Chapter 15 Introduction

In the primitive social state where there is no division of labor, less exchange, and everything you need is supplied by yourself, there is no need to reserve funds in order to operate social undertakings.Every one tries to satisfy by his own labor the wants which arise from time to time.When I was hungry, I went to the forest to hunt; when my clothes were damaged, I peeled off the hides of animals to wear them; After the division of labor has been thoroughly carried out, the products of a man's own labor can only satisfy a very small part of his needs from time to time.The greater part of other wants must be supplied by the produce of the labor of others.This product must be bought.The means of purchase is his own product, or the price of his own product.But before he can buy, the produce of his own labor must not only be made, but also sold, and so, until at least these two things can be done, there must be somewhere a store of goods of all kinds, sufficient to sustain him. Live, and provide materials and tools for his use.The weaver, for instance, cannot weave anything, unless he has a store, either in his own hands or in the hands of others, sufficient to sustain him, and furnish him with materials and implements, before the fabric is made and sold.Evidently this savings must have been made long before he began the profession.

According to the nature of things, the accumulation of wealth must precede the division of labor.The more abundant the accumulated funds, the finer the division of labor can be proportionally, and the finer the division of labor, the greater the proportional increase in the materials that can be processed by the same number of workers.As the operations performed by each workman became simpler and simpler, various new mechanical inventions made the operations easier and faster.Therefore, when the division of labor is advanced, and the number of laborers employed remains the same, the same amount of food supplies must be kept in advance as if the division of labor had not been so advanced; Much more is needed to progress.Moreover, the more finely is the division of labor in a trade, the more often is the number of its workers increased; or rather, it is their increase in number that enables them to be more and more finely divided.

For this great improvement in the productivity of labour, the accumulation of capital is absolutely necessary.And this accumulation will naturally lead to this improvement.He who invests in hired labour, naturally wishes to invest in a method which produces the greatest possible output.Every effort must be made, therefore, to make the assignment of the laborer's duties as proper as possible, and to have his machinery as good as possible, so far as he can invent or purchase it.But in these two areas, his ability often depends on how much money he has and how many workers he can hire.In every country, therefore, not only does the number of industries increase with the increase of the means by which they are carried on, but, as a result of this increase, the quantity of products which the same amount of industries can produce increases greatly.

What I want to explain in this article is: what is the nature of assets, and what is the impact of accumulation of assets on various capitals; what are the effects of different uses of capital?This article is divided into five chapters.We know that the wealth of a person or a large society will naturally be divided into several departments, so in the first chapter I will explain what these departments are.We regard money as a special department of the total wealth of society, so only in the second chapter, I will discuss the nature and function of money.As the stock accumulated as capital is either used by the owner himself or lent to another, I shall, in Chapters III and IV, treat both cases.The fifth chapter deals with the different effects directly produced by the different employments of stock upon the quantity of the national industry, and of the annual produce of land and labour.