An Inquiry into the Nature and Causes of the Wealth of Nations
Adam Smith

Part 8 out of 19

The great commerce of every civilized society is that carried on
between the inhabitants of the town and those of the country. It
consists in the exchange of rude for manufactured produce, either
immediately, or by the intervention of money, or of some sort of paper
which represents money. The country supplies the town with the means
of subsistence and the materials of manufacture. The town repays this
supply, by sending back a part of the manufactured produce to the
inhabitants of the country. The town, in which there neither is nor
can be any reproduction of substances, may very properly be said to
gain its whole wealth and subsistence from the country. We must not,
however, upon this account, imagine that the gain of the town is the
loss of the country. The gains of both are mutual and reciprocal, and
the division of labour is in this, as in all other cases, advantageous
to all the different persons employed in the various occupations into
which it is subdivided. The inhabitants of the country purchase of the
town a greater quantity of manufactured goods with the produce of a
much smaller quantity of their own labour, than they must have
employed had they attempted to prepare them themselves. The town
affords a market for the surplus produce of the country, or what is
over and above the maintenance of the cultivators; and it is there
that the inhabitants of the country exchange it for something else
which is in demand among them. The greater the number and revenue of
the inhabitants of the town, the more extensive is the market which it
affords to those of the country; and the more extensive that market,
it is always the more advantageous to a great number. The corn which
grows within a mile of the town, sells there for the same price with
that which comes from twenty miles distance. But the price of the
latter must, generally, not only pay the expense of raising it and
bringing it to market, but afford, too, the ordinary profits of
agriculture to the farmer. The proprietors and cultivators of the
country, therefore, which lies in the neighbourhood of the town, over
and above the ordinary profits of agriculture, gain, in the price of
what they sell, the whole value of the carriage of the like produce
that is brought from more distant parts; and they save, besides, the
whole value of this carriage in the price of what they buy. Compare
the cultivation of the lands in the neighbourhood of any considerable
town, with that of those which lie at some distance from it, and you
will easily satisfy yourself bow much the country is benefited by the
commerce of the town. Among all the absurd speculations that have been
propagated concerning the balance of trade, it has never been
pretended that either the country loses by its commerce with the town,
or the town by that with the country which maintains it.

As subsistence is, in the nature of things, prior to conveniency and
luxury, so the industry which procures the former, must necessarily be
prior to that which ministers to the latter. The cultivation and
improvement of the country, therefore, which affords subsistence,
must, necessarily, be prior to the increase of the town, which
furnishes only the means of conveniency and luxury. It is the surplus
produce of the country only, or what is over and above the maintenance
of the cultivators, that constitutes the subsistence of the town,
which can therefore increase only with the increase of the surplus
produce. The town, indeed, may not always derive its whole subsistence
from the country in its neighbourhood, or even from the territory to
which it belongs, but from very distant countries; and this, though it
forms no exception from the general rule, has occasioned considerable
variations in the progress of opulence in different ages and nations.

That order of things which necessity imposes, in general, though not
in every particular country, is in every particular country promoted
by the natural inclinations of man. If human institutions had never
thwarted those natural inclinations, the towns could nowhere have
increased beyond what the improvement and cultivation of the territory
in which they were situated could support; till such time, at least,
as the whole of that territory was completely cultivated and improved.
Upon equal, or nearly equal profits, most men will choose to employ
their capitals, rather in the improvement and cultivation of land,
than either in manufactures or in foreign trade. The man who employs
his capital in land, has it more under his view and command; and his
fortune is much less liable to accidents than that of the trader, who
is obliged frequently to commit it, not only to the winds and the
waves, but to the more uncertain elements of human folly and
injustice, by giving great credits, in distant countries, to men with
whose character and situation he can seldom be thoroughly acquainted.
The capital of the landlord, on the contrary, which is fixed in the
improvement of his land, seems to be as well secured as the nature of
human affairs can admit of. The beauty of the country, besides, the
pleasure of a country life, the tranquillity of mind which it
promises, and, wherever the injustice of human laws does not disturb
it, the independency which it really affords, have charms that, more
or less, attract everybody; and as to cultivate the ground was the
original destination of man, so, in every stage of his existence, he
seems to retain a predilection for this primitive employment.

Without the assistance of some artificers, indeed, the cultivation of
land cannot be carried on, but with great inconveniency and continual
interruption. Smiths, carpenters, wheelwrights and ploughwrights,
masons and bricklayers, tanners, shoemakers, and tailors, are people
whose service the farmer has frequent occasion for. Such artificers,
too, stand occasionally in need of the assistance of one another; and
as their residence is not, like that of the farmer, necessarily tied
down to a precise spot, they naturally settle in the neighbourhood of
one another, and thus form a small town or village. The butcher, the
brewer, and the baker, soon join them, together with many other
artificers and retailers, necessary or useful for supplying their
occasional wants, and who contribute still further to augment the
town. The inhabitants of the town, and those of the country, are
mutually the servants of one another. The town is a continual fair or
market, to which the inhabitants of the country resort, in order to
exchange their rude for manufactured produce. It is this commerce
which supplies the inhabitants of the town, both with the materials of
their work, and the means of their subsistence. The quantity of the
finished work which they sell to the inhabitants of the country,
necessarily regulates the quantity of the materials and provisions
which they buy. Neither their employment nor subsistence, therefore,
can augment, but in proportion to the augmentation of the demand from
the country for finished work; and this demand can augment only in
proportion to the extension of improvement and cultivation. Had human
institutions, therefore, never disturbed the natural course of things,
the progressive wealth and increase of the towns would, in every
political society, be consequential, and in proportion to the
improvement and cultivation of the territory of country.

In our North American colonies, where uncultivated land is still to be
had upon easy terms, no manufactures for distant sale have ever yet
been established in any of their towns. When an artificer has acquired
a little more stock than is necessary for carrying on his own business
in supplying the neighbouring country, he does not, in North America,
attempt to establish with it a manufacture for more distant sale, but
employs it in the purchase and improvement of uncultivated land. From
artificer he becomes planter; and neither the large wages nor the easy
subsistence which that country affords to artificers, can bribe him
rather to work for other people than for himself. He feels that an
artificer is the servant of his customers, from whom he derives his
subsistence; but that a planter who cultivates his own land, and
derives his necessary subsistence from the labour of his own family,
is really a master, and independent of all the world.

In countries, on the contrary, where there is either no uncultivated
land, or none that can be had upon easy terms, every artificer who has
acquired more stock than he can employ in the occasional jobs of the
neighbourhood, endeavours to prepare work for more distant sale. The
smith erects some sort of iron, the weaver some sort of linen or
woollen manufactory. Those different manufactures come, in process of
time, to be gradually subdivided, and thereby improved and refined in
a great variety of ways, which may easily be conceived, and which it
is therefore unnecessary to explain any farther.

In seeking for employment to a capital, manufactures are, upon equal
or nearly equal profits, naturally preferred to foreign commerce, for
the same reason that agriculture is naturally preferred to
manufactures. As the capital of the landlord or farmer is more secure
than that of the manufacturer, so the capital of the manufacturer,
being at all times more within his view and command, is more secure
than that of the foreign merchant. In every period, indeed, of every
society, the surplus part both of the rude and manufactured produce,
or that for which there is no demand at home, must be sent abroad, in
order to be exchanged for something for which there is some demand at
home. But whether the capital which carries this surplus produce
abroad be a foreign or a domestic one, is of very little importance.
If the society has not acquired sufficient capital, both to cultivate
all its lands, and to manufacture in the completest manner the whole
of its rude produce, there is even a considerable advantage that the
rude produce should be exported by a foreign capital, in order that
the whole stock of the society may be employed in more useful
purposes. The: wealth of ancient Egypt, that of China and Indostan,
sufficiently demonstrate that a nation may attain a very high degree
of opulence, though the greater part of its exportation trade be
carried on by foreigners. The progress of our North American and West
Indian colonies, would have been much less rapid, had no capital but
what belonged to themselves been employed in exporting their surplus

According to the natural course of things, therefore, the greater part
of the capital of every growing society is, first, directed to
agriculture, afterwards to manufactures, and, last of all, to foreign
commerce. This order of things is so very natural, that in every
society that had any territory, it has always, I believe, been in some
degree observed. Some of their lands must have been cultivated before
any considerable towns could be established, and some sort of coarse
industry of the manufacturing kind must have been carried on in those
towns, before they could well think of employing themselves in foreign

But though this natural order of things must have taken place in some
degree in every such society, it has, in all the modern states of
Europe, been in many respects entirely inverted. The foreign commerce
of some of their cities has introduced all their finer manufactures,
or such as were fit for distant sale; and manufactures and foreign
commerce together have given birth to the principal improvements of
agriculture. The manners and customs which the nature of their
original government introduced, and which remained after that
government was greatly altered, necessarily forced them into this
unnatural and retrograde order.



When the German and Scythian nations overran the western provinces of
the Roman empire, the confusions which followed so great a revolution
lasted for several centuries. The rapine and violence which the
barbarians exercised against the ancient inhabitants, interrupted the
commerce between the towns and the country. The towns were deserted,
and the country was left uncultivated; and the western provinces of
Europe, which had enjoyed a considerable degree of opulence under the
Roman empire, sunk into the lowest state of poverty and barbarism.
During the continuance of those confusions, the chiefs and principal
leaders of those nations acquired, or usurped to themselves, the
greater part of the lands of those countries. A great part of them was
uncultivated; but no part of them, whether cultivated or uncultivated,
was left without a proprietor. All of them were engrossed, and the
greater part by a few great proprietors.

This original engrossing of uncultivated lands, though a great, might
have been but a transitory evil. They might soon have been divided
again, and broke into small parcels, either by succession or by
alienation. The law of primogeniture hindered them from being divided
by succession; the introduction of entails prevented their being broke
into small parcels by alienation.

When land, like moveables, is considered as the means only of
subsistence and enjoyment, the natural law of succession divides it,
like them, among all the children of the family; of all of whom the
subsistence and enjoyment may be supposed equally dear to the father.
This natural law of succession, accordingly, took place among the
Romans who made no more distinction between elder and younger, between
male and female, in the inheritance of lands, than we do in the
distribution of moveables. But when land was considered as the means,
not of subsistence merely, but of power and protection, it was thought
better that it should descend undivided to one. In those disorderly
times, every great landlord was a sort of petty prince. His tenants
were his subjects. He was their judge, and in some respects their
legislator in peace and their leader in war. He made war according to
his own discretion, frequently against his neighbours, and sometimes
against his sovereign. The security of a landed estate, therefore, the
protection which its owner could afford to those who dwelt on it,
depended upon its greatness. To divide it was to ruin it, and to
expose every part of it to be oppressed and swallowed up by the
incursions of its neighbours. The law of primogeniture, therefore,
came to take place, not immediately indeed, but in process of time, in
the succession of landed estates, for the same reason that it has
generally taken place in that of monarchies, though not always at
their first institution. That the power, and consequently the security
of the monarchy, may not be weakened by division, it must descend
entire to one of the children. To which of them so important a
preference shall be given, must be determined by some general rule,
founded not upon the doubtful distinctions of personal merit, but upon
some plain and evident difference which can admit of no dispute. Among
the children of the same family there can be no indisputable
difference but that of sex, and that of age. The male sex is
universally preferred to the female; and when all other things are
equal, the elder everywhere takes place of the younger. Hence the
origin of the right of primogeniture, and of what is called lineal

Laws frequently continue in force long after the circumstances which
first gave occasion to them, and which could alone render them
reasonable, are no more. In the present state of Europe, the
proprietor of a single acre of land is as perfectly secure in his
possession as the proprietor of 100,000. The right of primogeniture,
however, still continues to be respected; and as of all institutions
it is the fittest to support the pride of family distinctions, it is
still likely to endure for many centuries. In every other respect,
nothing can be more contrary to the real interest of a numerous
family, than a right which, in order to enrich one, beggars all the
rest of the children.

