In countries where the effective desire of accumulation is low, profits are of necessity high.Such countries, too, from their inability to work up into instruments the same materials, must always be poorer than their neighbors.Hence high profits have been regarded as indicating, and producing poverty.This prejudice is one source of the errors of Sir Joshua Child on this subject, and it seems to have given rise to one or two rather declamatory passages in the Wealth of Nations."Our merchants and master manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods, both at home and abroad.They say nothing concerning the bad effects of high profits; they are silent with regard, to the pernicious effects of their own gains; they complain only of those of other people." (87) Now I apprehend that high profits springing from improvement, can never lessen the sale of goods either at home or abroad, for they do not occasion a rise in their price, but rather a fall in it.-- "In countries which are just advancing to riches, the low rate of profit may, in the price of many commodities, compensate the high wages of labor, and enable those countries to sell as cheap as their less thriving neighbors, among whom the wages of labor may be lower." (88) In countries rising to riches, I conceive, that profits will commonly be high.They will be higher than where, the principle of accumulation having had time to work up all the materials within reach of its strength, a stop is put to its further advancing the stock of existing instruments, and the state of the society becomes stationary.If they be lower than in other countries, during the progress, it is from the greater strength of this principle.
In North America, profits and labor have been permanently high, from the unintermitting transfer to that continent of European arts, and from the generation of new arts in the country itself.In Russia the passage, in like manner, of new arts has kept the rate of profits high.But, of all civilized countries of the present day, these, probably, are the most rapidly advancing to riches.
It thus appears, that it is through the operation of two principles, -- the accumulative, and inventive, that additions are made to the stocks of communities.It would contribute something to accuracy of phraseology, and therefore to distinctness of conception, to distinguish their modes of action by the following terms:
1.Accumulation of stock or capital, is the addition made to these, through the operation of the accumulative principle.
2.Augmentation of stock or capital, is the addition made to them, through the operation of the principle of invention.
3.Increase of stock or capital, is the addition made to them, by the conjoined operation of both principles.
Accumulation of stock diminishes profits; augmentation of stock increases profits; increase of stock neither increases nor diminishes profits.
CHAPTER XI.OF LUXURY.PART I.
The general tendency of all the circumstances, the nature and causes of which it has been our aim hitherto to investigate, is to advance the wealth of society, the capital and stock of communities.Were the operation of the principles of invention and accumulation to go on unchecked, the amount of the stock of all nations would be gradually and uninterruptedly increased; the one furnishing the means of providing additional supplies for the wants of futurity, the other giving the motives to make the provision.
But there are opposite principles, the tendency of which is either to retard the progress of the general stock, or actually to diminish the amount already existing.To some of these we have now to attend.
As the prevalence of the benevolent and social affections, and the strength of the intellectual powers, are the great springs from which the increase of the wealth and prosperity of communities arise, so it might be expected, as I believe it will be found, that the diminution of that wealth is chiefly occasioned by the spread of contrary principles, by the ascendency of the purely selfish, and debasement of the intellectual and moral parts of our nature.
The first of these principles, of which we have to consider the operation, is vanity; by which term I understand the mere desire of superiority over others, without any reference to the merit of that superiority.A perfect being may be desirous of superiority in well-doing, not on account of surpassing others, but from pleasure in the good he does.A very evil being may derive satisfaction from a superiority in evil-doing, simply from the pleasure which the certainty of having been the cause of very great misery may give him.But there seems to be a feeling that finds its proper gratification in merely going beyond others, without reference to the path taken.It would he gratified by excelling in vice, were it not that the moral feeling restrained it; it would be gratified by excelling in virtue, were it not that immoral propensities incapacitate it from attaining au eminent degree of it.It is this which, for want of a better word, I distinguish by tire term vanity.It is a purely selfish feeling; its pleasures centre in the individual; and if it does not endeavor to diminish the enjoyments of others, it is never directly its object to increase them.When, in the course of its action, pleasure is communicated to others, this arises from its being then blended with other feelings.
