The school distinguishes fixed capital from circulatingcapital, and classes under the former in a most remarkable mannera multitude of things which are in circulation without making anypractical application whatever of this distinction.The only casein which such a distinction can be of value, it passes by withoutnotice.The material as well as the mental capital is (namely)bound in a great measure to agriculture, to manufactures, tocommerce, or to special branches of either -- nay often, indeed, tospecial localities.Fruit trees, when cut down, are clearly not ofthe same value to the manufacturer (if he uses them for woodwork)as they are to the agriculturist (if he uses them for theproduction of fruit).Sheep, if, as has already frequently happenedin Germany and North America, they have to be slaughtered inmasses, have evidently not the value which they would possess whenused for the production of wool.Vineyards have (as such) a valuewhich, if used as arable fields, they would lose.Ships, if usedfor timber or for firewood, have a much lower value than when theyserve as means of transport.What use can be made of manufacturingbuildings, water-power, and machinery if the spinning industry isruined? In like manner individuals lose, as a rule, the greatestpart of their productive power, consisting in experience, habits,and skill, when they are displaced.The school gives to all theseobjects and properties the general name of capital, and wouldtransplant them (by virtue of this terminology) at its pleasurefrom one field of employment to another.J.B.Say thus advises theEnglish to divert their manufacturing capital to agriculture.Howthis wonder is to be accomplished he has not informed us, and ithas probably remained a secret to English statesmen to the presentday.Say has in this place evidently confounded private capitalwith national capital.A manufacturer or merchant can withdraw hiscapital from manufactures or from commerce by selling his works orhis ships and buying landed property with the proceeds.A wholenation, however, could not effect this operation except bysacrificing a large portion of its material and mental capital.Thereason why the school so deliberately obscures things which are soclear is apparent enough.If things are called by their propernames, it is easily comprehended that the transfer of theproductive powers of a nation from one field of employment toanother is subject to difficulties and hazards which do not alwaysspeak in favour of 'free trade,' but very often in favour ofnational protection.
NOTES:
1.Wealth of Nations, book IV.chap.ii.
2.Compare the following paragraph, which appeared in the Timesduring 1883:
'MANUFACTURES AND AGRICULTURE.The statistician of theAgricultural Department of the United States has shown in a recentreport that the value of farm lands decreases in exact proportionas the ratio of agriculture to other industries increases.That is,where all the labour is devoted to agriculture, the land is worthless than where only half of the people are farm labourers, andwhere only a quarter of them are so engaged the farms and theirproducts are still more valuable.It is, in fact, proved bystatistics that diversified industries are of the greatest value toa State, and that the presence of a manufactory near a farmincreases the value of the farm and its crops.It is furtherestablished that, dividing the United States into four sections orclasses, with reference to the ratio of agricultural workers to thewhole population, and putting those States having less than 30 percent of agricultural labourers in the first class, all having over30 and less than 50 in the second, those between 50 and 70 in thethird, and those having 70 or more in the fourth, the value offarms is in inverse ratio to the agricultural population; and that,whereas in the purely agricultural section, the fourth class, thevalue of the farms per acre is only $5 28c, in the next class it is$13 03c, in the third $22 21c, and in the manufacturing districts$40 91c.This shows an enormous advantage for a mixed district.Yetnot only is the land more valuable -- the production per acre isgreater, and the wages paid to farm hands larger.Manufactures andvaried industries thus not only benefit the manufacturers, but areof equal benefit and advantage to the farmers as well.The latterwould, therefore, do well to abandon their prejudice againstfactories, which really increase the value of their propertyinstead of depreciating it.' -- TR.
