The Online Library of Liberty

A project of Liberty Fund, Inc.

• Key to Abbreviations and References
• [iv] Book Iv, Continued.
• [iv.vi] Chapter VI: Of Treaties of Commerce
• [iv.vii] Chapter VII: Of Colonies
• [iv.vii.a] Part First: of the Motives For Establishing New Colonies
• [iv.vii.b] Part Second: Causes of the Prosperity of New Colonies
• [iv.vii.c] Part Third: of the Advantages Which Europe Has Derived From the Discovery of America, and From That of a Passage to the East Indies By the Cape of Good Hope.
• [iv.viii] Chapter VIII: Conclusion of the Mercantile System
• [iv.ix] Chapter IX: Of the Agricultural Systems, Or of Those Systems of Political Œconomy, Which Represent the Produce of Land As Either the Sole Or the Principal Source of the Revenue and Wealth of Every Country
• [v] Book V: Of the Revenue of the Sovereign Or Commonwealth
• [v.i] Chapter I: Of the Expences of the Sovereign Or Commonwealth
• [v.i.a] Part First: of the Expence of Defence
• [v.i.b] Part II: Of the Expence of Justice
• [v.i.c] Part III: Of the Expence of Publick Works and Publick Institutions
• Article I: Of the Publick Works and Institutions For Facilitating the Commerce of the Society
• [v.i.d] And, First, of Those Which Are Necessary For Facilitating Commerce In General A–a
• [v.i.e] of the Publick Works and Institutions Which Are Necessary For Facilitating Particular Branches of Commerce
• [v.i.f] Article II: Of the Expence of the Institutions For the Education of a Youth 1
• [v.i.g] Article III: Of the Expence of the Institutions For the Instruction of People of All Ages
• [v.i.h] Part IV: Of the Expence of Supporting the Dignity of the Sovereign
• [v.i.i] Conclusion of the Chapter
• [v.ii] Chapter II: Of the Sources of the General Or Publick Revenue of the Society
• [v.ii.a] Part I: Of the Funds Or Sources of Revenue Which May Peculiarly Belong to the Sovereign Or Commonwealth
• [v.ii.b] Part II: Of Taxes
• [v.ii.c] Article I: Taxes Upon Rent; Taxes Upon the Rent of Land
• [v.ii.d] Taxes Which Are Proportioned, Not to the Rent, But to the Produce of Land
• [v.ii.e] Taxes Upon the Rent of Houses
• [v.ii.f] Article II: Taxes Upon Profit, Or Upon the Revenue Arising From Stock
• [v.ii.g] Taxes Upon the Profit of Particular Employments
• [v.ii.h] Appendix to Articles I and II: Taxes Upon the Capital Value of Lands, Houses, and Stock
• [v.ii.i] Article III: Taxes Upon the Wages of Labour
• Article IV: Taxes Which, It Is Intended, Should Fall Indifferently Upon Every Different Species of Revenue
• [v.ii.j] Capitation Taxes
• [v.ii.k] Taxes Upon Consumable Commodities
• [v.iii] Chapter III: Of Publick Debts
• Appendix
• Textual Schedules
• Schedule A. Emendations of Accidental Readings
• Schedule B. Excluded Variants
• Schedule C. Line–end Hyphenation
• Table of Corresponding Passages

part third

Of the Advantages which Europe has derived from the Discovery of America, and from that of a Passage to the East Indies by the Cape of Good Hope.

1Such are the advantages which the colonies of America have derived from the policy of Europe.

2What are those which Europe has derived from the discovery and colonization of America?

3Those advantages may be divided, first, into the general advantages which Europe, considered as one great country, has derived from those great events; and, secondly, into the particular advantages which each colonizing country has derived from the colonies which particularly belong to it, in consequence of the authority or dominion which it exercises over them.

4The general advantages which Europe, considered as one great country, has derived from the discovery and colonization of America, consist, first, in the increase of its enjoyments; and, secondly, in the augmentation of its industry.1

5The surplus produce of America, imported into Europe, furnishes the inhabitants of this great continent with a variety of commodities which they could not otherwise have possessed, some for conveniency and use, some for pleasure, and some for ornament, and thereby contributes to increase their enjoyments.

6The discovery and colonization of America, it will readily be allowed, have contributed to augment the industry, first, of all the countries which trade to it directly; such as Spain, Portugal, France, and England; and, secondly, of all those which, without trading to it directly, send, through the medium of other countries, goods to it of their own produce; such as Austrian Flanders, and some provinces of Germany, which, through the medium of the countries before mentioned, send to it a considerable quantity of linen and other goods. All such countries have evidently gained a more extensive market for their surplus produce, and must consequently have been encouraged to increase its quantity.2

7But, that those great events should likewise have contributed to encourage the industry of countries, such as Hungary and Poland, which may never, perhaps, have sent a single commodity of their own produce to America, is not, perhaps, altogether so evident. That those events have done so, however, cannot be doubted. Some part of the produce of America is consumed in Hungary and Poland, and there is some demand there for the sugar, chocolate, and tobacco, of that new quarter of the world. But those commodities must be purchased with something which is either the produce of the industry of Hungary and Poland, or with something which had been purchased with some part of that produce. Those commodities of America are new values, new equivalents, introduced into Hungary and Poland to be exchanged there for the surplus produce of those countries. By being carried thither they create a new and more extensive market for that surplus produce. They raise its value, and thereby contribute to encourage its increase. Though no part of it may ever be carried to America, it may be carried to other countries which purchase it with a part of their share of the surplus produce of America; and it may find a market by means of the circulation of that trade which was originally put into motion by the surplus produce of America.

8Those great events may even have contributed to increase the enjoyments, and to augment the industry of countries which, not only never sent any commodities to America, but never received any from it. Even such countries may have received a greater abundance of other commodities from countries of which the surplus produce had been augmented by means of the American trade. This greater abundance, as it must necessarily have increased their enjoyments, so it must likewise have augmented their industry. A greater number of new equivalents of some kind or other must have been presented to them to be exchanged for the surplus produce of that industry. A more extensive market must have been created for that surplus produce, so as to raise its value, and thereby encourage its increase. The mass of commodities annually thrown into the great circle of European commerce, and by its various revolutions annually distributed among all the different nations comprehended within it, must have been augmented by the whole surplus produce of America. A greater share of this greater mass, therefore, is likely to have fallen to each of those nations, to have increased their enjoyments, and augmented their industry.

9The exclusive trade of the mother countries tends to diminish, or, at least, to keep down below what they would otherwise rise to, both the enjoyments and industry of all those nations in general, and of the American colonies in particular. It is a dead weight upon the action of one of the great springs which puts into motion a great part of the business of mankind. By rendering the colony produce dearer in all other countries, it lessens its consumption, and thereby cramps the industry of the colonies, and both the enjoyments and the industry of all other countries, which both enjoy less when they pay more for what they enjoy, and produce less when they get less for what they produce. By rendering the produce of all other countries dearer in the colonies, it cramps, in the same manner, the industry of all other countries, and both the enjoyments and the industry of the colonies. It is a clog which, for the supposed benefit of some particular countries, embarrasses the pleasures, and encumbers the industry of all other countries; but of the colonies more than of any other. It ^anot^a only excludes, as much as possible, all other countries from one particular market; but it confines, as much as possible, the colonies to one particular market: and the difference is very great between being excluded from one particular market, when all others are open, and being confined to one particular market, when all others are shut up. The surplus produce of the colonies, however, is the original source of all that increase of enjoyments and industry which Europe derives from the discovery and colonization of America; and the exclusive trade of the mother countries tends to render this source much less abundant than it otherwise would be.

10The particular advantages which each colonizing country derives from the colonies which particularly belong to it, are of two different kinds; first, those common advantages which every empire derives from the provinces subject to its dominion; and, secondly, those peculiar advantages which are supposed to result from provinces of so very peculiar a nature as the European colonies of America.

11 The common advantages which every empire derives from the provinces subject to its dominion, consist, first, in the military force which they furnish for its defence; and, secondly, in the revenue which they furnish for the support of its civil government. The Roman colonies furnished occasionally both the one and the other. The Greek colonies, sometimes, furnished a military force; but seldom any revenue. They seldom acknowledged themselves subject to the dominion of the mother city. They were generally her allies in war, but very seldom her subjects in peace.3

12The European colonies of America have never yet furnished any military force for the defence of the mother country. Their military force has never yet been sufficient for their own defence; and in the different wars in which the mother countries have been engaged, the defence of their colonies has generally occasioned a very considerable distraction of the military force of those countries. In this respect, therefore, all the European colonies have, without exception, been a cause rather of weakness than of strength to their respective mother countries.4

13The colonies of Spain and Portugal only have contributed any revenue towards the defence of the mother country, or the support of her civil government.5 The taxes which have been levied upon those of other European nations, upon those of England in particular, have seldom been equal to the expence laid out upon them in time of peace, and never sufficient to defray that which they occasioned in time of war. Such colonies, therefore, have been a source of expence and not of revenue to their respective mother countries.

14The advantages of such colonies to their respective mother countries, consist altogether in those peculiar advantages which are supposed to result from provinces of so very peculiar a nature as the European colonies of America; and the exclusive trade, it is acknowledged, is the sole source of all those peculiar advantages.

15In consequence of this exclusive trade, all that part of the surplus produce of the English colonies, for example, which consists in what are called enumerated commodities,6 can be sent to no other country but England. Other countries must afterwards buy it of her. It must be cheaper therefore in England than it can be in any other country, and must contribute more to increase the enjoyments of England, than those of any other country. It must likewise contribute more to encourage her industry. For all those parts of her own surplus produce which England exchanges for those enumerated commodities, she must get a better price than any other ^bcountries^b can get for the like parts of theirs, when they exchange them for the same commodities. The manufactures of England, for example, will purchase a greater quantity of the sugar and tobacco of her own colonies, than the like manufactures of other countries can purchase of that sugar and tobacco. So far, therefore, as the manufactures of England and those of other countries are both to be exchanged for the sugar and tobacco of the English colonies, this superiority of price gives an encouragement to the former, beyond what the latter can in these circumstances enjoy. The exclusive trade of the colonies, therefore, as it diminishes, or, at least, keeps down below what they would otherwise rise to, both the enjoyments and the industry of the countries which do not possess it; so it gives an evident advantage to the countries which do possess it over those other countries.7

16This advantage, however, will, perhaps, be found to be rather what may be called a relative than an absolute advantage; and to give a superiority to the country which enjoys it, rather by depressing the industry and produce of other countries, than by raising those of that particular country above what they would naturally rise to in the case of a free trade.

17The tobacco of Maryland and Virginia, for example, by means of the monopoly which England enjoys of it, certainly comes cheaper to England than it can do to France, to whom England commonly sells a considerable part of it. But had France, and all other European countries been, at all times, allowed a free trade to Maryland and Virginia, the tobacco of those colonies might, by this time, have come cheaper than it actually does, not only to all those other countries, but likewise to England. The produce of tobacco, in consequence of a market so much more extensive than any which it has hitherto enjoyed, might, and probably would, by this time, have been so much increased as to reduce the profits of a tobacco plantation to their natural level with those of a corn plantation, which, it is supposed, they are still somewhat above.8 The price of tobacco might, and probably would, by this time, have fallen somewhat lower than it is at present. An equal quantity of the commodities either of England, or of those other countries, might have purchased in Maryland and Virginia a greater quantity of tobacco than it can do at present, and, consequently, have been sold there for so much a better price.9 So far as that weed, therefore, can, by its cheapness and abundance, increase the enjoyments or augment the industry either of England or of any other country, it would, probably, in the case of a free trade, have produced both these effects in somewhat a greater degree than it can do at present. England, indeed, would not in this case have had any advantage over other countries. She might have bought the tobacco of her colonies somewhat cheaper, and, consequently, have sold some of her own commodities somewhat dearer than she actually does. But she could neither have bought the one cheaper nor sold the other dearer than any other country might have done. She might, perhaps, have gained an absolute, but she would certainly have lost a relative advantage.

18In order, however, to obtain this relative advantage in the colony trade, in order to execute the invidious and malignant project of excluding as much as possible other nations from any share in it, England, there are very probable reasons for believing, has not only sacrificed a part of the absolute advantage which she, as well as every other nation, might have derived from that trade, but has subjected herself both to an absolute and to a relative disadvantage in almost every other branch of trade.

19When, by the act of navigation,10 England assumed to herself the monopoly of the colony trade, the foreign capitals which had before been employed in it were necessarily withdrawn from it. The English capital, which had before carried on but a part of it, was now to carry on the whole. The capital which had before supplied the colonies with but a part of the goods which they wanted from Europe, was now all that was employed to supply them with the whole. But it could not supply them with the whole, and the goods with which it did supply them were necessarily sold very dear. The capital which had before bought but a part of the surplus produce of the colonies, was now all that was employed to buy the whole. But it could not buy the whole at any thing near the old price, and, therefore, whatever it did buy it necessarily bought very cheap. But in an employment of capital in which the merchant sold very dear and bought very cheap, the profit must have been very great, and much above the ordinary level of profit in other branches of trade. This superiority of profit in the colony trade could not fail to draw from other branches of trade a part of the capital which had before been employed in them. But this revulsion of capital, as it must have gradually increased the competition of capitals in the colony trade, so it must have gradually diminished that competition in all those other branches of trade; as it must have gradually lowered the profits of the one, so it must have gradually raised those of the other, till the profits of all came to a new level, different from and somewhat higher than that at which they had been before.11

20This double effect, of drawing capital from all other trades, and of raising the rate of profit somewhat higher than it otherwise would have been in all trades, was not only produced by this monopoly upon its first establishment, but has continued to be produced by it ever since.

21First, this monopoly has been continually drawing capital from all other trades to be employed in that of the colonies.

22Though the wealth of Great Britain has increased very much since the establishment of the act of navigation, it certainly has not increased in the same proportion as that of the colonies. But the foreign trade of every country naturally increases in proportion to its wealth, its surplus produce in proportion to its whole produce; and Great Britain having engrossed to herself almost the whole of what may be called the foreign trade of the colonies, and her capital not having increased in the same proportion as the extent of that trade, she could not carry it on without continually withdrawing from other branches of trade some part of the capital which had before been employed in them, as well as with–holding from them a great deal more which would otherwise have gone to them. Since the establishment of the act of navigation, accordingly, the colony trade has been continually increasing, while many other branches of foreign trade, particularly of that to other parts of Europe, have been continually decaying. Our manufactures for foreign sale, instead of being suited, as before the act of navigation, to the neighbouring market of Europe, or to the more distant one of the countries which lie round the Mediterranean sea, have, the greater part of them, been accommodated to the still more distant one of the colonies, to the market in which they have the monopoly, rather than to that in which they have many competitors. The causes of decay in other branches of foreign trade, which, by Sir Matthew Decker12 and other writers, have been sought for in the excess and improper mode of taxation, in the high price of labour, in the increase of luxury, &c. may all be found in the over–growth of the colony trade. The mercantile capital of Great Britain, though very great, yet not being infinite; and though greatly increased since the act of navigation, yet not being increased in the same proportion as the colony trade, that trade could not possibly be carried on without withdrawing some part of that capital from other branches of trade, nor consequently without some decay of those other branches.

23England, it must be observed, was a great trading country, her mercantile capital was very great and likely to become still greater and greater every day, not only before the act of navigation had established the monopoly of the colony trade, but before that trade was very considerable. In the Dutch war, during the government of Cromwel, her navy was superior to that of Holland; and in that which broke out in the beginning of the reign of Charles II. it was at least equal, perhaps superior, to the united navies of France and Holland. Its superiority, perhaps, would scarce appear greater in the present times; at least if the Dutch navy was to bear the same proportion to the Dutch commerce now which it did then. But this great naval power could not, in either of those wars, be owing to the act of navigation. During the first of them the plan of that act had been but just formed; and though before the breaking out of the second it had been fully enacted by legal authority; yet no part of it could have had time to produce any considerable effect, and least of all that part which established the exclusive trade to the colonies. Both the colonies and their trade were inconsiderable then in comparison of what they are now. The island of Jamaica was an unwholesome desert, little inhabited, and less cultivated. New York and New Jersey were in the possession of the Dutch: the half of St. Christopher’s in that of the French. The island of Antigua, the two Carolinas, Pensylvania, Georgia, and Nova Scotia, were not planted. Virginia, Maryland, and New England were planted; and though they were very thriving colonies, yet there was not, perhaps, at that time either in Europe or America a single person who foresaw or even suspected the rapid progress which they have since made in wealth, population and improvement. The island of Barbadoes, in short, was the only British colony of any consequence of which the condition at that time bore any resemblance to what it is at present. The trade of the colonies, of which England, even for some time after the act of navigation enjoyed but a part (for the act of navigation was not very strictly executed till several years after it was enacted), could not at that time be the cause of the great trade of England, nor of the great naval power which was supported by that trade.13 The trade which at that time supported that great naval power was the trade of Europe, and of the countries which lie round the Mediterranean sea. But the share which Great Britain at present enjoys of that trade could not support any such great naval power. Had the growing trade of the colonies been left free to all nations, whatever share of it might have fallen to Great Britain, and a very considerable share would probably have fallen to her, must have been all an addition to this great trade of which she was before in possession. In consequence of the monopoly, the increase of the colony trade has not so much occasioned an addition to the trade which Great Britain had before, as a total change in its direction.

24Secondly, this monopoly has necessarily contributed to keep up the rate of profit in all the different branches of British trade higher than it naturally would have been, had all nations been allowed a free trade to the British colonies.

25 The monopoly of the colony trade, as it necessarily drew towards that trade a greater proportion of the capital of Great Britain than what would have gone to it of its own accord; so by the expulsion of all foreign capitals it necessarily reduced the whole quantity of capital employed in that trade below what it naturally would have been in the case of a free trade. But, by lessening the competition of capitals in that branch of trade, it necessarily raised the rate of^c profit in that branch. By lessening too the competition of British capitals in all other branches of trade, it necessarily raised the rate of British profit in all those other branches. Whatever may have been, at any particular period, since the establishment of the act of navigation, the state or extent of the mercantile capital of Great Britain, the monopoly of the colony trade must, during the continuance of that state, have raised the ordinary rate of British profit higher than it otherwise would have been both in that and in all the other branches of British trade. If, since the establishment of the act of navigation, the ordinary rate of British profit has fallen considerably, as it certainly has, it must have fallen still lower, had not the monopoly established by that act contributed to keep it up.

26But whatever raises in any country the ordinary rate of profit higher than it otherwise would be, necessarily subjects that country both to an absolute and to a relative disadvantage in every branch of trade of which she has not the monopoly.

27 It subjects her to an absolute disadvantage: because in such branches of trade her merchants cannot get this greater profit, without selling dearer than they otherwise would do both the goods of foreign countries which they import into their own, and the goods of their own country which they export to foreign countries. Their own country must both buy dearer and sell dearer; must both buy less and sell less; must both enjoy less and produce less, than she otherwise would do.

28It subjects her to a relative disadvantage; because in such branches of trade it sets other countries which are not subject to the same absolute disadvantage, either more above her or less below her than they otherwise would be. It enables them both to enjoy more and to produce more in proportion to what she enjoys and produces. It renders their superiority greater or their inferiority less than it otherwise would be. By raising the price of her produce above what it otherwise would be, it enables the merchants of other countries to undersell her in foreign markets, and thereby to justle her out of almost all those branches of trade, of which she has not the monopoly.

29Our merchants frequently complain of the high wages of British labour as the cause of their manufactures being undersold in foreign markets; but they are silent about the high profits of stock. They complain of the extravagant gain of other people; but they say nothing of their own. The high profits of British stock, however, may contribute towards raising the price of British manufactures in many cases as much, and in some perhaps more, than the high wages of British labour.14

30 It is in this manner that the capital of Great Britain, one may justly say, has partly been drawn and partly been driven from the greater part of the different branches of trade of which she has not the monopoly; from the trade of Europe in particular, and from that of the countries which lie round the Mediterranean sea.15

31It has partly been drawn from those branches of trade; by the attraction of superior profit in the colony trade in consequence of the continual increase of that trade, and of the continual insufficiency of the capital which had carried it on one year to carry it on the next.

32It has partly been driven from them; by the advantage which the high rate of profit, established in Great Britain, gives to other countries, in all the different branches of trade of which Great Britain has not the monopoly.

33As the monopoly of the colony trade has drawn from those other branches a part of the British capital which would otherwise have been employed in them, so it has forced into them many foreign capitals which would never have gone to them, had they not been expelled from the colony trade. In those other branches of trade it has diminished the competition of British capitals, and thereby raised the rate of British profit higher than it otherwise would have been. On the contrary, it has increased the competition of foreign capitals, and thereby sunk the rate of foreign profit lower than it otherwise would have been. Both in the one way and in the other it must evidently have subjected Great Britain to a relative disadvantage in all those other branches of trade.

34The colony trade, however, it may perhaps be said, is more advantageous to Great Britain than any other; and the monopoly, by forcing into that trade a greater proportion of the capital of Great Britain than what would otherwise have gone to it, has turned that capital into an employment more advantageous to the country than any other which it could have found.

35The most advantageous employment of any capital to the country to which it belongs, is that which maintains there the greatest quantity of productive labour, and increases the most the annual produce of the land and labour of that country. But the quantity of productive labour which any capital employed in the foreign trade of consumption can maintain, is exactly in proportion, it has been shewn in the second book, to the frequency of its returns.16 A capital of a thousand pounds, for example, employed in a foreign trade of consumption, of which the returns are made regularly once in the year, can keep in constant employment, in the country to which it belongs, a quantity of productive labour equal to what a thousand pounds can maintain there for a year. If the returns are made twice or thrice in the year, it can keep in constant employment a quantity of productive labour equal to what two or three thousand pounds can maintain there for a year. A foreign trade of consumption carried on with a neighbouring^d , is, upon this account, in general, more advantageous than one carried on with a distant country; and for the same reason a direct foreign trade of consumption, as it has likewise been shewn in the second book,17 is in general more advantageous than a round–about one.

36But the monopoly of the colony trade, so far as it has operated upon the employment of the capital of Great Britain, has in all cases forced some part of it from a foreign trade of consumption carried on with a neighbouring^e , to one carried on with a more distant country, and in many cases from a direct foreign trade of consumption to a round–about one.

37First, the monopoly of the colony trade has in all cases forced some part of the capital of Great Britain from a foreign trade of consumption carried on with a neighbouring, to one carried on with a more distant country.

38It has, in all cases, forced some part of that capital from the trade with Europe, and with the countries which lie round the Mediterranean sea, to that with the more distant regions of America and the West Indies, from which the returns are necessarily less frequent, not only on account of the greater distance, but on account of the peculiar circumstances of those countries.18 New colonies, it has already been observed, are always understocked.19 Their capital is always much less than what they could employ with great profit and advantage in the improvement and cultivation of their land. They have a constant demand, therefore, for more capital than they have of their own; and, in order to supply the deficiency of their own, they endeavour to borrow as much as they can of the mother country, to whom they are, therefore, always in debt.20 The most common way in which the colonists contract this debt, is not by borrowing upon bond of the rich people of the mother country, though they sometimes do this too, but by running as much in arrear to their correspondents, who supply them with goods from Europe, as those correspondents will allow them. Their annual returns frequently do not amount to more than a third, and sometimes not to so great a proportion of what they owe. The whole capital, therefore, which their correspondents advance to them is seldom returned to Britain in less than three, and sometimes not in less than four or five years. But a British capital of a thousand pounds, for example, which is returned to Great Britain only once in five years, can keep in constant employment only one–fifth part of the British industry which it could maintain if the whole was returned once in the year; and, instead of the quantity of industry which a thousand pounds could maintain for a year, can keep in constant employment the quantity only which two hundred pounds can maintain for a year.21 The planter, no doubt, by the high price which he pays for the goods from Europe, by the interest upon the bills which he grants at distant dates, and by the commission upon the renewal of those which he grants at near dates, makes up, and probably more than makes up, all the loss which his correspondent can sustain by this delay. But, though he may make up the loss of his correspondent, he cannot make up that of Great Britain. In a trade of which the returns are very distant, the profit of the merchant may be as great or greater than in one in which they are very frequent and near; but the advantage of the country in which he resides, the quantity of productive labour constantly maintained there, the annual produce of the land and labour must always be much less. That the returns of the trade to America, and still more those of that to the West Indies, are, in general, not only more distant, but more irregular, and more uncertain too, than those of the trade to any part of Europe, or even of the countries which lie round the Mediterranean sea, will readily be allowed, I imagine, by every body who has any experience of those different branches of trade.

39Secondly, the monopoly of the colony trade has, in many cases, forced some part of the capital of Great Britain from a direct foreign trade of consumption, into a round–about one.

40Among the enumerated commodities which can be sent to no other market but Great Britain, there are several of which the quantity exceeds very much the consumption of Great Britain, and of which a part, therefore, must be exported to other countries. But this cannot be done without forcing some part of the capital of Great Britain into a round–about foreign trade of consumption. Maryland and Virginia, for example, send annually to Great Britain upwards of ninety–six thousand hogsheads of tobacco, and the consumption of Great Britain is said not to exceed fourteen thousand.22 Upwards of eighty–two thousand hogsheads, therefore, must be exported to other countries, to France, to Holland, and to the countries which lie round the Baltick and Mediterranean seas. But, that part of the capital of Great Britain which brings those eighty–two thousand hogsheads to Great Britain, which re–exports them from thence to those other countries, and which brings back from those other countries to Great Britain either goods or money in return, is employed in a roundabout foreign trade of consumption; and is necessarily forced into this employment in order to dispose of this great surplus. If we would compute in how many years the whole of this capital is likely to come back to Great Britain, we must add to the distance of the American returns that of the returns from those other countries. If, in the direct foreign trade of consumption which we carry on with America, the whole capital employed frequently does not come back in less than three or four years; the whole capital employed in this round–about one is not likely to come back in less than four or five. If the one can keep in constant employment but a third or a fourth part of the domestick industry which could be maintained by a capital returned once in the year, the other can keep in constant employment but a fourth or a fifth part of that industry. ^fAt some of the outports a credit is commonly given to those foreign correspondents to whom they export their tobacco. At the port of London, indeed, it is commonly sold for ready money. The rule is, Weigh and pay. At the port of London, therefore, the final returns of the whole round–about trade are more distant than the returns from America by the time only which the goods may lie unsold in the warehouse; where, however, they may sometimes lie long enough.^f But, had not the colonies been confined to the market of Great Britain for the sale of their tobacco, very little more of it would probably have come to us than what was necessary for the home consumption. The goods which Great Britain purchases at present for her own consumption with the great surplus of tobacco which she exports to other countries, she would, in this case, probably have purchased with the immediate produce of her own industry, or with some part of her own manufactures. That produce, those manufactures, instead of being almost entirely suited to one great market, as at present, would probably have been fitted to a great number of smaller markets. Instead of one great round–about foreign trade of consumption, Great Britain would probably have carried on a great number of small direct foreign trades of the same kind. On account of the frequency of the returns, a part, and, probably, but a small part; perhaps not above a third or a fourth, of the capital which at present carries on this great round–about trade, might have been sufficient to carry on all those small direct ones, might have kept in constant employment an equal quantity of British industry, and have equally supported the annual produce of the land and labour of Great Britain. All the purposes of this trade being, in this manner, answered by a much smaller capital, there would have been a large spare capital to apply to other purposes; to improve the lands, to increase the manufactures, and to extend the commerce of Great Britain; to come into competition at least with the other British capitals employed in all those different ways, to reduce the rate of profit in them all, and thereby to give to Great Britain, in all of them, a superiority over other countries still greater than what she at present ^genjoys^g .

41The monopoly of the colony trade too has forced some part of the capital of Great Britain from all foreign trade of consumption to a carrying trade; and, consequently, from supporting more or less the industry of Great Britain, to be employed altogether in supporting partly that of the colonies, and partly that of some other countries.

42The goods, for example, which are annually purchased with the great surplus of eighty–two thousand hogsheads of tobacco annually re–exported from Great Britain, are not all consumed in Great Britain. Part of them, linen from Germany and Holland, for example, is returned to the colonies for their particular consumption. But, that part of the capital of Great Britain which buys the tobacco with which this linen is afterwards bought, is necessarily withdrawn from supporting the industry of Great Britain, to be employed altogether in supporting, partly that of the colonies, and partly that of the particular countries who pay for this tobacco with the produce of their own industry.

