An Inquiry into the Nature and Causes of the Wealth of Nations
by
Adam Smith
Part 13 out of 19
The importation of sheep's wool from several different countries, of
cotton wool from all countries, of undressed flax, of the greater part
of dyeing drugs, of the greater part of undressed hides from Ireland,
or the British colonies, of seal skins from the British Greenland
fishery, of pig and bar iron from the British colonies, as well as of
several other materials of manufacture, has been encouraged by an
exemption from all duties, if properly entered at the custom-house.
The private interest of our merchants and manufacturers may, perhaps,
have extorted from the legislature these exemptions, as well as the
greater part of our other commercial regulations. They are, however,
perfectly just and reasonable; and if, consistently with the
necessities of the state, they could be extended to all the other
materials of manufacture, the public would certainly be a gainer.
The avidity of our great manufacturers, however, has in some cases
extended these exemptions a good deal beyond what can justly be
considered as the rude materials of their work. By the 24th Geo. II.
chap. 46, a small duty of only 1d. the pound was imposed upon the
importation of foreign brown linen yarn, instead of much higher
duties, to which it had been subjected before, viz. of 6d. the pound
upon sail yarn, of 1s. the pound upon all French and Dutch yarn, and
of £2:13:4 upon the hundred weight of all spruce or Muscovia yarn. But
our manufacturers were not long satisfied with this reduction: by the
29th of the same king, chap. 15, the same law which gave a bounty upon
the exportation of British and Irish linen, of which the price did not
exceed 18d. the yard, even this small duty upon the importation of
brown linen yarn was taken away. In the different operations, however,
which are necessary for the preparation of linen yarn, a good deal
more industry is employed, than in the subsequent operation of
preparing linen cloth from linen yarn. To say nothing of the industry
of the flax-growers and flaxdressers, three or four spinners at least
are necessary in order to keep one weaver in constant employment; and
more than four-fifths of the whole quantity of labour necessary for
the preparation of linen cloth, is employed in that of linen yarn; but
our spinners are poor people; women commonly scattered about in all
different parts of the country, without support or protection. It is
not by the sale of their work, but by that of the complete work of the
weavers, that our great master manufacturers make their profits. As it
is their interest to sell the complete manufacture as dear, so it is
to buy the materials as cheap as possible. By extorting from the
legislature bounties upon the exportation of their own linen, high
duties upon the importation of all foreign linen, and a total
prohibition of the home consumption of some sorts of French linen,
they endeavour to sell their own goods as dear as possible. By
encouraging the importation of foreign linen yarn, and thereby
bringing it into competition with that which is made by our own
people, they endeavour to buy the work of the poor spinners as cheap
as possible. They are as intent to keep down the wages of their own
weavers, as the earnings of the poor spinners; and it is by no means
for the benefit of the workmen that they endeavour either to raise the
price of the complete work, or to lower that of the rude materials. It
is the industry which is carried on for the benefit of the rich and
the powerful, that is principally encouraged by our mercantile system.
That which is carried on for the benefit of the poor and the indigent
is too often either neglected or oppressed.
Both the bounty upon the exportation of linen, and the exemption from
the duty upon the importation of foreign yarn, which were granted only
for fifteen years, but continued by two different prolongations,
expire with the end of the session of parliament which shall
immediately follow the 24th of June 1786.
The encouragement given to the importation of the materials of
manufacture by bounties, has been principally confined to such as were
imported from our American plantations.
The first bounties of this kind were those granted about the beginning
of the present century, upon the importation of naval stores from
America. Under this denomination were comprehended timber fit for
masts, yards, and bowsprits; hemp, tar, pitch, and turpentine. The
bounty, however, of £1 the ton upon masting-timber, and that of £6 the
ton upon hemp, were extended to such as should be imported into
England from Scotland. Both these bounties continued, without any
variation, at the same rate, till they were severally allowed to
expire; that upon hemp on the 1st of January 1741, and that upon
masting-timber at the end of the session of parliament immediately
following the 24th June 1781.
The bounties upon the importation of tar, pitch, and turpentine,
underwent, during their continuance, several alterations. Originally,
that upon tar was £4 the ton; that upon pitch the same; and that upon
turpentine £3 the ton. The bounty of £4 the ton upon tar was
afterwards confined to such as had been prepared in a particular
manner; that upon other good, clean, and merchantable tar was reduced
to £2:4s. the ton. The bounty upon pitch was likewise reduced to £1,
and that upon turpentine to £1:10s. the ton.
The second bounty upon the importation of any of the materials of
manufacture, according to the order of time, was that granted by the
21st Geo. II. chap.30, upon the importation of indigo from the British
plantations. When the plantation indigo was worth three-fourths of the
price of the best French indigo, it was, by this act, entitled to a
bounty of 6d. the pound. This bounty, which, like most others, was
granted only for a limited time, was continued by several
prolongations, but was reduced to 4d. the pound. It was allowed to
expire with the end of the session of parliament which followed the
25th March 1781.
The third bounty of this kind was that granted (much about the time
that we were beginning sometimes to court, and sometimes to quarrel
with our American colonies), by the 4th. Geo. III. chap. 26, upon the
importation of hemp, or undressed flax, from the British plantations.
This bounty was granted for twenty-one years, from the 24th June 1764
to the 24th June 1785. For the first seven years, it was to be at the
rate of £8 the ton; for the second at £6; and for the third at £4. It
was not extended to Scotland, of which the climate (although hemp is
sometimes raised there in small quantities, and of an inferior
quality) is not very fit for that produce. Such a bounty upon the
importation of Scotch flax in England would have been too great a
discouragement to the native produce of the southern part of the
united kingdom.
The fourth bounty of this kind was that granted by the 5th Geo. III.
chap. 45, upon the importation of wood from America. It was granted
for nine years from the 1st January 1766 to the 1st January 1775.
During the first three years, it was to be for every
hundred-and-twenty good deals, at the rate of £1, and for every load
containing fifty cubic feet of other square timber, at the rate of
12s. For the second three years, it was for deals, to be at the rate
of 15s., and for other squared timber at the rate of 8s.; and for the
third three years, it was for deals, to be at the rate of 10s.; and
for every other squared timber at the rate of 5s.
The fifth bounty of this kind was that granted by the 9th Geo. III.
chap. 38, upon the importation of raw silk from the British
plantations. It was granted for twenty-one years, from the 1st January
1770, to the 1st January 1791. For the first seven years, it was to be
at the rate of £25 for every hundred pounds value; for the second, at
£20; and for the third, at £15. The management of the silk-worm, and
the preparation of silk, requires so much hand-labour, and labour is
so very dear in America, that even this great bounty, I have been
informed, was not likely to produce any considerable effect.
The sixth Bounty of this kind was that granted by 11th Geo. III. chap.