Entails are the natural consequences of the law of primogeniture. They
were introduced to preserve a certain lineal succession, of which the
law of primogeniture first gave the idea, and to hinder any part of
the original estate from being carried out of the proposed line,
either by gift, or device, or alienation; either by the folly, or by
the misfortune of any of its successive owners. They were altogether
unknown to the Romans. Neither their substitutions, nor fidei
commisses, bear any resemblance to entails, though some French lawyers
have thought proper to dress the modern institution in the language
and garb of those ancient ones.

When great landed estates were a sort of principalities, entails might
not be unreasonable. Like what are called the fundamental laws of some
monarchies, they might frequently hinder the security of thousands
from being endangered by the caprice or extravagance of one man. But
in the present state of Europe, when small as well as great estates
derive their security from the laws of their country, nothing can be
more completely absurd. They are founded upon the most absurd of all
suppositions, the supposition that every successive generation of men
have not an equal right to the earth, and to all that it possesses;
but that the property of the present generation should be restrained
and regulated according to the fancy of those who died, perhaps five
hundred years ago. Entails, however, are still respected, through the
greater part of Europe; In those countries, particularly, in which
noble birth is a necessary qualification for the enjoyment either of
civil or military honours. Entails are thought necessary for
maintaining this exclusive privilege of the nobility to the great
offices and honours of their country; and that order having usurped
one unjust advantage over the rest of their fellow-citizens, lest
their poverty should render it ridiculous, it is thought reasonable
that they should have another. The common law of England, indeed, is
said to abhor perpetuities, and they are accordingly more restricted
there than in any other European monarchy; though even England is not
altogether without them. In Scotland, more than one fifth, perhaps
more than one third part of the whole lands in the country, are at
present supposed to be under strict entail.

Great tracts of uncultivated land were in this manner not only
engrossed by particular families, but the possibility of their being
divided again was as much as possible precluded for ever. It seldom
happens, however, that a great proprietor is a great improver. In the
disorderly times which gave birth to those barbarous institutions, the
great proprietor was sufficiently employed in defending his own
territories, or in extending his jurisdiction and authority over those
of his neighbours. He had no leisure to attend to the cultivation and
improvement of land. When the establishment of law and order afforded
him this leisure, he often wanted the inclination, and almost always
the requisite abilities. If the expense of his house and person either
equalled or exceeded his revenue, as it did very frequently, he had no
stock to employ in this manner. If he was an economist, he generally
found it more profitable to employ his annual savings in new purchases
than in the improvement of his old estate. To improve land with
profit, like all other commercial projects, requires an exact
attention to small savings and small gains, of which a man born to a
great fortune, even though naturally frugal, is very seldom capable.
The situation of such a person naturally disposes him to attend rather
to ornament, which pleases his fancy, than to profit, for which he has
so little occasion. The elegance of his dress, of his equipage, of his
house and household furniture, are objects which, from his infancy, he
has been accustomed to have some anxiety about. The turn of mind which
this habit naturally forms, follows him when he comes to think of the
improvement of land. He embellishes, perhaps, four or five hundred
acres in the neighbourhood of his house, at ten times the expense
which the land is worth after all his improvements; and finds, that if
he was to improve his whole estate in the same manner, and he has
little taste for any other, he would be a bankrupt before he had
finished the tenth part of it. There still remain, in both parts of
the united kingdom, some great estates which have continued, without
interruption, in the hands of the same family since the times of
feudal anarchy. Compare the present condition of those estates with
the possessions of the small proprietors in their neighbourhood, and
you will require no other argument to convince you how unfavourable
such extensive property is to improvement.

If little improvement was to be expected from such great proprietors,
still less was to be hoped for from those who occupied the land under
them. In the ancient state of Europe, the occupiers of land were all
tenants at will. They were all, or almost all, slaves, but their
slavery was of a milder kind than that known among the ancient Greeks
and Romans, or even in our West Indian colonies. They were supposed to
belong more directly to the land than to their master. They could,
therefore, be sold with it, but not separately. They could marry,
provided it was with the consent of their master; and he could not
afterwards dissolve the marriage by selling the man and wife to
different persons. If he maimed or murdered any of them, he was liable
to some penalty, though generally but to a small one. They were not,
however, capable of acquiring property. Whatever they acquired was
acquired to their master, and he could take it from them at pleasure.
Whatever cultivation and improvement could be carried on by means of
such slaves, was properly carried on by their master. It was at his
expense. The seed, the cattle, and the instruments of husbandry, were
all his. It was for his benefit. Such slaves could acquire nothing but
their daily maintenance. It was properly the proprietor himself,
therefore, that in this case occupied his own lands, and cultivated
them by his own bondmen. This species of slavery still subsists in
Russia, Poland, Hungary, Bohemia, Moravia, and other parts of Germany.
It is only in the western and south-western provinces of Europe that
it has gradually been abolished altogether.

But if great improvements are seldom to be expected from great
proprietors, they are least of all to be expected when they employ
slaves for their workmen. The experience of all ages and nations, I
believe, demonstrates that the work done by slaves, though it appears
to cost only their maintenance, is in the end the dearest of any. A
person who can acquire no property can have no other interest but to
eat as much and to labour as little as possible. Whatever work he does
beyond what is sufficient to purchase his own maintenance, can be
squeezed out of him by violence only, and not by any interest of his
own. In ancient Italy, how much the cultivation of corn degenerated,
how unprofitable it became to the master, when it fell under the
management of slaves, is remarked both by Pliny and Columella. In the
time of Aristotle, it had not been much better in ancient Greece.
Speaking of the ideal republic described in the laws of Plato, to
maintain 5000 idle men (the number of warriors supposed necessary for
its defence), together with their women and servants, would require,
he says, a territory of boundless extent and fertility, like the
plains of Babylon.

The pride of man makes him love to domineer, and nothing mortifies him
so much as to be obliged to condescend to persuade his inferiors.
Wherever the law allows it, and the nature of the work can afford it,
therefore, he will generally prefer the service of slaves to that of
freemen. The planting of sugar and tobacco can afford the expense of
slave cultivation. The raising of corn, it seems, in the present
times, cannot. In the English colonies, of which the principal produce
is corn, the far greater part of the work is done by freemen. The late
resolution of the Quakers in Pennsylvania, to set at liberty all their
negro slaves, may satisfy us that their number cannot be very great.
Had they made any considerable part of their property, such a
resolution could never have been agreed to. In our sugar colonies., on
the contrary, the whole work is done by slaves, and in our tobacco
colonies a very great part of it. The profits of a sugar plantation in
any of our West Indian colonies, are generally much greater than those
of any other cultivation that is known either in Europe or America;
and the profits of a tobacco plantation, though inferior to those of
sugar, are superior to those of corn, as has already been observed.
Both can afford the expense of slave cultivation but sugar can afford
it still better than tobacco. The number of negroes, accordingly, is
much greater, in proportion to that of whites, in our sugar than in
our tobacco colonies.

To the slave cultivators of ancient times gradually succeeded a
species of farmers, known at present in France by the name of
metayers. They are called in Latin Coloni Partiarii. They have been so
long in disuse in England, that at present I know no English name for
them. The proprietor furnished them with the seed, cattle, and
instruments of husbandry, the whole stock, in short, necessary for
cultivating the farm. The produce was divided equally between the
proprietor and the farmer, after setting aside what was judged
necessary for keeping up the stock, which was restored to the
proprietor, when the farmer either quitted or was turned out of the

Land occupied by such tenants is properly cultivated at the expense of
the proprietors, as much as that occupied by slaves. There is,
however, one very essential difference between them. Such tenants,
being freemen, are capable of acquiring property; and having a certain
proportion of the produce of the land, they have a plain interest that
the whole produce should be as great as possible, in order that their
own proportion may be so. A slave, on the contrary, who can acquire
nothing but his maintenance, consults his own ease, by making the land
produce as little as possible over and above that maintenance. It is
probable that it was partly upon account of this advantage, and partly
upon account of the encroachments which the sovereigns, always jealous
of the great lords, gradually encouraged their villains to make upon
their authority, and which seem, at least, to have been such as
rendered this species of servitude altogether inconvenient, that
tenure in villanage gradually wore out through the greater part of
Europe. The time and manner, however, in which so important a
revolution was brought about, is one of the most obscure points in
modern history. The church of Rome claims great merit in it; and it is
certain, that so early as the twelfth century, Alexander III.
published a bull for the general emancipation of slaves. It seems,
however, to have been rather a pious exhortation, than a law to which
exact obedience was required from the faithful. Slavery continued to
take place almost universally for several centuries afterwards, till
it was gradually abolished by the joint operation of the two interests
above mentioned; that of the proprietor on the one hand, and that of
the sovereign on the other. A villain, enfranchised, and at the same
time allowed to continue in possession of the land, having no stock of
his own, could cultivate it only by means of what the landlord
advanced to him, and must therefore have been what the French call a

It could never, however, be the interest even of this last species of
cultivators, to lay out, in the further improvement of the land, any
part of the little stock which they might save from their own share of
the produce; because the landlord, who laid out nothing, was to get
one half of whatever it produced. The tithe, which is but a tenth of
the produce, is found to be a very great hindrance to improvement. A
tax, therefore, which amounted to one half, must have been an
effectual bar to it. It might be the interest of a metayer to make the
land produce as much as could be brought out of it by means of the
stock furnished by the proprietor; but it could never be his interest
to mix any part of his own with it. In France, where five parts out of
six of the whole kingdom are said to be still occupied by this species
of cultivators, the proprietors complain, that their metayers take
every opportunity of employing their master's cattle rather in
carriage than in cultivation; because, in the one case, they get the
whole profits to themselves, in the other they share them with their
landlord. This species of tenants still subsists in some parts of
Scotland. They are called steel-bow tenants. Those ancient English
tenants, who are said by Chief-Baron Gilbert and Dr Blackstone to have
been rather bailiffs of the landlord than farmers, properly so called,
were probably of the same kind.

To this species of tenantry succeeded, though by very slow degrees,
farmers, properly so called, who cultivated the land with their own
stock, paying a rent certain to the landlord. When such farmers have a
lease for a term of years, they may sometimes find it for their
interest to lay out part of their capital in the further improvement
of the farm; because they may sometimes expect to recover it, with a
large profit, before the expiration of the lease. The possession, even
of such farmers, however, was long extremely precarious, and still is
so in many parts of Europe. They could, before the expiration of their
term, be legally ousted of their leases by a new purchaser; in
England, even, by the fictitious action of a common recovery. If they
were turned out illegally by the violence of their master, the action
by which they obtained redress was extremely imperfect. It did not
always reinstate them in the possession of the land, but gave them
damages, which never amounted to a real loss. Even in England, the
country, perhaps of Europe, where the yeomanry has always been most
respected, it was not till about the 14th of Henry VII. that the
action of ejectment was invented, by which the tenant recovers, not
damages only, but possession, and in which his claim is not
necessarily concluded by the uncertain decision of a single assize.
This action has been found so effectual a remedy, that, in the modern
practice, when the landlord has occasion to sue for the possession of
the land, he seldom makes use of the actions which properly belong to
him as a landlord, the writ of right or the writ of entry, but sues in
the name of his tenant, by the writ of ejectment. In England,
therefore the security of the tenant is equal to that of the
proprietor. In England, besides, a lease for life of forty shillings
a-year value is a freehold, and entitles the lessee to a vote for a
member of parliament; and as a great part of the yeomanry have
freeholds of this kind, the whole order becomes respectable to their
landlords, on account of the political consideration which this gives
them. There is, I believe, nowhere in Europe, except in England, any
instance of the tenant building upon the land of which he had no
lease, and trusting that the honour of his landlord would take no
advantage of so important an improvement. Those laws and customs, so
favourable to the yeomanry, have perhaps contributed more to the
present grandeur of England, than all their boasted regulations of
commerce taken together.

