Natural Agents That Assist in the Production of Wealth, Specially of Land

by JB Say

Industry receives aid from capital as the products of her own previous creation. These products create other products which aid industry through the agency of a variety of agents not of her own creation, but offered spontaneously by nature.

From the co-operation of these natural agents derives a portion of the utility she communicates to things.

What is true of one, two, three, or four individuals, is true of society in the aggregate. The capital of a nation is made up of the sum total of private capitals; and, in proportion as a nation is prosperous and industrious, in the same proportion is that part of its capital, vested in the shape of money, trifling compared to the amount of the gross national capital.

Neckar estimates the circulating medium in France, in the year 1784, at about 440 million dollars. His estimate is exaggerated.

However, if account be taken of all the works, enclosures, live stock, utensils, machines, ships, commodi- ties, and provisions of all sorts belonging to the French people or their government in any part of the world; and, if to these be added the furniture, decorations, jewellery, plate, and other items of luxury or convenience, whereof they were possessed, at the same period, it will be found that 440 millions of circulating medium was a mere trifle compared to the aggregate of these united values. 56

Thus, when a field is ploughed and sown, besides the science and the labour employed in this operation, besides the pre- created values brought into use, the values, for instance, of the plough, the harrow, the seed-corn, the food and clothing consumed by labourers during the process of production, there is a process performed by the soil, the air, the rain, and the sun, wherein mankind bears no part, but which nevertheless concurs in the creation of the new product that will be ac- quired at the season of harvest. This process I call the pro- ductive agency of natural agents. The term natural agents is here employed in a very extensive sense; comprising not merely inanimate bodies, whose agency operates to the creation of value, but likewise the laws.of the physical world, as gravitation, which makes the weight of a clock descend; magnetism, which points the needle of the compass= the elasticity of steel; the gravity of the atmosphere; the property of heat to discharge itself by ignition, &c. &c. Beeke estimates the total capital of Great Britain at 2300 millions sterling, 57 (equal to more than 11,000 millions of dollars.) The total amount of her circulating specie, before 30Book I= On Production the power of the natural agents that industry and civilization set at work for our advantage. The productive faculty of capital is often so interwoven with that of natural agents, that it is difficult, or perhaps impos- sible, to assign, with accuracy, their respective shares in the business of production. A hot-house for the raising of exotic plants, a meadow fertilized by judicious irrigation, owe the greater part of their productive powers to works and erec- tions, the effect of antecedent production, which form a part of the capital devoted to the furtherance of actual and present production. The same may be said of land newly cleared and brought into cultivation; of farm-buildings; of enclosures; and of all other permanent ameliorations of a landed estate. These values are items of capital, though it be no longer possible to sever them from the soil they are attached to. 60 Smith admits that human intelligence, and the knowledge of the laws of nature, enable mankind to turn the resources she offers to better account= but he goes on to attribute to the division of labour this very degree of intelligence and knowl- edge= and he is right to a certain degree; for a man, by the exclusive pursuit of a single art or science, has ampler means of accelerating its progress towards perfection. But, when once the system of nature is discovered, the production resulting from the discovery, is no longer the product of the inventor’s industry. The man who first discovered the property of fire to soften metals, was not the actual creator of the utility this process adds to smelted ore. That utility results from the physi- cal action of fire, in concurrence, it is true, with the labour and capital of those who employ the process. But are there no processes that mankind owes the knowledge of to pure acci- dent? or that are so self-evident, as to have required no skill to discover? When a tree, a natural product, is felled, is soci- ety put into possession of no greater produce than that of the mere labour of the woodman? In the employment of machinery, which wonderfully augments the productive power of man, the product obtained is due partly to the value of the capital vested in the machine, and partly to the agency of natural powers. Suppose a tread-mill, 61 worked by ten men, to be used in place of a wind-mill, the product of the mill might be considered as the fruit of the productive agency of a capital consisting of the value of the machine, and of the labour of ten men employed in turning the wheel. If the tread-mill be supplanted by sails, it is evi- dent that the wind, a natural agent, does the work of ten hu- man beings. From this error Smith has drawn the false conclusion, that all values produced represent pre-exerted human labour or in- dustry, either recent or remote; or, in other words, that wealth is nothing more than labour accumulated; from which posi- tion he infers a second consequence equally erroneous, viz. that labour is the sole measure of wealth, or of value pro- duced. In this instance, the absence of the natural agent might be remedied, by the employment of another power; but there are many cases, in which the agency of nature could not possibly be dispensed with, and is yet equally positive and real; for example, the vegetative power of the soil, the vital principle which concurs in the production of the animals domesticated to our use. A flock of sheep is the joint result of the owner’s and shepherd’s care, and the capital advanced in fodder, shel- ter, and shearing, and of the action of the organs and viscera with which nature has furnished these animals. This system is obviously in direct opposition to that of the economists of the eighteenth century, who, on the contrary, maintained that labour produces no value without consuming an equivalent; that, consequently, it leaves no surplus, no net produce; and that nothing but the earth produces gratuitous value,—therefore nothing else can yield net produce. Each of these positions has been reduced to system; I only cite them to warn the student of the dangerous consequences of an error in the outset, 63 and to bring the science back to the simple observation of facts. Now facts demonstrate, that val- ues produced are referable to the agency and concurrence of industry, of capital, 64 and of natural agents, whereof the chief, though by no means the only one, is land capable of cultiva- tion; and that no other but these three sources can produce value, or add to human wealth. Thus nature is commonly the fellow-labourer of man and his instruments; a fellowship advantageous to him in proportion as he succeeds in dispensing with. his own personal agency, and that of his capital, and in throwing upon nature a larger part of the burthen of production. Smith has taken infinite pains to explain, how it happens that civilized communities enjoy so great an abundance of prod- ucts, in comparison with nations less polished, and in spite of the swarm of idlers and unproductive labourers that is to be met with in society. He has traced the source of that abun- dance to the division of labour; 62 and it cannot be doubted, that the productive power of industry is wonderfully enhanced by that division, as we shall hereafter see by following his steps; but this circumstance alone is not sufficient to explain a phenomenon, that will no longer surprise, if we consider Of natural agents, some are susceptible of appropriation, that is to say of becoming the property of an occupant, as a field, a current of water; others can not be appropriated, but remain liable to public use, as the wind, the sea, free navigable streams, the physical or chemical action of bodies one upon another, &c. &c.

