The Different Kinds of Consumption

Whatever cannot possibly lose its value is not liable to consumption.

A landed estate cannot be consumed. But its annual productive agency may; for when once that agency has been exerted, it cannot be exerted again.

The improvements of an estate may be consumed, although their value may possibly exceed that of the estate itself; for these improvements are the effect of human exertion and industry; but the land itself is inconsumable.

Book 1 explained consumption, as production cannot be effected without consumption.

It had a different explanation there.

This is similar to production meaning creation of utility.

Here I explain consumption as the destruction of utility.

When once the utility of a thing is destroyed, its value ends. It is no longer an item of wealth.

So likewise it is with any industrious faculty.

One may consume a labourer’s day’s work, but not his faculty of working; which, however, is liable to destruction by the death of the person possessing it.

All products are consumed sooner or later; indeed they are produced solely for the purpose of consumption, and, when- ever the consumption of a product is delayed after it has reached the point of absolute maturity, it is value inert and neutralized for the time. For as all value may be employed reproductively, and made to yield a profit to the possessor, the withholding a product from consumption is a loss of the possible profit, in other words, of the interest its value would have yielded, if usefully employed. 2

Thus, the terms, to consume, to, destroy the utility, to annihilate the value of any thing, are as strictly synonymous as the opposite terms to produce, to communicate utility, to create value, and convey to the mind precisely the same idea. Consumption, then, being the destruction of value, is commensurate, not with the bulk, the weight, or the number of the prod- ucts consumed, but with their value. Large consumption is the destruction of large value, whatever form that value may happen to have assumed.

But, products being universally destined for consumption, and that too in the quickest way, how, it may be asked, can there be ever an accumulation of capital, that is to say, of values produced?

Every product is liable to be consumed; because the value, which can be added to, can likewise be subtracted from, any object. If it has been added by human exertion or industry, it may be subtracted by human use, or a variety of accidents. But it cannot be mole than once consumed; value once destroyed cannot be destroyed a second time. Consumption is sometimes rapid, sometimes gradual.

A house, a ship, an implement of iron, are equally consumable as a leaf, a joint of meat, or a coat. Consumption again may be but partial. A horse, an article of furniture, or a house when re-sold by the possessor, has been but partially consumed; there is still a residue of value, for which an equivalent is received in exchange on the re-sale. Sometimes consumption is involuntary, and either accidental, as when a house is burnt, or a vessel shipwrecked, oi contrary to the consumer’s intention, as when a cargo is thrown overboard, or stores set on fire to prevent their falling into enemies’ hands.

I answer — that value may be accumulated, without being necessarily vested all the while in the same identical product, provided only it be perpetuated in some product or other.

Values employed as capital are perpetuated by reproduction; the various products of which capital consists, are consumed like all other products= but their value is no sooner destroyed by consumption, than it re-appears in another, or a similar substance. A manufactory can not be kept up, without a consumption of victuals and clothes for the workmen, as well as of the raw material of manufacture; but, while value in those forms is undergoing consumption, new value is com- municated to the object of manufacture. The items that composed the capital so expended, are consumed and gone; but the capital, the accumulated value, still exists and re-appears under a new form, applicable to a second course of consump- tion. Whereas, if consumed unproductively, it never re-appears at all.

longer produced. All the stock on hand falls in price; the low price encourages the consumption, which soon absorbs the stock on hand.

The annual consumption of an individual, is, the aggregate of all the values consumed by that individual within the year. The annual consumption of a nation is, the aggregate of values consumed within the year by all the individuals and com- munities, whereof the nation consists.

The total national consumption may be divided into the heads of public consumption, and private consumption; the former is effected by the public, or in its service; the latter by individuals or families. Either class may be productive or unproductive.

In the estimate of individual or national consumption, must be included every kind of consumption, whatever be its motive or consequence, whether productive of new value or not;

in like manner, as the estimate of the annual production of a nation comprises the total value of its products raised within the year. Thus, a soap manufactory is said to consume such or such a quantity or value of alkali in a year, although this value be re-produced from the manufactory in the shape of soap; on the other hand, it is said to produce annually such and such a quantity or value of soap, although the production may have cost the destruction of a great variety of values, which, if deducted, would vastly reduce the apparent product.

By annual production, or consumption, national or individual, is therefore meant, the gross and not the net amount. 3 In every community each member is a consumer; for no one can subsist, without the satisfaction of some necessary wants, however confined and limited; on the other hand, all, who do not live on mere charity, or gratuitous bounty, contribute somehow to production, by their industry, their capital, or their land; wherefore, the consumers may be said to be themselves the producers; and the great bulk of consumption takes place amongst the middling and poorer classes, whose numbers more than counterbalance the smallness of the share allotted to each. 4

Whence it naturally follows, that all the commodities, which a nation imports, must be reckoned as a part of its annual product, and all its exports as part of its annual consumption.

The trade of France consumes the total value of the silk it exports to the United States; and produces, on the other hand, the total value of cotton received in return. And, in like manner, the manufacture of France consumes the value of alkali employed by the soap-boiler, and produces the value of soap derived from the concern. Opulent, civilised, and industrious nations, are greater consumers than poor ones, because they are infinitely greater producers. They annually, and in some cases, several times in the course of the year, re-consume their productive capital, which is thus continually renovated; and consume unproductively, the greater part of their revenues, whether derived from industry, from capital, or from land.

It is not uncommon to find authors proposing, as the model for imitation, those nations whose wants are few; whereas, it is far preferable to have numerous wants, along with the power to gratify them. This is the way at once to multiply the human species, and to give to each a more enlarged existence.

The total annual consumption of a nation, or an individual, is a very different thing from the aggregate of capital. A capital may be wholly or partially consumed several times a year.

When a shoemaker buys leather, and cuts and works it up into shoes, there is so much capital consumed and reproduced. Every time he repeats the operation, there is so much more capital consumed. Suppose the leather purchased to amount to 40 dollars, and the operation to be repeated 12 times in the year, there will have been an annual consumption of 480 dol- lars upon a capital of 40 dollars. On the other hand, there may be portions of his capital, implements of trade, for in- stance, which it may take several years to consume. Of this part of his capital he may consume annually but 1-4 or 1-10 perhaps.

Stewart 5 extols the Lacedaemonian policy, which consisted in practising the art of self-denial in the extreme, without aim- ing at progressive advancement in the art of production. But herein the Spartans were rivalled by the rudest tribes of sav- ages, which are commonly neither numerous nor amply provided.

Upon this principle, it would be the very acme of perfection to produce nothing and to have no wants; that is to say, to annihilate human existence.

In each country the wants of the consumer determine the quality of the product. The product most wanted is most in demand; and that which is most in demand yields the largest profit to industry, capital, and land, which are therefore employed in raising this particular product in preference; and, vice versa, when a product becomes less in demand, there is a less profit to be got by its production; it is, therefore, no