43The monopoly of the colony trade besides, by forcing towards it a much greater proportion of the capital of Great Britain than what would naturally have gone to it, seems to have broken altogether that natural balance which would otherwise have taken place among all the different branches of British industry.23 The industry of Great Britain, instead of being accommodated to a great number of small markets, has been principally suited to one great market. Her commerce, instead of running in a great number of small channels, has been taught to run principally in one great channel. But the whole system of her industry and commerce has thereby been rendered less secure; the whole state of her body politick less healthful, than it otherwise would have been. In her present condition, Great Britain resembles one of those unwholesome bodies in which some of the vital parts are overgrown, and which, upon that account, are liable to many dangerous disorders scarce incident to those in which all the parts are more properly proportioned. A small stop in that great blood–vessel, which has been artificially swelled beyond its natural dimensions, and through which an unnatural proportion of the industry and commerce of the country has been forced to circulate, is very likely to bring on the most dangerous disorders upon the whole body politick.24 The expectation of a rupture with the colonies, accordingly, has struck the people of Great Britain with more terror than they ever felt for a Spanish armada, or a French invasion.25 It was this terror, whether well or ill grounded, which rendered the repeal of the stamp act,26^hamong the merchants at least, a popular measure^h . In the total exclusion from the colony market, was it to last only for a few years, the greater part of our merchants used to fancy that they foresaw an entire stop to their trade; the greater part of our master manufacturers, the entire ruin of their business; and the greater part of our workmen, an end of their employment.27 A rupture with any of our neighbours upon the continent, though likely too to occasion some stop or interruption in the employments of some of all these different orders of people, is foreseen, however, without any such general emotion. The blood, of which the circulation is stopt in some of the smaller vessels, easily disgorges itself into the greater, without occasioning any dangerous disorder; but, when it is stopt in any of the greater vessels, convulsions, apoplexy, or death, are the immediate and unavoidable consequences. If but one of those overgrown manufactures, which by means either of bounties, or of the monopoly of the home and colony markets, have been artificially raised up to an unnatural height, finds some small stop or interruption in its employment, it frequently occasions a mutiny and disorder alarming to government, and embarrassing even to the deliberations of the legislature. How great, therefore, would be the disorder and confusion, it was thought, which must necessarily be occasioned by a sudden and entire stop in the employment of so great a proportion of our principal manufacturers?

44Some moderate and gradual relaxation of the laws which give to Great Britain the exclusive trade to the colonies, till it is rendered in a great measure free, seems to be the only expedient which canⁱ, in all future times,ⁱ deliver her from this danger, which can enable her or even force her to withdraw some part of her capital from this overgrown employment, and to turn it, though with less profit, towards other employments; and which, by gradually diminishing one branch of her industry and gradually increasing all the rest, can by degrees restore all the different branches of it to that natural, healthful, and proper proportion which perfect liberty necessarily establishes, and which perfect liberty can alone preserve. To open the colony trade all at once to all nations, might not only occasion some transitory inconveniency, but a great permanent loss to the greater part of those whose industry or capital is at present engaged in it. The sudden loss of the employment even of the ships which import the eighty–two thousand hogsheads of tobacco, which are over and above the consumption of Great Britain, might alone be felt very sensibly.28 Such are the unfortunate effects of all the regulations of the mercantile system! They not only introduce very dangerous disorders into the state of the body politick, but disorders which it is often difficult to remedy, without occasioning, for a time at least, still greater disorders. In what manner, therefore, the colony trade ought gradually to be opened; what are the restraints which ought first, and what are those which ought last to be taken away; or in what manner the natural system of perfect liberty and justice ought gradually to be restored, we must leave to the wisdom of future statesmen and legislators to determine.29

45Five different events, unforeseen and unthought of, have very fortunately concurred to hinder Great Britain from feeling, so sensibly as it was generally expected she would, the total exclusion which has now taken place for more than a year (from the first of December, 1774) from a very important branch of the colony trade, that of the twelve associated provinces of North America. First, those colonies, in preparing themselves for their non–importation agreement, drained Great Britain completely of all the commodities which were fit for their market: secondly, the extraordinary demand of the Spanish Flota has, this year, drained Germany and the North of many commodities, linen in particular, which used to come into competition, even in the British market, with the manufactures of Great Britain: thirdly, the peace between Russia and Turkey has occasioned an extraordinary demand from the Turkey market, which, during the distress of the country, and while a Russian fleet was cruizing in the Archipelago, had been very poorly supplied: fourthly, the demand of the north of Europe for the manufactures of Great Britain, has been increasing from year to year for some time past: and, fifthly, the late partition and consequential pacification of Poland, by opening the market of that great country, have this year added an extraordinary demand from thence to the increasing demand of the North. These events are all, except the fourth, in their nature transitory and accidental,30 and the exclusion from so important a branch of the colony trade, if unfortunately it should continue much longer, may still occasion some degree of distress. This distress, however, as it will come on gradually, will be felt much less severely than if it had come on all at once; and, in the mean time, the industry and capital of the country may find a new employment and direction, so as to prevent ^jthis distress^j from ever rising to any considerable height.

46The monopoly of the colony trade, therefore, so far as it has turned towards that trade a greater proportion of the capital of Great Britain than what would otherwise have gone to it, has in all cases turned it, from a foreign trade of consumption with a neighbouring, into one with a more distant country; in many cases, from a direct foreign trade of consumption, into a round–about one; and in some cases, from all foreign trade of consumption, into a carrying trade. It has in all cases, therefore, turned it, from a direction in which it would have maintained a greater quantity of productive labour, into one, in which it can maintain a much smaller quantity. By suiting, besides, to one particular market only, so great a part of the industry and commerce of Great Britain, it has rendered the whole state of that industry and commerce more precarious and less secure, than if their produce had been accommodated to a greater variety of markets.31

47We must carefully distinguish between the effects of the colony trade and those of the monopoly of that trade. The former are always and necessarily beneficial; the latter always and necessarily hurtful. But the former are so beneficial, that the colony trade, though subject to a monopoly, and notwithstanding the hurtful effects of that monopoly, is still upon the whole beneficial, and greatly beneficial; though a good deal less so than it otherwise would be.

48The effect of the colony trade in its natural and free state, is to open a great, though distant market for such parts of the produce of British industry as may exceed the demand of the markets nearer home, of those of Europe, and of the countries which lie round the Mediterranean sea. In its natural and free state, the colony trade, without drawing from those markets any part of the produce which had ever been sent to them, encourages Great Britain to increase the surplus continually, by continually presenting new equivalents to be exchanged for it. In its natural and free state, the colony trade tends to increase the quantity of productive labour in Great Britain, but without altering in any respect the direction of that which had been employed there before. In the natural and free state of the colony trade, the competition of all other nations would hinder the rate of profit from rising above the common level either in the new market, or in the new employment. The new market, without drawing any thing from the old one, would create, if one may say so, a new produce for its own supply; and that new produce would constitute a new capital for carrying on the new employment, which in the same manner would draw nothing from the old one.

49The monopoly of the colony trade, on the contrary, by excluding the competition of other nations, and thereby raising the rate of profit both in the new market and in the new employment, draws produce from the old market and capital from the old employment.32 To augment our share of the colony trade beyond what it otherwise would be, is the avowed purpose of the monopoly. If our share of that trade were to be no greater with, than it would have been without the monopoly, there could have been no reason for establishing the monopoly. But whatever forces into a branch of trade of which the returns are slower and more distant than those of the greater part of other trades, a greater proportion of the capital of any country, than what of its own accord would go to that branch, necessarily renders the whole quantity of productive labour annually maintained there, the whole annual produce of the land and labour of that country, less than they otherwise would be. It keeps down the revenue of the inhabitants of that country, below what it would naturally rise to, and thereby diminishes their power of accumulation. It not only hinders, at all times, their capital from maintaining so great a quantity of productive labour as it would otherwise maintain, but it hinders it from increasing so fast as it would otherwise increase, and consequently from maintaining a still greater quantity of productive labour.

50The natural good effects of the colony trade, however, more than counter–balance to Great Britain the bad effects of the monopoly, so that, monopoly and all together, that trade, even as it is carried on at present, is not only advantageous, but greatly advantageous. The new market and ^kthe^k new employment which are opened by the colony trade, are of much greater extent than that portion of the old market and of the old employment which is lost by the monopoly. The new produce and the new capital which has been created, if one may say so, by the colony trade, maintain in Great Britain a greater quantity of productive labour, than what can have been thrown out of employment by the revulsion of capital from other trades of which the returns are more frequent. If the colony trade, however, even as it is carried on at present is advantageous to Great Britain, it is not by means of the monopoly, but in spite of the monopoly.

51It is rather for the manufactured than for the rude produce of Europe, that the colony trade opens a new market.33 Agriculture is the proper business of all new colonies; a business which the cheapness of land renders more advantageous than any other. They abound, therefore, in the rude produce of land, and instead of importing it from other countries, they have generally a large surplus to export. In new colonies, agriculture either draws hands from all other employments, or keeps them from going to any other employment. There are few hands to spare for the necessary, and none for the ornamental manufactures. The greater part of the manufactures of both kinds, they find it cheaper to purchase of other countries than to make for themselves.34 It is chiefly by encouraging the manufactures of Europe, that the colony trade indirectly encourages its agriculture. The manufacturers of Europe, to whom that trade gives employment, constitute a new market for the produce of the land; and the most advantageous of all markets; the home market for the corn and cattle, for the bread and butchers–meat of Europe; is thus greatly extended by means of the trade to America.

52But that the monopoly of the trade of populous and thriving colonies is not alone sufficient to establish, or even to maintain manufactures in any country, the examples of Spain and Portugal sufficiently demonstrate. Spain and Portugal were manufacturing countries before they had any considerable colonies. Since they had the richest and most fertile in the world, they have both ceased to be so.

53 In Spain and Portugal, the bad effects of the monopoly, aggravated by other causes, have^l, perhaps, nearly overbalanced^l the natural good effects of the colony trade. These causes seem to be, other monopolies of different kinds; the degradation of the value of gold and silver below what it is in most other countries;35 the exclusion from foreign markets by improper taxes upon exportation, and the narrowing of the home market, by still more improper taxes upon the transportation of goods from one part of the country to another; but above all, that irregular and partial administration of justice, which often protects the rich and powerful debtor from the pursuit of his injured creditor, and which makes the industrious part of the nation afraid to prepare goods for the consumption of those haughty and great men, to whom they dare not refuse to sell upon credit, and from whom they are altogether uncertain of repayment.36

54In England, on the contrary, the natural good effects of the colony trade, assisted by other causes, have in a great measure conquered the bad effects of the monopoly. These causes seem to be, the general liberty of trade, which, notwithstanding some restraints, is at least equal, perhaps superior, to what it is in any other country; the liberty of exporting, duty free, almost all sorts of goods which are the produce of domestick industry, to almost any foreign country; and what, perhaps, is of still greater importance, the unbounded liberty of transporting them from any one part of our own country to any other, without being obliged to give any account to any publick office, without being liable to question or examination of any kind;37 but above all, that equal and impartial administration of justice which renders the rights of the meanest British subject respectable to the greatest, and which, by securing to every man the fruits of his own industry, gives the greatest and most effectual encouragement to every sort of industry.38

55If the manufactures of Great Britain, however, have been advanced, as they certainly have, by the colony trade, it has not been by means of the monopoly of that trade, but in spite of the monopoly. The effect of the monopoly has been, not to augment the quantity, but to alter the quality and shape of a part of the manufactures of Great Britain, and to accommodate to a market, from which the returns are slow and distant, what would otherwise have been accommodated to one from which the returns are frequent and near. Its effect has consequently been to turn a part of the capital of Great Britain from an employment in which it would have maintained a greater quantity of manufacturing industry, to one in which it maintains a much smaller, and thereby to diminish, instead of increasing, the whole quantity of manufacturing industry maintained in Great Britain.

56The monopoly of the colony trade, therefore, like all the other mean and malignant expedients of the mercantile system, depresses the industry of all other countries, but chiefly that of the colonies, without in the least increasing, but on the contrary diminishing, that of the country in whose favour it is established.

57The monopoly hinders the capital of that country, whatever may at any particular time be the extent of that capital, from maintaining so great a quantity of productive labour as it would otherwise maintain, and from affording so great a revenue to the industrious inhabitants as it would otherwise afford. But as capital can be increased only by savings from revenue,39 the monopoly, by hindering it from affording so great a revenue as it would otherwise afford, necessarily hinders it from increasing so fast as it would otherwise increase, and consequently from maintaining a still greater quantity of productive labour, and affording a still greater revenue to the industrious inhabitants of that country. One great original source of revenue, therefore, the wages of labour, the monopoly must necessarily have rendered at all times less abundant than it otherwise would have been.

58By raising the rate of mercantile profit, the monopoly discourages the improvement of land.40 The profit of improvement depends upon the difference between what the land actually produces, and what, by the application of a certain capital, it can be made to produce. If this difference affords a greater profit than what can be drawn from an equal capital in any mercantile employment, the improvement of land will draw capital from all mercantile employments. If the profit is less, mercantile employments will draw capital from the improvement of land. Whatever therefore raises the rate of mercantile profit, either lessens the superiority or increases the inferiority of the profit of improvement; and in the one case hinders capital from going to improvement, and in the other draws capital from it. But by discouraging improvement, the monopoly necessarily retards the natural increase of another great original source of revenue, the rent of land. By raising the rate of profit too the monopoly necessarily keeps up the market rate of interest higher than it otherwise would be. But the price of land in proportion to the rent which it affords, the number of years purchase which is commonly paid for it, necessarily falls as the rate of interest rises, and rises as the rate of interest falls.41 The monopoly, therefore, hurts the interest of the landlord two different ways, by retarding the natural increase, first, of his rent, and secondly, of the price which he would get for his land in proportion to the rent which it affords.

59The monopoly indeed, raises the rate of mercantile profit, and thereby augments somewhat the gain of our merchants. But as it obstructs the natural increase of capital, it tends rather to diminish than to increase the sum total of the revenue which the inhabitants of the country derive from the profits of stock; a small profit upon a great capital generally affording a greater revenue than a great profit upon a small one. The monopoly raises the rate of profit, but it hinders the sum of profit from rising so high as it otherwise would do.

60All the original sources of revenue, the wages of labour, the rent of land, and the profits of stock,42 the monopoly renders much less abundant than they otherwise would be. To promote the little interest of one little order of men in one country, it hurts the interest of all other orders of men in that country, and of all^m men in all other countries.

61It is solely by raising the ordinary rate of profit that the monopoly either has proved or could prove advantageous to any one particular order of men. But besides all the bad effects to the country in general, which have already been mentioned as necessarily resulting from a high rate of profit; there is one more fatal, perhaps, than all these put together, but which, if we may judge from experience, is inseparably connected with it. The high rate of profit seems every where to destroy that parsimony which in other circumstances is natural to the character of the merchant.43 When profits are high, that sober virtue seems to be superfluous, and expensive luxury to suit better the affluence of his situation. But the owners of the great mercantile capitals are necessarily the leaders and conductors of the whole industry of every nation, and their example has a much greater influence upon the manners of the whole industrious part of it than that of any other order of men. If his employer is attentive and parsimonious, the workman is very likely to be so too; but if the master is dissolute and disorderly, the servant who shapes his work according to the pattern which his master prescribes to him, will shape his life too according to the example which he sets him. Accumulation is thus prevented in the hands of all those who are naturally the most disposed to accumulate; and the funds destined for the maintenance of productive labour receive no augmentation from the revenue of those who ought naturally to augment them the most. The capital of the country, instead of increasing, gradually dwindles away, and the quantity of productive labour maintained in it grows every day less and less. Have the exorbitant profits of the merchants of Cadiz and Lisbon augmented the capital of Spain and Portugal?44 Have they alleviated the poverty, have they promoted the industry of those two beggarly countries? Such has been the tone of mercantile expence in those two trading cities, that those exorbitant profits, far from augmenting the general capital of the country, seem scarce to have been sufficient to keep up the capitals upon which they were made. Foreign capitals are every day intruding themselves, if I may say so, more and more into the trade of Cadiz and Lisbon. It is to expel those foreign capitals from a trade which their ownⁿ grows every day more and more insufficient for carrying on, that the Spaniards and Portugueze endeavour every day to straiten more and more the galling bands of their absurd monopoly. Compare the mercantile manners of Cadiz and Lisbon with those of Amsterdam, and you will be sensible how differently the conduct and character of merchants are affected by the high and by the low profits of stock.45 The merchants of London, indeed, have not yet generally become such magnificent lords as those of Cadiz and Lisbon; but neither are they in general such attentive and parsimonious burghers as those of Amsterdam. They are supposed, however, many of them, to be a good deal richer than the greater part of the former, and not quite so rich as many of the latter. But the rate of their profit is commonly much lower than that of the former, and a good deal higher than that of the latter. Light come light go, says the proverb; and the ordinary tone of expence seems every where to be regulated, not so much according to the real ability of spending, as to the supposed facility of getting money to spend.

62It is thus that the single advantage which the monopoly procures to a single order of men is in many different ways hurtful to the general interest of the country.

63To found a great empire for the sole purpose of raising up a people of customers, may at first sight appear a project fit only for a nation of shopkeepers.46 It is, however, a project altogether unfit for a nation of shopkeepers; but extremely fit for a nation ^owhose government is influenced^o by shopkeepers. Such ^pstatesmen^p and such ^qstatesmen^q only, are capable of fancying that they will find some advantage in employing the blood and treasure of their ^rfellow citizens^r to found and ^sto^s maintain such an empire. Say to a shopkeeper, Buy me a good estate, and I shall always buy my cloaths at your shop, even though I should pay somewhat dearer than what I can have them for at other shops; and you will not find him very forward to embrace your proposal. But should any other person buy you such an estate, the shopkeeper would be much obliged to your benefactor if he would enjoin you to buy all your cloaths at his shop. England purchased for some of her subjects, who found themselves uneasy at home, a great estate in a distant country. The price, indeed, was very small, and instead of thirty years purchase, the ordinary price of land in the present times, it amounted to little more than the expence of the different equipments which made the first discovery, reconnoitred the coast, and took a fictitious possession of the country. The land was good and of great extent, and the cultivators having plenty of good ground to work upon, and being for some time at liberty to sell their produce where they pleased, became in the course of little more than thirty or forty years (between 1620 and 1660) so numerous and thriving a people, that the shopkeepers and other traders of England wished to secure to themselves the monopoly of their custom.47 Without pretending, therefore, that they had paid any part, either of the original purchase–money, or of the subsequent expence of improvement, they petitioned the parliament that the cultivators of America might for the future be confined to their shop; first, for buying all the goods which they wanted from Europe; and, secondly, for selling all such parts of their own produce as those traders might find it convenient to buy. For they did not find it convenient to buy every part of it. Some parts of it imported into England might have interfered with some of the trades which they themselves carried on at home. Those particular parts of it, therefore, they were willing that the colonists should sell where they could; the farther off the better; and upon that account proposed that their market should be confined to the countries south of Cape Finisterre. A clause in the famous act of navigation established this truly shopkeeper proposal into a law.48

64The maintenance of this monopoly has hitherto been the principal, or more properly perhaps the sole end and purpose of the dominion which Great Britain assumes over her colonies. In the exclusive trade, it is supposed, consists the great advantage of provinces, which have never yet afforded either revenue or military force for the support of the civil government, or the defence of the mother country.49 The monopoly is the principal badge of their dependency,50 and it is the sole fruit which has hitherto been gathered from that dependency. Whatever expence Great Britain has hitherto laid out in maintaining this dependency, has really been laid out in order to support this monopoly. The expence of the ordinary peace establishment of the colonies amounted, before the commencement of the present disturbances, to the pay of twenty regiments of foot; to the expence of the artillery, stores, and extraordinary provisions with which it ^twas^t necessary to supply them; and to the expence of a very considerable naval force which ^uwas^u constantly kept up, in order to guard, from the smuggling vessels of other nations, the immense coast of North America, and that of our West Indian islands. The whole expence of this peace establishment was a charge upon the revenue of Great Britain, and was, at the same time, the smallest part of what the dominion of the colonies has cost the mother country.51 If we would know the amount of the whole, we must add to the annual expence of this peace establishment the interest of the sums which, in consequence of her considering her colonies as provinces subject to her dominion, Great Britain has upon different occasions laid out upon their defence. We must add to it, in particular, the whole expence of the late war, and a great part of that ^vof the war^v which preceded it. The late war was altogether a colony quarrel, and the whole expence of it, in whatever part of the world it may have been laid out, whether in Germany or^w the East Indies, ought justly to be stated to the account of the colonies. It amounted to more than ninety millions sterling, including not only the new debt which was contracted, but the two shillings in the pound additional land tax, and the sums which were every year borrowed from the sinking fund.52 The Spanish war which began in 1739, was principally a colony quarrel. Its principal object was to prevent the search of the colony ships which carried on a contraband trade with the Spanish main. This whole expence is, in reality, a bounty which has been given in order to support a monopoly. The pretended purpose of it was to encourage the manufactures, and to increase the commerce of Great Britain. But its real effect has been to raise the rate of mercantile profit, and to enable our merchants to turn into a branch of trade, of which the returns are more slow and distant than those of the greater part of other trades, a greater proportion of their capital than they otherwise would have done; two events which, if a bounty could have prevented, it might perhaps have been very well worth while to give such a bounty.

65Under the present system of management, therefore, Great Britain derives nothing but loss from the dominion which she assumes over her colonies.

66To propose that Great Britain should voluntarily give up all authority over her colonies,53 and leave them to elect their own magistrates, to enact their own laws, and to make peace and war as they might think proper, would be to propose such a measure as never was, and never will be adopted, by any nation in the world.54 No nation ever voluntarily gave up the dominion of any province, how troublesome soever it might be to govern it, and how small soever the revenue which it afforded might be in proportion to the expence which it occasioned.55 Such sacrifices, though they might frequently be agreeable to the interest, are always mortifying to the pride of every nation, and what is perhaps of still greater consequence, they are always contrary to the private interest of the governing part of it, who would thereby be deprived of the disposal of many places of trust and profit, of many opportunities of acquiring wealth and distinction, which the possession of the most turbulent, and, to the great body of the people, the most unprofitable province seldom fails to afford. The most visionary enthusiast would scarce be capable of proposing such a measure, with any serious hopes at least of its ever being adopted. If it was adopted, however, Great Britain would not only be immediately freed from the whole annual expence of the peace establishment of the colonies, but might settle with them such a treaty of commerce as would effectually secure to her a free trade, more advantageous to the great body of the people, though less so to the merchants, than the monopoly which she at present enjoys. By thus parting good friends, the natural affection of the colonies to the mother country, which, perhaps, our late dissentions have well nigh extinguished, would quickly revive.56 It might dispose them not only to respect, for whole centuries together, that treaty of commerce which they had concluded with us at parting, but to favour us in war as well as in trade, and, instead of turbulent and factious subjects, to become our most faithful, affectionate, and generous allies; and the same sort of parental affection on the one side, and filial respect on the other, might revive between Great Britain and her colonies, which used to subsist between those of ancient Greece and the mother city from which they descended.57

67 In order to render any province advantageous to the empire to which it belongs, it ought to afford, in time of peace, a revenue to the publick sufficient not only for defraying the whole expence of its own peace establishment, but for contributing its proportion to the support of the general government of the empire. Every province necessarily contributes, more or less, to increase the expence of that general government. If any particular province, therefore, does not contribute its share towards defraying this expence, an unequal burden must be thrown upon some other part of the empire. The extraordinary revenue too which every province affords to the publick in time of war, ought, from parity of reason, to bear the same proportion to the extraordinary revenue of the whole empire which its ordinary revenue does in time of peace.58 That neither the ordinary nor extraordinary revenue which Great Britain derives from her colonies, bears this proportion to the whole revenue of the British empire, will readily be allowed. The monopoly, it has been supposed, indeed, by increasing the private revenue of the people of Great Britain, and thereby enabling them to pay greater taxes, compensates the deficiency of the publick revenue of the colonies. But this monopoly, I have endeavoured to show, though a very grievous tax upon the colonies, and though it may increase the revenue of a particular order of men in Great Britain, diminishes instead of increasing that of the great body of the people; and consequently diminishes instead of increasing the ability of the great body of the people to pay taxes.59 The men too whose revenue the monopoly increases, constitute a particular order, which it is both absolutely impossible to tax beyond the proportion of other orders, and extremely impolitick even to attempt to tax beyond that proportion, as I shall endeavour to shew in the following book.60 No particular resource, therefore, can be drawn from this particular order.

68The colonies may be taxed by their own assemblies, or by the parliament of Great Britain.

69That the colony assemblies can ever be so managed as to levy upon their constituents a publick revenue sufficient, not only to maintain at all times their own civil and military establishment, but to pay their proper proportion of the expence of the general government of the British empire, seems not very probable. It was a long time before even the parliament of England, though placed immediately under the eye of the sovereign, could be brought under such a system of management, or could be rendered sufficiently liberal in their grants for supporting the civil and military establishments even of their own country. It was only by distributing among the particular members of parliament, a great part either of the offices, or of the disposal of the offices arising from this civil and military establishment, that such a system of management could be established even with regard to the parliament of England. But the distance of the colony assemblies from the eye of the sovereign, their number, their dispersed situation, and their various constitutions, would render it very difficult to manage them in the same manner, even though the sovereign had the same means of doing it; and those means are wanting. It would be absolutely impossible to distribute among all the leading members of all the colony assemblies such a share, either of the offices or of the disposal of the offices arising from the general government of the British empire, as to dispose them to give up their popularity at home and to tax their constituents for the support of that general government, of which almost the whole emoluments were to be divided among people who were strangers to them. The unavoidable ignorance of administration, besides, concerning the relative importance of the different members of those different assemblies, the offences which must frequently be given, the blunders which must constantly be committed in attempting to manage them in this manner, seems to render such a system of management altogether impracticable with regard to them.

70The colony assemblies, besides, cannot be supposed the proper judges of what is necessary for the defence and support of the whole empire. The care of that defence and support is not entrusted to them. It is not their business, and they have no regular means of information concerning it. The assembly of a province, like the vestry of a parish, may judge very properly concerning the affairs of its own particular district; but can have no proper means of judging concerning those of the whole empire. It cannot even judge properly concerning the proportion which its own province bears to the whole empire; or concerning the relative degree of its wealth and importance, compared with the other provinces; because those other provinces are not under the inspection and superintendency of the assembly of a particular province. What is necessary for the defence and support of the whole empire, and in what proportion each part ought to contribute, can be judged of only by that assembly which inspects and superintends the affairs of the whole empire.

71It has been proposed, accordingly, that the colonies should be taxed by requisition, the parliament of Great Britain determining the sum which each colony ought to pay, and the provincial assembly assessing and levying it in the way that suited best the circumstances of the province. What concerned the whole empire would in this way be determined by the assembly which inspects and superintends the affairs of the whole empire; and the provincial affairs of each colony might still be regulated by its own assembly. Though the colonies should in this case have no representatives in the British parliament, yet, if we may judge by experience, there is no probability that the parliamentary requisition would be unreasonable. The parliament of England has not upon any occasion shown the smallest disposition to overburden those parts of the empire which are not represented in parliament. The islands of Guernsey and Jersey, without any means of resisting the authority of parliament, are more lightly taxed than any part of Great Britain. Parliament in attempting to exercise its supposed right, whether well or ill grounded, of taxing the colonies, has never hitherto demanded of them any thing which even approached to a just proportion to what was paid by their fellow subjects at home. If the contribution of the colonies, besides, was to rise or fall in proportion to the rise or fall of the land tax, parliament could not tax them without taxing at the same time its own constituents, and the colonies might in this case be considered as virtually represented in parliament.

72Examples are not wanting of empires in which all the different provinces are not taxed, if I may be allowed the expression, in one mass; but in which the sovereign regulates the sum which each province ought to pay, and in some provinces assesses and levies it as he thinks proper; while in others, he leaves it to be assessed and levied as the respective states of each province shall determine. In some provinces of France, the king not only imposes what taxes he thinks proper, but assesses and levies them in the way he thinks proper.61 From others he demands a certain sum, but leaves it to the states of each province to assess and levy that sum as they think proper. According to the scheme of taxing by requisition, the parliament of Great Britain would stand nearly in the same situation towards the colony assemblies, as the king of France does towards the states of those provinces which still enjoy the privilege of having states of their own, the provinces of France which are supposed to be the best governed.

73But though, according to this scheme, the colonies could have no just reason to fear that their share of the publick burdens should ever exceed the proper proportion to that of their fellow–citizens at home; Great Britain might have just reason to fear that it never would amount to that proper proportion. The parliament of Great Britain has not for some time past had the same established authority in the colonies, which the French king has in those provinces of France which still enjoy the privilege of having states of their own. The colony assemblies, if they were not very favourably disposed (and unless more skilfully managed than they ever have been hitherto, they are not very likely to be so) might still find many pretences for evading or rejecting the most reasonable requisitions of parliament. A French war breaks out, we shall suppose; ten millions must immediately be raised, in order to defend the seat of the empire. This sum must be borrowed upon the credit of some parliamentary fund mortgaged for paying the interest. Part of this fund parliament proposes to raise by a tax to be levied in Great Britain, and part of it by a requisition to all the different colony assemblies of America and the West Indies. Would people readily advance their money upon the credit of a fund, which partly depended upon the good–humour of all those assemblies, far distant from the seat of the war, and sometimes, perhaps, thinking themselves not much concerned in the event of it? Upon such a fund no more money would probably be advanced than what the tax to be levied in Great Britain might be supposed to answer for. The whole burden of the debt contracted on account of the war would in this manner fall, as it always has done hitherto, upon Great Britain; upon a part of the empire, and not upon the whole empire. Great Britain is, perhaps, since the world began, the only state which, as it has extended its empire, has only increased its expence without once augmenting its resources. Other states have generally disburdened themselves upon their subject and subordinate provinces of the most considerable part of the expence of defending the empire. Great Britain has hitherto suffered her subject and subordinate provinces to disburden themselves upon her of almost this whole expence. In order to put Great Britain upon a footing of equality with her own colonies, which the law has hitherto supposed to be subject and subordinate, it seems necessary, upon the scheme of taxing them by parliamentary requisition, that parliament should have some means of rendering its requisitions immediately effectual, in case the colony assemblies62 should attempt to evade or reject them; and what those means are, it is not very easy to conceive, and it has not yet been explained.

