power in some of the departments of national industry; and have merely attempted to show, that even with such an admission, an assumption that the decrease necessarily originates in agriculture, is inamissible. Hereafter, we shall have occasion to prove, that the admission itself is too large; that a decrease in the rate of profit with stationary wages, does not of itself indicate any diminution of the productive power in the population; that it is even quite consistent with advancing efficiency in the national industry, and may be accompanied by a steady increase of the power of accumulating fresh capital; but the developement of this proposition belongs to another part of our subject."*

If the whole product be divided, as it must be, between the producer and the owner of the capital, and one remain stationary while the other is depressed, the cause is to be found in decreased production. It cannot "be accompanied by a steady increase in the power of accumulating fresh capital.”

Mr. Jones has shown very clearly that facts are in decided opposition to the doctrine of Messrs. Malthus and Ricardo, but he was himself embarrassed by that of monopoly and appropriation, and he did not remark that the reduction in the proportion of the capitalist is accompanied by an increased return for the use of capital. In consequence he has, we think, failed to give a satisfactory view of the causes of the variations in the mode of distribution.

We here close this review, and must now request the reader to turn to Chapter IX, and read the summary there given of the laws of the production and distribution of wealth, and satisfy himself whether they, or those proposed by the other writers whose works we have reviewed, are most in accordance with the phenomena offered to his consideration in the various states of society.

In the course of this investigation we have had occasion to use several terms in a sense different from that which is attached to them by some other writers, and will therefore now proceed to offer our definitions, with the reasons for using them in the manner we have done.

* Jones on the Distribution of Wealth, pp. 274, 275.

CHAPTER XVIII.

OF REVENUE.-DEFINITION.

DR. JOHNSON defines revenue to be "income: annual profits derived from land, or other funds." The fund which supplies revenue to the workman, is his labour: to the merchant, his activity and judgment: to the capitalist, his houses, mills, or stocks: to the landlord, his land: to the government, that portion of each which is required to defray the expenses of the state: to the nation, the whole sum of labour and of capital by which it is aided.

The commodities produced by an individual in any given period of time, constitute his revenue for that time. Those produced by a family, or by a community of any size, constitute the revenue of that community. All the commodities thus produced have value, and therefore we say that the sum of exchangeable values produced constitutes the revenue of a country.

This meaning of the term is perfectly well understood, and it is singular that Adam Smith should have used it differently. Instead of using it to designate the annual product, he applies it only to that portion which is annually expended, and in this mode of application he is followed by Mr. Malthus,* and many other writers.

If this mode of using it be sanctioned, the man who receives rents to the amount £ 1000 per annum and expends the whole, must be deemed to have a larger revenue than his neighbour who receives £ 2000 and applies £ 1200 of it to the increase of his capital; and the workman who expends the whole of his wages, has a larger revenue than his fellow workman who deposits a portion in the saving fund. Such a departure from

* "The workman whom the capitalist employs consumes that part of his wages which he does not save, as revenue, with a view to subsistence or enjoyment; and not as capital with a view to production."-Malthus, Definitions, p. 258.

"If the words revenue and income were co-extensive with expenditure, the common statement that a man is living within his income, would be a contradiction in terms."-Senior, Outline, p. 168.

the ordinary meaning of words cannot but cause difficulty, and should always be avoided. A recent writer, after mentioning that the farmers of England are compelled to live on their capital instead of their profits, says, "they are obliged to convert their capital into revenue," an expression which could not be understood by any one who was not initiated into the mysteries of the science. Our object being to avoid mystery, and to render the science easy of comprehension, we have used the word according to the definition of Dr. Johnson, including under it the whole product of labour. When it is said then that the revenue of one individual, or nation, is twice as great as that of another, the meaning can be understood without difficulty, but if there be attached to it the idea of double expenditure, a glossary must be supplied to enable the reader to comprehend it.

A portion of the revenue is expended, and the remainder, being laid by to accumulate, constitutes CAPITAL.

• Wealth of Nations, note on Chapter V., Book 2, by Mr. Wakefield.

CHAPTER XIX.

CAPITAL.-DEFINITION. ADVANTAGES OF CAPITAL. DIVISION OF LABOUR.

UNDER the head of capital we include all articles possessing exchangeable value, the accumulated results of past labour. It is defined by Mr. Senior to mean

"An article of wealth, the result of human exertion, employed in the production or distribution of wealth."*

He limits it to articles that are

"The result of human exertion, in order to exclude those productive instruments to which have been given the name of natural agents, and which afford not profit, in the scientific sense of that word, but rent."+

In thus excluding land, as well as all articles of wealth not employed in the production or distribution of wealth, Mr. Senior agrees with nearly all political economists, but we cannot agree in the propriety of the exclusion. We have shown that the value of land is derived exclusively from the labour that is bestowed upon it, and that it is governed by the same laws which govern all other capital. It must therefore be treated as capital. We shall add nothing to what we have already said on that subject, but will now inquire into the propriety of excluding commodities not applied to the production of additional wealth.

The hut of the woodman, and the cottage of the labourer, are unquestionably capital. They aid production, by preserving health. The dwelling house of the mechanic, of the merchant, and of the judge, are equally necessary, and it is difficult to tell where to draw the line between the log-hut of the settler, and the palace of the Marquis of Westminster. The horse of the farmer and the carriage of the physician are productively employed. The diamond in the possession of the owner of the mine, or of the diamond merchant, is capital. Can its transfer to the possession of the person who wears it change its cha* Outline, p. 153.

+ Ibid.

racter? The man who owns capital in the form of bank stock may to-morrow change it for capital in the form of ApsleyHouse, while the owner of the latter may find it more convenient to convert it into bank stock. Is it not equally capital in either form? Gold is admitted to be capital while it remains in the form of coin; when converted into ornaments it is still capital in the hands of the shopkeeper: when those ornaments are transferred to the persons who uses them, their character is supposed to be lost: yet it may be regained if the purchaser will return them to the shopkeeper.

A. possesses a diamond which he desires to sell, value $50,000. In his hands it is admitted to be capital. B. possesses bank stock to the same amount, making a total of $100,000. B., however, concludes to sell his stock, and purchase the diamond to ornament his sword hilt, and by this operation, according to most writers, the capital is reduced to $50,000, but will be restored to its original amount, if B., instead of using it, will make up his mind to hold it for sale, placing it for that purpose in the shop of a dealer. This seems very absurd, but it is precisely the effect of the exclusion.

According to this limitation, the bricks and mortar applied to building a store-house are capital, while those employed in the construction of the fine dwelling-house of the proprietor are not. They become so, however, when the time arrives for converting the dwelling house into a place of business. The attempt to establish such distinctions leads to difficulty, and should be abandoned. Bank stock, rail roads, store-houses, dwellings, gold, silver, diamonds, and pearls, and all other articles possessing exchangeable value, constitute the capital of a nation, and whether the owner of a portion of it be disposed to let it remain in the form of diamonds, yielding him gratification in one form, or invests it in machinery that shall yield him gratification in another, is totally unimportant. Nearly the whole amount that exists is directly used in aiding labour,* and thus

• A recent writer has arrived at the very singular conclusion, that when capital is used to aid production, commodities cannot be sold as cheap as when it is not so aided.

"In France, Switzerland, and Savoy, such proprietors (those who cultivate land without assistance, except from their own families,) are very common. There