50, for the importation of pipe, hogshead, and barrelstaves and
leading from the British plantations. It was granted for nine years,
from 1st January 1772 to the 1st January 1781. For the first three
years, it was, for a certain quantity of each, to be at the rate of
£6; for the second three years at £4; and for the third three years at
£2.
The seventh and last bounty of this kind was that granted by the 19th
Geo. III chap. 37, upon the importation of hemp from Ireland. It was
granted in the same manner as that for the importation of hemp and
undressed flax from America, for twenty-one years, from the 24th June
1779 to the 24th June 1800. The term is divided likewise into three
periods, of seven years each; and in each of those periods, the rate
of the Irish bounty is the same with that of the American. It does
not, however, like the American bounty, extend to the importation of
undressed flax. It would have been too great a discouragement to the
cultivation of that plant in Great Britain. When this last bounty was
granted, the British and Irish legislatures were not in much better
humour with one another, than the British and American had been
before. But this boon to Ireland, it is to be hoped, has been granted
under more fortunate auspices than all those to America. The same
commodities, upon which we thus gave bounties, when imported from
America, were subjected to considerable duties when imported from any
other country. The interest of our American colonies was regarded as
the same with that of the mother country. Their wealth was considered
as our wealth. Whatever money was sent out to them, it was said, came
all back to us by the balance of trade, and we could never become a
farthing the poorer by any expense which we could lay out upon them.
They were our own in every respect, and it was an expense laid out
upon the improvement of our own property, and for the profitable
employment of our own people. It is unnecessary, I apprehend, at
present to say anything further, in order to expose the folly of a
system which fatal experience has now sufficiently exposed. Had our
American colonies really been a part of Great Britain, those bounties
might have been considered as bounties upon production, and would
still have been liable to all the objections to which such bounties
are liable, but to no other.
The exportation of the materials of manufacture is sometimes
discouraged by absolute prohibitions, and sometimes by high duties.
Our woollen manufacturers have been more successful than any other
class of workmen, in persuading the legislature that the prosperity of
the nation depended upon the success and extension of their particular
business. They have not only obtained a monopoly against the
consumers, by an absolute prohibition of importing woollen cloths from
any foreign country; but they have likewise obtained another monopoly
against the sheep farmers and growers of wool, by a similar
prohibition of the exportation of live sheep and wool. The severity of
many of the laws which have been enacted for the security of the
revenue is very justly complained of, as imposing heavy penalties upon
actions which, antecedent to the statutes that declared them to be
crimes, had always been understood to be innocent. But the cruellest
of our revenue laws, I will venture to affirm, are mild and gentle, in
comparison to some of those which the clamour of our merchants and
manufacturers has extorted from the legislature, for the support of
their own absurd and oppressive monopolies. Like the laws of Draco,
these laws may be said to be all written in blood.
By the 8th of Elizabeth, chap. 3, the exporter of sheep, lambs, or
rams, was for the first offence, to forfeit all his goods for ever, to
suffer a year's imprisonment, and then to have his left hand cut off
in a market town, upon a market day, to be there nailed up; and for
the second offence, to be adjudged a felon, and to suffer death
accordingly. To prevent the breed of our sheep from being propagated
in foreign countries, seems to have been the object of this law. By
the 13th and 14th of Charles II. chap. 18, the exportation of wool was
made felony, and the exporter subjected to the same penalties and
forfeitures as a felon.
For the honour of the national humanity, it is to be hoped that
neither of these statutes was ever executed. The first of them,
however, so far as I know, has never been directly repealed, and
serjeant Hawkins seems to consider it as still in force. It may,
however, perhaps be considered as virtually repealed by the 12th of
Charles II. chap. 32, sect. 3, which, without expressly taking away
the penalties imposed by former statutes, imposes a new penalty, viz.
that of 20s. for every sheep exported, or attempted to be exported,
together with the forfeiture of the sheep, and of the owner's share of
the sheep. The second of them was expressly repealed by the 7th and
8th of William III. chap. 28, sect. 4, by which it is declared that
"Whereas the statute of the 13th and 14th of king Charles II. made
against the exportation of wool, among other things in the said act
mentioned, doth enact the same to be deemed felony, by the severity of
which penalty the prosecution of offenders hath not been so
effectually put in execution; be it therefore enacted, by the
authority aforesaid, that so much of the said act, which relates to
the making the said offence felony, be repealed and made void."
The penalties, however, which are either imposed by this milder
statute, or which, though imposed by former statutes, are not repealed
by this one, are still sufficiently severe. Besides the forfeiture of
the goods, the exporter incurs the penalty of 3s. for every pound
weight of wool, either exported or attempted to be exported, that is,
about four or five times the value. Any merchant, or other person
convicted of this offence, is disabled from requiring any debt or
account belonging to him from any factor or other person. Let his
fortune be what it will, whether he is or is not able to pay those
heavy penalties, the law means to ruin him completely. But, as the
morals of the great body of the people are not yet so corrupt as those
of the contrivers of this statute, I have not heard that any advantage
has ever been taken of this clause. If the person convicted of this
offence is not able to pay the penalties within three months after
judgment, he is to be transported for seven years; and if he returns
before the expiration of that term, he is liable to the pains of
felony, without benefit of clergy. The owner of the ship, knowing this
offence, forfeits all his interest in the ship and furniture. The
master and mariners, knowing this offence, forfeit all their goods and
chattels, and suffer three months imprisonment. By a subsequent
statute, the master suffers six months imprisonment.
In order to prevent exportation, the whole inland commerce of wool is
laid under very burdensome and oppressive restrictions. It cannot be
packed in any box, barrel, cask, case, chest, or any other package,
but only in packs of leather or pack-cloth, on which must be marked on
the outside the words WOOL or YARN, in large letters, not less than
three inches long, on pain of forfeiting the same and the package, and
8s. for every pound weight, to be paid by the owner or packer. It
cannot be loaden on any horse or cart, or carried by land within five
miles of the coast, but between sun-rising, and sun-setting, on pain
of forfeiting the same, the horses and carriages. The hundred next
adjoining to the sea coast, out of, or through which the wool is
carried or exported, forfeits £20, if the wool is under the value of
£10; and if of greater value, then treble that value, together with
treble costs, to be sued for within the year. The execution to be
against any two of the inhabitants, whom the sessions must reimburse,
by an assessment on the other inhabitants, as in the cases of robbery.
And if any person compounds with the hundred for less than this
penalty, he is to be imprisoned for five years; and any other person
may prosecute. These regulations take place through the whole kingdom.
