An Inquiry into the Nature and Causes of the Wealth of Nations
by
Adam Smith
Part 19 out of 19
they export to Great Britain is not equal to that of the manufactures
which they import for their own use, and for that of some of the other
colonies, to which they are the carriers. A balance, therefore, must
be paid to the mother-country in gold and silver and this balance they
generally find.
In the sugar colonies, the value of the produce annually exported to
Great Britain is much greater than that of all the goods imported from
thence. If the sugar and rum annually sent to the mother-country were
paid for in those colonies, Great Britain would be obliged to send
out, every year, a very large balance in money; and the trade to the
West Indies would, by a certain species of politicians, be considered
as extremely disadvantageous. But it so happens, that many of the
principal proprietors of the sugar plantations reside in Great
Britain. Their rents are remitted to them in sugar and rum, the
produce of their estates. The sugar and rum which the West India
merchants purchase in those colonies upon their own account, are not
equal in value to the goods which they annually sell there. A balance,
therefore, must necessarily be paid to them in gold and silver, and
this balance, too, is generally found.
The difficulty and irregularity of payment from the different colonies
to Great Britain, have not been at all in proportion to the greatness
or smallness of the balances which were respectively due from them.
Payments have, in general, been more regular from the northern than
from the tobacco colonies, though the former have generally paid a
pretty large balance in money, while the latter have either paid no
balance, or a much smaller one. The difficulty of getting payment from
our different sugar colonies has been greater or less in proportion,
not so much to the extent of the balances respectively due from them,
as to the quantity of uncultivated land which they contained; that is,
to the greater or smaller temptation which the planters have been
under of over-trading, or of undertaking the settlement and plantation
of greater quantities of waste land than suited the extent of their
capitals. The returns from the great island of Jamaica, where there is
still much uncultivated land, have, upon this account, been, in
general, more irregular and uncertain than those from the smaller
islands of Barbadoes, Antigua, and St. Christopher's, which have, for
these many years, been completely cultivated, and have, upon that
account, afforded less field for the speculations of the planter. The
new acquisitions of Grenada, Tobago, St. Vincent's, and Dominica, have
opened a new field for speculations of this kind; and the returns
front those islands have of late been as irregular and uncertain as
those from the great island of Jamaica.
It is not, therefore, the poverty of the colonies which occasions, in
the greater part of them, the present scarcity of gold and silver
money. Their great demand for active and productive stock makes it
convenient for them to have as little dead stock as possible, and
disposes them, upon that account, to content themselves with a
cheaper, though less commodious instrument of commerce, than gold and
silver. They are thereby enabled to convert the value of that gold and
silver into the instruments of trade, into the materials of clothing,
into household furniture, and into the iron work necessary for
building and extending their settlements and plantations. In those
branches of business which cannot be transacted without gold and
silver money, it appears, that they can always find the necessary
quantity of those metals; and if they frequently do not find it, their
failure is generally the effect, not of their necessary poverty, but
of their unnecessary and excessive enterprise. It is not because they
are poor that their payments are irregular and uncertain, but because
they are too eager to become excessively rich. Though all that part of
the produce of the colony taxes, which was over and above what was
necessary for defraying the expense of their own civil and military
establishments, were to be remitted to Great Britain in gold and
silver, the colonies have abundantly wherewithal to purchase the
requisite quantity of those metals. They would in this case be
obliged, indeed, to exchange a part of their surplus produce, with
which they now purchase active and productive stock, for dead stock.
In transacting their domestic business, they would be obliged to
employ a costly, instead of a cheap instrument of commerce; and the
expense of purchasing this costly instrument might damp somewhat the
vivacity and ardour of their excessive enterprise in the improvement
of land. It might not, however, be necessary to remit any part of the
American revenue in gold and silver. It might be remitted in bills
drawn upon, and accepted by, particular merchants or companies in
Great Britain, to whom a part of the surplus produce of America had
been consigned, who would pay into the treasury the American revenue
in money, after having themselves received the value of it in goods;
and the whole business might frequently be transacted without
exporting a single ounce of gold or silver from America.
It is not contrary to justice, that both Ireland and America should
contribute towards the discharge of the public debt of Great Britain.
That debt has been contracted in support of the government established
by the Revolution; a government to which the protestants of Ireland
owe, not only the whole authority which they at present enjoy in their
own country, but every security which they possess for their liberty,
their property, and their religion; a government to which several of
the colonies of America owe their present charters, and consequently
their present constitution; and to which all the colonies of America
owe the liberty, security, and property, which they have ever since
enjoyed. That public debt has been contracted in the defence, not of
Great Britain alone, but of all the different provinces of the empire.
The immense debt contracted in the late war in particular, and a great
part of that contracted in the war before, were both properly
contracted in defence of America.
By a union with Great Britain, Ireland would gain, besides the freedom
of trade, other advantages much more important, and which would much
more than compensate any increase of taxes that might accompany that
union. By the union with England, the middling and inferior ranks of
people in Scotland gained a complete deliverance from the power of an
aristocracy, which had always before oppressed them. By a union with
Great Britain, the greater part of people of all ranks in Ireland
would gain an equally complete deliverance from a much more oppressive
aristocracy; an aristocracy not founded, like that of Scotland, in the
natural and respectable distinctions of birth and fortune, but in the
most odious of all distinctions, those of religious and political
prejudices; distinctions which, more than any other, animate both the
insolence of the oppressors, and the hatred and indignation of the
oppressed, and which commonly render the inhabitants of the same
country more hostile to one another than those of different countries
ever are. Without a union with Great Britain, the inhabitants of
Ireland are not likely, for many ages, to consider themselves as one
people.