The law which secures the longest leases against successors of every
kind, is, so far as I know, peculiar to Great Britain. It was
introduced into Scotland so early as 1449, by a law of James II. Its
beneficial influence, however, has been much obstructed by entails;
the heirs of entail being generally restrained from letting leases for
any long term of years, frequently for more than one year. A late act
of parliament has, in this respect, somewhat slackened their fetters,
though they are still by much too strait. In Scotland, besides, as no
leasehold gives a vote for a member of parliament, the yeomanry are
upon this account less respectable to their landlords than in England.

In other parts of Europe, after it was found convenient to secure
tenants both against heirs and purchasers, the term of their security
was still limited to a very short period; in France, for example, to
nine years from the commencement of the lease. It has in that country,
indeed, been lately extended to twentyseven, a period still too short
to encourage the tenant to make the most important improvements. The
proprietors of land were anciently the legislators of every part of
Europe. The laws relating to land, therefore, were all calculated for
what they supposed the interest of the proprietor. It was for his
interest, they had imagined, that no lease granted by any of his
predecessors should hinder him from enjoying, during a long term of
years, the full value of his land. Avarice and injustice are always
short-sighted, and they did not foresee how much this regulation must
obstruct improvement, and thereby hurt, in the long-run, the real
interest of the landlord.

The farmers, too, besides paying the rent, were anciently, it was
supposed, bound to perform a great number of services to the landlord,
which were seldom either specified in the lease, or regulated by any
precise rule, but by the use and wont of the manor or barony. These
services, therefore, being almost entirely arbitrary, subjected the
tenant to many vexations. In Scotland the abolition of all services
not precisely stipulated in the lease, has, in the course of a few
years, very much altered for the better the condition of the yeomanry
of that country.

The public services to which the yeomanry were bound, were not less
arbitrary than the private ones. To make and maintain the high roads,
a servitude which still subsists, I believe, everywhere, though with
different degrees of oppression in different countries, was not the
only one. When the king's troops, when his household, or his officers
of any kind, passed through any part of the country, the yeomanry were
bound to provide them with horses, carriages, and provisions, at a
price regulated by the purveyor. Great Britain is, I believe, the only
monarchy in Europe where the oppression of purveyance has been
entirely abolished. It still subsists in France and Germany.

The public taxes, to which they were subject, were as irregular and
oppressive as the services The ancient lords, though extremely
unwilling to grant, themselves, any pecuniary aid to their sovereign,
easily allowed him to tallage, as they called it, their tenants, and
had not knowledge enough to foresee how much this must, in the end,
affect their own revenue. The taille, as it still subsists in France.
may serve as an example of those ancient tallages. It is a tax upon
the supposed profits of the farmer, which they estimate by the stock
that he has upon the farm. It is his interest, therefore, to appear to
have as little as possible, and consequently to employ as little as
possible in its cultivation, and none in its improvement. Should any
stock happen to accumulate in the hands of a French farmer, the taille
is almost equal to a prohibition of its ever being employed upon the
land. This tax, besides, is supposed to dishonour whoever is subject
to it, and to degrade him below, not only the rank of a gentleman, but
that of a burgher; and whoever rents the lands of another becomes
subject to it. No gentleman, nor even any burgher, who has stock, will
submit to this degradation. This tax, therefore, not only hinders the
stock which accumulates upon the land from being employed in its
improvement, but drives away all other stock from it. The ancient
tenths and fifteenths, so usual in England in former times, seem, so
far as they affected the land, to have been taxes of the same nature
with the taille.

Under all these discouragements, little improvement could be expected
from the occupiers of land. That order of people, with all the liberty
and security which law can give, must always improve under great
disadvantage. The farmer, compared with the proprietor, is as a
merchant who trades with burrowed money, compared with one who trades
with his own. The stock of both may improve; but that of the one, with
only equal good conduct, must always improve more slowly than that of
the other, on account of the large share of the profits which is
consumed by the interest of the loan. The lands cultivated by the
farmer must, in the same manner, with only equal good conduct, be
improved more slowly than those cultivated by the proprietor, on
account of the large share of the produce which is consumed in the
rent, and which, had the farmer been proprietor, he might have
employed in the further improvement of the land. The station of a
farmer, besides, is, from the nature of things, inferior to that of a
proprietor. Through the greater part of Europe, the yeomanry are
regarded as an inferior rank of people, even to the better sort of
tradesmen and mechanics, and in all parts of Europe to the great
merchants and master manufacturers. It can seldom happen, therefore,
that a man of any considerable stock should quit the superior, in
order to place himself in an inferior station. Even in the present
state of Europe, therefore, little stock is likely to go from any
other profession to the improvement of land in the way of farming.
More does, perhaps, in Great Britain than in any other country, though
even there the great stocks which are in some places employed in
farming, have generally been acquired by fanning, the trade, perhaps,
in which, of all others, stock is commonly acquired most slowly. After
small proprietors, however, rich and great farmers are in every
country the principal improvers. There are more such, perhaps, in
England than in any other European monarchy. In the republican
governments of Holland, and of Berne in Switzerland, the farmers are
said to be not inferior to those of England.

The ancient policy of Europe was, over and above all this,
unfavourable to the improvement and cultivation of land, whether
carried on by the proprietor or by the farmer; first, by the general
prohibition of the exportation of corn, without a special licence,
which seems to have been a very universal regulation; and, secondly,
by the restraints which were laid upon the inland commerce, not only
of corn, but of almost every other part of the produce of the farm, by
the absurd laws against engrossers, regraters, and forestallers, and
by the privileges of fairs and markets. It has already been observed
in what manner the prohibition of the exportation of corn, together
with some encouragement given to the importation of foreign corn,
obstructed the cultivation of ancient Italy, naturally the most
fertile country in Europe, and at that time the seat of the greatest
empire in the world. To what degree such restraints upon the inland
commerce of this commodity, joined to the general prohibition of
exportation, must have discouraged the cultivation of countries less
fertile, and less favourably circumstanced, it is not, perhaps, very
easy to imagine.



The inhabitants of cities and towns were, after the fall of the Roman
empire, not more favoured than those of the country. They consisted,
indeed, of a very different order of people from the first inhabitants
of the ancient republics of Greece and Italy. These last were composed
chiefly of the proprietors of lands, among whom the public territory
was originally divided, and who found it convenient to build their
houses in the neighbourhood of one another, and to surround them with
a wall, for the sake of common defence. After the fall of the Roman
empire, on the contrary, the proprietors of land seem generally to
have lived in fortified castles on their own estates, and in the midst
of their own tenants and dependants. The towns were chiefly inhabited
by tradesmen and mechanics, who seem, in those days, to have been of
servile, or very nearly of servile condition. The privileges which we
find granted by ancient charters to the inhabitants of some of the
principal towns in Europe, sufficiently show what they were before
those grants. The people to whom it is granted as a privilege, that
they might give away their own daughters in marriage without the
consent of their lord, that upon their death their own children, and
not their lord, should succeed to their goods, and that they might
dispose of their own effects by will, must, before those grants, have
been either altogether, or very nearly, in the same state of villanage
with the occupiers of land in the country.

They seem, indeed, to have been a very poor, mean set of people, who
seemed to travel about with their goods from place to place, and from
fair to fair, like the hawkers and pedlars of the present times. In
all the different countries of Europe then, in the same manner as in
several of the Tartar governments of Asia at present, taxes used to be
levied upon the persons and goods of travellers, when they passed
through certain manors, when they went over certain bridges, when they
carried about their goods from place to place in a fair, when they
erected in it a booth or stall to sell them in. These different taxes
were known in England by the names of passage, pontage, lastage, and
stallage. Sometimes the king, sometimes a great lord, who had, it
seems, upon some occasions, authority to do this, would grant to
particular traders, to such particularly as lived in their own
demesnes, a general exemption from such taxes. Such traders, though in
other respects of servile, or very nearly of servile condition, were
upon this account called free traders. They, in return, usually paid
to their protector a sort of annual poll-tax. In those days protection
was seldom granted without a valuable consideration, and this tax
might perhaps be considered as compensation for what their patrons
might lose by their exemption from other taxes. At first, both those
poll-taxes and those exemptions seem to have been altogether personal,
and to have affected only particular individuals, during either their
lives, or the pleasure of their protectors. In the very imperfect
accounts which have been published from Doomsday-book, of several of
the towns of England, mention is frequently made, sometimes of the tax
which particular burghers paid, each of them, either to the king, or
to some other great lord, for this sort of protection, and sometimes
of the general amount only of all those taxes. {see Brady's Historical
Treatise of Cities and Boroughs, p. 3. etc.}

But how servile soever may have been originally the condition of the
inhabitants of the towns, it appears evidently, that they arrived at
liberty and independency much earlier than the occupiers of land in
the country. That part of the king's revenue which arose from such
poll-taxes in any particular town, used commonly to be let in farm,
during a term of years, for a rent certain, sometimes to the sheriff
of the county, and sometimes to other persons. The burghers themselves
frequently got credit enough to be admitted to farm the revenues of
this sort winch arose out of their own town, they becoming jointly and
severally answerable for the whole rent. {See Madox, Firma Burgi, p.
18; also History of the Exchequer, chap. 10, sect. v, p. 223, first
edition.} To let a farm in this manner, was quite agreeable to the
usual economy of, I believe, the sovereigns of all the different
countries of Europe, who used frequently to let whole manors to all
the tenants of those manors, they becoming jointly and severally
answerable for the whole rent; but in return being allowed to collect
it in their own way, and to pay it into the king's exchequer by the
hands of their own bailiff, and being thus altogether freed from the
insolence of the king's officers; a circumstance in those days
regarded as of the greatest importance.

At first, the farm of the town was probably let to the burghers, in
the same manner as it had been to other farmers, for a term of years
only. In process of time, however, it seems to have become the general
practice to grant it to them in fee, that is for ever, reserving a
rent certain, never afterwards to be augmented. The payment having
thus become perpetual, the exemptions, in return, for which it was
made, naturally became perpetual too. Those exemptions, therefore,
ceased to be personal, and could not afterwards be considered as
belonging to individuals, as individuals, but as burghers of a
particular burgh, which, upon this account, was called a free burgh,
for the same reason that they had been called free burghers or free

Along with this grant, the important privileges, above mentioned, that
they might give away their own daughters in marriage, that their
children should succeed to them, and that they might dispose of their
own effects by will, were generally bestowed upon the burghers of the
town to whom it was given. Whether such privileges had before been
usually granted, along with the freedom of trade, to particular
burghers, as individuals, I know not. I reckon it not improbable that
they were, though I cannot produce any direct evidence of it. But
however this may have been, the principal attributes of villanage and
slavery being thus taken away from them, they now at least became
really free, in our present sense of the word freedom.

