Oeconomy in general is the art of providing for all the
wants of a family, with prudence and frugality.
If any thing necessary or useful is found wanting, if any thing
provided is lost or misapplied, if any servant, any animal, is supernumerary
or useless, if any one sick or infirm is neglected, we immediately
perceive a want of oeconomy. The object of it, in a private
family, is therefore to provide for the nourishment, the other wants,
and the employment of every individual. In the first place, for
the master, who is the head, and who directs the whole; next for
the children, who interest him above all other things; and last for
the servants, who being useful to the head, and essential to the
well-being of the family, have therefore a title to become an object
of the master’s care and concern.
2The whole oeconomy must be directed by the head, who is both
lord and steward of the family. It is however necessary, that these
two offices be not confounded with one another. As lord, he establishes
the laws of his oeconomy; as steward, he puts them in execution.
As lord, he may restrain and give his commands to all
within the house as he thinks proper; as steward, he must conduct
with gentleness and address, and is bound by his own regulations.
The better the oeconomist, the more uniformity is perceived in all
his actions, and the less liberties are taken to depart from stated
rules. He is no ways master to break through the laws of his oeconomy,
although in every respect he may keep each individual
within the house, in the most exact subordination to his commands.
Oeconomy and government, even in a private family, present
therefore two different ideas, and have also two different objects.
What oeconomy is in a family, political oeconomy is in a state:
with these essential differences however, that in a state there are no
servants, all are children: that a family may be formed when and
how a man pleases, and he may establish what plan of oeconomy he
thinks fit; but states are found formed, and the oeconomy of these
depends upon a thousand circumstances. The statesman (this is a
general term to signify the head, according to the form of government)
is neither master to establish what oeconomy he pleases, or
in the exercise of his sublime authority to overturn at will the established
laws of it, let him be the most despotic monarch upon
earth.
The great art therefore of political oeconomy is, first to adapt the
different operations of it to the spirit, manners, habits, and customs
of the people, and afterwards to model these circumstances so, as
to be able to introduce a set of new and more useful institutions.
The principal object of this science is to secure a certain fund of
subsistence for all the inhabitants, to obviate every circumstance
which may render it precarious; to provide every thing necessary
for supplying the wants of the society, and to employ the inhabitants
(supposing them to be freemen) in such a manner as naturally
3to create reciprocal relations and dependencies between them,
so as to make their several interests lead them to supply one another
with their reciprocal wants.
If one considers the variety which is found in different countries,
in the distribution of property, subordination of classes, genius of
people, proceeding from the variety of forms of government, laws,
and manners, one may conclude, that the political oeconomy in
each must necessarily be different, and that principles, however
universally true, may become quite ineffectual in practice, without
a sufficient preparation of the spirit of a people.
It is the business of a statesman to judge of the expediency of
different schemes of oeconomy, and by degrees to model the minds
of his subjects so as to induce them, from the allurement of private
interest, to concur in the execution of his plan.
The speculative person, who removed from the practice, extracts
the principles of this science from observation and reflection, should
divest himself, as far as possible, of every prejudice, in favour of
established opinions, however reasonable, when examined relatively
to particular nations: he must do his utmost to become a citizen of
the world, comparing customs, examining minutely institutions
which appear alike, when in different countries they are found to
produce different effects: he should examine the cause of such differences
with the utmost diligence and attention. It is from such
inquiries that the true principles are discovered.
He who takes up the pen upon this subject, keeping in his eye
the customs of his own or any other country, will fall more naturally
into a description of one particular system of it, than into an
examination of the principles of the science in general: he will
applaud such institutions as he finds rightly administred at home;
he will condemn those which are administred with abuse; but,
without comparing different methods of executing the same plan
in different countries, he will not easily distinguish the disadvantagesdisadvantages
which are essential to the institution, from those which proceed
from the abuse. For this reason a land tax excites the indignation
4of a Frenchman, an excise that of an Englishman. One who looks
into the execution of both, in each country, and in every branch
of management, will discover the real effects of these impositions,
and be able to distinguish what proceeds from abuse, from what is
essential to the burden.
Nothing is more effectual towards preparing the spirit of a
people to receive a good plan of oeconomy, than a proper representation
of it. On the other hand, nothing is better calculated
to keep the statesman, who is at the head of affairs, in awe.
When principles are well understood, the real consequences of
burdensome institutions are clearly seen: when the purposes they
are intended for, are not obtained, the abuse of the statesman’s administration
appears palpable. People then will not so much cry
out against the imposition, as against the misapplication. It will
not be a land tax of four shillings in the pound, nor an excise upon
wines and tobacco, which will excite the murmurs of a nation;
it will be the prodigal dissipation and misapplication of the amount
of these taxes after they are laid on. But when principles are not
known, all inquiry is at an end, the moment a nation can be engaged
to submit to the burden. It is the same with regard to every
other part of this science.
Having pointed out the object of my pursuit, I shall only add,
that my intention is to attach myself principally to a clear deduction
of principles, and a short application of them to familiar
examples, in order to avoid abstraction as much as possible. I
farther intend to confine myself to such parts of this extensive subject,
as shall appear the most interesting in the general system of
modern politics, of which I shall treat with that spirit of liberty,
which reigns more and more every day, throughout all the polite
and flourishing nations of Europe.
When I compare the elegant performances which have appeared
in Great Britain and in France with my dry and abstracted manner
of treating the same subject, in a plain language void of ornament,
I own I am discouraged on many accounts. If I am obliged to
5set out by laying down as fundamental principles the most obvious
truths, I dread the imputation of pedantry, and of pretending to
turn common sense into science. If I follow these principles
through a minute detail, I may appear trifling. I therefore hope
the reader will believe me, when I tell him, that these defects have
not escaped my discernment, but that my genius, the nature of
the work, and the connection of the subject, have obliged me to
write in an order and in a stile where every thing has been sacrificed
to perspicuity.
My principal aim shall be to discover truth, and to enable my
reader to touch the very link of the chain where I may at any time
go astray.
My business shall not be to seek for new thoughts, but to reason
consequentially; and if any thing new be found, it will be in the
conclusions.
Long steps in political reasoning lead to error; close reasoning is
tedious, and to many appears trivial: this however must be my
plan, and my consolation is, that the further I advance, I shall become
the more interesting.
Every supposition must be considered as strictly relative to the
circumstances presupposed; and though, in order to prevent misapplication,
and to avoid abstraction as much as possible, I frequently
make use of examples for illustrating every principle; yet
these, which are taken from matters of fact, must be supposed divested
of every foreign circumstance inconsistent with the supposition.
I shall combat no particular opinion in such intricate matters;
though sometimes I may pass them in review, in order to point out
how I am led to differ from them.
I pretend to form no system, but by following out a succession
of principles, consistent with the nature of man and with one another,
I shall endeavour to furnish some materials towards the forming
of a good one.
6
Man we find acting uniformly in all ages, in all countries,
and in all climates, from the principles of self-interest, expediency,
duty, or passion. In this he is alike, in nothing else.
These motives of human actions produce such a variety of
combinations, that if we consider the several species of animals in
the creation, we shall find the individuals in no class so unlike to
one another, as man to man. No wonder then if people differ in
opinion with regard to every thing which relates to man.
As this noble animal is a sociable creature, both from necessity
and inclination, we also find, in all ages, climates and countries,
a certain modification of government and subordination established
among them. Here again we are presented with as great variety
as there are different societies; all however agreeing in this, that
the end of a voluntary subordination to authority is with a view to
promote the general good.
Constant and uninterrupted experience has proved to man, that
virtue and justice in those who govern, are sufficient to render the
society happy, under any form of government. Virtue and justice
when applied to government mean no more than a tender affection
for the whole society, and an exact and impartial regard for the
interest of every class.
All actions, and indeed all things, are good or bad only by
relation. Nothing is so complex as relations when considered with
regard to a society, and nothing is so difficult as to discover truth
when involved and blended with these relations.
We must not conclude from this, that every operation of government
becomes problematical and uncertain as to its consequences:
some are evidently good; others are notoriously bad: the
7middle terms are always the least essential, and the more complex
they appear to a discerning eye, the more trivial they are found to
be in their immediate consequences.
A government must be continually in action, and one principal
object of its attention must be, the consequences and effects of
new institutions.
Experience alone will shew, what human prudence could not
foresee; and mistakes must be corrected as often as expediency
requires.
All governments have what they call their fundamental laws;
but fundamental, that is, invariable laws, can never subsist among
men, the most variable thing we know: the only fundamental
law, salus populi, must ever be relative, like every other thing. But
this is rather a maxim than a law.
It is however expedient, nay absolutely necessary, that in every
state, certain laws be supposed fundamental and invariable: both
to serve as a curb to the ambition of individuals, and to point out
to the statesman the out-lines, or sketch of that plan of government,
which experience has proved to be the best adapted to the
spirit of his people.
Such laws may even be considered as actually invariable, while
a state subsists without convulsions or revolutions: because then the
alterations are so gradual, that they become imperceptible to all,
but the most discerning, who compare the customs and manners of
the same people in different periods of time and under different
combinations of circumstances.
As we have taken for granted the fundamental maxim, that every
operation of government should be calculated for the good of the
people, so we may with equal certainty decide, that in order to
make a people happy, they must be governed according to the spirit
which prevails among them.
I am next to explain what I mean by the spirit of a people, and
to shew how far this spirit must be made to influence the government
of every society.
8
The spirit of a people is formed upon a set of received opinions
relative to three objects; morals, government, and
manners: these once generally adopted by any society, confirmed
by long and constant habit, and never called in question, form the
basis of all laws, regulate the form of every government, and determine
what is commonly called the customs of a country.
To know a people we must examine them under those general
heads. We acquire the knowledge of their morals with ease,
by consulting the tenets of their religion, and from what is taught
among them by authority and under direction.
The second, or government, is more disguised, as it is constantly
changing from circumstances, partly resulting from domestic and
partly from foreign considerations. A thorough knowledge of
their history, and conversation with their statesmen, may give one,
who has access to these helps, a very competent knowledge of this
branch.
The last, or the knowledge of the manners of a people, is by
far the most difficult to acquire, and yet is the most open to every
person’s observation. Certain circumstances with regard to manners
are supposed by every one in the country to be so well known,
so generally followed and observed, that it seldom occurs to any
body to inform a stranger concerning them. In one country nothing
is so injurious as a stroke with a stick, or even a gesture
which implies a design or a desire to strike[B]: in another a stroke is
nothing, but an opprobrious expression is not to be borne[C]. An innocent
liberty with the fair sex, which in one country passes without
censure, is looked upon in another as the highest indignity[D].
9In general, the opinion of a people with regard to injuries is established
by custom only, and nothing is more necessary in government,
than an exact attention to every circumstance peculiar to the
people to be governed.
The kingdom of Spain was lost for a violence committed upon
chastity[E]; the city of Genoa for a blow[F]; the kingdoms of
Naples and Sicily have ever been ready to revolt; because having
been for many ages under the dominion of strangers, the people
have never been governed according to the true spirit of their
manners. Let us consult the revolutions of all countries, and we
shall find, that the most trivial circumstances have had a greater influence
on the event, than the more weighty reasons, which are
always set forth as the real motives. I need not enlarge upon this
subject, my intention is only to suggest an idea which any one may
pursue, and which will be applied upon many occasions as we go
along; for there is no treating any point which regards the political
oeconomy of a nation, without accompanying the example with
some supposition relative to the spirit of the people. I return.
I have said, that the most difficult thing to learn concerning a
people, is the spirit of their manners. Consequently, the most difficult
thing for a stranger to adopt, is their manner. Men acquire
the language, nay even lose the foreign accent, before they lose
the oddity of their manner. The reason is plain. The inclinations
must be changed, the taste of amusement must be new modelled;
established maxims upon government, manners, nay even upon
some moral actions, must undergo certain new modifications, before
the stranger’s conversation and behaviour becomes consistent
with the spirit of the people with whom he lives.
10From these considerations, we may find the reason, why nothing
is more heavy to bear than the government of conquerors, in spite
of all their endeavours to render themselves agreeable to the conquered.
Of this experience has ever proved the truth, and princes
are so much persuaded of it, that when a country is subdued in our
days, or when it otherwise changes masters, there is seldom any
question of altering, but by very slow degrees and length of time,
the established laws and customs of the inhabitants. I might safely
say, there is no form of government upon earth so excellent in
itself, as, necessarily, to make the people happy under it. Freedom
itself, imposed upon a people groaning under the greatest slavery,
will not make them happy, unless it is made to undergo certain
modifications, relative to their established habits.
Having explained what I mean by the spirit of a people, I come
next to consider, how far this spirit must influence government.
If governments be taken in general, we shall find them analogous
to the spirit of the people. But the point under consideration
is, how a statesman is to proceed, when expediency and refinement
require a change of administration, or when it becomes necessary
from a change of circumstances.
The great alteration in the affairs of Europe within these three
centuries, by the discovery of America and the Indies, the springing
up of industry and learning, the introduction of trade and the
luxurious arts, the establishment of public credit, and a general
system of taxation, have entirely altered the plan of government
every where.
From feudal and military, it is become free and commercial. I
oppose freedom in government to the feudal system, only to mark
that there is not found now, that chain of subordination among
the subjects, which made the essential part of the feudal form.
The head there had little power, and the lower classes of the people
little liberty. Now every industrious man, who lives with oeconomy,
is free and independent, under most forms of government.
Formerly, the power of the barons swallowed up the independency
11of all inferior classes. I oppose commercial to military, only because
the military governments now are made to subsist from the
consequences and effects of commerce: that is, from the revenue
of the state, proceeding from taxes. Formerly, every thing was
brought about by numbers; now, numbers of men cannot be kept
together without money.
This is sufficient to point out the nature of the revolution in the
political state, and of consequence in the manners of Europe.
The spirit of a people changes no doubt of itself, but by slow
degrees. The same generation commonly adheres to the same
principles, and retains the same spirit. In every country we find
two generations upon the stage at a time; that is to say, we may
distribute into two classes the spirit which prevails; the one
amongst men between twenty and thirty, when opinions are forming;
the other of those who are past fifty, when opinions and habits
are formed and confirmed. A person of judgment and observation
may foresee many things relative to government, from
an exact application to the rise and progress of new customs and
opinions, provided he preserve his mind free from all attachments
and prejudices, in favour of those which he himself has adopted,
and in that delicacy of sensation necessary to perceive the influence
of a change of circumstances. This is the genius proper to form
a great statesman.
In every new step the spirit of the people should be first examined,
and if that be not found ripe for the execution of the plan,
it ought to be put off, kept entirely secret, and every method used
to prepare the people to relish the innovation.
The project of introducing popery into England was blown before
it was put in practice, and so misgave. Queen Elizabeth kept
her own secret, and succeeded in a similar attempt. The scheme
of a general excise was pushed with too much vivacity, was made
a matter of party, ill-timed, and the people nowise prepared for
it; hence it will be the more difficult to bring about at another time,
without the greatest precautions.
12In turning and working upon the spirit of a people, nothing is
impossible to an able statesman. When a people can be engaged
to murder their wives and children, and to burn themselves, rather
than submit to a foreign enemy, when they can be brought
to give their most precious effects, their ornaments of gold and
silver, for the support of a common cause; when women are
brought to give their hair to make ropes, and the most decrepit old
men to mount the walls of a town for its defence; I think I may
say, that by properly conducting and managing the spirit of a
people, nothing is impossible to be accomplished. But when I say,
nothing is impossible, I must be understood to mean, that nothing
essentially necessary for the good of the people is impossible; and
this is all that is required in government.
That it requires a particular talent in a statesman to dispose the
minds of a people to approve even of the scheme which is the
most conducive to their interest and prosperity, appears from this;
that we see examples of wise, rich and powerful nations languishing
in inactivity, at a time when every individual is animated with
a quite contrary spirit; becoming a prey to their enemies, like the
city of Jerusalem, while they are taken up with their domestic
animosities, only because the remedies proposed against these evils
contradict the spirit of the times[G].
The great art of governing is to divest one’s self of prejudices
and attachments to particular opinions, particular classes, and above
all to particular persons; to consult the spirit of the people, to give
way to it in appearance, and in so doing to give it a turn capable
of inspiring those sentiments which may induce them to relish the
change, which an alteration of circumstances has rendered necessary.
Can any change be greater among free men, than from a state
of absolute liberty and independency to become subject to constraint
13in the most trivial actions? This change has however taken
place over all Europe within these three hundred years, and yet we
think ourselves more free than ever our fathers were. Formerly a
gentleman who enjoyed a bit of land knew not what it was to
have any demand made upon him, but in virtue of obligations by
himself contracted. He disposed of the fruits of the earth, and of
the labour of his servants or vassals, as he thought fit. Every thing
was bought, sold, transferred, transported, modified, and composed,
for private consumption, or for public use, without ever the state’s
being once found interested in what was doing. This, I say, was
formerly the general situation of Europe, among free nations under
a regular administration; and the only impositions commonly
known to affect landed men were made in consequence of a contract
of subordination, feudal or other, which had certain limitations;
and the impositions were appropriated for certain purposes.
Daily experience shews, that nothing is more against the inclinations
of a people, than the imposition of taxes; and the less
they are accustomed to them, the more difficult it is to get them
established.
