Forthebetterillustrationoftheprinciple，letusputthefollowingcase。Aconsumermayexpendhisincomeeitherinbuyingservices，orcommodities。Hemayemploypartofitinhiringjourneymenbricklayerstobuildahouse，orexcavatorstodigartificiallakes，orlabourerstomakeplantationsandlayoutpleasuregrounds;or，insteadofthis，hemayexpendthesamevalueinbuyingvelvetandlace。Thequestionis，whetherthedifferencebetweenthesetwomodesofexpendinghisincomeaffectstheinterestofthelabouringclasses。Itisplainthatinthefirstofthetwocasesheemployslabourers，whowillbeoutofemployment，oratleastoutofthatemployment，intheoppositecase。ButthosefromwhomIdiffersaythatthisisofnoconsequence，becauseinbuyingvelvetandlaceheequallyemployslabourers，namely，thosewhomakethevelvetandlace。I
contend，however，thatinthislastcasehedoesnotemploylabourers;butmerelydecidesinwhatkindofworksomeotherpersonshallemploythem。Theconsumerdoesnotwithhisownfundspaytotheweaversandlacemakerstheirday’swages。Hebuysthefinishedcommodity，whichhasbeenproducedbylabourandcapital，thelabournotbeingpaidnorthecapitalfurnishedbyhim，butbythemanufacturer。Supposethathehadbeeninthehabitofexpendingthisportionofhisincomeinhiringjourneymenbricklayers，wholaidouttheamountoftheirwagesinfoodandclothing，whichwerealsoproducedbylabourandcapital。He，however，determinestoprefervelvet，forwhichhethuscreatesanextrademand。Thisdemandcannotbesatisfiedwithoutanextrasupply，norcanthesupplybeproducedwithoutanextracapital:where，then，isthecapitaltocomefrom？Thereisnothingintheconsumer’schangeofpurposewhichmakesthecapitalofthecountrygreaterthanitotherwisewas。Itappears，then，thattheincreaseddemandforvelvetcouldnotforthepresentbesupplied，wereitnotthattheverycircumstancewhichgaverisetoithassetatlibertyacapitaloftheexactamountrequired。Theverysumwhichtheconsumernowemploysinbuyingvelvet，formerlypassedintothehandsofjourneymenbricklayers，whoexpendeditinfoodandnecessaries，whichtheynoweithergowithout，orsqueezebytheircompetition，fromthesharesofotherlabourers。Thelabourandcapital，therefore，whichformerlyproducednecessariesfortheuseofthesebricklayers，aredeprivedoftheirmarket，andmustlookoutforotheremployment;andtheyfinditinmakingvelvetforthenewdemand。
Idonotmeanthattheverysamelabourandcapitalwhichproducedthenecessariesturnthemselvestoproducingthevelvet;
but，insomeoneorotherofahundredmodes，theytaketheplaceofthatwhichdoes。Therewascapitalinexistencetodooneoftwothingstomakethevelvet，ortoproducenecessariesforthejourneymenbricklayers;butnottodoboth。Itwasattheoptionoftheconsumerwhichofthetwoshouldhappen;andifhechoosesthevelvet，theygowithoutthenecessaries。
Forfurtherillustration，letussupposethesamecasereversed。Theconsumerhasbeenaccustomedtobuyvelvet，butresolvestodiscontinuethatexpense，andtoemploythesameannualsuminhiringbricklayers。Ifthecommonopinionbecorrect，thischangeinthemodeofhisexpendituregivesnoadditionalemploymenttolabour，butonlytransfersemploymentfromvelvet—makerstobricklayers。Oncloserinspection，however，itwillbeseenthatthereisanincreaseofthetotalsumappliedtotheremunerationoflabour。Thevelvetmanufacturer，supposinghimawareofthediminisheddemandforhiscommodity，diminishestheproduction，andsetsatlibertyacorrespondingportionofthecapitalemployedinthemanufacture。Thiscapital，thuswithdrawnfromthemaintenanceofvelvet—makers，isnotthesamefundwiththatwhichthecustomeremploysinmaintainingbricklayers;itisasecondfund。Thereare，therefore，twofundstobeemployedinthemaintenanceandremunerationoflabour，wherebeforetherewasonlyone。Thereisnotatransferofemploymentfromvelvet—makerstobricklayers;thereisanewemploymentcreatedforbricklayers，andatransferofemploymentfromvelvet—makerstosomeotherlabourers，mostprobablythosewhoproducethefoodandotherthingswhichthebricklayersconsume。