Nor was this all. They were generally at the same time erected into a
commonalty or corporation, with the privilege of having magistrates
and a town-council of their own, of making bye-laws for their own
government, of building walls for their own defence, and of reducing
all their inhabitants under a sort of military discipline, by obliging
them to watch and ward; that is, as anciently understood, to guard and
defend those walls against all attacks and surprises, by night as well
as by day. In England they were generally exempted from suit to the
hundred and county courts: and all such pleas as should arise among
them, the pleas of the crown excepted, were left to the decision of
their own magistrates. In other countries, much greater and more
extensive jurisdictions were frequently granted to them. {See Madox,
Firma Burgi. See also Pfeffel in the Remarkable events under Frederick
II. and his Successors of the House of Suabia.}

It might, probably, be necessary to grant to such towns as were
admitted to farm their own revenues, some sort of compulsive
jurisdiction to oblige their own citizens to make payment. In those
disorderly times, it might have been extremely inconvenient to have
left them to seek this sort of justice from any other tribunal. But it
must seem extraordinary, that the sovereigns of all the different
countries of Europe should have exchanged in this manner for a rent
certain, never more to be augmented, that branch of their revenue,
which was, perhaps, of all others, the most likely to be improved by
the natural course of things, without either expense or attention of
their own; and that they should, besides, have in this manner
voluntarily erected a sort of independent republics in the heart of
their own dominions.

In order to understand this, it must be remembered, that, in those
days, the sovereign of perhaps no country in Europe was able to
protect, through the whole extent of his dominions, the weaker part of
his subjects from the oppression of the great lords. Those whom the
law could not protect, and who were not strong enough to defend
themselves, were obliged either to have recourse to the protection of
some great lord, and in order to obtain it, to become either his
slaves or vassals; or to enter into a league of mutual defence for the
common protection of one another. The inhabitants of cities and
burghs, considered as single individuals, had no power to defend
themselves; but by entering into a league of mutual defence with their
neighbours, they were capable of making no contemptible resistance.
The lords despised the burghers, whom they considered not only as a
different order, but as a parcel of emancipated slaves, almost of a
different species from themselves. The wealth of the burghers never
failed to provoke their envy and indignation, and they plundered them
upon every occasion without mercy or remorse. The burghers naturally
hated and feared the lords. The king hated and feared them too; but
though, perhaps, he might despise, he had no reason either to hate or
fear the burghers. Mutual interest, therefore, disposed them to
support the king, and the king to support them against the lords. They
were the enemies of his enemies, and it was his interest to render
them as secure and independent of those enemies as he could. By
granting them magistrates of their own, the privilege of making
bye-laws for their own government, that of building walls for their
own defence, and that of reducing all their inhabitants under a sort
of military discipline, he gave them all the means of security and
independency of the barons which it was in his power to bestow.
Without the establishment of some regular government of this kind,
without some authority to compel their inhabitants to act according to
some certain plan or system, no voluntary league of mutual defence
could either have afforded them any permanent security, or have
enabled them to give the king any considerable support. By granting
them the farm of their own town in fee, he took away from those whom
he wished to have for his friends, and, if one may say so, for his
allies, all ground of jealousy and suspicion, that he was ever
afterwards to oppress them, either by raising the farm-rent of their
town, or by granting it to some other farmer.

The princes who lived upon the worst terms with their barons, seem
accordingly to have been the most liberal in grants of this kind to
their burghs. King John of England, for example, appears to have been
a most munificent benefactor to his towns. {See Madox.} Philip I. of
France lost all authority over his barons. Towards the end of his
reign, his son Lewis, known afterwards by the name of Lewis the Fat,
consulted, according to Father Daniel, with the bishops of the royal
demesnes, concerning the most proper means of restraining the violence
of the great lords. Their advice consisted of two different proposals.
One was to erect a new order of jurisdiction, by establishing
magistrates and a town-council in every considerable town of his
demesnes. The other was to form a new militia, by making the
inhabitants of those towns, under the command of their own
magistrates, march out upon proper occasions to the assistance of the
king. It is from this period, according to the French antiquarians,
that we are to date the institution of the magistrates and councils of
cities in France. It was during the unprosperous reigns of the princes
of the house of Suabia, that the greater part of the free towns of
Germany received the first grants of their privileges, and that the
famous Hanseatic league first became formidable. {See Pfeffel.}

The militia of the cities seems, in those times, not to have been
inferior to that of the country; and as they could be more readily
assembled upon any sudden occasion, they frequently had the advantage
in their disputes with the neighbouring lords. In countries such as
Italy or Switzerland, in which, on account either of their distance
from the principal seat of government, of the natural strength of the
country itself, or of some other reason, the sovereign came to lose
the whole of his authority; the cities generally became independent
republics, and conquered all the nobility in their neighbourhood;
obliging them to pull down their castles in the country, and to live,
like other peaceable inhabitants, in the city. This is the short
history of the republic of Berne, as well as of several other cities
in Switzerland. If you except Venice, for of that city the history is
somewhat different, it is the history of all the considerable Italian
republics, of which so great a number arose and perished between the
end of the twelfth and the beginning of the sixteenth century.

In countries such as France and England, where the authority of the
sovereign, though frequently very low, never was destroyed altogether,
the cities had no opportunity of becoming entirely independent. They
became, however, so considerable, that the sovereign could impose no
tax upon them, besides the stated farm-rent of the town, without their
own consent. They were, therefore, called upon to send deputies to the
general assembly of the states of the kingdom, where they might join
with the clergy and the barons in granting, upon urgent occasions,
some extraordinary aid to the king. Being generally, too, more
favourable to his power, their deputies seem sometimes to have been
employed by him as a counterbalance in those assemblies to the
authority of the great lords. Hence the origin of the representation
of burghs in the states-general of all great monarchies in Europe.

Order and good government, and along with them the liberty and
security of individuals, were in this manner established in cities, at
a time when the occupiers of land in the country, were exposed to
every sort of violence. But men in this defenceless state naturally
content themselves with their necessary subsistence; because, to
acquire more, might only tempt the injustice of their oppressors. On
the contrary, when they are secure of enjoying the fruits of their
industry, they naturally exert it to better their condition, and to
acquire not only the necessaries, but the conveniencies and elegancies
of life. That industry, therefore, which aims at something more than
necessary subsistence, was established in cities long before it was
commonly practised by the occupiers of land in the country. If, in the
hands of a poor cultivator, oppressed with the servitude of villanage,
some little stock should accumulate, he would naturally conceal it
with great care from his master, to whom it would otherwise have
belonged, and take the first opportunity of running away to a town.
The law was at that time so indulgent to the inhabitants of towns, and
so desirous of diminishing the authority of the lords over those of
the country, that if he could conceal himself there from the pursuit
of his lord for a year, he was free for ever. Whatever stock,
therefore, accumulated in the hands of the industrious part of the
inhabitants of the country, naturally took refuge in cities, as the
only sanctuaries in which it could be secure to the person that
acquired it.

The inhabitants of a city, it is true, must always ultimately derive
their subsistence, and the whole materials and means of their
industry, from the country. But those of a city, situated near either
the sea-coast or the banks of a navigable river, are not necessarily
confined to derive them from the country in their neighbourhood. They
have a much wider range, and may draw them from the most remote
corners of the world, either in exchange for the manufactured produce
of their own industry, or by performing the office of carriers between
distant countries, and exchanging the produce of one for that of
another. A city might, in this manner, grow up to great wealth and
splendour, while not only the country in its neighbourhood, but all
those to which it traded, were in poverty and wretchedness. Each of
those countries, perhaps, taken singly, could afford it but a small
part, either of its subsistence or of its employment; but all of them
taken together, could afford it both a great subsistence and a great
employment. There were, however, within the narrow circle of the
commerce of those times, some countries that were opulent and
industrious. Such was the Greek empire as long as it subsisted, and
that of the Saracens during the reigns of the Abassides. Such, too,
was Egypt till it was conquered by the Turks, some part of the coast
of Barbary, and all those provinces of Spain which were under the
government of the Moors.

The cities of Italy seem to have been the first in Europe which were
raised by commerce to any considerable degree of opulence. Italy lay
in the centre of what was at that time the improved and civilized part
of the world. The crusades, too, though, by the great waste of stock
and destruction of inhabitants which they occasioned, they must
necessarily have retarded the progress of the greater part of Europe,
were extremely favourable to that of some Italian cities. The great
armies which marched from all parts to the conquest of the Holy Land,
gave extraordinary encouragement to the shipping of Venice, Genoa, and
Pisa, sometimes in transporting them thither, and always in supplying
them with provisions. They were the commissaries, if one may say so,
of those armies; and the most destructive frenzy that ever befel the
European nations, was a source of opulence to those republics.

The inhabitants of trading cities, by importing the improved
manufactures and expensive luxuries of richer countries, afforded some
food to the vanity of the great proprietors, who eagerly purchased
them with great quantities of the rude produce of their own lands. The
commerce of a great part of Europe in those times, accordingly,
consisted chiefly in the exchange of their own rude, for the
manufactured produce of more civilized nations. Thus the wool of
England used to be exchanged for the wines of France, and the fine
cloths of Flanders, in the same manner as the corn in Poland is at
this day, exchanged for the wines and brandies of France, and for the
silks and velvets of France and Italy.

A taste for the finer and more improved manufactures was, in this
manner, introduced by foreign commerce into countries where no such
works were carried on. But when this taste became so general as to
occasion a considerable demand, the merchants, in order to save the
expense of carriage, naturally endeavoured to establish some
manufactures of the same kind in their own country. Hence the origin
of the first manufactures for distant sale, that seem to have been
established in the western provinces of Europe, after the fall of the
Roman empire.

No large country, it must be observed, ever did or could subsist
without some sort of manufactures being carried on in it; and when it
is said of any such country that it has no manufactures, it must
always be understood of the finer and more improved, or of such as are
fit for distant sale. In every large country both the clothing and
household furniture or the far greater part of the people, are the
produce of their own industry. This is even more universally the case
in those poor countries which are commonly said to have no
manufactures, than in those rich ones that are said to abound in them.
In the latter you will generally find, both in the clothes and
household furniture of the lowest rank of people, a much greater
proportion of foreign productions than in the former.

Those manufactures which are fit for distant sale, seem to have been
introduced into different countries in two different ways.

Sometimes they have been introduced in the manner above mentioned, by
the violent operation, if one may say so, of the stocks of particular
merchants and undertakers, who established them in imitation of some
foreign manufactures of the same kind. Such manufactures, therefore,
are the offspring of foreign commerce; and such seem to have been the
ancient manufactures of silks, velvets, and brocades, which flourished
in Lucca during the thirteenth century. They were banished from thence
by the tyranny of one of Machiavel's heroes, Castruccio Castracani. In
1310, nine hundred families were driven out of Lucca, of whom
thirty-one retired to Venice, and offered to introduce there the silk
manufacture. {See Sandi Istoria civile de Vinezia, part 2 vol. i, page
247 and 256.} Their offer was accepted, many privileges were conferred
upon them, and they began the manufacture with three hundred workmen.
Such, too, seem to have been the manufactures of fine cloths that
anciently flourished in Flanders, and which were introduced into
England in the beginning of the reign of Elizabeth, and such are the
present silk manufactures of Lyons and Spitalfields. Manufactures
introduced in this manner are generally employed upon foreign
materials, being imitations of foreign manufactures. When the Venetian
manufacture was first established, the materials were all brought from
Sicily and the Levant. The more ancient manufacture of Lucca was
likewise carried on with foreign materials. The cultivation of
mulberry trees, and the breeding of silk-worms, seem not to have been
common in the northern parts of Italy before the sixteenth century.
Those arts were not introduced into France till the reign of Charles
IX. The manufactures of Flanders were carried on chiefly with Spanish
and English wool. Spanish wool was the material, not of the first
woollen manufacture of England, but of the first that was fit for
distant sale. More than one half the materials of the Lyons
manufacture is at this day foreign silk; when it was first
established, the whole, or very nearly the whole, was so. No part of
the materials of the Spitalfields manufacture is ever likely to be the
produce of England. The seat of such manufactures, as they are
generally introduced by the scheme and project of a few individuals,
is sometimes established in a maritime city, and sometimes in an
inland town, according as their interest, judgment, or caprice, happen
to determine.

