Book II: Chapter 5

CHAPTER V.

OF THE DIFFERENT EMPLOYMENTS OF CAPITALS.

Though all capitals are destined for the maintenance of productive labour
only, yet the quantity of that labour which equal capitals are capable of
putting into motion, varies extremely according to the diversity of their
employment; as does likewise the value which that employment adds to the
annual produce of the land and labour of the country.

A capital may be employed in four different ways; either, first, in
procuring the rude produce annually required for the use and consumption of
the society ; or, secondly, in manufacturing and preparing that rude produce
for immediate use and consumption; or, thirdly in transporting either the
rude or manufactured produce from the places where they abound to those
where they are wanted ; or, lastly, in dividing particular portions of
either into such small parcels as suit the occasional demands of those who
want them. In the first way are employed the capitals of all those who
undertake improvement or cultivation of lands, mines, or fisheries; in the
second, those of all master manufacturers ; in the third, those of all
wholesale merchants; and in the fourth, those of all retailers. It is
difficult to conceive that a capital should be employed in any way which may
not be classed under some one or other of those four.

Each of those four methods of employing a capital is essentially necessary,
either to the existence or extension of the other three, or to the general
conveniency of the society.

Unless a capital was employed in furnishing rude produce to a certain degree
of abundance, neither manufactures nor trade of any kind could exist.

Unless a capital was employed in manufacturing that part of the rude
produce which requires a good deal of preparation before it can be fit for
use and consumption, it either would never be produced, because there could
be no demand for it; or if it was produced spontaneously, it would be of no
value in exchange, and could add nothing to the wealth of the society.

Unless a capital was employed in transporting either the rude or
manufactured produce from the places where it abounds to those where it is
wanted, no more of either could be produced than was necessary for the
consumption of the neighbourhood. The capital of the merchant exchanges the
surplus produce of one place for that of another, and thus encourages the
industry, and increases the enjoyments of both.

Unless a capital was employed in breaking and dividing certain portions
either of the rude or manufactured produce into such small parcels as suit
the occasional demands of those who want them, every man would be obliged to
purchase a greater quantity of the goods he wanted than his