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Essays Moral, Political, Literary, edited and with a Foreword, Notes, and Glossary by Eugene F. Miller, with an appendix of variant readings from the 1889 edition by T.H. Green and T.H. Grose, revised edition (Indianapolis: Liberty Fund 1987).

Author: David Hume
Editor: Eugene F. Miller

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PART II*

ESSAYS MORAL, POLITICAL, AND LITERARY

ESSAY I

OF COMMERCE

The greater part of mankind may be divided into two classes; that of shallow thinkers, who fall short of the truth; and that of abstruse thinkers, who go beyond it. The latter class are by far the most rare: and I may add, by far the most useful and valuable. They suggest hints, at least, and start difficulties, which they want, perhaps, skill to pursue; but which may produce fine discoveries, when handled by men who have a more just way of thinking. At worst, what they say is uncommon; and if it should cost some pains to comprehend it, one has, however, the pleasure of hearing something that is new. An author is little to be valued, who tells us nothing but what we can learn from every coffee-house conversation.

All people of shallow thought are apt to decry even those of solid understanding, as abstruse thinkers, and metaphysicians, and refiners; and never will allow any thing to be just which is beyond their own weak conceptions. There are some cases, I own, where an extraordinary refinement affords a strong presumption of falsehood, and where no reasoning is to be trusted but what is natural and easy. When a man deliberates concerning his conduct in any particular affair, and forms schemes in politics, trade, œconomy, or any business in life, he never ought to draw his arguments too fine, or connect too long a chain of consequences together. Something is sure to happen, that will disconcert his reasoning, and produce an event different from what he expected. But when we reason upon general subjects, one may justly affirm, that our speculations can scarcely ever be too fine, provided they be just; and that the difference between a common man and a man of genius is chiefly seen in the shallowness or depth of the principles upon which they proceed. General reasonings seem intricate, merely because they are general; nor is it easy for the bulk of mankind to distinguish, in a great number of particulars, that common circumstance in which they all agree, or to extract it, pure and unmixed, from the other superfluous circumstances. Every judgment or conclusion, with them, is particular. They cannot enlarge their view to those universal propositions, which comprehend under them an infinite number of individuals, and include a whole science in a single theorem. Their eye is confounded with such an extensive prospect; and the conclusions, derived from it, even though clearly expressed, seem intricate and obscure. But however intricate they may seem, it is certain, that general principles, if just and sound, must always prevail in the general course of things, though they may fail in particular cases; and it is the chief business of philosophers to regard the general course of things. I may add, that it is also the chief business of politicians; especially in the domestic government of the state, where the public good, which is, or ought to be their object, depends on the concurrence of a multitude of causes;1 not, as in foreign politics, on accidents and chances, and the caprices of a few persons. This therefore makes the difference between particular deliberations and general reasonings, and renders subtilty and refinement much more suitable to the latter than to the former.

I thought this introduction necessary before the following discourses on commerce, money, interest, balance of trade, &c.a where, perhaps, there will occur some principles which are uncommon, and which may seem too refined and subtile for such vulgar subjects. If false, let them be rejected: But no one ought to entertain a prejudice against them, merely because they are out of the common road.

The greatness of a state, and the happiness of its subjects, how independent soever they may be supposed in some respects, are commonly allowed to be inseparable with regard to commerce; and as private men receive greater security, in the possession of their trade and riches, from the power of the public, so the public becomes powerful in proportion to the opulence and extensive commerce of private men. This maxim is true in general; though I cannot forbear thinking, that it may possibly admit of exceptions, and that we often establish it with too little reserve and limitation. There may be some circumstances, where the commerce and riches and luxury of individuals, instead of adding strength to the public, will serve only to thin its armies, and diminish its authority among the neighbouring nations. Man is a very variable being, and susceptible of many different opinions, principles, and rules of conduct. What may be true, while he adheres to one way of thinking, will be found false, when he has embraced an opposite set of manners and opinions.

The bulk of every state may be divided into husbandmen and manufacturers. The former are employed in the culture of the land; the latter work up the materials furnished by the former, into all the commodities which are necessary or ornamental to human life. As soon as men quit their savage state, where they live chiefly by hunting and fishing, they must fall into these two classes; though the arts of agriculture employ at first the most numerous part of the society.2 Time and experience improve so much these arts, that the land may easily maintain a much greater number of men, than those who are immediately employed in its culture, or who furnish the more necessary manufactures to such as are so employed.

If these superfluous hands apply themselves to the finer arts, which are commonly denominated the arts of luxury, they add to the happiness of the state; since they afford to many the opportunity of receiving enjoyments, with which they would otherwise have been unacquainted. But may not another scheme be proposed for the employment of these superfluous hands? May not the sovereign lay claim to them, and employ them in fleets and armies, to encrease the dominions of the state abroad, and spread its fame over distant nations? It is certain that the fewer desires and wants are found in the proprietors and labourers of land, the fewer hands do they employ; and consequently the superfluities of the land, instead of maintaining tradesmen and manufacturers, may support fleets and armies to a much greater extent, than where a great many arts are required to minister to the luxury of particular persons. Here therefore seems to be a kind of opposition between the greatness of the state and the happiness of the subject. A state is never greater than when all its superfluous hands are employed in the service of the public. The ease and convenience of private persons require, that these hands should be employed in their service. The one can never be satisfied, but at the expence of the other. As the ambition of the sovereign must entrench on° the luxury of individuals; so the luxury of individuals must diminish the force, and check the ambition of the sovereign.

Nor is this reasoning merely chimerical; but is founded on history and experience. The republic of Sparta was certainly more powerful than any state now in the world, consisting of an equal number of people; and this was owing entirely to the want of commerce and luxury. The Helotes were the labourers: The Spartans were the soldiers or gentlemen. It is evident, that the labour of the Helotes could not have maintained so great a number of Spartans, had these latter lived in ease and delicacy, and given employment to a great variety of trades and manufactures. The like policy may be remarked in Rome. And indeed, throughout all ancient history, it is observable, that the smallest republics raised and maintained greater armies, than states consisting of triple the number of inhabitants, are able to support at present. It is computed, that, in all European nations, the proportion between soldiers and people does not exceed one to a hundred. But we read, that the city of Rome alone, with its small territory, raised and maintained, in early times, ten legions against the Latins.3Athens, the whole of whose dominions was not larger than Yorkshire, sent to the expedition against Sicily near forty thousand men.4Dionysius the elder, it is said, maintained a standing army of a hundred thousand foot and ten thousand horse, besides a large fleet of four hundred sail;5 though his territories extended no farther than the city of Syracuse, about a third of the island of Sicily, and some sea-port towns and garrisons on the coast of Italy and Illyricum.6 It is true, the ancient armies, in time of war, subsisted much upon plunder: But did not the enemy plunder in their turn? which was a more ruinous way of levying a tax, than any other that could be devised. In short, no probable reason can be assigned for the great power of the more ancient states above the modern, but their want of commerce and luxury. Few artizans were maintained by the labour of the farmers, and therefore more soldiers might live upon it. Livy says, that Rome, in his time, would find it difficult to raise as large an army as that which, in her early days, she sent out against the Gauls and Latins.7 Instead of those soldiers who fought for liberty and empire in Camillus’s time, there were, in Augustus’s days, musicians, painters, cooks, players, and tailors; and if the land was equally cultivated at both periods, it could certainly maintain equal numbers in the one profession as in the other. They added nothing to the mere necessaries of life, in the latter period more than in the former.

