"Perhaps it may be said, that if I had bought the suit of clothes in London, I should have replaced the capital of an English clothier, and an English tailor. If that were so, then I should not have replaced the capital of the manufacturer who fabricated the goods in which my revenue was remitted to France. But this idea of one man replacing the capital of another, appears to me quite erroneous: all capitalists replace their own capitals by their productions, and which they exchange with each other for their mutual advantage. A farmer with a capital of 1000l. has replaced it as soon as he has raised 1000l. worth of corn, exclusive of his rent; and if he raises 100l. worth more, he has ten per cent. profit on his capital: the whole 11007. worth of corn may be exchanged by him for the same value in goods produced by the other capitalists; and in the course of the year, they will all have reproduced their own capitals, and a surplus in addition, which they may either enjoy as revenue, or employ as additional capital."

This fair and clear statement of a favorite doctrine of some of our political economists having attracted my attention, I was desirous to examine opinions which appeared to me highly paradoxi cal. Soon after, some letters in the Morning Chronicle attracted my notice; and lastly, Mr. McCulloch's celebrated evidence before a Committee of the House of Commons. The apparent extravagance of the opinions given by that gentleman determined me to investigate the subject of absenteeism : I felt assured that a fallacy lurked somewhere; but never having thought much on the subject, I did not find it easy to detect it. Mr. McCulloch has been unsparingly censured, and not always in the most courteous terms; but I soon discovered that this was a much easier task than to answer him. By perseverance, however, I satisfied at least myself, that he has committed a great error, having totally overlooked the retail trade.

Liverpool, January, 1826.

ABSENTEEISM,

&c. &c.

Preliminary Observations.

I SHALL assume the following propositions : viz.

1st. Absenteeism either produces some effect, or none, on the wealth and industry of a country.

2d. If it produces some effect, then the effect produced will be proportionate to the duration of the absence.

3d. If it produces no effect, it is of no consequence whether it be temporary, or permanent.

1. Although in an opulent country like England, the effects of absenteeism may not be materially felt, we must not infer from this that it produces no effect: the question is not so much, what is the amount of the effect, as whether there is any actually produced; and to ascertain this we must take extreme cases; for, if it produces no effect, it can be of no importance to what extent it is carried.

2. If the buying a coat in Paris does not in any degree affect British industry or wealth, the buying of two coats in Paris will not, or two hundred, or two thousand, or two millions. If this proposition be true, it would be "quite immaterial" if all the people in England were to have their coats made in Paris.

3. If there are 10,000 British subjects, men, women and children resident in foreign countries, and if their expenses average only 100l. a-year each, here is an expenditure of one million sterling a-year abroad; and really, it requires some courage to maintain that it would not be more advantageous to expend it in England.

4. If 10,000 British subjects, who spend their incomes abroad, do not in any degree injure the wealth and industry of the country, the same may be said of 20,000 or 50,000. If this proposition be true, I do not see why it should be of any importance if every family in England, who are not engaged in any kind of business, were to spend their incomes abroad.

5. If ten or twenty families of our nobility were to take up their residence permanently in Italy, having the revenues of their English estates remitted to them in Italy, why then, those English estates might just as well belong to ten, or twenty families of Italian nobility; and if such absenteeism is not injurious to the wealth and industry of a country, then the law which prohibits foreigners from holding landed property in England is an absurd law, and it would be of no consequence if a large portion of the land in England were held by foreigners.

6. An absentee differs in nothing from an emigrant: he is, to be sure, only a temporary emigrant; but the effect is precisely the same: it only differs in duration. While he is absent, himself and his revenue are lost to his country. His estate is, to all intents and purposes, during his absence, no more an English estate, than if it belonged for the time to a Frenchman, or an Italian; for it can be of little importance, if the revenue is to be sent abroad to be expended there, whether it be sent to an Englishman, or to a Frenchman.

Effects of Absenteeism on the Capital of a Country.

The capital of a nation consists of every thing that the community possesses that has an exchangeable value. This includes all that the merchant possesses, or that is due to him in foreign countries. It is of no consequence whether it is abroad or at home; in British or in foreign securities, or mines; it is still British property, as effectually and truly as if it were all in specie, and in the hands of its owners: wherever it is, it forms a part of the aggregate wealth of the nation.