At other times, manufactures for distant sale grow up naturally, and
as it were of their own accord, by the gradual refinement of those
household and coarser manufactures which must at all times be carried
on even in the poorest and rudest countries. Such manufactures are
generally employed upon the materials which the country produces, and
they seem frequently to have been first refined and improved In such
inland countries as were not, indeed, at a very great, but at a
considerable distance from the sea-coast, and sometimes even from all
water carriage. An inland country, naturally fertile and easily
cultivated, produces a great surplus of provisions beyond what is
necessary for maintaining the cultivators; and on account of the
expense of land carriage, and inconveniency of river navigation, it
may frequently be difficult to send this surplus abroad. Abundance,
therefore, renders provisions cheap, and encourages a great number of
workmen to settle in the neighbourhood, who find that their industry
can there procure them more of the necessaries and conveniencies of
life than in other places. They work up the materials of manufacture
which the land produces, and exchange their finished work, or, what is
the same thing, the price of it, for more materials and provisions.
They give a new value to the surplus part of the rude produce, by
saving the expense of carrying it to the water-side, or to some
distant market; and they furnish the cultivators with something in
exchange for it that is either useful or agreeable to them, upon
easier terms than they could have obtained it before. The cultivators
get a better price for their surplus produce, and can purchase cheaper
other conveniencies which they have occasion for. They are thus both
encouraged and enabled to increase this surplus produce by a further
improvement and better cultivation of the land; and as the fertility
of she land had given birth to the manufacture, so the progress of the
manufacture reacts upon the land, and increases still further it's
fertility. The manufacturers first supply the neighbourhood, and
afterwards, as their work improves and refines, more distant markets.
For though neither the rude produce, nor even the coarse manufacture,
could, without the greatest difficulty, support the expense of a
considerable land-carriage, the refined and improved manufacture
easily may. In a small bulk it frequently contains the price of a
great quantity of rude produce. A piece of fine cloth, for example
which weighs only eighty pounds, contains in it the price, not only of
eighty pounds weight of wool, but sometimes of several thousand weight
of corn, the maintenance of the different working people, and of their
immediate employers. The corn which could with difficulty have been
carried abroad in its own shape, is in this manner virtually exported
in that of the complete manufacture, and may easily be sent to the
remotest corners of the world. In this manner have grown up naturally,
and, as it were, of their own accord, the manufactures of Leeds,
Halifax, Sheffield, Birmingham, and Wolverhampton. Such manufactures
are the offspring of agriculture. In the modern history of Europe,
their extension and improvement have generally been posterior to those
which were the offspring of foreign commerce. England was noted for
the manufacture of fine cloths made of Spanish wool, more than a
century before any of those which now flourish in the places above
mentioned were fit for foreign sale. The extension and improvement of
these last could not take place but in consequence of the extension
and improvement of agriculture, the last and greatest effect of
foreign commerce, and of the manufactures immediately introduced by
it, and which I shall now proceed to explain.



The increase and riches of commercial and manufacturing towns
contributed to the improvement and cultivation of the countries to
which they belonged, in three different ways:

First, by affording a great and ready market for the rude produce of
the country, they gave encouragement to its cultivation and further
improvement. This benefit was not even confined to the countries in
which they were situated, but extended more or less to all those with
which they had any dealings. To all of them they afforded a market for
some part either of their rude or manufactured produce, and,
consequently, gave some encouragement to the industry and improvement
of all. Their own country, however, on account of its neighbourhood,
necessarily derived the greatest benefit from this market. Its rude
produce being charged with less carriage, the traders could pay the
growers a better price for it, and yet afford it as cheap to the
consumers as that of more distant countries.

Secondly, the wealth acquired by the inhabitants of cities was
frequently employed in purchasing such lands as were to be sold, of
which a great part would frequently be uncultivated. Merchants are
commonly ambitious of becoming country gentlemen, and, when they do,
they are generally the best of all improvers. A merchant is accustomed
to employ his money chiefly in profitable projects; whereas a mere
country gentleman is accustomed to employ it chiefly in expense. The
one often sees his money go from him, and return to him again with a
profit; the other, when once he parts with it, very seldom expects to
see any more of it. Those different habits naturally affect their
temper and disposition in every sort of business. The merchant is
commonly a bold, a country gentleman a timid undertaker. The one is
not afraid to lay out at once a large capital upon the improvement of
his land, when he has a probable prospect of raising the value of it
in proportion to the expense; the other, if he has any capital, which
is not always the case, seldom ventures to employ it in this manner.
If he improves at all, it is commonly not with a capital, but with
what he can save out or his annual revenue. Whoever has had the
fortune to live in a mercantile town, situated in an unimproved
country, must have frequently observed how much more spirited the
operations of merchants were in this way, than those of mere country
gentlemen. The habits, besides, of order, economy, and attention, to
which mercantile business naturally forms a merchant, render him much
fitter to execute, with profit and success, any project of

Thirdly, and lastly, commerce and manufactures gradually introduced
order and good government, and with them the liberty and security of
individuals, among the inhabitants of the country, who had before
lived almost in a continual state of war with their neighbours, and of
servile dependency upon their superiors. This, though it has been the
least observed, is by far the most important of all their effects. Mr
Hume is the only writer who, so far as I know, has hitherto taken
notice of it.

In a country which has neither foreign commerce nor any of the finer
manufactures, a great proprietor, having nothing for which he can
exchange the greater part of the produce of his lands which is over
and above the maintenance of the cultivators, consumes the whole in
rustic hospitality at home. If this surplus produce is sufficient to
maintain a hundred or a thousand men, he can make use of it in no
other way than by maintaining a hundred or a thousand men. He is at
all times, therefore, surrounded with a multitude of retainers and
dependants, who, having no equivalent to give in return for their
maintenance, but being fed entirely by his bounty, must obey him, for
the same reason that soldiers must obey the prince who pays them.
Before the extension of commerce and manufactures in Europe, the
hospitality of the rich and the great, from the sovereign down to the
smallest baron, exceeded every thing which, in the present times, we
can easily form a notion of Westminster-hall was the dining-room of
William Rufus, and might frequently, perhaps, not be too large for his
company. It was reckoned a piece of magnificence in Thomas Becket,
that he strewed the floor of his hall with clean hay or rushes in the
season, in order that the knights and squires, who could not get
seats, might not spoil their fine clothes when they sat down on the
floor to eat their dinner. The great Earl of Warwick is said to have
entertained every day, at his different manors, 30,000 people; and
though the number here may have been exaggerated, it must, however,
have been very great to admit of such exaggeration. A hospitality
nearly of the same kind was exercised not many years ago in many
different parts of the Highlands of Scotland. It seems to be common in
all nations to whom commerce and manufactures are little known. I have
seen, says Doctor Pocock, an Arabian chief dine in the streets of a
town where he had come to sell his cattle, and invite all passengers,
even common beggars, to sit down with him and partake of his banquet.

The occupiers of land were in every respect as dependent upon the
great proprietor as his retainers. Even such of them as were not in a
state of villanage, were tenants at will, who paid a rent in no
respect equivalent to the subsistence which the land afforded them. A
crown, half a crown, a sheep, a lamb, was some years ago, in the
Highlands of Scotland, a common rent for lands which maintained a
family. In some places it is so at this day; nor will money at present
purchase a greater quantity of commodities there than in other places.
In a country where the surplus produce of a large estate must be
consumed upon the estate itself, it will frequently be more convenient
for the proprietor, that part of it be consumed at a distance from his
own house, provided they who consume it are as dependent upon him as
either his retainers or his menial servants. He is thereby saved from
the embarrassment of either too large a company, or too large a
family. A tenant at will, who possesses land sufficient to maintain
his family for little more than a quit-rent, is as dependent upon the
proprietor as any servant or retainer whatever, and must obey him with
as little reserve. Such a proprietor, as he feeds his servants and
retainers at his own house, so he feeds his tenants at their houses.
The subsistence of both is derived from his bounty, and its
continuance depends upon his good pleasure.

Upon the authority which the great proprietors necessarily had, in
such a state of things, over their tenants and retainers, was founded
the power of the ancient barons. They necessarily became the judges in
peace, and the leaders in war, of all who dwelt upon their estates.
They could maintain order, and execute the law, within their
respective demesnes, because each of them could there turn the whole
force of all the inhabitants against the injustice of anyone. No other
person had sufficient authority to do this. The king, in particular,
had not. In those ancient times, he was little more than the greatest
proprietor in his dominions, to whom, for the sake of common defence
against their common enemies, the other great proprietors paid certain
respects. To have enforced payment of a small debt within the lands of
a great proprietor, where all the inhabitants were armed, and
accustomed to stand by one another, would have cost the king, had he
attempted it by his own authority, almost the same effort as to
extinguish a civil war. He was, therefore, obliged to abandon the
administration of justice, through the greater part of the country, to
those who were capable of administering it; and, for the same reason,
to leave the command of the country militia to those whom that militia
would obey.

It is a mistake to imagine that those territorial jurisdictions took
their origin from the feudal law. Not only the highest jurisdictions,
both civil and criminal, but the power of levying troops, of coining
money, and even that of making bye-laws for the government of their
own people, were all rights possessed allodially by the great
proprietors of land, several centuries before even the name of the
feudal law was known in Europe. The authority and jurisdiction of the
Saxon lords in England appear to have been as great before the
Conquest as that of any of the Norman lords after it. But the feudal
law is not supposed to have become the common law of England till
after the Conquest. That the most extensive authority and
jurisdictions were possessed by the great lords in France allodially,
long before the feudal law was introduced into that country, is a
matter of fact that admits of no doubt. That authority, and those
jurisdictions, all necessarily flowed from the state of property and
manners just now described. Without remounting to the remote
antiquities of either the French or English monarchies, we may find,
in much later times, many proofs that such effects must always flow
from such causes. It is not thirty years ago since Mr Cameron of
Lochiel, a gentleman of Lochaber in Scotland, without any legal
warrant whatever, not being what was then called a lord of regality,
nor even a tenant in chief, but a vassal of the Duke of Argyll, and
with out being so much as a justice of peace, used, notwithstanding,
to exercise the highest criminal jurisdictions over his own people. He
is said to have done so with great equity, though without any of the
formalities of justice; and it is not improbable that the state of
that part of the country at that time made it necessary for him to
assume this authority, in order to maintain the public peace. That
gentleman, whose rent never exceeded 500 a-year, carried, in 1745,
800 of his own people into the rebellion with him.

The introduction of the feudal law, so far from extending, may be
regarded as an attempt to moderate, the authority of the great
allodial lords. It established a regular subordination, accompanied
with a long train of services and duties, from the king down to the
smallest proprietor. During the minority of the proprietor, the rent,
together with the management of his lands, fell into the hands of his
immediate superior; and, consequently, those of all great proprietors
into the hands of the king, who was charged with the maintenance and
education of the pupil, and who, from his authority as guardian, was
supposed to have a right of disposing of him in marriage, provided it
was in a manner not unsuitable to his rank. But though this
institution necessarily tended to strengthen the authority of the
king, and to weaken that of the great proprietors, it could not do
either sufficiently for establishing order and good government among
the inhabitants of the country; because it could not alter
sufficiently that state of property and manners from which the
disorders arose. The authority of government still continued to be, as
before, too weak in the head, and too strong in the inferior members;
and the excessive strength of the inferior members was the cause of
the weakness of the head. After the institution of feudal
subordination, the king was as incapable of restraining the violence
of the great lords as before. They still continued to make war
according to their own discretion, almost continually upon one
another, and very frequently upon the king; and the open country still
continued to be a scene of violence, rapine, and disorder.

