The Online Library of Liberty

A project of Liberty Fund, Inc.

• Commerce Defended, &c. &c.
• Introduction.
• Chapter I.: On the Security Or Insecurity of the British Commerce.
• Chap. II.: On Land, As a Source of Wealth.
• Chap. III.: Of the Definition of the Terms Wealth and Prosperity.
• Chap. IV.: Of Manufactures.
• Chap. V.: Commerce.
• Chap. VI.: Consumption.
• Chap. VII.: Of the National Debt.
• General Reflections.

CHAP. II.

On Land, as a Source of Wealth.

In the praises which the Economistes, together with Mr. Spence and Mr. Cobbett, bestow upon land as a source of wealth, absolutely considered, the intelligent reader will not hesitate to join, Of all species of labour, that which is bestowed upon the soil, is in general rewarded by the most abundant product. In the present circumstances of the greater part of Europe, the cultivation of the soil not only pays the wages of labour, and the profit of stock employed in it, the sole return of other species of industry, but over and above this affords a share of the produce payable as rent to the landlord. On this point, therefore, no controversy strictly exists; and when the patrons of the agricultural theory lament that the cabinets and legislatures of Europe, influenced by the ideas of the mercantile system, have so often thrown obstructions in the way of rural industry in favour of manufactures and trade, we acknowledge the justness of their accusations. One of the main objects which the immortal Smith proposed to himself, was to unfold the delusions of the mercantile system, by which the policy of almost all the governments of Europe was turned to the encouragement of trade rather than of agriculture, and a greater share of the industry and capital of every nation than consisted with its interests, was thus forcibly diverted into the commercial channel. Even to this hour the sound inquirer has most frequently occasion for his efforts in exposing the errors into which both governments and individuals fall by the remaining influence of the same theory. The firm hold indeed which this doctrine yet maintains on the minds of men, forms the principal obstacle to the diffusion, among mankind, of juster principles of political economy and of government. When a system, therefore, is propagated, diametrically opposite to the Mercantile, we might quietly allow the two theories to combat one another; and trust that the exposure of errors, if not the establishment of truths, would be the consequence. Unfortunately, however, it is much more the propensity of mankind to run from one extreme into another, than to rest in the wise and salutary middle; and a bias to the errors of the agricultural system would be not a whit less pernicious than a bias to the system which it would supplant. Of this indeed we have experimental proof; as some of the worst regulations which the new legislators of France adopted, were entirely founded upon the system of the Economistes.

There is one consequence of the doctrine which Messrs. Spence and Cobbett have embraced, which they seem rather unfairly to have kept out of sight They address themselves with great industry to the self-interest of the landholders, and study to win their support by representing the landed interest as deeply affected by the opinions which they wish to subvert. They abstain, however, from informing this class of their readers, that land, according to their doctrine, is the one and only proper subject of taxation. This the Economistes taught. It is a logical conclusion from their principles. If land be the one and only source of wealth, the absurdity is evident of seeking in any other quarter that portion of the national produce which is required for the necessities of the state; nor can one single argument be used against the exclusive taxation of land, which is not an argument, equally pointed, against the doctrine which the agricultural theorists espouse. It is shrewdly to be suspected that the landholders would deem themselves but little indebted to those gentlemen for the establishment of their system, if it was to be followed by this practical consequence. The fact is, that land in this country bears infinitely less than its due proportion of taxes, while commerce is loaded with them. At the beginning of the last century, and previous to that period, the land-tax equalled, or rather, exceeded, the whole amount of a!! the other taxes taken together. How insignificant a proportion does the land-tax now bear to the taxes on consumable commodities? The land-tax has remained without augmentation, while the permanent taxes have risen from little more than two millions to upwards of two and forty millions a year, and while the value of land has risen from fourteen or fifteen years purchase to thirty years purchase and upwards. The landholders, therefore, have little foundation for complaining, though the policy of the country has frequently appeared to favour mercantile rather than agricultural industry. By their superior influence in the legislature, they have taken care to repay themselves, as far as their personal interests were concerned, by throwing the burthen of the taxes upon the growing produce of commerce, while the increasing value of land stood exempt. The interests, however, of the country at large, the interests of the middling and industrious classes, have thus suffered in two ways. They have suffered by sustaining an undue proportion of the taxes; and they have suffered by the diminution of the annual produce of the land and labour of the country.*

[*]Mr. Spence, in a new passage inserted in his 3d edition, p 40, does at last state it as a consequence of his doctrine, ‘that all taxes, however levied, in the end fall upon the soil.’ But this is very different from saying that they ought to be immediately levied upon the soil. The landholders may very quietly allow you to say that the taxes fall upon them, as long as you make them light upon others. Mr. Spence is even accommodating enough to say that the corollary of the Economistes is wrong; and that taxes ought not to light, as they teach, upon the landlords. It is matter of regret he did not give us his reasons; for I can discover none which are not as strong against the theory as against the corollary. Unfortunately, however, all that Mr. Spence affords us on this score is the following;—‘Reasons,’ says he, (Ibid, p. 41, 42,) ‘which it is impracticable in this plan to adduce, render it doubtful, whether a direct land-tax would be advisable even in an infant state: and it is much more obvious that the intricate and artificial regulations of adult societies wholly preclude the propriety of such a tax.’