But in the particular counties of Kent and Sussex, the restrictions
are still more troublesome. Every owner of wool within ten miles of
the sea coast must give an account in writing, three days after
shearing, to the next officer of the customs, of the number of his
fleeces, and of the places where they are lodged. And before he
removes any part of them, he must give the like notice of the number
and weight of the fleeces, and of the name and abode of the person to
whom they are sold, and of the place to which it is intended they
should be carried. No person within fifteen miles of the sea, in the
said counties, can buy any wool, before he enters into bond to the
king, that no part of the wool which he shall so buy shall be sold by
him to any other person within fifteen miles of the sea. If any wool
is found carrying towards the sea side in the said counties, unless it
has been entered and security given as aforesaid, it is forfeited, and
the offender also forfeits 3s. for every pound weight, if any person
lay any wool, not entered as aforesaid, within fifteen miles of the
sea, it must be seized and forfeited; and if, after such seizure, any
person shall claim the same, he must give security to the exchequer,
that if he is cast upon trial he shall pay treble costs, besides all
other penalties.
When such restrictions are imposed upon the inland trade, the coasting
trade, we may believe, cannot be left very free. Every owner of wool,
who carrieth, or causeth to be carried, any wool to any port or place
on the sea coast, in order to be from thence transported by sea to any
other place or port on the coast, must first cause an entry thereof to
be made at the port from whence it is intended to be conveyed,
containing the weight, marks, and number, of the packages, before he
brings the same within five miles of that port, on pain of forfeiting
the same, and also the horses, carts, and other carriages; and also of
suffering and forfeiting, as by the other laws in force against the
exportation of wool. This law, however (1st of William III. chap. 32),
is so very indulgent as to declare, that this shall not hinder any
person from carrying his wool home from the place of shearing, though
it be within five miles of the sea, provided that in ten days after
shearing, and before he remove the wool, he do under his hand certify
to the next officer of the customs the true number of fleeces, and
where it is housed; and do not remove the same, without certifying to
such officer, under his hand, his intention so to do, three days
before. Bond must be given that the wool to be carried coast-ways is
to be landed at the particular port for which it is entered outwards;
and if my part of it is landed without the presence of an officer, not
only the forfeiture of the wool is incurred, as in other goods, but
the usual additional penalty of 3s. for every pound weight is likewise
incurred.
Our woollen manufacturers, in order to justify their demand of such
extraordinary restrictions and regulations, confidently asserted, that
English wool was of a peculiar quality, superior to that of any other
country; that the wool of other countries could not, without some
mixture of it, be wrought up into any tolerable manufacture; that fine
cloth could not be made without it; that England, therefore, if the
exportation of it could be totally prevented, could monopolize to
herself almost the whole woollen trade of the world; and thus, having
no rivals, could sell at what price she pleased, and in a short time
acquire the most incredible degree of wealth by the most advantageous
balance of trade. This doctrine, like most other doctrines which are
confidently asserted by any considerable number of people, was, and
still continues to be, most implicitly believed by a much greater
number: by almost all those who are either unacquainted with the
woollen trade, or who have not made particular inquiries. It is,
however, so perfectly false, that English wool is in any respect
necessary for the making of fine cloth, that it is altogether unfit
for it. Fine cloth is made altogether of Spanish wool. English wool,
cannot be even so mixed with Spanish wool, as to enter into the
composition without spoiling and degrading, in some degree, the fabric
of the cloth.
It has been shown in the foregoing part of this work, that the effect
of these regulations has been to depress the price of English wool,
not only below what it naturally would be in the present times, but
very much below what it actually was in the time of Edward III. The
price of Scotch wool, when, in consequence of the Union, it became
subject to the same regulations, is said to have fallen about one
half. It is observed by the very accurate and intelligent author of
the Memoirs of Wool, the Reverend Mr. John Smith, that the price of
the best English wool in England, is generally below what wool of a
very inferior quality commonly sells for in the market of Amsterdam.
To depress the price of this commodity below what may be called its
natural and proper price, was the avowed purpose of those regulations;
and there seems to be no doubt of their having produced the effect
that was expected from them.
This reduction of price, it may perhaps be thought, by discouraging
the growing of wool, must have reduced very much the annual produce of
that commodity, though not below what it formerly was, yet below what,
in the present state of things, it would probably have been, had it,
in consequence of an open and free market, been allowed to rise to the
natural and proper price. I am, however, disposed to believe, that the
quantity of the annual produce cannot have been much, though it may,
perhaps, have been a little affected by these regulations. The growing
of wool is not the chief purpose for which the sheep farmer employs
his industry and stock. He expects his profit, not so much from the
price of the fleece, as from that of the carcase; and the average or
ordinary price of the latter must even, in many cases, make up to him
whatever deficiency there may be in the average or ordinary price of
the former. It has been observed, in the foregoing part of this work,
that 'whatever regulations tend to sink the price, either of wool or
of raw hides, below what it naturally would be, must, in an improved
and cultivated country, have some tendency to raise the price of
butcher's meat. The price, both of the great and small cattle which
are fed on improved and cultivated land, must be sufficient to pay the
rent which the landlord, and the profit which the farmer, has reason
to expect from improved and cultivated land. If it is not, they will
soon cease to feed them. Whatever part of this price, therefore, is
not paid by the wool and the hide, must be paid by the carcase. The
less there is paid for the one, the more must be paid for the other.
In what manner this price is to be divided upon the different parts of
the beast, is indifferent to the landlords and farmers, provided it is
all paid to them. In an improved and cultivated country, therefore,
their interest as landlords and farmers cannot be much affected by
such regulations, though their interest as consumers may, by the rise
in the price of provisions.' According to this reasoning, therefore,
this degradation in the price of wool is not likely, in an improved
and cultivated country, to occasion any diminution in the annual
produce of that commodity; except so far as, by raising the price of
mutton, it may somewhat diminish the demand for, and consequently the
production of, that particular species of butcher's meat, Its effect,
however, even in this way, it is probable, is not very considerable.
But though its effect upon the quantity of the annual produce may not
have been very considerable, its effect upon the quality, it may
perhaps be thought, must necessarily have been very great. The
degradation in the quality of English wool, if not below what it was
in former times, yet below what it naturally would have been in the
present state of improvement and cultivation, must have been, it may
perhaps be supposed, very nearly in proportion to the degradation of
price. As the quality depends upon the breed, upon the pasture, and
upon the management and cleanliness of the sheep, during the whole
progress of the growth of the fleece, the attention to these
circumstances, it may naturally enough be imagined, can never be
greater than in proportion to the recompence which the price of the
fleece is likely to make for the labour and expense which that
attention requires. It happens, however, that the goodness of the
fleece depends, in a great measure, upon the health, growth, and bulk
of the animal: the same attention which is necessary for the
improvement of the carcase is, in some respect, sufficient for that of
the fleece. Notwithstanding the degradation of price, English wool is
said to have been improved considerably during the course even of the
present century. The improvement, might, perhaps, have been greater if
the price had been better; but the lowness of price, though it may
have obstructed, yet certainly it has not altogether prevented that
improvement.