But what all the violence of the feudal institutions could never have
effected, the silent and insensible operation of foreign commerce and
manufactures gradually brought about. These gradually furnished the
great proprietors with something for which they could exchange the
whole surplus produce of their lands, and which they could consume
themselves, without sharing it either with tenants or retainers. All
for ourselves, and nothing for other people, seems, in every age of
the world, to have been the vile maxim of the masters of mankind. As
soon, therefore, as they could find a method of consuming the whole
value of their rents themselves, they had no disposition to share them
with any other persons. For a pair of diamond buckles, perhaps, or for
something as frivolous and useless, they exchanged the maintenance,
or, what is the same thing, the price of the maintenance of 1000 men
for a year, and with it the whole weight and authority which it could
give them. The buckles, however, were to be all their own, and no
other human creature was to have any share of them; whereas, in the
more ancient method of expense, they must have shared with at least
1000 people. With the judges that were to determine the preference,
this difference was perfectly decisive; and thus, for the
gratification of the most childish, the meanest, and the most sordid
of all vanities they gradually bartered their whole power and

In a country where there is no foreign commerce, nor any of the finer
manufactures, a man of 10,000 a-year cannot well employ his revenue
in any other way than in maintaining, perhaps, 1000 families, who are
all of them necessarily at his command. In the present state of
Europe, a man of 10,000 a-year can spend his whole revenue, and he
generally does so, without directly maintaining twenty people, or
being able to command more than ten footmen, not worth the commanding.
Indirectly, perhaps, he maintains as great, or even a greater number
of people, than he could have done by the ancient method of expense.
For though the quantity of precious productions for which he exchanges
his whole revenue be very small, the number of workmen employed in
collecting and preparing it must necessarily have been very great. Its
great price generally arises from the wages of their labour, and the
profits of all their immediate employers. By paying that price, he
indirectly pays all those wages and profits, and thus indirectly
contributes to the maintenance of all the workmen and their employers.
He generally contributes, however, but a very small proportion to that
of each; to a very few, perhaps, not a tenth, to many not a hundredth,
and to some not a thousandth, or even a ten thousandth part of their
whole annual maintenance. Though he contributes, therefore, to the
maintenance of them all, they are all more or less independent of him,
because generally they can all be maintained without him.

When the great proprietors of land spend their rents in maintaining
their tenants and retainers, each of them maintains entirely all his
own tenants and all his own retainers. But when they spend them in
maintaining tradesmen and artificers, they may, all of them taken
together, perhaps maintain as great, or, on account of the waste which
attends rustic hospitality, a greater number of people than before.
Each of them, however, taken singly, contributes often but a very
small share to the maintenance of any individual of this greater
number. Each tradesman or artificer derives his subsistence from the
employment, not of one, but of a hundred or a thousand different
customers. Though in some measure obliged to them all, therefore, he
is not absolutely dependent upon any one of them.

The personal expense of the great proprietors having in this manner
gradually increased, it was impossible that the number of their
retainers should not as gradually diminish, till they were at last
dismissed altogether. The same cause gradually led them to dismiss the
unnecessary part of their tenants. Farms were enlarged, and the
occupiers of land, notwithstanding the complaints of depopulation,
reduced to the number necessary for cultivating it, according to the
imperfect state of cultivation and improvement in those times. By the
removal of the unnecessary mouths, and by exacting from the farmer the
full value of the farm, a greater surplus, or, what is the same thing,
the price of a greater surplus, was obtained for the proprietor, which
the merchants and manufacturers soon furnished him with a method of
spending upon his own person, in the same manner as he had done the
rest. The cause continuing to operate, he was desirous to raise his
rents above what his lands, in the actual state of their improvement,
could afford. His tenants could agree to this upon one condition only,
that they should be secured in their possession for such a term of
years as might give them time to recover, with profit, whatever they
should lay not in the further improvement of the land. The expensive
vanity of the landlord made him willing to accept of this condition;
and hence the origin of long leases.

Even a tenant at will, who pays the full value of the land, is not
altogether dependent upon the landlord. The pecuniary advantages which
they receive from one another are mutual and equal, and such a tenant
will expose neither his life nor his fortune in the service of the
proprietor. But if he has a lease for along term of years, he is
altogether independent; and his landlord must not expect from him even
the most trifling service, beyond what is either expressly stipulated
in the lease, or imposed upon him by the common and known law of the

The tenants having in this manner become independent, and the
retainers being dismissed, the great proprietors were no longer
capable of interrupting the regular execution of justice, or of
disturbing the peace of the country. Having sold their birth-right,
not like Esau, for a mess of pottage in time of hunger and necessity,
but, in the wantonness of plenty, for trinkets and baubles, fitter to
be the playthings of children than the serious pursuits of men, they
became as insignificant as any substantial burgher or tradesmen in a
city. A regular government was established in the country as well as
in the city, nobody having sufficient power to disturb its operations
in the one, any more than in the other.

It does not, perhaps, relate to the present subject, but I cannot help
remarking it, that very old families, such as have possessed some
considerable estate from father to son for many successive
generations, are very rare in commercial countries. In countries which
have little commerce, on the contrary, such as Wales, or the Highlands
of Scotland, they are very common. The Arabian histories seem to be
all full of genealogies; and there is a history written by a Tartar
Khan, which has been translated into several European languages, and
which contains scarce any thing else; a proof that ancient families
are very common among those nations. In countries where a rich man can
spend his revenue in no other way than by maintaining as many people
as it can maintain, he is apt to run out, and his benevolence, it
seems, is seldom so violent as to attempt to maintain more than he can
afford. But where he can spend the greatest revenue upon his own
person, he frequently has no bounds to his expense, because he
frequently has no bounds to his vanity, or to his affection for his
own person. In commercial countries, therefore, riches, in spite of
the most violent regulations of law to prevent their dissipation, very
seldom remain long in the same family. Among simple nations, on the
contrary, they frequently do, without any regulations of law; for
among nations of shepherds, such as the Tartars and Arabs, the
consumable nature of their property necessarily renders all such
regulations impossible.

A revolution of the greatest importance to the public happiness, was
in this manner brought about by two different orders of people, who
had not the least intention to serve the public. To gratify the most
childish vanity was the sole motive of the great proprietors. The
merchants and artificers, much less ridiculous, acted merely from a
view to their own interest, and in pursuit of their own pedlar
principle of turning a penny wherever a penny was to be got. Neither
of them had either knowledge or foresight of that great revolution
which the folly of the one, and the industry of the other, was
gradually bringing about.

It was thus, that, through the greater part of Europe, the commerce
and manufactures of cities, instead of being the effect, have been the
cause and occasion of the improvement and cultivation of the country.

This order, however, being contrary to the natural course of things,
is necessarily both slow and uncertain. Compare the slow progress of
those European countries of which the wealth depends very much upon
their commerce and manufactures, with the rapid advances of our North
American colonies, of which the wealth is founded altogether in
agriculture. Through the greater part of Europe, the number of
inhabitants is not supposed to double in less than five hundred years.
In several of our North American colonies, it is found to double in
twenty or five-and-twenty years. In Europe, the law of primogeniture,
and perpetuities of different kinds, prevent the division of great
estates, and thereby hinder the multiplication of small proprietors. A
small proprietor, however, who knows every part of his little
territory, views it with all the affection which property, especially
small property, naturally inspires, and who upon that account takes
pleasure, not only in cultivating, but in adorning it, is generally of
all improvers the most industrious, the most intelligent, and the most
successful. The same regulations, besides, keep so much land out of
the market, that there are always more capitals to buy than there is
land to sell, so that what is sold always sells at a monopoly price.
The rent never pays the interest of the purchase-money, and is,
besides, burdened with repairs and other occasional charges, to which
the interest of money is not liable. To purchase land, is, everywhere
in Europe, a most unprofitable employment of a small capital. For the
sake of the superior security, indeed, a man of moderate
circumstances, when he retires from business, will sometimes choose to
lay out his little capital in land. A man of profession, too whose
revenue is derived from another source often loves to secure his
savings in the same way. But a young man, who, instead of applying to
trade or to some profession, should employ a capital of two or three
thousand pounds in the purchase and cultivation of a small piece of
land, might indeed expect to live very happily and very independently,
but must bid adieu for ever to all hope of either great fortune or
great illustration, which, by a different employment of his stock, he
might have had the same chance of acquiring with other people. Such a
person, too, though he cannot aspire at being a proprietor, will often
disdain to be a farmer. The small quantity of land, therefore, which
is brought to market, and the high price of what is brought thither,
prevents a great number of capitals from being employed in its
cultivation and improvement, which would otherwise have taken that
direction. In North America, on the contrary, fifty or sixty pounds is
often found a sufficient stock to begin a plantation with. The
purchase and improvement of uncultivated land is there the most
profitable employment of the smallest as well as of the greatest
capitals, and the most direct road to all the fortune and illustration
which can be required in that country. Such land, indeed, is in North
America to be had almost for nothing, or at a price much below the
value of the natural produce; a thing impossible in Europe, or indeed
in any country where all lands have long been private property. If
landed estates, however, were divided equally among all the children,
upon the death of any proprietor who left a numerous family, the
estate would generally be sold. So much land would come to market,
that it could no longer sell at a monopoly price. The free rent of the
land would go no nearer to pay the interest of the purchase-money, and
a small capital might be employed in purchasing land as profitable as
in any other way.

England, on account of the natural fertility of the soil, of the great
extent of the sea-coast in proportion to that of the whole country,
and of the many navigable rivers which run through it, and afford the
conveniency of water carriage to some of the most inland parts of it,
is perhaps as well fitted by nature as any large country in Europe to
be the seat of foreign commerce, of manufactures for distant sale, and
of all the improvements which these can occasion. From the beginning
of the reign of Elizabeth, too, the English legislature has been
peculiarly attentive to the interest of commerce and manufactures, and
in reality there is no country in Europe, Holland itself not excepted,
of which the law is, upon the whole, more favourable to this sort of
industry. Commerce and manufactures have accordingly been continually
advancing during all this period. The cultivation and improvement of
the country has, no doubt, been gradually advancing too; but it seems
to have followed slowly, and at a distance, the more rapid progress of
commerce and manufactures. The greater part of the country must
probably have been cultivated before the reign of Elizabeth; and a
very great part of it still remains uncultivated, and the cultivation
of the far greater part much inferior to what it might be, The law of
England, however, favours agriculture, not only indirectly, by the
protection of commerce, but by several direct encouragements. Except
in times of scarcity, the exportation of corn is not only free, but
encouraged by a bounty. In times of moderate plenty, the importation
of foreign corn is loaded with duties that amount to a prohibition.
The importation of live cattle, except from Ireland, is prohibited at
all times; and it is but of late that it was permitted from thence.
Those who cultivate the land, therefore, have a monopoly against their
countrymen for the two greatest and most important articles of land
produce, bread and butcher's meat. These encouragements, although at
bottom, perhaps, as I shall endeavour to show hereafter, altogether
illusory, sufficiently demonstrate at least the good intention of the
legislature to favour agriculture. But what is of much more importance
than all of them, the yeomanry of England are rendered as secure, as
independent, and as respectable, as law can make them. No country,
therefore, which the right of primogeniture takes place, which pays
tithes, and where perpetuities, though contrary to the spirit of the
law, are admitted in some cases, can give more encouragement to
agriculture than England. Such, however, notwithstanding, is the state
of its cultivation. What would it have been, had the law given no
direct encouragement to agriculture besides what arises indirectly
from the progress of commerce, and had left the yeomanry in the same
condition as in most other countries of Europe? It is now more than
two hundred years since the beginning of the reign of Elizabeth, a
period as long as the course of human prosperity usually endures.

France seems to have had a considerable share of foreign commerce,
near a century before England was distinguished as a commercial
country. The marine of France was considerable, according to the
notions of the times, before the expedition of Charles VIII. to
Naples. The cultivation and improvement of France, however, is, upon
the whole, inferior to that of England. The law of the country has
never given the same direct encouragement to agriculture.

