CAROLINE

I HAVE been reflecting a great deal on our last conversation, Mrs. B., and the conclusions I have drawn from it are, that the greater the capital a country possesses, the greater number of people it can maintain, and the higher the wages of labour will be.

MRS. B

The greater the stock of subsistence, the more people may be maintained by it, no doubt; but your second inference is not at all a necessary conclusion. China is a very rich country, and yet wages are I believe no where so low. The accounts which travellers give of the miserable state of the inferior classes, are painful to hear; and their poverty is not the result of idleness, for they run about the streets with tools in their hands, begging for work.

CAROLINE

That is owing to the immense population of China; so that, though the capital of the country may be very considerable, still it is insufficient for the maintenance of all its inhabitants.

MRS. B

You should therefore always remember that the rate of wages does not depend upon the absolute quantity of capital, but upon its quantity relative to the number of people to be maintained by it. This is a truth which, however simple, is continually lost sight of, and hence arise errors without number in political economy. If China had ten times the wealth it actually possesses, and its population were at the same time tenfold as numerous, the people would not be better fed.