The great abuse of governors in the application of taxes contributes
not a little to augment and entertain this repugnancy in
the governed: but besides abuse, there is often too little management
used to prepare the spirits of the people for such innovations:
for we see them upon many occasions submitting with chearfulness
to very heavy impositions, provided they be well-timed, and
consistent with their manners and disposition. A French gentleman,
who cannot bear the thought of being put upon a level with
a peasant in paying a land tax, pays contentedly, in time of war,
a general tax upon all his effects, under a different name. To pay
for your head is terrible in one country; to pay for light appears
as terrible in another.
It often happens, that statesmen take the hint of new impositions
from the example of other nations, and not from a nice examination
of their own domestic circumstances. But when these are
14rightly attended to, it becomes easy to discover the means of executing
the same plan, in a way quite adapted to the spirit, temper,
and circumstances of the people. When strangers are employed
as statesmen, the disorder is still greater, unless in cases of most
extraordinary penetration, temper, and above all flexibility and
discretion.
Statesmen have sometimes recourse to artifice instead of reason,
because their intentions often are not upright. This destroys all
confidence between them and the people; and confidence is necessary
when you are in a manner obliged to ask a favor, or when
at least what you demand is not indisputably your right. A people
thus tricked into an imposition, though expedient for their prosperity,
will oppose violently, at another time, a like measure, even
when essential to their preservation.
At other times, we see statesmen presenting the allurement of
present ease, precisely at the time when people’s minds are best
disposed to receive a burden. I mean when war threatens, and
when the mind is heated with a resentment of injuries. Is it not
wonderful, at such a time as this, to increase taxes only in proportion
to the interest of money wanted; does not this imply a shortsightedness,
or at least an indifference as to what is to come? Is it
not more natural, that a people should consent to come under burdens
to gratify revenge, than submit to repay a large debt when
their minds are in a state of tranquillity.
From the examples I have given, I hope what I mean by the
spirit of a people is sufficiently understood, and I think I have
abundantly shewn the necessity of its being properly disposed, in
order to establish a right plan of oeconomy. This is so true, that
many examples may be found, of a people’s rejecting the most
beneficial institutions, and even the greatest favors, only because
some circumstance had shocked their established customs. No
wonder then, if we see them refuse to come under limitations,
restraints and burdens, when the utmost they can be flattered with
from them, is a distant prospect of national good.
15I have found it necessary to premise these general reflections, in
order to obviate many objections which might naturally enough
occur in the perusal of this inquiry. I shall have occasion to make
a number of suppositions, and to draw consequences from them,
which are abundantly natural, if a proper spirit in the people be
presupposed, but which would be far from being natural without
this supposition. I suppose, for example, that a poor man, loaded
with many children, would be glad to have the state maintain
them; that another, who has wasted lands, would be obliged to
one who would gratuitously build him a farm-house upon it. Yet
in both suppositions I may prove mistaken; for fathers there are,
who would rather see their children dead than out of their hands;
and proprietors are to be found, who, for the sake of hunting,
would lay the finest country in Europe into a waste.
In order to communicate an adequate idea of what I understand
by political oeconomy, I have explained the term, by pointing out
the object of the art; which is, to provide food, other necessaries,
and employment to every one of the society.
This is a very simple and a very general method of defining a
most complicated operation.
To provide a proper employment for all the members of a society,
is the same as to model and conduct every branch of their
concerns.
Upon this idea, I think, may be formed the most extensive basis
for an inquiry into the principles of political oeconomy.
The next thing to be done, is to fall upon a distinct method of
analysing so extensive a subject, by contriving a train of ideas,
which may be directed towards every part of the plan, and which,
at the same time, may be made to arise methodically from one
another.
For this purpose I have taken a hint from what the late revolutions
in the politics of Europe have pointed out to be the regular
progress of mankind, from great simplicity to complicated refinement.
16This first book shall then set out by taking up society in the
cradle, as I may say. I shall then examine the principles which
influence their multiplication, the method of providing for their
subsistence, the origin of their labour, the effects of their liberty
and slavery, the distribution of them into classes, with some other
topics which relate to mankind in general.
Here we shall find the principles of industry influencing the
multiplication of mankind, and the cultivation of the soil. This I
have thrown in on purpose to prepare my reader for the subject of
the second book; where he will find the same principle (under the
wings of liberty) providing an easy subsistence for a numerous
populace, by the means of trade, which sends the labour of an
industrious people over the whole world.
From the experience of what has happened these last two hundred
years, we find to what a pitch the trade and industry of Europe
has increased alienations, and the circulation of money. I shall,
therefore, closely adhere to these, as the most immediate consequences
of the preceding improvement; and, by analysing them,
I shall form my third book, in which I intend to treat of credit.
We see also how credit has engaged nations to avail themselves
of it in their wars, and how, by the use of it, they have been led to
contract debts; which they never can satisfy and pay, without imposing
taxes. The doctrine then of debts and taxes will very
naturally follow that of credit in this great chain of political consequences.
By this kind of historical clue, I shall conduct myself through
the great avenues of this extensive labyrinth; and in my review of
every particular district, I shall step from consequence to consequence,
until I have penetrated into the utmost recesses of my own
understanding.
When a subject is broken off, I shall render my transitions as
gradual as I can, by still preserving some chain of connexion; and
although I cannot flatter myself (in such infinite variety of choice,
as to order and distribution) to hit off, at all times, that method,
17which may appear to every reader the most natural and the most
correct, yet I shall spare no pains in casting the materials into different
forms, so as to make the best distribution of them in my
power.
The multiplication of mankind has been treated of in different
ways; some have made out tables to shew the progression of
multiplications, others have treated the question historically. The
state of numbers in different ages of the world, or in different
countries at different times, has been made the object of inquiry;
and the most exact scrutiny into antient authors, the means of
investigating the truth of this matter. All passages relative to the
subject have been laid together, and accompanied with glosses and
interpretations the most plausible, in order to determine the main
question. The elaborate performances of Mr. Hume, and Mr.
Wallace, who have adopted opposite opinions in regard to the
populousness of the antient world, have left nothing new to be
said upon this subject; at least the application they appear to have
given in examining the antients, is a great discouragement to any
one who might otherwise still flatter himself, there, to find out circumstances
proper to cast a new light upon the question.
My intention in this chapter is not to decide, nor even to give
my opinion upon that matter, far less to combat the arguments
advanced on either side. I am to consider the question under
18a different point of view; not to enquire what numbers of people
were found upon the earth at a certain time, but to examine the
natural and rational causes of multiplication. If we can discover
these, we may perhaps be led to judge how far they might have
operated in different ages and in different countries.
The fundamental principle of the multiplication of all animals,
and consequently of man, is generation; the next is food: generation
gives existence, food preserves it. Did the earth produce of itself
the proper nourishment for man, with unlimited abundance, we
should find no occasion to labour in order to procure it. Now in
all countries found inhabited, as in those which have been found
desolate, if the state of animals be inquired into, the number of
them will be found in proportion to the quantity of food produced
by the earth, regularly throughout the year, for their subsistence. I say,
regularly throughout the year, because we perceive in those animals
which produce in great abundance, such as all the feathered
genus, that vast multitudes are destroyed in winter; they are
brought forth with the fruits of the earth, and fall in proportion.
This principle is so natural, that I think it can hardly be controverted.
As to man, the earth does not spontaneously produce nourishment
for him in any considerable degree. I allow that as some
species of animals support life by devouring others, so may man;
but it must be observed, that the species feeding must always be
much inferior in number to the species fed upon. This is evident
in reason and in fact.
Were the earth therefore uncultivated, the numbers of mankind
would not exceed the proportion of the spontaneous fruits which
she offers for their immediate use, or for that of the animals which
might be the proper nourishment of man.
There is therefore a certain number of mankind which the earth
would be able to maintain without any labour: allow me to call
this quantity (A). Does it not, from this exposition of the matter,
appear plain, that without labour (A) never can increase any more
19than animals, which do not work for themselves, can increase
beyond the proportion of food provided for them by nature? Let
it be however observed, that I do not pretend to limit (A) to a determined
number. The seasons will no doubt influence the numbers
of mankind, as we see they influence the plenty of other animals;
but I say (A) will never increase beyond the fixed proportion above-mentioned.
Having resolved one question with regard to multiplication, and
shewn that numbers must become greater or smaller according to
the productions of nature, I come to the second thing proposed to
be treated of in the chapter: to wit, what will become of the generative
faculty after it has produced the full proportion of (A), and
what effects will afterwards follow.
We see how beneficent, I might have said prodigal, nature is, in
bestowing life by generation. Several kinds of animals, especially
insects, multiply by thousands, and yet the species does not appear
annually to increase. No body can pretend that particular individuals
of any species have a privilege to live, and that others die
from a difference in their nature. It is therefore reasonable to conclude,
that what destroys such vast quantities of those produced,
must be, among other causes, the want of food. Let us apply this
to man.
Those who are supposed to be fed with the spontaneous fruits of
the earth, cannot, from what has been said, multiply beyond that
proportion; at the same time the generative faculty will work its
natural effects in augmenting numbers. The consequence will be,
that certain individuals must become worse fed, consequently
weaker; consequently, if in that weakly state, nature should
withold a part of her usual plenty, the whole multitude will be
affected by it; a disease may take place, and sweep off a far greater
number than that proportioned to the deficiency of the season.
What results from this? That those who have escaped, finding food
more plentiful, become vigorous and strong; generation gives life
20to additional numbers, food preserves it, until they rise up to the
former standard.
Thus the generative faculty resembles a spring loaded with a
weight, which always exerts itself in proportion to the diminution
of resistance: when food has remained some time without augmentation
or diminution, generation will carry numbers as high as
possible; if then food come to be diminished, the spring is overpowered;
the force of it becomes less than nothing. Inhabitants
will diminish, at least, in proportion to the overcharge. If upon
the other hand, food be increased, the spring which stood at 0, will
begin to exert itself in proportion as the resistance diminishes;
people will begin to be better fed; they will multiply, and in proportion
as they increase in numbers, the food will become scarce
again.
I must here subjoin a remark very analogous to this subject.
That the generative faculty in man (which we have compared to a
spring) and the care and love we have for our children, first prompt
us to multiply, and then engage us to divide what we have with
our little ones. Thus from dividing and subdividing it happens,
that in every country where food is limited to a certain quantity,
the inhabitants must be subsisted in a regular progression, descending
down from plenty and ample subsistence, to the last periods of
want, and even sometimes starving for hunger.
Although the examples of this last extremity are not common in
some countries, yet I believe they are more so than is generally
imagined; and the other stages of want are productive of many
diseases, and of a decay which extinguishes the faculty of generation,
or which weakens it, so as to produce children less vigorous
and less healthy. I appeal to experience, if this reasoning be not
just.
Put two or three pairs of rabbits into a field proper for them, the
multiplication will be rapid; and in a few years the warren will be
stocked: you may take yearly from it a hundred pairs, I shall suppose,
21and keep your warren in good order: give over taking any
for some years, you will perhaps find your original stock rather
diminished than increased, for the reasons above mentioned.
Africa yearly furnishes many thousands for the cultivation of America;
in this she resembles the warren. I have little doubt but that
if all her sons were returned to her, by far the greater part would
die of hunger.
I proceed in my examination. I now suppose man to add his
labour and industry to the natural activity of the soil: in so far,
as by this he produces an additional quantity of food, in so far he
lays a foundation for the maintenance of an additional number.
This number I shall call (B). From this I conclude, that as (A) is
in a constant proportion to the spontaneous fruits, so (B) must be
in proportion to agriculture (by this term I understand at present
every method of augmenting food by labour) consequently the number
maintained by the labour of mankind must be to the whole number
of mankind as (B) is to (A + B), or as (B) is to (A) and (B) jointly.
By this operation we find mankind immediately divided into two
classes; those who, without working, live upon the spontaneous
fruits of the earth; that is, upon milk, cattle, hunting, &c. The
other part, those who are obliged to labour the soil. It is proper
next to inquire what should naturally oblige a man to labour; and
what are the natural consequences of it as to multiplication.
We have already said, that the principle of generation is inherent
in man, and prompts him to multiply. Another principle, as naturally
22inherent in the mind, as the first is in the body, is self-love,
or a desire of ease and happiness, which prompts those who find in
themselves any superiority; whether personal, or political, to make
use of every natural advantage. Consequently, such will multiply
proportionably: because by appropriating to themselves the
fruits of the earth, they have the means of subsisting their offspring.
The others, I think, will very naturally become their servants; as
this method is of all others the most easy to procure subsistence.
This is so analogous to the nature of man, that we see every
where, even among children, that the smallest superiority in any
one over the rest, constantly draws along with it a tribute of service
in one way or other. Those who become servants for the sake
of food, will soon become slaves: for slavery is but the abuse of service,
established by a civil institution; and men who find no possibility
of subsisting otherwise, will be obliged to serve upon the
conditions prescribed to them.
This seems a consequence not unnatural in the infancy of the
world: yet I do not pretend to affirm that this was the origin of slavery.
Servants, however, there have always been; and the abuse of
service is what we understand by slavery. The subordination of
children to their parents, and of servants to their masters, seems to
be the most rational origin of society and government. The first of
these is natural, and follows as the unavoidable consequence of an
entire dependencedependence: the second is political, and may very naturally
take place as to those who cannot otherwise procure subsistence.
This last species of subordination may, I think, have taken place,
the moment man became obliged to labour for subsistence, but no
sooner.
The wants of man are not confined to food, merely. When food is to
be produced from the rude surface of the earth, a great part of his
time must be taken up with this object, even supposing him to be
provided with every utensil proper for the exercise of his industry:
he must therefore be in a worse condition to provide for his other
23wants: consequently, he may be willing to serve any one who will
do it for him. Whereas on the other hand, if we suppose all mankind
idle and fed, living upon the spontaneous fruits of the earth,
the plan of universal liberty becomes quite natural: because under
such circumstances they find no inducement to come under a voluntary
subordination.
Let us now borrow the idea of a primitive society, of a government,
of a king, from the most antient history we have, the better
to point out the effects of agriculture and multiplication. The
society is the whole taken together; it is Jacob, his sons, their
wives, their children, and all the servants. The government regards
the institutions prescribed by Jacob, to every one of the family,
concerning their respective subordination and duty. Multiplication
will here go forward, not in proportion to the generative faculty,
but according to the employment of the persons already generated.
If Jacob continue pasturing his herds, he must extend the limits of
his right of pasture; he must multiply his stock of cattle, in proportion
as the mouths of his family augment. He is charged with
all this detail: for he is master, and director, and statesman, and
general provider. His servants will work as they are ordered; but
if he has not had the proper foresight, to break up lands so soon as
his family comes nearly up to that proportion which his flocks can
easily feed; if in this case, a dry season should burn up the grass in
Palestine, he will be obliged to send some of his stock of cattle,
with some of his family, to market, there to be sold; and with the
price he must buy corn. For in this early age, there was money,
there were manufacturers of sackcloth, of common rayment, and
of party-coloured garments; there was a trade in corn, in spicery,
balm, and myrrh. Jacob and his family were shepherds, but they
lived not entirely on flesh; they eat bread: consequently there was
tillage in those days, though they exercised none. The famine
however was ready to destroy them, and probably would have done
it, but for the providential circumstance of Joseph’s being governor
of Egypt. He relieved their distress, he gave to his family the best
24country in the whole kingdom for pasture; and they had a gratuitous
supply of bread.
No doubt, so long as these favourable circumstances subsisted,
multiplication would go on apace. What supernatural assistance
God was pleased to grant for the increase of his chosen people,
does not concern my inquiry.
I have mentioned transiently this example of the patriarch, only
to point out how antient the use of money, the invention of trade
and manufactures appear to have been. Without such previous
establishments, I consider mankind as savages, living on the spontaneous
fruits of the earth, as in the first supposition; and confined,
as to numbers, to the actual extent of these productions.
From what has been said, we may conclude, that the numbers of
mankind must depend upon the quantity of food produced by the
earth for their nourishment; from which, as a corollary, may be
drawn,
That mankind have been, as to numbers, and must ever be, in proportion
to the food produced; and that the food produced will be
in the compound proportion of the fertility of the climate, and the
industry of the inhabitants.
From this last proposition it appears plain, that there can be no
general rule for determining the number of inhabitants necessary
for agriculture, not even in the same country. The fertility of the
soil when laboured; the ease of labouring it; the quantity of good
spontaneous fruits; the plenty of fish in the rivers and sea; the
abundance of wild birds and beasts; have in all ages, and ever
must influence greatly the nourishment, and, consequently, regulate
the multiplication of man, and determine his employment.
To make an establishment in a country not before inhabited, to
root out woods, destroy wild and venomous animals, drain marshy
grounds, give a free course to water, and to lay down the surface
into corn fields, must surely require more hands than to cultivate
the same after it is improved. For the truth of this, I appeal to our
American brethren.
25We may therefore conclude, that the most essential requisite for
population, is that of agriculture, or the providing of subsistence.
Upon this all the rest depends: while subsistence is upon a precarious
footing, no statesman can turn his attention to any thing else.
The great importance of this object has engaged some to imagine,
that the luxurious arts, in our days, are prejudicial both to agriculture
and multiplication. It is sometimes a loss to fix one’s attention
too much upon any one object, however important. No body
can dispute that agriculture is the foundation of multiplication,
and the most essential requisite for the prosperity of a state. But it
does not follow from this, that almost every body in the state should
be employed in it; that would be inverting the order of things, and
turning the servant into the master. The duty and business of man
is not to feed; he is fed, in order to do his duty, and to become
useful.
It is not sufficient for my purpose to know, that the introduction
of agriculture, by multiplying the quantity of the earth’s productions,
does evidently tend to increase the numbers of mankind. I
must examine the political causes which must concur, in order to
operate this effect.
