There Can Be No Doubt That
Trade Produces Capital; And, In This Point Of View, Capital Must Be
Regarded As An Effect:
There can be as little doubt, that an increase of
capital is favourable to an increase of commerce, and actually produces it;
in this point of view, therefore, capital must be regarded as a cause.
As
in the physical world action and reaction are equal, so are they, in many
respects, and under many circumstances, in the moral and intellectual
world; but, whereas in the physical world the action and reaction are not
only equal but simultaneous, in the moral and intellectual world the
reaction does not take place till after the immediate and particular action
from which it springs has ceased.
To apply these remarks to our present subject, it is unnecessary to point
out in what manner trade must increase capital; that capital, on the other
hand, increases trade, is not, perhaps, at first sight, quite so obvious;
but that it must act in this manner will be perceptible, when, we reflect
on the advantages which a large capital gives to its possessor. It enables
him to buy cheaper, because he can buy larger quantities, and give ready
money; buying cheaper, he can sell cheaper, or give longer credit, or both;
and this must ensure an increase of trade. It enables him immediately to
take advantage of any improvement in the mode of manufacturing any article;
and to push the sale of any article into countries where it was before
unknown.
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