It is natural on this occasion to ask, whether sovereigns may not return to the maxims of ancient policy, and consult their own interest in this respect, more than the happiness of their subjects? I answer, that it appears to me, almost impossible; and that because ancient policy was violent, and contrary to the more natural and usual course of things. It is well known with what peculiar laws Sparta was governed, and what a prodigy that republic is justly esteemed by every one, who has considered human nature as it has displayed itself in other nations, and other ages. Were the testimony of history less positive and circumstantial,° such a government would appear a mere philosophical whim or fiction, and impossible ever to be reduced to practice. And though the Roman and other ancient republics were supported on principles somewhat more natural, yet was there an extraordinary concurrence of circumstances to make them submit to such grievous burthens.° They were free states; they were small ones; and the age being martial, all their neighbours were continually in arms. Freedom naturally begets public spirit, especially in small states; and this public spirit, this amor patriæ,° must encrease, when the public is almost in continual alarm, and men are obliged, every moment, to expose themselves to the greatest dangers for its defence. A continual succession of wars makes every citizen a soldier: He takes the field in his turn: And during his service he is chiefly maintained by himself. This service is indeed equivalent to a heavy tax; yet is it less felt by a people addicted to arms, who fight for honour and revenge more than pay, and are unacquainted with gain and industry as well as pleasure.8 Not to mention the great equality of fortunes among the inhabitants of the ancient republics, where every field, belonging to a different proprietor, was able to maintain a family, and rendered the numbers of citizens very considerable, even without trade and manufactures.

But though the want of trade and manufactures, among a free and very martial people, may sometimes have no other effect than to render the public more powerful, it is certain, that, in the common course of human affairs, it will have a quite contrary tendency. Sovereigns must take mankind as they find them, and cannot pretend to introduce any violent change in their principles and ways of thinking. A long course of time, with a variety of accidents and circumstances, are requisite to produce those great revolutions, which so much diversify the face of human affairs. And the less natural any set of principles are, which support a particular society, the more difficulty will a legislator meet with in raising and cultivating them. It is his best policy to comply with the common bent of mankind, and give it all the improvements of which it is susceptible. Now, according to the most natural course of things, industry and arts and trade encrease the power of the sovereign as well as the happiness of the subjects; and that policy is violent, which aggrandizes the public by the poverty of individuals. This will easily appear from a few considerations, which will present to us the consequences of sloth and barbarity.

Where manufactures and mechanic arts are not cultivated, the bulk of the people must apply themselves to agriculture; and if their skill and industry encrease, there must arise a great superfluity from their labour beyond what suffices to maintain them. They have no temptation, therefore, to encrease their skill and industry; since they cannot exchange that superfluity for any commodities, which may serve either to their pleasure or vanity. A habit of indolence naturally prevails. The greater part of the land lies uncultivated. What is cultivated, yields not its utmost for want of skill and assiduity in the farmers. If at any time the public exigencies require, that great numbers should be employed in the public service, the labour of the people furnishes now no superfluities, by which these numbers can be maintained. The labourers cannot encrease their skill and industry on a sudden.° Lands uncultivated cannot be brought into tillage for some years. The armies, mean while, must either make sudden and violent conquests, or disband for want of subsistence. A regular attack or defence, therefore, is not to be expected from such a people, and their soldiers must be as ignorant and unskilful as their farmers and manufacturers.

Every thing in the world is purchased by labour; and our passions are the only causes of labour. When a nation abounds in manufactures and mechanic arts, the proprietors of land, as well as the farmers, study agriculture as a science, and redouble their industry and attention. The superfluity, which arises from their labour, is not lost; but is exchanged with manufactures for those commodities, which men’s luxury now makes them covet. By this means, land furnishes a great deal more of the necessaries of life, than what suffices for those who cultivate it. In times of peace and tranquillity, this superfluity goes to the maintenance of manufacturers, and the improvers of liberal arts. But it is easy for the public to convert many of these manufacturers into soldiers, and maintain them by that superfluity, which arises from the labour of the farmers. Accordingly we find, that this is the case in all civilized governments. When the sovereign raises an army, what is the consequence? He imposes a tax. This tax obliges all the people to retrench° what is least necessary to their subsistence. Those, who labour in such commodities, must either enlist in the troops, or turn themselves to agriculture, and thereby oblige some labourers to enlist for want of business. And to consider the matter abstractedly, manufactures encrease the power of the state only as they store up so much labour, and that of a kind to which the public may lay claim, without depriving any one of the necessaries of life. The more labour, therefore, is employed beyond mere necessaries, the more powerful is any state; since the persons engaged in that labour may easily be converted to the public service. In a state without manufactures, there may be the same number of hands; but there is not the same quantity of labour, nor of the same kind. All the labour is there bestowed upon necessaries, which can admit of little or no abatement.°

Thus the greatness of the sovereign and the happiness of the state are, in a great measure, united with regard to trade and manufactures. It is a violent method, and in most cases impracticable, to oblige the labourer to toil, in order to raise from the land more than what subsists himself and family. Furnish him with manufactures and commodities, and he will do it of himself. Afterwards you will find it easy to seize some part of his superfluous labour, and employ it in the public service, without giving him his wonted° return. Being accustomed to industry, he will think this less grievous, than if, at once, you obliged him to an augmentation of labour without any reward. The case is the same with regard to the other members of the state. The greater is the stock of labour of all kinds, the greater quantity may be taken from the heap, without making any sensible alteration in it.

A public granary of corn, a storehouse of cloth, a magazine of arms; all these must be allowed real riches and strength in any state. Trade and industry are really nothing but a stock of labour, which, in times of peace and tranquillity, is employed for the ease and satisfaction of individuals; but in the exigencies of state, may, in part, be turned to public advantage. Could we convert a city into a kind of fortified camp, and infuse into each breast so martial a genius, and such a passion for public good, as to make every one willing to undergo the greatest hardships for the sake of the public; these affections might now, as in ancient times, prove alone a sufficient spur to industry, and support the community. It would then be advantageous, as in camps, to banish all arts and luxury; and, by restrictions on equipage and tables, make the provisions and forage last longer than if the army were loaded with a number of superfluous retainers. But as these principles are too disinterested and too difficult to support, it is requisite to govern men by other passions, and animate them with a spirit of avarice and industry, art and luxury. The camp is, in this case, loaded with a superfluous retinue; but the provisions flow in proportionably larger. The harmony of the whole is still supported; and the natural bent of the mind being more complied with, individuals, as well as the public, find their account in the observance of those maxims.

The same method of reasoning will let us see the advantage of foreign commerce, in augmenting the power of the state, as well as the riches and happiness of the subject. It encreases the stock of labour in the nation; and the sovereign may convert what share of it he finds necessary to the service of the public. Foreign trade, by its imports, furnishes materials for new manufactures; and by its exports, it produces labour in particular commodities, which could not be consumed at home. In short, a kingdom, that has a large import and export, must abound more with industry, and that employed upon delicacies and luxuries, than a kingdom which rests contented with its native commodities. It is, therefore, more powerful, as well as richer and happier. The individuals reap the benefit of these commodities, so far as they gratify the senses and appetites. And the public is also a gainer, while a greater stock of labour is, by this means, stored up against any public exigency; that is, a greater number of laborious men are maintained, who may be diverted to the public service, without robbing any one of the necessaries, or even the chief conveniencies of life.

If we consult history, we shall find, that, in most nations, foreign trade has preceded any refinement in home manufactures, and given birth to domestic luxury. The temptation is stronger to make use of foreign commodities, which are ready for use, and which are entirely new to us, than to make improvements on any domestic commodity, which always advance by slow degrees, and never affect us by their novelty. The profit is also very great, in exporting what is superfluous at home, and what bears no price, to foreign nations, whose soil or climate is not favourable to that commodity. Thus men become acquainted with the pleasures of luxury and the profits of commerce; and their delicacy and industry, being once awakened, carry them on to farther improvements, in every branch of domestic as well as foreign trade. And this perhaps is the chief advantage which arises from a commerce with strangers. It rouses men from their indolence; and presenting the gayer and more opulent part of the nation with objects of luxury, which they never before dreamed of, raises in them a desire of a more splendid way of life than what their ancestors enjoyed. And at the same time, the few merchants, who possess the secret of this importation and exportation, make great profits; and becoming rivals in wealth to the ancient nobility, tempt other adventurers to become their rivals in commerce. Imitation soon diffuses all those arts; while domestic manufactures emulate the foreign in their improvements, and work up every home commodity to the utmost perfection of which it is susceptible. Their own steel and iron, in such laborious hands, become equal to the gold and rubies of the Indies.

