The Employments of Capital most beneficial to Society

When a nation has an immense accumulation of capital, it will do well to embark it in all these different channels of industry; for they are all lucrative.

and in nearly equal degree to the capitalist, though in very different degrees to the nation at large.

What prejudice can arise to the lands of Holland, which are already in a high state of cultivation and management, and want neither clearing nor enclosing, or what injury be sustained by nations possessed of little territory, like the old states of Venice, Genoa, and Hamburg, from the large investments of national capital in the carrying trade? It flowed into that particular channel of employment, merely because there was no other open to it.

But that class of trade, and generally all external commerce, is ill adapted to a na- tion deficient in capital, and having not enough to keep its agriculture and manufacture in activity.

It would be absurd for its government to give premature encouragement to those external branches of industry; for such a measure would but check the employment of capital in the manner best calculated to increase the national revenue.

China, though it is the largest empire in the world, and must possess the greatest aggregate revenue, since it maintains the most numerous and dense population, abandons to foreigners almost all its exter- nal commerce. Undoubtedly, in her present condition, she would be a gainer by extending her external relations of com- merce; but she affords a very striking example of the prosperity attainable without them.

To the capitalist himself, the most advantageous employment of capital is that, which with equal risk yields the largest profit; but what is to him most beneficial, may perhaps not be so to the community at large; for capital has this peculiar faculty, that, besides being productive of a revenue peculiar to itself, it is, moreover, a means, whereby land and industry may gen- erate a revenue likewise. This is an exception to the general principle, that what is the most productive to the individual, is so to the community at large.

A capital lent to a foreign country, may very probably produce to the proprietors and the nation, the highest possible rate of interest; but can afford no assistance towards extending the revenue of the national territory, or for the national industry, as it would do, if employed within the pale of the nation.

The portion of capital embarked in domestic agriculture is employed best for the interests of a nation; it enhances the productive power of the land and of the labour of a country.

It augments at once the profits of industry and those of real property. Capital employed under intelligent direction, may make barren rocks to bear increase.

The Cevennes, the Pyrenees, and the Pays de Vaud, present on every side the view of mountains, once a scene of unvaried sterility, now covered with verdure and enriched by cultivation.

Parts of these rocks have been blasted with gunpowder, and the shivered fragments employed in the construction of terraces one above another, supporting a thin stratum of earth carried thither by human labour.

In this manner is the barren surface of the rock transformed into shelving platforms, richly furnished with verdure, and teeming with produce and population.

The capital originally expended in these laborious improvements might, perhaps, have produced larger profits to the capitalist, if em- ployed in external commerce; but probably the total revenue of the district would have been inferior in amount.

It is very fortunate, that the natural course of things impels capital rather into those channels, which are the most benefi- cial to the community, than into those, which afford the larg- est ratio of profit. The investments generally preferred are those that are nearest home; whereof the first and foremost is the improvement of the soil, which is justly considered the most safe and permanent; the next, manufacture and internal commerce; and the last of all, external commerce, the trade of transport, and the commerce with distant nations. The owner of a capital, especially of a moderate one, will embark it rather under his own superintendence, than in distant and remote concerns. He is apt to think his risk too hazardous, when he loses sight of his property for any considerable length of time, when he consigns it to strangers, or can expect only tardy returns, or is exposed to the chances of litigation with fraudu- lent debtors, who may take advantage of their unsettled hab- its of life, or of the laws of foreign countries, with which he is himself unacquainted Nothing, but the bait of exclusive privi- lege and monopoly profit. or the violent derangement of in- ternal industry, can induce an European nation, not possessed of a large surplus capital, to engage in the colonial or East India trade. 73

For a similar reason, capital cannot be more beneficially employed, than in strengthening and aiding the productive powers of nature. Well contrived and useful machinery pro- duces more than the interest of its prime cost; and besides affording additional profit to the proprietor, benefits the con- sumer and the community at large, to the full extent of the saving effected by its means; for every thing saved is so much gain. The productive employments, that rank next in point of national benefit, are those of manufacture and internal com- merce; for the profits of the industry they set in motion are earned at home; whereas, capital embarked in foreign trade benefits the industry and natural resources of all nations in- discriminately.