revenue.

We

What! all our revenues are immaterial!! Yes, Sir, all: otherwise it would be necessary that the mass of matter of which the Globe is composed should be augmented every year. This would be necessary in order that every year we might have a fresh material We neither create nor destroy a single atom. confine ourselves to changing its combinations, and every thing we employ in it is immaterial. It is of value; and it is that value, also immaterial, which we consume daily and yearly, and which keeps us alive; for consumption is a change of form given to matter, or, if you prefer it, a derangement of form, as production is the arrangement of it. If you find any thing paradoxical in all these propositions, look at the things they express, and I have no doubt they will appear very simple and very reasonable to you.

W

Without this analysis I defy you to explain the entire facts; to explain, for example, how the same capital is consumed twice, productively by an enterpriser, and unproductively by his workman. By help of the preceding analysis it will be seen, that the workman supplies his labor, the produce of his capacity, which he sells to the enterpriser takes home his salary, which forms his revenue, and consumes it unproductively. The enterpriser, (who has bought the labor of the workman) on his part, by devoting a part of his capital to it, consumes it productively, the same as the dyer productively consumes the indigo he throws into his cauldron. These values,having been reproductively destroyed, reappear in the produce which comes out of the hands of the enterpriser. It is not the enterpriser's capital which forms the workman's revenue, as M. Sismondi pretends. It is in the workshops, and not in the workman's dwelling, that the enterpriser's capital is consumed. The value consumed at the workman's house has another source, it is the produce of his industrious powers. The enterpriser devotes a part of his capital to thepurchase of this labor.

Having bought it, he consumes it; and the workman on his part consumes the value he has obtained in exchange for his labor. Wherever there is an exchange, there are two values created and bartered; and wherever two values are created, there can be and there is in fact two consumptions.1

A domestic produces personal services, which, as soon as produced, are unproductively consumed by his master. The service of a public functionary is also entirely consumed by the public, as it is produced. This is the reason why these different services do not produce any augmentation of wealth. The consumer enjoys these services but cannot accumulate them. This is particularly explained in my Treatise on Political Economy, 4th Ed. vol. i. page 124. How Mr. Malthus could print page 35 after this, is inconceivable :

It is the same with productive service yielded by the capital. The capatilist who lends it sells the service, the labor of his commodity, and the daily or yearly price, which an enterpriser pays him for it, is called interest. The two terms of exchange are, the one service of capital, the other interest.

The enterpriser, at the same time that he productively consumes the capital, also productively consumes the service of the capital. The lender, on his part, who has sold the service of his capital, unproductively consumes the interest of it, which is a material value, given in exchange for the immaterial service of the capital. Is it astonishing that there is a double consumption: that of the enterpriser to make his produce, and that of the capitalist to satisfy his wants, since there are the two terms of one exchange, two values proceeding from two different funds, bartered, and both consumable?

You say, Sir, that the distinction between productive and unproductive labor is the corner stone of Adam Smith's work, and that to call, as I have done, that labor productive which is not fixed in any material object, is to overthrow his work from top to bottom. No, Sir, this is not the corner stone of Adam Smith's work, since, that stone being shaken, the edifice is imperfect without being less stable. What will eternally support that excellent work is, that it proclaims in all its pages, that the changeable value of things is the foundation of all wealth. It is from that time that political economy is become a positive science; for the pricecurrent of each thing is a determined quantity, the elements of which may be analised, the causes assigned, the bearings studied, and the changes foreseen. By taking away from the definition of wealth this essential character, allow me to inform you, Sir, we replunge the science into the surge, and drive it back.

in which he says that," the progress which Europe has made since the feudal times cannot be explained, if personal service is considered as productive as the labor of tradesmen and manufacturers. It is the same with these. services as with the labor of the gardener who has cultivated salads or strawberries. The wealth of Europe certainly does not proceed from the strawberries, because they, like personal service, are all unproductively consumed as they ripen, although not so quick as personal service.

I mention strawberries here, as a produce of very short duration, but it is not because a production is durable that it gives greater facility to accumulation. It is because it is so consumed as to produce its value in another article; for durable or not, every production is devoted to consumption, and is no further useful than by its consumption (this utility consists, either in satisfying a want, or in producing a fresh value). When we begin to write upon political economy, the first thing to be done is to divest ourselves of the idea that a durable production accumulates better than a perishable

one.

Far from undermining the celebrated inquiries into the Wealth of Nations, I support them in all their essential parts; but at the same time, I think Adam Smith has misconceived real exchangeable value, by forgetting that which is attached to productive service, which leaves no trace behind, because the whole of it is consumed. I think he has also forgotten real services, which even leave traces behind them, in material productions: such as service of capital, consumed, independently of the capital itself. I think he has got into infinite obscurity, for want of having distinguished the consumption of the industrious services of an enterpriser, from the services of his capital-a distinction so real, however, that there is scarcely any commercial house that does not keep these accounts under distinct heads.