When the affairs of the society are once brought to this situation, a nation may lose most of its foreign trade, and yet continue a great and powerful people. If strangers will not take any particular commodity of ours, we must cease to labour in it. The same hands will turn themselves towards some refinement in other commodities, which may be wanted at home. And there must always be materials for them to work upon; till every person in the state, who possesses riches, enjoys as great plenty of home commodities, and those in as great perfection, as he desires; which can never possibly happen. China is represented as one of the most flourishing empires in the world; though it has very little commerce beyond its own territories.

It will not, I hope, be considered as a superfluous digression, if I here observe, that, as the multitude of mechanical arts is advantageous, so is the great number of persons to whose share the productions of these arts fall. A too great disproportion among the citizens weakens any state. Every person, if possible, ought to enjoy the fruits of his labour, in a full possession of all the necessaries, and many of the conveniencies of life. No one can doubt, but such an equality is most suitable to human nature, and diminishes much less from the happiness of the rich than it adds to that of the poor. It also augments the power of the state, and makes any extraordinary taxes or impositions be paid with more chearfulness. Where the riches are engrossed° by a few, these must contribute very largely to the supplying of the public necessities. But when the riches are dispersed among multitudes, the burthen feels light on every shoulder, and the taxes make not a very sensible difference on any one’s way of living.

Add to this, that, where the riches are in few hands, these must enjoy all the power, and will readily conspire to lay the whole burthen on the poor, and oppress them still farther, to the discouragement of all industry.

In this circumstance consists the great advantage of England above any nation at present in the world, or that appears in the records of any story. It is true, the English feel some disadvantages in foreign trade by the high price of labour, which is in part the effect of the riches of their artisans, as well as of the plenty of money: But as foreign trade is not the most material circumstance, it is not to be put in competition with the happiness of so many millions. And if there were no more to endear to them that free government under which they live, this alone were sufficient. The poverty of the common people is a natural, if not an infallible effect of absolute monarchy; though I doubt, whether it be always true, on the other hand, that their riches are an infallible result of liberty. Liberty must be attended with particular accidents, and a certain turn of thinking, in order to produce that effect. Lord Bacon, accounting for the great advantages obtained by the English in their wars with France, ascribes them chiefly to the superior ease and plenty of the common people amongst the former; yet the government of the two kingdoms was, at that time, pretty much alike.9 Where the labourers and artisans are accustomed to work for low wages, and to retain but a small part of the fruits of their labour, it is difficult for them, even in a free government, to better their condition, or conspire among themselves to heighten their wages. But even where they are accustomed to a more plentiful way of life, it is easy for the rich, in an arbitrary government, to conspire against them, and throw the whole burthen of the taxes on their shoulders.

It may seem an odd position, that the poverty of the common people in France, Italy, and Spain, is, in some measure, owing to the superior riches of the soil and happiness of the climate; yet there want not reasons to justify this paradox. In such a fine mould or soil as that of those more southern regions, agriculture is an easy art; and one man, with a couple of sorry° horses, will be able, in a season, to cultivate as much land as will pay a pretty considerable rent to the proprietor. All the art, which the farmer knows, is to leave his ground fallow° for a year, as soon as it is exhausted; and the warmth of the sun alone and temperature of the climate enrich it, and restore its fertility. Such poor peasants, therefore, require only a simple maintenance for their labour. They have no stock or riches, which claim more; and at the same time, they are for ever dependant on their landlord, who gives no leases, nor fears that his land will be spoiled by the ill methods of cultivation. In England, the land is rich, but coarse; must be cultivated at a great expence; and produces slender crops, when not carefully managed, and by a method which gives not the full profit but in a course of several years. A farmer, therefore, in England must have a considerable stock, and a long lease; which beget proportional profits. The fine vineyards of Champagne and Burgundy,10 that often yield to the landlord above five pounds per acre, are cultivated by peasants, who have scarcely bread: The reason is, that such peasants need no stock but their own limbs, with instruments of husbandry, which they can buy for twenty shillings. The farmers are commonly in some better circumstances in those countries. But the grasiers° are most at their ease of all those who cultivate the land. The reason is still the same. Men must have profits proportionable to their expence and hazard. Where so considerable a number of the labouring poor as the peasants and farmers are in very low circumstances, all the rest must partake of their poverty, whether the government of that nation be monarchical or republican.

We may form a similar remark with regard to the general history of mankind. What is the reason, why no people, living between the tropics, could ever yet attain to any art or civility, or reach even any police° in their government, and any military discipline; while few nations in the temperate climates have been altogether deprived of these advantages? It is probable that one cause of this phænomenon is the warmth and equality of weather in the torrid zone, which render clothes and houses less requisite for the inhabitants, and thereby remove, in part, that necessity, which is the great spur to industry and invention. Curis acuens mortalia corda.11 Not to mention, that the fewer goods or possessions of this kind any people enjoy, the fewer quarrels are likely to arise amongst them, and the less necessity will there be for a settled police or regular authority to protect and defend them from foreign enemies, or from each other.

ESSAY II

OF REFINEMENT IN THE ARTSa

Luxury is a word of an uncertain signification, and may be taken in a good as well as in a bad sense. In general, it means great refinement in the gratification of the senses; and any degree of it may be innocent or blameable, according to the age, or country, or condition of the person. The bounds between the virtue and the vice cannot here be exactly fixed, more than in other moral subjects. To imagine, that the gratifying of any sense, or the indulging of any delicacy in meat, drink, or apparel, is of itself a vice, can never enter into a head, that is not disordered by the frenzies of enthusiasm. I have, indeed, heard of a monk abroad, who, because the windows of his cell opened upon a noble prospect, made a covenant with his eyes never to turn that way, or receive so sensual a gratification. And such is the crime of drinking Champagne or Burgundy, preferably to small beer or porter.° These indulgences are only vices, when they are pursued at the expence of some virtue, as liberality or charity; in like manner as they are follies, when for them a man ruins his fortune, and reduces himself to want and beggary. Where they entrench upon no virtue, but leave ample subject° whence to provide for friends, family, and every proper object of generosity or compassion, they are entirely innocent, and have in every age been acknowledged such by almost all moralists. To be entirely occupied with the luxury of the table, for instance, without any relish for the pleasures of ambition, study, or conversation, is a mark of stupidity, and is incompatible with any vigour of temper or genius. To confine one’s expence° entirely to such a gratification, without regard to friends or family, is an indication of a heart destitute of humanity or benevolence. But if a man reserve time sufficient for all laudable pursuits, and money sufficient for all generous purposes, he is free from every shadow of blame or reproach.

Since luxury may be considered either as innocent or blameable, one may be surprized at those preposterous opinions, which have been entertained concerning it; while men of libertine° principles bestow praises even on vicious luxury, and represent it as highly advantageous to society; and on the other hand, men of severe morals blame even the most innocent luxury, and represent it as the source of all the corruptions, disorders, and factions, incident to civil government. We shall here endeavour to correct both these extremes, by proving, first, that the ages of refinement are both the happiest and most virtuous; secondly, that wherever luxury ceases to be innocent, it also ceases to be beneficial; and when carried a degree too far, is a quality pernicious, though perhaps not the most pernicious, to political society.

To prove the first point, we need but consider the effects of refinement both on private and on public life. Human happiness, according to the most received notions, seems to consist in three ingredients; action, pleasure, and indolence: And though these ingredients ought to be mixed in different proportions, according to the particular disposition of the person; yet no one ingredient can be entirely wanting, without destroying, in some measure, the relish of the whole composition. Indolence or repose, indeed, seems not of itself to contribute much to our enjoyment; but, like sleep, is requisite as an indulgence to the weakness of human nature, which cannot support an uninterrupted course of business or pleasure. That quick march of the spirits, which takes a man from himself, and chiefly gives satisfaction, does in the end exhaust the mind, and requires some intervals of repose, which, though agreeable for a moment, yet, if prolonged, beget a languor and lethargy, that destroys all enjoyment. Education, custom, and example, have a mighty influence in turning the mind to any of these pursuits; and it must be owned, that, where they promote a relish for action and pleasure, they are so far favourable to human happiness. In times when industry and the arts flourish, men are kept in perpetual occupation, and enjoy, as their reward, the occupation itself, as well as those pleasures which are the fruit of their labour. The mind acquires new vigour; enlarges its powers and faculties; and by an assiduity in honest industry, both satisfies its natural appetites, and prevents the growth of unnatural ones, which commonly spring up, when nourished by ease and idleness. Banish those arts from society, you deprive men both of action and of pleasure; and leaving nothing but indolence in their place, you even destroy the relish of indolence, which never is agreeable, but when it succeeds to labour, and recruits° the spirits, exhausted by too much application and fatigue.

