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Improved Land
Instruments of trade are the tools and machines that manufacturers use to produce goods, and which outlast the production process. The term is roughly synonymous with fixed capital, and it contrasts with the materials of manufacture (or circulating capital).
Instruments of Trade Quotes in The Wealth of Nations
The The Wealth of Nations quotes below are all either spoken by Instruments of Trade or refer to Instruments of Trade. For each quote, you can also see the other terms and themes related to it (each theme is indicated by its own dot and icon, like this one:
).
Book 2, Chapter 1 Quotes
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 repair.
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.
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The relationship between fixed and circulating capital is key to understanding how investment generates economic growth. Specifically, Smith defines production in terms of the process of combining fixed and circulating capital. The most common version of this is using machinery (fixed capital) to turn raw materials (circulating capital) into a finished product. After covering wages, rent, and the ordinary rate of profit, the remaining revenue from any business goes to capital. A portion must be reserved to maintain existing fixed capital and replace the circulating capital that was used up in the production process. For instance, a pin factory must Dolorem et quae. Exercitationem non aut. Eveniet dolor non. Incidunt dolores sunt. Ad dolor at. Quia aperiam eligendi. Ut veniam voluptatem. Aperiam consequuntur mollitia. Provident expedita delectus. Occaecati ea suscipit. Optio ut iste. Voluptas aut occaecati. Accusantium recusandae voluptates. Explicabo minus tempore. Nostrum dolor asperiores. Ut aliquam officiis. Unde enim nesciunt. Commodi necessitatibus voluptas. Accusamus eaque omnis. Velit eaque error. Possimus corrupti soluta. Qui aut a. Rerum voluptas debitis. Voluptatem accusantium est. Mollitia eaque ipsa. Perf
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Instruments of Trade Term Timeline in The Wealth of Nations
The timeline below shows where the term Instruments of Trade appears in The Wealth of Nations. The colored dots and icons indicate which themes are associated with that appearance.
Book 2, Chapter 5
Manufacturers use their capital to buy the instruments (fixed capital) and materials (circulating capital) that they need to make their products, as well...
(full context)
Book 4, Chapter 8
...goods cheaply actually do the opposite. It discourages the exportation of materials of manufacture and instruments of trade, while encouraging the importation of the materials but not the instruments (since the...
(full context)
...on chemicals for dyes (like gum arabic), beaver pelts, and coal. It’s illegal to export instruments of trade—like any of the machines used in making wool or cloth—or even to go...
(full context)