The violence of these regulations, therefore, seems to have affected
neither the quantity nor the quality of the annual produce of wool, so
much as it might have been expected to do (though I think it probable
that it may have affected the latter a good deal more than the
former); and the interest of the growers of wool, though it must have
been hurt in some degree, seems upon the whole, to have been much less
hurt than could well have been imagined.
These considerations, however, will not justify the absolute
prohibition of the exportation of wool; but they will fully justify
the imposition of a considerable tax upon that exportation.
To hurt, in any degree, the interest of any one order of citizens, for
no other purpose but to promote that of some other, is evidently
contrary to that justice and equality of treatment which the sovereign
owes to all the different orders of his subjects. But the prohibition
certainly hurts, in some degree, the interest of the growers of wool,
for no other purpose but to promote that of the manufacturers.
Every different order of citizens is bound to contribute to the
support of the sovereign or commonwealth. A tax of five, or even of
ten shillings, upon the exportation of every tod of wool, would
produce a very considerable revenue to the sovereign. It would hurt
the interest of the growers somewhat less than the prohibition,
because it would not probably lower the price of wool quite so much.
It would afford a sufficient advantage to the manufacturer, because,
though he might not buy his wool altogether so cheap as under the
prohibition, he would still buy it at least five or ten shillings
cheaper than any foreign manufacturer could buy it, besides saving the
freight and insurance which the other would be obliged to pay. It is
scarce possible to devise a tax which could produce any considerable
revenue to the sovereign, and at the same time occasion so little
inconveniency to anybody.
The prohibition, notwithstanding all the penalties which guard it,
does not prevent the exportation of wool. It is exported, it is well
known, in great quantities. The great difference between the price in
the home and that in the foreign market, presents such a temptation to
smuggling, that all the rigour of the law cannot prevent it. This
illegal exportation is advantageous to nobody but the smuggler. A
legal exportation, subject to a tax, by affording a revenue to the
sovereign, and thereby saving the imposition of some other, perhaps
more burdensome and inconvenient taxes, might prove advantageous to
all the different subjects of the state.
The exportation of fuller's earth, or fuller's clay, supposed to be
necessary for preparing and cleansing the woollen manufactures, has
been subjected to nearly the same penalties as the exportation of
wool. Even tobacco-pipe clay, though acknowledged to be different from
fuller's clay, yet, on account of their resemblance, and because
fuller's clay might sometimes be exported as tobacco-pipe clay, has
been laid under the same prohibitions and penalties.
By the 13th and 14th of Charles II. chap, 7, the exportation, not only
of raw hides, but of tanned leather, except in the shape of boots,
shoes, or slippers, was prohibited; and the law gave a monopoly to our
boot-makers and shoe-makers, not only against our graziers, but
against our tanners. By subsequent statutes, our tanners have got
themselves exempted from this monopoly, upon paying a small tax of
only one shilling on the hundred weight of tanned leather, weighing
one hundred and twelve pounds. They have obtained likewise the
drawback of two-thirds of the excise duties imposed upon their
commodity, even when exported without further manufacture. All
manufactures of leather may be exported duty free; and the exporter is
besides entitled to the drawback of the whole duties of excise. Our
graziers still continue subject to the old monopoly. Graziers,
separated from one another, and dispersed through all the different
corners of the country, cannot, without great difficulty, combine
together for the purpose either of imposing monopolies upon their
fellow-citizens, or of exempting themselves from such as may have been
imposed upon them by other people. Manufacturers of all kinds,
collected together in numerous bodies in all great cities, easily can.
Even the horns of cattle are prohibited to be exported; and the two
insignificant trades of the horner and comb-maker enjoy, in this
respect, a monopoly against the graziers.
Restraints, either by prohibitions, or by taxes, upon the exportation
of goods which are partially, but not completely manufactured, are not
peculiar to the manufacture of leather. As long as anything remains to
be done, in order to fit any commodity for immediate use and
consumption, our manufacturers think that they themselves ought to
have the doing of it. Woollen yarn and worsted are prohibited to be
exported, under the same penalties as wool even white cloths we
subject to a duty upon exportation; and our dyers have so far obtained
a monopoly against our clothiers. Our clothiers would probably have
been able to defend themselves against it; but it happens that the
greater part of our principal clothiers are themselves likewise dyers.
Watch-cases, clock-cases, and dial-plates for clocks and watches, have
been prohibited to be exported. Our clock-makers and watch-makers are,
it seems, unwilling that the price of this sort of workmanship should
be raised upon them by the competition of foreigners.
By some old statutes of Edward III, Henry VIII. and Edward VI. the
exportation of all metals was prohibited. Lead and tin were alone
excepted, probably on account of the great abundance of those metals;
in the exportation of which a considerable part of the trade of the
kingdom in those days consisted. For the encouragement of the mining
trade, the 5th of William and Mary, chap.17, exempted from this
prohibition iron, copper, and mundic metal made from British ore. The
exportation of all sorts of copper bars, foreign as well as British,
was afterwards permitted by the 9th and 10th of William III. chap 26.
The exportation of unmanufactured brass, of what is called gun-metal,
bell-metal, and shroff metal, still continues to be prohibited. Brass
manufactures of all sorts may be exported duty free.
The exportation of the materials of manufacture, where it is not
altogether prohibited, is, in many cases, subjected to considerable
duties.
By the 8th Geo. I. chap.15, the exportation of all goods, the produce
of manufacture of Great Britain, upon which any duties had been
imposed by former statutes, was rendered duty free. The following
goods, however, were excepted: alum, lead, lead-ore, tin, tanned
leather, copperas, coals, wool, cards, white woollen cloths, lapis
calaminaris, skins of all sorts, glue, coney hair or wool, hares wool,
hair of all sorts, horses, and litharge of lead. If you except horses,
all these are either materials of manufacture, or incomplete
manufactures (which may be considered as materials for still further
manufacture), or instruments of trade. This statute leaves them
subject to all the old duties which had ever been imposed upon them,
the old subsidy, and one per cent. outwards.
By the same statute, a great number of foreign drugs for dyers use are
exempted from all duties upon importation. Each of them, however, is
afterwards subjected to a certain duty, not indeed a very heavy one,
upon exportation. Our dyers, it seems, while they thought it for their
interest to encourage the importation of those drugs, by an exemption
from all duties, thought it likewise for their own interest to throw
some small discouragement upon their exportation. The avidity,
however, which suggested this notable piece of mercantile ingenuity,
most probably disappointed itself of its object. It necessarily taught
the importers to be more careful than they might otherwise have been,
that their importation should not exceed what was necessary for the
supply of the home market. The home market was at all times likely to
be more scantily supplied; the commodities were at all times likely to
be somewhat dearer there than they would have been, had the
exportation been rendered as free as the importation.
