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sequent rise of wages would bring down profits, in spite of any cheapness of food. Suppose then that the population of Great Britain goes on increasing at its present rate, and demands every year a supply of imported food considerably beyond that of the year preceding. This annual increase in the food demanded from the exporting countries, can only be obtained either by great improvements in their agriculture, or by the application of a great additional capital to the growth of food. The former is likely to be a very slow process, from the rudeness and ignorance of the agricultural classes in the food-exporting countries of Europe, while the British colonies and the United States are already in possession of most of the improvements yet made, so far as suitable to their circumstances. There remains as a resource, the extension of cultivation. And on this it is to be remarked, that the capital by which any such extension can take place, is mostly still to be created. In Poland, Russia, Hungary, Spain, the increase of capital is extremely slow. In America it is rapid, but not more rapid than the population. The principal fund at present available for supplying this country with a yearly increasing importation of food, is that portion of the annual savings of America which has heretofore been applied to increasing the manufacturing establishments of the United States, and which free trade in corn may possibly divert from that purpose to growing food for our market. This limited source of supply, unless great improvements take place in agriculture, cannot be expected to keep pace with the growing demand of so rapidly in. creasing a population as that of Great Britain ; and if our population and capital continue to increase with their present rapidity, the only mode in which food can continue to be supplied cheaply to the one, is by sending the other abroad to produce it.


§ 8. This brings us to the last of the counter-forces -, which check the downward tendency of profits in a country whose capital increases faster than that of its neighbours, and

whose profits are therefore nearer to the minimum. This

is, the perpetual overflow of capital into colonies or foreign

countries, to seek higher profits than can be obtained at
home. I believe this to have been for many years one of
the principal causes by which the decline of profits in Eng-
land has been arrested. It has a twofold operation. In the
first place, it does what a fire, or an inundation, or a com-
mercial crisis would have done: it carries off a part of the
increase of capital from which the reduction of profits pro-
ceeds. Secondly, the capital so carried off is not lost, but
is chiefly employed either in founding colonies, which be-
come large exporters of cheap agricultural produce, or in
extending and perhaps improving the agriculture of older
communities. It is to the emigration of English capital,
that we have chiefly to look for keeping up a supply of
cheap food and cheap materials of clothing, proportional to
the increase of our population: thus enabling an increasing
capital to find employment in the country, without reduc-
tion of profit, in producing manufactured articles with which
to pay for this supply of raw produce. Thus, the exporta-
tion of capital is an agent of great efficacy in extending the
field of employment for that which remains: and it may be
said truly that, up to a certain point, the more capital we
send away, the more we shall possess and be able to retain
at home. -
In countries which are further advanced in industry and
population, and have therefore a lower rate of profit, than
others, there is always, long before the actual minimum is
reached, a practical minimum, viz. when profits have fallen
so much below what they are elsewhere, that, were they to
fall lower, all further accumulations would go abroad. In
the present state of the industry of the world, when there is
occasion, in any rich and improving country, to take the
minimum of profits at all into consideration for practical
purposes, it is only this practical minimum that needs be
considered. As long as there are old countries where capi-
tal increases very rapidly, and new countries where profit

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is still high, profits in the old countries will not sink to the rate which would put a stop to accumulation; the fall is stopped at the point which sends capital abroad. It is only, however, by improvements in production, and even in the production of things consumed by labourers, that the capital of a country like o is prevented from speedily reaching that degree of lowness of profit, which would cause all further savings to be sent to find employment in

the colonies, or in foreign countries. ,’

-: *

CONSEQUENCES OF THE TENDENCY OF PROFITS TO - - A MINIMUM. 2§ 1. THE theory of the effect of accumulation on prof. its, laid down in the preceding chapter, materially alters many of the practical conclusions which might otherwise be supposed to follow from the general principles of Political Economy, and which were, indeed, long admitted as true

by the highest authorities on the subjeet. * * * *

It must greatly abate, or rather, altogether destroy, in countries where, profits are low, the immense importance which used to be attached by political economists to the effects which an event or a measure of government might have in adding to or subtracting from the capital of the country. We have now seen that the lowness of profits is a proof that the spirit of accumulation is so active, and that the increase of capital has proceeded at so rapid a rate, as to outstrip the two counter-agencies, improvements in production, and increased supply of cheap necessaries from abroad: and that unless a considerable portion of the annual increase of capital were, either periodically destroyed, or exported for foreign investment, the country would speedily attain the point at which further accumulation would cease, or at least spontaneously slacken, so as no longer to overpass the march of invention in the arts which produce the necessaries of life. In such a state of things as this, a sudden addition to the capital of the country,

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unaccompanied by any increase of productive power, would be but of transitory duration; since by depressing profits and interest, it would either diminish by a corresponding amount the savings which would be made from income in the year or two following, or it would cause an equivalent amount to be sent abroad, or to be wasted in rash speculations. Neither, on the other hand, would a sudden abstraction of capital, unless of inordinate amount, have any real effect in impoverishing the country. After a few months or years, there would exist in the country just as much capital as if none had been taken away. The abstraction, by raising profits and interest, would give a fresh stimulus to the accumulative principle, which would speedily fill up the vacuum. Probably, indeed, the only effect that would ensue, would be that for some time afterwards less capital would be exported, and less thrown away in hazardous speculation. In the first place, then, this view of things greatly weakens, in a wealthy and industrious country, the force of the economical argument against the expenditure of public money for really valuable, even though industriously unproductive, purposes. If for any great object of justice or philanthropic policy, such as the industrial regeneration of Ireland, or a comprehensive measure of colonization or of public education, it were proposed to raise a large sum by way of loan, politicians need not demur to the abstraction of so much capital, as tending to dry up the permanent sources of the country’s wealth, and diminish the fund which supplies the subsistence of the labouring population. The utmost expense which could be requisite for any of these purposes, would not in all probability deprive one labourer of employment, or diminish the next year's production by one ell of cloth or one bushel of grain. In poor countries, the capital of the country requires the legislator's sedulous care; he is bound to be most cautious of encroaching upon it, and should favour to the utmost its accumulation at home, and its introduction from abroad. But in rich, - - T

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