Another advantage of industry and of refinements in the mechanical arts, is, that they commonly produce some refinements in the liberal; nor can one be carried to perfection, without being accompanied, in some degree, with the other. The same age, which produces great philosophers and politicians, renowned generals and poets, usually abounds with skilful weavers, and ship-carpenters. We cannot reasonably expect, that a piece of woollen cloth will be wrought to perfection in a nation, which is ignorant of astronomy, or where ethics are neglected. The spirit of the age affects all the arts; and the minds of men, being once roused from their lethargy, and put into a fermentation, turn themselves on all sides, and carry improvements into every art and science. Profound ignorance is totally banished, and men enjoy the privilege of rational creatures, to think as well as to act, to cultivate the pleasures of the mind as well as those of the body.

The more these refined arts advance, the more sociable men become: nor is it possible, that, when enriched with science, and possessed of a fund° of conversation, they should be contented to remain in solitude, or live with their fellow-citizens in that distant manner, which is peculiar to ignorant and barbarous nations. They flock into cities; love to receive and communicate knowledge; to show their wit or their breeding; their taste in conversation or living, in clothes or furniture. Curiosity allures the wise; vanity the foolish; and pleasure both. Particular clubs and societies are every where formed: Both sexes meet in an easy and sociable manner; and the tempers of men, as well as their behaviour, refine apace.° So that, beside the improvements which they receive from knowledge and the liberal arts, it is impossible but they must feel an encrease of humanity, from the very habit of conversing together, and contributing to each other’s pleasure and entertainment. Thus industry, knowledge, and humanity, are linked together by an indissoluble chain, and are found, from experience as well as reason, to be peculiar to the more polished, and, what are commonly denominated, the more luxurious ages.

Nor are these advantages attended with disadvantages, that bear any proportion to them. The more men refine upon pleasure, the less will they indulge in excesses of any kind; because nothing is more destructive to true pleasure than such excesses. One may safely affirm, that the Tartars1 are oftener guilty of beastly gluttony, when they feast on their dead horses, than European courtiers with all their refinements of cookery. And if libertine love, or even infidelity to the marriage-bed, be more frequent in polite ages, when it is often regarded only as a piece of gallantry; drunkenness, on the other hand, is much less common: A vice more odious, and more pernicious both to mind and body. And in this matter I would appeal, not only to an Ovid or a Petronius,2 but to a Seneca or a Cato. We know, that Cæsar, during Catiline’s conspiracy, being necessitated to put into Cato’s hands a billet-doux,° which discovered° an intrigue with Servilia, Cato’s own sister, that stern philosopher threw it back to him with indignation; and in the bitterness of his wrath, gave him the appellation of drunkard, as a term more opprobrious than that with which he could more justly have reproached him.3

But industry, knowledge, and humanity, are not advantageous in private life alone: They diffuse their beneficial influence on the public, and render the government as great and flourishing as they make individuals happy and prosperous. The encrease and consumption of all the commodities, which serve to the ornament and pleasure of life, are advantageous to society; because, at the same time that they multiply those innocent gratifications to individuals, they are a kind of storehouse of labour, which, in the exigencies of state, may be turned to the public service. In a nation, where there is no demand for such superfluities, men sink into indolence, lose all enjoyment of life, and are useless to the public, which cannot maintain or support its fleets and armies, from the industry of such slothful members.

The bounds of all the European kingdoms are, at present, nearly the same they were two hundred years ago: But what a difference is there in the power and grandeur of those kingdoms? Which can be ascribed to nothing but the encrease of art and industry. When Charles VIII. of France invaded Italy, he carried with him about 20,000 men: Yet this armament so exhausted the nation, as we learn from Guicciardin, that for some years it was not able to make so great an effort.4 The late king of France, in time of war, kept in pay above 400,000 men;5 though from Mazarine’s death to his own, he was engaged in a course of wars that lasted near thirty years.

This industry is much promoted by the knowledge inseparable from ages of art and refinement; as, on the other hand, this knowledge enables the public to make the best advantage of the industry of its subjects. Laws, order, police, discipline; these can never be carried to any degree of perfection, before human reason has refined itself by exercise, and by an application to the more vulgar arts, at least, of commerce and manufacture. Can we expect, that a government will be well modelled by a people, who know not how to make a spinning-wheel, or to employ a loom to advantage? Not to mention, that all ignorant ages are infested with superstition, which throws the government off its bias,° and disturbs men in the pursuit of their interest and happiness.

Knowledge in the arts of government naturally begets mildness and moderation, by instructing men in the advantages of humane maxims above rigour and severity, which drive subjects into rebellion, and make the return to submission impracticable, by cutting off all hopes of pardon. When the tempers of men are softened as well as their knowledge improved, this humanity appears still more conspicuous, and is the chief characteristic which distinguishes a civilized age from times of barbarity and ignorance. Factions are then less inveterate,° revolutions less tragical,° authority less severe, and seditions less frequent. Even foreign wars abate of their cruelty; and after the field of battle, where honour and interest steel men against compassion as well as fear, the combatants divest themselves of the brute, and resume the man.

Nor need we fear, that men, by losing their ferocity, will lose their martial spirit, or become less undaunted° and vigorous in defence of their country or their liberty. The arts have no such effect in enervating either the mind or body. On the contrary, industry, their inseparable attendant, adds new force to both. And if anger, which is said to be the whetstone of courage, loses somewhat of its asperity, by politeness and refinement; a sense of honour, which is a stronger, more constant, and more governable principle, acquires fresh vigour by that elevation of genius which arises from knowledge and a good education. Add to this, that courage can neither have any duration, nor be of any use, when not accompanied with discipline and martial skill, which are seldom found among a barbarous people. The ancients remarked, that Datames was the only barbarian that ever knew the art of war.6 And Pyrrhus, seeing the Romans marshal their army with some art and skill, said with surprize, These barbarians have nothing barbarous in their discipline!7 It is observable, that, as the old Romans, by applying themselves solely to war, were almost the only uncivilized people that ever possessed military discipline; so the modern Italians are the only civilized people, among Europeans, that ever wanted courage and a martial spirit. Those who would ascribe this effeminacy of the Italians to their luxury, or politeness, or application to the arts, need but consider the French and English, whose bravery is as uncontestable, as their love for the arts, and their assiduity in commerce. The Italian historians give us a more satisfactory reason for this degeneracy of their countrymen. They shew us how the sword was dropped at once by all the Italian sovereigns; while the Venetian aristocracy was jealous of its subjects, the Florentine democracy applied itself entirely to commerce; Rome was governed by priests, and Naples by women. War then became the business of soldiers of fortune, who spared one another, and to the astonishment of the world, could engage a whole day in what they called a battle, and return at night to their camp, without the least bloodshed.

What has chiefly induced severe moralists to declaim against refinement in the arts, is the example of ancient Rome, which, joining, to its poverty and rusticity, virtue and public spirit, rose to such a surprizing height of grandeur and liberty; but having learned from its conquered provinces b the Asiatic luxury, fell into every kind of corruption; whence arose sedition and civil wars, attended at last with the total loss of liberty. All the Latin classics, whom we peruse in our infancy, are full of these sentiments, and universally ascribe the ruin of their state to the arts and riches imported from the East: Insomuch that Sallust represents a taste for painting as a vice, no less than lewdness and drinking. And so popular were these sentiments, during the later ages of the republic, that this author abounds in praises of the old rigid Roman virtue, though himself the most egregious instance of modern luxury and corruption; speaks contemptuously of the Grecian eloquence, though the most elegant writer in the world; nay, employs preposterous digressions and declamations to this purpose, though a model of taste and correctness.8

But it would be easy to prove, that these writers mistook the cause of the disorders in the Roman state, and ascribed to luxury and the arts, what really proceeded from an ill modelled government, and the unlimited extent of conquests. c Refinement on the pleasures and conveniencies of life has no natural tendency to beget venality and corruption. The value, which all men put upon any particular pleasure, depends on comparison and experience; nor is a porter less greedy of money, which he spends on bacon and brandy, than a courtier, who purchases champagne and ortolans.° Riches are valuable at all times, and to all men; because they always purchase pleasures, such as men are accustomed to, and desire: Nor can any thing restrain or regulate the love of money, but a sense of honour and virtue; which, if it be not nearly equal at all times, will naturally abound most in ages of knowledge and refinement.