74Should the parliament of Great Britain, at the same time, be ever fully established in the right of taxing the colonies, even independent of the consent of their own assemblies, the importance of those assemblies would from that moment be at an end, and with it, that of all the leading men of British America. Men desire to have some share in the management of publick affairs chiefly on account of the importance which it gives them.63 Upon the power which the greater part of the leading men, the natural aristocracy of every country, have of preserving or defending their respective importance, depends the stability and duration of every system of free government.64 In the attacks which those leading men are continually making upon the importance of one another, and in the defence of their own, consists the whole play of domestick faction and ambition. The leading men of America, like those of all other countries, desire to preserve their own importance. They feel, or imagine, that if their assemblies, which they are fond of calling parliaments, and of considering as equal in authority to the parliament of Great Britain, should be so far degraded as to become the humble ministers and executive officers of that parliament, the greater part of their own importance would be at an end. They have rejected, therefore, the proposal of being taxed by parliamentary requisition, and like other ambitious and high–spirited men, have rather chosen to draw the sword in defence of their own importance.

75Towards the declension of the Roman republick, the allies of Rome, who had borne the principal burden of defending the state and extending the empire, demanded to be admitted to all the privileges of Roman citizens. Upon being refused, the social war broke out. During the course of that war Rome granted those privileges to the greater part of them, one by one, and in proportion as they detached themselves from the general confederacy. The parliament of Great Britain insists upon taxing the colonies; and they refuse to be taxed by a parliament in which they are not represented. If to each colony, which should detach itself from the general confederacy, Great Britain should allow such a number of representatives as suited the proportion of what it contributed to the publick revenue of the empire,65 in consequence of its being subjected to the same taxes, and in compensation admitted to the same freedom of trade with its fellow–subjects at home; the number of its representatives to be augmented as the proportion of its contribution might afterwards augment; a new method of acquiring importance, a new and more dazzling object of ambition would be presented to the leading men of each colony.66 Instead of piddling for the little prizes which are to found in what may be called the paltry raffle of colony faction; they might then hope, from the presumption which men naturally have in their own ability and good fortune, to draw some of the great prizes which sometimes come from the wheel of the great state lottery of British politicks. Unless this or some other method is fallen upon, and there seems to be none more obvious than this, of preserving the importance and of gratifying the ambition of the leading men of America, it is not very probable that they will ever voluntarily submit to us; and we ought to consider that the blood which must be shed in forcing them to do so, is, every drop of it, the blood either of those who are, or of those whom we wish to have for our fellow–citizens. They are very weak who flatter themselves that, in the state to which things have come, our colonies will be easily conquered by force alone.67 The persons who now govern the resolutions of that they call their continental congress, feel in themselves at this moment a degree of importance which, perhaps, the greatest subjects in Europe scarce feel. From shopkeepers, tradesmen, and attornies, they are become statesmen and legislators, and are employed in contriving a new form of government for an extensive empire, which, they flatter themselves, will become, and which, indeed, seems very likely to become, one of the greatest and most formidable that ever was in the world. Five hundred different people, perhaps, who in different ways act immediately under the continental congress; and five hundred thousand, perhaps, who act under those five hundred, all feel in the same manner a proportionable rise in their own importance. Almost every individual of the governing party in America, fills, at present in his own fancy, a station superior, not only to what he had ever filled before, but to what he had ever expected to fill; and unless some new object of ambition is presented either to him or to his leaders, if he has the ordinary spirit of a man, he will die in defence of that station.

76It is a remark of the president Henaut that we now read with pleasure the account of many little transactions of the Ligue, which when they happened were not perhaps considered as very important pieces of news. But every man then, says he, fancied himself of some importance; and the innumerable memoirs which have come down to us from those times, were, the greater part of them, written by people who took pleasure in recording and magnifying events in which, they flattered themselves, they had been considerable actors.68 How obstinately the city of Paris upon that occasion defended itself, what a dreadful famine it supported rather than submit to the best and afterwards the most beloved of all the French kings, is well known. The greater part of the citizens, or those who governed the greater part of them, fought in defence of their own importance, which they foresaw was to be at an end whenever the ancient government should be reestablished. Our colonies, unless they can be induced to consent to a union, are very likely to defend themselves against the best of all mother countries, as obstinately as the city of Paris did against one of the best of kings.

77The idea of representation was unknown in ancient times. When the people of one state were admitted to the right of citizenship in another, they had no other means of exercising that right but by coming in a body to vote and deliberate with the people of that other state. The admission of the greater part of the inhabitants of Italy to the privileges of Roman citizens, completely ruined the Roman republick. It was no longer possible to distinguish between who was and who was not a Roman citizen. No tribe could know its own members. A rabble of any kind could be introduced into the assemblies of the people, could drive out the real citizens, and decide upon the affairs of the republick as if they themselves had been such.69 But though America ^xwas^x to send fifty of sixty new representatives to parliament, the door–keeper of the house of commons could not find any great difficulty in distinguishing between who was and who was not a member. Though the Roman constitution, therefore, was necessarily ruined by the union of Rome with the allied states of Italy, there is not the least probability that the British constitution would be hurt by the union of Great Britain with her colonies. That constitution, on the contrary, would be completed by it, and seems to be imperfect without it.70 The assembly which deliberates and decides concerning the affairs of every part of the empire, in order to be properly informed, ought certainly to have representatives from every part of it. That this union, however, could be easily effectuated, or that difficulties and great difficulties might not occur in the execution, I do not pretend. I have yet heard of none, however, which appear insurmountable.71 The principal perhaps arise, not from the nature of things, but from the prejudices and opinions of the people both on this and ^yon^y the other side of the Atlantic.

78We, on this side the water, are afraid lest the multitude of American representatives should overturn the balance of the constitution, and increase too much either the influence of the crown on the one hand, or the force of the democracy on the other. But if the number of American representatives ^zwas^z to be in proportion to the produce of American taxation, the number of people to be managed would increase exactly in proportion to the means of managing them; and the means of managing, to the number of people to be managed. The monarchical and democratical parts of the constitution would, after the union, stand exactly in the same degree of relative force with regard to one another as they had done before.

79The people on the other side of the water are afraid lest their distance from the seat of government might expose them to many oppressions. But their representatives in parliament, of which the number ought from the first to be considerable, would easily be able to protect them from all oppression. The distance could not much weaken the dependency of the representative upon the constituent, and the former would still feel that he owed his seat in parliament, and all the consequence which he derived from it, to the good–will of the latter. It would be the interest of the former, therefore, to cultivate that good–will by complaining, with all the authority of a member of the legislature, of every outrage which any civil or military officer might be guilty of in those remote parts of the empire. The distance of America from the seat of government, besides, the ^anatives^a of that country might flatter themselves, with some appearance of reason too, would not be of very long continuance. Such has hitherto been the rapid progress of that country in wealth, population and improvement, that in the course of little more than a century, perhaps, the produce of American might exceed that of British taxation. The seat of the empire would then naturally remove itself to that part of the empire which contributed most to the general defence and support of the whole.72

80The discovery of America, and that of a passage to the East Indies by the Cape of Good Hope, are the two greatest and most important events recorded in the history of mankind.73 Their consequences have already been very great: but, in the short period of between two and three centuries which has elapsed since these discoveries were made, it is impossible that the whole extent of their consequences can have been seen. What benefits, or what misfortunes to mankind may hereafter result from those great events no human wisdom can foresee. By uniting, in some measure, the most distant parts of the world, by enabling them to relieve one another’s wants, to increase one another’s enjoyments, and to encourage one another’s industry, their general tendency would seem to be beneficial. To the natives, however, both of the East and West Indies, all the commercial benefits which can have resulted from those events have been sunk and lost in the dreadful misfortunes which they have occasioned.74 These misfortunes, however, seem to have arisen rather from accident than from any thing in the nature of those events themselves. At the particular time when these discoveries were made, the superiority of force happened to be so great on the side of the Europeans, that they were enabled to commit with impunity every sort of injustice in those remote countries. Hereafter, perhaps, the natives of those countries may grow stronger, or those of Europe may grow weaker, and the inhabitants of all the different quarters of the world may arrive at that equality of courage and force which, by inspiring mutual fear, can alone overawe the injustice of independent nations into some sort of respect for the rights of one another.75 But nothing seems more likely to establish this equality of force than that mutual communication of knowledge and of all sorts of improvements which an extensive commerce from all countries to all countries naturally, or rather necessarily, carries along with it.

81In the mean time one of the principal effects of those discoveries has been to raise the mercantile system to a degree of splendor and glory which it could never otherwise have attained to. It is the object of that system to enrich a great nation rather by trade and manufactures than by the improvement and cultivation of land, rather by the industry of the towns than by that of the country. But, in consequence of those discoveries, the commercial towns of Europe, instead of being the manufacturers and carriers for but a very small part of the world (that part of Europe which is washed by the Atlantic ocean, and the countries which lie round the Baltick and Mediterranean seas), have now become the manufacturers for the numerous and thriving cultivators of America, and the carriers, and in some respects the manufacturers too, for almost all the different nations of Asia, Africa, and America. Two new worlds have been opened to their industry, each of them much greater and more extensive than the old one, and the market of one of them growing still greater and greater every day.

82The countries which possess the colonies of America, and which trade directly to the East Indies, enjoy, indeed, the whole shew and splendor of this great commerce. Other countries, however, notwithstanding all the invidious restraints by which it is meant to exclude them, frequently enjoy a greater share of the real benefit of it.76 The colonies of Spain and Portugal, for example, give more real encouragement to the industry of other countries than to that of Spain and Portugal. In the single article of linen alone the consumption of those colonies amounts, it is said, but I do not pretend to warrant the quantity, to more than three millions sterling a year. But this great consumption is almost entirely supplied by France, Flanders, Holland, and Germany. Spain and Portugal furnish but a small part of it. The capital which supplies the colonies with this great quantity of linen is annually distributed among, and furnishes a revenue to the inhabitants of those other countries. The profits of it only are spent in Spain and Portugal, where they help to support the sumptuous profusion of the merchants of Cadiz and Lisbon.77

83Even the regulations by which each nation endeavours to secure to itself the exclusive trade of its own colonies, are frequently more hurtful to the countries in favour of which they are established than to those against which they are established. The unjust oppression of the industry of other countries falls back, if I may say so, upon the heads of the oppressors, and crushes their industry more than it does that of those other countries. By those regulations, for example, the merchant of Hamburgh must send the linen which he destines for the American market to London, and he must bring back from thence the tobacco which he destines for the German market; because he can neither send the one directly to America, nor bring back the other directly from thence. By this restraint he is probably obliged to sell the one somewhat cheaper, and to buy the other somewhat dearer than he otherwise might have done; and his profits are probably somewhat abridged by means of it. In this trade, however, between Hamburgh and London, he certainly receives the returns of his capital much more quickly than he could possibly have done in the direct trade to America, even though we should suppose, what is by no means the case, that the payments of America were as punctual as those of London. In the trade, therefore, to which those regulations confine the merchant of Hamburgh, his capital can keep in constant employment a much greater quantity of German industry than it possibly could have done in the trade from which he is excluded. Though the one employment, therefore, may to him perhaps be less profitable than the other, it cannot be less advantageous to his country. It is quite otherwise with the employment into which the monopoly naturally attracts, if I may say so, the capital of the London merchant. That employment may, perhaps, be more profitable to him than the greater part of other employments, but, on account of the slowness of the returns, it cannot be more advantageous to his country.

84After all the unjust attempts, therefore, of every country in Europe to engross to itself the whole advantage of the trade of its own colonies, no country has yet been able to engross to itself any thing but the expence of supporting in time of peace and of defending in time of war the oppressive authority which it assumes over them. The inconveniencies resulting from the possession of its colonies, every country has engrossed to itself completely. The advantages resulting from their trade it has been obliged to share with many other countries.

85At first sight, no doubt, the monopoly of the great commerce of America, naturally seems to be an acquisition of the highest value. To the undiscerning eye of giddy ambition, it naturally presents itself amidst the confused scramble of politicks and war, as a very dazzling object to fight for. The dazzling splendor of the object, however, the immense greatness of the commerce, is the very quality which renders the monopoly of it hurtful, or which makes one employment, in its own nature necessarily less advantageous to the country than the greater part of other employments, absorb a much greater proportion of the capital of the country than what would otherwise have gone to it.

86The mercantile stock of every country, it has been shewn in the second book,78 naturally seeks, if one may say so, the employment most advantageous to that country. If it is employed in the carrying trade, the country to which it belongs becomes the emporium of the goods of all the countries whose trade that stock carries on. But the owner of that stock necessarily wishes to dispose of as great a part of those goods as he can at home. He thereby saves himself the trouble, risk, and expence, of exportation, and he will upon that account be glad to sell them at home, not only for a much smaller price, but with somewhat a smaller profit than he might expect to make by sending them abroad. He naturally, therefore, endeavours as much as he can to turn his carrying trade into a foreign trade of consumption. If his stock again is employed in a foreign trade of consumption, he will, for the same reason, be glad to dispose of at home as great a part as he can of the home goods, which he collects in order to export to some foreign market, and he will thus endeavour, as much as he can, to turn his foreign trade of consumption into a home trade. The mercantile stock of every country naturally courts in this manner the near, and shuns the distant employment; naturally courts the employment in which the returns are frequent, and shuns that in which they are distant and slow; naturally courts the employment in which it can maintain the greatest quantity of productive labour in the country to which it belongs, or in which its owner resides, and shuns that in which it can maintain there the smallest quantity. It naturally courts the employment which in ordinary cases is most advantageous, and shuns that which in ordinary cases is least advantageous to that country.

87But if any of those distant employments, which in ordinary cases are less advantageous to the country, the profit should happen to rise somewhat higher than what is sufficient to balance the natural preference which is given to nearer employments, this superiority of profit will draw stock from those nearer employments, till the profits of all return to their proper level. This superiority of profit, however, is a proof that in the actual circumstances of the society, those distant employments are somewhat understocked in proportion to other employments, and that the stock of the society is not distributed in the properest manner among all the different employments carried on in it. It is a proof that something is either bought cheaper or sold dearer than it ought to be, and that some particular class of citizens is more or less oppressed either by paying more or by getting less than what is suitable to that equality, which ought to take place, and which naturally does take place among all the different classes of them. Though the same capital never will maintain the same quantity of productive labour in a distant as in a near employment, yet a distant employment may be as necessary for the welfare of the society as a near one;79 the goods which the distant employment deals in being necessary, perhaps, for carrying on many of the nearer employments. But if the profits of those who deal in such goods are above their proper level, those goods will be sold dearer than they ought to be, or somewhat above their natural price, and all those engaged in the nearer employments will be more or less oppressed by this high price. Their interest, therefore, in this case requires that some stock should be withdrawn from those nearer employments, and turned towards that distant ^bone^b , in order to reduce its profits to their proper level, and the price of the goods which it deals in to their natural price. In this extraordinary case, the publick interest requires that some stock should be withdrawn from those employments which in ordinary cases are more advantageous, and turned towards one which in ordinary cases is less advantageous to the publick: and in this extraordinary case, the natural interests and inclinations of men coincide as exactly with the publick interest as in all other ordinary cases, and lead them to withdraw stock from the near, and to turn it towards the distant employment.

88It is thus that the private interests and passions of individuals naturally dispose them to turn their stock towards the employments which in ordinary cases are most advantageous to the society.80 But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society, among all the different employments carried on in it, as nearly as possible in the proportion which is most agreeable to the interest of the whole society.

89All the different regulations of the mercantile system, necessarily derange more or less this natural and most advantageous distribution of stock. But those which concern the trade to America and the East Indies derange it perhaps more than any other;81 because the trade to those two great continents absorbs a greater quantity of stock than any two other branches of trade. The regulations, however, by which this derangement is effected in those two different branches of trade are not altogether the same. Monopoly is the great engine of both; but it is a different sort of monopoly. Monopoly of one kind or another, indeed, seems to be the sole engine of the mercantile system.82

90 In the trade to America every nation endeavours to engross as much as possible the whole market of its own colonies, by fairly excluding all other nations from any direct trade to them. During the greater part of the sixteenth century, the Portugueze endeavoured to manage the trade to the East Indies in the same manner, by claiming the sole right of sailing in the Indian seas, on account of the merit of having first found out the road to them. The Dutch still continue to exclude all other European nations from any direct trade to their spice islands. Monopolies of this kind are evidently established against all other European nations, who are thereby not only excluded from a trade to which it might be convenient for them to turn some part of their stock, but are obliged to buy the goods which that trade deals in somewhat dearer, than if they could import them themselves directly from the countries which produce them.

91But since the fall of the power of Portugal, no European nation has claimed the exclusive right of sailing in the Indian seas, of which the principal ports are now open to the ships of all European nations. Except in Portugal,83 however, and within these few years in France, the trade to the East Indies has in every European country been subjected to an exclusive company. Monopolies of this kind are properly established against the very nation which erects them.84 The greater part of that nation are thereby not only excluded from a trade to which it might be con venient for them to turn some part of their stock, but are obliged to buy the goods which that trade deals in, somewhat dearer than if it was open and free to all their countrymen. Since the establishment of the English East India company, for example, the other inhabitants of England, over and above being excluded from the trade, must have paid in the price of the East India goods which they have consumed, not only for all the extraordinary profits which the company may have made upon those goods in consequence of their monopoly, but for all the extraordinary waste which the fraud and abuse, inseparable from the management of the affairs of so great a company, must necessarily have occasioned. The absurdity of this second kind of monopoly, therefore, is much more manifest than that of the first.

92Both these kinds of monopolies derange more or less the natural distribution of the stock of the society: but they do not always derange it in the same way.

93Monopolies of the first kind always attract to the particular trade in which they are established, a greater proportion of the stock of the society than what would go to that trade of its own accord.

94Monopolies of the second kind, may sometimes attract stock towards the particular trade in which they are established, and sometimes repel it from that trade according to different circumstances. In poor countries they naturally attract towards that trade more stock than would otherwise go to it. In rich countries they naturally repel from it a good deal of stock which would otherwise go to it.

95Such poor countries as Sweden and Denmark, for example, would probably have never sent a single ship to the East Indies, had not the trade been subjected to an exclusive company. The establishment of such a company necessarily encourages adventurers. Their monopoly secures them against all competitors in the home market, and they have the same chance for foreign markets with the traders of other nations. Their monopoly shows them the certainty of a great profit upon a considerable quantity of goods, and the chance of a considerable profit upon a great quantity. Without such extraordinary encouragement, the poor traders of such poor countries would probably never have thought of hazarding their small capitals in so very distant and uncertain an adventure as the trade to the East Indies must naturally have appeared to them.85

96Such a rich country as Holland, on the contrary, would probably, in the case of a free trade, send many more ships to the East Indies than it actually does. The limited stock of the Dutch East India company probably repels from that trade many great mercantile capitals which would otherwise go to it. The mercantile capital of Holland is so great that it is, as it were, continually overflowing, sometimes into the publick funds of foreign countries, sometimes into loans to private traders and adventurers of foreign countries, sometimes into the most round–about foreign trades of consumption, and sometimes into the carrying trade. All near employments being completely filled up, all the capital which can be placed in them with any tolerable profit being already placed in them, the capital of Holland necessarily flows towards the most distant employments.86 The trade to the East Indies, if it ^cwas^c altogether free, would probably absorb the greater part of this redundant capital. The East Indies offer a market both for the manufactures of Europe and for the gold and silver as well as for several other productions of America, greater and more extensive than both Europe and America put together.

97Every derangement of the natural distribution of stock is necessarily hurtful to the society in which it takes place; whether it be by repelling from a particular trade the stock which would otherwise go to it, or by attracting towards a particular trade that which would not otherwise come to it.87 If, without any exclusive company, the trade of Holland to the East Indies would be greater than it actually is, that country must suffer a considerable loss by part of its capital being excluded from the employment most convenient for that part. And in the same manner, if, without an exclusive company, the trade of Sweden and Denmark to the East Indies would be less than it actually is, or, what perhaps is more probable, would not exist at all, those two countries must likewise suffer a considerable loss by part of their capital being drawn into an employment which must be more or less unsuitable to their present circumstances. Better for them, perhaps, in their present circumstances, to buy East India goods of other nations, even though they should pay somewhat dearer, than to turn so great a part of their small capital to so very distant a trade, in which the returns are so very slow, in which that capital can maintain so small a quantity of productive labour at home, where productive labour is so much wanted, where so little is done, and where so much is to do.

98Though without an exclusive company, therefore, a particular country should not be able to carry on any direct trade to the East Indies, it will not from thence follow that such a company ought to be established there, but only that such a country ought not in these circumstances to trade directly to the East Indies. That such companies are not in general necessary for carrying on the East India trade, is sufficiently demonstrated by the experience of the Portugueze, who enjoyed almost the whole of it for more than a century together without any exclusive company.

99No private merchant, it has been said, could well have capital sufficient to maintain factors and agents in the different ports of the East Indies, in order to provide goods for the ships which he might occasionally send thither; and yet, unless he was able to do this, the difficulty of finding a cargo might frequently make his ships lose the season for returning, and the expence of so long a delay would not only eat up the whole profit of the adventure, but frequently occasion a very considerable loss. This argument, however, if it proved any thing at all, would prove that no one great branch of trade could be carried on without an exclusive company, which is contrary to the experience of all nations. There is no great branch of trade in which the capital of any one private merchant is sufficient, for carrying on all the subordinate branches which must be carried on, in order to carry on the principal ^done^d . But when a nation is ripe for any great branch of trade, some merchants naturally turn their capitals towards the principal, and some towards the subordinate branches of it; and though all the different branches of it are in this manner carried on, yet it very seldom happens that they are all carried on by the capital of one private merchant. If a nation, therefore, is ripe for the East India trade, a certain portion of its capital will naturally divide itself among all the different branches of that trade. Some of its merchants will find it for their interest to reside in the East Indies, and to employ their capitals there in providing goods for the ships which are to be sent out by other merchants who reside in Europe. The settlements which different European nations have obtained in the East Indies, if they were taken from the exclusive companies to which they at present belong and put under the immediate protection of the sovereign, would render this residence both safe and easy, at least to the merchants of the particular nations to whom those settlements belong. If at any particular time that part of the capital of any country which of its own accord tended and inclined, if I may say so, towards the East India trade, was not sufficient for carrying on all those different branches of it, it would be a proof that, at that particular time, that country was not ripe for that trade, and that it would do better to buy for some time, even at a higher price, from other European nations, the East India goods it had occasion for, than to import them itself directly from the East Indies. What it might lose by the high price of those goods could seldom be equal to the loss which it would sustain by the distraction of a large portion of its capital from other employments more necessary, or more useful, or more suitable to its circumstances and situation, than a direct trade to the East Indies.

100Though the Europeans possess many considerable settlements both upon the coast of Africa and in the East Indies, they have not yet established in either of those countries such numerous and thriving colonies as those in the islands and continent of America. Africa, however, as well as several of the countries comprehended under the general name of the East Indies, are inhabited by barbarous nations. But those nations were by no means so weak and defenceless as the miserable and helpless Americans; and in proportion to the natural fertility of the countries which they inhabited, they were besides much more populous. The most barbarous nations either of Africa or of the East Indies were shepherds; even the Hottentots were so.88 But the natives of every part of America, except Mexico and Peru, were only hunters; and the difference is very great between the number of shepherds and that of hunters whom the same extent of equally fertile territory can maintain.89 In Africa and the East Indies, therefore, it was more difficult to displace the natives, and to extend the European plantations over the greater part of the lands of the original inhabitants. The genius of exclusive companies, besides, is unfavourable, it has already been observed, to the growth of new colonies, and has probably been the principal cause of the little progress which they have made in the East Indies.90 The Portugueze carried on the trade both to Africa and the East Indies without any exclusive companies,91 and their settlements at Congo, Angola, and Benguela on the coast of Africa, and at Goa in the East Indies, though much depressed by superstition and every sort of bad government, yet bear some faint resemblance to the colonies of America, and are partly inhabited by Portugueze who have been established there for several generations. The Dutch settlements at the Cape of Good Hope and at Batavia, are at present the most considerable colonies which the Europeans have established either in Africa or in the East Indies, and both ^ethese^e settlements are peculiarly fortunate in their situation. The Cape of Good Hope was inhabited by a race of people almost as barbarous and quite as incapable of defending themselves as the natives of America. It is besides the half–way house, if one may say so, between Europe and the East Indies, at which almost every European ship makes some stay both in going and returning. The supplying of those ships with every sort of fresh provisions, with fruit and sometimes with wine, affords alone a very extensive market for the surplus produce of the colonists. What the Cape of Good Hope is between Europe and every part of the East Indies, Batavia is between the principal countries of the East Indies. It lies upon the most frequented road from Indostan to China and Japan, and is nearly about mid–way upon that road. Almost all the ships too that sail between Europe and China touch at Batavia; and it is, over and above all this, the center and principal mart of what is called the country trade of the East Indies; not only of that part of it which is carried on by Europeans, but of that which is carried on by the native Indians; and vessels navigated by the inhabitants of China92 and Japan, of Tonquin, Malacca, Cochin–China, and the island of Celebes, are frequently to be seen in its port. Such advantageous situations have enabled those two colonies to surmount all the obstacles which the oppressive genius of an exclusive company may have occasionally opposed to their growth. They have enabled Batavia to surmount the additional disadvantage of perhaps the most unwholesome climate in the world.

101 The English and Dutch companies, though they have established no considerable colonies, except the two above mentioned, have both made considerable conquests in the East Indies. But in the manner in which they both govern their new subjects, the natural genius of an exclusive company has shown itself most distinctly.93 In the spice islands the Dutch ^fare said to^f burn all the spiceries which a fertile season produces beyond what they expect to dispose of in Europe with such a profit as they think sufficient.94 In the islands where they have no settlements, they give a premium to those who collect the young blossoms and green leaves of the clove and nutmeg trees which naturally grow there, but which this ^gsavage^g policy has now, it is said, almost compleatly extirpated. Even in the islands where they have settlements they have very much reduced, it is said, the number of those trees. If the produce even of their own islands was much greater than what suited their market, the natives, they suspect, might find means to convey some part of it to other nations; and the best way, they imagine, to secure their own monopoly, is to take care that no more shall grow than what they themselves carry to market. By different arts of oppression they have reduced the population of several of the Moluccas nearly to the number which is sufficient to supply with fresh provisions and other necessaries of life their own insignificant garrisons, and such of their ships as occasionally come there for a cargo of spices. Under the government even of the Portugueze, however, those islands are said to have been tolerably well inhabited. The English company have not yet had time to establish in Bengal so perfectly destructive a system. The plan of their government, however, has had exactly the same tendency. It has not been uncommon, I am well assured, for the chief, that is, the first clerk of a factory, to order a peasant to plough up a rich field of poppies, and sow it with rice or some other grain. The pretence was, to prevent a scarcity of provisions; but the real reason, to give the chief an opportunity of selling at a better price a large quantity of opium, which he happened then to have upon hand. Upon other occasions the order has been reversed; and a rich field of rice or other grain has been ploughed up, in order to make room for a plantation of poppies; when the chief foresaw that extraordinary profit was likely to be made by opium.95 The servants of the company have upon several occasions attempted to establish in their own favour the monopoly of some of the most important branches, not only of the foreign, but of the inland trade of the country. Had they been allowed to go on, it is impossible that they should not at some time or another have attempted to restrain the production of the particular articles of which they had thus usurped the monopoly, not only to the quantity which they themselves could purchase, but to that which they could expect to sell with such a profit as they might think sufficient. In the course of a century or two, the policy of the English company would in this manner have probably proved as compleatly destructive as that of the Dutch.

