4 OBSERVATIONS REGARDING ACCUMULATED CAPITAL WEALTH, 



Adam Smith, in commenting on the "Errors of M. 

 cle Quesnai's System,' observes:- — ■ 



"The capital error of the system seems to lie in 

 representing the class of artificers, manufacturers, and 

 merchants, as altogether barren and unproductive. 



"The following oibservations may serve to show the 

 impropriety of this representation. 



"First, this class, it is acknowledged, reproduces 

 annually the value of its own annual consumption, 

 and continues, ait least, the existence of the stock or 

 capital which maintains and employs it. 



"Secondly, it seems, upon this account, altogether 

 improper to consider artificers, manufacturers, and 

 merchants, in the same light as menial servants. The 

 labour of menial servantsi does not continue the exist- 

 ence of the fund which maintains ancL employs them. 

 Their maintenance and employment is altogether at 

 the expense of their masters ( ?) and the work which 

 they perform is not of a nature to repay that ex- 

 pense." 



It seems strange that an economist, so eminent as 

 the author of "The Wealth of Nations," should have failed 

 to see that the menial's personal service referred to was — 

 as a product^ — directly absorbed and enjoyed by the 

 masters — not in the relation of master to servant, but 

 rather as consumers of services of a definite economic 

 value. In the differentiated condition of the modern 

 system of organised labour, it is rarely the case that the 

 primary raw materials, upon which the particular worker 

 or factory is engaged, happens to pass directly — as in the 

 case of the menial's personal services — in a finished con- 

 dition to the consumer. On the contrary, the raw ma- 

 terial, in most cases, passes through many hands, and 

 many stages of transport, modification, and improvement, 

 before it attains to the completed condition of the con- 

 sumer's marketable commodity. 



In the latest of all the stages and processes of the 

 commodity or personal service, is accumulated the com- 

 posite cost of all its previous stages of production, trans- 

 port, and modification. At this final stage, when passing 

 over to the consnmer, the latter pays the cost of the ser- 

 vices of all the productive agencies which, stage by stage, ^ 

 accrued and became incorporated in the final marketable 

 stage of the specific commodity or service. 



But it is important to observe that in the act of 

 consumption, whether of a valuable commodity or a valu- 