Of all European kingdoms, Poland seems the most defective in the arts of war as well as peace, mechanical as well as liberal; yet it is there that venality and corruption do most prevail. The nobles seem to have preserved their crown elective for no other purpose, than regularly to sell it to the highest bidder. This is almost the only species of commerce, with which that people are acquainted.

The liberties of England, so far from decaying since the improvements in the arts, have never flourished so much as during that period. And though corruption may seem to encrease of late years; this is chiefly to be ascribed to our established liberty, when our princes have found the impossibility of governing without parliaments, or of terrifying parliaments by the phantom of prerogative.9 Not to mention, that this corruption or venality prevails much more among the electors than the elected; and therefore cannot justly be ascribed to any refinements in luxury.

If we consider the matter in a proper light, we shall find, that a progress in the arts is rather favourable to liberty, and has a natural tendency to preserve, if not produce a free government. In rude unpolished nations, where the arts are neglected, all labour is bestowed on the cultivation of the ground; and the whole society is divided into two classes, proprietors of land, and their vassals or tenants. The latter are necessarily dependent, and fitted for slavery and subjection; especially where they possess no riches, and are not valued for their knowledge in agriculture; as must always be the case where the arts are neglected. The former naturally erect themselves into petty tyrants; and must either submit to an absolute master, for the sake of peace and order; or if they will preserve their independency, like the d ancient barons, they must fall into feuds and contests among themselves, and throw the whole society into such confusion, as is perhaps worse than the most despotic government. But where luxury nourishes commerce and industry, the peasants, by a proper cultivation of the land, become rich and independent; while the tradesmen and merchants acquire a share of the property, and draw authority and consideration to that middling rank of men, who are the best and firmest basis of public liberty. These submit not to slavery, like the peasants, from poverty and meanness of spirit; and having no hopes of tyrannizing over others, like the barons, they are not tempted, for the sake of that gratification, to submit to the tyranny of their sovereign. They covet equal laws, which may secure their property, and preserve them from monarchical, as well as aristocratical tyranny.

The lower house is the support of our popular government; and all the world acknowledges, that it owed its chief influence and consideration to the encrease of commerce, which threw such a balance of property into the hands of the commons. How inconsistent then is it to blame so violently a refinement in the arts, and to represent it as the bane of liberty and public spirit!

To declaim against present times, and magnify the virtue of remote ancestors, is a propensity almost inherent in human nature: And as the sentiments and opinions of civilized ages alone are transmitted to posterity, hence it is that we meet with so many severe judgments pronounced against luxury, and even science; and hence it is that at present we give so ready an assent to them. But the fallacy is easily perceived, by comparing different nations that are contemporaries; where we both judge more impartially, and can better set in opposition those manners, with which we are sufficiently acquainted. Treachery and cruelty, the most pernicious and most odious of all vices, seem peculiar to uncivilized ages; and by the refined Greeks and Romans were ascribed to all the barbarous nations, which surrounded them. They might justly, therefore, have presumed, that their own ancestors, so highly celebrated, possessed no greater virtue, and were as much inferior to their posterity in honour and humanity, as in taste and science. An ancient Frank or Saxon may be highly extolled: But I believe every man would think his life or fortune much less secure in the hands of a Moor or Tartar, than in those of a French or English gentleman, the rank of men the most civilized in the most civilized nations.

We come now to the second position which we proposed to illustrate, to wit, that, as innocent luxury, or a refinement in the arts and conveniencies of life, is advantageous to the public; so wherever luxury ceases to be innocent, it also ceases to be beneficial; and when carried a degree farther, begins to be a quality pernicious, though, perhaps, not the most pernicious, to political society.

Let us consider what we call vicious luxury. No gratification, however sensual, can of itself be esteemed vicious. A gratification is only vicious, when it engrosses all a man’s expence, and leaves no ability for such acts of duty and generosity as are required by his situation and fortune. Suppose, that he correct the vice, and employ part of his expence in the education of his children, in the support of his friends, and in relieving the poor; would any prejudice result to society? On the contrary, the same consumption would arise; and that labour, which, at present, is employed only in producing a slender gratification to one man, would relieve the necessitous, and bestow satisfaction on hundreds. The same care and toil that raise a dish of peas at Christmas, would give bread to a whole family during six months. To say, that, without a vicious luxury, the labour would not have been employed at all, is only to say, that there is some other defect in human nature, such as indolence, selfishness, inattention to others, for which luxury, in some measure, provides a remedy; as one poison may be an antidote to another. But virtue, like wholesome food, is better than poisons, however corrected.

Suppose the same number of men, that are at present in Great Britain, with the same soil and climate; I ask, is it not possible for them to be happier, by the most perfect way of life that can be imagined, and by the greatest reformation that Omnipotence itself could work in their temper and disposition? To assert, that they cannot, appears evidently ridiculous. As the land is able to maintain more than all its present inhabitants, they could never, in such a Utopian state, feel any other ills than those which arise from bodily sickness; and these are not the half of human miseries. All other ills spring from some vice, either in ourselves or others; and even many of our diseases proceed from the same origin. Remove the vices, and the ills follow. You must only take care to remove all the vices. If you remove part, you may render the matter worse. By banishing vicious luxury, without curing sloth and an indifference to others, you only diminish industry in the state, and add nothing to men’s charity or their generosity. Let us, therefore, rest contented with asserting, that two opposite vices in a state may be more advantageous than either of them alone; but let us never pronounce vice in itself advantageous. Is it not very inconsistent for an author to assert in one page, that moral distinctions are inventions of politicians for public interest; and in the next page maintain, that vice is advantageous to the public?10 And indeed it seems upon any system of morality, little less than a contradiction in terms, to talk of a vice, which is in general beneficial to society.e

I thought this reasoning necessary, in order to give some light to a philosophical question, which has been much disputed in England. I call it a philosophical question, not a political one. For whatever may be the consequence of such a miraculous transformation of mankind, as would endow them with every species of virtue, and free them from every species of vice; this concerns not the magistrate, who aims only at possibilities. He cannot cure every vice by substituting a virtue in its place. Very often he can only cure one vice by another; and in that case, he ought to prefer what is least pernicious to society. Luxury, when excessive, is the source of many ills; but is in general preferable to sloth and idleness, which would commonly succeed in its place, and are more hurtful both to private persons and to the public. When sloth reigns, a mean uncultivated way of life prevails amongst individuals, without society, without enjoyment. And if the sovereign, in such a situation, demands the service of his subjects, the labour of the state suffices only to furnish the necessaries of life to the labourers, and can afford nothing to those who are employed in the public service.

ESSAY III

OF MONEY

Money is not, properly speaking, one of the subjects of commerce; but only the instrument which men have agreed upon to facilitate the exchange of one commodity for another. It is none of the wheels of trade: It is the oil which renders the motion of the wheels more smooth and easy. If we consider any one kingdom by itself, it is evident, that the greater or less plenty of money is of no consequence; since the prices of commodities are always proportioned to the plenty of money, and a crown in Harry VII.’s time served the same purpose as a pound does at present.1 It is only the public which draws any advantage from the greater plenty of money; and that only in its wars and negociations with foreign states. And this is the reason, why all rich and trading countries from Carthage to Great Britain and Holland, have employed mercenary troops, which they hired from their poorer neighbours. Were they to make use of their native subjects, they would find less advantage from their superior riches, and from their great plenty of gold and silver; since the pay of all their servants must rise in proportion to the public opulence. Our small army of 20,000 men is maintained at as great expence as a French army a twice as numerous. The English fleet, during the late war,2 required as much money to support it as all the Roman legions, which kept the whole world in subjection, during the time of the emperors.3

The greater number of people and their greater industry are serviceable in all cases; at home and abroad, in private, and in public. But the greater plenty of money, is very limited in its use, and may even sometimes be a loss to a nation in its commerce with foreigners.