By the above-mentioned statute, gum senega, or gum arabic, being among
the enumerated dyeing drugs, might be imported duty free. They were
subjected, indeed, to a small poundage duty, amounting only to
threepence in the hundred weight, upon their re-exportation. France
enjoyed, at that time, an exclusive trade to the country most
productive of those drugs, that which lies in the neighbourhood of the
Senegal; and the British market could not be easily supplied by the
immediate importation of them from the place of growth. By the 25th
Geo. II. therefore, gum senega was allowed to be imported (contrary to
the general dispositions of the act of navigation) from any part of
Europe. As the law, however, did not mean to encourage this species of
trade, so contrary to the general principles of the mercantile policy
of England, it imposed a duty of ten shillings the hundred weight upon
such importation, and no part of this duty was to be afterwards drawn
back upon its exportation. The successful war which began in 1755 gave
Great Britain the same exclusive trade to those countries which France
had enjoyed before. Our manufactures, as soon as the peace was made,
endeavoured to avail themselves of this advantage, and to establish a
monopoly in their own favour both against the growers and against the
importers of this commodity. By the 5th of Geo. III. therefore, chap.
37, the exportation of gum senega, from his majesty's dominions in
Africa, was confined to Great Britain, and was subjected to all the
same restrictions, regulations, forfeitures, and penalties, as that of
the enumerated commodities of the British colonies in America and the
West Indies. Its importation, indeed, was subjected to a small duty of
sixpence the hundred weight; but its re-exportation was subjected to
the enormous duty of one pound ten shillings the hundred weight. It
was the intention of our manufacturers, that the whole produce of
those countries should be imported into Great Britain; and in order
that they themselves might be enabled to buy it at their own price,
that no part of it should be exported again, but at such an expense as
would sufficiently discourage that exportation. Their avidity,
however, upon this, as well as upon many other occasions, disappointed
itself of its object. This enormous duty presented such a temptation
to smuggling, that great quantities of this commodity were
clandestinely exported, probably to all the manufacturing countries of
Europe, but particularly to Holland, not only from Great Britain, but
from Africa. Upon this account, by the 14th Geo. III. chap.10, this
duty upon exportation was reduced to five shillings the hundred
weight.
In the book of rates, according to which the old subsidy was levied,
beaver skins were estimated at six shillings and eight pence a piece;
and the different subsidies and imposts which, before the year 1722,
had been laid upon their importation, amounted to one-fifth part of
the rate, or to sixteen pence upon each skin; all of which, except
half the old subsidy, amounting only to twopence, was drawn back upon
exportation. This duty, upon the importation of so important a
material of manufacture, had been thought too high; and, in the year
1722, the rate was reduced to two shillings and sixpence, which
reduced the duty upon importation to sixpence, and of this only
one-half was to be drawn back upon exportation. The same successful
war put the country most productive of beaver under the dominion of
Great Britain; and beaver skins being among the enumerated
commodities, the exportation from America was consequently confined to
the market of Great Britain. Our manufacturers soon bethought
themselves of the advantage which they might make of this
circumstance; and in the year 1764, the duty upon the importation of
beaver skin was reduced to one penny, but the duty upon exportation
was raised to sevenpence each skin, without any drawback of the duty
upon importation. By the same law, a duty of eighteen pence the pound
was imposed upon the exportation of beaver wool or woumbs, without
making any alteration in the duty upon the importation of that
commodity, which, when imported by British, and in British shipping,
amounted at that time to between fourpence and fivepence the piece.
Coals may be considered both as a material of manufacture, and as an
instrument of trade. Heavy duties, accordingly, have been imposed upon
their exportation, amounting at present (1783) to more than five
shillings the ton, or more than fifteen shillings the chaldron,
Newcastle measure; which is, in most cases, more than the original
value of the commodity at the coal-pit, or even at the shipping port
for exportation.
The exportation, however, of the instruments of trade, properly so
called, is commonly restrained, not by high duties, but by absolute
prohibitions. Thus, by the 7th and 8th of William III chap.20, sect.8,
the exportation of frames or engines for knitting gloves or stockings,
is prohibited, under the penalty, not only of the forfeiture of such
frames or engines, so exported, or attempted to be exported, but of
forty pounds, one half to the king, the other to the person who shall
inform or sue for the same. In the same manner, by the 14th Geo. III.
chap. 71, the exportation to foreign parts, of any utensils made use
of in the cotton, linen, woollen, and silk manufactures, is prohibited
under the penalty, not only of the forfeiture of such utensils, but of
two hundred pounds, to be paid by the person who shall offend in this
manner; and likewise of two hundred pounds, to be paid by the master
of the ship, who shall knowingly suffer such utensils to be loaded on
board his ship.
When such heavy penalties were imposed upon the exportation of the
dead instruments of trade, it could not well be expected that the
living instrument, the artificer, should be allowed to go free.
Accordingly, by the 5th Geo. I. chap. 27, the person who shall be
convicted of enticing any artificer, of or in any of the manufactures
of Great Britain, to go into any foreign parts, in order to practise
or teach his trade, is liable, for the first offence, to be fined in
any sum not exceeding one hundred pounds, and to three months
imprisonment, and until the fine shall be paid; and for the second
offence, to be fined in any sum, at the discretion of the court, and
to imprisonment for twelve months, and until the fine shall be paid.
By the 23d Geo. II. chap. 13, this penalty is increased, for the first
offence, to five hundred pounds for every artificer so enticed, and to
twelve months imprisonment, and until the fine shall be paid; and for
the second offence, to one thousand pounds, and to two years
imprisonment, and until the fine shall be paid.
By the former of these two statutes, upon proof that any person has
been enticing any artificer, or that any artificer has promised or
contracted to go into foreign parts, for the purposes aforesaid, such
artificer may be obliged to give security, at the discretion of the
court, that he shall not go beyond the seas, and may be committed to
prison until he give such security.
If any artificer has gone beyond the seas, and is exercising or
teaching his trade in any foreign country, upon warning being given to
him by any of his majesty's ministers or consuls abroad, or by one of
his majesty's secretaries of state, for the time being, if he does
not, within six months after such warning, return into this realm, and
from henceforth abide and inhabit continually within the same, he is
from thenceforth declared incapable of taking any legacy devised to
him within this kingdom, or of being executor or administrator to any
person, or of taking any lands within this kingdom, by descent,
devise, or purchase. He likewise forfeits to the king all his lands,
goods, and chattels; is declared an alien in every respect; and is put
out of the king's protection.
It is unnecessary, I imagine, to observe how contrary such regulations
are to the boasted liberty of the subject, of which we affect to be so
very jealous; but which, in this case, is so plainly sacrificed to the
futile interests of our merchants and manufacturers.
