perishes, and is reproduced. With regard to the most enduring fabrics and instruments, as well as the human agents employed in production, the invariable truth holds good

"Omnia paulatim consumit longior ætas,

Vivendoque simul morimur, rapimurque manendo.”*

"The growth of capital," it has been justly observed by Mr. Mill, "is similar to the growth of population. Every individual who is born dies, but in each year the number born exceeds the number who die: the population, therefore, always increases, though not one person of those composing it was alive at a very recent date."†

Thus we see that everything that is produced is destined to be consumed, either more slowly or more speedily, subject, however, to an essential distinction, which involves some of the most important laws and instructive lessons of political economy. For there are two sorts of consumption, attended by very different consequences to society. The one, an unproductive consumption, which terminates in the act itself, a destruction of value which is followed by no renovation of the matter consumed, either in the same or in any other shape; the other, a reproductive consumption,-a temporary destruction of value succeeded by a new and increased value in an altered shape. Let us exemplify this distinction by an example. A. expends a given sum of money in

*"By time's slow waste all earthly things decay,

Dying we live, and perish day by day."

† Mill, Prin. of Polit. Econ. book i. chap. 5. s. 6.

a costly entertainment, B. expends the same sum in converting a piece of undraineď morass into a potatogarden. Each gives employment, by that one act of expenditure, to a certain amount of labour, and contributes to the maintenance of a certain number of families, belonging, indeed, in the two cases, to a different class, but we will assume the benefit conferred in this respect to be equal. The value thus expended is in both instances consumed, but with how different a result! In the former case the viands are eaten, the music ceases, the garlands fade, the guests have enjoyed their revel. Nothing beyond the pleasure of the hour has been the result of that profitless expenditure. No fund survives for employing a new series of wine-growers, serving-men, confectioners, and musicians. So much value has been irrecoverably sunk and lost. To that extent A. has become a poorer man than he was before. On the other hand, B., the improver of the soil, is not only as rich as he was before his expenditure commenced, but richer. His potato-ground has returned a produce which not only replaces all that he has paid to his labourers in wages, together with the tithes and taxes, and a percentage on his fixed capital, but, over and above these, a profit on his outlay. The money which he sunk in the soil has been replaced with usury. He has the same fund in hand to expend over again in maintaining labourers and their families; year after year this process of reproductive consumption may go on; the same capital may be again and again employed, consumed, and replaced, furnishing in each successive cycle maintenance to the labourer and income to the capitalist. The capital thus appropriated constitutes,

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as Adam Smith says, a "perpetual fund for the maintenance of labour in all time to come." It is a fund, too, which, from the operation of natural motives on the human mind, tends perpetually to increase in amount. The profits of the capitalist furnish the sources of fresh accumulation. If, indeed, he is content with the amount of his acquisitions, he will only re-invest year by year the same amount as before in his business, expending the entire profits as income in the gratification of his wants: in that case his capital will undergo neither diminution nor increase. But if, like the major part of mankind, he is ambitious to increase his store, if he partakes in that prevailing desire to better his condition, which, as the same author says, comes with us from the womb, and never leaves us till we go to the grave," he will be impelled to add more and more to his capital, by turning into that channel some portion of the annually-accruing profits which he might otherwise expend as income. As fast as he does this, fresh employment is created for labour, a larger fund is made the basis of increased gains, which again afford a margin for the creation of fresh capital. Whatever be the proportions in which the capitalist appropriates his net returns, whether by spending them as income or adding them to his active capital,-in the former case, it will be clearly perceived that the labour employed and the wealth expended are employed and expended once for all-the revenue once enjoyed is sunk and gone; in the latter case, the wagesfund renews itself year by year, and the labourer has the best possible security for the permanency of his income, because it is that very perennial expen

diture that maintains him which yields also a constant income to his employer.

These, perhaps, may appear obvious and familiar truths, but I may be forgiven for attempting to elucidate, even at the risk of some reiteration, the essential distinction between productive and unproductive consumption, on account of the great strength and obstinacy of the popular fallacy which prevails on the subject of expenditure. It is only necessary to have a clear perception of the fact that, whatever is employed as capital is consumed just as much as what is spent as income, only with this difference, that the one is spent many times over, and the other once for all, in order to explode the mischievous delusion which attaches some sort of éclat to the conduct of the spendthrift. If we may judge from the opinions that are afloat in society, the general sympathy of mankind runs strongly with those who, as the phrase goes, "spend their money freely," no matter what direction their expenditure may take. The opinion has been pushed to its strict logical result by some writers, who have not shrunk from asserting broadly the position, that "private vices are public benefits." I have referred, in a former Lecture, to a modern French writer, who, while advocating self-indulgence and luxurious living on economical grounds, consistently maintains that war, heavy taxation, nay, even great conflagrations, such as the fire of London,-on account of the extensive employment to which they give rise, are favourable rather than

* M. de Saint Chamans. See Introductory Lecture on "The Harmonies of the Social Economy," p. 23. note.

detrimental to the wealth of nations. The argument is of some value as a reductio ad absurdum. But many persons, who would recoil from the abstract proposition just referred to, entertain, and not unfrequently profess, a sort of predilection for the reckless spendthrift. The lavish squanderer of his substance is often spoken of, under a total misconception of the social consequences of his conduct, as a person who is "no one's enemy but his own." Nay, so far is this indulgence carried, that it is sometimes extended not only to those who spend their whole fortunes on their own personal enjoyment, but even to those who, by running into debt beyond their means of repayment, virtually consume for the same purpose the property of their neighbours. Such excesses are frequently spoken of as venial, on the absurd ground, that, however ruinous to the individual such a course may be, at all events it causes money to be circulated, and furnishes a good deal of employment so long as the expenditure lasts. Now the analysis that has just been made of the destination and employment of capital explodes in a moment all such mischievous illusions; it shows that the reproductive capitalist is as necessarily an employer of industry, though a far more constant one, as the spendthrift; that it is saving, not self-indulgence, which promotes most effectively the circulation of wealth,- meaning by saving, not the locking up of guineas in a strong-box, but the continued transfer from unproductive to productive expenditure of part of the profits derived from the employment of capital. It shows that if any man, not content with spending his whole income on his