102Nothing, however, can be more directly contrary to the real interest of those companies, considered as the sovereigns of the countries which they have conquered, than this destructive plan. In almost all countries the revenue of the sovereign is drawn from that of the people. The greater the revenue of the people, therefore, the greater the annual produce of their land and labour, the more they can afford to the sovereign. It is his interest, therefore, to increase as much as possible that annual produce. But if this is the interest of every sovereign, it is peculiarly so of one whose revenue, like that of the sovereign of Bengal, arises chiefly from a land–rent.96 That rent must necessarily be in proportion to the quantity and value of the produce, and both the one and the other must depend upon the extent of the market. The quantity will always be suited with more or less exactness to the consumption of those who can afford to pay for it, and the price which they will pay will always be in proportion to the eagerness of their competition. It is the interest of such a sovereign, therefore, to open the most extensive market for the produce of his country, to allow the most perfect freedom of commerce, in order to increase as much as possible the number and the competition of buyers; and upon this account to abolish, not only all monopolies, but all restraints upon the transportation of the home produce from one part of the country to another, upon its exportation to foreign countries, or upon the importation of goods of any kind for which it can be exchanged. He is in this manner most likely to increase both the quantity and value of that produce, and consequently of his own share of it, or of his own revenue.

103But a company of merchants are, it seems, incapable of considering themselves as sovereigns, even after they have become such.97 Trade, or buying in order to sell again, they still consider as ^htheir^h principal business, and by a strange absurdity, regard the character of the sovereign as but an appendix to that of the merchant, as something which ought to be made subservient to it, or by means of which they may be enabled to buy cheaper in India, and thereby to sell with a better profit in Europe. They endeavour for this purpose to keep out as much as possible all competitors from the market of the countries which are subject to their government, and consequently to reduce, at least, some part of the surplus produce of those countries to what is barely sufficient for supplying their own demand, or to what they can expect to sell in Europe with such a profit as they may think reasonable. Their mercantile habits draw them in this manner, almost necessarily, though perhaps insensibly, to prefer upon all ordinary occasions the little and transitory profit of the monopolist to the great and permanent revenue of the sovereign, and would gradually lead them to treat the countries subject to their government nearly as the Dutch treat the Moluccas. ⁱIt is the interest of the East India company, considered as sovereigns, that the European goods which are carried to their Indian dominions, should be sold there as cheap as possible; and that the Indian goods which are brought from thence should bring there as good a price, or should be sold there as dear as possible. But the reverse of this is their interest as merchants. As sovereigns, their interest is exactly the same with that of the country which they govern. As merchants their interest is directly opposite to that interest.ⁱ

104But if the genius of such a government, even as to what concerns its direction in Europe, is in this manner essentially and perhaps incurably faulty, that of its administration in India is still more so.98 That administration is necessarily composed of a council of merchants, a profession no doubt extremely respectable, but which in no country in the world carries along with it that sort of authority which naturally over–awes the people, and without force commands their willing obedience. Such a council can command obedience only by the military force with which they are accompanied, and their government is therefore necessarily military and despotical. Their proper business, however, is that of merchants. It is to sell, upon their masters account, the European goods consigned to them, and to buy in return Indian goods for the European market. It is to sell the one as dear and to buy the other as cheap as possible, and consequently to exclude as much as possible all rivals from the particular market where they keep their shop. The genius of the administration, therefore, so far as concerns the trade of the company, is the same as that of the direction. It tends to make government subservient to the interest of monopoly, and consequently to stunt the natural growth of some parts at least of the surplus produce of the country to what is barely sufficient for answering the demand of the company.

105All the members of the administration, besides, trade more or less upon their own account, and it is in vain to prohibit them from doing so. Nothing can be more compleatly foolish than to expect that the clerks of a great counting–house at ten thousand miles distance, and consequently almost quite out of sight, should, upon a simple order from their masters, give up at once doing any sort of business upon their own account, abandon for ever all hopes of making a fortune, of which they have the means in their hands, and content themselves with the moderate salaries which those masters allow them, and which, moderate as they are, can seldom be augmented, being commonly as large as the real profits of the company trade can afford.99 In such circumstances, to prohibit the servants of the company from trading upon their own account, can have scarce any other effect than to enable the superior servants, under pretence of executing their masters order, to oppress such of the inferior ones as have had the misfortune to fall under their displeasure. The servants naturally endeavour to establish the same monopoly in favour of their own private trade as of the publick trade of the company. If they are suffered to act as they could wish, they will establish this monopoly openly and directly, by fairly prohibiting all other people from trading in the articles in which they chuse to deal; and this, perhaps, is the best and least oppressive way of establishing it. But if by an order from Europe they are prohibited from doing this, they will, notwithstanding, endeavour to establish a monopoly of the same kind, secretly and indirectly, in a way that is much more destructive to the country. They will employ the whole authority of government, and pervert the administration of justice, in order to harass and ruin those who interfere with them in any branch of commerce which, by means of agents, either concealed, or at least not publickly avowed, they may chuse to carry on. But the private trade of the servants will naturally extend to a much greater variety of articles than the publick trade of the company. The publick trade of the company extends no further than the trade with Europe, and comprehends a part only of the foreign trade of the country. But the private trade of the servants may extend to all the different branches both of its inland and foreign trade. The monopoly of the company can tend only to stunt the natural growth of that part of the surplus produce which, in the case of a free trade, would be exported to Europe. That of the servants tends to stunt the natural growth of every part of the produce in which they chuse to deal, of what is destined for home consumption, as well as of what is destined for exportation; and consequently to degrade the cultivation of the whole country, and to reduce the number of its inhabitants. It tends to reduce the quantity of every sort of produce, even that of the necessaries of life, whenever the servants of the company chuse to deal in them, to what those servants can both afford to buy and expect to sell with such a profit as pleases them.100

106From the nature of their situation too the servants must be more disposed to support with rigorous severity their own interest against that of the country which they govern, than their masters can be to support theirs. The country belongs to their masters, who cannot avoid having some regard for the interest of what belongs to them. But it does not belong to the servants. The real interest of their masters, if they were capable of understanding it, is the same with that of the country* , and it is from ignorance ^kchiefly,^k and the meanness of mercantile prejudice, that they ever oppress it. But the real interest of the servants is by no means the same with that of the country, and the most perfect information would not necessarily put an end to their oppressions. The regulations accordingly which have been sent out from Europe, though they have been frequently weak, have ^lupon most occasions^l been well–meaning. More intelligence and perhaps less good–meaning has sometimes appeared in those established by the servants in India. It is a very singular government in which every member of the administration wishes to get out of the country, and consequently to have done with the government, as soon as he can, and to whose interest, the day after he has left it and carried his whole fortune with him, it is perfectly indifferent ^mthough^m the whole country was swallowed up by an earthquake.101

107I mean not, however, by any thing which I have here said, to throw any odious imputation upon the general character of the servants of the East India company, and much less upon that of any particular persons. It is the system of government, the situation in which they ⁿareⁿ placed, that I mean to censure; not the character of those who have acted in it. They acted as their situation naturally directed, and they who have clamoured the loudest against them would, probably, not have acted better themselves.102 In war and negociation, the councils of Madras and Calcutta have upon several occasions conducted themselves with a resolution and decisive wisdom which would have done honour to the senate of Rome in the best days of that republick. The members of those councils, however, had been bred to professions very different from war and politicks. But their situation alone, without education, experience, or even example, seems to have formed in them all at once the great qualities which it required, and to have inspired them both with abilities and virtues which they themselves could not well know that they possessed. If upon some occasions, therefore, it has animated them to actions of magnanimity which could not well have been expected from them, we should not wonder if upon others it has prompted them to exploits of somewhat a different nature.

108Such exclusive companies, therefore, are nuisances in every respect; always more or less inconvenient to the countries in which they are established, and destructive to those which have the misfortune to fall under their government.

^aCHAPTER VIII^a

Conclusion of the Mercantile System

1Though the encouragement of exportation, and the discouragement of importation are the two great engines by which the mercantile system proposes to enrich every country, yet with regard to some particular commodities, it seems to follow an opposite plan: to discourage exportation and to encourage importation. Its ultimate object, however, it pretends, is always the same, to enrich the country by an advantageous balance of trade. It discourages the exportation of the materials of manufacture, and of the instruments of trade, in order to give our own workmen an advantage, and to enable them to undersell those of other nations in all foreign markets: and by restraining, in this manner, the exportation of a few commodities, of no great price, it proposes to occasion a much greater and more valuable exportation of others.1 It encourages the importation of the materials of manufacture, in order that our own people may be enabled to work them up more cheaply, and thereby prevent a greater and more valuable importation of the manufactured commodities. I do not observe, at least in our Statute Book, any encouragement given to the importation of the instruments of trade. When manufactures have advanced to a certain pitch of greatness, the fabrication of the instruments of trade becomes itself the object of a great number of very important manufactures. To give any particular encouragement to the importation of such instruments, would interfere too much with the interest of those manufactures. Such importation, therefore, instead of being encouraged, has frequently been prohibited. Thus the importation of wool cards, except from Ireland, or when brought in as wreck or prize goods, was prohibited by the 3d of Edward IV.;2 which prohibition was renewed by the 39th of Elizabeth,3 and has been continued and rendered perpetual by subsequent laws.4

2The importation of the materials of manufacture has sometimes been encouraged by an exemption from the duties to which other goods are subject, and sometimes by bounties.

3The importation of sheep’s wool from several different countries,5 of cotton wool from all countries,6 of undressed flax,7 of the greater part of dying drugs,8 of the greater part of undressed hides from Ireland or the British colonies,9 of seal skins from the British Greenland fishery,10 of pig and bar iron from the British colonies,11 as well as of several other materials of manufacture, has been encouraged by an exemption from all duties, if properly entered at the customhouse. The private interest of our merchants and manufacturers may, perhaps, have extorted from the legislature these exemptions, as well as the greater part of our other commercial regulations. They are, however, perfectly just and reasonable, and if, consistently with the necessities of the state, they could be extended to all the other materials of manufacture, the publick would certainly be a gainer.

4The avidity of our great manufacturers, however, has in some cases extended these exemptions a good deal beyond what can justly be considered as the rude materials of their work. By the 24 Geo. II. chap. 46. a small duty of only one penny the pound was imposed upon the importation of foreign brown linen yarn, instead of much higher duties to which it had been subjected before, viz. of sixpence the pound upon sail yarn, of one shilling the pound upon all French and Dutch yarn, and of two ^bpound^b thirteen shillings and four pence upon the hundred weight of all spruce or Muscovia yarn.12 But our manufacturers were not long satisfied with this reduction. By the 29th of the same king, chap. 15. the same law which gave a bounty upon the exportation of British and Irish linen of which the price did not exceed eighteen pence the yard, even this small duty upon the importation of brown linen yarn was taken away.13 In the different operations, however, which are necessary for the preparation of linen yarn, a good deal more industry is employed than in the subsequent operation of preparing linen cloth from linen yarn. To say nothing of the industry of the flax–growers and flax–dressers, three or four spinners, at least, are necessary, in order to keep one weaver in constant employment; and more than four–fifths of the whole quantity of labour, necessary for the preparation of linen cloth, is employed in that of linene yarn; but our spinners are poor people, women commonly, scattered about in all different parts of the country, without support or protection.14 It is not by the sale of their work, but by that of the compleat work of the weavers, that our great master manufacturers make their profits. As it is their interest to sell the compleat manufacture as dear, so is it to buy the materials as cheap as possible. By extorting from the legislature bounties upon the exportation of their own linen, high duties upon the importation of all foreign linen, and a total prohibition of the home consumption of some sorts of French linen,15 they endeavour to sell their own goods as dear as possible. By encouraging the importation of foreign linen yarn, and thereby bringing it into competition with that which is made by our own people, they endeavour to buy the work of the poor spinners as cheap as possible. They are as intent to keep down the wages of their own weavers, as the earnings of the poor spinners, and it is by no means for the benefit of the workman, that they endeavour either to raise the price of the compleat work, or to lower that of the rude materials. It is the industry which is carried on for the benefit of the rich and the powerful, that is principally encouraged by our mercantile system. That which is carried on for the benefit of the poor and the indigent, is too often, either neglected, or oppressed.

5Both the bounty upon the exportation of linen, and the exemption from duty upon the importation of foreign yarn, which were granted only for fifteen years, but continued by two different prolongations,16 expire with the end of the session of parliament which shall immediately follow the 24th of June 1786.

6The encouragement given to the importation of the materials of manufacture by bounties, has been principally confined to such as were imported from our American plantations.17

7The first bounties of this kind were those granted, about the beginning of the present century, upon the importation of naval stores from America.18 Under this denomination were comprehended timber fit for masts, yards, and bowsprits; hemp; tar, pitch, and turpentine. The bounty, however, of one pound the ton upon masting timber, and that of six pounds the ton upon hemp, were extended to such as should be imported into England from Scotland.19 Both these bounties continued without any variation, at the same rate, till they were severally allowed to expire; that upon hemp on the 1st of January 1741, and that upon mastingtimber at the end of the session of parliament immediately following the 24th June 1781.

8The bounties upon the importation of tar, pitch, and turpentine underwent, during their continuance, several alterations. Originally20 that upon tar was four pounds the ton; that upon pitch, the same; and that upon turpentine, three pounds the ton. The bounty of four pounds the ton upon tar was afterwards confined to such as had been prepared in a particular manner; that upon other good, clean, and merchantable tar was reduced to two pounds four shillings the ton. The bounty upon pitch was likewise reduced to one pound; and that upon turpentine to one pound ten shillings the ton.21

9The second bounty upon the importation of any of the materials of manufacture, according to the order of time, was that granted by the 21 Geo. II. chap. 30. upon the importation of indigo from the British plantations.22 When the plantation indigo was worth three–fourths of the price of the best French indigo, it was by this act entitled to a bounty of sixpence the pound. This bounty, which, like most others, was granted only for a limited time, was continued by several prolongations, but was reduced to four pence the pound.23 It was allowed to expire with the end of the session of parliament which followed the 25th March, 1781.

10The third bounty of this kind was that granted (much about the time that we were beginning sometimes to court and sometimes to quarrel with our American colonies) by the 4 Geo. III. chap. 26. upon the importation of hemp, or undressed flax, from the British plantations.24 This bounty was granted for twenty–one years, from the 24th June 1764, to the 24th June 1785. For the first seven years it was to be at the rate of eight pounds the ton, for the second at six pounds, and for the third at four pounds. It was not extended to Scotland of which the climate (although hemp is sometimes raised there, in small quantities and of an inferior quality) is not very fit for that produce. Such a bounty upon the importation of Scotch flax into England would have been too great a discouragement to the native produce of the southern part of the united kingdom.

11The fourth bounty of this kind, was that granted by the 5 Geo. III. chap. 45. upon the importation of wood from America.25 It was granted for nine years, from the 1st January 1766, to the 1st January 1775. During the first three years, it was to be for every hundred and twenty good deals, at the rate of one pound; and for every load containing fifty cubic feet of other squared timber at the rate of twelve shillings. For the second three years, it was for deals to be at the rate of fifteen shillings, and for other squared timber, at the rate of eight shillings; and for the third three years, it was for deals, to be at the rate of ten shillings, and for other squared timber, at the rate of five shillings.

12The fifth bounty of this kind was that granted by the 9 Geo. III. chap. 38. upon the importation of raw silk from the British plantations.26 It was granted for twenty–one years, from the 1st January 1770, to the 1st January 1791. For the first seven years it was to be at the rate of twenty–five pounds for every hundred pounds value; for the second, at twenty pounds; and for the third at fifteen pounds. The management of the silk–worm, and the preparation of silk, requires so much hand labour; and labour is so very dear in America,27 that even this great bounty, I have been informed, was not likely to produce any considerable effect.

13The sixth bounty of this kind, was that granted by 11 Geo. III. chap. 50. for the importation of pipe, hogshead, and barrel staves and heading from the British plantations. It was granted for nine years, from 1st January 1772, to the 1st January 1781.28 For the first three years, it was for a certain quantity of each, to be at the rate of six pounds; for the second three years, at four pounds; and for the third three years, at two pounds.

14The seventh, and last bounty of this kind, was ^cthat^c granted by the 19 Geo. III. chap. 37. upon the importation of hemp from Ireland.29 It was granted in the same manner as that for the importation of hemp and undressed flax from America, for twenty–one years, from the 24th June 1779, to the 24th June 1800. This term is divided, likewise, into three periods of seven years each; and in each of those periods, the rate of the Irish bounty is the same with that of the American. It does not, however, like the American bounty, extend to the importation of undressed flax. It would have been too great a discouragement to the cultivation of that plant in Great Britain. When this last bounty was granted, the British and Irish legislatures were not in much better humour with one another, than the British and American had been before. But this boon to Ireland, it is to be hoped, has been granted under more fortunate auspices, than all those to America.

15The same commodities upon which we thus gave bounties, when imported from America, were subjected to considerable duties when imported from any other country.30 The interest of our American colonies was regarded as the same with that of the mother country. Their wealth was considered as our wealth. Whatever money was sent out to them, it was said, came all back to us by the balance of trade, and we could never become a farthing the poorer, by any expence which we could lay out upon them. They were our own in every respect, and it was an expence laid out upon the improvement of our own property, and for the profitable employment of our own people. It is unnecessary, I apprehend, at present to say any thing further, in order to expose the folly of a system, which fatal experience has now sufficiently exposed. Had our American colonies really been a part of Great Britain, those bounties might have been considered as bounties upon production, and would still have been liable to all the objections to which such bounties are liable, but to no other.31

16 The exportation of the materials of manufacture is sometimes discouraged by absolute prohibitions, and sometimes by high duties.

17Our woollen manufacturers have been more successful than any other class of workmen, in persuading the legislature that the prosperity of the nation depended upon the success and extension of their particular business.32 They have not only obtained a monopoly against the consumers by an absolute prohibition of importing woollen cloths from any foreign country;33 but they have likewise obtained another monopoly against the sheep farmers and growers of wool, by a similar prohibition of the exportation of live sheep and wool. The severity of many of the laws which have been enacted for the security of the revenue is very justly complained of, as imposing heavy penalties upon actions which antecedent to the statutes that declared them to be crimes, had always been understood to be innocent. But the cruellest of our revenue laws, I will venture to affirm, are mild and gentle, in comparison of some of those which the clamour of our merchants and manufacturers has extorted from the legislature, for the support of their own absurd and oppressive monopolies. Like the laws of Draco, these laws may be said to be all written in blood.

18By the 8th of Elizabeth, chap. 3.34 the exporter of sheep, lambs or rams, was for the first offence to forfeit all his goods for ever, to suffer a year’s imprisonment, and then to have his left hand cut off in a market town upon a market day, to be there nailed up; and for the second offence to be adjudged a felon, and to suffer death accordingly. To prevent the breed of our sheep from being propagated in foreign countries, seems to have been the object of this law. By the 13th and 14th of Charles II. chap. 18.35 the exportation of wool was made felony, and the exporter subjected to the same penalties and forfeitures as a felon.36

19For the honour of the national humanity, it is to be hoped that neither of these statutes were ever executed. The first of them, however, so far as I know, has never been directly repealed,37 and Serjeant Hawkins seems to consider it as still in force.38 It may however, perhaps, be considered as virtually repealed by the 12th of Charles II. chap. 32. sect. 3.39 which, without expressly taking away the penalties imposed by former statutes, imposes a new penalty, viz. That of twenty shillings for every sheep exported, or attempted to be exported, together with the forfeiture of the sheep and of the owner’s share of the ship. The second of them was expressly repealed by the 7th and 8th of William III. chap. 28. sect. 4.40 By which it is declared that, “Whereas the statute of the 13th and 14th of King Charles II. made against the exportation of wool, among other things in the said act mentioned, doth enact the same to be deemed felony; by the severity of which penalty the prosecution of offenders hath not been so effectually put in execution: Be it, therefore, enacted by the authority foresaid, that so much of the said act, which relates to the making the said offence felony, be repealed and made void.”41

20The penalties, however, which are either imposed by this milder statute, or which, though imposed by former statutes, are not repealed by this one, are still sufficiently severe. Besides the forfeiture of the goods, the exporter incurs the penalty of three shillings for every pound weight of wool either exported or attempted to be exported, that is about four or five times the value. Any merchant or other person convicted of this offence is disabled from requiring any debt or account belonging to him from any factor or other person.42 Let his fortune be what it will, whether he is, or is not able to pay those heavy penalties, the law means to ruin him compleatly. But as the morals of the great body of the people are not yet so corrupt as those of the contrivers of this statute, I have not heard that any advantage has ever been taken of this clause. If the person convicted of this offence is not able to pay the penalties within three months after judgment, he is to be transported for seven years, and if he returns before the expiration of that term, he is liable to the pains of felony, without benefit of clergy. The owner of the ship knowing this offence forfeits all his interest in the ship and furniture. The master and mariners knowing this offence forfeit all their goods and chattels, and suffer three months imprisonment.43 By a subsequent statute the master suffers six months imprisonment.44

21 In order to prevent exportation, the whole inland commerce of wool is laid under very burdensome and oppressive restrictions.45 It cannot be packed in any box, barrel, cask, case, chest, or any other package, but only in packs of leather or pack–cloth, on which must be marked on the outside the words wool or yarn, in large letters not less than three inches long, on pain of forfeiting the same and the package, and three shillings for every pound weight, to be paid by the owner or packer.46 It cannot be loaden on any horse or cart, or carried by land within five miles of the coast, but between sun–rising and sun–setting, on pain of forfeiting the same, the horses and carriages. The hundred next adjoining to the sea coast, out of, or through which the wool is carried or exported, forfeits twenty pounds, if the wool is under the value of ten pounds; and if of greater value, then treble that value, together with treble costs, to be sued for within the year. The execution to be against any two of the inhabitants, whom the sessions must reimburse, by an assessment on the other inhabitants, as in the cases of robbery. And if any person compounds with the hundred for less than this penalty, he is to be imprisoned for five years; and any other person may prosecute. These regulations take place through the whole kingdom.47

22But in the particular counties of Kent and Sussex the restrictions are still more troublesome. Every owner of wool within ten miles of the sea–coast must give an account in writing, three days after shearing, to the next officer of the customs, of the number of his fleeces, and of the places where they are lodged. And before he removes any part of them he must give the like notice of the number and weight of the fleeces, and of the name and abode of the person to whom they are sold, and of the place to which it is intended they should be carried. No person within fifteen miles of the sea, in the said counties, can buy any wool, before he enters into bond to the king, that no part of the wool which he shall so buy shall be sold by him to any other person within fifteen miles of the sea. If any wool is found carrying towards the sea–side in the said counties, unless it has been entered and security given as aforesaid, it is forfeited, and the offender also forfeits three shillings for every pound weight. If any person lays any wool, not entered as aforesaid, within fifteen miles of the sea, it must be seized and forfeited; and if, after such seizure, any person shall claim the same, he must give security to the Exchequer, that if he is cast upon trial he shall pay treble costs, besides all other penalties.48

23When such restrictions are imposed upon the inland trade, the coasting trade, we may believe, cannot be left very free. Every owner of wool who carrieth or causeth to be carried any wool to any port or place on the sea–coast, in order to be from thence transported by sea to any other place or port on the coast, must first cause an entry thereof to be made at the port from whence it is intended to be conveyed, containing the weight, marks, and number of the packages before he brings the same within five miles of that port; on pain of forfeiting the same, and also the horses, carts, and other carriages; and also of suffering and forfeiting, as by the other laws in force against the exportation of wool. This law, however, (1 Will. III. chap. 32.) is so very indulgent as to declare, that “this shall not hinder any person from carrying his wool home from the place of shearing, though it be within five miles of the sea, provided that in ten days after shearing, and before he remove the wool, he do under his hand certify to the next officer of the customs, the true number of fleeces, and where it is housed; and do not remove the same, without certifying to such officer, under his hand, his intention so to do, three days before.”49 Bond must be given that the wool to be carried coastways is to be landed at the particular port for which it is entered outwards; and if any part of it is landed without the presence of an officer, not only the forfeiture of the wool is incurred as in other goods, but the usual additional penalty of three shillings for every pound weight is likewise incurred.

24Our woollen manufacturers, in order to justify their demand of such extraordinary restrictions and regulations, confidently asserted, that English wool was of a peculiar quality, superior to that of any other country; that the wool of other countries could not, without some mixture of it, be wrought up into any tolerable manufacture; that fine cloth could not be made without it; that England, therefore, if the exportation of it could be totally prevented, could monopolize to herself almost the whole woollen trade of the world; and thus, having no rivals, could sell at what price she pleased, and in a short time acquire the most incredible degree of wealth by the most advantageous balance of trade. This doctrine, like most other doctrines which are confidently asserted by any considerable number of people, was, and still continues to be, most implicitly believed by a much greater number; by almost all those who are either unacquainted with the woollen trade, or who have not made particular enquiries. It is, however, so perfectly false, that English wool is in any respect necessary for the making of fine cloth, that it is altogether unfit for it. Fine cloth is made altogether of Spanish wool. English wool cannot be even so mixed with Spanish wool as to enter into the composition without spoiling and degrading, in some degree, the fabric of the cloth.50

25It has been shown in the foregoing part of this work,51 that the effect of these regulations has been to depress the price of English wool, not only below what it naturally would be in the present times, but very much below what it actually was in the time of Edward III.52 The price of Scots wool, when in consequence of the union it became subject to the same regulations, is said to have fallen about one half.53 It is observed by the very accurate and intelligent author of the Memoirs of Wool, the Reverend Mr. John Smith, that the price of the best English wool in England is generally below what wool of a very inferior quality commonly sells for in the market of Amsterdam.54 To depress the price of this commodity below what may be called its natural and proper price, was the avowed purpose of those regulations; and there seems to be no doubt of their having produced the effect that was expected from them.

26This reduction of price, it may perhaps be thought, by discouraging the growing of wool, must have reduced very much the annual produce of that commodity, though not below what it formerly was, yet below what, in the present state of things, it ^dprobably would^d have been, had it, in consequence of an open and free market, been allowed to rise to the natural and proper price. I am, however, disposed to believe, that the quantity of the annual produce cannot have been much, though it may perhaps have been a little, affected by these regulations. The growing of wool is not the chief purpose for which the sheep farmer employs his industry and stock. He expects his profit, not so much from the price of the fleece, as from that of the carcase; and the average or ordinary price of the latter, must even, in many cases, make up to him whatever deficiency there may be in the average or ordinary price of the former. It has been observed in the foregoing part of this work, that “Whatever regulations tend to sink the price, either of wool or of raw hides, below what it naturally would be, must, in an improved and cultivated country, have some tendency to raise the price of butchers meat. The price both of the great and small cattle which are fed on improved and cultivated land, must be sufficient to pay the rent which the landlord, and the profit which the farmer has reason to expect from improved and cultivated land. If it is not, they will soon cease to feed them. Whatever part of this price, therefore, is not paid by the wool and the hide, must be paid by the carcase. The less there is paid for the one, the more must be paid for the other. In what manner this price is to be divided upon the different parts of the beast, is indifferent to the landlords and farmers, provided it is all paid to them. In an improved and cultivated country, therefore, their interest as landlords and farmers cannot be much affected by such regulations, though their interest as consumers may, by the rise in the price of provisions.”55 According to this reasoning, therefore, this degradation in the price of wool is not likely, in an improved and cultivated country, to occasion any diminution in the annual produce of that commodity; except so far as, by raising the price of mutton, it may somewhat diminish the demand for, and consequently the production of, that particular species of butchers meat. Its effect, however, even in this way, it is probable, is not very considerable.

27But though its effect upon the quantity of the annual produce may not have been very considerable, its effect upon the quality, it may perhaps be thought, must necessarily have been very great. The degradation in the quality of English wool, if not below what it was in former times, yet below what it naturally would have been in the present state of improvement and cultivation, must have been, it may perhaps be supposed, very nearly in proportion to the degradation of price. As the quality depends upon the breed, upon the pasture, and upon the management and cleanliness of the sheep, during the whole progress of the growth of the fleece, the attention to these circumstances, it may naturally enough be imagined, can never be greater than in proportion to the recompence which the price of the fleece is likely to make for the labour and expence which that attention requires. It happens, however, that the goodness of the fleece depends in a great measure, upon the health, growth, and bulk of the animal; the same attention which is necessary for the improvement of the carcase, is, in some respects, sufficient for that of the fleece. Notwithstanding the degradation of price, English wool is said to have been improved considerably during the course even of the present century. The improvement might perhaps have been greater if the price had been better; but the lowness of price, though it may have obstructed, yet certainly it has not altogether prevented that improvement.

28The violence of these regulations, therefore, seems to have affected neither the quantity nor the quality of the annual produce of wool so much as it might have been expected to do; (though I think it probable that it may have affected the latter a good deal more than the former) and the interest of the growers of wool, though it must have been hurt in some degree, seems, upon the whole, to have been much less hurt than could well have been imagined.

29These considerations, however, will not justify the absolute prohibition of the exportation of^e wool. But they will fully justify the imposition of a considerable tax upon that exportation.

30To hurt in any degree the interest of any one order of citizens, for no other purpose but to promote that of some other, is evidently contrary to that justice and equality of treatment which the sovereign owes to all the different orders of his subjects. But the prohibition certainly hurts, in some degree, the interest of the growers of wool, for no other purpose but to promote that of the manufacturers.