I revere Adam Smith, he is my master. At the commencement of my career in Political Economy, whilst yet tottering, and driven on the one hand by the Doctors of the Balance of Trade, and on the other by the Doctors of Net Proceeds, I stumbled at every step, he showed me the right road. Leaning upon his Wealth of Nations, which at the same time discovers to us the wealth of his genius, I learned to go alone. Now I no longer belong to any school, and shall not share the ridicule of the Reverend Jesuit Fathers who translated Newton's Elements, with notes. They felt that the laws of natural philosophy did not well accord with those of Loyola; they also took care to inform the public by an Advertisement, that although they had apparently shown the motion of the Earth, in order to complete the developement of celestial philosophy, they were not less under subjection to the decrees of the Pope, who did not admit this motion. I am only under the subjection of the decrees of eternal Reason, and I am not afraid to say so. Adam Smith has not embraced the whole of the phenomenon of the production and consumption of wealth, but he has done so much that we ought to feel 'grateful to him. Thanks to him, the most vague, the most obscure of sciences will soon become the most precise, and that which of all others will leave the fewest points unexplained.

Let us figure to ourselves, producers (and under this name I comprise as well the possessors of capitals and lands, as the possessors of industrious powers,) let us fancy them advancing to meet each other with their productive services, or the profit which has resulted from them (an immaterial quality). This profit is their produce. Sometimes it is fixed on an immaterial object, which is transmitted with the immaterial produce, but which in itself is of no importance, is nothing, in political Economy: for matter, dispossessed of value, is not wealth. Sometimes it is transmitted, is sold by one, and bought by another, without being VOL. XVII. Pam. NO. XXXIV. U

fixed in any matter. It is the advice of the Doctor or the Lawyer, the service of the Soldier or the public Officer. Every one exchanges the utility he produces against that which is produced by others, and in every one of these exchanges, which are carried to account in a book of competition, as the utility offered by Paul is more or less in demand than that offered by Jacques, it sells dearer or cheaper that is to say, that it obtains in exchange more or less of the utility offered by the latter. It is in this sense that the influence of the demand and supply must be understood.'

This, Sir, is not a doctrine advanced by way of after-thought; it is to be found in sundry parts of my Treatise on Political Economy; and by the help of my Epitome its coincidence with every other principle of the science, and with all the facts which serve for its basis, is fundamentally the same. It is already professed in many parts of Europe; but I earnestly desire that it may succeed in convincing you, and that it may appear to you to be worthy of being introduced into the chair, which you fill with so much eclat.

After these necessary explanations, you will not accuse me of finesse if I rest upon those laws which I have shown to be founded on the nature of things and on the facts which issue from them.

Commodities, you say, are only exchanged for commodities: they are also exchanged for labor. If this labor be a produce that some persons sell, that others buy, and that the latter consume, it will cost me very little to call it a Commodity, and it will cost you very little more to assimilate other commodities to it, for they are also produce. Then comprising both under the generic name of Produce, you may perhaps admit that produce is bought only with pro

duce.

LETTER THE SECOND.

SIR,

I think I have proved in my first letter that Produce can only be bought with Produce. I still see no cause to abandon this What the English call Want and Supply,

2 Fourth edition, Bk. 1, ch. 15. Bk. 11. ch. 1, 2, 3 and 5. See also the Epitome at the end of each work, particularly the words Productive Services, Charges of Production, Revenues, Profit, Value.

doctrine, that it is production which opens a market for production. It is true that I have taken as produce, all the services which proceed from our personal capacities, from our capitals, and our property in land, which has put me under the necessity of sketching afresh, and in other terms, the Doctrine of Production, which Smith evidently has neither understood, nor entirely described.

I

However, Sir, on reading again the 3rd section of your chapter 7, 1 I feel that there is still one point in which you do not agree with me. You will perhaps confess that produce is bought only with other produce, but you persist in maintaining that men can, putting all productions together, produce a quantity more than equal to their wants, and consequently-that there will be no employ for a part of these productions-that there may be a superabundance and glut of all kinds at the same time. For the purpose of presenting your objection in all its force, I will transform it into a figure, and will say, M. Malthus readily admits that one hundred sacks of wheat will purchase a hundred pieces of cloth, in a partnership which has occasion for this quantity of cloth and wheat to clothe and feed themselves, but that if the same company should produce two hundred sacks of wheat and two hundred pieces of cloth, it would be in vain that these two commodities could be exchanged the one for the other: he will maintain that a part of them would find no buyers. I must therefore, Sir, prove in the first place, that whatever be the quantity produced, and the consequent depreciation of its price, a quantity produced of one kind is always sufficient to enable the producer to acquire the quantity produced of another kind; and after having proved that the possibility of acquiring exists, I must enquire how those productions which superabound give rise to wants to consume them.

The farmer who produces wheat, after having bought the productive services of the land, of the capital he employs, and of his servants, and having added his own labour to it, has consumed all these values to convert them into sacks of wheat, and each sack, including his own labour, that is to say his profit, we will suppose returns him 30 francs. On the other hand the manufacturer who produces flaxen, woollen, or cotton cloth, no matter which, the manufacturer in fact after having in the same manner consumed the services of his capital, his own services, and those of ́his men, has manufactured pieces of cloth, each of which also returns him 30 francs. If you will allow me to come at once to the main point of the question, I will confess to you that my clothmerchant represents in my mind the producers of all manufactur

'Malthus's Principles of Political Economy, page 351.