UNCONSCIOUS VITAL PROCESSES IN LIEE OF COMMUNITIES. 661 
form in which it can he made available for consumption as food, 
clothing, and shelter — and the manner in which it is circulated 
through, the community to perform the functions of repairing waste 
and providing for growth. 
1. As to the source of revenue. “ The annual labour of every 
nation is the fund which originally supplies it with all the necessaries 
and conveniences of life which it armually consumes, and which con- 
sists always either in the immediate produce of that labour or in what 
is purchased with that produce from other nations” — (“Wealth of 
Nations,’’ opeuing sentence). The ultimate source, therefore, of the 
income or revenue of every community is the application of human labour 
to the gifts of Nature, whether those gifts are organic or inorganic, 
animal, vegetable, or mineral. The term 45 immediate produce” in the 
passage just cited includes of course the results of all labour applied 
to any object by means of which an additional value is added to it up to 
the time of its passing into actual consumption within the community, 
or of its being applied in exchange for the produce of other nations. 
The fault in the agricultural or physioeratic system of political 
economy, which represented the produce of laud as the sole source of 
the revenue and wealth of every country, was that it denied that the 
labour of artificers and manufacturers applied to the rude products of 
the earth added anything to the whole annual amount of the produce* 
Such labour was therefore considered unproductive. Adam Smith 
refutes this notion at some length (Book IV., chap, ix.) The circum- 
stance that the notion was quite inconsistent with observed facts was 
probably sufficient to account for the neglect of this system. The 
fallacy of the notion is apparent as soon as it is recognised that the 
products of the earth are not for the most part destined to be imme- 
diately consumed in their rude slate by the persons whose labour 
produces them. So far as they are destined to be exchanged for 
other products it is plain that all labour applied to them which results 
in their being exchangeable for a larger quantity of such other 
products than if it were not applied increases their value for the 
purpose of exchange. And, as the things obtained in exchange are 
intended for the purposes of consumption, the result is the same as if 
the labour applied to the rude products had been applied to the pro- 
duction of the things obtained in exchange. The consequence to the 
community has been that by reason of the labour of the artificer 
consumable articles of greater value have come into its possession 
than would have come if he had not done the work. His labour is 
therefore productive. Apart from this defect the agricultural system 
seems to have been founded upon the only sure basis, and it is to be 
regretted that its doctrines have been so much neglected. 
It cannot be too often or too emphatically repeated that the only 
permanent source of the income of a community is the labour of its 
people applied to the gifts of nature. There are, it is true, two other 
possible sources — loans from other communities, and receipts of indi- 
vidual members of the community from investments made abroad. In 
considering the state of a community at any particular time regard 
must, of course, be had to these other sources of income. But neither 
can be treated as normal. They may therefore be disregarded for the 
present purpose. I wish that this fundamental and axiomatic principle 
2 T 