There seems to be a happy concurrence of causes in human affairs, which checks the growth of trade and riches, and hinders them from being confined entirely to one people; as might naturally at first be dreaded from the advantages of an established commerce. Where one nation has gotten the start of another in trade, it is very difficult for the latter to regain the ground it has lost; because of the superior industry and skill of the former, and the greater stocks, of which its merchants are possessed, and which enable them to trade on so much smaller profits. But these advantages are compensated, in some measure, by the low price of labour in every nation which has not an extensive commerce, and does not much abound in gold and silver. Manufactures, therefore gradually shift their places, leaving those countries and provinces which they have already enriched, and flying to others, whither they are allured by the cheapness of provisions and labour; till they have enriched these also, and are again banished by the same causes. And, in general, we may observe, that the dearness° of every thing, from plenty of money, is a disadvantage, which attends an established commerce, and sets bounds to it in every country, by enabling the poorer states to undersel the richer in all foreign markets.

This has made me entertain a doubt concerning the benefit of banks and paper-credit, which are so generally esteemed advantageous to every nation. That provisions and labour should become dear by the encrease of trade and money, is, in many respects, an inconvenience; but an inconvenience that is unavoidable, and the effect of that public wealth and prosperity which are the end of all our wishes. It is compensated by the advantages, which we reap from the possession of these precious metals, and the weight, which they give the nation in all foreign wars and negociations. But there appears no reason for encreasing that inconvenience by a counterfeit money, which foreigners will not accept of in any payment, and which any great disorder in the state will reduce to nothing. There are, it is true, many people in every rich state, who having large sums of money, would prefer paper with good security; as being of more easy transport and more safe custody. If the public provide not a bank, private bankers will take advantage of this circumstance; as the goldsmiths formerly did in London, or as the bankers do at present in Dublin: And therefore it is better, it may be thought, that a public company should enjoy the benefit of that paper-credit, which always will have place in every opulent kingdom. But to endeavour artificially to encrease such a credit, can never be the interest of any trading nation; but must lay them under disadvantages, by encreasing money beyond its natural proportion to labour and commodities, and thereby heightening their price to the merchant and manufacturer. And in this view, it must be allowed, that no bank could be more advantageous, than such a one as locked up all the money it received,4 and never augmented the circulating coin, as is usual, by returning part of its treasure into commerce. A public bank, by this expedient, might cut off much of the dealings of private bankers and money-jobbers; and though the state bore the charge of salaries to the directors and tellers of this bank (for, according to the preceding supposition, it would have no profit from its dealings), the national advantage, resulting from the low price of labour and the destruction of paper-credit, would be a sufficient compensation. Not to mention, that so large a sum, lying ready at command, would be a convenience in times of great public danger and distress; and what part of it was used might be replaced at leisure, when peace and tranquillity was restored to the nation.

But of this subject of paper credit we shall treat more largely hereafter. And I shall finish this essay on money, by proposing and explaining two observations, which may, perhaps, serve to employ the thoughts of our speculative politicians.c

It was a shrewd observation of Anacharsis5 the Scythian, who had never seen money in his own country, that gold and silver seemed to him of no use to the Greeks, but to assist them in numeration and arithmetic. It is indeed evident, that money is nothing but the representation of labour and commodities, and serves only as a method of rating or estimating them. Where coin is in greater plenty; as a greater quantity of it is required to represent the same quantity of goods; it can have no effect, either good or bad, taking a nation within itself; any more than it would make an alteration on a merchant’s books, if, instead of the Arabian method of notation, which requires few characters, he should make use of the Roman, which requires a great many. Nay, the greater quantity of money, like the Roman characters, is rather inconvenient, and requires greater trouble both to keep and transport it. But notwithstanding this conclusion, which must be allowed just, it is certain, that, since the discovery of the mines in America, industry has encreased in all the nations of Europe, except in the possessors of those mines; and this may justly be ascribed, amongst other reasons, to the encrease of gold and silver. Accordingly we find, that, in every kingdom, into which money begins to flow in greater abundance than formerly, every thing takes a new face: labour and industry gain life; the merchant becomes more enterprising, the manufacturer more diligent and skilful, and even the farmer follows his plough with greater alacrity and attention. This is not easily to be accounted for, if we consider only the influence which a greater abundance of coin has in the kingdom itself, by heightening the price of commodities, and obliging every one to pay a greater number of these little yellow or white pieces for every thing he purchases. And as to foreign trade, it appears, that great plenty of money is rather disadvantageous, by raising the price of every kind of labour.

To account, then, for this phenomenon, we must consider, that though the high price of commodities be a necessary consequence of the encrease of gold and silver, yet it follows not immediately upon that encrease; but some time is required before the money circulates through the whole state, and makes its effect be felt on all ranks of people. At first, no alteration is perceived; by degrees the price rises, first of one commodity, then of another; till the whole at last reaches a just proportion with the new quantity of specie which is in the kingdom. In my opinion, it is only in this interval or intermediate situation, between the acquisition of money and rise of prices, that the encreasing quantity of gold and silver is favourable to industry. When any quantity of money is imported into a nation, it is not at first dispersed into many hands; but is confined to the coffers of a few persons, who immediately seek to employ it to advantage. Here are a set of manufacturers or merchants, we shall suppose, who have received returns of gold and silver for goods which they sent to Cadiz.6 They are thereby enabled to employ more workmen than formerly, who never dream of demanding higher wages, but are glad of employment from such good paymasters. If workmen become scarce, the manufacturer gives higher wages, but at first requires an encrease of labour; and this is willingly submitted to by the artisan, who can now eat and drink better, to compensate his additional toil and fatigue. He carries his money to market, where he finds every thing at the same price as formerly, but returns with greater quantity and of better kinds, for the use of his family. The farmer and gardener, finding, that all their commodities are taken off, apply themselves with alacrity to the raising more; and at the same time can afford to take better and more cloths from their tradesmen, whose price is the same as formerly, and their industry only whetted by so much new gain. It is easy to trace the money in its progress through the whole commonwealth; where we shall find, that it must first quicken the diligence of every individual, before it encrease the price of labour.

And that the specie° may encrease to a considerable pitch, before it have this latter effect, appears, amongst other instances, from the frequent operations of the French king on the money; where it was always found, that the augmenting of the numerary value did not produce a proportional rise of the prices, at least for some time. In the last year of Louis XIV. money was raised three-sevenths, but prices augmented only one. Corn in France is now sold at the same price, or for the same number of livres, it was in 1683; though silver was then at 30 livres the mark, and is now at 50.7 Not to mention the great addition of gold and silver, which may have come into that kingdom since the former period.

From the whole of this reasoning we may conclude, that it is of no manner of consequence, with regard to the domestic happiness of a state, whether money be in a greater or less quantity. The good policy of the magistrate consists only in keeping it, if possible, still encreasing; because, by that means, he keeps alive a spirit of industry in the nation, and encreases the stock of labour, in which consists all real power and riches. A nation, whose money decreases, is actually, at that time, weaker and more miserable than another nation, which possesses no more money, but is on the encreasing hand. This will be easily accounted for, if we consider, that the alterations in the quantity of money, either on one side or the other, are not immediately attended with proportionable alterations in the price of commodities. There is always an interval before matters be adjusted to their new situation; and this interval is as pernicious to industry, when gold and silver are diminishing, as it is advantageous when these metals are encreasing. The workman has not the same employment from the manufacturer and merchant; though he pays the same price for every thing in the market. The farmer cannot dispose of his corn and cattle; though he must pay the same rent to his landlord. The poverty, and beggary, and sloth, which must ensue, are easily foreseen.