31Every different order of citizens is bound to contribute to the support of the sovereign or commonwealth. A tax of five, or even of ten shillings upon the exportation of every tod of wool, would produce a very considerable revenue to the sovereign. It would hurt the interest of the growers somewhat less than the prohibition, because it would not probably lower the price of wool quite so much. It would afford a sufficient advantage to the manufacturer, because, though he might not buy his wool altogether so cheap as under the prohibition, he would still buy it, at least, five or ten shillings cheaper than any foreign manufacturer could buy it, besides saving the freight and insurance, which the other would be obliged to pay. It is scarce possible to devise a tax which could produce any considerable revenue to the sovereign, and at the same time occasion so little inconveniency to any body.

32The prohibition, notwithstanding all the penalties which guard it, does not prevent the exportation of wool. It is exported, it is well known, in great quantities. The great difference between the price in the home and that in the foreign market, presents such a temptation to smuggling, that all the rigour of the law cannot prevent it. This illegal exportation is advantageous to no body but the smuggler. A legal exportation subject to a tax, by affording a revenue to the sovereign, and thereby saving the imposition of some other, perhaps, more burdensome and inconvenient taxes, might prove advantageous to all the different subjects of the state.

33The exportation of fuller’s earth, or fuller’s clay, supposed to be necessary for preparing and cleansing the woollen manufactures, has been subjected to nearly the same penalties as the exportation of wool.56 Even tobacco–pipe clay, though acknowledged to be different from fuller’s clay, yet, on account of their resemblance, and because fuller’s clay might sometimes be exported as tobacco–pipe clay, has been laid under the same prohibitions and penalties.57

34 By the 13th and 14th of Charles II. chap. 7. the exportation, not only of raw hides, but of tanned leather, except in the shape of boots, shoes, or slippers, was prohibited;58 and the law gave a monopoly to our boot–makers and shoe–makers, not only against our graziers, but against our tanners. By subsequent statutes our tanners have got themselves exempted from this monopoly, upon paying a small tax of only one shilling on the hundred weight of tanned leather, weighing one hundred and twelve pounds.59 They have obtained likewise the drawback of two thirds of the excise duties imposed upon their commodity, even when exported without further manufacture. All manufactures of leather may be exported duty free; and the exporter is besides entitled to the drawback of the whole duties of excise.60 Our graziers still continue subject to the old monopoly. Graziers separated from one another, and dispersed through all the different corners of the country, cannot, without great difficulty, combine together for the purpose either of imposing monopolies upon their fellow–citizens, or of exempting themselves from such, as may have been imposed upon them by other people.61 Manufacturers of all kinds, collected together in numerous bodies in all great cities, easily can. Even the horns of cattle are prohibited to be exported; and the two insignificant trades of the horner and comb–maker enjoy, in this respect, a monopoly against the graziers.62

35 Restraints, either by prohibitions or by taxes, upon the exportation of goods which are partially, but not completely manufactured, are not peculiar to the manufacture of leather. As long as any thing remains to be done, in order to fit any commodity for immediate use and consumption, our manufacturers think that they themselves ought to have the doing of it. Woollen yarn and worsted are prohibited to be exported under the same penalties as wool.63 Even white cloths are subject to a duty upon exportation,64 and our dyers have so far obtained a monopoly against our clothiers. Our clothiers would probably have been able to defend themselves against it, but it happens that the greater part of our principal clothiers are themselves likewise dyers. Watch–cases, clock–cases, and dial–plates for clocks and watches, have been prohibited to be exported.65 Our clock–makers and watch–makers are, it seems, unwilling that the price of this sort of workmanship should be raised upon them by the competition of foreigners.

36By some old statutes of Edward III.,66 Henry VIII.,67 and Edward VI.,68 the exportation of all metals was prohibited. Lead and tin were alone excepted; probably on account of the great abundance of those metals; in the exportation of which, a considerable part of the trade of the kingdom in those days consisted. For the encouragement of the mining trade, the 5th of William and Mary, chap. 17.,69 exempted from this prohibition iron, copper, and mundic metal made from British ore. The exportation of all sorts of copper bars, foreign as well as British, was afterwards permitted by the 9th and 10th of William III., chap. 26.70 The exportation of unmanufactured brass, of what is called gun–metal, bell–metal, and shroff–metal, still continues to be prohibited. Brass manufactures of all sorts may be exported duty free.71

37The exportation of the materials of manufacture, where it is not altogether prohibited, is in many cases subjected to considerable duties.

38By the 8th George I., chap. 15.,72 the exportation of all goods, the produce or manufacture of Great Britain, upon which any duties had been imposed by former statutes, was rendered duty free. The following goods, however, were excepted: Allum, lead, lead ore, tin, tanned leather, copperas, coals, wool cards, white woollen cloths, lapis calaminaris, skins of all sorts, glue, coney hair or wool, hares wool, hair of all sorts, horses, and litharge of lead. If you except horses, all these are either materials of manufacture, or incomplete manufactures (which may be considered as materials for still further manufacture), or instruments of trade. This statute leaves them subject to all the old duties which had ever been imposed upon them, the old subsidy and one per cent. outwards.73

39By the same statute a great number of foreign drugs for dyers use, are exempted from all duties upon importation. Each of them, however, is afterwards subjected to a certain duty, not indeed a very heavy one, upon exportation. Our dyers, it seems, while they thought it for their interest to encourage the importation of those drugs, by an exemption from all duties, thought it likewise for their interest to throw some small discouragement upon their exportation. The avidity, however, which suggested this notable piece of mercantile ingenuity, most probably disappointed itself of its object. It necessarily taught the importers to be more careful than they might otherwise have been, that their importation should not exceed what was necessary for the supply of the home market. The home market was at all times likely to be more scantily supplied; the commodities were at all times likely to be somewhat dearer there than they would have been, had the exportation been rendered as free as the importation.

40By the above–mentioned statute, gum senega, or gum arabic, being among the enumerated dying drugs, might be imported duty free. They were subjected, indeed, to a small poundage duty, amounting only to three pence in the hundred weight upon their re–exportation. France enjoyed, at that time, an exclusive trade to the country most productive of those drugs, that which lies in the neighbourhood of the Senegal; and the British market could not ^feasily be^f supplied by the immediate importation of them from the place of growth.74 By the 25th Geo. II. therefore, gum senega was allowed to be imported, (contrary to the general dispositions of the act of navigation) from any part of Europe. As the law, however, did not mean to encourage this species of trade, so contrary to the general principles of the mercantile policy of England, it imposed a duty of ten shillings the hundred weight upon such importation, and no part of this duty was to be afterwards drawn back upon its exportation.75 The successful war which began in 1755 gave Great Britain the same exclusive trade to those countries which France had enjoyed before. Our manufacturers, as soon as the peace was made, endeavoured to avail themselves of this advantage, and to establish a monopoly in their own favour, both against the growers, and against the importers of this commodity. By the 5th Geo. III. therefore, chap. 37.76 the exportation of gum senega from his majesty’s dominions in Africa was confined to Great Britain, and was subjected to all the same restrictions, regulations, forfeitures and penalties, as that of the enumerated commodities of the British colonies in America and the West Indies.77 Its importation, indeed, was subjected to a small duty of sixpence the hundred weight, but its re–exportation was subjected to the enormous duty of one pound ten shillings the hundred weight. It was the intention of our manufacturers that the whole produce of those countries should be imported into Great Britain, and in order that they themselves might be enabled to buy it at their own price, that no part of it should be exported again, but at such an expence as would sufficiently discourage that exportation. Their avidity, however, upon this, as well as upon many other occasions, disappointed itself of its object. This enormous duty presented such a temptation to smuggling, that great quantities of this commodity were clandestinely exported, probably to all the manufacturing countries of Europe, but particularly to Holland, not only from Great Britain but from Africa. Upon this account, by the 14 Geo. III. chap. 10. this duty upon exportation was reduced to five shillings the hundred weight.78

41In the book of rates, according to which the old subsidy was levied, beaver skins were estimated at six shillings and eight pence a piece, and the different subsidies and imposts, which before the year 1722 had been laid upon their importation, amounted to one–fifth part of the rate, or to sixteen pence upon each skin; all of which, except half the old subsidy, amounting only to two pence, was drawn back upon exportation.79 This duty upon the importation of so important a material of manufacture had been thought too high, and, in the year 1722, the rate was reduced to two shillings and sixpence, which reduced the duty upon importation to sixpence, and of this only one half was to be drawn back upon exportation.80 The same successful war put the country most productive of beaver under the dominion of Great Britain, and beaver skins being among the enumerated commodities, their exportation from America was consequently confined to the market of Great Britain.81 Our manufacturers soon bethought themselves of the advantage which they might make of this circumstance, and in the year 1764,82 the duty upon the importation of beaverskin was reduced to one penny, but the duty upon exportation was raised to seven pence each skin, without any drawback of the duty upon importation. By the same law, a duty of eighteen pence the pound was imposed upon the exportation of beaver–wool or wombs, without making any alteration in the duty upon the importation of that commodity, which when imported by British and in British shipping, amounted at that time to between four pence and five pence the piece.

42Coals may be considered both as a material of manufacture and as an instrument of trade.83 Heavy duties, accordingly, have been imposed upon their exportation, amounting at present (1783) to more than five shillings the ton, or to more than fifteen shillings the chaldron, Newcastle measure; which is in most cases more than the original value of the commodity at the coal pit, or even at the shipping port for exportation.

43The exportation, however, of the instruments of trade, properly so called, is commonly restrained, not by high duties, but by absolute prohibitions.84 Thus by the 7th and 8th of William III. chap. 20. sect. 8.85 the exportation of frames or engines for knitting gloves or stockings is prohibited under the penalty, not only of the forfeiture of such frames or engines, so exported, or attempted to be exported, but of forty pounds, one half to the king, the other to the person who shall inform or sue for the same. In the same manner by the 14th Geo. III. chap. 71.86 the exportation to foreign parts, of any utensils made use of in the cotton, linen, woollen and silk manufactures, is prohibited under the penalty, not only of the forfeiture of such utensils, but of two hundred pounds, to be paid by the person who shall offend in this manner, and likewise of two hundred pounds to be paid by the master of the ship who shall knowlingly suffer such utensils to be loaded on board his ship.

44When such heavy penalties were imposed upon the exportation of the dead instruments of trade, it could not well be expected that the living instrument, the artificer,87 should be allowed to go free. Accordingly, by the 5 Geo. I. chap. 27.88 the person who shall be convicted of enticing any artificer of, or in any of the manufactures of Great Britain, to go into any foreign parts in order to practice or teach his trade, is liable for the first offence to be fined in any sum not exceeding one hundred pounds, and to three months imprisonment, and until the fine shall be paid; and for the second offence, to be fined in any sum at the discretion of the court, and to imprisonment for twelve months, and until the fine shall be paid. By the 23 Geo. II. chap. 13.89 this penalty is increased for the first offence to five hundred pounds for every artificer so enticed, and to twelve months imprisonment, and until the fine shall be paid; and for the second offence, to one thousand pounds, and to two years imprisonment, and until the fine shall be paid.

45 By the former of those two statutes, upon proof that any person has been enticing any artificer, or that any artificer has promised or contracted to go into foreign parts for the purposes aforesaid, such artificer may be obliged to give security at the discretion of the court, that he shall not go beyond the seas, and may be committed to prison until he give such security.

46If any artificer has gone beyond the seas, and is exercising or teaching his trade in any foreign country, upon warning being given to him by any of his majesty’s ministers or consuls abroad, or by one of his majesty’s secretaries of state for the time being, if he does not, within six months after such warning, return into this realm, and from thenceforth abide and inhabit continually within the same, he is from thenceforth declared incapable of taking any legacy devised to him within this kingdom, or of being executor or administrator to any person, or of taking any lands within this kingdom by descent, devise, or purchase. He likewise forfeits to the king, all his lands, goods and chattels, is declared an alien in every respect, and is put out of the king’s protection.

47It is unnecessary, I imagine, to observe, how contrary such regulations are to the boasted liberty of the subject, of which we affect to be so very jealous; but which, in this case, is so plainly sacrificed to the futile interests of our merchants and manufacturers.

48 The laudable motive of all these regulations, is to extend our own manufactures, not by their own improvement, but by the depression of those of all our neighbours, and by putting an end, as much as possible, to the troublesome competition of such odious and disagreeable rivals. Our master manufacturers think it reasonable, that they themselves should have the monopoly of the ingenuity of all their countrymen. Though by restraining, in some trades, the number of apprentices which can be employed at one time, and by imposing the necessity of a long apprenticeship in all trades, they endeavour, all of them, to confine the knowledge of their respective employments to as small a number as possible; they are unwilling, however, that any part of this small number should go abroad to instruct foreigners.

49Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.^f The maxim is so perfectly self–evident, that it would be absurd to attempt to prove it. But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce.

50In the restraints upon the importation of all foreign commodities which can come into competition with those of our own growth, or manufacture, the interest of the home–consumer is evidently sacrificed to that of the producer. It is altogether for the benefit of the latter, that the former is obliged to pay that enhancement of price which this monopoly almost always occasions.

51It is altogether for the benefit of the producer that bounties are granted upon the exportation of some of his productions. The home–consumer is obliged to pay, first, the tax which is necessary for paying the bounty, and secondly, the still greater tax which necessarily arises from the enhancement of the price of the commodity in the home market.90

52By the famous treaty of commerce with Portugal,91 the consumer is prevented by high duties from purchasing of a neighbouring country, a commodity which our own climate does not produce, but is obliged to purchase it of a distant country, though it is acknowledged that the commodity of the distant country is of a worse quality than that of the near one. The home–consumer is obliged to submit to this inconveniency, in order that the producer may import into the distant country some of his productions upon more advantageous terms than he would otherwise have been allowed to do. The consumer, too, is obliged to pay, whatever enhancement in the price of those very productions, this forced exportation may occasion in the home–market.

53But in the system of laws which has been established for the management of our American and West Indian colonies, the interest of the home–consumer has been sacrificed to that of the producer with a more extravagant profusion than in all our other commercial regulations. A great empire has been established for the sole purpose of raising up a nation of customers who should be obliged to buy from the shops of our different producers, all the goods with which these could supply them.92 For the sake of that little enhancement of price which this monopoly might afford our producers, the home–consumers have been burdened with the whole expence of maintaining and defending that empire. For this purpose, and for this purpose only, in the two last wars, more than two hundred millions have been spent, and a new debt of more than a hundred and seventy millions has been contracted over and above all that had been expended for the same purpose in former wars.93 The interest of this debt alone is not only greater than the whole extraordinary profit, which, it ever could be pretended, was made by the monopoly of the colony trade, but than the whole value of that trade or than the whole value of the goods, which at an average have been annually exported to the colonies.

54It cannot be very difficult to determine who have been the contrivers of this whole mercantile system; not the consumers, we may believe, whose interest has been entirely neglected; but the producers whose interest has been so carefully attended to; and among this latter class our merchants and manufacturers have been by far the principal architects. In the mercantile regulations, which have been taken notice of in this chapter, the interest of our manufacturers has been most peculiarly attended to; and the interest, not so much of the consumers, as that of some other sets of producers, has been sacrificed to it.^a

(At this point in 3 Smith supplies as an ‘Appendix’ various computations relating to IV.v which he had previously incorporated in the text of 2A. This ‘Appendix’ now appears at the conclusion of the present edition, pp. 948–50.)

CHAPTER ^aIX^a

Of the agricultural Systems, or of those Systems of political Œconomy, which represent the Produce of Land as either the sole or the principal Source of the Revenue and Wealth of every Country

1The agriculture systems of political œconomy will not require so long an explanation as that which I have thought it necessary to bestow upon the mercantile or commercial system.

2That system which represents the produce of land as the sole source of the revenue and wealth of every country, has, so far as I know, never been adopted by any nation, and it at present exists only in the speculations of a few men of great learning and ingenuity in France.1 It would not, surely, be worth while to examine at great length the errors of a system which never has done, and probably never will do any harm in any part of the world. I shall endeavour to explain, however, as distinctly as I can, the great outlines of this very ingenious system.

3Mr. Colbert, the famous minister of Lewis XIV. was a man of probity, of great industry and knowledge of detail; of great experience and acuteness in the examination of publick accounts, and of abilities, in short, every way fitted for introducing method and good order into the collection and expenditure of the publick revenue.2 That minister had unfortunately embraced all the prejudices of the mercantile system ^b , in its nature and essence a system of restraint and regulation, ^cand such as^c could scarce fail to be agreeable to a laborious and plodding man of business, who had been accustomed to regulate the different departments of publick offices, and to establish the necessary checks and controuls for confining each to its proper sphere. The industry and commerce of a great country he endeavoured to regulate upon the same model as the departments of a publick office; and instead of allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty and justice, he bestowed upon certain branches of industry extraordinary privileges, while he laid others under as extraordinary restraints. He was not only disposed, like other European ministers, to encourage more the industry of the towns than that of the country; but, in order to support the industry of the towns, he was willing even to depress and keep down that of the country. In order to render provisions cheap to the inhabitants of the towns, and thereby to encourage manufactures and foreign commerce,3 he prohibited altogether the exportation of corn, and thus excluded the inhabitants of the country from every foreign market for by far the most important part of the produce of their industry. This prohibition, joined to the restraints imposed by the antient provincial laws of France upon the transportation of corn from one province to another, and to the arbitrary and degrading taxes which are levied upon the cultivators in almost all the provinces, discouraged and kept down the agriculture of that country very much below the state to which it would naturally have risen in so very fertile a soil and so very happy a climate.4 This state of discouragement and depression was felt more or less in every different part of the country, and many different enquiries were set on foot concerning the causes of it. One of those causes appeared to be the preference given, by the institutions of Mr. Colbert, to the industry of the towns above that of the country.

4If the rod be bent too much one way, says the proverb, in order to make it straight you must bend it as much the other. The French philosophers, who have proposed the system which represents agriculture as the sole source of the revenue and wealth of every country, seem to have adopted this proverbial maxim; and as in the plan of Mr. Colbert the industry of the towns was certainly over–valued in comparison with that of the country; so in their system it seems to be as certainly under–valued.

5The different orders of people who have ever been supposed to contribute in any respect towards the annual produce of the land and labour of the country, they divide into three classes. The first is the class of the proprietors of land. The second is the class of the cultivators, of farmers and country labourers, whom they honour with the peculiar appellation of the productive class. The third is the class of artificers, manufacturers and merchants, whom they endeavour to degrade by the humiliating appellation of the barren or unproductive class.

6The class of proprietors contributes to the annual produce by the expence which they may occasionally lay out upon the improvement of the land, upon the buildings, drains, enclosures and other ameliorations, which they may either make or maintain upon it, and by means of which the cultivators are enabled, with the same capital, to raise a greater produce, and consequently to pay a greater rent. This advanced rent may be considered as the interest or profit due to the proprietor upon the expence or capital which he thus employs in the improvement of his land. Such expences are in this system called ground expences (depenses foncieres).

7The cultivators or farmers contribute to the annual produce by what are in this system called the original and annual expences (depenses primitives et depenses annuelles) which they lay out upon the cultivation of the land. The original expences consist in the instruments of husbandry, in the stock of cattle, in the seed, and in the maintenance of the farmer’s family, servants and cattle, during at least a great part of the first year of his occupancy, or till he can receive some return from the land. The annual expences consist in the seed, in the ^dwear and tear^d of the instruments of husbandry, and in the annual maintenance of the farmer’s servants and cattle, and of his family too, so far as any part of them can be considered as servants employed in cultivation. That part of the produce of the land which remains to him after paying the rent, ought to be sufficient, first, to replace to him within a reasonable time, at least during the term of his occupancy, the whole of his original expences, together with the ordinary profits of stock; and, secondly, to replace to him annually the whole of his annual expences, together likewise with the ordinary profits of stock. Those two sorts of expences are two capitals which the farmer employs in cultivation; and unless they are regularly restored to him, together with a reasonable profit, he cannot carry on his employment upon a level with other employments; but, from a regard to his own interest, must desert it as soon as possible, and seek some other^e . That part of the produce of the land which is thus necessary for enabling the farmer to continue his business, ought to be considered as a fund sacred to cultivation, which if the landlord violates, he necessarily ^freduces^f the produce of his own land, and in a few years not only disables the farmer from paying this racked rent, but from paying the reasonable rent which he might otherwise have got for his land. The rent which properly belongs to the landlord, is no more than the neat produce which remains after paying in the compleatest manner all the necessary expences which must be previously laid out in order to raise the gross, or the whole produce. It is because the labour of the cultivators, over and above paying compleatly all those necessary expences, affords a neat produce of this kind, that this class of people are in this system peculiarly distinguished by the honourable appellation of the productive class.5 Their original and annual expences are for the same reason called, in this system, productive expences, because, over and above replacing their own value, they occasion the annual reproduction of this neat produce.

8The ground expences, as they are called, or what the landlord lays out upon the improvement of his land, are in this system too honoured with the appellation of productive expences. Till the whole of those expences, together with the ordinary profits of stock, have been compleatly repaid to him by the advanced rent which he gets from his land, that advanced rent ought to be regarded as sacred and inviolable, both by the church and by the king; ought to be subject neither to tithe nor to taxation. If it is otherwise, by discouraging the improvement of land, the church discourages the future increase of her own tithes, and the king the future increase of his own taxes. As in a well–ordered state of things, therefore, those ground expences, over and above reproducing in the compleatest manner their own value, occasion likewise after a certain time a reproduction of a neat produce, they are in this system considered as productive expences.

9The ground expences of the landlord, however, together with the original and the annual expences of the farmer, are the only three sorts of expences which in this system are considered as productive. All other expences and all other orders of people, even those who in the common apprehensions of men are regarded as the most productive, are in this account of things represented as altogether barren and unproductive.

10Artificers and manufacturers, in particular, whose industry, in the common apprehensions of men, increases so much the value of the rude produce of land, are in this system represented as a class of people altogether barren and unproductive. Their labour, it is said, replaces only the stock which employs them, together with its ordinary profits. That stock consists in the materials, tools, and wages, advanced to them by their employer; and is the fund destined for their employment and maintenance. Its profits are the fund destined for the maintenance of their employer. Their employer, as he advances to them the stock of materials, tools and wages necessary for their employment, so he advances to himself what is necessary for his own maintenance, and this maintenance he generally proportions to the profit which he expects to make by the price of their work. Unless its price repays to him the maintenance which he advances to himself, as well as the materials, tools and wages which he advances to his workmen, it evidently does not repay ^gto^g him the whole expence which he lays out upon it. The profits of manufacturing stock, therefore, are not, like the rent of land, a neat produce which remains after compleatly repaying the whole expence which must be laid out in order to obtain them. The stock of the farmer yields him a profit as well as that of the master manufacturer; and it yields a rent likewise to another person, which that of the master manufacturer does not. The expence, therefore, laid out in employing and maintaining artificers and manufacturers, does no more than continue, if one may say so, the existence of its own value, and does not produce any new value. It is therefore altogether a barren and unproductive expence. The expence, on the contrary, laid out in employing farmers and country labourers, over and above continuing the existence of its own value, produces a new value, the rent of the landlord. It is therefore a productive expence.

11Mercantile stock is equally barren and unproductive with manufacturing stock.6 It only continues the existence of its own value, without producing any new value. Its profits are only the repayment of the maintenance which its employer advances to himself during the time that he employs it, or till he receives the returns of it. They are only the repayment of a part of the expence which must be laid out in employing it.

12The labour of artificers and manufacturers never adds any thing to the value of the whole annual amount of the rude produce of the land. It adds indeed greatly to the value of some particular parts of it. But the consumption which in the mean time it occasions of other parts, is precisely equal to the value which it adds to those parts; so that the value of the whole amount is not, at any one moment of time, in the least augmented by it. The person who works the lace of a pair of fine ruffles, for example, will sometimes raise the value of perhaps a pennyworth of flax to thirty pounds sterling. But though at first sight he appears thereby to multiply the value of a part of the rude produce about seven thousand and two hundred times, he in reality adds nothing to the value of the whole annual amount of the rude produce. The working of that lace costs him perhaps two years labour. The thirty pounds which he gets for it when it is finished, is no more than the repayment of the subsistence which he advances to himself during the two years that he is employed about it. The value which, by every day’s, month’s, or year’s labour, he adds to the flax, does no more than replace the value of his own consumption during that day, month, or year. At no moment of time, therefore, does he add any thing to the value of the whole annual amount of the rude produce of the land: the portion of that produce which he is continually consuming, being always equal to the value which he is continually producing. The extreme poverty of the greater part of the persons employed in this expensive, though trifling manufacture, may satisfy us that the price of their work does not in ordinary cases exceed the value of their subsistence. It is otherwise with the work of farmers and country labourers. The rent of the landlord is a value, which, in ordinary cases, it is continually producing, over and above replacing, in the most compleat manner, the whole consumption, the whole expence laid out upon the employment and maintenance both of the workmen and of their employer.

13Artificers, manufacturers and merchants, can augment the revenue and wealth of their society, by parsimony only; or, as it is expressed in this system, by privation, that is, by depriving themselves of a part of the funds destined for their own subsistence. They annually reproduce nothing but those funds. Unless, therefore, they annually save some part of them, unless they annually deprive themselves of the enjoyment of some part of them, the revenue and wealth of their society can never be in the smallest degree augmented by means of their industry. Farmers and country labourers, on the contrary, may enjoy compleatly the whole funds destined for their own subsistence, and yet augment at the same time the revenue and wealth of their society. Over and above ^hwhat is^h destined for their own subsistence, their industry annually affords a neat produce, of which the augmentation necessarily augments the revenue and wealth of their society. Nations, therefore, which, like France or England, consist in a great measure of proprietors and cultivators, can be enriched by industry and enjoyment. Nations, on the contrary, which, like Holland and Hamburgh, are composed chiefly of merchants, artificers and manufacturers, can grow rich only through parsimony and privation. As the interest of nations so differently circumstanced, is very different, so is likewise the common character of the people. In those of the former kind, liberality, frankness, and good fellowship, naturally make a part of that common character. In the latter, narrowness, meanness, and a selfish disposition, averse to all social pleasure and enjoyment.

14The unproductive class, that of merchants, artificers, and manufacturers, is maintained and employed altogether at the expence of the two other classes, of that of proprietors, and of that of cultivators. They furnish it both with the materials of its work and with the fund of its subsistence, with the corn and cattle which it consumes while it is employed about that work. The proprietors and cultivators finally pay both the wages of all the workmen of the unproductive class, and the profits of all their employers. Those workmen and their employers are properly the servants of the proprietors and cultivators. They are only servants who work without doors, as menial servants work within. Both the one and the other, however, are equally maintained at the expence of the same masters. The labour of both is equally unproductive. It adds nothing to the value of the sum total of the rude produce of the land. Instead of increasing the value of that sum total, it is a charge and expence which must be paid out of it.

15The unproductive class, however, is not only useful, but greatly useful to the other two classes. By means of the industry of merchants, artificers and manufacturers, the proprietors and cultivators can purchase both the foreign goods and the manufactured produce of their own country which they have occasion for, with the produce of a much smaller quantity of their own labour, than what they would be obliged to employ, if they were to attempt, in an aukward and unskilful manner, either to import the one, or to make the other for their own use. By means of the unproductive class, the cultivators are delivered from many cares which would otherwise distract their attention from the cultivation of land. The superiority of produce, which, in consequence of this undivided attention, they are enabled to raise, is fully sufficient to pay the whole expence which the maintenance and employment of the unproductive class costs either the proprietors, or themselves. The industry of merchants, artificers, and manufacturers, though in its own nature altogether unproductive, yet contributes in this manner indirectly to increase the produce of the land. It increases the productive powers of productive labour, by leaving it at liberty to confine itself to its proper employment, the cultivation of land; and the plough goes frequently the easier and the better by means of the labour of the man whose business is most remote from the plough.

16It can never be the interest of the proprietors and cultivators to restrain or to discourage in any respect the industry of merchants, artificers and manufacturers. The greater the liberty which this unproductive class enjoys, the greater will be the competition in all the different trades which compose it, and the cheaper will the other two classes be supplied, both with foreign goods and with the manufactured produce of their own country.

17It can never be the interest of the unproductive class to oppress the other two classes. It is the surplus produce of the land, or what remains after deducting the maintenance, first, of the cultivators, and afterwards, of the proprietors, that maintains and employs the unproductive class. The greater this surplus, the greater must likewise be ⁱtheⁱ maintenance and employment ^jof that class^j . The establishment of perfect justice, of perfect liberty,7 and of perfect equality, is the very simple secret which most effectually secures the highest degree of prosperity to all the three classes.

18The merchants, artificers, and manufacturers of those mercantile states which, like Holland and Hamburgh, consist chiefly of this unproductive class, are in the same manner maintained and employed altogether at the expence of the proprietors and cultivators of land. The only difference is, that those proprietors and cultivators are, the greater part of them, placed at a most inconvenient distance from the merchants, artificers, and manufacturers whom they supply with the materials of their work and the fund of their subsistence, are the inhabitants of other countries, and the subjects of other governments.