For this purpose, my next inquiry shall be directed towards discovering
the true principles which influence the employment of
man, with respect to agriculture. I shall spare no pains in examining
this point to the bottom, even though it should lead me to
anticipate some branches of my subject.
I shall endeavour to lay down principles consistent with the nature
of man, with agriculture, and with multiplication, in order, by
their means, to discover both the use and abuse of the two last.
When these parts are well understood, the rest will go on more
smoothly, and I shall find the less occasion to interrupt my subject,
in order to explain the topics upon which the whole depends.
26
I have already shewn, how the spontaneous fruits of the earth
provide a fund of nourishment for a determined number of
men, and I have slightly touched upon the consequences of adding
labour to the natural activity of the soil.
Let me now carry this inquiry a little farther. Let me suppose
a country fertile in spontaneous productions, capable of improvements
of every kind, inhabited by a people living under a free
government, and in the most refined simplicity, without trade,
without the luxurious arts, and without ambition. Let me here
suppose a statesman, who shall inspire a taste for agriculture and
for labour into those who formerly consumed the spontaneous
fruits of the earth in ease and idleness. What will become of this
augmentation of food produced by this additional labour?
The sudden increase of food, such as that here supposed, will
immediately diffuse vigour into all; and if the additional quantity
be not very great, no superfluity will be found. No sooner will the
inhabitants be fully nourished, but they will begin to multiply
a-new; then they will come to divide with their children, and food
will become scarce again.
Thus much is necessary for the illustration of one principle; but
the effects, which we have been pointing out, will not be produced
barely by engaging those who lived by hunting (I suppose) to quit
that trade, and turn farmers. The statesman must also find out a
method to make the produce of this new branch of industry circulate
downwards, so as to relieve the wants of the most necessitous.
Otherwise, the plenty produced, remaining in the hands of
those who produced it, will become to them an absolute superfluity;
27which, had they any trade with a neighbouring state, they would
sell, or exchange, and leave their fellow citizens to starve. And as
we suppose no trade at all, this superfluity will perish like their
cherries, in a year of plenty; and consequently the farmers will
immediately give over working.
If, to prevent this inconveniency, the statesman forces certain
classes to labour the soil, and, with discretion, distributes the produce
of it to all that have occasion for subsistence, taking in return
their services for the public benefit; this will prove an infallible
way of multiplying inhabitants, of making them laborious, and
of preserving a simplicity of manners; but it is also the picture of
antient slavery, and is therefore excluded from the supposition.
If he acts consistently with that spirit of liberty, which we have
supposed to animate his subjects, he has no method left, but to contrive
different employments for the hands of the necessitous, that,
by their labour, they may produce an equivalent which may be acceptable
to the farmers, in lieu of this superfluity; for these last
will certainly not raise it, if they cannot dispose of it; nor will
they dispose of it, but for a proper equivalent. This is the only
method (in a free state) of procuring additional food, and of distributing
it through the society, as the price of those hours which
before were spent in idleness: and, as this will prove a more certain
and more extensive fund of subsistence, than the precarious
productions of spontaneous fruits, which cannot be increased at
discretion, and in proportion to demand, it will greatly increase
numbers; but, on the other hand, it must evidently destroy that
simplicity of manners which naturally reigns among nations who
do not labour.
A people, therefore, who have an industrious turn, will multiply
in proportion to the superfluity of their farmers; because the
labour of the necessitous will prove an equivalent for it.
Now this additional number of inhabitants being raised and fed
with the superfluity actually produced by the farmers, can never be
supposed necessary for providing that quantity, which (though relatively
28to the farmers it be called a superfluity) is only a sufficiency
relatively to the whole society; and, therefore, if it be found necessary
to employ the new inhabitants also in farming, it must only
be with a view to a still greater multiplication.
Farther, we may lay it down as a principle, that a farmer will
not labour to produce a superfluity of grain relatively to his own
consumption, unless he finds some want which may be supplied by
means of that superfluity; neither will other industrious persons
work to supply the wants of the farmer for any other reason than
to procure subsistence, which they cannot otherwise so easily obtain.
These are the reciprocal wants which the statesman must
create, in order to bind the society together. Here then is one
principle: Agriculture among a free people will augment population, only in
proportion as the necessitous are put in a situation to purchase subsistence with
their labour. I proceed.
If in any country which actually produces nourishment for its
inhabitants, according to the progression above-mentioned, (p. 27.)
a plan is set on foot for the extension of agriculture; the augmentation
must be made to bear a due proportion to the progress of industry
and wants of the people, or else an outlet must be provided
for disposing of the superfluity. And if, at setting out, a foreign
consumption cannot be procured for the produce of husbandry,
the greatest caution must be had to keep the improvement of the
soil within proper bounds: for, without this, the plan intended for
an improvement will, by over-doing, turn out to the detriment
of agriculture. This will be the case, if the fruits of the earth be
made to increase faster than the numbers and the industry of
those who are to consume them. For if the whole be not consumed,
the regorging plenty will discourage the industry of the
farmer.
But if, together with an encouragement to agriculture, a proper
outlet be found for the superfluity, until the numbers and industry
of the people, by increasing, shall augment the home-consumption,
which again by degrees will diminish the quantity of exportation,
29then the spring will easily overcome the resistance; it will dilate;
that is, numbers will continue to increase.
From this may be derived another principle: That agriculture, when
encouraged for the sake of multiplying inhabitants, must keep pace with the
progress of industry; or an out-let must be provided for all superfluity.
In the foregoing example, I have supposed no exportation, the
more to simplify the supposition: I was, therefore, obliged to
throw in a circumstance, in order to supply the want of it; to wit,
an augmentation of inland demand from the suspension of hunting;
and I have supposed those who formerly supported themselves by
this, to consume the superfluous food of the farmers for the price of
their labour. This may do well enough as a supposition, and has
been made use of only to explain principles; but the manners of a
people are not so easily changed; and therefore I have anticipated a
little the supposition of trade, only to shew how it must concur with
industry, in the advancement of agriculture and multiplication.
Let me next consider the consequences of an augmentation of
agriculture in a country where the inhabitants are lazy; or where
they live in such simplicity of manners, as to have few wants which
labour and industry can supply. In this case, I say, the scheme of
agriculture will not succeed; and, if set on foot, part of the grounds
will soon become uncultivated again.
The laziest part of the farmers, disgusted with a labour which
produces a plenty superfluous to themselves, which they cannot
dispose of for any equivalent, will give over working, and return to
their antient simplicity. The more laborious will not furnish food
to the necessitous for nothing: such therefore who cannot otherwise
subsist, will naturally serve the industrious, and thereby sell their
service for food. Thus by the diminution of labour, a part of the
country, proportional to the quantity of food which the farmers
formerly found superfluous, will again become uncultivated.
Here then will be found a country, the population of which must
stop for want of food; and which, by the supposition, is abundantly
able to produce more. Experience every where shews the
30possible existence of such a case, since no country in Europe is cultivated
to the utmost; and that there are many still, where cultivation,
and consequently multiplication, is at a stop. These nations
I consider as in a moral incapacity of multiplying: the incapacity
would be physical, if there was an actual impossibility of their procuring
an augmentation of food by any means whatsoever.
These principles seem to be confirmed by experience, whether we
compare them with the manner of living among the free American
savages, or among the free, industrious, and laborious Europeans.
We find the productions of all countries, generally speaking, in
proportion to the number of their inhabitants; and, on the other
hand, the inhabitants are most commonly in proportion to the
food.
I beg that this may not be looked upon as a quibble, or what is
called a vicious circle. I have qualified the general proposition by
subjoining that it is found true most commonly; and from what is
to follow, we shall better discover both the truth and meaning of
what is here advanced. While certain causes operate, food will
augment, and mankind will increase in proportion; when these
causes cease, procreation will not augment numbers; then the general
proposition will take place; numbers and food will remain the
same, and balance one another. This I imagine to be so in fact;
and I hope to shew that it is rational also. Let me now put an end
to this chapter, by drawing some conclusions from what has been
laid down, in order to enlarge our ideas, and to enable us to extend
our plan.
I. One consequence of a fruitful soil, possessed by a free people,
given to agriculture, and inclined to industry, will be the production
of a superfluous quantity of food, over and above what is necessary
to feed the farmers. Inhabitants will multiply; and according
to their increase, a certain number of the whole, proportional to
such superfluity of nourishment produced, will apply themselves
to industry and to the supplying of other wants.
31II. From this operation produced by industry, we find the people
distributed into two classes. The first is that of the farmers who
produce the subsistence, and who are necessarily employed in this
branch of business; the other I shall call free hands; because their
occupation being to procure themselves subsistence out of the superfluity
of the farmers, and by a labour adapted to the wants of
the society, may vary according to these wants, and these again according
to the spirit of the times.
III. If in the country we are treating of, both money and the
luxurious arts are supposed unknown, then the superfluity of the
farmers will be in proportion to the number of those whose labour
will be found sufficient to provide for all the other necessities of
the inhabitants; and so soon as this is accomplished, the consumption
and produce becoming equally balanced, the inhabitants will
increase no more, or at least very precariously, unless their wants
be multiplied.
If the country we were treating of in the former chapter be supposed
of a considerable extent and fruitfulness, and if the inhabitants
have a turn for industry; in a short time, luxury and the
use of money (or of something participating of the nature of money)
will infallibly be introduced.
By LUXURY, I understand the consumption of any thing produced by
the labour or ingenuity of man, which flatters our senses or taste of living,
and which is neither necessary for our being well fed, well clothed, well defended
32against the injuries of the weather, nor for securing us against every
thing which can hurt us[H].
By MONEY, I understand any commodity, which purely in itself is of no
material use to man for the purposes above-mentioned, but which acquires
such an estimation from his opinion of it, as to become the universal measure of
what is called value, and an adequate equivalent for any thing alienable.
Here a new scene opens. This money must be found in the
hands of some of the inhabitants; naturally, of such as have had
the wit to invent it, and the address to make their countrymen
fond of it, by representing it as an equivalent value for food and
necessaries; that is to say, the means of procuring, without work
or toil, not only the labour of others, but food itself.
Here then is produced a new object of want. Every person becomes
fond of having money; but how to get it is the question.
The proprietors will not give it for nothing, and by our former
supposition every one within the society was understood to be
33abundantly supplied with food and necessaries; the farmers, from
their labouring the ground; the free hands, by the return of their
own ingenuity, in furnishing necessaries. The proprietors therefore
of this money have all their wants supplied, and still are possessors
of this new kind of riches, which we now suppose to be
coveted by all.
The natural consequence here will be, that those who have the
money will cease to labour, and yet will consume; and they will
not consume for nothing, for they will pay with money.
Here then is a number of inhabitants, who live and consume
the produce of the earth without labouring: food will soon become
scarce; demand for it will rise, and that will be paid with
money; this is the best equivalent of all; many will run to the
plough; the superfluity of the farmers will augment; the rich will
call for superfluities; the free hands will supply them, and demand
food in their turn. These will not be found a burden on the
husbandmen, as formerly; the rich, who hired of them their labour
or service, must pay them with money, and this money in
their hands will serve as an equivalent for the superfluity of nourishment
produced by additional agriculture.
When once this imaginary wealth, money, becomes well introduced
into a country, luxury will very naturally follow; and when
money becomes the object of our wants, mankind become industrious,
in turning their labour towards every object which may
engage the rich to part with it; and thus the inhabitants of
any country may increase in numbers, until the ground refuses
farther nourishment. The consequences of this will make the
subject of another chapter.
Before we proceed, something must be said, in order to restrain
these general assertions a little.
We have supposed a very rapid progress of industry, and a very
sudden augmentation of inhabitants, from the introduction of
money. But it must be observed, that many circumstances have
concurred with the money, to produce this effect.
34We have supposed a country capable of improvement, a laborious
people, a taste of refinement and luxury in the rich, an ambition
to become so, and an application to labour and ingenuity in
the lower classes of men. According to the greater or less degree
of force, or concurrence of these and like circumstances, will the
country in question become more or less cultivated, and consequently
peopled.
If the soil be vastly rich, situated in a warm climate, and naturally
watered, the productions of the earth will be almost spontaneous:
this will make the inhabitants lazy. Laziness is the greatest
of all obstacles to labour and industry. Manufactures will
never flourish here. The rich, with all their money, will not become
luxurious with delicacy and refinement; for I do not mean
by luxury the gratification of the animal appetites, nor the abuse
of riches, but an elegance of taste and in living, which has for its object the
labour and ingenuity of man; and as the ingenuity of workmen begets
a taste in the rich, so the allurement of riches kindles an ambition,
and encourages an application to works of ingenuity in the poor.
Riches therefore will here be adored as a god, but not made
subservient to the uses of man; and it is only by the means of
swift circulation from hand to hand, (as shall be observed in its
proper place) that they become productive of the effects mentioned
above[I].
When money does not circulate, it is the same thing as if it did
not exist; and as the treasures found in countries where the inhabitants
are lazy do not circulate, they are rather ornamental than
useful.
35It is not therefore in the most fruitful countries of the world,
nor in those which are the best calculated for nourishing great
multitudes, that we find the most inhabitants. It is in climates less
favoured by nature, and where the soil only produces to those who
labour, and in proportion to the industry of every one, where we
may expect to find great multitudes; and even these will be found
greater or less, in proportion as the turn of the inhabitants is
directed to ingenuity and industry.
In such countries where these are made to flourish, the free
hands (of whom we have spoken above) will be employed in useful
manufactures, which, being refined upon by the ingenious,
will determine what is called the standard of taste; this taste will
increase consumption, which again will multiply workmen, and
these will encourage the production of food for their nourishment.
Let it therefore never be said, that there are too many manufacturers
employed in a country; it is the same as if it were said,
there are too few idle persons, too few beggars, and too many husbandmen.
We have more than once endeavoured to shew, that these manufacturers
never can be fed but out of the superfluity of nourishment
produced by the farmers. It is a contradiction, I think, to
say, that those who are fed upon the surplus of those who cultivate
the soil are necessary for producing a sufficiency to themselves.
For if even this surplus were to diminish, the manufactures,
not the labourers, would be the first to be extinguished for
want of nourishment.
The importance of the distributive proportion of mankind into
labourers and free hands appears so great, and has so intimate a
connection with this subject, that it engages me to seek for an illustration
of the principles I have been laying down, in an example
drawn from facts, as it is found to stand in one of the
greatest and most flourishing nations in Europe. But before I proceed
farther in this part of my subject, I must examine the consequences
36of slavery with regard to the subject we are now upon.
Relations here are so many and so various, that it is necessary
to have sometimes recourse to transitions, of which I give notice to
my reader, that he may not lose the connection.
Before I go on to follow the consequences of the above reasoning,
I must stop, to consider a difference, of no small importance,
between antient and modern times, which will serve to
illustrate the nature of slavery, with regard to population and the
employment of mankind.
We have endeavoured to lay down the principles which seem to
influence these two objects, supposing all to be free. In that case I
imagine the human species will multiply pretty much in proportion
to their industry; their industry will increase according to their
wants, and these again will be diversified according to the spirit of
the times.
From this I conclude, that the more free and simple the manners
of a country are, cæteris paribus, the fewer inhabitants will be found
in it. This is proved by experience every where. The Tartars,
who freely wander up and down a country of vast extent, multiply
but little; the savages in America, who live upon hunting, in a
state of great independence; the inhabitants of several mountainous
countries in Europe, where there are few manufactures,
and where the inhabitants do not leave the country; in all such
places mankind do not multiply. What is the reason of this?
One would imagine, where there is a great extent of ground capable
37of producing food, that mankind should multiply until the
soil refused to give more. I imagine the answer may be easily discovered
from the principles above laid down.
Where mankind have few wants, the number of free hands necessary
to supply them is very small, consequently very little surplus
from the farmers is sufficient to maintain them. When therefore
it happens, that any poor family in the class of free hands is very
numerous, division there comes to be carried to its utmost extent,
and the greatest part become quite idle, because there is no demand
for their work. As long as they can be fed by the division
of the emoluments arising from the labour of their parents, or
by the charity of others, they live; when these resources fail,
they become miserable. In so wretched a situation it is not easy to
find bread. The farmers will not double their diligence from a
charitable disposition. Those who have land will not allow those
indigent people a liberty to raise grain in it for nothing; and although
they should, the poor are not in a capacity to provide what
is necessary for doing it. All other work is fully stocked, the
wretched die, or extinguish without multiplying.
To make this more evident, let us suppose the wants of mankind,
in any polite nation of Europe, which lives and flourishes in
our days upon the produce of its own soil, reduced all at once to
the simplicity of the antient patriarchs, or even to that of the old
Romans. Suppose all the hands now employed in the luxurious
arts, and in every branch of modern manufactures, to become quite
idle, how could they be subsisted? What oeconomy could be set on
foot able to preserve so many lives useful to the state? Yet it is
plain by the supposition, that the farmers of the country are capable
of maintaining them, since they do so actually. It would be
absurd to propose to employ them in agriculture, seeing there are
enough employed in this, to provide food for the whole.
If it be certain, that such people would die for want without any
resource, must it not follow, that unless their parents had found
the means of maintaining them when children, and they themselves
38the means of subsisting by their industry in supplying wants,
they could not have existed beyond their first infancy.
This seems to strike deep against the populousness of the old
world, where we know that the wants of mankind, with regard to
trades and manufactures, were so few.
But in those days the wants of mankind were of a different nature.
