But this is precisely what the capitalists would do were they entirely free. Every one of them, in fact, is interested in keeping his capital as near home as possible, with a view to better supervision. Only as a last resource does he venture to engage in foreign commerce. Again, even among the industries carried on in his own country every capitalist will preferably choose that which will result in the production of the greatest exchange value, seeing that his profit varies with the amount of this exchange value. His investments will accordingly be made in the order mentioned, an order which roughly corresponds to the greater or lesser quantity of exchange values produced by each industry. And finally, when contemplating investment in foreign trade he will for the same reason follow the order specified above—the order of greatest general utility. Thus the double desire of keeping one’s capital within one’s reach and of finding for it the most lucrative field of investment leads every capitalist to employ his capital in the fashion which is most advantageous for the nation. Such is the argument, whatever its value. Even if we adopted his criteria it is obvious that his classification is altogether too arbitrary. How, for example, can we justify the statement that an industrial enterprise or the carrying trade employs less capital than agriculture? The exact contrary would be nearer the truth, and agriculture ought to be given a much more modest position. Moreover, the conception of such a hierarchy does not accord very well with the theory of division of labour, which seeks to put the various forms of human activity more nearly on an equality. As a matter of fact we cannot even accept a criterion which takes the amount of exchange values furnished by an industry as the test of its social utility. This increase in the quantity of exchange values simply proves that the demand for the goods concerned is stronger than the demand for some others. When capital flows into certain industries it only points to the spontaneous satisfaction of social demand. But social demand and social utility are not necessarily the same. Demand is the outcome of human desires, and its intensity depends upon the revenue drawn by the individual. But we can neither regard these desires in themselves or the system of distribution that makes such desires “effective” as sufficient tests of social utility. And to say that production follows demand is to prove nothing at all. Smith himself seems to have realised this; hence his other criterion—the quantity of productive labour employed by capital. According to this test those industries that employ the least amount of machinery and the greatest amount of hand labour are the most useful—quite an untenable view.