The laudable motive of all these regulations, is to extend our own
manufactures, not by their own improvement, but by the depression of
those of all our neighbours, and by putting an end, as much as
possible, to the troublesome competition of such odious and
disagreeable rivals. Our master manufacturers think it reasonable that
they themselves should have the monopoly of the ingenuity of all their
countrymen. Though by restraining, in some trades, the number of
apprentices which can be employed at one time, and by imposing the
necessity of a long apprenticeship in all trades, they endeavour, all
of them, to confine the knowledge of their respective employments to
as small a number as possible; they are unwilling, however, that any
part of this small number should go abroad to instruct foreigners.
Consumption is the sole end and purpose of all production; and the
interest of the producer ought to be attended to, only so far as it
may be necessary for promoting that of the consumer.
The maxim is so perfectly self-evident, that it would be absurd to
attempt to prove it. But in the mercantile system, the interest of the
consumer is almost constantly sacrificed to that of the producer; and
it seems to consider production, and not consumption, as the ultimate
end and object of all industry and commerce.
In the restraints upon the importation of all foreign commodities
which can come into competition with those of our own growth or
manufacture, the interest of the home consumer is evidently sacrificed
to that of the producer. It is altogether for the benefit of the
latter, that the former is obliged to pay that enhancement of price
which this monopoly almost always occasions.
It is altogether for the benefit of the producer, that bounties are
granted upon the exportation of some of his productions. The home
consumer is obliged to pay, first the tax which is necessary for
paying the bounty; and, secondly, the still greater tax which
necessarily arises from the enhancement of the price of the commodity
in the home market.
By the famous treaty of commerce with Portugal, the consumer is
prevented by duties from purchasing of a neighbouring country, a
commodity which our own climate does not produce; but is obliged to
purchase it of a distant country, though it is acknowledged, that the
commodity of the distant country is of a worse quality than that of
the near one. The home consumer is obliged to submit to this
inconvenience, in order that the producer may import into the distant
country some of his productions, upon more advantageous terms than he
otherwise would have been allowed to do. The consumer, too, is obliged
to pay whatever enhancement in the price of those very productions
this forced exportation may occasion in the home market.
But in the system of laws which has been established for the
management of our American and West Indian colonies, the interest of
the home consumer has been sacrificed to that of the producer, with a
more extravagant profusion than in all our other commercial
regulations. A great empire has been established for the sole purpose
of raising up a nation of customers, who should be obliged to buy,
from the shops of our different producers, all the goods with which
these could supply them. For the sake of that little enhancement of
price which this monopoly might afford our producers, the home
consumers have been burdened with the whole expense of maintaining and
defending that empire. For this purpose, and for this purpose only, in
the two last wars, more than two hundred millions have been spent, and
a new debt of more than a hundred and seventy millions has been
contracted, over and above all that had been expended for the same
purpose in former wars. The interest of this debt alone is not only
greater than the whole extraordinary profit which, it never could be
pretended, was made by the monopoly of the colony trade, but than the
whole value of that trade, or than the whole value of the goods which,
at an average, have been annually exported to the colonies.
It cannot be very difficult to determine who have been the contrivers
of this whole mercantile system; not the consumers, we may believe,
whose interest has been entirely neglected; but the producers, whose
interest has been so carefully attended to; and among this latter
class, our merchants and manufacturers have been by far the principal
architects. In the mercantile regulations which have been taken notice
of in this chapter, the interest of our manufacturers has been most
peculiarly attended to; and the interest, not so much of the
consumers, as that of some other sets of producers, has been
sacrificed to it.
CHAPTER IX.
OF THE AGRICULTURAL SYSTEMS, OR OF THOSE SYSTEMS OF POLITICAL ECONOMY
WHICH REPRESENT THE PRODUCE OF LAND, AS EITHER THE SOLE OR THE
PRINCIPAL SOURCE OF THE REVENUE AND WEALTH OF EVERY COUNTRY.
The agricultural systems of political economy will not require so long
an explanation as that which I have thought it necessary to bestow
upon the mercantile or commercial system.
That 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.
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.
Mr. 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 public accounts; and of abilities, in
short, every way fitted for introducing method and good order into the
collection and expenditure of the public revenue. That minister had
unfortunately embraced all the prejudices of the mercantile system, in
its nature and essence a system of restraint and regulation, and such
as could scarce fail to be agreeable to a laborious and plodding man
of business, who had been accustomed to regulate the different
departments of public offices, and to establish the necessary checks
and controls 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 public 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, 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 ancient
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. This state of discouragement and
depression was felt more or less in every different part of the
country, and many different inquiries 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.
If 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
overvalued in comparison with that of the country, so in their system
it seems to be as certainly under-valued.
The 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.
The class of proprietors contributes to the annual produce, by the
expense which they may occasionally lay out upon the improvement of
the land, upon the buildings, drains, inclosures, 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 expense or capital which he thus employs in the
improvement of his land. Such expenses are in this system called
ground expenses (depenses foncieres).
The cultivators or farmers contribute to the annual produce, by what
are in this system called the original and annual expenses (depenses
primitives, et depenses annuelles), which they lay out upon the
cultivation of the land. The original expenses 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 expenses consist in
the seed, in the wear and tear of 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 expenses, together with
the ordinary profits of stock; and, secondly, to replace to him
annually the whole of his annual expenses, together likewise with the
ordinary profits of stock. Those two sorts of expenses 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. 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 reduces 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 completest manner, all the necessary expenses 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 completely all those necessary expenses, 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.
Their original and annual expenses are for the same reason called, In
this system, productive expenses, because, over and above replacing
their own value, they occasion the annual reproduction of this neat
produce.
The ground expenses, 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 expenses. Till the whole of those
expenses, together with the ordinary profits of stock, have been
completely 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 expenses,
over and above reproducing in the completest manner their own value,
occasion likewise, after a certain time, a reproduction of a neat
produce, they are in this system considered as productive expenses.
The ground expenses of the landlord, however, together with the
original and the annual expenses of the farmer, are the only three
sorts of expenses which in this system are considered as productive.
All other expenses, 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.
Artificers 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 to him the whole expense 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 completely
repaying the whole expense 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 expense,
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 expense. The expense,
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
expense.
Mercantile stock is equally barren and unproductive with manufacturing
stock. 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 expense which must be laid out in
employing it.
The 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 £30 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 £30
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 complete manner, the whole consumption, the whole expense laid
out upon the employment and maintenance both of the workmen and of
their employer.
Artificers, 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 completely 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 what is 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 their common character; in the latter,
narrowness, meanness, and a selfish disposition, averse to all social
pleasure and enjoyment.
The unproductive class, that of merchants, artificers, and
manufacturers, is maintained and employed altogether at the expense 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 expense 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 expense
which must be paid out of it.
The 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 awkward 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 expense 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.
It 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.
It 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 the maintenance and employment of that class. The
establishment of perfect justice, of perfect liberty, and of perfect
equality, is the very simple secret which most effectually secures the
highest degree of prosperity to all the three classes.