At present there is a demand for the ingenuity of man;
then there was a demand for his person and service. Now provided
there be a demand for man, whatever use he be put to, the
species will multiply; for those who stand in need of them will
always feed them, and as long as food is to be found, numbers
will increase.
In the present times food cannot, in general, be found, but by
labour, and that cannot be found but to supply wants. Nobody
will feed a free man, more than he will feed the wild birds or
beasts of the field, unless he has occasion for the labour of the one
or the flesh of the other.
In the old world the principles were the same, but the spirit of
nations was different. Princes wanted to have numerous armies.
Free states sought for power in the number of their citizens. The
wants of mankind being few, and a simplicity of manners established,
to have encouraged industry, excepting in agriculture,
which in all ages has been the foundation of population, would
have been an inconsistency. To make mankind labour beyond
their wants, to make one part of a state work to maintain the
other gratuitously, could only be brought about by slavery, and
slavery was therefore introduced universally. Slavery was then as
necessary towards multiplication, as it would now be destructive
of it. The reason is plain. If mankind be not forced to labour,
they will only labour for themselves; and if they have few wants,
there will be little labour. But when states come to be formed,
and have occasion for idle hands to defend them against the violence
of their enemies, food at any rate must be procured for those
who do not labour; and as, by the supposition, the wants of the
39labourers are small, a method must be found to increase their labour
above the proportion of their wants.
For this purpose slavery was calculated: it had two excellent effects
with respect to population. The first, that, in unpolished
nations, living upon the spontaneous fruits of the earth, and almost
continually in war, lives were preserved for the sake of making
slaves of the captives. These sold to private people, or different
states, were sure of being fed; whereas remaining in their
own country, they only occupied a place, which, by the force of
the generative faculty, as has been observed, was soon to be filled
up by propagation: for it must not be forgot, that when numbers
are swept off, by any sudden calamity, which does not proportionally
diminish subsistence, a new multiplication immediately
takes place. Thus we perceive the hurt done by plagues, by war,
and by other devastations, either among men, or cattle, repaired in
a few years, even in those countries where the standard number of
both is seldom found to increase. What immense quantities of
cattle are yearly slaughtered! Does any body imagine that if all
were allowed to live, numbers would increase in proportion? The
same is true of men.
The second advantage of slavery was, that in countries where a
good police prevailed, and where the people had fewer wants by far
than are felt in modern times, the slaves were forced to labour the
soil which fed both them and the idle freemen, as was the case in
Sparta; or they filled all the servile places which freemen fill now,
and they were likewise employed, as in Greece and in Rome, in supplying
with manufactures those whose service was necessary for the state.
Here then was a violent method of making mankind laborious
in raising food; and providing this be accomplished, (by any means
whatever) numbers will increase.
Trade, industry, and manufactures, only tend to multiply the
numbers of men, by encouraging agriculture. If it be therefore
supposed, that two states are equally extended, equally fruitful,
and equally cultivated, and the produce consumed at home, I believe
40they will be found equally peopled. But suppose the one laboured
by free men, the other by slaves, what difference will be
found in making war? In the first, the free hands must, by their
industry and labour, purchase their food, and a day lost in labour
is in a manner a day of fasting: in the last, the slaves produce the
food, they are first fed, and the rest costs nothing to the body of
free men, who may be all employed in war, without the smallest
prejudice to industry.
From these principles it appears, that slavery in former times
had the same effect in peopling the world that trade and industry
have now. Men were then forced to labour because they were
slaves to others; men are now forced to labour because they are
slaves to their own wants.
I only add, that I do not pretend that in fact slavery in antient
times did every where contribute to population, any more than I
can affirm that the spirit of industry in the Dutch is common to all
free nations in our days. All that is necessary for my purpose is,
to set forth the two principles, and to shew the natural effects of
the one and the other, with respect to the multiplication of mankind
and advancement of agriculture, the principal objects of our
attention throughout this book.
I shall at present enlarge no farther upon this matter, but return
to where I left off in the preceeding chapter, and take up the farther
examination of the fundamental distribution of inhabitants
into labourers and free hands.
41
I have proposed this question, not with an intention to answer
it fully, but to point out how, with the proper lights given, it
may be answered.
As I write under circumstances not the most favourable for having
recourse to books, I must employ those I have. The article Political
Arithmetic, of Mr. Chambers’s Cyclopedia, furnishes me with some
extracts from Sir William Petty, and Dr. Davenant, which I here
intend to employ, towards pointing out a solution of the question
proposed. These authors consider the state of England as it appeared
to them, and what they say is conclusive only with respect
to that state.
Sir William Petty supposes the inhabitants of England to be six
millions, the value of grain yearly consumed by them ten millions
sterling, the bushel of wheat reckoned at 5s. and that of barley at
2s. 6d. If we cast the two together, and reckon upon an average,
this will make the quarter, or eight bushels of grain, worth 1l. 10s.
but in regard, the barley cannot amount to one half of all the grain
consumed, especially as there is a good quantity of rye made use
of, which is worth more than the barley, though less than the
wheat; let us suppose the grain worth 32s. per quarter, at a medium;
then ten millions sterling will purchase six millions of quarters
of grain, or thereabouts: which used for nourishment, in
bread and beer, gives the mean quantity of one quarter, or 512
pounds of grain for every inhabitant, including the nourishment
of his proportional part of animals; supposing that Sir William
attended to this circumstance, for it is not mentioned by Chambers.
And I must observe, by the by, that this computation may hold
42good as to England, where people eat so little bread; but would
not answer in France, nor in almost any other country I have seen.
Dr. Davenant, correcting Sir William’s calculation, makes the
inhabitants 5,545,000. These, according to Sir William’s prices and
proportions, would consume to the amount of 8,872,000l. sterling;
but the Dr. carries it, with reason, a little higher, and states it at
9,075,000l. sterling; the difference, however, is inconsiderable.
From this he concludes, the gross produce of the corn fields to be
about 9,075,000l. sterling. I make no criticism upon this computation.
Next, as to the value of other lands; I find Sir William reckons
the gross produce of them in butter, cheese, milk, wool, horses
yearly bred, flesh for food, tallow, hides, hay, and timber, to
amount to 12,000,000l. sterling: The amount therefore of the gross
produce of all the lands in England must be equal to these two sums
added together, that is to 21,075,000l. sterling.
From these data, the Dr. values the yearly rent of corn lands at
two millions sterling, and those of pasture, &c. at seven millions,
in all nine millions.
From this it appears, that the land rents of England are to the
gross produce, as nine is to twenty one, or thereabouts.
Let me now examine some other proportions.
The rents of the corn lands are to the gross produce of them, as
two is to nine; those of pasture, as seven to twelve.
Now it is very certain, that all rents are in a pretty just proportion
to the gross produce, after deducting three principal articles.
1. The nourishment of the farmer, his family and servants.
2. The necessary expences of his family, for manufactures, and
instruments for cultivating the ground.
3. His reasonable profits, according to the custom of every
country.
Of these three articles, let us distinguish what part implies the
direct consumption of the pure produce, from what does not.
43Of the first sort are the nourishment of men and cattle, wool and
flax for cloathing, firing, and other smaller articles.
Of the second are all manufactures bought, servants wages, the
hire of labourers occasionally, and profits, either spent in luxury,
(that is superfluity) lent, or laid up.
The three articles above mentioned (which we have distributed
under two heads) being deduced from the gross produce, the remaining
value shews the land rent.
This being the case, I am next to examine the cause of the great
disproportion between the rents of corn lands, and those of pasture,
when compared with the gross produce, in order to draw some conclusion,
which may lead to the solution of the question here proposed.
This difference must proceed from the greater proportion of
labouring and other inhabitants employed in consequence of tillage;
which makes the expence of it far greater than that of pasture.
And since, in the one and the other, every article of necessary expence
or consumption, appears to be proportionally equal among those
concerned in both, that is, proportional to the number of labouring
inhabitants; it follows, that the proportion of people employed in
agriculture, and upon the account of it, in different countries, is
nearly in the ratio of the gross produce to the land-rent; or in other
words, in the proportion of the consumption made by the farmers,
and by those employed necessarily by them, to the net produce;
which is the same thing.
Now as the consumption upon corn farms is 7⁄9, and that upon
pasture 5⁄12, the proportion of these two fractions must mark the
ratio between the populousness of pasture lands, and those in tillage;
that is to say, tillage lands in England were, at that time,
peopled in proportion to pasture lands, as 84 is to 45, or as 28 to 15.
This point being settled, I proceed to another; to wit, the application
of this net produce or surplus of the quantity of food and
necessaries remaining over and above the nourishment, consumption
and expence, of the inhabitants employed in agriculture; and
44which we have observed above, to be equal to the land-rents of
England, that is to say, to nine millions yearly.
Must not this of necessity be employed in the nourishment, and
for the use of those whom we have called the free hands; who may
be employed in manufactures, trades, or in any way the state
pleases.
Now the number of people, I take to be very nearly in the
proportion of the quantity of food they consume; especially when
a society is taken thus, in such accumulative proportion, and when
all are found under the same circumstances as to the plenty of the
year.
The whole gross produce of England we have said to be
21,000,000l. sterling, of which 9 millions have remained for those
not employed in agriculture; the farmers, therefore, and their
attendants, must annually consume 12 millions; consequently the
last class is to the first as 12 is to 9. If therefore, according to Dr.
Davenant, there be 5,545,000 people in that kingdom, there must
be about 3,168,571 employed or dependent upon agriculture, and
2,376,429 free hands for every other occupation. But this proportion
of farmers will be found far less, if we reflect, that we have
reckoned for them the total amount of the three articles above mentioned,
that is to say, the total consumption they make, as well in
manufactures, profits upon their labour, &c. as for food and necessaries;
whereas there has been nothing reckoned for the free hands,
but the land-rent: consequently there should be added to the number
of the latter as many as are employed in supplying with all
sorts of manufactures the whole of the farmers of England, and all
those who depend upon them; and this number must be taken from
one and added to the other class.
If this number be supposed to amount to four hundred thousand,
it will do more than cast the balance upon the opposite side.
From these matters of fact (in so far as they are so) we may conclude:
45I. That the raising of the rents of lands shews the increase of
industry, as it swells the fund of subsistence consumed by the industrious;
that is, by those who buy it.
II. That it may denote either an increase of inhabitants, or the
depopulation of the land, in order to assemble the superfluous
mouths in villages, towns, &c. where they may exercise their industry
with greater conveniency.
While the land-rents of Europe were very low, numbers of the
inhabitants appeared to be employed in agriculture; but were really
no more than idle consumers of the produce of it. This shall be
farther illustrated in the subsequent chapters.
III. The more a country is in tillage, the more it is inhabited, and
the smaller is the proportion of free hands for all the services of the
state. The more a country is in pasture, the less it is inhabited, but
the greater is the proportion of free hands.
I do not pretend, as I have said above, that there is any calculation
to be depended on in this chapter; I have only endeavoured
to point out how a calculation might be made, when the true state
of England comes to be known.
This question not being of a nature to enter into the chain of our
reasoning, may be considered rather as incidental than essential; I
have therefore treated it superficially, and chiefly for the sake of
the conclusions.
Our next inquiry will naturally be into the principles which determine
the residence of inhabitants, in order to discover why, in
all flourishing states, cities are now found to be every where increasing.
46
Having pointed out the natural distribution of inhabitants
into the two capital classes of which we have been treating, I
am now going to examine how far their employment must decide
as to their place of residence.
I. When mankind is fed upon the spontaneous fruits of the earth,
the distribution of their residence depends upon the division of the
lands. If these are in common to all, then the inhabitants will be
scattered abroad, or gathered together, according as the productions
of the earth are equally distributed over the face of the country,
or confined to some fruitful spots.
Hence the Tartars wander with their flocks and feed upon them:
hence the hunting Indians are scattered in small societies, through
the woods, and live upon game: hence others, who feed upon the
fruits of the earth, are collected in greater numbers upon the sides
of rivers, and in watered vallies.
Where therefore the surface of the earth is not appropriated, there
the place producing food determines the place of residence of every
one of the society, and there mankind may live in idleness, and remain
free from every constraint.
II. When the earth is not in common to those who live upon her
spontaneous fruits, but appropriated by a few, there either slavery
or industry must be introduced among those who consume the surplus
of the proprietors; because they will expect either service or
work in return for their superfluity. In that case, the residence of
the inhabitants will depend upon the circumstances we are going
to consider; and the object of agriculture (in countries where the
47surface of the earth is not broken up, being solely directed towards
the gathering in of fruits) will only determine the residence of
these who are necessary for that purpose: consequently it will follow,
that in climates where the earth produces spontaneously, and
in vast abundance, there may be found large cities; because the
number of those who are necessary for gathering in the fruits, is
small in proportion to their quantity; whereas in other countries,
where the earth’s productions are scanty, and where the climate
refuses those of the copious and luxuriant kind, there will hardly
be found any considerable town, as the number of those who are
necessary for collecting the subsistence, bear a great proportion to
the fruits themselves. I do not say, that in the first case there must
be large towns, or that in the other there can be none; but I say,
that in the first case, those who may be gathered into towns, bear a
great proportion to the whole society; and that in the second, they
bear a small one.
I think I have found this principle confirmed by experience.
When I compare the bulk and populousness of the cities of Lombardy,
and still more, those of the watered provinces of Spain, with
the inhabitants of the territory which maintains them, I find the
proportion of the first vastly greater than in those of France and
England; and still more again in these two last mentioned kingdoms,
than in the more northern countries and provinces, where the
earth’s productions bear a less proportion to the labour bestowed in
producing them. Now, although I allow that neither the one or the
other to be fed by spontaneous productions, yet still it may be inferred,
that the more the climate contributes to favour the labour of man,
the more the productions participate of the spontaneous nature[J].
48Again, in countries where labour is required for feeding a society,
the smaller the proportion of labourers, the greater will be that of
the free hands. Fruits which are produced by annual labour, and
still more, such as are the consequence of a thorough cultivation,
(such as luxuriant pasture) give returns far superior to the nourishment
of those employed in the cultivation; consequently, all the
surplus is consumed by people not employed in agriculture; consequently,
by those who are not bound to reside upon the spot
which feeds them, and who may choose the habitation best adapted
for the exercise of that industry which is most proper to produce an
equivalent to the farmers for their superfluities.
From this it is plain that the residence of the farmers only, is
essentially attached to the place of cultivation. Hence, farms in
some provinces, villages in others.
I now proceed to the other class of inhabitants; the free hands
who live upon the surplus of the farmers.
These I must subdivide into two conditions. The first, those to
whom this surplus directly belongs, or who, with a revenue in
money already acquired, can purchase it. The second, those who
purchase it with their daily labour or personal service.
Those of the first condition may live where they please; those of
the second, must live where they can. The residence of the consumers,
in many cases, determines that of the suppliers. In proportion,
therefore, as those who live where they please choose to
live together, in that proportion the others must follow them. And
in proportion as the state thinks fit to place the administration of
government in one place, in that proportion must the administrators,
and every one depending upon them, be gathered together. These
49I take to be principles which influence the swelling of the bulk of
capitals, and smaller cities.
When the residence of the consumer does not determine that of
him who supplies it, other considerations are allowed to operate.
This is the case in what may properly be called manufactures, distinguished
from trades, whether they be for home consumption, or
foreign exportation. These considerations are,
I. Relative to the place and situation of the establishment, which
gives a preference to the sides of rivers and rivulets, when machines
wrought by water are necessary; to the proximity of forests when
fire is employed; to the place which produces the substance of the
manufacture; as in mines, collieries, brick-works, &c.
II. Relative to the conveniency of transportation, as upon navigable
rivers, or by great roads.
III. Relative to the cheapness of living, consequently not (frequently)
in great cities, except for their own consumption. But it
must be observed, that this last consideration can hardly ever be permanent:
for the very establishment being the means of raising
prices, the advantage must diminish in proportion as the undertaking
comes to succeed. The best rule therefore is, to set down
such manufactures upon the banks of navigable rivers, where all
necessary provisions may be brought from a distance at a small
cost. This advantage is permanent, the others are not; and may
prove in time hurtful, by a change in these very circumstances
which decided as to the choice of the situation. From the establishment
of manufactures we see hamlets swell into villages, and villages
into towns.
Sea-ports owe their establishment to foreign trade. From one or
other of these and similar principles, are mankind gathered into
hamlets, villages, towns, and cities.
50
I am next going to examine the consequences resulting to the
state, to the citizens, and to the landed interest, from this kind
of separation, as I may call it, between the parent earth and her
laborious children, which I suppose to take place every where in
proportion to the progress of industry, luxury, and the swift circulation
of money.
As to the state, it is, I think, very plain, that, without such a
distribution of inhabitants, it would be impossible to levy taxes.
For as long as the earth nourishes directly those who are upon her
surface, as long as she delivers her fruits into the very hand of
him who consumes them, there is no alienation, no occasion for
money, consequently no possibility of establishing an extensive
taxation, as shall in its place be fully explained, and from this
principle is, I imagine, to be deduced the reason, why we find
taxation so little known under the feudal form of government.
The personal service of the vassals, with their cattle and servants,
upon all occasions made the power and wealth of the lords, and
their rents were mostly paid in kind. They lived upon their lands,
were commonly jealous of one another, and had constant disputes.
This was a very good reason to keep them from coming together.
