works, however, require some, though it may be very little, occasional outlay to maintain their full effect.

These improvements, however, by the very fact of their deserving that title, produce an increase of return, which, after defraying all expenditure necessary for keeping them up, still leaves a surplus. This surplus forms the return to the capital sunk in the first instance, and that return does not, as in the case of machinery, terminate by the wearing out of the machine, but continues forever. The land, thus increased in productiveness, bears a value in the market proportional to the increase; and hence it is usual to consider the capital which was invested, or sunk, in making the improvement, as still existing in the increased value of the land. There must be no mistake, however. The capital, like all other capital, has been consumed. It was consumed in maintaining the laborers who executed the improvement, and in the wear and tear of the tools by which they were assisted. But it was consumed productively, and has left a permanent result in the improved productiveness of an appropriated natural agent, the land. We may call the increased produce the joint result of the land and of a capital fixed in the land. But as the capital, having in reality been consumed, cannot be withdrawn, its productiveness is thenceforth indissolubly blended with that arising from the original qualities of the soil; and the remuneration for the use of it thenceforth depends, not upon the laws which govern the returns to labor and capital, but upon those which govern the recompense for natural agents. What these are, we shall see hereafter.*

§ 2. There is a great difference between the effects of circulating and those of fixed capital, on the amount of the gross produce of the country. Circulating capital being

* Infra, book ii. chap. xvi. On Rent.

destroyed as such, or at any rate finally lost to the owner, by a single use; and the product resulting from that one use being the only source from which the owner can replace the capital, or obtain any remuneration for its productive employment; the product must of course be sufficient for those purposes, or in other words, the result of a single use must be a reproduction equal to the whole amount of the circulating capital used, and a profit beside. This, however, is by no means necessary in the case of fixed capital. Since machinery, for example, is not wholly consumed by one use, it is not necessary that it should be wholly replaced from the product of that use. The machine answers the purpose of its owner if it brings in, during each interval of time, enough to cover the expense of repairs, and the deterioration in value which the machine has sustained during the same time, with a surplus sufficient to yield the ordinary profit on the entire value of the machine.

From this it follows that all increase of fixed capital, when taking place at the expense of circulating, must be, at least temporarily, prejudicial to the interests of the laborers. This is true not of machinery alone, but of all improvements by which capital is sunk; that is, rendered permanently incapable of being applied to the maintenance and remuneration of labor. Suppose that a person farms his own land, with a capital of two thousand quarters of corn, employed in maintaining laborers during one year, (for simplicity we omit the consideration of seed and tools,) whose labor produces him annually two thousand four hundred quarters, being a profit of twenty per cent. This profit we shall suppose that he annually consumes, carrying on his operations from year to year on the original capital of two thousand quarters. Let us now suppose that by the expenditure of half his capital, he effects a permanent improvement of his land, which is executed by half his laborers, and occupies them for a year, after which he will only require,

for the effectual cultivation of his land, half as many laborers as before. The remainder of his capital he employs as usual. In the first year there is no difference in the condition of the laborers, except that part of them have received the same pay for trenching or tile-draining or manuring the land, which they previously obtained for ploughing, sowing, and reaping. At the end of the year, however, the improver has not as before a capital of two thousand quarters of corn. Only one thousand quarters of his capital have been reproduced in the usual way; he has now only those thousand quarters and his improvement. He will employ, in the next and in each following year, only half the number of laborers, and will divide among them only half the former quantity of subsistence. The loss would soon be made up to them if the improved land, with the diminished quantity of labor, produced two thousand four hundred quarters as before, because so enormous an accession of gain would probably induce the improver to save a part, add it to his capital, and become a larger employer of labor. this may not, and often will not, be the case; for (supposing, as we may do, that the improvement will last indefinitely, without any outlay worth mentioning to keep it up,) the improver will have gained largely by his improvement if the land now yields, not two thousand four hundred, but one thousand five hundred quarters; since this will replace the one thousand quarters forming his present circulating capital, with a profit of twenty-five per cent. (instead of twenty as before) on the whole capital, fixed and circulating together. The improvement, therefore, may be a very profitable one to him, and yet very injurious to the laborers.

But

It will, perhaps, be objected that agricultural improvements do not operate in the manner supposed, do not enable a part of the labor previously employed on the land to be dispensed with, but only enable the same labor to raise 10*

VOL. I.

a greater produce. This is true of some kinds of agricultural improvement; but the contrary is true of others. Suppose, however, that the case were as the objection assumes it to be. Suppose, too, that the greater produce, which by means of the improvement can be raised from the soil with the same labor, is all wanted, and will find purchasers. The improver will in that case require the same number of laborers as before, at the same wages. But where will he find the means of paying them? He has no longer his original capital of two thousand quarters disposable for the purpose. One thousand of them are lost and gone-consumed in making the improvement. If he is to employ as many laborers as before, and pay them as highly, he must borrow, or obtain from some other source, a thousand quarters, to supply the deficit. But these thousand quarters already maintained, or were destined to maintain, an equivalent quantity of labor. They are not a fresh creation; their destination is only changed from one productive employment to another; and though the agriculturist has made up the deficiency in his own circulating capital, the breach in the circulating capital of the community remains unrepaired.

I cannot assent to the argument relied on by most of those who contend that machinery can never be injurious to the laboring class, namely, that by cheapening production it creates such an increased demand for the commodity, as enables, ere long, a greater number of persons than ever to find employment in producing it. The fact, though too broadly stated, is, no doubt, often true. The copyists who were thrown out of employment by the invention of printing, were doubtless soon outnumbered by the compositors and pressmen who took their place: and the number of laboring persons now occupied in the cotton manufacture is many times greater than were so occupied previously to the inventions of Hargreaves and Arkwright, which shows that beside the enormous fixed capital now embarked in

the manufacture, it also employs a far larger circulating capital than at any former time. But if this capital was drawn from other employments; if the funds which took the place of the capital sunk in costly machinery, were supplied not by an additional saving consequent on the improvements, but by drafts on the general capital of the community; what better are the laboring classes for the mere transfer? In what manner is the loss they sustained by the conversion of circulating into fixed capital, made up to them by a mere shifting of part of the remainder of the circulating capital from its old employments to a new one?

All attempts to make out that the laboring classes, as a collective body, cannot suffer by the introduction of machinery, or by the sinking of capital in permanent improvements, are, I conceive, necessarily fallacious. That they would suffer in the particular department of industry to which the change applies, is generally admitted, and obvious to common sense; but it is often said that though employment is withdrawn from labor in one department, an exactly equivalent employment is opened for it in others, because what the consumers save in the increased cheapness of one particular article enables them to augment their consumption of others, thereby increasing the demand for other kinds of labor. This is plausible, but, as we saw in the last chapter, involves a fallacy; demand for commodities being a totally different thing from demand for labor. It is true, the consumers have now additional money to buy other things, but this will not create the other things, unless there is capital to produce them; and the improvement has not set at liberty any capital, if even it has not absorbed some from other employments. The supposed increase of production and of employment for labor in other departments therefore will not take place; and the increased demand for commodities by some consumers, will be balanced by a cessation of demand on the part of others,