II. The second observation which I proposed to make with regard to money, may be explained after the following manner. There are some kingdoms, and many provinces in Europe, (and all of them were once in the same condition) where money is so scarce, that the landlord can get none at all from his tenants; but is obliged to take his rent in kind, and either to consume it himself, or transport it to places where he may find a market. In those countries, the prince can levy few or no taxes, but in the same manner: And as he will receive small benefit from impositions so paid, it is evident that such a kingdom has little force even at home; and cannot maintain fleets and armies to the same extent, as if every part of it abounded in gold and silver. There is surely a greater disproportion between the force of Germany, at present, and what it was three centuries ago,8 than there is in its industry, people, and manufactures. The Austrian dominions in the empire are in general well peopled and well cultivated, and are of great extent; but have not a proportionable weight in the balance of Europe; proceeding, as is commonly supposed, from the scarcity of money. How do all these facts agree with that principle of reason, that the quantity of gold and silver is in itself altogether indifferent? According to that principle wherever a sovereign has numbers of subjects, and these have plenty of commodities, he should of course be great and powerful, and they rich and happy, independent of the greater or lesser abundance of the precious metals. These admit of divisions and subdivisions to a great extent; and where the pieces might become so small as to be in danger of being lost, it is easy to mix the gold or silver with a baser metal, as is practised in some countries of Europe; and by that means raise the pieces to a bulk more sensible and convenient. They still serve the same purposes of exchange, whatever their number may be, or whatever colour they may be supposed to have.

To these difficulties I answer, that the effect, here supposed to flow from scarcity of money, really arises from the manners and customs of the people; and that we mistake, as is too usual, a collateral effect for a cause. The contradiction is only apparent; but it requires some thought and reflection to discover the principles, by which we can reconcile reason to experience.

It seems a maxim almost self-evident, that the prices of every thing depend on the proportion between commodities and money, and that any considerable alteration on either has the same effect, either of heightening or lowering the price. Encrease the commodities, they become cheaper; encrease the money, they rise in their value. As, on the other hand, a diminution of the former, and that of the latter, have contrary tendencies.

It is also evident, that the prices do not so much depend on the absolute quantity of commodities and that of money, which are in a nation, as on that of the commodities, which come or may come to market, and of the money which circulates. If the coin be locked up in chests, it is the same thing with regard to prices, as if it were annihilated; if the commodities be hoarded in e magazines and granaries, a like effect follows. As the money and commodities, in these cases, never meet, they cannot affect each other. Were we, at any time, to form conjectures concerning the price of provisions, the corn, which the farmer must reserve f for seed and for the maintenance of himself and family, ought never to enter into the estimation. It is only the overplus,° compared to the demand, that determines the value.

To apply these principles, we must consider, that, in the first and more uncultivated ages of any state, ere fancy has confounded her wants with those of nature, men, content with the produce of their own fields, or with those rude improvements which they themselves can work upon them, have little occasion for exchange, at least for money, which, by agreement, is the common measure of exchange. The wool of the farmer’s own flock, spun in his own family, and wrought by a neighbouring weaver, who receives his payment in corn or wool, suffices for furniture and cloathing. The carpenter, the smith, the mason, the tailor, are retained by wages of a like nature; and the landlord himself, dwelling in the neighbourhood, is content to receive his rent in the commodities raised by the farmer. The greater part of these he consumes at home, in rustic hospitality: The rest, perhaps, he disposes of for money to the neighbouring town, whence he draws the few materials of his expence and luxury.

But after men begin to refine on all these enjoyments, and live not always at home, nor are content with what can be raised in their neighbourhood, there is more exchange and commerce of all kinds, and more money enters into that exchange. The tradesmen will not be paid in corn; because they want something more than barely to eat. The farmer goes beyond his own parish for the commodities he purchases, and cannot always carry his commodities to the merchant who supplies him. The landlord lives in the capital, or in a foreign country; and demands his rent in gold and silver, which can easily be transported to him. Great undertakers, and manufacturers, and merchants, arise in every commodity; and these can conveniently deal in nothing but in specie. And consequently, in this situation of society, the coin enters into many more contracts, and by that means is much more employed than in the former.

The necessary effect is, that, provided the money encrease not in the nation, every thing must become much cheaper in times of industry and refinement, than in rude, uncultivated ages. It is the proportion between the circulating money, and the commodities in the market, which determines the prices. Goods, that are consumed at home, or exchanged with other goods in the neighbourhood, never come to market; they affect not in the least the current specie; with regard to it they are as if totally annihilated; and consequently this method of using them sinks the proportion on the side of the commodities, and encreases the prices. But after money enters into all contracts and sales, and is every where the measure of exchange, the same national cash has a much greater task to perform; all commodities are then in the market; the sphere of circulation is enlarged; it is the same case as if that individual sum were to serve a larger kingdom; and therefore, the proportion being here lessened on the side of the money, every thing must become cheaper, and the prices gradually fall.

By the most exact computations, that have been formed all over Europe, after making allowance for the alteration in the numerary° value or the denomination, it is found, that the prices of all things have only risen three, or at most, four times, since the discovery of the West Indies.9 But will any one assert, that there is not much more than four times the coin in Europe, that was in the fifteenth century, and the centuries preceding it? The Spaniards and Portuguese from their mines, the English, French, and Dutch, by their African trade, and by their interlopers in the West Indies, bring home about g six millions a year, of which not above a third goes to the East-Indies. This sum alone, in ten years, would probably double the ancient stock of money in Europe. And no other satisfactory reason can be given, why all prices have not risen to a much more exorbitant height, except that which is derived from a change of customs and manners. Besides that more commodities are produced by additional industry, the same commodities come more to market, after men depart from their ancient simplicity of manners. And though this encrease has not been equal to that of money, it has, however, been considerable, and has preserved the proportion between coin and commodities nearer the ancient standard.

Were the question proposed, Which of these methods of living in the people, the simple or refined, is the most advantageous to the state or public? I should, without much scruple, prefer the latter, in a view to politics at least; and should produce this as an additional reason for the encouragement of trade and manufactures.

While men live in the ancient simple manner, and supply all their necessaries from domestic industry or from the neighbourhood, the sovereign can levy no taxes in money from a considerable part of his subjects; and if he will impose on them any burthens, he must take payment in commodities, with which alone they abound; a method attended with such great and obvious inconveniencies, that they need not here be insisted on. All the money he can pretend to raise, must be from his principal cities, where alone it circulates; and these, it is evident, cannot afford him so much as the whole state could, did gold and silver circulate throughout the whole. But besides this obvious diminution of the revenue, there is another cause of the poverty of the public in such a situation. Not only the sovereign receives less money, but the same money goes not so far as in times of industry and general commerce. Every thing is dearer, where the gold and silver are supposed equal; and that because fewer commodities come to market, and the whole coin bears a higher proportion to what is to be purchased by it; whence alone the prices of every thing are fixed and determined.

Here then we may learn the fallacy of the remark, often to be met with in historians, and even in common conversation, that any particular state is weak, though fertile, populous, and well cultivated, merely because it wants money. It appears, that the want of money can never injure any state within itself: For men and commodities are the real strength of any community. It is the simple manner of living which here hurts the public, by confining the gold and silver to few hands, and preventing its universal diffusion and circulation. On the contrary, industry and refinements of all kinds incorporate it with the whole state, however small its quantity may be: They digest it into every vein, so to speak; and make it enter into every transaction and contract. No hand is entirely empty of it. And as the prices of every thing fall by that means, the sovereign has a double advantage: He may draw money by his taxes from every part of the state; and what he receives, goes farther in every purchase and payment.

We may infer, from a comparison of prices, that money is not more plentiful in China, than it was in Europe three centuries ago: But what immense power is that empire possessed of, if we may judge by the civil and military establishment maintained by it? Polybius10 tells us, that provisions were so cheap in Italy during his time, that in some places theh stated price for a meal at the inns was a semis a head, little more than a farthing! Yet the Roman power had even then subdued the whole known world. About a century before that period, the Carthaginian ambassador said, by way of raillery, that no people lived more sociably amongst themselves than the Romans; for that, in every entertainment, which, as foreign ministers, they received, they still observed the same plate at every table.11 The absolute quantity of the precious metals is a matter of great indifference. There are only two circumstances of any importance, namely, their gradual encrease, and their thorough concoction and circulation through the state; and the influence of both these circumstances has here been explained.

In the following Essay we shall see an instance of a like fallacy as that above mentioned; where a collateral effect is taken for a cause, and where a consequence is ascribed to the plenty of money; though it be really owing to a change in the manners and customs of the people.

