1831] 
in Manufactures . 
203 
employed, at both times, in a manner similarr in evey apparent respect : Indeed, he 
invariably calculates on all accumulations of capital, and on all labourers, as being 
of necessity productive of gain, when employed on the preparation of “ such articles 
as are, for some time at least, capable of duration, and of being exchanged for 
some other product.” 
Another error into which Dr. Smith runs, and which has pervaded the writings 
of all subsequent reasoners, is this. He judges, invariably, of the enrichment of 
capitalists, by the rate of the profit realized, and not by their amount in the aggre- 
gate. He has thus let slip the only mode of tracing the operation of the limit 
to production and enrichment, and has left these altogether uncertain ; and he 
has, consequently, been led into the contradictions just remarked ; on the one hand 
stating, that with increases of capital, and the will to employ it in production, 
wealth must ever be progressive ; while, on the other, he tells us, that countries 
can enjoy only a certain complement of wealth ; and calculates on the influence 
of competition for the means of employing capital, a thing which could not b e 
known, but for the very influence of that limit, the existence of which he would 
seem to deny. 
Look at the more remote consequences of these errors, in the conclusions of 
his followers : they, looking solely to the rate of profits, reason thus, and are 
warranted in so doing by their text book. The productive powers of labour are 
greatest in agriculture, when, with a small outlay of capital, a high rate of profits 
is realized ; and when the productive powers of labour are great, the power of 
accumulation is great in proportion ; for then it is that the surplus produce remain- 
ing after satisfying the wants of producers, is the most. As the rates of profits 
fall, the power of accumulation suffers reduction ; for it is by transfers from the 
revenue of the producers that capital is realized. With the loss of the power of 
accumulating capital, which the fall in the rates of profits is supposed to cause, the 
progress of wealth is retarded ; for wealth proceeds yearly increasing, rapidly or 
slowly, as transfers from revenue to productive capital, are large or small. With 
the falls in the rate of profits, consequent on the employment of increasing capital 
being recompensed by a smaller and smaller return, as cultivation is extended over 
inferior soils, the power of further accumulation suffers a gradual diminution * 
and this proceeds till it is ultimately lost, by profits being absorbed altogether, or 
at least brought to so low a rate, that the motive to accumulation ceases to act. At 
this time capitalists wall be living from hand to mouth, and will probably be in 
worse circumstances than labourers ; and thus we are brought to this most strange 
conclusion, that when countries are most improved, and are consequently most 
wealthy, they have the least disposable wealth, and the smallest power of accu- 
mulation. 
But if the reasonings advanced in this Essay are at all correct, it is shown, that at 
the time the progress of enrichment and population are arrested by obstacles offered 
by the physical circumstances of the country, together with the existing knowledge 
of productive arts among the population, then the power of accumulation is greatest ; 
and then all the productive classes, of which society is composed, are actually in the 
enjoyment of larger incomes than they could possibly have possessed before. In 
proof of the correctness of these conclusions, I appeal to the experience of countries 
which have made the most marked progress in enrichment ; and which have 
consequently made, what will be allowed to be, the most near approach to the 
physical limit to production ; and I ask, whether it was not in such countries 
that the power of accumulation was the greatest ? and whether it was not at these 
times, that this power exhibited itself most efficiently ? Whenever new openings 