19Such mercantile states, however, are not only useful, but greatly useful to the inhabitants of those other countries. They fill up, in some measure, a very important void, and supply the place of the merchants, artificers and manufacturers, whom the inhabitants of those countries ought to find at home, but whom, from some defect in their policy, they do not find at home.

20It can never be the interest of those landed nations, if I may call them so, to discourage or distress the industry of such mercantile states, by imposing high duties upon their trade, or upon the commodities which they furnish. Such duties, by rendering those commodities dearer, could serve only to sink the real value of the surplus produce of their own land, with which, or, what comes to the same thing, with the price of which those commodities are purchased. Such duties could serve only to discourage the increase of that surplus produce, and consequently the improvement and cultivation of their own land. The most effectual expedient, on the contrary, for raising the value of that surplus produce, for encouraging its increase, and consequently the improvement and cultivation of their own land, would be to allow the most perfect freedom to the trade of all such mercantile nations.

21This perfect freedom of trade would even be the most effectual expedient for supplying them, in due time, with all the artificers, manufacturers and merchants, whom they wanted at home, and for filling up in the properest and most advantageous manner that very important void which they felt there.

22The continual increase of the surplus produce of their land, would, in due time, create a greater capital than what could be employed with the ordinary rate of profit in the improvement and cultivation of land; and the surplus part of it would naturally turn itself to the employment of artificers and manufacturers at home. But those artificers and manufacturers, finding at home both the materials of their work and the fund of their subsistence, might immediately, even with much less art and skill, be able to work as cheap as the like artificers and manufacturers of such mercantile states, who had both to bring from a ^kgreat^k distance. Even though from want of art and skill, they might not for some time be able to work as cheap, yet, finding a market at home, they might be able to sell their work there as cheap as that of the artificers and manufacturers of such mercantile states, which could not be brought to that market but from so great a distance; and as their art and skill improved, they would soon be able to sell it cheaper. The artificers and manufacturers of such mercantile states, therefore, would immediately be rivalled in the market of those landed nations, and soon after undersold and justled out of it altogether. The cheapness of the manufactures of those landed nations, in consequence of the gradual improvements of art and skill, would, in due time, extend their sale beyond the home market, and carry them to many foreign markets, from which they would in the same manner gradually justle out many of the manufactures of such mercantile nations.

23This continual increase both of the rude and manufactured produce of those landed nations would in due time create a greater capital than could, with the ordinary rate of profit, be employed either in agriculture or in manufactures. The surplus of this capital would naturally turn itself to foreign trade, and be employed in exporting, to foreign countries, such parts of the rude and manufactured produce of its own country, as exceeded the demand of the home market. In the exportation of the produce of their own country, the merchants of a landed nation would have an advantage of the same kind over those of mercantile nations, which its artificers and manufacturers had over the artificers and manufacturers of such nations; the advantage of finding at home that cargo, and those stores and provisions, which the others were obliged to seek for at a distance. With inferior art and skill in navigation, therefore, they would be able to sell that cargo as cheap in foreign markets as the merchants of such mercantile nations; and with equal art and skill they would be able to sell it cheaper. They would soon, therefore, rival those mercantile nations in this branch of^l foreign trade, and in due time would justle them out of it altogether.

24According to this liberal and generous system, therefore, the most advantageous method in which a landed nation can raise up artificers, manufacturers and merchants of its own, is to grant the most perfect freedom of trade to the artificers, manufacturers and merchants of all other nations. It thereby raises the value of the surplus produce of its own land, of which the continual increase gradually establishes a fund which in due time necessarily raises up all the artificers, manufacturers and merchants whom it has occasion for.

25When a landed nation, on the contrary, oppresses either by high duties or by prohibitions the trade of foreign nations, it necessarily hurts its own interest in two different ways. First, by raising the price of all foreign goods and of all sorts of manufactures, it necessarily sinks the real value of the surplus produce of its own land, with which, or, what comes to the same thing, with the price of which, it purchases those foreign goods and manufactures. Secondly, by giving a sort of monopoly of the home market to its own merchants, artificers and manufacturers, it raises the rate of mercantile and manufacturing profit in proportion to that of agricultural profit, and consequently either draws from agriculture a part of the capital which had before been employed in it, or hinders from going to it a part of what would otherwise have gone to it. This policy, therefore, discourages agriculture in two different ways; first, by sinking the real value of its produce, and thereby lowering the rate of its profit; and, secondly, by raising the rate of profit in all other employments. Agriculture is rendered less advantageous, and trade and manufactures more advantageous than they otherwise would be; and every man is tempted by his own interest to turn, as much as he can, both his capital and his industry from the former to the latter employments.

26Though, by this oppressive policy, a landed nation should be able to raise up artificers, manufacturers and merchants of its own, somewhat sooner than it could do by the freedom of trade; a matter, however, which is not a little doubtful; yet it would raise them up, if one may say so, prematurely, and before it was perfectly ripe for them. By raising up too hastily one species of industry, it would depress another more valuable species of industry. By raising up too hastily a species of industry which only replaces the stock which employs it, together with the ordinary profit, it would depress a species of industry which, over and above replacing that stock with its profit, affords likewise a neat produce, a free rent to the landlord. It would depress productive labour, by encouraging too hastily that labour which is altogether barren and unproductive.

27In what manner, according to this system, the sum total of the annual produce of the land is distributed among the three classes above mentioned, and in what manner the labour of the unproductive class, does no more than replace the value of its own consumption, without increasing in any respect the value of that sum total, is represented by Mr. Quesnai, the very ingenious and profound author of this system, in some arithmetical formularies. The first of these formularies, which by way of eminence he peculiarly distinguishes by the name of the Oeconomical Table,8 represents the manner in which he supposes this distribution takes place, in a state of the most perfect liberty, and therefore of the highest prosperity; in a state where the annual produce is such as to afford the greatest possible neat produce, and where each class enjoys its proper share of the whole annual produce. Some subsequent formularies represent the manner in which, he supposes, this distribution is made in different states of restraint and regulation; in which, either the class of proprietors, or the barren and unproductive class, is more favoured than the class of cultivators, and in which, either the one or the other encroaches more or less upon the share which ought properly to belong to this productive class.9 Every such encroachment, every violation of that natural distribution, which the most perfect liberty would establish, must, according to this system, necessarily degrade more or less, from one year to another, the value and sum total of the annual produce, and must necessarily occasion a gradual declension in the real wealth and revenue of the society; a declension of which the progress must be quicker or slower, according to the degree of this encroachment, according as that natural distribution, which the most perfect liberty would establish, is more or less violated. Those subsequent formularies represent the different degrees of declension, which, according to this system correspond to the different degrees in which this natural distribution of things is violated.

28Some speculative physicians seem to have imagined that the health of the human body could be preserved only by a certain precise regimen of diet and exercise, of which every, the smallest, violation necessarily occasioned some degree of disease or disorder proportioned to the degree of the violation. Experience, however, would seem to show that the human body frequently preserves, ^mto all appearance at least^m , the most perfect state of health under a vast variety of different regimens; even under some which are generally believed to be very far from being perfectly wholesome. But the healthful state of the human body, it would seem, contains in itself some unknown principle of preservation, capable either of preventing or of correcting, in many respects, the bad effects even of a very faulty regimen. Mr. Quesnai, who was himself a physician, and a very speculative physician,10 seems to have entertained a notion of the same kind concerning the political body, and to have imagined that it would thrive and prosper only under a certain precise regimen, the exact regimen of perfect liberty and perfect justice. He seems not to have considered that in the political body, the natural effort which every man is continually making to better his own condition,11 is a principle of preservation capable of preventing and correcting, in many respects, the bad effects of a political œconomy, in some degree, both partial and oppressive. Such a political œconomy, though it no doubt retards more or less, is not always capable of stopping altogether the natural progress of a nation towards wealth and prosperity, and still less of making it go backwards. If a nation could not prosper without the enjoyment of perfect liberty and perfect justice, there is not in the world a nation which could ever have prospered. In the political body, however, the wisdom of nature has fortunately made ample provision for remedying many of the bad effects of the folly and injustice of man; in the same manner as it has done in the natural body, for remedying those of his sloth and intemperance.

29The capital error of this system, however, seems to lie in its representing the class of artificers, manufacturers and merchants, as altogether barren and unproductive. The following observations may serve to show the impropriety of this representation.

30First, this class, it is acknowledged, reproduces annually the value of its own annual consumption, and continues, at least, the existence of the stock or capital which maintains and employs it. But upon this account alone the denomination of barren or unproductive should seem to be very improperly applied to it. We should not call a marriage barren or unproductive, though it produced only a son and a daughter, to replace the father and mother, and though it did not increase the number of the human species, but only continued it as it was before. Farmers and country labourers, indeed, over and above the stock which maintains and employs them, reproduce annually a neat produce, a free rent to the landlord. As a marriage which affords three children is certainly more productive than one which affords only two; so the labour of farmers and country labourers is certainly more productive than that of merchants, artificers and manufacturers. The superior produce of the one class, however, does not render the other barren or unproductive.12

31Secondly, it seems, upon this account, altogether improper to consider artificers, manufacturers and merchants, in the same light as menial servants. The labour of menial servants does not continue the existence of the fund which maintains and employs them. Their maintenance and employment is altogether at the expence of their masters, and the work which they perform is not of a nature to repay that expence. That work consists in services which perish generally in the very instant of their performance, and does not fix or realize itself in any vendible commodity which can replace the value of their wages and maintenance.13 The labour, on the contrary, of artificers, manufacturers and merchants, naturally does fix and realize itself in some such vendible commodity. It is upon this account that, in the chapter in which I treat of productive and unproductive labour, I have classed artificers, manufacturers and merchants, among the productive labourers, and menial servants among the barren or unproductive.14

32Thirdly, it seems, upon every supposition, improper to say, that the labour of artificers, manufacturers and merchants, does not increase the real revenue of the society. Though we should suppose, for example, as it seems to be supposed in this system, that the value of the daily, monthly, and yearly consumption of this class was exactly equal to that of its daily, monthly, and yearly production, yet it would not from thence follow that its labour added nothing to the real revenue, to the real value of the annual produce of the land and labour of the society. An artificer, for example, who in the first six months after harvest, executes ten pounds worth of work, though he should in the same time consume ten pounds worth of corn and other necessaries, yet really adds the value of ten pounds to the annual produce of the land and labour of the society. While he has been consuming a half yearly revenue of ten pounds worth of corn and other necessaries, he has produced an equal value of work capable of purchasing, either to himself or to some other person, an equal half yearly revenue. The value, therefore, of what has been consumed and produced during these six months is equal, not to ten, but to twenty pounds. It is possible, indeed, that no more than ten pounds worth of this value, may even have existed at any one moment of time. But if the ten pounds worth of corn and other necessaries, which were consumed by the artificer, had been consumed by a soldier or by a menial servant, the value of that part of the annual produce which existed at the end of the six months, would have been ten pounds less than it actually is in consequence of the labour of the artificer. Though the value of what the artificer produces, therefore, should not at any one moment of time be supposed greater than the value he consumes, yet at every moment of time the actually existing value of goods in the market is, in consequence of what he produces, greater than it otherwise would be.

33When the patrons of this system assert that the consumption of artificers, manufacturers and merchants, is equal to the value of what they produce, they probably mean no more than that their revenue, or the fund destined for their consumption, is equal to it. But if they had expressed themselves more accurately, and only asserted that the revenue of this class was equal to the value of what they produced, it might readily have occurred to the reader, that what would naturally be saved out of this revenue, must necessarily increase more or less the real wealth of the society. In order, therefore, to make out something like an argument, it was necessary that they should express themselves as they have done; and this argument, even supposing things actually were as it seems to presume them to be, turns out to be a very inconclusive one.

34Fourthly, farmers and country labourers can no more augment, without parsimony, the real revenue, the annual produce of the land and labour of their society, than artificers, manufacturers and merchants.15 The annual produce of the land and labour of any society can be augmented only in two ways; either, first, by some improvement in the productive powers of the useful labour actually maintained within it; or, secondly, by some increase in the quantity of that labour.16

35The improvement in the productive powers of useful labour depend, first, upon the improvement in the ability of the workman; and, secondly, upon that of the machinery with which he works. But the labour of artificers and manufacturers, as it is capable of being more subdivided, and the labour of each workman reduced to a greater simplicity of operation, than that of farmers and country labourers,17 so it is likewise capable of both these sorts of improvement in a much higher degree* . In this respect, therefore, the class of cultivators can have no sort of advantage over that of artificers and manufacturers.

36The increase in the quantity of useful labour actually employed within any society, must depend altogether upon the increase of the capital which employs it; and the increase of that capital again must be exactly equal to the amount of the savings from the revenue, either of the particular persons who manage and direct the employment of that capital, or of some other persons who lend it to them.18 If merchants, artificers and manufacturers are, as this system seems to suppose, naturally more inclined to parsimony and saving than proprietors and cultivators, they are, so far, more likely to augment the quantity of useful labour employed within their society, and consequently to increase its real revenue, the annual produce of its land and labour.

37Fifthly and lastly, though the revenue of the inhabitants of every country was supposed to consist altogether, as this system seems to suppose, in the quantity of subsistence which their industry could procure to them; yet, even upon this supposition, the revenue of a trading and manufacturing country must, other things being equal, always be much greater than that of one without trade or manufactures. By means of trade and manufactures, a greater quantity of subsistence can be annually imported into a particular country than what its own lands, in the actual state of their cultivation, could afford. The inhabitants of a town, though they frequently possess no lands of their own, yet draw to themselves by their industry such a quantity of the rude produce of the lands of other people as supplies them, not only with the materials of their work, but with the fund of their subsistence. What a town always is with regard to the country in its neighbourhood, one independent state or country may frequently be with regard to other independent states or countries.19 It is thus that Holland draws a great part of its subsistence from other countries; live cattle from Holstein and Jutland, and corn from almost all the different countries of Europe.20 A small quantity of manufactured produce purchases a great quantity of rude produce. A trading and manufacturing country, therefore, naturally purchases with a small part of its manufactured produce a great part of the rude produce of other countries; while, on the contrary, a country without trade and manufactures is generally obliged to purchase, at the expence of a great part of its rude produce, a very small part of the manufactured produce of other countries. The one exports what can subsist and accommodate but a very few, and imports the subsistence and accommodation of a great number. The other exports the accommodation and subsistence of a great number, and imports that of a very few only. The inhabitants of the one must always enjoy a much greater quantity of subsistence than what their own lands, in the actual state of their cultivation, could afford. The inhabitants of the other must always enjoy a much smaller quantity.

38This system, however, with all its imperfections is, perhaps, the nearest approximation to the truth that has yet been published upon the subject of political oeconomy, and is upon that account well worth the consideration of every man who wishes to examine with attention the principles of that very important science. Though in representing the labour which is employed upon land as the only productive labour, the notions which it inculcates are perhaps too narrow and confined; yet in representing the wealth of nations as consisting, not in the unconsumable riches of money, but in the consumable goods annually reproduced by the labour of the society; and in representing perfect liberty as the only effectual expedient for rendering this annual reproduction the greatest possible, its doctrine seems to be in every respect as just as it is generous and liberal. Its followers are very numerous; and as men are fond of paradoxes, and of appearing to understand what surpasses the comprehension of ordinary people, the paradox which it maintains, concerning the unproductive nature of manufacturing labour, has not perhaps contributed a little to increase the number of its admirers.21 They have for some years past made a pretty considerable sect, distinguished in the French republick of letters by the name of, The Oeconomists. Their works have certainly been of some service to their country,22 not only by bringing into general discussion, many subjects which had never been well examined before, but by influencing in some measure the publick administration in favour of agriculture. It has been in consequence of their representations, accordingly, that the agriculture of France has been delivered from several of the oppressions which it before laboured under. The term during which such a lease can be granted, as will be valid against every future purchaser or proprietor of the land, has been prolonged from nine to twenty–seven years.23 The antient provincial restraints upon the transportation of corn from one province of the kingdom to another, have been entirely taken away, and the liberty of exporting it to all foreign countries, has been established as the common law of the kingdom in all ordinary cases.24 This sect,25 in their works, which are very numerous, and which treat not only of what is properly called Political Oeconomy,26 or of the nature and causes of the wealth of nations, but of every other branch of the system of civil government, all follow implicitly, and without any sensible variation, the doctrine of Mr. Quesnai.27 There is upon this account little variety in the greater part of their works. The most distinct and best connected account of this doctrine is to be found in a little book written by Mr. Mercier de la Riviere,28 sometime Intendant of Martinico, intitled, The natural and essential Order of Political Societies. The admiration of this whole sect for their master, who was himself a man of the greatest modesty and simplicity, is not inferior to that of any of the antient philosophers for the founders of their respective systems. “There have been, since the world began,” says a very diligent and respectable author, the Marquis de Mirabeau, “three great inventions which have principally given stability to political societies, independent of many other inventions which have enriched and adorned them. The first, is the invention of writing, which alone gives human nature the power of transmitting, without alteration, its laws, its contracts, its annals, and its discoveries. The second, is the invention of money, which binds together all the relations between civilized societies. The third, is the Oeconomical Table, the result of the other two, which completes them both by perfecting their object; the great discovery of our age, but of which our posterity will reap the benefit.”29

39As the political oeconomy of the nations of modern Europe, has been more favourable to manufactures and foreign trade, the industry of the towns, than to agriculture, the industry of the country; so that of other nations has followed a different plan, and has been more favourable to agriculture than to manufactures and foreign trade.

40The policy of China favours agriculture more than all other employments.30 In China, the condition of a labourer is said to be as much superior to that of an artificer; as in most parts of Europe, that of an artificer is to that of a labourer.31 In China, the great ambition of every man is to get possession of some little bit of land, either in property or in lease; and leases are there said to be granted upon very moderate terms, and to be sufficiently secured to the lessees.32 The Chinese have little respect for foreign trade.33 Your beggarly commerce! was the language in which the Mandarins of Pekin used to talk to Mr. ⁿDe Langeⁿ , the Russian envoy, concerning it* . Except with Japan, the Chinese carry on, themselves, and in their own bottoms, little or no foreign trade; and it is only into one or two ports of their kingdom that they even admit the ships of foreign nations. Foreign trade, therefore, is, in China, every way confined within a much narrower circle than that to which it would naturally extend itself, if more freedom was allowed to it, either in their own ships, of in those of foreign nations.

41Manufactures, as in a small bulk they frequently contain a great value, and can upon that account be transported at less expence from one country to another than most ^pparts^p of rude produce, are, in almost all countries, the principal support of foreign trade.34 In countries, besides, less extensive and less favourably circumstanced for interior commerce than China, they generally require the support of foreign trade. Without an extensive foreign market, they could not well flourish, either in countries so moderately extensive as to afford but a narrow home market; or in countries where the communication between one province and another was so difficult, as to render it impossible for the goods of any particular place to enjoy the whole of that home market which the country could afford. The perfection of manufacturing industry, it must be remembered, depends altogether upon the division of labour; and the degree to which the division of labour can be introduced into any manufacture, is necessarily regulated, it has already been shown, by the extent of the market.35 But the great extent of the empire of China, the vast multitude of its inhabitants, the variety of climate, and consequently of productions in its different provinces, and the easy communication by means of water carriage between the greater part of them, render the home market of that country of so great extent, as to be alone sufficient to support very great manufactures, and to admit of very considerable subdivisions of labour.36 The home market of China is, perhaps, in extent, not much inferior to the market of all the different countries of Europe put together.37 A more extensive foreign trade, however, which to this great home market added the foreign market of all the rest of the world; especially if any considerable part of this trade was carried on in Chinese ships; could scarce fail to increase very much the manufactures of China, and to improve very much the productive powers of its manufacturing industry.38 By a more extensive navigation, the Chinese would naturally learn the art of using and constructing themselves all the different machines made use of in other countries, as well as^q the other improvements of art and industry which are practised in all the different parts of the world. Upon their present plan they have little opportunity of improving themselves by the example of any other nation; except that of the Japanese.

42The policy of ancient Egypt too, and that of the Gentoo government of Indostan, seem to have favoured agriculture more than all other employments.39

43Both in ancient Egypt and^r Indostan, the whole body of the people was divided into different casts or tribes, each of which was confined, from father to son, to a particular employment or class of employments. The son of a priest was necessarily a priest; the son of a soldier, a soldier; the son of a labourer, a labourer; the son of a weaver, a weaver; the son of a taylor, a taylor; &c. In both countries, the cast of the priests held the highest rank, and that of the soldiers the next; and in both countries, the cast of the farmers and labourers was superior to the casts of merchants and manufacturers.40

44The government of both countries was particularly attentive to the interest of agriculture. The works constructed by the ancient sovereigns of Egypt for the proper distribution of the waters of the Nile were famous in antiquity; and the ruined remains of some of them are still the admiration of travellers. Those of the same kind which were constructed by the antient sovereigns of Indostan, for the proper distribution of the waters of the Ganges as well as of many other rivers, though they have been less celebrated, seem to have been equally great. Both countries, accordingly, though subject occasionally to dearths, have been famous for their great fertility. Though both were extremely populous, yet, in years of moderate plenty, they were both able to export great quantities of grain to their neighbours.

45 The antient Egyptians had a superstitious aversion to the sea; and as the Gentoo religion does not permit its followers to light a fire, nor consequently to dress any victuals upon the water, it in effect prohibits them from all distant sea voyages. Both the Egyptians and Indians must have depended almost altogether upon the navigation of other nations for the exportation of their surplus produce; and this dependency, as it must have confined the market, so it must have discouraged the increase of this surplus produce.41 It must have discouraged too the increase of the manufactured produce more than that of the rude produce. Manufactures require a much more extensive market than the most important parts of the rude produce of the land. A single shoemaker will make more than three hundred pairs of shoes in the year; and his own family will not perhaps wear out six pairs. Unless therefore he has the custom of at least fifty such families as his own, he cannot dispose of the whole produce of his own labour.42 The most numerous class of artificers will seldom, in a large country, make more than one in fifty or one in a hundred of a whole number of families contained in it. But in such large countries as France and England, the number of people employed in agriculture has by some authors been computed at a half, by others at a third, and by no author that I know of, at less than a fifth of the whole inhabitants of the country. But as the produce of the agriculture of both France and England is, the far greater part of it, consumed at home, each person employed in it must, according to these computations, require little more than the custom of one, two, or, at most, ^sof^s four such families as his own, in order to dispose of the whole produce of his own labour. Agriculture, therefore, can support itself under the discouragement of a confined market, much better than manufactures. In both antient Egypt and Indostan, indeed, the confinement of the foreign market was in some measure compensated by the conveniency of many inland navigations, which opened, in the most advantageous manner, the whole extent of the home market to every part of the produce of every different district of those countries. The great extent of Indostan too rendered the home market of that country very great, and sufficient to support a great variety of manufactures. But the small extent of antient Egypt, which was never equal to England, must at all times have rendered the home market of that country too narrow for supporting any great variety of manufactures. Bengal, accordingly, the province of Indostan, which commonly exports the greatest quantity of rice, has always been more remarkable for the exportation of a great variety of manufactures, than for that of its grain. Antient Egypt, on the contrary, though it exported some manufactures, fine linen in particular, as well as some other goods, was always most distinguished for its great exportation of grain. It was long the granary of the Roman empire.

46 The sovereigns of China, of antient Egypt, and of the different kingdoms into which Indostan has at different times been divided, have always derived the whole, or by far the most considerable part, of their revenue from some sort of land–tax or land–rent. This land–tax or land–rent, like the tithe in Europe, consisted in a certain proportion, a fifth, it is said, of the produce of the land, which was either delivered in kind, or paid in money, according to a certain valuation, and which therefore varied from year to year according to all the variations of the produce. It was natural, therefore, that the sovereigns of those countries should be particularly attentive to the interests of agriculture, upon the prosperity or declension of which immediately depended the yearly increase or diminution of their own revenue.43

47The policy of the antient republicks of Greece, and that of Rome, though it honoured agriculture more than manufactures or foreign trade, yet seems rather to have discouraged the latter employments, than to have given any direct or intentional encouragement to the former. In several of the antient states of Greece, foreign trade was prohibited altogether; and in several others the employments of artificers and manufacturers were considered as hurtful to the strength and agility of the human body, as rendering it incapable of those habits which their military and gymnastic exercises endeavoured to form in it, and as thereby disqualifying it more or less ^tfor^t undergoing the fatigues and encountering the dangers of war.44 Such occupations were considered as fit only for slaves, and the free citizens of the state were prohibited from exercising them.45 Even in those states where no such prohibition took place, as in Rome and Athens, the great body of the people were in effect excluded from all the trades which are now commonly exercised by the lower sort of the inhabitants of towns. Such trades were, at Athens and Rome, all occupied by the slaves of the rich, who exercised them for the benefit of their masters, whose wealth, power, and protection, made it almost impossible for a poor freeman to find a market for his work, when it came into competition with that of the slaves of the rich.46 Slaves, however, are very seldom inventive; and all the most important improvements, either in machinery, or in ^uthe^u arrangement and distribution of work which facilitate and abridge labour, have been the discoveries of freemen.47 Should a slave propose any improvement of this kind, his master would be very apt to consider the proposal as the suggestion of laziness, and^v a desire to save his own labour at the master’s expence.48 The poor slave, instead of reward, would probably meet with much abuse, perhaps with some punishment. In the manufactures carried on by slaves, therefore, more labour must generally have been employed to execute the same quantity of work, than in those carried on by freemen.49 The work of the former must, upon that account, generally have been dearer than that of the latter.50 The Hungarian mines, it is remarked by Mr. Montesquieu,51 though not ^wricher^w , have always been wrought with less expence, and therefore with more profit, than the Turkish mines in their neighbourhood. The Turkish mines are wrought by slaves; and the arms of those slaves are the only machines which the Turks have ever thought of employing. The Hungarian mines are wrought by freemen, who employ a ^xgreat^x deal of machinery, by which they facilitate and abridge their own labour.52 From the very little that is known about the price of manufactures in the times of the Greeks and Romans, it would appear that those of the finer sort were excessively dear. Silk sold for its weight in gold. It was not, indeed, in those times a European manufacture; and as it was all brought from the East Indies, the distance of the carriage may in some measure account for the greatness of the price. The price, however, which a lady, it is said, would sometimes pay for a piece of very fine linen, seems to have been equally extravagant; and as linen was always either ^ya^y European, or, at farthest, an Egyptian manufacture, this high price can be accounted for only by the great expence of the labour which must have been employed about it, and the expence of this labour again could arise from nothing but the aukwardness of the machinery which it made use of. The price of fine woollens too, though not quite so extravagant, seems however to have been much above that of the present times. Some cloths, we are told by Pliny, dyed in a particular manner, cost a hundred denarii, or three pounds six shillings and eight pence the pound weight* .53 Others dyed in another manner cost a thousand denarii the pound weight, or thirty–three ^apound^a six shillings and eight pence. The Roman pound, it must be remembered, contained only twelve of our avoirdupois ounces.54 This high price, indeed, seems to have been principally owing to the dye. But had not the cloths themselves been much dearer than any which are made in the present times, so very expensive a dye would not probably have been bestowed upon them. The disproportion would have been too great between the value of the accessory and that of the principal. The price mentioned by the same† author of some Triclinaria, a sort of woollen pillows or cushions made use of to lean upon as they reclined upon their couches at table, passes all credibility; some of them being said to have cost more than thirty thousand, others more than three hundred thousand pounds. This high price too is not said to have arisen from the dye. In the dress of the people of fashion of both sexes, there seems to have been much less variety, it is observed by Doctor Arbuthnot,55 in antient than in modern times; and the very little variety which we find in that of the antient statues confirms his observation. He infers from this, that their dress must upon the whole have been cheaper than ours: but the conclusion does not seem to follow. When the expence of fashionable dress is very great, the variety must be very small. But when, by the improvements in the productive powers of manufacturing art and industry, the expence of any one dress comes to be very moderate, the variety will naturally be very great. The rich not being able to distinguish themselves by the expence of any one dress, will naturally endeavour to do so by the multitude and variety of their dresses.56

48The greatest and most important branch of the commerce of every nation, it has already been observed,57 is that which is carried on between the inhabitants of the town and those of the country. The inhabitants of the town draw from the country the rude produce which constitutes both the materials of their work and the fund of their subsistence; and they pay for this rude produce by sending back to the country a certain portion of it manufactured and prepared for immediate use. The trade which is carried on between ^cthese^c two different sets of people, consists ultimately in a certain quantity of rude produce exchanged for a certain quantity of manufactured produce. The dearer the latter, therefore, the cheaper the former; and whatever tends in any country to raise the price of manufactured produce, tends to lower that of the rude produce of the land, and thereby to discourage agriculture. The smaller the quantity of manufactured produce which any given quantity of rude produce, or, what comes to the same thing, which the price of any given quantity of rude produce is capable of purchasing, the smaller the ^dexchangeable^d value of that given quantity of rude produce; the smaller the encouragement which either the landlord has to increase its quantity by improving, or the farmer by cultivating the land. Whatever, besides, tends to diminish in any country the number of artificers and manufacturers, tends to diminish the home market, the most important of all markets for the rude produce of the land, and thereby still further to discourage agriculture.