ESSAY IV

OF INTEREST

Nothing is esteemed a more certain sign of the flourishing condition of any nation than the lowness of interest: And with reason; though I believe the cause is somewhat different from what is commonly apprehended. Lowness of interest is generally ascribed to plenty of money.1 But money, however plentiful, has no other effect, if fixed, than to raise the price of labour. Silver is more common than gold; and therefore you receive a greater quantity of it for the same commodities. But do you pay less interest for it? Interest in Batavia and Jamaica is at 10 per cent. in Portugal at 6; though these places, as we may learn from the prices of every thing, abound more in gold and silver than either London or Amsterdam.

Were all the gold in England annihilated at once, and one and twenty shillings substituted in the place of every guinea, would money be more plentiful or interest lower? No surely: We should only use silver instead of gold. Were gold rendered as common as silver, and silver as common as copper; would money be more plentiful or interest lower? We may assuredly give the same answer. Our shillings would then be yellow, and our halfpence white; and we should have no guineas. No other difference would ever be observed; no alteration on commerce, manufactures, navigation, or interest; unless we imagine, that the colour of the metal is of any consequence.

Now, what is so visible in these greater variations of scarcity or abundance in the precious metals, must hold in all inferior changes. If the multiplying of gold and silver fifteen times makes no difference, much less can the doubling or tripling them. All augmentation has no other effect than to heighten the price of labour and commodities; and even this variation is little more than that of a name. In the progress towards these changes, the augmentation may have some influence, by exciting industry; but after the prices are settled, suitably to the new abundance of gold and silver, it has no manner of influence.

An effect always holds proportion with its cause. Prices have risen near four times since the discovery of the Indies; and it is probable gold and silver have multiplied much more: But interest has not fallen much above half. The rate of interest, therefore, is not derived from the quantity of the precious metals.

Money having chiefly a fictitious value,a the greater or less plenty of it is of no consequence, if we consider a nation within itself; and the quantity of specie, when once fixed, though ever so large, has no other effect, than to oblige every one to tell out° a greater number of those shining bits of metal, for clothes, furniture or equipage, without encreasing any one convenience of life. If a man borrow money to build a house, he then carries home a greater load; because the stone, timber, lead, glass, &c. with the labour of the masons and carpenters, are represented by a greater quantity of gold and silver. But as these metals are considered chiefly as representations, there can no alteration arise, from their bulk or quantity, their weight or colour, either upon their real value or their interest. The same interest, in all cases, bears the same proportion to the sum. And if you lent me so much labour and so many commodities; by receiving five per cent. you always receive proportional labour and commodities, however represented, whether by yellow or white coin, whether by a pound or an ounce. It is in vain, therefore, to look for the cause of the fall or rise of interest in the greater or less quantity of gold and silver, which is fixed in any nation.

High interest arises from three circumstances: A great demand for borrowing; little riches to supply that demand; and great profits arising from commerce: And these circumstances are a clear proof of the small advance of commerce and industry, not of the scarcity of gold and silver. Low interest, on the other hand, proceeds from the three opposite circumstances: A small demand for borrowing; great riches to supply that demand; and small profits arising from commerce: And these circumstances are all connected together, and proceed from the encrease of industry and commerce, not of gold and silver. We shall endeavour to prove these points; and shall begin with the causes and the effects of a great or small demand for borrowing.

When a people have emerged ever so little from a savage state, and their numbers have encreased beyond the original multitude, there must immediately arise an inequality of property; and while some possess large tracts of land, others are confined within narrow limits, and some are entirely without any landed property. Those who possess more land than they can labour, employ those who possess none, and agree to receive a determinate part of the product. Thus the landed interest is immediately established; nor is there any settled government, however rude, in which affairs are not on this footing. Of these proprietors of land, some must presently discover themselves to be of different tempers from others; and while one would willingly store up the produce of his land for futurity,° another desires to consume at present what should suffice for many years. But as the spending of a settled revenue is a way of life entirely without occupation;° men have so much need of somewhat° to fix and engage them, that pleasures, such as they are, will be the pursuit of the greater part of the landholders, and the prodigals among them will always be more numerous than the misers. In a state, therefore, where there is nothing but a landed interest, as there is little frugality, the borrowers must be very numerous, and the rate of interest must hold proportion to it. The difference depends not on the quantity of money, but on the habits and manners which prevail. By this alone the demand for borrowing is encreased or diminished. Were money so plentiful as to make an egg be sold for sixpence; so long as there are only landed gentry and peasants in the state, the borrowers must be numerous, and interest high. The rent for the same farm would be heavier and more bulky: But the same idleness of the landlord, with the higher price of commodities, would dissipate it in the same time, and produce the same necessity and demand for borrowing.b

Nor is the case different with regard to the second circumstance which we proposed to consider, namely, the great or little riches to supply the demand. This effect also depends on the habits and way of living of the people, not on the quantity of gold and silver. In order to have, in any state, a great number of lenders, it is not sufficient nor requisite, that there be great abundance of the precious metals. It is only requisite, that the property or command of that quantity, which is in the state, whether great or small, should be collected in particular hands, so as to form considerable sums, or compose a great monied interest. This begets a number of lenders, and sinks the rate of usury; and this I shall venture to affirm, depends not on the quantity of specie, but on particular manners and customs, which make the specie gather into separate sums or masses of considerable value.

For suppose, that, by miracle, every man in Great Britain should have five pounds slipt into his pocket in one night; this would much more than double the whole money that is at present in the kingdom; yet there would not next day, nor for some time, be any more lenders, nor any variation in the interest. And were there nothing but landlords and peasants in the state, this money, however abundant, could never gather into sums; and would only serve to encrease the prices of every thing, without any farther consequence. The prodigal landlord dissipates it, as fast as he receives it; and the beggarly peasant has no means, nor view, nor ambition of obtaining above a bare livelihood. The overplus of borrowers above that of lenders continuing still the same, there will follow no reduction of interest. That depends upon another principle; and must proceed from an encrease of industry and frugality, of arts and commerce.

Every thing useful to the life of man arises from the ground; but few things arise in that condition which is requisite to render them useful. There must, therefore, beside the peasants and the proprietors of land, be another rank of men, who receiving from the former the rude materials, work them into their proper form, and retain part for their own use and subsistence. In the infancy of society, these contracts between the artisans and the peasants, and between one species of artisans and another are commonly entered into immediately by the persons themselves, who, being neighbours, are easily acquainted with each other’s necessities, and can lend their mutual assistance to supply them. But when men’s industry encreases, and their views enlarge, it is found, that the most remote parts of the state can assist each other as well as the more contiguous, and that this intercourse of good offices may be carried on to the greatest extent and intricacy. Hence the origin of merchants, one of the most useful races of men, who serve as agents between those parts of the state, that are wholly unacquainted, and are ignorant of each other’s necessities. Here are in a city fifty workmen in silk and linen, and a thousand customers; and these two ranks of men, so necessary to each other, can never rightly meet, till one man erects a shop, to which all the workmen and all the customers repair. In this province, grass rises in abundance: The inhabitants abound in cheese, and butter, and cattle; but want bread and corn, which, in a neighbouring province, are in too great abundance for the use of the inhabitants. One man discovers this. He brings corn from the one province and returns with cattle; and supplying the wants of both, he is, so far, a common benefactor. As the people encrease in numbers and industry, the difficulty of their intercourse encreases: The business of the agency or merchandize becomes more intricate; and divides, subdivides, compounds, and mixes to a greater variety. In all these transactions, it is necessary, and reasonable, that a considerable part of the commodities and labour should belong to the merchant, to whom, in a great measure, they are owing. And these commodities he will sometimes preserve in kind, or more commonly convert into money, which is their common representation. If gold and silver have encreased in the state together with the industry, it will require a great quantity of these metals to represent a great quantity of commodities and labour. If industry alone has encreased, the prices of every thing must sink, and a small quantity of specie will serve as a representation.

There is no craving or demand of the human mind more constant and insatiable than that for

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PART II: ESSAYS MORAL, POLITICAL, AND LITERARY - David Hume, Essays Moral, Political, Literary (LF ed.) [1777]

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