education, study, or apprenticeship, always 
costs a real expense, which is a capital fixed 
and realised, as it were, in his person. Those 
talents, as they make a part of his fortune, so 
do they likewise that of the society to which 
he belongs. The improved dexterity of a 
workman may be considered in the same light 
as a machine or instrument of trade which 
facilitates and abridges labour, and which, 
though it costs a certain expense, repays that 
expense with a profit
The third and last of the three portions into 
which the general stock of the society naturally 
divides itself, is the circulating capital
of which the characteristic is, that it affords 
a revenue only by circulating or changing 
masters. It is composed likewise of four 
First, of the money, by means of which all 
the other three are circulated and distributed 
to their proper consumers. 
Secondly, of the stock of provisions which 
are in the possession of the butcher, the grazier
the farmer, the corn-merchant, the brewer
&c. and from the sale of which they expect to 
derive a profit
Thirdly, of the materials, whether altogether 
rude, or more or less manufactured, of 
clothes, furniture, and building which are not 
yet made up into any of those three shapes
but which remain in the hands of the growers
the manufacturers, the mercers, and drapers
the timber-merchants, the carpenters and 
joiners, the brick-makers, &c. 
Fourthly, and lastly, of the work which is 
made up and completed, but which is still in 
the hands of the merchant and manufacturer
and not yet disposed of or distributed to the 
proper consumers; such as the finished work 
which we frequently find ready made in the 
shops of the smith, the cabinet-maker, the 
goldsmith, the jeweller, the china-merchant
&c. The circulating capital consists, in this 
manner, of the provisions, materials, and finished 
work of all kinds that are in the hands 
of their respective dealers, and of the money 
that is necessary for circulating and distributing 
them to those who are finally to use or to 
consume them. 
Of these four parts, three¬óprovisions, materials
and finished work, are either annually 
or in a longer or shorter period, regularly 
withdrawn from it, and placed either in the 
fixed capital, or in the stock reserved for immediate 
Every fixed capital is both originally derived 
from, and requires to be continually supported 
by, a circulating capital. All useful 
machines and instruments of trade are originally 
derived from a circulating capital, which 
furnishes the materials of which they are 
made, and the maintenance of the workmen 
who make them. They require, too, a capital 
of the same kind to keep them in constant 
No fixed capital can yield any revenue but 
by means of a circulating capital. The most 
useful machines and instruments of trade will 
produce nothing, without the circulating capital
which affords the materials they are employed 
upon, and the maintenance of the 
workmen who employ them. Land, however 
improved, will yield no revenue without a circulating 
capital, which maintains the labourers 
who cultivate and collect its produce
To maintain and augment the stock which 
may be reserved for immediate consumption
is the sole end and purpose both of the fixed 
and circulating capitals. It is this stock which 
feeds, clothes, and lodges the people. Their 
riches or poverty depend upon the abundant 
or sparing supplies which those two capitals 
can afford to the stock reserved for immediate 
So great a part of the circulating capital 
being continually withdrawn from it, in order 
to be placed in the other two branches of the 
general stock of the society, it must in its 
turn require continual supplies without which 
it would soon cease to exist. These supplies 
are principally drawn from three sources; the 
produce of land, of mines, and of fisheries
These afford continual supplies of provisions 
and materials, of which part is afterwards 
wrought up into finished work and by which 
are replaced the provisions, materials, and 
finished work, continually withdrawn from 
the circulating capital. From mines, too, is 
drawn what is necessary for maintaining and 
augmenting that part of it which consists in 
money. For though, in the ordinary course 
of business, this part is not, like the other 
three, necessarily withdrawn from it, in order 
to be placed in the other two branches of the 
stock of the society, it must, however, 
like all other things, be wasted and worn out 
at last, and sometimes, too, be either lost or 
sent abroad, and must, therefore, require continual
though no doubt much smaller, supplies
Lands, mines, and fisheries, require all 
both a fixed and circulating capital to cultivate 
them; and their produce replaces, with a 
profit not only those capitals, but all the 
others in the society. Thus the farmer annually 
replaces to the manufacturer the provisions 
which he had consumed, and the materials 
which he had wrought up the year before; 
and the manufacturer replaces to the 
farmer the finished work which he had wasted 
and worn out in the same time. This is the 
real exchange that is annually made between 
those two orders of people, though it seldom 
happens that the rude produce of the one, and 
the manufactured produce of the other, are 
directly bartered for one another; because it 
seldom happens that the farmer sells his corn 
and his cattle, his flax and his wool, to the 
very same person of whom he chuses to purchase 
the clothes, furniture, and instruments