Chapter 5

The Mode in Which Industry, Capital, and Natural Agents Unite in Production

by JB Say Icon

Industry and capital are likewise competent to produce by themselves, when that industry is employed upon products of foreign growth, procurable by capital only; as in the European manufacture of cotton and many other articles.

So that every class of manufacture is competent to raise products, provided there be industry and capital exerted.

The presence of land is not absolutely necessary, unless perhaps the area whereon the work is done, and which is commonly rented, may be thought to come under this description, as in extreme strictness it certainly must.

However, if the ground where the business of industry is carried on, be reckoned as land used, it must at least be admitted, that, with aid of a large capital, an immense manufacturing concern may be conducted upon a very trifling spot of ground.

Whence this conclusion may be drawn, that national industry is limited, not by territorial extent, but by extent of capital.

We have seen how industry, capital, and natural agents concur in production, each in its respective department; and we have likewise seen that these three sources are indispensable to the creation of products. It is not, however, absolutely necessary that they should all belong to the same individual.

An industrious person may lend his industry to another possessed of capital and land only.

The landholder may lend his estate to a person possessing capital and industry only.

A stocking manufacturer with a capital say of 4000 dollars, may keep in constant work ten stocking frames. If he manages to double his capital he can employ twenty; that is to say, he may buy ten more frames, pay double ground-rent, purchase double the quantity of silk or cotton to be wrought into stockings, and make the requisite advances to double the number of workmen, &c. &c.

Whether the thing lent be industry, capital, or land, inasmuch as all three concur in the creation of value, their use also bears value. and is commonly paid for.

The price paid for the loan of industry is called wages.

The price paid for the loan of capital is called interest.

But that portion of agricultural industry, devoted to the tillage of land, is, in the course of nature, limited by extent of surface.

Neither individuals nor communities can extend or And. that paid for the loan of land is called rent.

The first step towards the attainment of any specific product, is the study of the laws and course of nature regarding that product.

A lock could never have been constructed without a previous knowledge of the properties of iron, the method of extracting from the mine and refining the ore, as well as of mollifying and fashioning the metal. fertilize their territory, beyond what the nature of things permits;

but they have unlimited power of enlarging their capital, and consequently, of setting at work a larger body of industry, and thus of multiplying their products; in other words, their wealth.

There have been instances of people, like the Genevese, who with a territory that has not produced the twentieth part of the necessaries of life, have yet contrived to live in affluence.

The natives of the barren glens of Jura are in easy circumstances because many mechanical arts are there practised.

In the 13th century, the world beheld the republic of Venice, ere it held a foot of land in Italy, derive wealth enough from its commerce to possess itself of Dalmatia, together with most of the Greek isles, and even the capital of the Greek empire.

The extent and fertility of a nation’s territory depend a good deal upon its fortunate position. Whereas the power of its industry and capital depends upon its own good management;

for it is always competent to improve the one and augment the other.

The next step is the application of this knowledge to an useful purpose: for instance, the conclusion, or conviction, that a particular form, communicated to the metal, will furnish the means of closing a door to all the wards, except to the possessor of the key.

The last step is the execution of the manual labour, suggested and pointed out by the two former operations; as, for instance, the forging, filing, and putting together of the different component parts of the lock.

These 3 operations are seldom performed by one and the same person. It commonly happens, that one man studies the laws and conduct of nature; that is to say, the philosopher, or man of science, of whose knowledge another avails himself to create useful products, being either agriculturist, manufacturer, or trader; while the third supplies the executive exertion, under the direction of the former two; which third person is the operative workman or labourer.

Nations deficient in capital, labour under great disadvantage in the sale of their produce; being unable to sell at long credit, or to grant time or accommodation to their home or foreign customers.

If the deficiency be very great indeed, they may be unable even to make the advance of the raw material and their own industry. This accounts for the necessity, in the In- dian and Russian trade, of remitting the purchase-money six months or sometimes a year in advance, before the time when an order for goods can be executed. These nations must be highly favoured in other respects, or they never could make considerable sales in the face of such a disadvantage. All products whatever will be found, on analysis, to derive existence from these three operations.

Take the example of a sack of wheat, or a pipe of wine. The first stage towards the attainment of either of these products was, the discovery by the natural philosopher or geologist, 66 of the conduct and course of nature in the production of the grain or the grape; the proper season and soil for sowing or planting; and the care requisite to bring the herb or plant to maturity. The tenant, if not the proprietor himself, must afterward have applied this knowledge to his own particular object, brought together the means requisite to the creation of an useful product, and removed the obstacles in the way of its creation. Finally, the labourer must have turned up the soil, sown the seed, or pruned and bound up the vine. These three distinct operations were indispensable to the complete pro- duction of the product, corn or wine.

Having informed ourselves of the method in which the three great agents of production, industry, capital and natural agents, concur in the creation of products, that is to say, of things applicable to the uses of mankind, let us proceed to analyze more minutely the particular operation of each. The inquiry is important, inasmuch as it leads imperceptibly to the knowl- edge of what is more and what is less favourable to produc- tion, the true source of individual affluence, as wall as na- tional power.


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