No oppressive aristocracy has ever prevailed in the colonies. Even
they, however, would, in point of happiness and tranquillity, gain
considerably by a union with Great Britain. It would, at least,
deliver them from those rancourous and virulent factions which are
inseparable from small democracies, and which have so frequently
divided the affections of their people, and disturbed the tranquillity
of their governments, in their form so nearly democratical. In the
case of a total separation from Great Britain, which, unless prevented
by a union of this kind, seems very likely to take place, those
factions would be ten times more virulent than ever. Before the
commencement of the present disturbances, the coercive power of the
mother-country had always been able to restrain those factions from
breaking out into any thing worse than gross brutality and insult. If
that coercive power were entirely taken away, they would probably soon
break out into open violence and bloodshed. In all great countries
which are united under one uniform government, the spirit of party
commonly prevails less in the remote provinces than in the centre of
the empire. The distance of those provinces from the capital, from the
principal seat of the great scramble of faction and ambition, makes
them enter less into the views of any of the contending parties, and
renders them more indifferent and impartial spectators of the conduct
of all. The spirit of party prevails less in Scotland than in England.
In the case of a union, it would probably prevail less in Ireland than
in Scotland; and the colonies would probably soon enjoy a degree of
concord and unanimity, at present unknown in any part of the British
empire. Both Ireland and the colonies, indeed, would be subjected to
heavier taxes than any which they at present pay. In consequence,
however, of a diligent and faithful application of the public revenue
towards the discharge of the national debt, the greater part of those
taxes might not be of long continuance, and the public revenue of
Great Britain might soon be reduced to what was necessary for
maintaining a moderate peace-establishment.
The territorial acquisitions of the East India Company, the undoubted
right of the Crown, that is, of the state and people of Great Britain,
might be rendered another source of revenue, more abundant, perhaps,
than all those already mentioned. Those countries are represented as
more fertile, more extensive, and, in proportion to their extent, much
richer and more populous than Great Britain. In order to draw a great
revenue from them, it would not probably be necessary to introduce any
new system of taxation into countries which are already sufficiently,
and more than sufficiently, taxed. It might, perhaps, be more proper
to lighten than to aggravate the burden of those unfortunate
countries, and to endeavour to draw a revenue from them, not by
imposing new taxes, but by preventing the embezzlement and
misapplication of the greater part of those which they already pay.
If it should be found impracticable for Great Britain to draw any
considerable augmentation of revenue from any of the resources above
mentioned, the only resource which can remain to her, is a diminution
of her expense. In the mode of collecting and in that of expending the
public revenue, though in both there may be still room for
improvement, Great Britain seems to be at least as economical as any
of her neighbours. The military establishment which she maintains for
her own defence in time of peace, is more moderate than that of any
European state, which can pretend to rival her either in wealth or in
power. None of these articles, therefore, seem to admit of any
considerable reduction of expense. The expense of the
peace-establishment of the colonies was, before the commencement of
the present disturbances, very considerable, and is an expense which
may, and, if no revenue can be drawn from them, ought certainly to be
saved altogether. This constant expense in time of peace, though very
great, is insignificant in comparison with what the defence of the
colonies has cost us in time of war. The last war, which was
undertaken altogether on account of the colonies, cost Great Britain,
it has already been observed, upwards of ninety millions. The Spanish
war of 1739 was principally undertaken on their account; in which, and
in the French war that was the consequence of it, Great Britain, spent
upwards of forty millions; a great part of which ought justly to be
charged to the colonies. In those two wars, the colonies cost Great
Britain much more than double the sum which the national debt amounted
to before the commencement of the first of them. Had it not been for
those wars, that debt might, and probably would by this time, have
been completely paid; and had it not been for the colonies, the former
of those wars might not, and the latter certainly would not, have been
undertaken. It was because the colonies were supposed to be provinces
of the British Empire, that this expense was laid out upon them. But
countries which contribute neither revenue nor military force towards
the support of the empire, cannot be considered as provinces. They
may, perhaps, be considered as appendages, as a sort of splendid and
shewy equipage of the empire. But if the empire can no longer support
the expense of keeping up this equipage, it ought certainly to lay it
down; and if it cannot raise its revenue in proportion to its expense,
it ought at least to accommodate its expense to its revenue. If the
colonies, notwithstanding their refusal to submit to British taxes,
are still to be considered as provinces of the British empire, their
defence, in some future war, may cost Great Britain as great an
expense as it ever has done in any former war. The rulers of Great
Britain have, for more than a century past, amused the people with the
imagination that they possessed a great empire on the west side of the
Atlantic. This empire, however, has hitherto existed in imagination
only. It has hitherto been, not an empire, but the project of an
empire; not a gold mine, but the project of a gold mine; a project
which has cost, which continues to cost, and which, if pursued in the
same way as it has been hitherto, is likely to cost, immense expense,
without being likely to bring any profit; for the effects of the
monopoly of the colony trade, it has been shewn, are to the great body
of the people, mere loss instead of profit. It is surely now time that
our rulers should either realize this golden dream, in which they have
been indulging themselves, perhaps, as well as the people; or that
they should awake from it themselves, and endeavour to awaken the
people. If the project cannot be completed, it ought to be given up.
If any of the provinces of the British empire cannot be made to
contribute towards the support of the whole empire, it is surely time
that Great Britain should free herself from the expense of defending
those provinces in time of war, and of supporting any part of their
civil or military establishment in time of peace; and endeavour to
accommodate her future views and designs to the real mediocrity of her
circumstances.
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