Towns were situated round their habitations. These were mostly
composed of the few tradesmen and manufacturers that were in
the country. The lord’s judge, his fiscal, and his court of record,
added to these numbers; law-suits, and the lord’s attendance,
brought the vassals frequently together; this gave encouragement
to houses of entertainment; and this I take to be the picture of
51the greatest part of small towns, if we ascend three or four hundred
years from the present time.
Cities were the residence of bishops. These lords were very independent
of the civil government, and had at the same time the
principal direction in it. They procured privileges to their cities,
and these communities formed themselves by degrees into small
republics: taxes here have ever been familiar. The feudal lords
seldom appeared there, and the inferior classes of the people enjoyed
liberty and ease in these cities only.
In some countries of Europe, as in Germany, the principal citizens,
in time, became patricians. In France certain offices of public
trust sometimes procured nobility to those who bore them,
and always consideration. The representatives of the citizens
were even admitted into the states, and formed the tiers êtat. Elsewhere
they received casual marks of distinction from the sovereign,
as the Lord Mayor of London does to this day usually receive
knighthood. In short, the only dawning of public liberty
to be met with during the feudal government, was in the cities;
no wonder then if they increased.
Upon the discovery of America and the East-Indies, industry,
trade, and luxury, were soon introduced in the kingdoms of Spain,
France, and England: the grandeur and power of the Hans
towns had already pointed out to sovereigns the importance of
those objects.
The courts of princes then became magnificent; the feudal
lords insensibly began to frequent them with more assiduity than
formerly. The splendor of the prince soon eclipsed those rays
which shone around them upon their own lands. They now no
more appeared to one another as objects of jealousy, but of emulation.
They became acquainted, began to relish a court life, and
every one proposed to have a house in the capital. A change of
habitation made a change of circumstances, both as to city and
country. As to the city; in so far as inhabitants were increased,
by the addition of the great lords, and of those who followed their
52example, demand increased for every sort of provision and labour;
and this quickly drew more inhabitants together. Every one vied
with another in magnificence of palaces, clothes, equipages. Modes
changed, and by turns enlivened the different branches of ingenuity.
Whence came so great a number of inhabitants all of a
sudden? He who would have cast his eyes on the deserted residences
of the nobility, would have seen the old people weeping
and wailing, and nothing heard among them but complaints of
desolation: the youth were retired to the city; there was no change
as to them.
This is no doubt a plain consequence of a sudden revolution,
which never can happen without being attended with great inconveniencies.
Many of the numerous attendants of the nobility
who uselesly filled every house and habitation belonging to the
great man, were starving for want. He was at court, and calling
aloud for money, a thing he was seldom accustomed to have occasion
for, except to lock up in his chest. In order to procure this
money, he found it expedient to convert a portion of the personal
services of his vassals into cash: by this he lost his authority. He
then looked out for a farmer (not a husbandman) for an estate
which he formerly consumed in its fruits. This undertaker, as I
may call him, began by dismissing idle mouths. Still greater
complaints ensued. At last, the money spent in the city began to
flow into the hands of the industrious: this raised an emulation,
and the children of the miserable, who had felt the sad effects of
the revolution, but who could not foresee the consequences, began
to profit by it. They became easy and independent in the great
city, by furnishing to the extravagance of those under whose dominion
they were born.
This progression is perhaps too minutely traced to be exact; I
therefore stop, to consider the situation of affairs at that period,
when all the inconveniences of the sudden revolution had ceased,
and when things were come to the state in which we now find
them. Capitals swelled to a great extent. Paris and London appear
53monstrous to some, and are said to be a load upon the rest of
the country. This must be examined.
We agree, I suppose, that the inhabitants of cities are not employed
in agriculture, and we may agree that they are fed by
it: we have examined into the causes of the increase of cities, and
we have seen the fund provided for their subsistence, to wit, the
surplus of fruits produced by husbandmen.
What are then the advantages resulting to the citizens from
this great increase of their city? I cannot find any great benefit
resulting to individuals from that circumstance; but I conclude,
that the same advantages which many find in particular, must be
common to great numbers, consequently great numbers are gathered
together.
The principal objections against great cities are, that health there
is not so good, that marriages are not so frequent as in the country,
that debauchery prevails, and that abuses are multiplied.
To this I answer, that these objections lie equally against all cities,
and are not peculiar to those complained of for their bulk;
and that the evils proceed more from the spirit of the inhabitants,
than from the size of the capital. As for the prolongation of life,
it is more a private than a public concern.
It is farther urged, that the number of deaths exceeds the number
of births in great cities; consequently smaller towns, and
even the country, is stripped of its inhabitants, in order to recruit
these capitals.
Here I deny, first, that in all capitals the number of deaths exceeds
the number of births; for in Paris it is otherwise. But supposing
the assertion to be true, what conclusion can be drawn from
it, except that many people who are born in the country die in
town. That the country should furnish cities with inhabitants is
no evil. What occasion has the country for supernumerary hands?
If it has enough for the supply of its own wants, and of the demands
of cities, has it not enough? Had it more, the supernumeraries
would either consume without working, or, if added to the class
54of labourers, instead of being added to the number of free hands,
would overturn the balance between the two classes; grain would
become too plentiful, and that would cast a general discouragement
upon agriculture: whereas, by going to cities, they acquire
money, and therewith purchase the grain they would have consumed,
had they remained in the country; and this money, which
their additional labour in cities will force into circulation, would
otherwise have remained locked up, or at least would never have
gone into the country, but in consequence of the desertion of the
supernumeraries. The proper and only right encouragement for
agriculture, is a moderate and gradual increase of demand for the
productions of the earth: this works a natural and beneficial increase
of inhabitants; and this demand must come from cities, for
the husbandmen never have occasion to demand; it is they who
offer to sale.
The high prices of most things in large cities is surely a benefit,
not a loss to the country. But I must observe, that the great expence
of living in capitals does not affect the lower classes, nor the
moderate and frugal, in any proportion to what it does the rich.
If you live on beef, mutton, bread, and beer, you may live as
cheap in London and in Paris as in most cities I know. These articles
abound, and though the demand be great, the provision
made for supplying it is in proportion. But when you come to fish,
fowl, and game; delicacies of every kind brought from far, by
the post, by ships, and messengers; when you have fine equipages,
large houses, expensive servants, and abundance of waste in every
article, without one grain of oeconomy in any, it is no wonder that
money should run away so fast.
I do not, from what has been said, conclude, that there is any
evident advantage in having so overgrown a capital as London in
such a kingdom as England; but only that I do not find great force
in the objections I have met with against it. That there may be
others which I do not know, I will not deny, because I am not sufficiently
55acquainted with that kingdom to be a competent judge of
the matter.
Let me now conclude this chapter, by mentioning in what respects
I think cities an advantage, in general, to a country; and,
as I go along, I shall point out wherein they prove a disadvantage,
in particular, to some parts of it.
The general advantages of them are;
I. To remove the unnecessary load upon the land; those idle
people, who eat up a part of the produce of labour without contributing
to it.
II. The opportunity of levying taxes, and of making these affect
the rich, in proportion to the consumption they make, without
hurting industry or exportation.
III. The advantages resulting to the landed interest are no less
considerable. This is proved by universal experience: for we see
every where, that the moment any city, town, or village, begins
to increase, by the establishment of trade or manufactures, the
lands round about immediately rise in their value. The reason of
this seems easily deduced from the above principles.
When a farmer has got his oeconomy under right regulations,
not one supernumerary, nor useless mouth, but abundance of
hands for every kind of labour, which is generally the case near
towns and cities, the proximity of them discharges him of every
superfluity. His cattle consume the exact quantity of grain and
of forage necessary; what remains is money; a superfluous egg is
money; a superfluous day of a cart, of a horse, a superfluous hour
of a servant, is all money to the farmer. There is a constant demand
for every thing he can do or furnish. To make this the
more sensibly perceived, remove into a province, far from a town,
and compare situations. There you find abundance of things superfluous,
which cannot be turned into money, which therefore
are consumed without much necessity, and with no profit. It is
good to have an estate there, when you want to live upon it; it
is better to have one near the great town, when you do not.
56It may be alledged, that the disadvantages felt by the distant
farmer and proprietor, when they compare situations with those
situated near the town, proceed from the town: this must be examined.
If the town consume the produce of this distant farm, it must
consume it in competition with every place at a smaller distance;
consequently this competition must do more good than harm to
the distant farm. If the city consumes none of the produce, wherein
does it affect it? It may be answered, that, by entering into
competition with the distant farmer for the labouring inhabitants,
these desert agriculture, in favour of a more lucrative occupation,
to be found in the city. Scarcity of hands in the country raises
the price of labour on one hand, while it diminishes the demand
on the other; consequently the farmer suffers a double disadvantage.
Of this there can be no doubt; but as these revolutions
cannot by their nature be sudden, it becomes the duty of the statesman,
whom I suppose constantly awake, to set on foot directly
some branch of industry in every such distant part of the country;
and as prices will diminish for a while, for the reasons above-mentioned,
this will prove an encouragement to the establishment;
this again will accelerate propagation, as it will prove an outlet for
children, and, in a short time, the farmer will find himself in a
better situation than ever. But even without this assistance from
the state, a few years will set all to rights, providing the spirit of
industry is kept up: for cities, by swelling, extend their demand
to the most distant corners of a country; the inhabitants who desert
do not cease to consume, and thereby they repair the hurt they
did by their desertion. I appeal to experience for the truth of this.
Do we not perceive demand extending every year farther and farther
from great capitals? I know places in France which, twenty
years ago, never knew what it was to send even a delicacy to Paris,
but by the post, and which now send thither every week loaded
waggons, with many thousand weight of provisions; in so much
that I may almost say, that a fatted chicken in the most distant
57province of that country can be sold with great profit in the Paris
market during all the winter season; and cattle carry thither their
own flesh cheaper than any waggon can. What distant farm then
can complain of the greatness of that noble city? There is however
a case, where a distant part of a country may suffer in every
respect, to wit, when the revolution is sudden; as when a rich
man, used to spend his income in his province, for the encouragement
of industry, goes to Paris or London, and stays away for
a year or two, without minding the interest of the estate he abandons.
No doubt that must affect his province in proportion; but
in every revolution which comes on gradually by the desertion of
such as only lived by their industry, new mouths are born and
supply the old. The only question is about employing them well:
while you have superfluous food and good oeconomy, a country
will always reap the same benefit from her natural advantages.
IV. Another advantage of cities is, the necessity arising from
thence of having great roads, and these again prove a considerable
encouragement to agriculture.
The miserable condition of roads over all Europe almost, till
within these hundred years, is a plain proof of the scanty condition
of the cities, and of the small encouragement formerly given
towards extending the improvement of the soil.
Let any one examine the situation of the landed interest before
the making of great roads in several provinces in France, and
compare it with what it is at present. If this be found a difficult
inquiry, let him compare the appearance of young gentlemen of
middling fortune, as he finds them at Paris, or in their regiment,
with that of their fathers, who live in their province in the old
way, and he will have a very good opportunity of perceiving the
progress of ease and refinement in that class, which has proceeded
from no other cause than the improvement of the soil. People
complain that prices are risen; of this there is no doubt with regard
to many articles. Is it not quite consistent with our principles?
It is not because there is now a larger mass of money in
58the kingdom, though I allow this to be true, and also that this
circumstance may have contributed to raise prices; but the direct
principle which has influenced them, and which will always regulate
their rise and fall, is the increase of demand. Now the great
roads in a manner carry the goods to market; they seem to shorten
distances, they augment the number of carriages of all sorts, they
remove the inconveniencies above-mentioned resulting from the
distance of the city. The more distant parts of the country come
to market, in competition with the farmers in the neighbourhood
of the cities. This competition might make the rents of lands lying
round such as were the first to encourage industry, sink in
their value. But the hurt in this respect done to the proprietors of
these lands would soon be repaired. The cities would increase in
bulk, demand would increase also, and prices would rise a-new.
Every thing which employs inhabitants usefully promotes consumption;
and this again is an advantage to the state, as it draws
money from the treasures of the rich into the hands of the industrious.
The easy transportation of fruits produces this effect:
the distant farmer can employ his idle hours in providing, and
the idle days of his servants and cattle in sending things to market,
from farms which formerly never knew what it was to sell
such productions.
I shall carry these speculations no farther, but conclude by observing,
that the making of roads must advance population, as
they contribute to the advancement of agriculture.
59
Having deduced the effects of modern policy, in assembling
so large a proportion of inhabitants into cities, it is proper
to point out the principles which should direct the statesman to
the proper means of providing, supporting, and employing them.
Without this they neither can live nor multiply. Their parent,
Earth, has in a manner banished them from her bosom; they have
her no more to suckle them in idleness; industry has gathered them
together, labour must support them, and that must produce a surplus
for bringing up children. If this resource should fail, misery
will ensue: the depopulation of the cities will be followed by the
ruin of the lands, and all will go to wreck together.
We have already laid down the principles which appear the most
natural to engage mankind to labour, supposing all to be free; and
we have observed how slavery, in former times, might work the
same effect, as to peopling the world, that trade and industry do now;
men were then forced to labour because they were slaves to others,
men are forced to labour now because they are slaves to their own
wants: provided man be made to labour, and make the earth produce
abundantly, and providing that either authority, industry or
charity, can make the produce circulate for the nourishment of
the free hands, the principle of a great population is brought to
a full activity.
I shall now suppose these principles to be well understood. Wants
promote industry, industry gives food, food increases numbers: the
next question is, how numbers are to be well employed?
It is a general maxim in the mouth of every body; increase the
inhabitants of the state: the strength and power of a state is in proportion
to the number of its inhabitants.
60I am not fond of condemning opinions; but I am very much for
limiting general propositions. I have hardly ever escaped being led
into error by every one I have laid down. Nothing is so systematical,
nothing so pretty in a treatise as general maxims; they facilitate
the distribution of our ideas, and I have never been able to dash
them out but with a certain regret.
As I often recur to private oeconomics for clearing up my ideas
concerning the political, I have asked myself, if it be a general
rule, that the master of a family should increase the mouths of it,
to the full proportion of all he can feed? Now it is my opinion,
that in a small family well composed, and where every one is properly
employed, both master and servants are much happier than in
others vastly more numerous, where the same order and regularity
is not kept up; and that a small number of well disciplined soldiers
is more formidable, and really stronger, than the numerous populace
of a large city.
The use of inhabitants is to be mutually serviceable one to
another in particular, and to the society in general. Consequently,
every state should, in good policy, first apply itself to make the inhabitants
they have answer that purpose, before they carry their
views towards augmenting their numbers. I think it is absurd to
wish for new inhabitants, without first knowing how to employ the
old; and it is ignorance of the real effects of population, to imagine
that an increase of numbers will infallibly remove inconveniencies
which proceed from the abuses of those already existing.
I shall then begin by supposing that inhabitants require rather
to be well employed than increased in numbers.
If I know the number of inhabitants, I may know the proportion
which die every year: consequently, I know how many pairs of
breeders are necessary to keep up the stock. If I want to raise twenty
bushels of grain only, I do not sow my lands with twenty bushels.
If I have as many children born as there are people who die, I have
enough by the supposition. But these children must be raised proportionally,
from the different classes of inhabitants, which I here
61consider as distributed into two conditions; those who do not labour,
and those who do. May I not venture to say, that there is no absolute
necessity that those of the first class should multiply in order
to recruit the second. If then the second class is kept up to its proper
standard by its own multiplication, and if their work be all
consumed, will it not be found that the diminution of those mouths
who do not work, and which appear only useful in consideration
of the consumption they make, is no real loss to the nation? But
to this it is objected, that if the number of the first class be diminished,
the work of the second will lie upon hand.
Here I look for my answer from what daily experience points
out. Two persons (A) and (B) have each 1000l. a year; (A) has
many children, (B) has none: they both spend their income; (A)
upon the necessaries of life for his family, and for the education of
his children; for the supplying of which, those of the working
class are only employed, for who ever does or gives any thing for
money, I consider as a worker: (B) spends his income as a fashionable
young gentleman; he has a fine chariot, abundance of footmen
in laced liveries; in short, without examining into the particulars
of his expence, I find the whole 1000l. spent at the end of
the year. Neither (A) nor (B) do any work; nor are any of (A’s)
children necessary as a supply to the working hands, by the supposition.
Is it not true then, that (B) has consumed as much work
or service, for these I consider as the same thing, as (A) with his
family? Nay, I may still go farther, and affirm, that (B) has contributed
as much, if not more, to population than (A). For if it
be true, that he who gives food gives numbers, I say, that the expence
of (B) has given food to the children of the industrious employed
by him: consequently, in place of having directly contributed
to the increase of the idle of the state, which is the case with
(A), he has indirectly contributed to the multiplication of the industrious.
What good then does the state reap from (A’s) children,
from his marriage, from his multiplication? Indeed, I see no harm
although he had remained a batchelor: for those who produce only
62idle consumers, certainly add neither riches, strength, or ease to a
state. And it is of such people alone that there is any question here.
From this I conclude, that there can be no determined number
of rich idle consumers necessary to employ a determined number
of industrious people, no more than of masters to employ a fixt
number of menial servants. Do we not see a single man frequently
attended by more servants than are necessary when he gets a wife
and family: nay, it many times happens, that a young man, upon
his marriage, diminishes the number of his domestics, in order to
give bread to his children.
If riches are calculated, as I hope to be able to shew, for the encouragement
of industry; if circulation is to be accelerated by every
method, in order to give bread to those who are disposed to work,
or, in other words, who are disposed to become vigorous members
of the commonwealth, by contributing with their strength, their
ingenuity, or their talents, to supply her wants, to augment their
riches, to promote and administer a good government at home, or
to serve it abroad: then, I say, the too great multiplication of those,
who come under none of these classes, the idle consumers as I have
called them, contribute directly to make the other part languish.