The 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 expense 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.
Such 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.
It 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 only serve 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.
This 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.
The continual increase of the surplus produce of their land would, in
due time, create a greater capital than what would 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 these
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 little
artificers and manufacturers of such mercantile states, who had both
to bring from a greater 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 manufacturers of
such mercantile nations.
This 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 foreign trade, and, in due time, would justle them out
of it altogether.
According 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.
When 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
profits; 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.
Though, 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 duly 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.
In 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 Economical Table, 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. 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.
Some 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 proportionate to the
degree of the violation. Experience, however, would seem to shew, that
the human body frequently preserves, to all appearance at least, 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, 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, is a principle of preservation
capable of preventing and correcting, in many respects, the bad
effects of a political economy, in some degree both partial and
oppressive. Such a political economy, 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;
it the same manner as it has done in the natural body, for remedying
those of his sloth and intemperance.
The 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 shew the impropriety of this representation: --
First, this class, it is acknowledged, reproduces annually the
value of its own annual consmnption, 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.
Secondly, it seems, on 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 expense of their
masters, and the work which they perform is not of a nature to repay
that expense. 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. 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.
Thirdly, 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 ever 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.
When the patrons of this system assert, that the consumption of
artificers, manufacturer's, 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.
Fourthly, 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. 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.
The improvement in the productive powers of useful labour depends,
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;
so it is likewise capable of both these sorts of improvement in a much
higher degree {See book i chap. 1.} In this respect, therefore, the
class of cultivators can have no sort of advantage over that of
artificers and manufacturers.
The 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. 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.
Fifthly 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. 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. 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 expense 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.
This system, however, with all its imperfections, is perhaps the
nearest approximation to the truth that has yet been published upon
the subject of political economy; 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 comprehensions 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. They have for some years past
made a pretty considerable sect, distinguished in the French republic
of letters by the name of the Economists. Their works have certainly
been of some service to their country; not only by bringing into
general discussion, many subjects which had never been well examined
before, but by influencing, in some measure, the public 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. The ancient 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. This sect, in their
works, which are very numerous, and which treat not only of what is
properly called Political Economy, or of the nature and causes or 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. Qttesnai. 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, some time intendant of
Martinico, entitled, 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 ancient 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 economical 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.'
As the political economy 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.
The policy of China favours agriculture more than all other
employments. 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. In China, the great ambition
of every man is to get possession of a 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.
The Chinese have little respect for foreign trade. Your beggarly
commerce! was the language in which the mandarins of Pekin used to
talk to Mr. De Lange, the Russian envoy, concerning it {See the
Journal of Mr. De Lange, in Bell's Travels, vol. ii. p. 258, 276,
293.}. 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, or in those of foreign nations.
Manufactures, as in a small bulk they frequently contain a great
value, and can upon that account be transported at less expense from
one country to another than most parts of rude produce, are, in almost
all countries, the principal support of foreign trade. In countries,
besides, less extensive, and less favourably circumstanced for
inferior 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 shewn, by the extent of the
market. 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. The home market of China is,
perhaps, in extent, not much inferior to the market of all the
different countries of Europe put together. 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. 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 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.
The policy of ancient Egypt, too, and that of the Gentoo government of
Indostan, seem to have favoured agriculture more than all other
employments.
Both in ancient Egypt and 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 tailor, a tailor, etc. In both
countries, the cast of the priests holds 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.
The 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 ancient 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.
The ancient 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. 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 300 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, 50 such families as his
own, he cannot dispose of the whole product of his own labour. The
most numerous class of artificers will seldom, in a large country,
make more than one in 50, or one in a 100, of the 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 that 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, of 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 ancient 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 ancient 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. Ancient 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.
The sovereigns of China, of ancient 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.
The policy of the ancient republics 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 ancient 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, for
undergoing the fatigues and encountering the dangers of war. Such
occupations were considered as fit only for slaves, and the free
citizens of the states were prohibited from exercising them. 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. Slaves,
however, are very seldom inventive; and all the most important
improvements, either in machinery, or in the arrangement and
distribution of work, which facilitate and abridge labour have been
the discoveries of freemen. 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 of a desire to save his own labour at
the master's expense. 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. The work of the farmer must, upon
that account, generally have been dearer than that of the latter. The
Hungarian mines, it is remarked by Mr. Montesquieu, though not richer,
have always been wrought with less expense, 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 great deal of machinery, by
which they facilitate and abridge their own labour. 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 an 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 an European, or at farthest, an Egyptian manufacture, this high
price can be accounted for only by the great expense of the labour
which must have been employed about It, and the expense of this labour
again could arise from nothing but the awkwardness of the machinery
which is 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 {Plin. 1.
ix.c.39.}, dyed in a particular manner, cost a hundred denarii, or
£3:6s:8d. the pound weight. Others, dyed in another manner, cost a
thousand denarii the pound weight, or £33:6s:8d. The Roman pound, it
must be remembered, contained only twelve of our avoirdupois ounces.
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 {Plin. 1.
viii.c.48.}, 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 £30,000, others more than £300,000. 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 Dr. Arbuthnot, in ancient than in modern times; and the
very little variety which we find in that of the ancient 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 expense 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
expense 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 expense of any one dress, will naturally endeavour
to do so by the multitude and variety of their dresses.
The greatest and most important branch of the commerce of every
nation, it has already been observed, 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 these 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 exchangeable 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.
Those 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.
It 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.
All 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. 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 interests of the society. 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;
and, thirdly, the duty of erecting and maintaining certain public
works, and certain public 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 expense to any
individual, or small number of individuals, though it may frequently
do much more than repay it to a great society.
The proper performance of those several duties of the sovereign
necessarily supposes a certain expense; and this expense again
necessarily requires a certain revenue to support it. In the following
book, therefore, I shall endeavour to explain, first, what are the
necessary expenses of the sovereign or commonwealth; and which of
those expenses 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 expenses 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.
APPENDIX TO BOOK IV
The two following accounts are subjoined, in order to illustrate and
confirm what is said in the fifth chapter of the fourth book,
concerning the Tonnage Bounty to the Whit-herring Fishery. The reader,
I believe, may depend upon the accuracy of both accounts.
An account of Busses fitted out in Scotland for eleven Years, with the
Number of empty Barrels carried out, and the Number of Barrels of
Herrings caught; also the Bounty, at a Medium, on each Barrel of
Sea-sricks, and on each Barrel when fully packed.
Years Number of Empty Barrels Barrels of Her- Bounty paid on
Busses carried out rings caught the Busses
£. s. d.
