220 ADAM SMITH. 



currency, provisions in the hands of the raisers of 

 them, unmanufactured materials of articles of consump- 

 tion, and manufactured articles of consumption. But 

 the circulating capital of the community differs from 

 that of an individual ; because the latter is wholly ex- 

 cluded from his net revenue, his profits, while the former 

 may enter into the whole trade of the community and 

 be replaced with a profit. 



ii. The only part of the circulating capital of the 

 community which cannot be maintained without dimi- 

 nishing the net revenue is the money of the community. 

 It resembles the fixed capital, first, in requiring like 

 machinery an expense for keeping it up ; secondly, in 

 making no part of revenue ; and, thirdly, in adding to 

 the revenue by improvements which may economise 

 its use. Under this head Dr. Smith discusses the prin- 

 ciples of banking and of currency. 



iii. The capital employed by the owner is distin- 

 guished by Dr. Smith into two kinds, as it puts in 

 motion and maintains productive or unproductive 

 labour. In this phraseology he follows the French 

 Economists, but he differs materially from them in his 

 classification of labour, considering as productive im- 

 portant branches of what they consider as unproductive. 

 The Economists considered the labourer employed 

 upon land as alone productive, because he alone 

 replaces the capital and labour with their ordinary 

 profit, and adds also a net profit; he alone replaces 

 the cost of his subsistence, of the seed sown by him, 

 of the tools used by him, and of the farmer's stock or 

 capital with a profit, and also adds a net produce, the 

 rent of the land, thus augmenting the whole capital of 

 the community ; while the retail dealer, the manu- 

 facturer, and the merchant only receive from the pro- 

 duce of the soil purchased with their goods, their 

 subsistence and the profits of their capital, but make no 

 addition to the capital of the community. Still more, 

 they reckon unproductive the labour of professional 