There is no governing a state in perfection, and consequently
no executing the plan of a right distribution of the inhabitants,
without exactly knowing their situation as to numbers, their employment,
the gains upon every species of industry, the numbers
produced from each class. These are the means of judging how
far those of a particular trade or occupation are in a situation to
bring up a family. To examine, on the other hand, the state of
the higher classes who do not labour, the ease of their circumstances,
and the use the state has for their service, may appear superfluous.
Since those who do not work, must be supposed to have wherewithal
to live; and consequently, not to stand in need of assistance.
But this is not every where, nor always the case: many excellent
subjects are lost to a state, for want of a proper attention in the
statesman to this object.
63I have observed how necessary a thing it was to govern a people
according to their spirit: now by governing I understand, protecting,
cherishing, and supporting, as well as punishing, restraining,
and exacting. If, therefore, there be found in any country, a very
numerous nobility, who look upon trade and the inferior arts, as
unbecoming their birth; a good statesman must reflect upon the
spirit of former times, and compare it with that of the present. He
will then perceive, that these sentiments have been transmitted
from father to son, and that six generations are not elapsed since,
over all Europe, they were universally adopted: that although the
revolution we talked of in the 10th chap. has in effect rendered
them less adapted to the spirit of the present times, they are however
productive of excellent consequences; they serve as a bulwark
to virtue, against the allurements of riches; and it is dangerous to
force a set of men who form a considerable body in a state, from
necessity, to trample under foot, what they have been persuaded
from their infancy to be the test of a noble and generous mind.
About 200 years ago, the nobility of several nations, I mean, by
this term, all people well born, whether adorned with particular
marks of royal favour or not, used to live upon the produce of
their lands. In those days there was little luxury, little circulation;
the lands fed numbers of useless mouths, in the modern acceptation
of useless, consequently produced a very moderate income in money
to the proprietors, who were, notwithstanding, the most considerable
persons in the state. This class of inhabitants remaining inactive
in the country, during the revolution above mentioned, have, in
consequence of the introduction of industry, trade and luxury, insensibly
had the balance of wealth, and consequently of consideration
turned against them. Of this there is no doubt. This class however
has retained the military spirit, the lofty sentiments; and notwithstanding
of their depression in point of fortune, are found calculated
to shine the brightest, when set in a proper elevation. In
times of peace, when trade flourishes, the lustre of those who wallow
in public money, the weight and consideration of the wealthy
64merchant, and even the ease and affluence of the industrious
tradesman, eclipse the poor nobility: they become an object of
contempt to bad citizens, an object of compassion to the good;
and political writers imagine they render them an important service,
when they propose to receive them into the lower classes of
the people. But when danger threatens from abroad, and when
armies are brought into the field, compare the behaviour of those
conducted by a warlike nobility, with those conducted by the
sons of labour and industry; those who have glory, with those
who have gain for their point of view. Let the state only suffer
this nobility to languish without a proper encouragement, there is
no fear but they will soon disappear; their lands will become possessed
by people of a way of thinking more a la mode, and the
army will quickly adopt new sentiments, more analogous to the
spirit of a moneyed interest.
I find nothing more affecting to a good mind, than to see the
distress of a poor nobility in both sexes. Some have proposed
trade for this class. Why do you not trade? I answer, for the nobility;
Because, in order to trade, I must have money. This objection
is unanswerable. Why then do you not apply to other
branches of industry? If it is the state who is supposed to ask
the question, I ask, in my turn, What advantage she can reap from
their industry? What profit from their becoming shop-keepers,
weavers, or taylors? Are not, or ought not all these classes to be
provided with hands from their own multiplication? What advantage
can she reap by the children of one class taking the bread out
of the mouths of another?
If the sentiments in which the nobility have been educated,
prove detrimental to the state, throw a discouragement upon them.
If birth is to be no mark of distinction, let it not be distinguished
by any particular privilege, which in appearance sets that class
above the level of those with whom the state intends they should
be incorporated. You do not make your valet de chambre get
behind your coach, though upon an occasion it might be convenient,
65and though perhaps he had been your footman the day before;
you would even turn him out of doors, did he not change his
company with his rank.
If you cannot afford to have a nobility, let it die away: grant, as
in England, the title of noble to one of a family, and let all the
rest be commoners; that is to say, distinguished by no personal privilege
whatsoever from the lowest classes of the people. But if
you want them to serve you as soldiers, and that they should preserve
those sentiments you approve of in a soldier, take care at
least of their children. If these appear to you poor and ragged,
while they are wandering up and down their fathers lands, chasing
a wretched hare or a partridge, compare them, when in the troops,
with those of your wealthy neighbours, if any such you have.
The establishment of an hôtel militaire shews at least that there are
people who lend an ear to such representations. I do not propose
that a prince should divert into that channel those streams of
wealth which flow from every part of the state, though nothing
is more reasonable than for men to pay in order to protect their
gains, but let a tax be imposed upon noble property, and let that
be applied for the education of the generous youth from their earliest
years. There the state will have all under her eye, they are
her children, her subjects, and they ask no more than to be taken
from the obscurity of their habitations, and rendered capable of
being employed while young and vigorous. When they have
done their task, the country which produced them will receive
them back into her warm bosom; there they will produce others
like themselves, and support the spirit and propagation of their
own class, without becoming any charge upon others.
A statesman should make it his endeavour to employ as many of
every class as possible, and when employment fails in the common
run of affairs, to contrive new outlets for young people of
every denomination. The old and idle are lost beyond recovery in
many particulars.
66The mutual relations likewise, through industry, between class
and class should be multiplied and encouraged to the utmost. Relations
by marriage, I am apt to believe, prove here more hurtful
than beneficial. That is to say, I would rather discourage the intermarriage
of the persons of different classes; but I would encourage,
as much as possible, all sorts of mutual dependencies between
them, in the way of their trades. The last tends to keep
every one employed, according to the wants and spirit of his
class; the first is productive in general of no good effect that I can
perceive; which is reason sufficient for a state to give at least no
encouragement to such marriages, and this is all the restraint proper
to be imposed.
Such members of the society as remain unemployed, either from
natural infirmities or misfortunes, and who thereby become a load
upon others, are really a load upon the state. This is a disease
which must be endured. There is no body, no thing, without diseases.
A state should provide retreats of all sorts, for the different
conditions of her decayed inhabitants: humanity, good policy, and
christianity, require it. Thus much may be said in general upon
the principles which direct the employment and distribution of
inhabitants, which in every state must be different, according to
circumstances relating to the extension, situation and soil of the
country, and above all, to the spirit of the people. I am next to
offer some considerations with regard to the proper methods of
augmenting numbers.
67
We have the happiness to live in an age where daily opportunities
offer, of perceiving the difference between exercising
an art according to the mechanical received practice, and according
to the principles which study and refinement have introduced
for bringing it to perfection. This will appear in the strongest
light to one who compares the operation of building an ordinary
house, with that of executing a great public work, where the
most able architects are employed; the making a common parish
road, with that of a military way, through mountains, forests,
and marshes. In the first, every difficulty appears unsurmountable:
in the second, the greatest obstacles are made to vanish. By comparing
these things, we distinguish between the artist, who proceeds
by the rules of the science, and the ordinary tradesman, who
has no other resource than common practice, aided by his own ingenuity.
Every branch of science must be carried to perfection by a master
in it, formed by the hand of nature, and improved by application
and experience. The great genius of Mr. de Colbert saw
through the confusion and perplexity of the administration of the
French finances; he invented resources for swelling the public
treasure, which never would have been liable to so many inconveniencies
as are complained of, had the administration been conducted
with as much disinterestedness, as it was set on foot with
ability. The genius of Mr. Law was original as to figures and
paper credit. Sir Robert Walpole discovered new principles of
68taxation, he extended the plan of public credit, and reduced the
application of it to a science. These were born statesmen, they
were creators of new ideas, they found out new principles for the
government of men, and led them by their interest to concur in
the execution of their plans. Men of a speculative disposition may
broach hints, although the force of theory, destitute of practice, and
unassisted by experiment, be not sufficient to carry them the length
of forming a plan. A great genius, with power and authority,
has occasion for no more than a hint to strike out the system, and
to carry it, with success, into execution.
No problems of political oeconomy seem more obscure than those
which influence the multiplication of the human species, and
which determine the distribution and employment of them, so as
best to advance the prosperity of each particular society.
I have no where found these matters treated to my wish, nor
have I ever been able to satisfy myself concerning them. There
are many clouds which still cover the fruitful fields of this science;
and until these be dissipated, the political eye cannot take in the
whole landscape, nor judge of the deformities which appear in
the many representations which our modern painters are daily
giving of it.
I may here, without an imputation of vanity, put myself so far
upon a level with the great Montesquieu, as to adopt the saying of
Correggio, Io anche son pittore; I am also a dawber; for I frankly
acknowledge my own insufficiency to treat this subject with perspicuity:
my frequent repetitions, and my often returning to it at
different times, in order to clear up my ideas and those of my
readers, shews plainly, that I am sensible of my own insufficiency.
By setting it in different lights, and viewing it as it were from
different stations, perhaps both my reader and I may come at last
to see a little clearer.
In a former chapter, I have endeavoured to lay down the principles
which influence multiplication; but alas! they are all so
general, that they can be considered only as the most remote.
69They may satisfy a slight speculation, but can be of little use in
practice. I have principally insisted upon those which are found
to operate at all times among societies where primitive simplicity
prevails. Now this matter comes to be examined in a more complex
light, as relative to the modern manners of mankind, which
no statesman, however able, can change, where trade, industry,
luxury, credit, taxes, and debts, are introduced. In these the
most polite nations of Europe are involved. This is a chain of
adamant, it hangs together by a cohesion, which the successive
revolutions of three centuries have so cemented with the spirit of
nations, that it appears to be indissoluble. It is not my business
to examine how far the modern system is to be preferred to the
antient; my point of view is, to investigate how a statesman may
turn the circumstances which have produced this new plan of
oeconomy to the best advantage for mankind, leaving the reformation
of such plan to time and events, of which I am not the master.
Schemes of recalling antient simplicity, and of making mankind
honest and virtuous, are beautiful speculations: I admire
them as much as any body, but not enough to believe them practicable
in our degenerate age.
If therefore the principles I here lay down appear contradictory
to so amiable a system of policy, let no man thence conclude any
thing to my disadvantage upon the account of my particular opinion
of it, which is a matter of no importance whatsoever. My
object is to examine the consequences of what we feel and see
daily passing, and to point out how far the bad may be avoided,
and the good turned to the best advantage.
The loss of antient simplicity, and the introduction of this complicated
scheme of living, has rendered the mechanism of government
infinitely more difficult, and almost every disorder in the
political body affects multiplication. Depopulation is as certain a
mark of political diseases, as wasting is of those in the human
body. The increase of numbers in a state shews youth and vigour;
70when numbers do not diminish, we have an idea of manhood, and
of age when they decline.
The importance of the subject therefore requires me to bring it
once more upon the carpet, in order to inquire into the proper
methods of restoring and preferring youth, and of diffusing vigour
into every articulation, into every vein, into every nerve, as
I may say, of a modern society.
In the republic of Lycurgus an unmarried man met with no respect;
because no reason but debauchery could prevent his marrying.
Marriage was no load in a state where all were fed and taken
care of at the public charge. A Spartan who did not marry, was
considered as one who refused to contribute towards recruiting of
the army, only to gratify a vicious habit.
The jus trium liberorum, and the other encouragements given by
Augustus Cæsar to engage the Romans to marry, were calculated
chiefly for the nobility, and only for the citizens, but not at
all for the inferior class (the slaves) bound to labour. The vice to
be corrected, and that which the emperor had in his eye in those
institutions, was the prodigal and dissolute life of rich men who
lived in celibacy. This affected the Roman state, and deprived it
of its principal force, the military power, the equites. Judge of
the force of this class by the numbers of them destroyed at Cannæ.
In those days, the chief encouragement to multiplication was to
be directed towards the higher classes; the lower classes of the
people (by far the most numerous in all countries and in all ages)
were easily recruited, by the importation of slaves, as they are
now in the West-Indies, where, consequently, the same principle
must naturally operate, which fixed the attention of the wise emperor.
The state of affairs in Europe, and in England particularly,
is changed entirely, by the establishment of universal liberty.
Our lowest classes are absolutely free; they belong to themselves,
and must bring up their own children, else the state becomes depopulated.
There is no resource to us from importation, whether
by ships, or acts of parliament for naturalization. We shall
71always have a numerous and free common people, and shall constantly
have the same inconveniencies to struggle with, as long as
the lowest classes remain in such depression as not to be able to support
their own numbers. Here then lies the difficulty. In order
to have a flourishing state, which Sir William Temple beautifully
compared to a pyramid, we must form a large and solid basis of
the lowest classes of mankind. As the classes mount in wealth, the
pyramid draws narrower until it terminate in a point, (as in monarchy)
or in a small square, as in the aristocratical and mixed governments.
This lowest class therefore must be kept up, and, as
we have said, by its own multiplication. But where every one lives
by his own industry, a competition comes in, and he who works
cheapest gains the preference. How can a married man, who has
children to maintain, dispute this preference with one that is single?
The unmarried therefore force the others to starve; and the basis
of the pyramid is contracted. Let this short sketch of a most important
part of our subject suffice at present; it shall be taken up
and examined at more length, in the chapter of physical necessaries,
or natural wants.
From this results the principal cause of decay in modern states:
it results from liberty, and is inseparably connected with it.
Several modern writers upon this subject, recommend marriage,
in the strongest manner, to all classes of inhabitants; yet a parish
priest might, properly enough, not be warranted to join a couple
unless they could make it appear that their children were not likely
to become a burden to the parish. Could any fault be found, reasonably,
with such a regulation? Those who are gratuitously fed
by others are a load upon the state, and no acquisition, certainly,
so long as they continue so. Nothing is so easy as to
marry; nothing so natural, especially among the lower sort. But
as in order to reap, it is not sufficient to plow and to sow, so in
order to bring up children, it is not sufficient to marry. A nest is
necessary for every animal which produces a helpless brood: a house
72is the nest for children; but every man who can beget a child cannot
build or rent a house.
These reflections lead me to make a distinction which I apprehend
may be of use in clearing up our ideas concerning population. Let
me therefore consider the generation of man in a political light,
and it will present itself under two forms. The one as a real multiplication;
the other only as procreation.
Children produced from parents who are able to maintain them,
and bring them up to a way of getting bread for themselves, do
really multiply and serve the state. Those born of parents whose
subsistence is precarious, or which is proportioned only to their own
physical necessary, have a precarious existence, and will undoubtedly
begin their life by being beggars. Many such will perish for want
of food, but many more for want of ease; their mendicity will be
accompanied with that of their parents, and the whole will go to
ruin; according to the admirable expression of the Marechal de
Vauban, in his Dixme Royale. La mendicité, says he, est un mal qui
tue bientot son homme. He had many examples of the truth of it before
his eyes; whoever has not, must have seen little of the world.
When marriage is contracted without the requisites for multiplication,
it produces a procreation, attended with the above mentioned
inconveniencies; and as by far the greater part of inhabitants
are in the lower classes, it becomes the duty of a statesman to
provide against such evils, if he intends, usefully, to increase the
number of his people.
Every plan proposed for this purpose, which does not proceed
upon an exact recapitulation of the inhabitants of a country, parish
by parish, will prove nothing more than an expedient for walking
in the dark. Among such recapitulations or lists I would recommend,
as an improvement upon those I have seen in the Marechal
de Vauban’s excellent performance above cited, and in the states of
his Prussian Majesty, or elsewhere, to have one made out, classing all
the inhabitants, not only by the trades they exercise, but by those
73of their fathers, with a view to distinguish those classes which multiply,
from those which only procreate. I should be glad also to
see bills of mortality made out for every class, principally to compare
the births and deaths of the children in them.
Let me take an example. Suppose then, that I have before me a
general recapitulation of all the inhabitants of a country, parish
by parish, where they may appear distributed under the respective
denominations of their fathers’ employment. I shall immediately
find a considerable number produced from the higher classes, from
those who live upon an income already provided, and upon branches
of industry which produce an easy and ample subsistence. These
have no occasion for the assistance of the state in bringing up their
children, and you may encourage marriage, or permit celibacy in
such classes, in proportion to the use you find for their offspring
when they are brought up. When I come to the lower classes, I
examine, for example, that of shoemakers, where I find a certain
number produced. This number I first compare with the number
of shoemakers actually existing, and then with the number of marriages
subsisting among them, (for I suppose recapitulations of every
kind) from which I discover the fertility of marriage, and the success
of multiplication in that part. When the state of the question
is examined, class by class, I can decide where marriage succeeds,
and where it does not. I have said, that I imagine it an advantage
that every class should support at least its own numbers; and
when it does more, I should wish (were it possible) that the higher
classes might be recruited from the lower, rather than the lower
fromfrom the higher; the one seems a mark of prosperity, the other of
decay: but I must confess that the first is by far the most difficult
to be obtained.
According therefore to circumstances, and in consistence with
these principles, I would encourage marriage by taking the children
off the hands of their parents. Where marriage succeeds the
worst, if it happens to be in a very low class, great encouragement
should be given to it: perhaps the whole should be taken care of.
