AN INQUIRY INTO THE NATURE AND CAUSES
OF THE WEALTH OF NATIONS
OF THE NATURE, ACCUMULATION, AND EMPLOYMENT OF STOCK
Chapter 3: Of the Accumulation of Capital, or of Productive and Unproductive Labour
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 Whatever a person saves from his revenue he adds to his capital, and either employs it himself in maintaining an additional number of productive hands,
or enables some other person to do so, by lending it to him for an interest, that is, for a share of the profits. As the capital of an individual can be increased only by
what he saves from his annual revenue or his annual gains, so the capital of a society, which is the same with that of all the individuals who compose it,
can be increased only in the same manner.
 Parsimony, and not industry, is the immediate cause of the increase of capital. Industry, indeed, provides the subject which parsimony accumulates.
But whatever industry might acquire, if parsimony did not save and store up, the capital would never be the greater.
 Parsimony, by increasing the fund which is destined for the maintenance of productive hands, tends to increase the number of those hands whose labour adds
to the value of the subject upon which it is bestowed. It tends, therefore, to increase the exchangeable value of the annual produce of the land and labour of the country.
It puts into motion an additional quantity of industry, which gives an additional value to the annual produce.
 What is annually saved is as regularly consumed as what is annually spent, and nearly in the same time too; but it is consumed by a different set of people.
That portion of his revenue which a rich man annually spends is in most cases consumed by idle guests and menial servants, who leave nothing behind them in return
for their consumption. That portion which he annually saves, as for the sake of the profit it is immediately employed as a capital, is consumed in the same manner,
and nearly in the same time too, but by a different set of people, by labourers, manufacturers, and artificers, who reproduce with a profit the value of their annual
 His revenue, we shall suppose, is paid him in money. Had he spent the whole, the food, clothing, and lodging, which the whole could have purchased,
would have been distributed among the former set of people. By saving a part of it, as that part is for the sake of the profit immediately employed as a capital either
by himself or by some other person, the food, clothing, and lodging, which may be purchased with it, are necessarily reserved for the latter. The consumption
is the same, but the consumers are different.
 By what a frugal man annually saves, he not only affords maintenance to an additional number of productive hands, for that or the ensuing year, but,
like the founder of a public workhouse, he establishes as it were a perpetual fund for the maintenance of an equal number in all times to come. The perpetual allotment
and destination of this fund, indeed, is not always guarded by any positive law, by any trust-right or deed of mortmain. It is always guarded, however, by a very powerful
principle, the plain and evident interest of every individual to whom any share of it shall ever belong. No part of it can ever afterwards be employed to maintain any but
productive hands without an evident loss to the person who thus perverts it from its proper destination.
 The prodigal perverts it in this manner. By not confining his expense within his income, he encroaches upon his capital. Like him who perverts
the revenues of some pious foundation to profane purposes, he pays the wages of idleness with those funds which the frugality of his forefathers had, as it were,
consecrated to the maintenance of industry. By diminishing the funds destined for the employment of productive labour, he necessarily diminishes,
so far as it depends upon him, the quantity of that labour which adds a value to the subject upon which it is bestowed, and, consequently, the value of the annual produce
of the land and labour of the whole country, the real wealth and revenue of its inhabitants. If the prodigality of some was not compensated by the frugality of others,
the conduct of every prodigal, by feeding the idle with the bread of the industrious, tends not only to beggar himself, but to impoverish his country.
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 Whatever, therefore, we may imagine the real wealth and revenue of a country to consist in, whether in the value of the annual produce of its land
and labour, as plain reason seems to dictate; or in the quantity of the precious metals which circulate within it, as vulgar prejudices suppose; in either view
of the matter, every prodigal appears to be a public enemy, and every frugal man a public benefactor.