another book to his library. In short, he would have employed his 6 francs in some way which this accident has prevented.

"Let us take a view of industry in general as affected by this circumstance. The window being broken, the glazier's trade is encouraged to the amount of 6 francs; this is that which is seen.

"If the window had not been broken, the shoemaker's trade (or some other) would have been encouraged to the amount of 6 francs; this is that which is not seen.

"And if that which is not seen is taken into consideration, because it is a negative fact, as well as that which is seen, because it is a positive fact, it will be understood that neither industry in general, nor the sum total of national labour, is affected, whether windows are broken or not.

"Now let us consider Jacques Bonhomme himself. In the former supposition, that of the window being broken, he spends 6 francs, and has neither more nor less than he had before, the enjoyment of a window.

"In the second, where we suppose the window not to have been broken, he would have spent 6 francs in shoes, and would have had at the same time the enjoyment of a pair of shoes and of a window.

"Now as Jacques Bonhomme forms a part of society, we must come to the conclusion, that, taking it altogether, and making an estimate of its enjoyments and its labours, it has lost the value of the broken window."

This illustration exhibits the folly of the excuse so often made for waste and luxurious extravagance, i. e. that they are good for trade.

A knowledge of one of the first principles of political economy is sufficient to shew that society is no gainer by the reckless expenditure of the spendthrift. This subject cannot, however, be further investigated without entering upon an explanation of the functions of capital. This introduces another branch of the science of political economy, and must be reserved for a future chapter.

I.

QUESTIONS ON CHAPTER II. On Labour.

Shew that labour is indispensable to the production of wealth.

2. Enumerate some of the different kinds of labour necessary to produce such a commodity as bread.

3. Define the exact service rendered by labour to production.

4. What is productive labour?

5. Shew that unproductive labour is often indirectly very productive.

6. How does division of labour increase its productiveness? Quote Adam Smith's three advantages of division of labour.

7. What fourth advantage has been pointed out by Mr Babbage?

8. Shew that Free Trade is simply division of labour. 9. What is cooperation of labour?

10. Define simple and complex cooperation.

11. What is Wakefield's theory of colonization?

12. In what ways does machinery increase the productiveness of labour?

13. What moral agencies increase the productiveness of labour?

14. What is productive and unproductive consumption? 15. Shew by M. Bastiat's example that unproductive consumption does not conduce to national prosperity.

I. Is the air in a diving bell wealth, and if so why? 2. Is the labour of a boy writing Virgil for a punishment productive or unproductive?

3. What kind of cooperation of labour is there in a game of cricket, and what division of labour between the different parts of the human body?

4. What are the advantages gained by division and cooperation of labour in games?

5. What is the effect of the division of labour which now universally prevails, on the highest kind of artistic skill; as for instance, Herr Joachim's violin playing?

6. Is the cooperation of labour in a game of cricket simple or complex ?

7. In a game of cricket is the cooperation of any labour required except that of the players?

8. Is smoking a productive or unproductive consumption of wealth?

9. Would it be good for trade if an earthquake shook down all the houses in London?

10. Would it be good for trade if an explosion of gunpowder blew up the Houses of Parliament?

II. State the economic result of your father's gardener knocking off one of his quarts of beer.

12. What would become of undertakers if people left off dying?

CHAPTER III, On Capital.

It is erroneous to suppose that Capital and Money are synonymous. Capital is sometimes spoken of as if it were synonymous with money; if this were so it would not be true that Capital was one of the three requisites of the production of wealth, for money in itself does not assist in the production of wealth. A few pages back the use and functions of money were explained, and if this explanation is borne in mind it becomes evident that money is not identical with either wealth or capital. It must not be forgotten that money is a measure of value and a medium of exchange: in other words that it is a substance which is selected by universal consent to serve as a standard by which the value of all other commodities may be estimated, and which consequently may be exchanged for all other commodities.

A Definition of Capital. Capital may be defined as that part of wealth which is saved in order to assist future production.

An example of the service which Capital renders to Production. Agricultural operations could not be carried on unless the labourers were supported by wealth which had been previously accumulated. Many months elapse between the sowing of the seed and the time when the produce of that

seed is converted into a loaf of bread. It is therefore evident that the labourers cannot live upon that which their labour is assisting to produce; but they are maintained by that wealth which their labour or the labour of others has previously produced. This wealth is Capital. Formerly the service which the wealth produced by past labour rendered to future production was more apparent; because farmers, instead of paying their labourers in money, paid them by giving them so much corn, potatoes, beer, cider, etc. This was called paying "in kind." A somewhat similar method of paying labourers is also known as "truck," which has been restrained and regulated by many Acts of Parliament. It has, however, been found more convenient for the farmer to exchange his wealth for money, and to distribute that portion of it which he gives as wages to his workpeople in money also. Wages are now almost universally paid in money; this money is the representative of wealth previously accumulated, and renders the same assistance to future production as the food with which the labourer was formerly remunerated. Let it then be remembered that the wealth which is distributed as wages to productive labourers is capital, and that it renders an essential service to production by maintaining the labourer whilst he is engaged in assisting future production. It must always be remembered that the money, in which the wages are distributed, is not capital: but the food, clothing, etc., for which this money is exchanged, are capital. Gold and silver cannot of themselves maintain labour; they are useless unless they can be exchanged for the necessaries of life. During the hardships suffered by the French army in the retreat from Moscow, the difficulties of carriage made it necessary to abandon the treasure-chest. Its contents were seized by some of the soldiers who filled their pockets and knapsacks with the gold. But they did not keep it long; it was entirely useless in alleviating their wretchedness; the weight of it, in fact, increased their distress. They soon flung it out upon the snow rather than endure the burden of carrying it. This incident illustrates the uselessness of money unless it can be exchanged for commodities which are capable in themselves of supporting life or increasing its pleasures.

The wages-fund.

The wealth which is expended in wages

is called the wages-fund. It must be remembered that the wealth expended in wages is not all employed to support productive labourers. A considerable proportion of it is distributed to those whose labour is strictly unproductive. Only that portion of the wages-fund which supports productive labour, is capital. The wages-fund, therefore, resolves itself into two leading divisions:- Ist, that which supports productive labour and forms a part of the general capital of the country; and 2nd, that which supports labour not creative of wealth, and goes in unproductive expenditure.

An example of another service which Capital renders to Production. The maintenance of the labourer is not the only service which capital renders to the production of wealth. All wealth which is set aside to assist future production is capital. Buildings, machinery, and tools which assist the production of wealth, constitute capital. Many manufactures cannot be profitably carried on without the erection of large buildings and costly machinery. Take for an example the case of the manufacture of woollen cloth. The manufacturer, besides the capital which he requires for wages, must also have a vast amount of capital in buildings, tools, and machinery. It must not be supposed that the whole wealth of the manufacturer is capital; a part of his wealth is spent in various luxuries; that part, only, of his wealth is capital "which he designs to employ in carrying on fresh production." In the words of Mr Mill, "What capital does for production is to afford the shelter, protection, tools and materials which the work requires, and to feed and otherwise maintain the labourers during the process. These are the services which present labour requires from past, and from the produce of past, labour. Whatever things are destined for this use-destined to supply productive labour with these various pre-requisites-are capital."

A demand for commodities not a demand for labour. It was said above that the part of the wealth of the manufacturer which he spends in luxuries does not constitute capital, but that part only is capital which is employed in carrying on