74Certain trades may be loaded with one child, others with two, and
so progressively. But of this, more in another place. I beg it may
not here be imagined that I propose, that the whole of the lower
classes of people are to marry and propagate, and that the state is
to feed all their offspring. My view extends no farther, than to be
assured of having such a number of children yearly taken care of
as shall answer the multiplication proposed, and that these be proportionally
raised from each class, and from each part of the country,
and produced from marriages protected by the state, distinguished
from the others, which under a free government must always be
found exposed to the inconveniencies of want and misery. To guard
against such evils ought to be another object of public care. Hospitals
for foundlings are an admirable institution; and colonies are
an outlet for superfluous inhabitants. But I insensibly enter into a detail
which exceeds my plan. To lay down a scheme, you must suppose
a particular state perfectly known. This lies beyond my reach, and
therefore I shall go no farther, but illustrate what I have said, by some
observations and reflections which seem analogous to the subject.
I have not here proposed plans of multiplication inconsistent with
the spirit of the nations with which I am a little acquainted; nor with
the religion professed in Europe, for many reasons, obvious to any
rational man. But principally, because, I believe, it will be found,
that a sufficient abundance of children are born already; and that
we have neither occasion for concubinage, nor polygamy, to increase
their numbers. But we want a right method of taking care
of those we have, in order to produce a multiplication proportioned
to the possibility of our providing nourishment and employment.
I have therefore proposed, that a statesman, well informed of the
situation of his people, the state of every class, the number of marriages
found in each, should say, let there be so many marriages
authorised in every class, distributed in a certain proportion for
every parish, city, burrow, &c. in the country; let rules be laid
down to direct a preference, in case of a competition, between different
couples; and let the consequence of this approbation be, to
75relieve the parents of all children above a certain number, as has
been said. I propose no new limitations upon marriage, because I am
a friend to liberty, and because such limitations would shock the
spirit of the times. I therefore would strongly recommend hospitals
for foundlings over all the country; and still more strongly
the frugal maintenance of children in such hospitals, and their
being bred up early to fill and recruit the lowest classes of the
people.
Mr. Derham has furnished some tables which shew the proportion
between marriages and births in England, to be as
1 to 4; that of births to burials as 1 12⁄100to 1: from which it appears
that multiplication there goes on, though slowly: a mark of
youth and vigour. Dr. Davenant values the augmentation at 9000
a year. Could matters be kept at that standard, I should prefer it
by far to a more rapid multiplication: it amounts to about a
million in a century (without entering into accumulations or exact
calculations) and the longer youth is preserved so much the better.
A rapid multiplication will stop at some period, and that stop,
which marks distress, must produce great inconveniencies.
These calculations extracted from very lame vouchers, shew
how necessary it is to have authentic recapitulations: since, lame
as they are, it is from these and the like, that Dr. Halley, and
others, have calculated the value of annuities, which (at a time
when all the states of Europe are borrowing money at the expence
76of every man’s private industry or property) ought to be valued at
their real worth. Now, in all these calculations of mortality, it appears
that what we have called the abuse of marriage or procreation
is included.
If it be true, as I think it is, from what I have seen and observed,
that numbers, especially of children, among the lower classes,
perish from the effects of indigence; either directly by want of
food, or by diseases contracted gradually from the want of convenient
ease; and that others perish for want of care, when the
slightest assistance of a surgeon to let them blood, would be sufficient
to preserve them against the inflammatory distempers to which
they are chiefly exposed.
If these things are so, must we not infer, that calculations formed
upon a conclusion drawn from the births and deaths of mankind
in general, cannot possibly be so exact as if the like were drawn
from those of every class of inhabitants taken separately.
It may here be answered, that among the rich and easy, there are
found diseases which sweep off numbers, in as great a proportion
as other distempers do of the poor: that we see very large families
brought up among the lowest classes, while a great man has
all the pains in the world to preserve a young boy from the wreck
of a number of children.
All this I agree may be true; but I should be glad to see in what
proportion it is so, and to be certain of the fact. I want to know
the diseases of the rich and of the poor; I want to have as particular
details of the births and deaths of every class, as I can have
of those of the cities of Paris, London, or Breslaw. I want to know
from what parents those multitudes of poor which I find every
where are sprung; and most of all to have such accounts from
different countries, where different manners prevail. For no just
conclusion can be drawn from the comparison of facts, without
examining circumstances. The most barren class in one country,
may be the most fruitful in another. As an example of this, let
77any one compare the state of marriage among the footmen of London
and of Paris.
I find error concealed every where under general propositions.
The children of the poor, says one, thrive better than those of the
rich. If it be so, it ought not to be so in common reason. But the
same person will tell you, I have made my son a merchant; he will
be a rich man. Why? Because (A B) was a merchant, who, from
nothing, died worth a hundred thousand pounds. But if you go
through all the letters of the alphabet following (A B), among those
who set out as he did, you will find, that perhaps every one of
them died a bankrupt. Those who prove successful are remarkable:
those who miscarry are never heard of. It is just so with
respect to the question before us. But to return to our tables, and
what are called calculations.
One marriage produces four children at a medium in England.
If you reckon 6,000,000 of people in that country, and that 1⁄30 part
dies annually, then to keep up the stock it is sufficient that 200,000
be annually born; add to this the yearly increase of 9000, the total
of births will then be 209,000: for if 200,000 die this year, and if
209,000 be born, this must certainly imply an increase of 9000, providing
we suppose the acquisition of foreigners to be equal to the
exportation of the natives. As this is only meant as an illustration,
I need not examine the matter of fact. The next question is, how
many marriages, properly contracted or encouraged as above, will
give this increase? For we may know that these subsisting in that
kingdom, joined with the effects of extramatrimonial conjunctions,
is just sufficient to produce it. I imagine that nothing but experiment
can give the solution of this question. Mr. King supposes
every 104th person in England to marry yearly, that is 57,682 persons,
or 28,841 couples. If this number of marriages be supposed
to subsist with fertility for seven years, producing a child every
year, the number of 200,000 births would be procured; but I apprehend
that marriages, rightly contracted, subsist much longer in
general than seven years, even with fertility, though not in proportion
78to a child every year: consequently, the number of marriages
constantly subsisting with fertility in England, where it is
supposed that 28,841 are yearly contracted, must be much greater
than seven times that number, or than 201,887201,887. If we suppose the
whole of the 209,000 births to be produced by marriages, at three
marriages to every child annually produced, then the number of
marriages subsisting will be 627,000. From these speculations (for I
do not pretend to call them calculations) I conclude, that the more
fruitful marriages are rendered (not with regard to procreation,
merely, but multiplication, which I have above distinguished) the
fewer become necessary; and the fewer unnecessary marriages are
contracted, the better for the state, and the less misery for those who
contract them. I shall here stop, and leave to the reader to draw
his conclusions, putting him in mind of the wide difference that is
always found between theory and practice.
From this reasoning I infer, that no exact judgment can be formed,
as to the numbers in any society, from the single datum of the annual
number of deaths among them; and although the just proportion
between numbers and deaths may exactly be determined in
one particular place, yet that proportion will not serve as a general
standard, and being taken for granted may lead to error.
Here are the reasons for my opinion.
Were no body to marry but such as could maintain their children,
the bills of births and burials would, I apprehend, diminish, and
yet numbers might remain as before; and were every body to marry
who could procreate, they certainly would increase, but still numbers
would never exceed the proportion of subsistence. Could we
but see bills of births and deaths for the city of Rome, while in all
its glory; or indeed for the sugar colonies in America, where slaves
are imported, adding the number of those imported to that of
births, and supposing the colony neither upon the growing nor the
declining hand, then the deaths and births would be equal; but
the proportion of them to all in the colony, I apprehend, would be
far less than in any state in Europe, where slavery does not prevail.
79It may be alledged, that were all to marry, the consequence
would be a great multiplication. I say not; or if it were, what sort
of multiplication would it be? A multitude of children who never
could come to manhood; or who would starve their parents, and
increase misery beyond expression. All therefore that can be learned
from bills of mortality, &c. is, that if the births exceed the deaths,
and that all remain in the country, numbers will increase; that
if the deaths exceed the births, numbers will diminish; but while
they stand at par, no conclusion can be drawn as to numbers in
general: these will be in a less proportion as abusive procreation
goes forward; and, vice versa, they will be in a greater. There still
hangs a cloud upon this subject: let me therefore reason upon an
example. Suppose the inhabitants of a country to stand at 6,000,000,
one thirtieth to die every year, and as many to be born, that is,
the births and burials to stand at 200,000; that every three marriages
subsisting produce a child every year, that is 600,000 marriages;
let the quantity of food be supposed the same, without a
possibility of being augmented. Would not the consequence be,
that numbers could not increase? Now let me suppose marriages
carried to 1,000,000, I say the effect would be, either that they
would become in general less fruitful, or if they suffered no diminution
in this particular, that the bills of births and deaths would
rise to 333,333; that is to say, they would be to the number of inhabitants
as 1 to 18, instead of being as 1 to 30. Now this increase
of mortality proceeding from want of food, either the old would
starve the young, or the young would starve the old; or a third case,
more probable than either, would happen, the rich would starve
the poor. What would be the consequences in all these three suppositions?
In the first, the number of 6,000,000 would be found to
diminish; because the proportion of large consumers would rise,
and mortality would increase among the children. In the second,
the standard number would augment, because the proportion of
small consumers would rise, and mortality would increase among
the parents. In the third, numbers would remain pretty much
80the same, but misery and distress would lay all the lower classes
waste. It is computed that one half of mankind die before the
age of puberty in countries where numbers do not augment; from
this I conclude, that too many are born. If methods therefore are
fallen upon to render certain diseases less mortal to children, all
the good that will be got by it, in general, will be to render old
people of the lower classes more wretched; for if the first are
brought to live, the last must die.
From these speculations I cannot help wishing to see bills of
mortality made out for different classes, as well as for different
ages. Were this executed it would be an easy matter to perceive,
whether the mortality among children proceeds from diseases to
which infancy is necessarily exposed, or from abusive procreation.
I am pretty much convinced before I see the experiment, that it
proceeds from the latter; but should experience prove it, the principles
I have laid down would acquire an additional force. In the
mean time, I must conclude, that it is not for want of marrying
that a people does not increase, but from the want of subsistence; and
it is miserable and abusive procreation which starves one half of
the whole, and is the fountain of so much wretchedness.
Upon the whole, I may say, that were it possible to get a view
of the general state of births and burials in every class of the inhabitants
of a country, marriage might surely be put upon a better
footing than ever it has been, for providing a determined number
of good and wholesome recruits every year towards national
multiplication. This is walking in the light, and is a means of
procuring whatever augmentation of hands you wish for. What
difficulties may be found in the execution, nothing but experience
can shew; and this, to a judicious eye, will point out the remedy.
In my opinion, this will be far better than a general naturalization,
which I take to be a leap in the dark. For however easy
it may be to naturalize men, I believe nothing is so difficult
as to naturalize customs and foreign habits; and the greatest blessing
any nation can enjoy, is an uniformity of opinion upon every
81point which concerns public affairs and the administration of them.
When God blesses a people, he makes them unanimous, and bestows
upon them a governor who loves them, and who is beloved,
honoured and respected by them; this, and this only, can create
unanimity.
Let this suffice at present, as to the distribution, employment,
and increase of a people. Upon the proper employment of the
free hands, the prosperity of every state must depend: consequently
the principal care of a statesman should be, to keep all
employed, and for this purpose he must acquire an exact knowledge
of the state of every denomination, in order to prevent any
one from rising above, or sinking below that standard which is best
proportioned to the demand made for their particular industry. As
the bad consequences resulting from the loss of this exact balance
are not immediate, a moderate attention, with the help of the proper
recapitulations, will be sufficient to direct him.
This and the two preceding chapters have in a manner wholly
treated of the employment of the free hands: I must now consider
the effects of an overcharge of those employed in agriculture.
Here we shall still discover inconveniencies, resulting from the
want of that just proportion in the distribution of classes, which
gives health and vigour to a state; and we shall see how it may
happen, that even an overcharge of inhabitants in general may
become a political disease; as an abundance of blood, however
rich and good, may affect the health of the human body.
82
I have taken notice above of two performances, wherein the
authors, with equal ability, have treated of the numbers of
mankind; a subject which has a very close connection with political
oeconomy.
Although (as I have said) I do not pretend to decide between
them as to the point in dispute, I find that in this chapter I shall
be naturally led into a chain of reasoning very contrary to that of
Mr. Wallace, which is a thing I should have dispensed with, did
not the merit of his performance in the eyes of the learned
world appear sufficient to draw my attention.
Agriculture is without all doubt the foundation of multiplication,
which must ever be in proportion to it; that is, to the earth’s productions,
as has been said. But it does not follow, that in proportion
to multiplication those produced must of course become
useful to one another, and useful to the society in general. Now
I consider multiplication as no otherwise useful to a state, than in
so far as the additional number becomes so, to those who are already
existing, whom I consider as the body-politic of the society.
If it therefore happens, that an additional number produced do
no more than feed themselves, then I perceive no advantage gained
to the society by their production. If, without rendering any
equivalent service, they are fed by others, there is a loss.
Agriculture may be said to be carried to its utmost extent, when
the earth is so laboured as to produce the greatest quantity of
fruits possible for the use of man; and in judging of the improvement
of two spots of ground of the same extent, that may be said
to be most improved which produces the greatest quantity of food:
but as to population, the question does not stop there; for let the
83quantity be equal on both, yet if the inhabitants of the one be more
frugal livers than those of the other, this circumstance alone will
make an inequality. If agriculture therefore be considered only with
respect to population, we must consider that country as the best
peopled, where productions are the most abundant, and where the
inhabitants are the most sober. Thus much with regard to the extent
of agriculture and population: we come now to consider the
inconveniencies which may result to a society from an over-stretch,
or from what I call an abuse of either the one or the other.
I call every thing an abuse in society which implies a contradiction
to the spirit of it, or which draws along with it an inconveniency
to certain classes, which is not compensated by the general
welfare.
The political oeconomy of government is brought to perfection,
when every class in general, and every individual in particular, is
made to be aiding and assisting to the community, in proportion to
the assistance he receives from it. This conveys my idea of a free
and perfect society, which is, a general tacit contract, from which reciprocal
and proportional services result universally between all those who compose
it.
Whenever therefore any one is found, upon whom nobody depends,
and who depends upon every one, as is the case with him
who is willing to work for his bread, but who can find no employment,
there is a breach of the contract, and an abuse. For
the same reason, if we can suppose any person entirely taken up
in feeding himself, depending upon no one, and having nobody
depending on him, we lose the idea of society, because there are
no reciprocal obligations between such a person and the other
members of the society.
Those who are for employing the whole of a people in agriculture
may answer, that all their time cannot be employed in this
occupation, and that in the intervals they may apply themselves to
supply reciprocal wants.
84I very readily agree, that any person, who would calculate his
labour in agriculture, purely for his own subsistence, would find
abundance of idle hours. But the question is, whether in good
oeconomy such a person would not be better employed in providing
nourishment for others, than in providing for any other want. When
he provides food, he surely provides for a want; and experience
shews, that it is better for a man to apply close to one trade, than
to turn himself to several.
Hence I conclude, that the best way of binding a free society together,
is by multiplying reciprocal obligations, and creating a general
dependence between all its members. This cannot be better
effected, than by appropriating a certain number of inhabitants,
for the production of the quantity of food required for all, and by
distributing the remainder into proper classes for supplying every
other want. I say farther, that this distribution is not only the
most rational, but that mankind fall naturally into it; and misery
attends and has ever attended those who have been found without
a particular employment.
It must not be concluded from this reasoning, that abuse is always
implied when we find any of the classes of the free hands
of a state casually employed in agriculture.
There is such a variety of circumstances in every country, that
without a peculiar talent of laying principles together, so as to answer
every combination, the most perfect theory which can be proposed
must appear defective.
In countries ill-improved, where industry begins to take root, we
are not to conclude, that good policy requires a sudden and immediate
separation between the dwellings of the husbandmen and
free hands. Sudden revolutions are constantly hurtful, and a good
statesman ought to lay down his plan of arriving at perfection by
gradual steps.
If he finds, as is the case of rude and uncivilized societies, that
many are occupied, partly, in providing subsistence for their own
85family, partly, in other useful pursuits, he may by degrees detach
as many as he can from every other branch of industry, except that
of agriculture. The most wealthy are the most proper to carry this
branch to any degree of perfection. The landed men ought to be
encouraged by every means to apply to the study of farming.
This employment has been considered as honourable in all ages of
the world, and very well suits the rank, the interest, and the
amusement of gentlemen.
The next step is to introduce manufactures into the country,
and to provide a ready market abroad for every superfluous part of
them. The allurement of gain will soon engage every one to pursue
that branch of industry which succeeds best in his hands. By
these means many will follow manufactures and abandon agriculture;
others will prosecute their manufactures in the country, and
avail themselves at the same time, of small portions of land, proper
for gardens, grass for cows, and even for producing certain
kinds of fruit necessary for their own maintenance.
This I do not consider as a species of farming. It is more properly,
in a political light, a sort of village life, only the village
here appears dispersed over a large extent; and I call it a village
life, because here the occupation of the inhabitants is principally
directed towards the prosecution of their trades: agriculture is
but a subaltern consideration, and will be carried on so far only,
as it occasions no great avocation from the main object. It will
however have the effect to parcel out the lands into small possessions:
a system admirably calculated for the improvement of the
soil, and advantageous to population, when the spirit of industry
is not thereby checked. This is not the casenot the case when such possessors apply
totally to agriculture, and content themselves with a bare subsistence
from it, without prosecuting any other branch of industry,
or forming any plan of ambition for themselves, or for their
children’s emerging from so circumscribed a sphere of life: from
this alone proceeds, in most countries, the inconveniency of a minute
subdivision of land property.
