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• 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

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

[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.

[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)].

[o]2–6

[z]2–6

[b]2–6