The greater the amount of the aggregate property of the community the richer is the nation. Whatever diminishes that amount diminishes the wealth and resources of the nation.

Revenue expended at home gives birth to fresh industry, to supply the deficiency caused by consumption; the savings of the profit on which is an addition to the aggregate wealth of the country.

Absenteeism diminishes the wealth and resources of a nation, by withdrawing a part of the aggregate capital of the community, and receiving nothing for it in return.

If a merchant sends goods abroad, and incurs a loss by bad debts, or in any other way, it is a loss to him individually, and also a loss to the community of part of its aggregate capital.

If a British ship is lost, it is a loss of British property, whether she was insured or not; for though, if insured, the owners will be indemnified by the underwriters, yet the underwriters are worth so much less, and there is so much less property left in the nation.

The same is the case in losses by fire.

If property is taken out of a country, and nothing is received for it, either directly or indirectly, the country from which it is taken will be poorer by the whole amount or value of that property.

If a person emigrates to America, taking the whole of his property with him, say 20,000l., in goods, if you please, there will be 20,000l. less in England, and 20,000l. more in America, than there was before he emigrated.

If I take my revenue abroad, it ceases to be British property: it no longer operates as British property; but it operates as the property of the country to which I take it. It then forms a part of the aggregate capital of another community. It is as much an addition to the wealth of that country, as the absentee himself is an addition to its population.

A merchant in England ships goods to a merchant in France, amount 500l.: if I pay to the latter 5007., and take a bill of exchange for that sum on his correspondent in France, I leave exactly as much property in England as there was before I went to France. I have replaced the capital of the English merchant that was in France with my property that was in England; and when the French merchant has paid the bill, there is exactly as much property in France as there was before he paid it: but, if I had not gone to France, the French merchant would have had to remit 500l. to his correspondent in England; so that if I had stayed at home there would have been 500l. more in England, and 5007. less in France.

There is in England my income of 500l., and 500l. worth of goods which I should buy for my use if I staid at home; in all 1,000l.: if I buy 500l. worth of foreign gold, or merchandise, if you please, in England, I replace the foreign gold, or merchandise, with English gold, or capital, and so far the account is balanced; there remains exactly as much property in England as there was before: but, if I take the foreign gold, or the merchandise to France, and bring nothing back to England, there will be 5001. worth of property less in England, and 500l. worth more in France, than there was before I left England. And not only so,

but there will be 500l. worth of English property less in existence than there was before; for the moment it arrives in France with a view to be expended there, it ceases to be English property.

Of replacing Capital.

Capital is replaced when money, or commodities, are disposed of, or exchanged for other money, or other commodities.

Before capital can be replaced it must be parted with; it must be placed out of the control of the possessor. A manufacturer can hardly be said to have replaced his capital by his productions, till he has sold, or exchanged them; for while he is manufacturing commodities his capital is never out of his own control, and consequently is only putting into a form in which he can exchange it with advantage: while his productions remain on hand his capital has only assumed another shape.

It is said, that "a farmer with a capital of 1,000l. has replaced it as soon as he has raised 1,000l. worth of corn, exclusive of his rent. I think he has not; for, till he has sold it, he cannot be certain that he shall get 1,000l. for it. While it is on his hands he has only the same capital in another shape; as is evident by the fact that he cannot raise as much more corn till he has sold it.

I am not aware that the point is of much importance; yet, I think some distinction should be made between the reproduction and the replacing of capital.

If "all capitalists replace their own capitals by their productions," all exporters replace their own capitals by their imports; and this they do without the assistance of absentees.

If a merchant exports goods to Peru, and receives back a quantity of gold, which gold he exchanges with you for English gold, do you call this replacing his capital? I do not. His capital was replaced by the gold which he received from Peru.

If, indeed, he has exported to France, and has given an order on his correspondent there to pay the amount to you, for value received of you in England, then I grant that you have replaced his capital; but I am sorry you took the trouble to do it; for by so doing you have spared the French merchant the trouble of sending any thing to England. You have actually prevented an import of the same amount.

If I have a coat made in Paris instead of having it made in London, I replace the capital of a French clothier and a French tailor, instead of replacing the capital of an English clothier and an English tailor; and the profit which the English clothier and