"The capital of all the individuals in a nation is increased in the same manner as that of a single individual, by their continually accumulating and adding to it whatever they save out of their revenue.(8) As the national capital is thus increased by parsimony, so it is diminished by prodigality ad misconduct.The conduct of those whose expense just equals their revenue, without either accumulating or encroaching, neither increases nor diminishes it.It can seldom happen that the circumstances of a great nation ca be much affected by the prodigality of individuals; the profusion of some, being always more than compensated by the frugality and good conduct of others.Men are prompted to expense, by the desire of present enjoyment, a passion only momentary and occasional.They are prompted to save by the desire of bettering their condition, a passion which comes with them from the womb, and never leaves them till they go to the grave.In the whole course of life of the greater part of men, therefore, though the principle of expense prevails occasionally, yet the principle of frugality predominates, and predominates very greatly.(9)"The principle exciting to frugality, the uniform, constant, and uninterrupted effort of every ma to better his condition, produces both public and national, as well as private opulence, and is frequently more than sufficiently powerful to counteract the extravagance of government, and the greatest errors of administration.Like the unknown principle of animal life, it frequently restores health and vigor to the constitution, in spite, not only of the disease, but of the absurd prescriptions of the doctor.(10) Alone and without any assistance, it is capable, not only of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations." (11)The reader will perceive, that the whole force of these arguments lies in the assumption, that the process of the increase of national capital, is precisely the same as that of the increase of individual capital.
The observation of Bacon is now trite, that men believe that the words they employ in the process of reasoning, serve the intellect as mere passive instruments, but that, in reality, they have often an active reflex power, through which, while the mind deems it governs them, they are enabled to usurp the command of it, and so misdirect its course.
Our author notices the errors, which, in this way, have arisen from the use of the term money.
"Money, in common language, as I have already observed, frequently signifies wealth; and this ambiguity of expression has rendered this popular notion so familiar to us, that even they who are convinced of its absurdity, are very apt to forget their own principles, and, in the course of their reasons, to take it for granted as a certain and undeniable truth.Some of the best English writers upon commerce set out with observing, that the wealth of a country consists, not in its gold and silver only, but in its lands, houses, and consumable goods of all different kinds.In the course of their reasons, however, the lands, houses, and consumable goods, seem to slip out of their memory; and the strain of their argument frequently supposes that all wealth consists in gold and silver, and that to multiply those metals, is the great object of national industry and commerce." (12)It is remarkable that, in the use of the term capital, he himself leads his readers into a somewhat similar error.Capital means in common language a sum of money, or something for which a sum of money can be got; and, as the increase both of national and individual capital produces a sum of money, or something for which a sum of money can be got, the similar estimation of both by a row of figures is the thing that in this way naturally comes uppermost to the mind, and hence, the things themselves in both cases forming the increase not being immediately present to its thoughts, it heedlessly falls into the conclusion that they also are perfectly similar.
In comparing indeed the national capital as it has existed at distant periods, the small national capital of remote periods with the large national capital of the present, we immediately perceive, that not only the sum at which the national wealth was formerly rated is increased, but that the things which constituted it are changed.The wealth of England is certainly ten times now what it was in the reign of Henry the VIII; we do not conceive, however, that it is formed by the multiplying tenfold such articles as constituted the sole riches of its inhabitants in that somewhat rude and barbarous age.We perceive here, that there is, and must be, not only an increase, but a change.When, however, we come to consider the smaller parts of which this increase is gradually made up, as the change here is not perhaps perceptible, and as all we see is the sum produced by it, the fact of the increase being more easily ascertained than the manner of it, the similarity of the terms naturally inclines us to conceive that it resembles the increase of individual capital, and consists of a mere increase of things, not of a change also in them.Would we take time to consider of it, we must perceive that such an increase of national capital as individuals make of individual capital, is, at least, unlikely, seeing there is no apparent cause for it.Considering capital in general, the only use we can discover for it is its enabling the community to draw from the resources the country affords, the necessaries, conveniences, and amusements of life, its supply of which, according to our author, constitutes its real wealth.
