treats of the different effects which the different employments of capital immediately produce upon the quantity both of national industry, and of the annual produce of land and labor.
CHAPTER I
of the division of stock
WHEN the stock which a man possesses is no more than sufficient to maintain him for a few days or a few weeks, he seldom thinks of deriving any revenue from it. He consumes it as sparingly as he can, and endeavors by his labor to acquire something which may supply its place before it be consumed altogether. His revenue is, in this case, derived from his labor only. This is the state of the greater part of the laboring poor in all countries.
But when he possesses stock sufficient to maintain him for months or years, he naturally endeavors to derive a revenue from the greater part of it; reserving only so much for his immediate consumption as may maintain him till this revenue begins to come in. His whole stock, therefore, is distinguished into two parts. That part which, he expects, is to afford him this revenue, is called his capital.[1] The other is that which supplies his immediate consumption;
- ↑ Not having the fear of ulterior consequences before his mind, and hence not feeling it incumbent upon him to guard against Socialistic deductions by carefully framing a definition which should define nothing, Adam Smith states the meaning of capital in the above lucid terms. To him the capitalist as such implies the laborer as such, and the advanced civilization this separation of classes involves—as will appear from what follows. What would the old Scotch economist have thought of the nonsense to which modern orthodox economists are driven in their efforts to evade the consequences of a plain definition—to their talk about Robinson's wheelbarrow constituting him a capitalist, and the like?—Ed.
