A publication of

left absolutely vacant. The country is the poorer for his

consumption, to the full amount of what he has con-

sumed. It is not the poorer, but the richer for what the

ploughman has consumed, because, during the time he

was consuming it, he has reproduced what does more

than replace it.

We may hence perceive how it is, that a country

advances in property, and how it is that it declines. When

the produce of each year is the same with that of the

preceding year, it is plain that the riches of the country

are stationary; when the produce of each year is greater

than that of the preceding, the wealth of the country is

advancing; and when the produce of each year is less than

that of the preceding, the wealth of the country is on the

decline. What then is the cause by which the annual

produce of a country is increased? About this there can

luckily be no controversy. The cause by which the annual

produce of a country is increased, is the increase of that

division of the annual produce, which is destined to

administer to reproduction. That we may have more

work, we must employ more workmen, and use more

materials. The maintenance of these workmen, and the

materials on which they operate, are the new fund which

is indispensably requisite to the increase of the annual

produce. But the only source whence this provision can

be drawn, is the source whence the whole fund destined

to administer to reproduction is drawn, the annual pro-

duce of the country.

Now, we have already clearly seen, that the annual

produce of every country is always divided into two

parts, that which is destined for mere consumption, and

that which is destined for the business of reproduction;

and that those two parts always wholly exhaust that

produce. In whatever proportion, therefore, the part des-

tined for reproduction is augmented, in the same propor-

tion must the part intended for consumption be

diminished, and vice versa. When the affairs of a country

are stationary, when the produce of this year, for exam-

ple, is the same with that of the last, that is to say, is equal

both to that part which was appropriated to the business

of reproduction and to that which was appropriated to

consumption, the part destined for reproduction must

have been so large as to suffice for replacing itself, and

for affording an increase equal to that part of the annual

produce which was taken for consumption. Again, if the

produce for the succeeding year is to be the same with

the present, such a part of this year’s produce must be

devoted to the business of reproduction as will suffice to

replace itself, and to afford a surplus equal to that part

which is reserved for immediate consumption. While this

proportion is maintained, the situation of the country is

stationary.

When, however, it fortunately happens, that a smaller

proportion than this of the annual produce is withdrawn

for consumption, and a greater proportion than this is left

for reproduction, the prosperity of the country advances.

The produce of each year is greater than that of the

preceding. On the other hand, whenever in the stationary

situation of a country, a greater than the usual proportion

of the annual produce is withdrawn from the business of

reproduction, and devoted to consumption, the produce

of the succeeding year becomes necessarily diminished,

and as long as this consumption continues, the affairs of

the country are retrograde. It is evident, that the arrange-

ment of society, which has a tendency to draw the great-

est proportion of the annual produce to consumption, is

that in which there is the greatest inequality of fortunes,

in which there is the greatest number of persons, who

have no occasion to devote themselves to any useful

pursuit.

1

 But it is the maintenance of great fleets and

armies, which is always the most formidable weight in

the scale of consumption, and which has the most fatal

tendency to turn the balance against reproduction and

prosperity. It is by the lamentable continuance of wars,

almost always nourished by puerile prejudices and blind

passions, that the affairs of prosperous nations are first

brought to the stationary condition, and from this

plunged into the retrograde.

Mr. Spence offers one curious observation. After the

statement which we have already quoted, of the miseries

which he supposes would flow from a disposition in the

landholders not to spend, he anticipates an objection.

*

“Let it not be urged,” says he, “that what they might save

would not be hoarded, (for misers now-a-days are wiser

than to keep their money in strong boxes at home) but

would be lent on interest; it would still be employed in

circulation, and would still give employment to manu-

facturers.” This objection he encounters with the follow-

ing answer: “It should be considered, that money

borrowed on interest is destined not for expenditure, but

to be employed as capital; that the very circumstance of

lessening expenditure decreases the means of the profit-

able employment of capital, and consequently that the

employment of the sum alluded to as capital, would in

no degree diminish the hardships of those, who had been

deprived of the revenue derived from its expenditure.”

6

JAMES MILL

ON THE OVERPRODUCTION AND UNDERCONSUMPTION FALLACIES

* 

See Mr. S;’s pamphlet, p. 32.

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