Note 167 — Chapter II · : ADAM SMITH

We have spoken of the controversies as threadbare, for every economist is by this time persuaded that, assuming the necessity for the co-operation of capital, land, and labour in production, it is quite clear that the amount of produce raised must depend upon the amount of each of these factors employed, and not upon the amount of any one of them.

Smith had anticipated the arguments advanced by such socialists as Rodbertus and Lassalle, who regard saving rather than labour as the source of capital. “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.” (Wealth of Nations, Book II, chap. 3; Cannan, vol. i, p. 320.)