proportion to those which are likely to be employed in the
maintenance of idleness than they were two or three centuries
ago。 Our ancestors were idle for want of a sufficient
encouragement to industry。 It is better； says the proverb； to
play for nothing than to work for nothing。 In mercantile and
manufacturing towns； where the inferior ranks of people are
chiefly maintained by the employment of capital； they are in
general industrious； sober； and thriving； as in many English； and
in most Dutch towns。 In those towns which are principally
supported by the constant or occasional residence of a court； and
in which the inferior ranks of people are chiefly maintained by
the spending of revenue； they are in general idle； dissolute； and
poor； as at Rome； Versailles； Compiegne； and Fontainebleu。 If you
except Rouen and Bordeaux； there is little trade or industry in
any of the parliament towns of France； and the inferior ranks of
people； being elderly maintained by the expense of the members of
the courts of justice； and of those who come to plead before
them； are in general idle and poor。 The great trade of Rouen and
Bordeaux seems to be altogether the effect of their situation。
Rouen is necessarily the entrepot of almost all the goods which
are brought either from foreign countries； or from the maritime
provinces of France； for the consumption of the great city of
Paris。 Bordeaux is in the same manner the entrepot of the wines
which grow upon the banks of the Garonne； and of the rivers which
run into it； one of the richest wine countries in the world； and
which seems to produce the wine fittest for exportation； or best
suited to the taste of foreign nations。 Such advantageous
situations necessarily attract a great capital by the great
employment which they afford it； and the employment of this
capital is the cause of the industry of those two cities。 In the
other parliament towns of France； very little more capital seems
to be employed than what is necessary for supplying their own
consumption； that is； little more than the smallest capital which
can be employed in them。 The same thing may be said of Paris；
Madrid； and Vienna。 Of those three cities； Paris is by far the
most industrious； but Paris itself is the principal market of all
the manufactures established at Paris； and its own consumption is
the principal object of all the trade which it carries on。
London； Lisbon； and Copenhagen； are； perhaps； the only three
cities in Europe which are both the constant residence of a
court； and can at the same time be considered as trading cities；
or as cities which trade not only for their own consumption； but
for that of other cities and countries。 The situation of all the
three is extremely advantageous； and naturally fits them to be
the entrepots of a great part of the goods destined for the
consumption of distant places。 In a city where a great revenue is
spent； to employ with advantage a capital for any other purpose
than for supplying the consumption of that city is probably more
difficult than in one in which the inferior ranks of people have
no other maintenance but what they derive from the employment of
such a capital。 The idleness of the greater part of the people
who are maintained by the expense of revenue corrupts； it is
probable； the industry of those who ought to be maintained by the
employment of capital； and renders it less advantageous to employ
a capital there than in other places。 There was little trade or
industry in Edinburgh before the union。 When the Scotch
Parliament was no longer to be assembled in it； when it ceased to
be the necessary residence of the principal nobility and gentry
of Scotland； it became a city of some trade and industry。 It
still continues； however； to be the residence of the principal
courts of justice in Scotland； of the Boards of Customs and
Excise； etc。 A considerable revenue； therefore； still continues
to be spent in it。 In trade and industry it is much inferior to
Glasgow； of which the inhabitants are chiefly maintained by the
employment of capital。 The inhabitants of a large village； it has
sometimes been observed； after having made considerable progress
in manufactures； have become idle and poor in consequence of a
great lord having taken up his residence in their neighbourhood。
The proportion between capital and revenue； therefore； seems
everywhere to regulate the proportion between industry and
idleness。 Wherever capital predominates； industry prevails：
wherever revenue； idleness。 Every increase or diminution of
capital； therefore； naturally tends to increase or diminish the
real quantity of industry； the number of productive hands； and
consequently the exchangeable value of the annual produce of the
land and labour of the country； the real wealth and revenue of
all its inhabitants。
Capitals are increased by parsimony； and diminished by
prodigality and misconduct。
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 consumption。
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。
Though the expense of the prodigal should be altogether in
home…made； and no part of it in foreign commodities； its effect
upon the productive funds of the society would still be the same。
Every year there would still be a certain quantity of food and
clothing； which ought to have maintained productive； employed in
maintaining unproductive hands。 Every year； therefore； there
would still be some diminution in what would otherwise have been
the value of the annual produce of the land and labour of the
country。
This expense； it may be said indeed； not being in foreign
goods； and not occasioning any exportation of gold and silver；
the same quantity of money would remain in the country as before。
But if the quantity of food and clothing； which were thus
consumed by unproductive； had been distributed among productive
hands； they would have reproduced； together with a profit； the
full value of their consumption。 The same quantity of money would
in t