The axiom which he brings forward, that the capital of a society is the same with that of all the individuals who compose it, being granted, it follows that to increase the capitals of all the individuals in a society is to increase the general capital of the society.It seems, therefore, also to follow that as every man is best judge of is on business and of the modes in which his own capital may be augmented, so to prevent him from adopting these modes is to obstruct him in his efforts to increase his own capital, and, in so far as his capital is a part of the general capital of the society, to check the increase of that general capital;and hence, that, as all laws for the regulation of commere are in fact means by which the legislator prevents individuals conducting their business as they themselves would deem best, they must operate prejudicially on the increase of individual and so of general wealth.
In pursuance of the same idea of the perfect identity of the means by which individual and national capitals are increased, the argument is thus further enforced.Accumulation is the means by which individual capital is augmented.We know very well that if any person spend as fast as he makes, he can never get richer.Whatever his gains are he must save some part of them, else he can never add to his capital.The amount also of his savings for any period of time must measure the addition, which, during that time he makes to is wealth.As, therefore, the capital of a single individual is increased by his continually accumulating and adding to it whatever he saves out of his revenue, so the national capital, or the capital of all the individuals in a nation, is increased by these individuals continually accumulating and adding to it what they save out of their respective revenues.
Hence whatever prevents them from making the most of their respective capitals, or drawing from them the largest revenue, in so far as it deprives them of the power of laying past so large a portion of that revenue as they otherwise would, must in a like proportion diminish their individual accumulations, and consequently the sum of all their accumulations, or the amount added to the national capital.But all laws for the regulation of commerce, and all encouragements given to particular branches of industry, do in fact prevent individuals from turning their capitals into the channels which, but for these regulations, they would prefer as offering the largest returns.
They must, therefore, it is said, to a certain extent, diminish individual accumulation, and consequently, in an equal proportion, the increase of national capital.
Viewing, then, the subject in this simple light, and taking as undoubted truths the assumptions of our author, that individual and national wealth increase in the same manner, and that the manner in which individuals increase their riches is by saving from their revenues, we would easily arrive at the doctrine he inculcates, that as every man is best judge of his own interests, so he should be left to pursue them in is own way, without the legislator at all interfering with his operations, or pretending to aid or direct them.
This very simple view of the subject would, however, be defective in two respects.
1.Though it is, in the general, true that individuals may find some employment, by the prosecution of which they may procure a revenue, and so, by saving from this revenue, acquire wealth, or add to what they have before acquired, yet it seems not so clear that it is by this means alone that nations advance, or can advance, in the acquisition of wealth; because it must occur to us that materials on which the national industry may he employed are to be provided, and often are or may be wanting.
2.It is not altogether correct to say that the sole means, which an individual employs to add to his capital is the process of saving from revenue.It is very evident he must first gain this revenue, and that the amount he gains, and consequently the amount he can save, must in general depend on the talents and capacities he possesses for the prosecution of the particular employment to which he devotes himself.As an inquiry, therefore, into the manner in which an individual might most rapidly accumulate wealth, would in part resolve itself into an examination of the modes by which he might acquire the greatest perfection of knowledge, skill, dexterity, and other talents and capacities, tending to the successful prosecution of his business; so an inquiry into national wealth, even supposing the process by which nations and individuals add to their riches to be the same, must partly resolve itself into an examination of the modes by which the knowledge, skill, and dexterity of all the individuals in a nation, in the various businesses and professions that may be carried on in it, may be raised to the highest pitch.
These two circumstances render the subject more intricate, than the first simple view we might be inclined to take of it, would lead us to suspect.An attention to the operation of either of them will be sufficient to show that identity of the interests of individuals and states, which is assumed throughout the Wealth of Nations, is not a self-evident principle.
In the following observations, I shall, however, confine myself to the former of them.
