to add to the enjoyment of their producers; or they are intended to be employed as capital, and made to reproduce a greater value than themselves. In the first case, by delaying to use them, it is plain we either refuse to satisfy a want, or deny ourselves a gratification it is in our power to obtain ;-and in the second,

new kind of alchemy it converts wheat into gold and cotton into silk, or into whatsoever other metal, or material, or form, the dealers a tthis new manufacturing mill may choose to require. If we could suppose this transformation thus effected by art and skill, what limit could we set to the national value of an engine of such superhuman powers, and what difference does it make to the nation, while it receives the benefit, as to the particular process by which the conversion is effected.

2. In estimating the benefits of commerce, it teaches us that we need look no further than the warehouse of the merchant; that which goes in is to be -compared with that which comes out; what passes in the interval is nothing more than the process of the manufacture,-the merchant scatters his wheat upon the waters as the farmer does his upon the land, and "after many days he finds it,”—to judge of the national benefit, there is no more necessity of tracing the changes it undergoes on the bosom of the one than in the dark recesses of the other. In the case of the farmer, we learn the quantity sown and the crop that he has reaped, and are satisfied that in the proportion which exists between them lies all which is material to himself or the nation. The subdivision of his farm, the rotation of his crops, and the nature of his fences, we leave confidently to the operation of self-interest and private judgment. So is it with the merchant, he sows cotton and reaps silk; what is it to the public whether it be upon land or water; that it brings a good crop is all, that concerns the public to know, and that is known by it continuing to be cultivated. As to the various processes through which that which is consumed passes before it issues again in its new form, that is, as to all the detail of commercial balances, markets, and exchanges, it is an analysis as foreign to the determination of the result, as an examination into the progress of vegetation would be, previous to deciding on the profits of the farmer.

3. This analogy serves to set in a still stronger light, the absurdity of resting the benefits of commerce upon the balance of trade,-or rather it shows that the rule is to be reversed, so far as any conclusion can be drawn from it. In a good crop, whether from land or sea, the returns must exceed the outlay-and the farmer, and the merchant, and the country alike grow rich, just in proportion as they do so.

These observations may serve also to show the identity of interest that prevails throughout all the classes of the community, and the fallacy of dividing them into separate interests. Who is the farmer, and who is the manufacturer? Or rather, what merchant is there who is not either the one or the other. If he furnish to the country of the produce of the ground he is the former, if the results of after labour he is the latter,—no matter what materials he makes them out of, or with what machines he works, or by what name he may be popularly distinguished, to the eye of the political economist, and in so far as he is connected with national interests, the merchant is a woollen, or cotton, or iron manufacturer, the proprietor of a vineyard, or the manager of a sugar plantation, just according to the varying nature of the products which are the result of his labour. The community, as such, has but one interest, viz. the cheapness and goodness of the commodities it consumes. The science knows no such interest as that of the producer, that interest is always a monopoly. Production is but the means to an end,--and the producer is, in all cases, but the servant of the public.-E.

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by delaying to use them, it is equally plain we allow the instru- Consumpments of production to lie idle, and lose the profit that might be tionof derived from their employment.

Wealth.

vantageous

But, although all commodities are produced only to be con- Test of adsumed, we must not fall into the error of supposing, that all con- Consump sumption is equally advantageous to the individual, or the so- tion. cięty. If an individual employs a set of labourers to build him a house the one summer, and to pull it down the next, their labour, or rather the capital he gave them in exchange for their labour, and which they have consumed during the time they were engaged in this futile employment, is evidently destroyed for ever, and absolutely lost both to himself and the public; whereas, had he employed them in the raising of corn, or in the production of any species of valuable produce, he would have obtained commodities of equal, or more than equal, value to the capital he gave them. The value of the return, or the advantage obtained from the consumption, is, therefore, the true and only test of advantageous and disadvantageous, or, as it is more commonly termed, of productive and unproductive consumption. Commodities are consumed productively when the advantage or benefit accruing in consequence to their possessors, or when the value of the products obtained in their stead exceeds their value; and they are consumed unproductively when the value of the advantage or benefit, or the value of the new commodities, is less than their value. It is on this balance of consumption and reproduction, and not, as was so long supposed, on the balance of trade, that the prosperity or decay of every nation depends. If, in given periods, the commodities produced in a country exceed those consumed in it, the means of increasing its capital will be provided, and its population will either increase, or the actual numbers will be better accommodated, or both. If the consumption in such periods fully equals the reproduction, no means will be afforded of increasing the stock or capital of the nation, and society will be at a stand. And if the consumption exceeds the reproduction, every succeeding period will see the society worse supplied; its prosperity and population will evidently decline, and pauperism will gradually and progressively spread itself over the whole country.

It is impossible, however, to fix on any standard by a comparison with which we may be able to obtain even a tolerable approximation to the comparative value or advantage of different kinds of consumption. This is a point on which the sentiments of no two individuals can ever exactly coincide. The opinions of each will always depend more or less on the situation in which he is placed. The rich man will naturally be inclined to give a greater extension to the limits of advantageous consumption than the man of middling fortune; and the latter than the man who is poor. And it is undoubtedly true that a man's expenses ought always to bear some proportion to the magnitude of his fortune, and his condition in society; and that what might be proper and advantageous expenditure in one case, might be exceedingly improper and disadvantageous in another. It is, therefore, quite Impossible to frame any system of rules on the subject of expenditure, which shall be applicable to the case of every individual; and even if it were practicable, there is no ground to think that

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Consumption of Wealth.