49Those systems, therefore, which preferring agriculture to all other employments, in order to promote it, impose restraints upon manufactures and foreign trade, act contrary to the very end which they propose, and indirectly discourage that very species of industry which they mean to promote. They are so far, perhaps, more inconsistent than even the mercantile system. That system, by encouraging manufactures and foreign trade more than agriculture, turns a certain portion of the capital of the society from supporting a more advantageous, to support a less advantageous species of industry. But still it really and in the end encourages that species of industry which it means to promote. Those agricultural systems, on the contrary, really and in the end discourage their own favourite species of industry.

50It is thus that every system which endeavours, either, by extraordinary encouragements, to draw towards a particular species of industry a greater share of the capital of the society than what would naturally go to it; or, by extraordinary restraints, to force from a particular species of industry some share of the capital which would otherwise be employed in it; is in reality subversive of the great purpose which it means to promote. It retards, instead of accelerating, the progress of the society towards real wealth and greatness; and diminishes, instead of increasing, the real value of the annual produce of its land and labour.58

51All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord.59 Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.60 According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice;61 and, thirdly, the duty of erecting and maintaining certain publick works and certain publick institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expence to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.62

52The proper performance of those several duties of the sovereign necessarily supposes a certain expence; and this expence again necessarily requires a certain revenue to support it. In the following book, therefore, I shall endeavour to explain; first, what are the necessary expences of the sovereign or common–wealth; and which of those expences ought to be defrayed by the general contribution of the whole society; and which of them, by that of some particular part only, or of some particular members of the society: secondly, what are the different methods in which the whole society may be made to contribute towards defraying the expences incumbent on the whole society, and what are the principal advantages and inconveniencies of each of those methods: and, thirdly, what are the reasons and causes which have induced almost all modern governments to mortgage some part of this revenue, or to contract debts, and what have been the effects of those debts upon the real wealth, the annual produce of the land and labour of the society. The following book, therefore, will naturally be divided into three chapters.

[V] BOOK V

Of the Revenue of the Sovereign or Commonwealth

[V.i] CHAPTER I

Of the Expences of the Sovereign or Commonwealth

[1 ]See below, § 81.

[2 ]The vent for surplus as a gain from trade is cited, for example, at IV.i.31.

[a–a]3–6

[3 ]Sometimes revenue was paid: ‘These Cotyorites are our colonists, and it was we who gave over to them this land, after we had taken it away from barbarians; therefore they pay us a stated tribute, as do the people of Cerasus and Trapezus.’ (Xenophon, Anabasis, V.v.10, translated by C. L. Brownson in Loeb Classical Library (1921), 134–5.) The relationship between the Greek colonies and the mother country is described at IV.vii.a.2.

[4 ]The military costs of the colonies to Great Britain are examined at § 64. See also IV.vii.b.20 and V.iii.92.

[5 ]See above, IV.vii.b.20.

[6 ]The enumerated goods are described at IV.vii.b.25,35.

[b–b]country 1

[7 ]Pownall commented on this part of Smith’s argument, Letter, 40: ‘You in words advance upon the ground of probable reasons for believing only, you prove by probable suppositions only; yet most people who read your book, will think you mean to set up an absolute proof, and your conclusion is drawn as though you had.’ See above, II.v, where Smith advances his thesis with regard to the different employments of capital: a thesis on which much of the argument of this section would seem to depend.

[8 ]See above, I.xi.b.33.

[9 ]See above, I.xi.b.32.

[10 ]12 Charles II, c.18 (1660). See above, IV.ii.24–30.

[11 ]See above, I.ix.12, where Smith comments on the increase in the rate of profit consequent on the appearance of new outlets for stock.

[12 ]‘. . . the foreign trade of every country must decline, that lays unequal taxes and oppressive excises on its people—cramps its trade, the foundation of riches, by high customs and prohibitions—suffers many monopolies—oppresses its people by prohibiting the importation of victuals, under the pretence of raising the value of its lands—gives bounties to feed foreigners cheaper than its own people—encourages idleness by bad laws relating to its poor—tempts foreigners to carry away its coin for less than its intrinsic value—makes the obtaining justice chargeable—suffers a very heavy national debt, contracted in time of war, to continue unpaid in time of peace.’ (M. Decker, Essay on the Causes of the Decline of Foreign Trade, 56–7.) Decker is described as an ‘excellent authority’ at IV.v.a.20, and also mentioned in V.ii.k.9,18 and V.iii.74.

[13 ]See above, IV.ii.30. While European markets were important, the expansion of foreign trade in the eighteenth century was almost entirely the result of the growth in the colonial trade. P. Deane and W. A. Cole, British Economic Growth, 1688–1959 (Cambridge, 1969), 34–5 and 86–7.

[c]the 1

[14 ]A very similar point is made above, I.ix.24. Smith also comments below, § 61, on the additional problem caused by the habits of prodigality associated with high profit levels.

[15 ]Pownall held that the proposition concerning the transfer of capital relates to a matter of fact ‘which must not be established by an argument a priori’ and commented rather drily that he did not find such ‘an actual deduction of facts’ in Smith’s book. Moreover, Pownall contended that the facts did not support Smith’s case, basing this opinion on the ‘very useful collection of data’ which had been published by Sir C. Whitworth, Letter, 41.

[16 ]Above, II.v.27.

[d]country 1

[17 ]Above, II.v.28.

[e]country 1

[18 ]Pownall argued against this that ‘if you will compare notes between the merchant trading in British manufactures to Germany, and the merchant trading with British manufactures to America and the West Indies, you will find the returns of the latter upon the whole . . . not slower than those from Germany. Credit has, even before the present war, been extended in Germany, and shortened towards America: inquire after this fact in Norwich, London, and the other great manufacturing places, and you will find it so.’ (Letter, 46.) At the same time, however, Pownall considered that the round–about trade involved in sending tobacco to England prior to its re–export to the Continent was a ‘needless and very disadvantageous operation, in which some relaxation ought to be made’. See above, II.v.28 and IV.iii.c.12, where Smith comments on the advantages of trade with France as compared to America.

[19 ]See above, I.ix.11.

[20 ]Smith comments on the use of British capital in the colonies at II.v.21, IV.vii.b.56, and V.iii.83.

[21 ]On commenting on this argument, Pownall suggested that capital withheld in America ‘is not withheld unprofitably to Great Britain; like that portion of harvest which is detained for seed, it is the matrix of a succeeding and increased production; . . .’ (Letter, 43.) See above, II.v.21.

[22 ]The same figure is cited at II.v.34, and IV.iv.5.

[f–f]2–6

[g–g]possesses 1

[23 ]The concept of a natural balance of industry is developed below, § 97. See also IV.ii.3, IV.ii.12,31, IV.iv.14, and IV.v.a.39.

[24 ]Pownall rejected the analogy of the blood vessel and argued that the fact that trade had felt no such ‘convulsions or apoplexy’ on the obstruction of our ‘American artery’ proved that America was ‘not our principal, much less our sole channel of commerce’. He rejected Smith’s explanation for this fact, developed below, which relied on the impact of five unforeseen and unthought of events. Letter, 45.

[25 ]Smith was evidently very interested in the current difficulties with America, and prepared a memorandum for Alexander Wedderburn, a former pupil and latterly Solicitor–General in Lord North’s administration. The document forms a part of the Rosslyn MSS. (Ann Arbor, Michigan); it is dated February 1778 and endorsed ‘Smith’s Thoughts on the State of the Contest with America’. It is hereinafter referred to as ‘Thoughts on America’. The text is included in the volume of Correspondence which forms a part of this edition of Smith’s Works. It was first published by G. H. Guttridge in the American Historical Review, 38 (1932–3), hereinafter cited as AHR.

[26 ]The stamp act is mentioned at I.viii.50. Stamp duties are also discussed at V.ii.h.12 where they are stated to be of ‘very modern invention’.

[h–h]a popular measure, among the merchants at least 1

[27 ]In Letter 149 addressed to Smith, dated 8 February 1776, Hume complained about the delay in publication of the WN and reminded his friend that ‘If you wait till the Fate of America be decided, you may wait long.’ He went on: ‘The Duke of Buccleugh tells me, that you are very zealous In American Affairs. My Notion is, that the Matter is not so important as is commonly imagind. If I be mistaken, I shall probably correct my Error, when I see or read you. Our Navigation and general Commerce may suffer more than our Manufactures.’ In Letter 233 addressed to William Eden, dated 15 December 1783, Smith wrote: ‘I have little anxiety about what becomes of the American commerce. By an equality of treatment to all nations, we might soon open a commerce with the neighbouring nations of Europe infinitely more advantageous than that of so distant a country as America.’

[i–i]2–6

[28 ]Cf. IV.ii.42 where Smith comments favourably on the ability of the economy to absorb dramatic changes.

[29 ]See below, IV.ix.51, where Smith describes the system of ‘perfect liberty’, and cf. I.x.a.1, I.vii.6,30, and IV.ix.17.

[30 ]In 1779 the official value of English domestic exports was the lowest since 1747.

[j–j]it 1

[31 ]See below, § 97, where Smith comments further on the disadvantages involved in artificially constraining the use of stock.

[32 ]See above, I.ix.11.

[k–k]3–6

[33 ]See above, IV.vii.b.40.

[34 ]See above, II.v.21 and IV.vii.b.44.

[l–l]entirely conquered 1

[35 ]See above, IV.i.13.

[36 ]See above, I.xi.n.1, where it is remarked that although the feudal government had been eliminated in Spain and Portugal, it had not been succeeded by a much better.

[37 ]The wool trade being the exception. It is stated at IV.viii.21 that the restrictions imposed upon it were ‘very burdensome and oppressive’.

[38 ]Cf. II.iii.36 and IV.v.c.43, where Smith comments on the experience of England.

[39 ]Above, II.iii.15.

[40 ]Though Smith has already recognized the beneficial effects when mercantile profits are subsequently invested in land. See above, III.iv.3.

[41 ]Above, II.iv.17.

[42 ]The original sources of revenue are discussed at I.vi.17.

[m]the 6

[43 ]Smith comments on the relationship between manners and frugality at II.iii.12 and IV.vii.b.20. Sir James Steuart also noted that where high profits are sustained ‘for a long time, they insensibly become consolidated, or, as it were, transformed into the intrinsic value of the goods’, thus affecting the competitive position of the country or industry concerned. See especially, Principles, II.x.

[44 ]See below, § 82, where Smith also refers to the ‘sumptuous profusion’ of the merchants of Cadiz and Lisbon.

[n]capital 1

[45 ]Smith refers to the low rate of return on capital in Amsterdam at V.ii.k.80, and above, I.ix.10.

[46 ]See below, IV.viii.53. Pownall objected to the tone of this passage, since what he called ‘creating and securing’ an ‘encreasing nation of appropriated customers’ was the only idea which he could find ‘precisely to define the relation which a commercial country bears to its colonies’ (Letter, 44.n.). Cf. the same author’s Administration of the Colonies (4th ed., London, 1768), vol. i, chapter viii.

[o–o]that is governed 1

[p–p]soverigns 1

[q–q]soverigns 1

[r–r]subjects 1

[s–s]om. 4–6

[47 ]See above, IV.vii.b.15–17, where Smith comments on the prosperity of the American colonies, and § 63 of the same section where it is stated that the interest taken in them by the mother country was consequent on their success.

[48 ]See above, IV.ii.24–31, where the main provisions of the act are reviewed.

[49 ]Smith also mentions the lack of an American contribution to the costs of defence in Letter 221 addressed to John Sinclair, dated 14 October 1782. Again, Pownall objected: ‘I will beg leave to suggest to you some facts that induce me, and may perhaps you also, to be of a very different opinion. That very naval force, which by their armed vessels they are now so destructively exerting against our West–India trade and transports, they did very effectively in the two late wars, especially in the last, exert to the ruin of the West India commerce of France and Spain . . .’ He added, with respect to the ‘point of revenue’ that ‘before we went to decided war, a revenue might have been had upon compact, on terms which would have established the constitutional sovereignty of this country, regulating at the same time the trade and naval powers of the colonies, if those terms might have gone, at the same time, to securing the rights of those colonies as granted by the government of that mother country.’ (Letter, 38.)

[50 ]Smith uses the term ‘badge’ in a similar context above, IV.vii.b.44.

[t–t]is 1

[u–u]is 1

[51 ]See above, IV.vii.b.20 and IV.vii.c.12.

[v–v]2–6

[w]in 1

[52 ]Smith reviews the costs of wars at II.iii.35, IV.i.26, IV.viii.53, and V.iii.92; cf. V.iii.88, where he states that the colonies should contribute to costs incurred on their behalf, and IV.vii.c.13, where he remarks that only the Spanish and Portuguese colonies had so contributed. In commenting on the saving of costs to be expected from the emancipation of America, Smith pointed out that Britain’s two most expensive wars, the Spanish War of 1739 and the French War of 1755, ‘were undertaken, the one chiefly, the other altogether on account of the colonies’. He went on to point out that the British had at one time complained of involvement in the affairs of Hanover ‘with which we should, otherwise, have had nothing to do. But we, surely, have had much more reason to complain, upon the same account, of our connexion with America.’ (‘Thoughts on America’, § 12, AHR 717–18.) Smith restated this theme in Letter 221 addressed to Sir John Sinclair, dated 14 October 1782: ‘The real futility of all distant dominions, of which the defence is necessarily most expensive, and which contribute nothing, either by revenue or military force, to the general defence of the empire, and very little even to their own particular defence, is, I think, the subject upon which the public prejudices of Europe require most to be set right.’ Sinclair had apparently commented to Smith on the bleak prospect of the American War, and that ‘if we go on at this rate, the nation must be ruined’, to which Smith replied: ‘Be assured, my young friend, that there is a great deal of ruin in a nation.’ Sinclair Corr., i.390–1. In Letter 158 addressed to Strahan, dated 3 June 1776, Smith wrote: ‘The American Campaign had begun awkwardly. I hope, I cannot say that I expect, it will end better. England, tho’ in the present times it breeds men of great professional abilities in all different ways, great Lawyers, great watch makers & Clockmakers, &c. &c., seems to breed neither Statesmen nor Generals.’

[53 ]Pownall objected to Smith’s conclusion that the colonies should be given up at least in so far as that conclusion was based on the general analysis of the natural progress of opulence and Smith’s views as to the different employments of capital: ‘If we lose our colonies, we must submit to our fate; but the idea of parting with them on the ground of system, is much like the system which an ironical proverb recommends, ‘of dying to save charges.’ (37.) Pownall’s criticism of Smith’s views on the colony trade appears mainly at pp. 37–48 of the Letter.

[54 ]Cf. Smith’s ‘Thoughts on America’, with regard to the emancipation of the colonies: ‘tho’ this termination of the war might be really advantageous, it would not, in the eyes of Europe appear honourable to Great Britain; and when her empire was so much curtailled, her power and dignity would be supposed to be proportionably diminished. What is of still greater importance, it could scarce fail to discredit the Government in the eyes of our own people, who would probably impute to mal–administration what might, perhaps, be no more than the unavoidable effect of the natural and necessary course of things. (it) . . . would have everything to fear from their rage and indignation at the public disgrace and calamity, for such they would suppose it to be, of thus dismembering the empire.’ (§ 13, AHR 718.)

[55 ]But cf. V.iii.92, where Smith recommends that Britain should give up her imperial pretensions.

[56 ]Cf. ‘Thoughts on America’: ‘tho’ Canada, Nova Scotia, and the Floridas were all given up to our rebellious colonies, or were all conquered by them, yet the similarity of language and manners would in most cases dispose the Americans to prefer our alliance to that of any other nation. Their antient affection for the people of this country might revive, if they were once assured that we meant to claim no dominion over them, . . . By a federal union with America we should certainly incur much less expense, and might, at the same time, gain as real advantages, as any we have hitherto derived from all the nominal dominion we have ever exercised over them.’ (§ 12, AHR 718.) It is worth observing that Smith meant by ‘federal union’ a set of links established by the executive (federal) power rather than the type of constitutional arrangement which was later to be adopted in America. His own preference was for an incorporating union, of the kind which was later applied to Ireland, which would have given the colonies representation at Westminster. See below, § 77–9, and V.iii.90.

[57 ]See above, IV.vii.a.2.

[58 ]‘. . . there never was an Idea of exempting the Colonies: on the Contrary, Restraints upon their Trade, and Taxes on their Consumption, have always gone together: And together compose the System, by which they have been constantly and happily governed . . . Our Taxes have been since encreased many–fold: Their Abilities have been enlarged still faster . . . The Proportion between the publick Burthens on the Mother–country and the Colonies, as divided when they were in their Infancy, is entirely lost: And to restore that Proportion, and again to make something like a Partition of those Burthens, is no more than maintaining the System, upon which we have always acted, and to which I own I am partial, because the Colonies have flourished under it beyond all Example in History, and I cannot prefer visionary speculations and novel Doctrines to such an Experience.’ (Considerations on the Trade and Finance of the Kingdom (London, 1766), 81, attributed to T. Whateley and often ascribed to George Grenville.)

[59 ]above, § 59.

[60 ]Below, V.ii.f.6. Cf. Hume, History of England (1754), i.243–4: ‘To complain of the parliament’s employing the power of taxation, as the means of extorting concessions from their sovereign, were to expect, that they would intirely disarm themselves, and renounce the sole expedient, provided by the constitution, for ensuring to the kingdom a just and legal administration. In all periods of English story, there occur instances of their remonstrating with their princes in the freest manner, and of their refusing supply, when disgusted with any circumstance of public conduct. ’Tis, however, certain, that this power, tho’ essential to parliaments, may easily be abused, as well by the frequency and the minuteness of their remonstrances, as by their intrusion into every part of the king’s councils and determinations. Under color of advice, they may give disguised orders; and in complaining of grievances, they may draw to themselves every power of government. Whatever measure is embraced, without consulting them, may be pronounced an oppression of the people; and till corrected, they may refuse the most necessary supplies to their indigent sovereign.’

[61 ]See below, V.ii.k.70.

[62 ]These assemblies are described above, IV.vii.b.51.

[63 ]Smith provides another example below, V.ii.k.80, drawn from Holland.

[64 ]Cf. ‘Thoughts on America’: ‘The principal security of every government arises always from the support of those whose dignity, authority and interest, depend upon its being supported.’ (§ 10, AHR 716.)

[65 ]See below, V.iii.68, where it is stated that taxation with representation conforms to British constitutional practice.

[66 ]Smith points out in the ‘Thoughts on America’ that a form of union with America might be possible: ‘The leading men of America, we may believe, wish to continue to be the principal people in their own country. After a union with Great Britain, they might expect to continue to be so; in the same manner as the leading men of Scotland continued to be the principal people in their own country after the union with England.’ (§ 14, AHR 719.) It was in this context that Smith made the ingenious suggestion that should the idea of union fail, the solution might be ‘An apparent restoration of the old system, so contrived as to lead necessarily, but insensibly to the total dismemberment of America, might, perhaps, satisfy both the people of Great Britain and the leading men of America: the former mistaking, and the latter understanding, the meaning of the scheme.’ (§ 16.) Another ingenious suggestion, to be applied in the case of the complete emancipation of America, was that we should restore Canada to France and the Floridas to Spain, thereby rendering our own colonies the ‘natural enemies of those two monarchies and consequently the natural allies of Great Britain’. In this way, Smith hoped that ‘old enmities, and probably old friendships’ might be revived. § 12, AHR 718.

[67 ]It is pointed out in V.i.a.27 that while militias are generally inferior to standing armies, this need not be the case where the former are long in the field, and that another campaign would place the American militia on a par with the British army.

[68 ]C. J. F. Hénault, Nouvel Abrégé chronologique de l’histoire de France (Paris, 1768), 581.

[69 ]Cf. Montesquieu, Considerations, 93: ‘Once the peoples of Italy became its citizens, each city brought to Rome its genius, its particular interests, and its dependence on some great protector. The distracted city no longer formed a complete whole.’

[x–x]were 4–6

[70 ]See below, V.iii.89–90, where Smith elaborates on the economic and political benefits of union with regard to the colonies and Ireland.

[71 ]Smith considered the desirability of an incorporating union in the ‘Thoughts on America’, somewhat along the lines of the existing union between Scotland and England, but added that such a plan as would ‘certainly tend most to the prosperity, to the splendor, and to the duration of the empire, if you except here and there a solitary philosopher like myself, seems scarce to have a single advocate’ (§ 11, AHR 717). He added that the Americans especially, in their ‘present elevation of spirits’ were unlikely to agree, and as to British opinion, he believed the most popular solution was military victory.

Both Lord Kames and Benjamin Franklin supported the idea of consolidating union, although the latter clearly recognized that delay would make it increasingly unlikely as a solution. None the less, it is interesting to recall that the First Continental Congress of 1774 debated and narrowly defeated Joseph Galloway’s plan for a ‘grand legislative council’ which was to be responsible for controlling the affairs of the union. The whole issue of union is extensively discussed in Richard Koebner’s Empire (Cambridge, 1961), chapter 4.

[y–y]2–6

[z–z]were 4–6

[a–a]nations 1

[72 ]It is interesting to note that in reading this section of Smith’s work, Hugh Blair expressed regret that he had given the colonial affair ‘a representation &c. which I wish had been omitted, because it is too much like a publication for the present moment. In Subsequent editions when public Measures come to be Settled, these pages will fall to be omitted or Altered.’ (Letter 151 addressed to Smith, dated 3 April 1776.) In Letter 147 addressed to Smith, dated 1 November 1775, John Roebuck, friend and former partner of James Watt, stated the opposite opinion: ‘I hoped by this time to have seen your Name in the Papers. The meeting of Parlt. is the proper time for the Publication of such a work as yours. It might also have been of general use in influencing the Opinion of many in this American contest.’ In Letter 153 addressed to Smith, dated 8 April 1776, William Robertson commented that: ‘Many of your observations concerning the Colonies are of capital importance to me. I shall often follow you as my Guide and Instructor. I am happy to find my own ideas concerning the absurdity of the limitations upon the Colony trade established much better than I could have done myself.’

[73 ]See above, IV.i.33. Cf. G. T. F. Raynal, Histoire philosophique, i.1, trans. J. Justamond, i.1: ‘The discovery of the new world, and the passages to the East Indies by the Cape of Good Hope, is one of the most important events in the history of the human species.’

[74 ]Smith comments on the savage injustice inflicted by the Europeans on the native populations in IV.i.32 and below, § 100.

[75 ]It is pointed out in LJ (B) 339, ed. Cannan 265, in the course of considering the laws of nations, that: ‘where there is no supreme legislative power nor judge to settle differences, we may always expect uncertainty and irregularity.’

[76 ]See above, IV.vii.c.6.

[77 ]See above, § 61.

[78 ]See above, II.v.

[79 ]A related point is made at II.v.34.

[b–b]employment 1

[80 ]See above, IV.ii.9.

[81 ]See above, § 46.

[82 ]Smith refers to restraints on imports and the encouragement of exports as the ‘two great engines’ of the mercantile system, at IV.i.35 and IV.viii.1.

[83 ]See below, IV.vii.c.100.

[84 ]See above, I.viii.26. Smith considers the disadvantages of exclusive companies with regard to the colonies at IV.vii.b.22 and offers an extensive account of their record in V.i.e.

[85 ]See below, V.i.e.30, where Smith defends temporary monopolies, including those granted to merchants who first establish a hazardous trade. See also § 2 of the same section.

[86 ]See above, II.v.35.

[c–c]were 4–6

[87 ]See above, § 43, and IV.ii.3 for an elaboration of this point.

[d–d]branch 1

[88 ]Smith remarked in FA that the Hottentots ‘are the most barbarous nation of shepherds that is known in the world’.

[89 ]This point is elaborated below, V.i.a.5.

[90 ]Above, IV.vii.b.22, and cf. IV.vii.c.103.

[91 ]See above, IV.vii.c.91.

[e–e]those 1

[92 ]See above, I.ix.15, where Smith comments on the discouragement to foreign trade in China.

[93 ]The English colonies in the East Indies are cited as an example of the decaying economy in I.viii.26. The history of the East India Company is reviewed at V.i.e.26–30.

[f–f]2–6

[94 ]A similar point is made above, IV.v.b.4 and I.xi.b.33.

[g–g]barbarous 1

[95 ]See above, IV.v.b.6.

[96 ]See below, V.ii.a.13, where it is pointed out that land rents have provided the funds for many a state which has escaped from the shepherd stage. Details of the land tax in Bengal are given in William Bolts, Considerations on India Affairs, particularly respecting the Present State of Bengal and its Dependencies (London, 1772), i, chapter XII.

[97 ]See above, IV.vii.b.11, where the government of merchants is described as the ‘worst of all’.

[h–h]the 1

[i–i]2–6

[98 ]Smith considers the constitutional reforms of 1773 at V.i.e.26, and see also V.ii.a.7.

[99 ]See above, I.ix.21.

[100 ]In his Considerations on India Affairs, William Bolts made the same points several times, e.g. i.206–7: ‘We have seen all merchants from the interior parts of Asia effectually prevented from having any mercantile intercourse with Bengal, while, at the same time, the natives in general are in fact deprived of all trade within those provinces, it being wholly monopolized by a few Company’s servants and their dependents: In such a situation, what commercial country can flourish.’

[jj* ]The interest of every proprietor of India Stock, however, is by no means the same with that of the country in the government of which his vote gives him some influence. See Book V. Chap. i. Part 3d.j

[k–k]only 1

[l–l]commonly 1

[m–m]if 1

[101 ]Smith makes a related point at V.ii.k.74 in discussing the activities of tax–farmers who are indifferent to the fate of the people they abuse, unlike the sovereign whose proper interest it is to protect them. The example of China ‘suddenly swallowed up by an earthquake’ is cited in TMS III.3.4.

[n–n]were 1–2

[102 ]See below, V.i.e.26, where it is pointed out that abuses of this kind often reflect the circumstances prevailing; what Smith calls ‘irresistible moral causes’.

[a–a]2A–6 [all of Chapter VIII]

[1 ]See above, IV.i.35, where the general outlines of the mercantile policy are given.

[2 ]3 Edward IV, c. 4 (1463).

[3 ]39 Elizabeth I, c. 14 (1597).

[4 ]3 Charles I, c. 5 (1627) in Statutes of the Realm, v.27–30; 3 Charles I, c. 4 in Ruffhead’s edition and 14 Charles II, c. 19 (1662) in Statutes of the Realm, v.412; 13 and 14 Charles II, c. 19 in Ruffhead’s edition.

[5 ]12 George II, c. 21 (1738) allowed the import of wool from Ireland duty free. H. Saxby The British Customs (1757), 143, states that Spanish wool for clothing and Spanish felt–wool was also duty free. 26 George II, c. 8 (1753) permitted the importation of wool and woollen yarn from Ireland to the port of Exeter. See below, V.ii.k.24.

[6 ]6 George III, c. 52 (1766).

[7 ]4 George II, c. 27 (1730). See below, V.ii.k.24.

[8 ]8 George I, c. 15 (1721). See IV.viii.38, where the drugs which may be imported are listed and their significance evaluated.

[9 ]9 George III, c. 39 (1769), continued by 14 George III, c. 86 (1774) and 21 George III, c. 29 (1781). See above, I.xi.m.11.

[10 ]15 George III, c. 31 (1775).

[11 ]23 George II, c. 29 (1749). See above, IV.vii.b.37 and 42.

[b–b]pounds 2A; 4–6

[12 ]24 George II, c. 46 (1750) imposed the duties Smith cites, but the other sums quoted are the values of the various types of yarn in the Book of Rates of 12 Charles II, c. 4 (1660), and not the duties levied on them. The duty on the specified values was increased by various measures to a total of 20 per cent. H. Saxby The British Customs (1757), 264–5.

[13 ]29 George II, c. 15 (1756), continued by 10 George III, c. 38 (1770) and 19 George III, c. 27 (1779). See below, IV.viii.5 and V.ii.k.24. In LJ (B) 232–3, ed. Cannan 180, the bounty was payable when coarse linen was ‘under 12 pence a yard’.

[14 ]See above, I.x.b.51, and IV.vii.b.24 and note 33.

[15 ]18 George II, c. 36 (1744); 21 George II, c. 26 (1747); 32 George II, c. 32 (1758); 7 George III, c. 43 (1766). See also IV.iii.a.1 and IV.iv.7.

[16 ]By 10 George III, c. 38 (1770) and 19 George III, c. 27 (1779). See above, § 4.

[17 ]See above, IV.vii.b.45.

