22 Manual of Political Economy,
BOOK I. CH. IV.
Unproductive consumption diminishes wealth which might otherwise be used as capital.
labourers in the improvement of his estate? Is not the one course as good for trade as the other? It is, however, easy to show that there is an important difference in the results which follow from these two courses. The purchase of the velvet may no doubt give a certain amount of enjoyment to those who wear it, but it will do nothing to assist the future production of wealth. The wealth which is expended in paying the wages of labourers engaged in the improvement of an estate will be consumed just as certainly as the velvet will be worn out; but the wearing out of the velvet leaves no result behind, whereas, as a direct consequence of employing labourers in the improvement of an estate, the productiveness of the land may be increased by an amount more than equivalent in value to the wealth which has been consumed in improving it. It thus follows that the unproductive consumption of commodities diminishes the amount which may subsequently be devoted to paying the wages of labour; whereas wealth directly expended in paying the wages of labourers will, unless it is unskilfully, and therefore unprofitably, applied, increase the amount which may be expended in wages.
The proposition which has just been established is of much practical importance, because it disproves the idea which is so common that the labourer is benefited by the wasteful expenditure of the spendthrift. Not only is extravagance often excused on the plea that it is good for trade, but saving not infrequently incurs much popular reproach because it is supposed that the person who saves does no good to the labourer. It has, however, we think, been shown that the industrial classes are more benefited by a man who saves wealth and productively employs it, than by one who spends it on his own indulgences.
In thus contrasting the different results which follow from the saving and spending of wealth it has been assumed that the wealth which is saved is devoted to the productive employment of labourers. It may, however, very possibly happen that the work in which labourers are engaged is not reproductive of fresh wealth. Thus they may be employed in making an artificial lake which, though useful for ornament, does not promote the