Luxury not disadvantageous.

the formation of such rules would be of the smallest utility. The state has no right whatever to control individual expenditure; nor, even if it had such a right, could it exercise it without occasioning serious injury. The public interest requires that the national capital should, if possible, be constantly kept on the increase; or, which is the same thing, that the consumption of any given period should be made the means of reproducing a greater value. But we have sufficiently proved that this cannot, in any case, or under any circumstances, be the result of a system of surveillance and restriction. Industry and frugality never have been, and never can be, promoted by such means. To render a man industrious, secure him the peaceable enjoyment of the fruits of his industry;-to wean him from extravagance, and to render him frugal and parsimonious, allow him to reap all the disadvantage of the one line of conduct, and all the advantage of the other. The poverty and loss of station which is the necessary and inevitable result of improvident and prodigal consumption, is a sufficient security against its ever becoming injuriously prevalent; and wherever the public burdens are moderate, property protected, and the perfect and uncontrolled freedom of industry secured, the constant efforts of the great body of the people to rise in the world and improve their condition, will ensure the continued increase of national wealth. It is idle to expect that all unproductive and unprofitable expenditure can ever be avoided; but the experience of all tolerably well governed states proves, that the amount of the produce of industry productively expended, is always infinitely greater than that which is expended unproductively.

It was long a prevalent opinion among moralists, that the labour bestowed on the production of luxuries, and consequently their consumption, was unproductive. But this opinion is now almost universally abandoned. Unless, indeed, all comforts and enjoyments are to be proscribed, it is impossible to say where necessaries end, and luxuries begin. But if we are to understand by necessaries such products only as are absolutely required for the support of human life, every thing but wild fruits, roots, and water, must be deemed superfluous; and in this view of the matter, the peasantry of Ireland, who live only on potatoes and butter-milk, must be considered as contributing much more to the national wealth than the peasantry of Britain! The mere statement of such a doctrine is sufficient for its refutation. Every thing that stimulates exertion is advantageous. The mere necessaries of life may be obtained with comparatively little labour; and those savage and uncivilized hordes, who have no desire to possess its comforts, are proverbially and notoriously indolent and dissipated. To make men industrious-to make them shake off that lethargy which is natural to them, they must be inspired with a taste for the luxuries and enjoyments of civilized life. When this is done, their artificial wants will become equally clamorous with those that are strictly necessary, and they will increase exactly as the means of gratifying them increase. Wherever a taste for comforts and conveniencies has been generally diffused, the wants and desires of man become altogether unlimited. The gratification of one leads directly to the formation of another. In highly civilized societies, new

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products and new modes of enjoyment are constantly presenting Consump
themselves as motives to exertion, and as means of rewarding it. Wealth.
Perseverance is, in consequence, given to all the operations of
industry; and idleness, and its attendant train of evils, almost
entirely disappear. What," asks Dr. Paley,
66 can be less
necessary, or less connected with the sustentation of human life,
than the whole produce of the silk, lace, and plate manufactory?
Yet what multitudes labour in the different branches of these
arts! What can be imagined more capricious than the fondness
for tobacco and snuff? Yet how many various occupations, and
how many thousands in each, are set at work in administering
to this frivolous gratification!" It is the stimulus which the de-
sire to possess these articles of luxury gives to industry that
renders their introduction advantageous. The earth is capable
of furnishing food adequate for the support of a much greater
portion of human beings than can be employed in its cultivation.
But those who are in possession of the soil will not part with
their produce for nothing; or rather, they will not raise at all
what they can neither use themselves nor exchange for what
they want. As soon, however, as a taste for conveniencies and
luxuries has been introduced, the occupiers of the ground raise
from it the utmost that it can be made to produce, and exchange
the surplus for such conveniencies and gratifications as they are
desirous of obtaining and, in consequence, the producers of
these articles, though they have neither property in the soil, nor
any concern in its cultivation, are regularly and liberally supplied
with its produce. In this way, the quantity of necessaries, as
well as of useful and, agreeable products, is vastly increased by
the introduction of a taste for luxuries; and the population are,
in consequence, not only better provided for, but their numbers
are proportionably and greatly augmented.

It is plain, therefore, that the consumption of luxuries cannot, provided it be confined within proper limits, be justly considered as either disadvantageous or unproductive. If, indeed, a man were to consume more luxuries than his labour or his fortune enabled him to command, his consumption would be disadvantageous. But it is plain, the same thing would equally have happened had he consumed a greater quantity of necessaries than he could afford. The mischief does not consist in the species of articles consumed, but in the excess of their value over the means of purchasing them possessed by the consumers. This, however, is a fault which ought always to be left to be corrected by the self-interest of those concerned. The poverty and degradation caused by indulging in unproductive consumption is a natural and sufficient guarantee against its ever being carried to an injurious extent. To attempt to lessen unproductive consumption by proscribing luxury, is really the same thing as to attempt to enrich a country by taking away some of the most powerful motives to production.*

* That sumptuary laws are unwise may be judged from their general abandonment; once they were common throughout Europe, now they are confined almost to the mountains of Switzerland. At an early period. they formed a prominent feature of the colonial laws of our country, but as their old annalist observes, survived not its "golden age." They were found here, as elsewhere, to be inconsistent with the progress of

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