[18 ]3 and 4 Anne, c. 9 (1704) in Statutes of the Realm, viii.354–6; 3 and 4 Anne, c. 10 in Ruffhead’s edition. See above, IV.vii.b.36.

[19 ]First by 12 Anne, c. 9 (1712) in Statutes of the Realm, ix.768–70; 12 Anne, st. 1, c. 9 in Ruffhead’s edition. 8 George I, c. 12 (1721) gave further encouragement to the importation of naval stores and encouraged the growth of hemp in Scotland. The encouragement of imports of masting timber from Scotland was extended further by 2 George II, c. 35, s. 12 (1728).

[20 ]By 3 and 4 Anne, c. 9 (1704) in Statutes of the Realm, viii.354–6; 3 and 4 Anne, c. 10 in Ruffhead’s edition.

[21 ]8 George I, c. 12 (1721) and especially 2 George II, c. 35 (1728).

[22 ]21 George II, c. 30 (1747).

[23 ]21 George II, c. 30 (1747) was continued by 28 George II, c. 25 (1755) and by 3 George III, c. 25 (1763) to the end of the parliamentary session after 25 March 1770, but the bounty was reduced to 4d. per pound. Continued until 1781 by 17 George III, c. 44 (1777).

[24 ]4 George III, c. 26 (1764).

[25 ]5 George III, c. 45 (1765).

[26 ]9 George III, c. 38 (1769).

[27 ]See above, I.ix.11 and I.viii.23.

[28 ]11 George III, c. 50 (1771).

[c–c]om. 2A

[29 ]19 George III, c. 37 (1779).

[30 ]See above, IV.vii.b.45.

[31 ]Bounties on production are considered at IV.v.a.25.

[32 ]Cf. LJ (A) ii.91: ‘some years ago the British nation took a fancy (a very whimsicall one indeed) that the wealth and strength of the nation depended entirely on the flourishing of their woolen trade, and that this could not prosper if the exportation of wool was permitted. To prevent this, it was enacted that the exportation of wool should be punished with death.’ Cf. I.xi.m.11 and cf. I.xi.p.10, where Smith comments generally on the influence of sectional interests on the legislature.

[33 ]See IV.ii.1.

[34 ]8 Elizabeth I, c. 3 (1566).

[35 ]14 Charles II, c. 18 (1662) in Statutes of the Realm, v.410–12; 13 and 14 Charles II, c.18 in Ruffhead’s edition. See below, IV.viii.35 and V.ii.k.24.

[36 ]In LJ (A) v.64 counterfeiting the coin is cited as a felony, and also in LJ (B) 81, ed. Cannan 57. LJ (A) ii.92 mentioned that at one time the exporting of wool was treated as a felony, but that: ‘No one would consent to the punishment of a thing in itself so innocent, by so high a penalty. They were therefore obliged to lessen the punishment to confiscation of goods and vessel.’ A similar point is made in LJ (B) 182, ed. Cannan 136, where Smith also cites the case of the sentinel condemned to death for falling asleep on duty: a punishment which clearly reflected the need to protect the public good, but which was nevertheless one which ‘mankind can never enter into . . . as if he had been a thief or a robber.’ See TMS II.ii.3.11.

[37 ]8 Elizabeth I, c. 3 (1566) was repealed by 3 George IV, c. 41, s. 4 (1822).

[38 ]‘By some old Statutes, and 13 & 14 Car. 2. 18 the Exportation of Wool was made Felony; but by 7 & 8 W. 3. 28 it is reduced to a Misdemeanour only, and it is subjected to severe Penalties by many late Statutes.’ Hawkins then repeats the terms of 8 Elizabeth, c. 3, which indicates he considered it still in force. W. Hawkins, A Treatise of the Pleas of the Crown (London, 3rd ed. 1739), i.119–20.

[39 ]12 Charles II, c. 32 (1660). See below, IV.viii.20, 32, 33.

[40 ]7 and 8 William III, c. 28, 8. 2 (1695), in Statutes of the Realm, vii.118.

[41 ]14 Charles II, c. 18 (1662) in Statutes of the Realm, v.410–12; 13 and 14 Charles II in Ruffhead’s edition was finally repealed by 19 and 20 Victoria, c. 64 (1856).

[42 ]12 Charles II, c. 32 (1660). See below, IV.viii.33.

[43 ]4 George I, c. 11 (1717).

[44 ]Probably 10 William III, c. 16 (1698) in Statutes of the Realm, vii.524–8; 10 and 11 William, c. 10 (1698) in Ruffhead’s edition. See above, IV.vii.b.43.

[45 ]This illustrates the qualification to the general liberality of trade in England as mentioned at IV.vii.c.54. The restrictions imposed on the wool trade in the colonies are mentioned at IV.vii.b.43.

[46 ]12 George II, c. 21 (1738).

[47 ]7 and 8 William III, c. 28 (1695). See below, IV.viii.35.

[48 ]9 William III, c. 40 (1697) in Statutes of the Realm, vii.421–3; 9 and 10 William III, c. 40 in Ruffhead’s edition.

[49 ]1 William and Mary, c. 32 in Statutes of the Realm, vi.96–8; 1 William and Mary, sess. 1, c. 32 in Ruffhead’s edition. The quotation is not quite verbatim.

[50 ]‘It is well known that the real very superfine cloth everywhere must be entirely of Spanish wool.’ (A. Anderson, Origin of Commerce (1764), ii.137.)

[51 ]See above, I.xi.m.9.

[52 ]In Letter 203 addressed to William Eden, dated 3 January 1780, Smith wrote that ‘The Price of wool is now lower than in the time of Edward III; because it is now confined to the market of Great Britain; whereas then the market of the world was open to it. The low price of wool tends to debase the quality of the commodity, and may thus hurt the woollen manufacture in one way, as much as it may benefit it in another. By this prohibition, besides, the interest of the [grower] is evidently sacrificed to the interest of the manufacturer.’

[53 ]A similar point is made at I.xi.m.13.

[54 ]John Smith refers to the high quality wool of England and in a footnote discusses the term ‘precious fleeces’. He continues: ‘how does this Encomium [precious] agree with the Weight of their Fleeces, (which are but light, like the Spanish) and with the Price at which they are ordinarily sold in England; which is not only below the lowest Wool of Spain, at Amsterdam, but even below the coarse Wools of Germany, and the yet coarser of Tours in France’. (J. Smith, Chronicon Rusticum–Commerciale; or Memoirs of Wool, ii.418, n.)

[d–d]would probably 6

[55 ]See above I.xi.m.12. The passage is quoted verbatim but with some minor changes of punctuation.

[e]the 2A

[56 ]12 Charles II, c. 32 (1660). See above, IV.viii.19 and 20. See also Hume, History of England (1778), vi.305, for an illustration of the penalties imposed on offenders.

[57 ]14 Charles II, c. 18 (1662) in Statutes of the Realm, v.411; 13 and 14 Charles II, c. 18 in Ruffhead’s edition.

[58 ]14 Charles II, c. 7 (1662) in Statutes of the Realm, v.378–97; 13 and 14 Charles II, c. 7 in Ruffhead’s edition. See above, I.xi.m.11.

[59 ]19 and 20 Charles II, c. 10 (1667) in Statutes of the Realm, v.640; 20 Charles II, c. 5 in Ruffhead’s edition. Provisions confirmed by 9 Anne, c. 6 (1710).

[60 ]9 Anne, c. 12 (1710) in Statutes of the Realm, ix.405–17; 9 Anne, c. 11 in Ruffhead’s edition gave two–thirds of the duty as a drawback. 13 Anne, c. 18 (1713) in Statutes of the Realm, ix.936–60; 12 Anne, st. 2, c. 9 in Ruffhead’s edition gave a drawback of 1½d. for every pound of tanned leather.

[61 ]See above, IV.viii.4 and note 14.

[62 ]4 Edward IV, c. 8 (1464) allowed the export of refuse horns. The Act was repealed by 1 James I, c. 25 (1603); 2 (vulgo 1) James I, c. 25 in Ruffhead’s edition, but 7 James I, c. 14 (1609) introduced a general prohibition.

[63 ]14 Charles II, c. 18 (1662) in Statutes of the Realm, v.411; 13 and 14 Charles II, c. 18 in Ruffhead’s edition. See above, IV.viii.18 and 33. 7 and 8 William III, c. 28 (1695) had similar provisions. See above, IV.viii.21.

[64 ]12 Charles II, c. 4 (1660), re–enforced by 14 Charles II, c. 11 (1662) in Statutes of the Realm, v.393–400; 13 and 14 Charles, c. 11 in Ruffhead’s edition. See below, IV.viii.38.

[65 ]7 and 8 William III, c. 19 (1695) prohibited the export of unwrought plate except on a certificate. 9 William III, c. 28 (1697) in Statutes of the Realm, vii.399–400; 9 and 10 William III, c. 28 in Ruffhead’s edition allowed the export of watches, etc. but prohibited the export of cases without the movement and the maker’s name. The objective was to avoid frauds.

[66 ]28 Edward III, c. 5 (1354).

[67 ]33 Henry VIII, c. 7 (1541).

[68 ]2 and 3 Edward VI, c. 37 (1548), re–enforcing 33 Henry VIII, c. 7 (1541).

[69 ]5 and 6 William and Mary, c. 17 (1694) in Statutes of the Realm, vi.480–1, and in Ruffhead. Exporting of iron, copper, and mundic metal allowed except ‘pot–metal, gunmetal, shriff metal or . . . other metal than what is made of English ore’.

[70 ]9 William III, c. 26 (1697) in Statutes of the Realm, vii.393–7; 9 and 10 William III, c. 26 in Ruffhead’s edition.

[71 ]8 George I, c. 15 (1721). See above, IV.viii.3, and below, IV.viii.38 and 41.

[72 ]8 George I, c. 15 (1721). See above, §§ 3 and 36, and below, § 41.

[73 ]The duties were imposed by 12 Charles II, c. 4 (1660) and 14 Charles II, c. 11 (1662) in Statutes of the Realm, v.393–400; 13 and 14 Charles II, c. 11 in Ruffhead’s edition.

[f–f]be easily 5–6

[74 ]See below, V.ii.k.24.

[75 ]25 George II, c. 32 (1751).

[76 ]5 George III, c. 37 (1765).

[77 ]The enumerated commodities are described at IV.vii.b.35.

[78 ]14 George III, c. 10 (1774) reduced the duty from 30s. to 5s. No duty was imposed on gum senega exported from Great Britain to Ireland under licence. See below, V.ii.k.24.

[79 ]12 Charles II, c. 4 (1660). See above, IV.iv.3, IV.v.b.37, and below, V.ii.k.23.

[80 ]8 George I, c. 15 (1721). See above, IV.viii.3, 36, 38.

[81 ]See above, IV.vii.b.35.

[82 ]4 George III, c. 9 (1763).

[83 ]See below, V.ii.k.12, where Smith comments favourably on granting a bounty on the transport of coal.

[84 ]See above, II.i.14, where Smith refers to ‘machines and instruments of trade’ and cf. §§ 1 and 38 of this section.

[85 ]7 and 8 William III, c. 20 (1695). See above, IV.iii.a.1.

[86 ]14 George III, c. 71 (1774).

[87 ]Smith includes the ‘living instrument’ in the nations fixed capital in II.i.17; the restrictions on the freedom of movement of labour are summarized in I.x.c.

[88 ]5 George I, c. 27 (1718).

[89 ]23 George II, c. 13 (1749).

[f]new ¶ 6

[90 ]See above, IV.v.a.24.

[91 ]See above, IV.vi.3.

[92 ]See above, IV.vii.c.63.

[93 ]See below, V.iii.92, and above, IV.vii.c.64, IV.i.26, II.iii.35.

[a–a]VIII. 1–2

[1 ]Apart from a visit of ten days in February 1764, Smith spent some ten months in Paris from December 1765 to October 1766. He thus came into contact with the ‘economists’ at a time when the school was particularly active and appears to have met the main figures such as Quesnay and Mirabeau. He also attended the literary salons and seems to have recalled that of Holbach with particular pleasure. In Letter 259 addressed to Morellet, dated 1 May 1786, Smith mentioned many of the people he had met during his stay such as Helvetius, Turgot, D’Alembert, and Diderot. He particularly mentioned Holbach and asked Morellet ‘to assure him of my most affectionate and respectful remembrance, and that I shall never forget the very great kindness he did me the honour to shew me during my residence at Paris’. See John Rae, Life, xiv and on the physiocratic school, R. L. Meek, The Economics of Physiocracy (London, 1962).

[2 ]Colbert is described at IV.ii.38 as a man of ‘great abilities’.

[b]That system 1

[c–c]2–6

[3 ]Smith comments on the advantage of cheap provisions at III.iii.20.

[4 ]The arbitrary taxes in France are reviewed at V.ii.g.6, 7 and their impact on commerce at V.ii.k.70.

[d–d]tear and wear 1

[e]employment 1

[f–f]degrades 1

[5 ]See above, II.iii.1 and note. Smith discusses the physiocratic single tax at V.ii.c.7 where it is stated to be the consequence of the doctrine that land alone can produce a surplus. In this place Smith declined to go into what he described as the ‘disagreeable . . . metaphysical arguments’ of the physiocratic case.

[g–g]2–6

[6 ]Smith objected to the doctrine, for example, at II.v.7.

[h–h]the funds 1

[i–i]its 1

[j–j]2–6

[7 ]For Smith’s use of this term, see for example IV.vii.c.44, I.x.a.1, I.x.c.1, I.vii.6, 30, and cf. below, § 51.

[k–k]greater 5–6

[l]their 1

[8 ]Quesnay’s Tableau économique (1757–8), ed. with translation and notes by M. Kuczynski and R. L. Meek (London, 1972). It is interesting to observe that the model which Smith expounds is rather more elaborate than that offered by Quesnay in the sense that it makes allowance for the existence of rent, wages, and profit, as separate categories, and for a distinction between wage labour and the entrepreneur. This may suggest that Smith used a modified form for the purposes of exposition and/or that he may have based his account on the work done by writers such as Baudeau or Turgot. Baudeau was the founder of the Ephémérides du Citoyen. This journal printed Turgot’s Reflections in 1769–70 and it is now known that Smith’s holdings of the journal included the first two parts of Turgot’s work. Smith met Turgot during his stay in Paris and it seems likely that they would discuss matters of common interest especially since Turgot must have been working on the Reflections during the course of 1766. The view that the two men discussed economics is supported by Morellet in a passage which refers to Smith and then goes on: ‘M. Turgot, who like me loved things metaphysical, estimated his talents greatly. We saw him several times; he was presented at the house of M. Helvetius; we talked of commercial theory, banking, public credit and several points in the great work he was meditating’. (Mémoires (Paris, 1823), i.244.) Smith refers to a meeting with Turgot in Letter 93 addressed to Hume, dated 6 July 1766. In Letter 248 addressed to Rochefoucauld dated 1 November 1785, Smith indicated that although he had not corresponded with, Turgot, yet ‘I had the happiness of his acquaintance, and, I flattered myself, even of his friendship and esteem’. In the same letter Smith refers to the fact that Turgot had sent him a copy of the Procès verbal, containing a record of events following on the registration of the six edicts, which, Smith remarked, ‘did so much honour to their Author, and, had they been executed without alteration, would have proved so beneficial to his country’.

[9 ]See for example Quesnay’s Analyse (1766) and his essay Problème économique (1766) both of which appeared in Physiocratie (1768) edited by Dupont de Nemours, a copy of which was in Smith’s Library. These works are translated by R. L. Meek and included in his Economics of Physiocracy. In 1788 Dupont sent a copy of his work on the Eden Treaty to Smith as a mark of respect ‘pour le Livre excellent dont vous avez enrichi le monde’. Letter 277 addressed to Smith, dated 19 June 1788.

[m–m]at least to all appearance 1

[10 ]While in Paris, Quesnay attended Smith’s charge, the Duke of Buccleuch; a fact mentioned by Smith in Letter 94 addressed to Charles Townshend, dated 26 August 1766. Quesnay is also mentioned in Letter 97 addressed to Lady Frances Scott, dated 15 October 1766, where Smith described him as ‘one of the worthiest men in France & one of the best Physicians that is to be met with in any country. He was not only the Physician but the friend & confident of Madame Pompadour a woman who was no contemptible Judge of merit.’ Smith seems to have thought sufficiently highly of Quesnay as to have intended to ‘inscribe’ the WN to him. Stewart III.12.

[11 ]See above, IV.v.b.43, II.iii.28,36, and III.iii.12.

[12 ]See above, II.v.12, where Smith comments on the superior productivity of agriculture.

[13 ]Cf. II.iii.2.

[14 ]See II.iii.

[15 ]See above, II.iii.16.

[16 ]This point is made above, II.iii.32.

[17 ]See above, I.i.4.

[* ]See Book I. Chap. I.

[18 ]See above, II.iii.15.

[19 ]See, for example, III.i.1.

[20 ]Smith comments on the position of Holland as an importer of grain at I.xi.e.38 and I.xi.b.12.

[21 ]Astronomy, IV.34, refers to ‘that love of paradox, so natural to the learned, and that pleasure, which they are so apt to take in exciting, by the novelty of their supposed discoveries, the amazement of mankind’.

[22 ]See below, V.ii.c.7.

[23 ]See above, III.ii.16.

[24 ]See I.xi.g.15, IV.v.a.5, where it is pointed out that the prohibition on the export of grain was applied until 1764.

[25 ]In the manner of the time, Smith would appear to have used the term ‘sect’ for ‘school’ For example, in discussing the system of eccentric spheres in his account of astronomical theories, he comments that it ‘was never adopted by any one sect of philosophers’ (Astronomy, IV.17). He refers to the Pythagoreans as a sect at § 28.

[26 ]The term ‘political economy’ is used, for example, at IV.i, II.v.31, IV.i.35. The physiocrats are described at V.ii.c.7. as a sect who call themselves ‘the oeconomists’.

[27 ]For comment on this point, see R. L. Meek, The Economics of Physiocracy, 27.

[28 ]Mercier de la Riviere, L’ordre naturel et essential des sociétés politiques (1767). This book was in Smith’s library, which also included works by Dupont de Nemours, Forbonnais, Le Trosne, Mirabeau, Morellet, and Quesnay. In addition to the Ephémérides Smith owned copies of the Journal de l’Agriculture, du Commerce et de Finances for 1765–7, which was edited by Dupont from September 1765 to October 1766.

[29 ]Philosophie rurale ou économie générale et politique de l’agriculture, pour servir de suite à l’Ami des Hommes (Amsterdam, 1766), i.52–3.

[30 ]‘The whole attention, in general, of the Chinese government, is directed towards agriculture.’ (P. Poivre, Voyages d’un philosophe (1768), translated as Travels of a Philosopher, or, Observations on the Manners and Arts of Various Nations in Africa and Asia (Glasgow, 1790), 169.)

[31 ]‘L’Agriculture y est sort estimée, et les Labourers, dont la profession est regardée comme la plus nécessaire à un Etat, y tiennent un rang considérable; on leur accorde de grands privileges, et on les préfere aux Marchands et aux Artisans.’ (J. B. Du Halde, Description geographique, historique, chronologique, politique, et physique de l’Empire de la Chine et de la Tartarie Chinoise (Paris, 1735), ii.64.)

[32 ]‘The lands are as free as the people; no feudal services, and no fines of alienation; . . . none of that destructive possession, hatched in the delirium of the feudal system, under these auspices arise millions of processes . . .’ (P. Poivre, Voyages d’un philosophe, translated as Travels of a Philosopher, 170–1.)

[33 ]Smith comments on the wealth of China, despite the lack of foreign trade, at IV.iii.c. 11, II.v.22; cf. III.i.7.

[n–n]Langlet 1

[oo* ]See the Journal of Mr. De Lange in Bell’s Travels, vol. ii. p. 258. 276. and 293.o

[The mandarins told De Lange, when he asked for a free passage for the caravan by the old road of Kerlinde: ‘That they expected to have been freed from their importuning the council about their beggarly commerce, after they had been told so often, that the council would not embarrass themselves any more about affairs that were only beneficial to the Russes; and that, of course, they had only to return by the way they came.’ (J. Bell, Travels from St. Petersburg in Russia to diverse parts of Asia (Glasgow, 1763), ii.293; See also ii.258 and 276.)]

[p–p]sorts 1

[34 ]See above, IV.i.29 and III.iv.20.

[35 ]Above, I.iii.

[36 ]See above, I.iii.7, where it is stated that China’s opulence was derived from an inland navigation.

[37 ]‘L’historien dit que le commerce qui se fait dans l’intérieur de la Chine est si grand, que celui de l’Europe ne peut pas lui être comparé.’ F. Quesnay, Oeuvres economiques et philosophiques, ed. A. Oncken (Paris, 1888), 603.)

[38 ]See above, I.ix.15.

[q]all 1

[39 ]See II.v.22 and IV.iii.c.11.

[r]in 1

[40 ]See above, I.vii.31.

[41 ]See above, II.v.22.

[42 ]See above, I.iii.2.

[s–s]om. 1

[43 ]See below, V.ii.d.5.

[t–t]from 1

[44 ]See below, V.i.f. 39–45, where Greek education is described.

[45 ]LJ (B) 39, ed. Cannan 27 states that ‘At Rome and Athens the arts were carried on by slaves, and the Lacedemonians went so far as not to allow any freemen to be brought up to mechanic employments, because they imagined that they hurt the body.’ LJ (A) iv.82 also comments on this belief, in stating that the Greeks considered, ‘and I believe, with justice, that every sort of constant labour hurt the shape and rendered him less fit for military exercises, which made the chief view of all lawgivers at that time. (We can know a taylor by his gait.)’ Montesquieu also noted that the Romans regarded ‘commerce and the arts as the occupations of slaves: they did not practice them.’ (Considérations, 98–9.) A similar point is made with regard to the Greeks in Esprit, IV.viii. Cf. Cicero, De Officiis, I.xlii. While confirming that most trades were sordid and mean, Cicero argued however that ‘of all the occupations by which gain is secured, none is better than agriculture, none more profitable, none more delightful, none more becoming to a freeman.’ Translated by W. Miller in Loeb Classical Library (1921), 155.

[46 ]A very similar expression is used above, IV.vii.a.3.

[u–u]that 1

[47 ]See above, I.i.8 and note 17.

[v]of 1, 4e–5

[48 ]See LJ (A) vi. 41–2, and above, I.i.8. In LJ (B) 217, ed. Cannan 167, some improvements in milling are ascribed to the slave. However, it is noted in LJ (B) 299 ed. Cannan 231, that slaves cannot work as well as free men because ‘they have no motive to labour but the dread of punishment, and can never invent any machine for facilitating their business’. Smith also noted that any suggestion from the slave with regard to facilitating his work was likely to be regarded as laziness.

[49 ]Montesquieu held that as ‘A general rule: A nation in slavery labours more to preserve than to acquire; a free nation more to acquire than to preserve.’ (Esprit, XX.iv.9.)

[50 ]See above, III.ii.9 and I.viii.41.

[51 ]‘The Turkish mines in the Bannat of Temeswaer, though richer than those of Hungary, did not yield so much; because the working of them depended entirely on the strength of their slaves.’ (Montesquieu, Esprit, XV.viii.3.)

[w–w]more rich 1

[x–x]good 1

[52 ]The same point is made in LJ (B) 299–300, ed. Cannan 231, with regard to the use of labour in Turkish and Hungarian mines.

[y–y]an 4–6

[zz* ]Plin. l.ix.c.39z [‘Cornelius Nepos, who died in the principate of the late lamented Augustus, says: “In my young days the violent purple dye was the vogue, a pound of which sold at 100 denarii; and not much later the red purple of Taranto. This was followed by the double–dyed Tyrian purple, which it was impossible to buy for 1000 denarii per pound.” ’ (Pliny, Natural History, IX.lxiii, translated by H. Rackham in Loeb Classical Library (1950), iii.255.)]

[53 ]See above, I.xi.k.1.

[a–a]pounds, 1, 4–6

[54 ]See above, I.iv.10.

[bb† ]Plin. l.viii.c.48b [‘Metallus Scipio counts it among the charges against Capito that Babylonian coverlets [tricliniaria] were already then sold for 800,000 sesterces, which lately cost the Emperor Nero 4,000,000.’ (Ibid. VIII.lxxiv, trans. Rackham, iii.137–9)].

[55 ]C. Arbuthnot, Tables of Ancient Coins, Weights and Measures (London, 1727), 140–8. Arbuthnot also quoted (142) the same example of extravagance concerning triclinaria as Smith: ‘It seems they were extravagant in their Triclinaria, which one may translate Quilts or Carpets. Capito was reproached by Metellus, that he had paid for Babylonian Triclinaria £6,458 6s. 8d. This is nothing to the price paid by Nero mentioned afterwards viz. £32,291 13s. 4d.’

[56 ]See above, I.xi.c.31.

[57 ]See above, III.i.1.

[c–c]those 1

[d–d]real 1

[58 ]See IV.ii.2 and note for an elaboration of this doctrine.

[59 ]See above, IV.vii.c.44.

[60 ]See also above, IV.ii.10, and below, V.ii.c.18; cf. IV.vii.b.44 where Smith comments with reference to the colonies, that regulation of their activities constitutes a ‘manifest violation of the most sacred rights of mankind’. Dugald Stewart (IV.25) quoted from one of Smith’s (now lost) manuscripts, to the effect that ‘Little else is requisite to carry a state to the highest degree of opulence, from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice.’

[61 ]Smith especially emphasized the need for an exact administration of justice in the TMS II.ii.3.4, in arguing that if beneficence is an ornament to society, justice must be regarded as ‘the main pillar that upholds the whole edifice’ so that if it was removed, the ‘immense fabric of human society’ must ‘in a moment crumble into atoms’. It was in this context that Smith also said that: ‘Society may subsist among different men, as among different merchants, from a sense of its utility, without any mutual love or affection; and though no man in it should owe any obligation, or be bound in gratitude to any other, it may still be upheld by a mercenary exchange of good offices according to an agreed valuation.’ (II.ii.3.2.)

[62 ]A similar expression is used below, V.i.c.1.

[jj* ]The interest of every proprietor of India Stock, however, is by no means the same with that of the country in the government of which his vote gives him some influence. See Book V. Chap. i. Part 3d.j

[oo* ]See the Journal of Mr. De Lange in Bell’s Travels, vol. ii. p. 258. 276. and 293.o

[The mandarins told De Lange, when he asked for a free passage for the caravan by the old road of Kerlinde: ‘That they expected to have been freed from their importuning the council about their beggarly commerce, after they had been told so often, that the council would not embarrass themselves any more about affairs that were only beneficial to the Russes; and that, of course, they had only to return by the way they came.’ (J. Bell, Travels from St. Petersburg in Russia to diverse parts of Asia (Glasgow, 1763), ii.293; See also ii.258 and 276.)]

[zz* ]Plin. l.ix.c.39z [‘Cornelius Nepos, who died in the principate of the late lamented Augustus, says: “In my young days the violent purple dye was the vogue, a pound of which sold at 100 denarii; and not much later the red purple of Taranto. This was followed by the double–dyed Tyrian purple, which it was impossible to buy for 1000 denarii per pound.” ’ (Pliny, Natural History, IX.lxiii, translated by H. Rackham in Loeb Classical Library (1950), iii.255.)]

[bb† ]Plin. l.viii.c.48b [‘Metallus Scipio counts it among the charges against Capito that Babylonian coverlets [tricliniaria] were already then sold for 800,000 sesterces, which lately cost the Emperor Nero 4,000,000.’ (Ibid. VIII.lxxiv, trans. Rackham, iii.137–9)].

[j]3–6 In ed. 2 the note reads: This would be exactly true if those masters never had any other interest but that which belongs to them as Proprietors of India stock. But they frequently have another of much greater importance. Frequently a man of great, sometimes even a man to moderate fortune, is willing to give thirteen or fourteen hundred pounds (the present price of a thousand pounds share in India stock) merely for the influence which he expects to acquire by a vote in the Court of Proprietors. It gives him a share, though not in the plunder, yet in the appointment of the plunderers of India; the Directors, although they make those appointments, being necessarily more or less under the influence of the Court of Proprietors, which not only elects them, but sometimes over–rules their appointments. A man of great or even a man of moderate fortune, provided he can enjoy this influence for a few years, and thereby get a certain number of his friends appointed to employments in India, frequently cares little about the dividend which he can expect from so small a capital, or even about the improvement or loss of the capital itself upon which his vote is founded. About the prosperity or ruin of the great empire, in the government of which that vote gives him a share, he seldom cares at all. No other sovereigns ever were, or from the nature of things ever could be, so perfectly indifferent about the happiness or misery of their subjects, the improvement or waste of their dominions, the glory or disgrace of their administration; as, from irresistible moral causes, the greater part of the Proprietors of such a mercantile Company are, and necessarily must be. [The matter of this note is incorporated in V.i.e.25, i.e. in a section of the WN which first appeared in 2A and ed. 3.]

[o]2–6

[z]2–6

[b]2–6