Of Capital. 53
future production of wealth. It will therefore be desirable to consider whether any different consequences result to the labourers as a class when wealth is expended in paying their wages for some unproductive employment instead of being unproductively consumed by its possessor. In order to investigate this point let us inquire what will take place if a thousand pounds which has before been expended in the purchase of velvet is now employed in the making of an artificial lake. Accepting the conclusions which have been arrived at by Mr. J. S. Mill, and other political economists, we have, in editions previous to the sixth, endeavoured to show that the unproductive consumption of wealth by its owners would produce much less beneficial consequences to the labourers than if the wealth were expended in paying their wages, even although they were employed upon some entirely unproductive work. Subsequent consideration has induced us to think that this conclusion requires considerable modification. As previously remarked, in investigating many of the problems connected with capital it often happens that sufficient stress is not laid upon the fact that only a portion of the wealth which is saved in such a country as England is employed as capital in supporting home industry. With the extension of foreign commerce and increased facilities of communication a larger proportion of the wealth which is saved is every year embarked in foreign investments. It may be readily shown that this fact has an important bearing in tracing the results which will follow from employing wealth in paying the wages of unproductive labourers instead of consuming it unproductively. It has been argued by Mr. Mill, and other political economists, that although in the first instance, the amount devoted to wages must be nearly the same, whether a thousand pounds is laid out in velvet or is paid to labourers who are making an artificial lake, yet the consequences which ultimately ensue are very different, and they seek to establish this conclusion by some such considerations as the following. A large part of the thousand pounds which is expended in velvet is employed in paying the wages of the labourers who make the velvet, and therefore it would appear that in the:
BOOK I. CH. IV.
Consequences resulting from devoting capital to paying wages to labourers who produce articles of luxury.
The conclusions arrived at are modified by the ease with which in modern times capital is exported.