The ownership of land, capital, and industry is sometimes united in the same hands. A man who cultivates his own garden at his own expense, is at once the possessor of land, capi- tal, and industry, and exclusively enjoys the profits of propri- etor, capitalist, and labourer.

We shall by-and-by have an opportunity of convincing our- selves, that this alternative, of productive agents being or not being susceptible of appropriation, is highly favourable to the progress of wealth. Natural agents, like land, which are susceptible of appropriation, would not produce nearly so much, were not the proprietors certain of exclusively gather- ing their produce, and able to vest in them, with full confi- dence, the capital which so much enlarges their productive- ness. On the other hand, the indefinite latitude allowed to industry to occupy at will the unappropriated natural agents, opens a boundless prospect to the extension of her agency and production. It is not nature, but ignorance and bad gov- ernment, that limit the productive powers of industry. The knife-grinder’s craft requires no occupancy of land; he carries his stock in trade upon his shoulders, and his skill and industry at his fingers’ ends; being at the same time adven- turer, 65 capitalist and labourer. It is seldom that we meet with adventurers in industry so poor as not to own at least a share of the capital embarked in their concern. Even the common labourer generally advances some portion; the bricklayer comes with his trowel in his hand; the journeyman tailor is provided with his thimble and needles; all are clothed better or worse; and though it be true, that their clothing must be found out of their wages, still they find it themselves in advance. Such of the natural agents as are susceptible of appropria- tion. form an item of productive means; for they do not yield their concurrence without equivalent; which equivalent, as we shall see in the proper place, forms an item of the rev- enues of the appropriators. At present we must be content to investigate the productive operation of natural agents of ev- ery description, whether already known, or hereafter to be discovered. Where the land is not exclusive property, as is the case with some stone-quarries, with public rivers and seas to which in- dustry resorts for fish, pearls, coral, &c., products may be obtained by industry and capital only.