1771 29 5,948 2,832 2,885 0 0
1772 168 41,316 22,237 11,055 7 6
1773 190 42,333 42,055 12,510 8 6
1774 240 59,303 56,365 26,932 2 6
1775 275 69,144 52,879 19,315 15 0
1776 294 76,329 51,863 21,290 7 6
1777 240 62,679 43,313 17,592 2 6
1778 220 56,390 40,958 16,316 2 6
1779 206 55,194 29,367 15,287 0 0
1780 181 48,315 19,885 13,445 12 6
1781 135 33,992 16,593 9,613 15 6
Totals 2,186 550,943 378,347 £165,463 14 0
Sea-sticks 378,347 Bounty, at a medium, for each
barrel of sea-sticks, £ 0 8 2¼
But a barrel of sea-sticks
being only reckoned two thirds
of a barrel fully packed, one
third to be deducted, which
¹/³deducted 126,115 brings the bounty to £ 0 12 3¾
Barrels fully
packed 252,231
And if the herrings are exported, there is besides a
premium of £ 0 2 8
So the bounty paid by government in money for each
barrel is £ 0 14 11¾
But if to this, the duty of the salt usually taken
credit for as expended in curing each barrel, which
at a medium, is, of foreign, one bushel and one-
fourth of a bushel, at 10s. a-bushel, be added, viz 0 12 6
the bounty on each barrel would amount to £ 1 7 5¾
If the herrings are cured with British salt, it will
stand thus, viz.
Bounty as before £ 0 14 11¾
But if to this bounty, the duty on two bushels of
Scotch salt, at 1s.6d. per bushel, supposed to be
the quantity, at a medium, used in curing each
barrel is added, viz. 0 3 0
The bounty on each barrel will amount to £ 0 17 11¾
And when buss herrings are entered for home
consumption in Scotland, and pay the shilling a
barrel of duty, the bounty stands thus, to wit,
as before £ 0 12 3¾
From which the shilling a barrel is to be deducted 0 1 0
£ 0 11 3¾
But to that there is to be added again, the duty of
the foreign salt used curing a barrel of herring viz 0 12 6
So that the premium allowed for each barrel of her-
rings entered for home consumption is £ 1 3 9¾
If the herrings are cured in British salt, it will
stand as follows viz.
Bounty on each barrel brought in by the busses, as
above £ 0 12 3¾
From which deduct 1s. a-barrel, paid at the time
they are entered for home consumption 0 1 0
£ 0 11 3¾
But if to the bounty, the the duty on two bushel
of Scotch salt, at 1s.6d. per bushel supposed to
be the quantity, at a medium, used in curing each
barrel, is added, viz 0 3 0
the premium for each barrel entered for home
consumption will be £ 1 14 3¾
Though the loss of duties upon herrings exported cannot, perhaps,
properly be considered as bounty, that upon herrings entered for
home consumption certainly may.
An account of the Quantity of Foreign Salt imported into Scotland,
and of Scotch Salt delivered Duty-free from the Works there, for
the Fishery, from the 5th. of April 1771 to the 5th. of April 1782
with the Medium of both for one Year.
Foreign Salt Scotch Salt delivered
PERIOD imported from the Works
Bushels Bushels
From 5th. April 1771 to
5th. April 1782 936,974 168,226
Medium for one year 85,159½ 15,293¼
It is to be observed, that the bushel of foreign salt weighs 48lbs.,
that of British weighs 56lbs. only.
BOOK V.
OF THE REVENUE OF THE SOVEREIGN OR COMMONWEALTH
CHAPTER I.
OF THE EXPENSES OF THE SOVEREIGN OR COMMONWEALTH.
PART I. Of the Expense of Defence.
The first duty of the sovereign, that of protecting the society from
the violence and invasion of other independent societies, can be
performed only by means of a military force. But the expense both of
preparing this military force in time of peace, and of employing it in
time of war, is very different in the different states of society, in
the different periods of improvement.
Among nations of hunters, the lowest and rudest state of society, such
as we find it among the native tribes of North America, every man is a
warrior, as well as a hunter. When he goes to war, either to defend
his society, or to revenge the injuries which have been done to it by
other societies, he maintains himself by his own labour, in the same
manner as when he lives at home. His society (for in this state of
things there is properly neither sovereign nor commonwealth) is at no
sort of expense, either to prepare him for the field, or to maintain
him while he is in it.
Among nations of shepherds, a more advanced state of society, such as
we find it among the Tartars and Arabs, every man is, in the same
manner, a warrior. Such nations have commonly no fixed habitation, but
live either in tents, or in a sort of covered waggons, which are
easily transported from place to place. The whole tribe, or nation,
changes its situation according to the different seasons of the year,
as well as according to other accidents. When its herds and flocks
have consumed the forage of one part of the country, it removes to
another, and from that to a third. In the dry season, it comes down to
the banks of the rivers; in the wet season, it retires to the upper
country. When such a nation goes to war, the warriors will not trust
their herds and flocks to the feeble defence of their old men, their
women and children; and their old men, their women and children, will
not be left behind without defence, and without subsistence. The whole
nation, besides, being accustomed to a wandering life, even in time of
peace, easily takes the field in time of war. Whether it marches as an
army, or moves about as a company of herdsmen, the way of life is
nearly the same, though the object proposed by it be very different.
They all go to war together, therefore, and everyone does as well as
he can. Among the Tartars, even the women have been frequently known
to engage in battle. If they conquer, whatever belongs to the hostile
tribe is the recompence of the victory; but if they are vanquished,
all is lost; and not only their herds and flocks, but their women and
children become the booty of the conqueror. Even the greater part of
those who survive the action are obliged to submit to him for the sake
of immediate subsistence. The rest are commonly dissipated and
dispersed in the desert.
The ordinary life, the ordinary exercise of a Tartar or Arab, prepares
him sufficiently for war. Running, wrestling, cudgel-playing, throwing
the javelin, drawing the bow, etc. are the common pastimes of those
who live in the open air, and are all of them the images of war. When
a Tartar or Arab actually goes to war, he is maintained by his own
herds and flocks, which he carries with him, in the same manner as in
peace. His chief or sovereign (for those nations have all chiefs or
sovereigns) is at no sort of expense in preparing him for the field;
and when he is in it, the chance of plunder is the only pay which he
either expects or requires.
An army of hunters can seldom exceed two or three hundred men. The
precarious subsistence which the chace affords, could seldom allow a
greater number to keep together for any considerable time. An army of
shepherds, on the contrary, may sometimes amount to two or three
hundred thousand. As long as nothing stops their progress, as long as
they can go on from one district, of which they have consumed the
forage, to another, which is yet entire; there seems to be scarce any
limit to the number who can march on together. A nation of hunters can
never be formidable to the civilized nations in their neighbourhood; a
nation of shepherds may. Nothing can be more contemptible than an
Indian war in North America; nothing, on the contrary, can be more
dreadful than a Tartar invasion has frequently been in Asia. The
judgment of Thucydides, that both Europe and Asia could not resist the
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