ADAM SMITH. 277 



II. CAPITAL. 



By capital, when used generally, we understand the whole 

 of the material world which man can appropriate, as well as 

 those talents, natural or acquired, which are the springs of 

 his exertions. In this sense of the word, it signifies all 

 property material and mental, or every thing valuable to 

 man. Among other things, it clearly comprehends land. 

 But sometimes we speak of capital, in opposition to land ; 

 and, in this case, it comprehends every thing valuable, except 

 the ground ; for it certainly includes all the parts and pro- 

 ductions of the soil which are severed from it. In this 

 sense, the division nearly resembles the legal distribution of 

 property into real and personal. Both these definitions of 

 capital are used repeatedly, and with equal frequency, by 

 every writer on political economy. 



If capital is contradistinguished from land, the separation 

 is made by a most indefinite and obscure boundary. Canals, 

 roads and bridges, are as much a part of capital, as any por- 

 table machines, fashioned out of the produce or parts of the 

 soil. The same may be said of fences, drains, footways, and 

 in general of all the ostensible monuments of labour in an 

 improved farm. But is not the soil itself, also, referable 

 to the very same class, after it has been worked up with 

 manure and composts, so as to be highly fertilized ? Is not 

 the whole surface of an improved farm, therefore, to be con- 

 sidered as capital, rather than as land ? And when a person 

 buys a hundred acres of improved land, how can he say what 

 part of the price is paid for land, and what part for capital ? 

 We speak indeed of capital vested in land, and use the 

 phrase, until we actually think there is such a thing as 



of the Balance of Trade. In stating the proportion of exports to imports, 

 it has justly been observed, that no notice can ever be taken, in Custom- 

 house accounts, of money remitted for subsidies, or for the payment of our 

 troops and fleets abroad. But it has very inaccurately been added, that 

 these sums are so much actually sent out of the country without an equi- 

 valent. In fact, the equivalent is great and obvious, although of a nature 

 which cannot be stated in figures among the imports. The equivalent is 

 all the success gained by our foreign warfare and foreign policy the 

 aggrandisement and security of the State, and the power of carrying on 

 that commerce, without which there would be neither exports nor imports 

 to calculate and compare. 



