It is plain, then, according to this reasoning, that for every portion of capital consumed in production, a new capital re-appears.  If two capitals are consumed in production, two new capitals reappear in their place:  if three are consumed, three reappear; and so on.  Let us now go back to Adam Smith’s words quoted above:  “The capital which sends British goods to Portugal, and brings back Portuguese goods to Great Britain, replaces, by every such operation, only one British capital.  The other is a Portuguese one.  Though the returns, therefore, of the foreign trade of consumption should be as quick as those of the home trade, the capital employed in it will give but one half of the encouragement to the industry or productive labour of the country.”  Applying this principle to the subject in hand, we find that Absenteeism inflicts an injury upon Ireland, in addition to, and quite distinct from the one, which results from the nature of the commodities sent by Ireland to England.  An Irish absentee in London buys British commodities with Irish commodities.  In doing so, he replaces two capitals, one British and one Irish; but if he resides in Ireland, and buys Irish commodities with Irish commodities, he replaces two Irish capitals instead of one, as happens, when he resides in England; and thus gives double the encouragement to Irish industry which he would give to it if he resided in England.

“The entire price or gross value of every home-made article constitutes net revenue, net income to British subjects.  Not a portion of the value, but the whole value, is resolvable into net income and revenue maintaining British families, and creating and sustaining British markets.  Purchase British articles with British articles, and you create two such aggregate values, and two such markets for British industry.  Whereas, on the contrary, the entire value of every foreign article imported is net income to the foreigner and sustains foreign markets.  Purchase foreign articles with British articles, and you only create one value for your own benefit instead of creating two, and only one market for British industry instead of two.  You lose the acquisition of the entire value on one side, which you might have had, as well as on the other, and you lose a market for British industry to the full extent of that gross value."[324]

If the principle laid down by Adam Smith were unsound, that the man who buys British commodities with British commodities replaces two British capitals, whilst he who buys foreign commodities with British commodities replaces but one British capital, Mr. M’Culloch had an inviting opportunity of exposing its unsoundness in the edition of The Wealth of Nations edited by him; and in fact he has written an elaborate note on the passage, but, as it seems to me, without proving the doctrine which it enunciates to be incorrect.  Here is the portion of Mr. M’Culloch’s