The foreign commerce of Spain and Portual to the other parts of
Europe, though chiefly carried on in foreign ships, is very
considerable. That to their colonies is carried on in their own, and
is much greater, on account of the great riches and extent of those
colonies. But it has never introduced any considerable manufactures
for distant sale into either of those countries, and the greater part
of both still remains uncultivated. The foreign commerce of Portugal
is of older standing than that of any great country in Europe, except

Italy is the only great country of Europe which seems to have been
cultivated and improved in every part, by means of foreign commerce
and manufactures for distant sale. Before the invasion of Charles
VIII., Italy, according to Guicciardini, was cultivated not less in
the most mountainous and barren parts of the country, than in the
plainest and most fertile. The advantageous situation of the country,
and the great number of independent status which at that time
subsisted in it, probably contributed not a little to this general
cultivation. It is not impossible, too, notwithstanding this general
expression of one of the most judicious and reserved of modern
historians, that Italy was not at that time better cultivated than
England is at present.

The capital, however, that is acquired to any country by commerce and
manufactures, is always a very precarious and uncertain possession,
till some part of it has been secured and realized in the cultivation
and improvement of its lands. A merchant, it has been said very
properly, is not necessarily the citizen of any particular country. It
is in a great measure indifferent to him from what place he carries on
his trade; and a very trifling disgust will make him remove his
capital, and, together with it, all the industry which it supports,
from one country to another. No part of it can be said to belong to
any particular country, till it has been spread, as it were, over the
face of that country, either in buildings, or in the lasting
improvement of lands. No vestige now remains of the great wealth said
to have been possessed by the greater part of the Hanse Towns, except
in the obscure histories of the thirteenth and fourteenth centuries.
It is even uncertain where some of them were situated, or to what
towns in Europe the Latin names given to some of them belong. But
though the misfortunes of Italy, in the end of the fifteenth and
beginning of the sixteenth centuries, greatly diminished the commerce
and manufactures of the cities of Lombardy and Tuscany, those
countries still continue to be among the most populous and best
cultivated in Europe. The civil wars of Flanders, and the Spanish
government which succeeded them, chased away the great commerce of
Antwerp, Ghent, and Bruges. But Flanders still continues to be one of
the richest, best cultivated, and most populous provinces of Europe.
The ordinary revolutions of war and government easily dry up the
sources of that wealth which arises from commerce only. That which
arises from the more solid improvements of agriculture is much more
durable, and cannot be destroyed but by those more violent convulsions
occasioned by the depredations of hostile and barbarous nations
continued for a century or two together; such as those that happened
for some time before and after the fall of the Roman empire in the
western provinces of Europe.



Political economy, considered as a branch of the science of a
statesman or legislator, proposes two distinct objects; first, to
provide a plentiful revenue or subsistence for the people, or, more
properly, to enable them to provide such a revenue or subsistence for
themselves; and, secondly, to supply the state or commonwealth with a
revenue sufficient for the public services. It proposes to enrich both
the people and the sovereign.

The different progress of opulence in different ages and nations, has
given occasion to two different systems of political economy, with
regard to enriching the people. The one may be called the system of
commerce, the other that of agriculture. I shall endeavour to explain
both as fully and distinctly as I can, and shall begin with the system
of commerce. It is the modern system, and is best understood in our
own country and in our own times.



That wealth consists in money, or in gold and silver, is a popular
notion which naturally arises from the double function of money, as
the instrument of commerce, and as the measure of value. In
consequence of its being the instrument of commerce, when we have
money we can more readily obtain whatever else we have occasion for,
than by means of any other commodity. The great affair, we always
find, is to get money. When that is obtained, there is no difficulty
in making any subsequent purchase. In consequence of its being the
measure of value, we estimate that of all other commodities by the
quantity of money which they will exchange for. We say of a rich man,
that he is worth a great deal, and of a poor man, that he is worth
very little money. A frugal man, or a man eager to be rich, is said to
love money; and a careless, a generous, or a profuse man, is said to
be indifferent about it. To grow rich is to get money; and wealth and
money, in short, are, in common language, considered as in every
respect synonymous.

A rich country, in the same manner as a rich man, is supposed to be a
country abounding in money; and to heap up gold and silver in any
country is supposed to be the readiest way to enrich it. For some time
after the discovery of America, the first inquiry of the Spaniards,
when they arrived upon any unknown coast, used to be, if there was any
gold or silver to be found in the neighbourhood? By the information
which they received, they judged whether it was worth while to make a
settlement there, or if the country was worth the conquering. Plano
Carpino, a monk sent ambassador from the king of France to one of the
sons of the famous Gengis Khan, says, that the Tartars used frequently
to ask him, if there was plenty of sheep and oxen in the kingdom of
France? Their inquiry had the same object with that of the Spaniards.
They wanted to know if the country was rich enough to be worth the
conquering. Among the Tartars, as among all other nations of
shepherds, who are generally ignorant of the use of money, cattle are
the instruments of commerce and the measures of value. Wealth,
therefore, according to them, consisted in cattle, as, according to
the Spaniards, it consisted in gold and silver. Of the two, the Tartar
notion, perhaps, was the nearest to the truth.

Mr Locke remarks a distinction between money and other moveable goods.
All other moveable goods, he says, are of so consumable a nature, that
the wealth which consists in them cannot be much depended on; and a
nation which abounds in them one year may, without any exportation,
but merely by their own waste and extravagance, be in great want of
them the next. Money, on the contrary, is a steady friend, which,
though it may travel about from hand to hand, yet if it can be kept
from going out of the country, is not very liable to be wasted and
consumed. Gold and silver, therefore, are, according to him, the must
solid and substantial part of the moveable wealth of a nation; and to
multiply those metals ought, he thinks, upon that account, to be the
great object of its political economy.

Others admit, that if a nation could be separated from all the world,
it would be of no consequence how much or how little money circulated
in it. The consumable goods, which were circulated by means of this
money, would only be exchanged for a greater or a smaller number of
pieces; but the real wealth or poverty of the country, they allow,
would depend altogether upon the abundance or scarcity of those
consumable goods. But it is otherwise, they think, with countries
which have connections with foreign nations, and which are obliged to
carry on foreign wars, and to maintain fleets and armies in distant
countries. This, they say, cannot be done, but by sending abroad money
to pay them with; and a nation cannot send much money abroad, unless
it has a good deal at home. Every such nation, therefore, must
endeavour, in time of peace, to accumulate gold and silver, that when
occasion requires, it may have wherewithal to carry on foreign wars.

In consequence of those popular notions, all the different nations of
Europe have studied, though to little purpose, every possible means of
accumulating gold and silver in their respective countries. Spain and
Portugal, the proprietors of the principal mines which supply Europe
with those metals, have either prohibited their exportation under the
severest penalties, or subjected it to a considerable duty. The like
prohibition seems anciently to have made a part of the policy of most
other European nations. It is even to be found, where we should least
of all expect to find it, in some old Scotch acts of Parliament, which
forbid, under heavy penalties, the carrying gold or silver forth of
the kingdom. The like policy anciently took place both in France and

When those countries became commercial, the merchants found this
prohibition, upon many occasions, extremely inconvenient. They could
frequently buy more advantageously with gold and silver, than with any
other commodity, the foreign goods which they wanted, either to import
into their own, or to carry to some other foreign country. They
remonstrated, therefore, against this prohibition as hurtful to trade.

They represented, first, that the exportation of gold and silver, in
order to purchase foreign goods, did not always diminish the quantity
of those metals in the kingdom; that, on the contrary, it might
frequently increase the quantity; because, if the consumption of
foreign goods was not thereby increased in the country, those goods
might be re-exported to foreign countries, and being there sold for a
large profit, might bring back much more treasure than was originally
sent out to purchase them. Mr Mun compares this operation of foreign
trade to the seed-time and harvest of agriculture. "If we only
behold," says he, "the actions of the husbandman in the seed time,
when he casteth away much good corn into the ground, we shall account
him rather a madman than a husbandman. But when we consider his
labours in the harvest, which is the end of his endeavours, we shall
find the worth and plentiful increase of his actions."

They represented, secondly, that this prohibition could not hinder the
exportation of gold and silver, which, on account of the smallness of
their bulk in proportion to their value, could easily be smuggled
abroad. That this exportation could only be prevented by a proper
attention to what they called the balance of trade. That when the
country exported to a greater value than it imported, a balance became
due to it from foreign nations, which was necessarily paid to it in
gold and silver, and thereby increased the quantity of those metals in
the kingdom. But that when it imported to a greater value than it
exported, a contrary balance became due to foreign nations, which was
necessarily paid to them in the same manner, and thereby diminished
that quantity: that in this case, to prohibit the exportation of
those metals, could not prevent it, but only, by making it more
dangerous, render it more expensive: that the exchange was thereby
turned more against the country which owed the balance, than it
otherwise might have been; the merchant who purchased a bill upon the
foreign country being obliged to pay the banker who sold it, not only
for the natural risk, trouble, and expense of sending the money
thither, but for the extraordinary risk arising from the prohibition;
but that the more the exchange was against any country, the more the
balance of trade became necessarily against it; the money of that
country becoming necessarily of so much less value, in comparison with
that of the country to which the balance was due. That if the exchange
between England and Holland, for example, was five per cent. against
England, it would require 105 ounces of silver in England to purchase
a bill for 100 ounces of silver in Holland: that 105 ounces of silver
in England, therefore, would be worth only 100 ounces of silver in
Holland, and would purchase only a proportionable quantity of Dutch
goods; but that 100 ounces of silver in Holland, on the contrary,
would be worth 105 ounces in England, and would purchase a
proportionable quantity of English goods; that the English goods which
were sold to Holland would be sold so much cheaper, and the Dutch
goods which were sold to England so much dearer, by the difference of
the exchange: that the one would draw so much less Dutch money to
England, and the other so much more English money to Holland, as this
difference amounted to: and that the balance of trade, therefore,
would necessarily be so much more against England, and would require a
greater balance of gold and silver to be exported to Holland.

Those arguments were partly solid and partly sophistical. They were
solid, so far as they asserted that the exportation of gold and silver
in trade might frequently be advantageous to the country. They were
solid, too, in asserting that no prohibition could prevent their
exportation, when private people found any advantage in exporting
them. But they were sophistical, in supposing, that either to preserve
or to augment the quantity of those metals required more the attention
of government, than to preserve or to augment the quantity of any
other useful commodities, which the freedom of trade, without any such
attention, never fails to supply in the proper quantity. They were
sophistical, too, perhaps, in asserting that the high price of
exchange necessarily increased what they called the unfavourable
balance of trade, or occasioned the exportation of a greater quantity
of gold and silver. That high price, indeed, was extremely
disadvantageous to the merchants who had any money to pay in foreign
countries. They paid so much dearer for the bills which their bankers
granted them upon those countries. But though the risk arising from
the prohibition might occasion some extraordinary expense to the
bankers, it would not necessarily carry any more money out of the
country. This expense would generally be all laid out in the country,
in smuggling the money out of it, and could seldom occasion the
exportation of a single sixpence beyond the precise sum drawn for. The
high price of exchange, too, would naturally dispose the merchants to
endeavour to make their exports nearly balance their imports, in order
that they might have this high exchange to pay upon as small a sum as
possible. The high price of exchange, besides, must necessarily have
operated as a tax, in raising the price of foreign goods, and thereby
diminishing their consumption. It would tend, therefore, not to
increase, but to diminish, what they called the unfavourable balance
of trade, and consequently the exportation of gold and silver.

