low. But it is a very different thing; to allow that the capital is deficient compared with the population; and to allow that it is deficient compared with the demand for it, and the demand for the commodities procured by it.[1] The two cases are very frequently confounded, because they both produce distress among the labouring classes; but they are essentially distinct. They are attended with some very different symptoms, and require to be treated in a very different manner.
If one fourth of the capital of a country were suddenly destroyed, or entirely transferred to a different part of the world, without any other cause occurring of a diminished demand for commodities, this scantiness of capital would certainly occasion great inconvenience to consumers, and great distress among the working classes, but it would be attended with great advantages to the remaining capitalists. Commodities, in general, would be scarce, and bear a high price on account of the deficiency in the means of producing them. Nothing would be so easy as to find a profitable employment for capital; but it would by no means be easy to find capital for the number of employments in which it was deficient; and consequently the rate of profits would be very high. In this state of things there would be an immediate and pressing demand for capital, on account of there being an immediate and pressing demand for commodities; and the obvious remedy would be, the supply of the demand in the only way in which it could take place, namely, by saving from revenue to add to capital. This supply of capital would, as I have before stated, take place just upon the same principle as a supply of population would
- ↑ It is a contradiction in terms, to say that labour is redundant compared with capital, and that capital is at the same time redundant compared with labour:—but it is no contradiction in terms to say that both labourers and capital may be redundant, compared with the means of employing them profitably. I have never maintained the former position, though I have been charged with so doing; but the latter has been so fully established by experience, that I am surprized at the pertinacity with which theoretical writers continue to refuse their assent to it.
