The Theory of the Powers of Production and the Theory of ValuesAdam Smith's celebrated work is entitled， 'The Nature andCauses of the Wealth of Nations.' The founder of the prevailingeconomical school has therein indicated the double point of viewfrom which the economy of nations， like that of private separateindividuals， should be regarded.
The causes of wealth are something totally different fromwealth itself.A person may possess wealth， i.e.exchangeablevalue； if， however， he does not possess the power of producingobjects of more value than he consumes， he will become poorer.Aperson may be poor； if he， however， possesses the power ofproducing a larger amount of valuable articles than he consumes， hebecomes rich.
The power of producing wealth is therefore infinitely moreimportant than wealth itself； it insures not only the possessionand the increase of what has been gained， but also the replacementof what has been lost.This is still more the case with entirenations (who cannot live out of mere rentals) than with privateindividuals.Germany has been devastated in every century bypestilence， by famine， or by civil or foreign wars； she has，nevertheless， always retained a great portion of her powers ofproduction， and has thus quickly re-attained some degree ofprosperity； while rich and mighty but despot- and priest-riddenSpain， notwithstanding her comparative enjoyment of internalpeace，(1*) has sunk deeper into poverty and misery.The same sunstill shines on the Spaniards， they still possess the same area ofterritory， their mines are still as rich， they are still the samepeople as before the discovery of America， and before theintroduction of the Inquisition； but that nation has gradually losther powers of production， and has therefore become poor andmiserable.The War of Independence of the United States of Americacost that nation hundreds of millions， but her powers of productionwere immeasurably strengthened by gaining independence， and it wasfor this reason that in the course of a few years after the peaceshe obtained immeasurably greater riches than she.had everpossessed before.If we compare the state of France in the year1809 with that of the year 1839， what a difference in favour of thelatter！ Nevertheless， France has in the interim lost hersovereignty over a large portion of the European continent； she hassuffered two devastating invasions， and had to pay milliards ofmoney in war contributions and indemnities.
It was impossible that so clear an intellect as Adam Smithpossessed could altogether ignore the difference between wealth andits causes and the overwhelming influence of these causes on thecondition of nations.In the introduction to his work， he says inclear words in effect： 'Labour forms the fund from which everynation derives its wealth， and the increase of wealth depends firston the productive power of labour， namely， on the degree of skill，dexterity， and judgment with which the labour of the nation isgenerally applied， and secondly， on the proportion between thenumber of those employed productively and the number of those whoare not so employed.' From this we see how clearly Smith in generalperceived that the condition of nations is principally dependent onthe sum of their productive powers.
It does not， however， appear to be the plan of nature thatcomplete sciences should spring already perfected from the brain ofindividual thinkers.It is evident that Smith was too exclusivelypossessed by the cosmopolitical idea of the physiocrats， 'universalfreedom of trade，' and by his own great discovery， 'the division oflabour，' to follow up the idea of the importance to a nation of itspowers of production.However much science may be indebted to himin respect of the remaining parts of his work， the idea 'divisionof labour' seemed to him his most brilliant thought.It wascalculated to secure for his book a name， and for himselfposthumous fame.
He had too much worldly wisdom not to perceive that whoeverwishes to sell a precious jewel does not bring the treasure tomarket most profitably by burying it in a sack of wheat， howeveruseful the grains of wheat may be， but better by exposing it at theforefront.He had too much experience not to know that a d閎utant(and he was this as regards political economy at the time of thepublication of his work) who in the first act creates a furore iseasily excused if in the following ones he only occasionally raiseshimself above mediocrity； he had every motive for making theintroduction to his book， the doctrine of division of labour.Smithhas not been mistaken in his calculations； his first chapter hasmade the fortune of his book， and founded his authority as aneconomist.
However， we on our part believe ourselves able to prove thatjust this zeal to put the important discovery 'division of labour'