Such as they were, however, those arguments convinced the people to
whom they were addressed. They were addressed by merchants to
parliaments and to the councils of princes, to nobles, and to country
gentlemen; by those who were supposed to understand trade, to those
who were conscious to them selves that they knew nothing about the
matter. That foreign trade enriched the country, experience
demonstrated to the nobles and country gentlemen, as well as to the
merchants; but how, or in what manner, none of them well knew. The
merchants knew perfectly in what manner it enriched themselves, it was
their business to know it. But to know in what manner it enriched the
country, was no part of their business. The subject never came into
their consideration, but when they had occasion to apply to their
country for some change in the laws relating to foreign trade. It then
became necessary to say something about the beneficial effects of
foreign trade, and the manner in which those effects were obstructed
by the laws as they then stood. To the judges who were to decide the
business, it appeared a most satisfactory account of the matter, when
they were told that foreign trade brought money into the country, but
that the laws in question hindered it from bringing so much as it
otherwise would do. Those arguments, therefore, produced the
wished-for effect. The prohibition of exporting gold and silver was,
in France and England, confined to the coin of those respective
countries. The exportation of foreign coin and of bullion was made
free. In Holland, and in some other places, this liberty was extended
even to the coin of the country. The attention of government was
turned away from guarding against the exportation of gold and silver,
to watch over the balance of trade, as the only cause which could
occasion any augmentation or diminution of those metals. From one
fruitless care, it was turned away to another care much more
intricate, much more embarrassing, and just equally fruitless. The
title of Mun's book, England's Treasure in Foreign Trade, became a
fundamental maxim in the political economy, not of England only, but
of all other commercial countries. The inland or home trade, the most
important of all, the trade in which an equal capital affords the
greatest revenue, and creates the greatest employment to the people of
the country, was considered as subsidiary only to foreign trade. It
neither brought money into the country, it was said, nor carried any
out of it. The country, therefore, could never become either richer or
poorer by means of it, except so far as its prosperity or decay might
indirectly influence the state of foreign trade.

A country that has no mines of its own, must undoubtedly draw its gold
and silver from foreign countries, in the same manner as one that has
no vineyards of its own must draw its wines. It does not seem
necessary, however, that the attention of government should be more
turned towards the one than towards the other object. A country that
has wherewithal to buy wine, will always get the wine which it has
occasion for; and a country that has wherewithal to buy gold and
silver, will never be in want of those metals. They are to be bought
for a certain price, like all other commodities; and as they are the
price of all other commodities, so all other commodities are the price
of those metals. We trust, with perfect security, that the freedom of
trade, without any attention of government, will always supply us with
the wine which we have occasion for; and we may trust, with equal
security, that it will always supply us with all the gold and silver
which we can afford to purchase or to employ, either in circulating
our commodities or in other uses.

The quantity of every commodity which human industry can either
purchase or produce, naturally regulates itself in every country
according to the effectual demand, or according to the demand of those
who are willing to pay the whole rent, labour, and profits, which must
be paid in order to prepare and bring it to market. But no commodities
regulate themselves more easily or more exactly, according to this
effectual demand, than gold and silver; because, on account of the
small bulk and great value of those metals, no commodities can be more
easily transported from one place to another; from the places where
they are cheap, to those where they are dear; from the places where
they exceed, to those where they fall short of this effectual demand.
If there were in England, for example, an effectual demand for an
additional quantity of gold, a packet-boat could bring from Lisbon, or
from wherever else it was to be had, fifty tons of gold, which could
be coined into more than five millions of guineas. But if there were
an effectual demand for grain to the same value, to import it would
require, at five guineas a-ton, a million of tons of shipping, or a
thousand ships of a thousand tons each. The navy of England would not
be sufficient.

When the quantity of gold and silver imported into any country exceeds
the effectual demand, no vigilance of government can prevent their
exportation. All the sanguinary laws of Spain and Portugal are not
able to keep their gold and silver at home. The continual importations
from Peru and Brazil exceed the effectual demand of those countries,
and sink the price of those metals there below that in the
neighbouring countries. If, on the contrary, in any particular
country, their quantity fell short of the effectual demand, so as to
raise their price above that of the neighbouring countries, the
government would have no occasion to take any pains to import them. If
it were even to take pains to prevent their importation, it would not
be able to effectuate it. Those metals, when the Spartans had got
wherewithal to purchase them, broke through all the barriers which the
laws of Lycurgus opposed to their entrance into Lacedaemon. All the
sanguinary laws of the customs are not able to prevent the importation
of the teas of the Dutch and Gottenburg East India companies; because
somewhat cheaper than those of the British company. A pound of tea,
however, is about a hundred times the bulk of one of the highest
prices, sixteen shillings, that is commonly paid for it in silver, and
more than two thousand times the bulk of the same price in gold, and,
consequently, just so many times more difficult to smuggle.

It is partly owing to the easy transportation of gold and silver, from
the places where they abound to those where they are wanted, that the
price of those metals does not fluctuate continually, like that of the
greater part of other commodities, which are hindered by their bulk
from shifting their situation, when the market happens to be either
over or under-stocked with them. The price of those metals, indeed, is
not altogether exempted from variation; but the changes to which it is
liable are generally slow, gradual, and uniform. In Europe, for
example, it is supposed, without much foundation, perhaps, that during
the course of the present and preceding century, they have been
constantly, but gradually, sinking in their value, on account of the
continual importations from the Spanish West Indies. But to make any
sudden change in the price of gold and silver, so as to raise or lower
at once, sensibly and remarkably, the money price of all other
commodities, requires such a revolution in commerce as that occasioned
by the discovery of America.

If, not withstanding all this, gold and silver should at any time fall
short in a country which has wherewithal to purchase them, there are
more expedients for supplying their place, than that of almost any
other commodity. If the materials of manufacture are wanted, industry
must stop. If provisions are wanted, the people must starve. But if
money is wanted, barter will supply its place, though with a good deal
of inconveniency. Buying and selling upon credit, and the different
dealers compensating their credits with one another, once a-month, or
once a-year, will supply it with less inconveniency. A well-regulated
paper-money will supply it not only without any inconveniency, but, in
some cases, with some advantages. Upon every account, therefore, the
attention of government never was so unnecessarily employed, as when
directed to watch over the preservation or increase of the quantity of
money in any country.

No complaint, however, is more common than that of a scarcity of
money. Money, like wine, must always be scarce with those who have
neither wherewithal to buy it, nor credit to borrow it. Those who have
either, will seldom be in want either of the money, or of the wine
which they have occasion for. This complaint, however, of the scarcity
of money, is not always confined to improvident spendthrifts. It is
sometimes general through a whole mercantile town and the country in
its neighbourhood. Over-trading is the common cause of it. Sober men,
whose projects have been disproportioned to their capitals, are as
likely to have neither wherewithal to buy money, nor credit to borrow
it, as prodigals, whose expense has been disproportioned to their
revenue. Before their projects can be brought to bear, their stock is
gone, and their credit with it. They run about everywhere to borrow
money, and everybody tells them that they have none to lend. Even such
general complaints of the scarcity of money do not always prove that
the usual number of gold and silver pieces are not circulating in the
country, but that many people want those pieces who have nothing to
give for them. When the profits of trade happen to be greater than
ordinary over-trading becomes a general error, both among great and
small dealers. They do not always send more money abroad than usual,
but they buy upon credit, both at home and abroad, an unusual quantity
of goods, which they send to some distant market, in hopes that the
returns will come in before the demand for payment. The demand comes
before the returns, and they have nothing at hand with which they can
either purchase money or give solid security for borrowing. It is not
any scarcity of gold and silver, but the difficulty which such people
find in borrowing, and which their creditor find in getting payment,
that occasions the general complaint of the scarcity of money.

It would be too ridiculous to go about seriously to prove, that wealth
does not consist in money, or in gold and silver; but in what money
purchases, and is valuable only for purchasing. Money, no doubt, makes
always a part of the national capital; but it has already been shown
that it generally makes but a small part, and always the most
unprofitable part of it.

It is not because wealth consists more essentially in money than in
goods, that the merchant finds it generally more easy to buy goods
with money, than to buy money with goods; but because money is the
known and established instrument of commerce, for which every thing is
readily given in exchange, but which is not always with equal
readiness to be got in exchange for every thing. The greater part of
goods, besides, are more perishable than money, and he may frequently
sustain a much greater loss by keeping them. When his goods are upon
hand, too, he is more liable to such demands for money as he may not
be able to answer, than when he has got their price in his coffers.
Over and above all this, his profit arises more directly from selling
than from buying; and he is, upon all these accounts, generally much
more anxious to exchange his goods for money than his money for goods.
But though a particular merchant, with abundance of goods in his
warehouse, may sometimes be ruined by not being able to sell them in
time, a nation or country is not liable to the same accident, The
whole capital of a merchant frequently consists in perishable goods
destined for purchasing money. But it is but a very small part of the
annual produce of the land and labour of a country, which can ever be
destined for purchasing gold and silver from their neighbours. The far
greater part is circulated and consumed among themselves; and even of
the surplus which is sent abroad, the greater part is generally
destined for the purchase of other foreign goods. Though gold and
silver, therefore, could not be had in exchange for the goods destined
to purchase them, the nation would not be ruined. It might, indeed,
suffer some loss and inconveniency, and be forced upon some of those
expedients which are necessary for supplying the place of money. The
annual produce of its land and labour, however, would be the same, or
very nearly the same as usual; because the same, or very nearly the
same consumable capital would be employed in maintaining it. And
though goods do not always draw money so readily as money draws goods,
in the long-run they draw it more necessarily than even it draws them.
Goods can serve many other purposes besides purchasing money, but
money can serve no other purpose besides purchasing goods. Money,
therefore, necessarily runs after goods, but goods do not always or
necessarily run after money. The man who buys, does not always mean to
sell again, but frequently to use or to consume; whereas he who sells
always means to buy again. The one may frequently have done the whole,
but the other can never have done more than the one half of his
business. It is not for its own sake that men desire money, but for
the sake of what they can purchase with it.

Consumable commodities, it is said, are soon destroyed; whereas gold
and silver are of a more durable nature, and were it not for this
continual exportation, might be accumulated for ages together, to the
incredible augmentation of the real wealth of the country. Nothing,
therefore, it is pretended, can be more disadvantageous to any
country, than the trade which consists in the exchange of such lasting
for such perishable commodities. We do not, however, reckon that trade
disadvantageous, which consists in the exchange of the hardware of
England for the wines of France, and yet hardware is a very durable
commodity, and were it not for this continual exportation, might too
be accumulated for ages together, to the incredible augmentation of
the pots and pans of the country. But it readily occurs, that the
number of such utensils is in every country necessarily limited by the
use which there is for them; that it would be absurd to have more pots
and pans than were necessary for cooking the victuals usually consumed
there; and that, if the quantity of victuals were to increase, the
number of pots and pans would readily increase along with it; a part
of the increased quantity of victuals being employed in purchasing
them, or in maintaining an additional number of workmen whose business
it was to make them. It should as readily occur, that the quantity of
gold and silver is, in every country, limited by the use which there
is for those metals; that their use consists in circulating
commodities, as coin, and in affording a species of household
furniture, as plate; that the quantity of coin in every country is
regulated by the value of the commodities which are to be circulated
by it; increase that value, and immediately a part of it will be sent
abroad to purchase, wherever it is to be had, the additional quantity
of coin requisite for circulating them: that the quantity of plate is
regulated by the number and wealth of those private families who
choose to indulge themselves in that sort of magnificence; increase
the number and wealth of such families, and a part of this increased
wealth will most probably be employed in purchasing, wherever it is to
be found, an additional quantity of plate; that to attempt to increase
the wealth of any country, either by introducing or by detaining in it
an unnecessary quantity of gold and silver, is as absurd as it would


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