86We shall presently see, by various examples, the truth of this
proposition; and from what observations I have been able to make,
it appears, that a great inconvenience flows from it; the property
of the lands, and not the bare possession of them, is vested in the
lower classes. While they only remain as tenants, the interest of
the proprietor, on one hand, will lead him to incorporate these
small possessions into larger farms, the moment the possessors, by
relaxing from their principal occupation, (industry) are no longer
able to pay a rent above the value of the grounds when let in
farms; and the interest of these tenants, on the other hand, will
frequently lead them to abandon such small possessions, when the
prosecution of their industry demands a change of habitation.
Thus the interest of agriculture will go hand in hand with that of
industry, and classes will separate their habitations, according as
their respective interests require.
It is certainly the interest of every landlord, whose land is ill
improved, to multiply habitations upon it, providing he makes
choice of such people as can live by some other branch of industry
than bare agriculture: and, in many cases, it may be his advantage
to incorporate his lands into farms as soon as they are fully cultivated.
By this plan he will advance the improvement of his land; he
will multiply the useful inhabitants; and he will at the same time
share the profits of their industry beyond the value of the land
rent.
By these means has the woollen manufacture in England, and
the linen in Ireland and Scotland been greatly augmented. But as
the improvement of land goes on, this oeconomy will decline:
towns will swell in consequence of the principles we are now going
to deduce; the lands will become more thinly inhabited; and
farms will by degrees grow more extensive. I appeal to experience
for the justness of this opinion.
Hence it plainly appears, that, in every light this matter can be
represented, we still find it impossible to employ usefully above
a certain part of a people in agriculture. The next question is,
87how to determine the just proportion. For this purpose we must
have recourse to facts, not to theory. We have, in a former chapter,
examined the state of this question with regard to one country.
I shall here only add, that, in proportion to the culture of the soil,
and to the number of crops it is made to produce, a greater or less
number will be required; and in proportion to the surplus of food
above what is necessary to maintain the labourers, will a number
of free hands be provided for. If therefore a species of agriculture
can be found established, which produces little or no surplus,
there little or no industry can be exercised; few wants can be supplied:
this will produce a wonderful simplicity of manners, will
ruin the system of modern policy, and produce what I must call
an abuse. Let me look for some examples, in order to set this
question in a clearer light.
In the wine-provinces of France, we find the lands which lie
round the villages divided into very small lots, and there cultivation
is carried to a very extraordinary height. These belong in
property to the peasants, who cultivate the vines. No frugality
can be greater than in the consumption of this produce, and the
smallest weed which comes up among the grain, is turned to account,
for the food of animals. The produce of such lands, I may
say, is intirely consumed by the proprietor and his family, who
are all employed in the cultivation, and there is no superfluous
quantity here produced for the maintenance of others. Does not
this resemble the distribution of lands made by the Romans in
favour of 5000 Sabine families, where each received two plethra of
ground. [See Numbers of Mankind, p. 117.] Now let me examine
the political state of agriculture, and of other labour performed
by my French vine-dresser.
By the supposition we imply, that the bit of land is sufficient for
maintaining the man and his family, and nothing more; he has
no grain to sell, no food can by him be supplied to any other
person whatever; but the state of other lands capable of yielding
a surplus, such as the vineyard, produces a demand for his labour.
88This labour, considered with respect to the vine-dresser, is a fund
for providing all his wants in manufactures, salt, &c. and what is
over must be considered as his profits, out of which he pays the
royal impositions. The same labour, considered with regard to the
proprietor of the vineyard, enters into that necessary deduction out
of the fruits, which, when deducted, leaves the remainder, which
we call surplus, or what answers to the land rent. This belongs
to the proprietor, and becomes a fund for supplying all his wants.
Here we have an idea of society. The vine-dresser depends upon
the proprietor for the price of his labour; the proprietor upon
the vine-dresser for his surplus. But did we suppose all the kingdom
parcelled out, and laboured, as the spot which lies round the village,
what would become of the vine-dresser with regard to all his other
wants; there would be no vines to dress, no surplus nourishment
any where found, consequently no employment, not even life, for
those who had no land. From this example we discover the difference
between agriculture exercised as a trade and as a direct means
of subsisting, a distinction to be attended to, as it will very frequently
occur in the prosecution of our subject. We have the two species
in the vine-dresser: he labours the vineyard as a trade, and his
spot of ground for subsistence. We may farther conclude, that, as
to the last part, he is only useful to himself; but, as to the first, he
is useful to the society, and becomes a member of it; consequently,
were it not for his trade, the state would lose nothing,
though the vine-dresser and his land were both swallowed up by
an earthquake. The food and the consumers would both disappear
together, without the least political harm to any body: consequently,
such a species of agriculture is no benefit to a state; and
consequently, neither is that species of multiplication, implied by
such a distribution of property, any benefit. Thus an over-extension
of agriculture and division of lands becomes an abuse, and
so, consequently, does an over-multiplication.
Here I am obliged to conclude, that those passages of Roman authors
which mention the frugality of that people, and the small
89extent of their possessions cannot be rightly understood, without the
knowledge of many circumstances relative to the manners of those
times. For if you understand such a distribution of lands to have
extended over all the Roman territory, the number of the citizens
would have far exceeded what they appear to have been by
the Census, and even surpass all belief. But farther, I may be
allowed to ask, whether or no it be supposed that these frugal
Romans laboured this small portion of lands with their own hands
and consumed the produce of it? If I am answered in the affirmative,
(which is necessary to prove the advantages of agriculture’s being
exercised by all the classes of a people) then I ask, from whence
were the inhabitants of Rome, and other cities, subsistedsubsisted;
who fed the armies when in the field? If these were fed by foreign
grain imported, or plundered from their neighbours, where was
the advantage of this subdivision of lands, and of this extensive
agriculture, which could not feed the inhabitants of the state? If
it be said, that notwithstanding this frugal distribution of property
among the citizens, there was still found surplus enough to supply
both Rome and the armies, will it not then follow, that there was
no necessity for employing all the people in agriculture, since the
labour of a part might have sufficed.
That number of husbandmen, therefore, is the best, which can provide
food for all the state; and that number of inhabitants is the best, which is
compatible with the full employment of every one of them.
Idle mouths are only useful to themselves, not to the state; consequently,
are not an object of the care of the state, any farther than
to provide employment for them; and their welfare (while they
remain useless to others) is, in a free country, purely a matter of
private concern. Let me take another example for the farther
illustration of this matter.
Those who travel into the southern provinces of Spain, find large
tracts of land quite uncultivated, producing only a scanty pasture
for herds of the lesser cattle. Here and there are found interspersed
some spots of watered lands, which, from the profusion of every
90gift which nature can bestow, strike a northern traveller with an
idea of paradise. In such places villages are found, and numbers
of inhabitants. It must be allowed that industry and labour do not
here go forward as in other countries; but to supply this want
charity steps in. Charity in Spain (in proportion to its extent) is
as powerful a principle towards multiplication as industry and labour.
Whatever gives food gives numbers: but charity cannot extend
beyond superfluity, and this must ever be in proportion to industry.
These watered lands are well laboured and improved. The
value of them in one sense, is in proportion to their fertility, and
the surplus of the labourers should naturally be given for an equivalent
in money or work: but this equivalent cannot be found, because
the consumers have neither the one nor the other. If the
Spaniards, therefore, were not the most charitable people upon earth,
it is very plain that the labouring of these watered lands would
diminish, until it came upon a level with the wealth and industry
of the consumers. But here it is otherwise: labour goes on mechanically,
and without combination of circumstances, and the
poor live in ease, in proportion to the plenty of the year.
Here then is a third principle of multiplication. The first is
slavery, or a violent method of making mankind labour; the second
is industry, which is a rational excitement to it; the third is charity,
which resembles the manna in the desert, the gift of God upon
a very extraordinary occasion, and when nothing else could have
preserved the lives of his people. Whether, in all cases, this principle
of christianity advances the prosperity of a modern society
(when complied with from obedience to precept, without consulting
reason as to the circumstances of times and situations) is a question
which lies out of my road to examine. The action, considered in
the intention of the agent, must in every case appear highly beautiful,
and we plainly see how far it contributes to multiplication,
though we do not so plainly perceive how this again is advantageous
to society.
91Now if we examine the state of agriculture in the territory of this
Spanish village, we find, upon the whole, no more surplus of fruits
than upon the French vine dresser’s portion of land; consequently,
if all Spain was laboured and inhabited like this village and its small
garden, as it is called, it would be the most populous country in
the world, the most simple in the manner of living; but it never
could communicate the idea of a vigorous or a flourishing state.
It is the employment alone of the inhabitants which can impress
that character.
Now in this last example, what a number of free hands do we
find! are not all the poor of this class? Would it not be better if
all these by their labour could purchase their subsistence, than be
obliged to receive it in the precarious manner they do? Can one
suppose all these people industrious, without implying what I call
superfluity of labour? Is not this luxury, according to my definition
of it? Where would be the harm if the Spanish farmer, who gives
a third of his crop in charity, should in return receive some changes
of raiment, some convenient furniture for his house, some embellishment
to his habitation; these things would cost him nothing;
he would receive them in exchange for what he now gives from a
principle of charity, and those who have a precarious, would have
a certain livelihood. Let us travel a little farther in search of the
abuse of population.
In Germany, we find many small towns, formed into corporations,
which enjoy certain privileges. The freedom of such towns is
not easily purchased; and one, upon considering outward circumstances,
must be not a little surprized to hear of the sums refused,
when offered, to obtain it. Round these towns there is a small territory
divided into very small portions, and not able to maintain the
inhabitants: these lands therefore are infinitely overstocked with
husbandmen; for every proprietor, less or more, concerns himself
with the cultivation. Here, one who would aspire to extend his
possession would, according to the sentiment of Manius Curius Dentatus,
certainly be considered as a dangerous citizen, and a hurtful
92member of the society. Those lots are divided among the children
of the proprietors, who are free of the town, by which means they
are constantly splitting by multiplication, and consolidating by
death, and by marriage: these nearly balance one another, and
property remains divided as before. A stranger is at a loss to find
out the reason why the liberty of so poor a little town should be so
valuable. Here it is; first there are certain advantages enjoyed in
common, such as the privilege of pasture on the town lands, and
others of a like nature; but I find the charges which the burgesses
are obliged to pay, may more than compensate them. The principal
reason appears to be, that no one who has not the liberty of
the town, can settle in a way of industry so as to marry and have a
family: because without this his labour can only be directed towards
furnishing the wants of peasants who live in villages; these
are few, and little ingenuity is required for it. In towns there is
found a greater diversity of wants, and the people there have found
out mechanically, that if strangers were allowed to step in and supply
them, their own children would starve; therefore the heads of
the corporation, who have an interest to keep up the price of work,
have also an interest to hold the liberty of their town at a high value.
This appears to me a pretty just representation of the present
state of some towns I have seen, relative to the present object of
inquiry.
But as industry becomes extended, and trade and manufactures
are established, this political oeconomy must disappear.
Such a change, however, will not probably happen without the
interposition of the sovereign, and a new plan of administration; what
else can give a turn to this spirit of idleness, or rather, as I may
call it, of this trifling industry? Agriculture can never be a proper
occupation for those who live in towns: this therefore is an abuse
of it, or rather indeed an abuse of employment.
Ease and plenty can never enter a little town, but by the means
of wealth; wealth can never come in but by the produce of labour
going out; and when people labour purely for their own subsistence,
93they only make the little money they have circulate, but can acquire
nothing new; and those who with difficulty can maintain themselves,
can never hope to increase their numbers.
If in spite of the little industry set on foot in such towns, the
generative faculty shall work its effect and increase numbers, this
will make the poor parents still divide, and misery will ensue;
this again may excite compassion, and that will open the chests of
those who have a charitable disposition: hospitals are founded for
the relief of the poor, they are quickly filled, and as many necessitous
remain as ever. The reason is plain; the hospital applies a
palliative for the abuse, but offers no cure. A tree is no sooner discharged
of its branches than it pushes new ones. It has been said,
that numbers are in proportion to food; consequently, poor are in
proportion to charity. Let the King give his revenue in charity,
he will soon find poor enough to consume it. Let a rich man spend
100,000l. a year upon a table, he will find guests (the best in the
kingdom) for every cover. These things, in my way of considering
them, are all analogous, and flow from the same principle. And
the misery found in these little German towns, is another modification
of the abuse of population. These examples shew the inconveniencies
and abuses which result from a misapplication of inhabitants
to agriculture, which produces a population more burthensome
than beneficial to a modern state.
If the simplicity of the antients is worthy of imitation, or if it
appears preferable to the present system, which it is not my business
to decide, then either slavery must be introduced to make those
subsist who do not labour, or they must be fed upon charity. Labour
and industry can never, I think, be recommended on one hand,
and the effects of them proscribed on the other. If a great body of
warlike men (as was the case in Sparta) be considered as essential to
the well being of the state; if all trade and all superfluity be forbid
amongst them, and no employment but military exercises allowed;
if all these warriors be fed at public tables, must you not either
have a set of helotes to plow the ground for them, or a parcel of
charitable Spanish farmers to feed them gratis.
94Thus much I have thought might be of use to say to illustrate
the principles I have laid down. I find these very contrary to the
reasoning which runs through the whole of the performance which
I mentioned above, and which I have had in my eye. A more particular
examination of it might be useful, and even amusing; but
it would engage me in too long a disquisition for the nature of this
work. I cannot however help, in this place, adding one observation
more, in consequence of our principles, which seems contrary to the
strain of our ingenious author’s reasoning. I say seems, because almost
all difference of opinion upon such subjects proceeds from the defect
of language in transmitting our ideas when complex or abstract.
The effect of diseases which sweep off numbers of people does
not essentially diminish population, except when they come suddenly
or irregularly, any more than it would necessarily dispeople
the world if all mankind were to be swept off the stage at the age of
forty six years. I apprehend that in man, as in every other animal,
the generative faculty is more than able to repair all losses occasioned
by regular diseases; and I have shewn, I think, more than
once, that multiplication never can stop but for want of food.
As long then as the labour of man can continue annually to produce
the same quantity of food as at present, and that motives
are found to make him labour, the same numbers may be fed,
and the generative faculty, which from one pair has produced so
many millions, would certainly do more than keep up the stock,
although no person were to pass the age above mentioned. Here
is the proof: was the life of man confined to forty six years, the
state of mortality would be increased in the proportion which those
who die above forty six bear to those who die under this age. This
proportion is, I believe, as 1 to 10, consequently, mortality would
increase 1⁄10, consequently, numbers would be kept up by 1⁄10 increase
upon births; and surely the generative faculty of man far exceeds
this proportion, when the other requisites for propagation, to wit,
food, &c. are to be found, as by the supposition.
95
A letter from Dr. Brakenridge, F. R. S. addressed to George
Lewis Scott, Esq; which I found in the Danish Mercury
for March 1758, furnishes me with a very good opportunity
of applying the principles we have been laying down to the
state of population in Great-Britain. I shall therefore, according
to my plan, pass in review that gentleman’s opinion, without entring
upon any refutation of it. I shall extract the propositions
he lays down, examine the conclusions he draws from them, and
then shew wherein they differ from those which result from the
theory established in this inquiry.
The author’s calculations and suppositions as to matters of
fact shall be taken for granted, as I believe the first are as good as
any that can be made, upon a subject where all the data required
for solving the problem are quite a piece of guess-work.
I must follow the Mercury, not having the original.
Prop. I. After a very close examination, says our author, I find,
that our islands gain, as to population, absolutely no more than
what is requisite for repairing their losses, and that, in England itself,
numbers would diminish, were they not recruited from Ireland
and Scotland.
Prop. II. Men, able to carry arms, that is from 18 to 56 years,
make, according to Dr. Halley, the fourth part of a people; and
when a people increase in numbers, every denomination, as to age,
increases in that proportion: consequently in England, where the
number of inhabitants does not exceed six millions, if the annual
augmentation upon the whole do not exceed 18,000, as I am pretty
96sure it does not, the yearly augmentation of those fit to carry arms
will be only 4,500.
Prop. III. In England, burials are to births, as 100 is to 113. I
suppose that, in Scotland and Ireland, they may be as 100 is to 124.
And as there may be, in these two last kingdoms, about two millions
and a half of inhabitants, the whole augmentation may be
stated at 15,000; and consequently that, of such as are fit to
carry arms, at 3,750. Add this number to those annually produced
in England, and the sum total of the whole augmentation in the
British isles will be about 8,250.
Prop. IV. The strangers, who arrive in England, in order to
settle, are supposed to compensate those who leave the country with
the same intent.
Prop. V. It is out of this number of 8,250, that all our losses
are to be deduced. If the colonies, wars, and navigation, carry off
from us annually 8,000 men, the British isles cannot augment in
people: if we lose more, numbers must diminish.
Prop. VI. By calculations, such as they are, our author finds,
that, upon an average of 66 years, from 1690 to 1756, this number
of 8000 have been annually lost, that is, have died abroad in
the colonies, in war, or on the account of navigation.
Prop. VII. That, since the inhabitants of Britain and Ireland
are about 8,000,000, and that the augmentation is annually about
8000, we may conclude in general for all Europe, that, for every
million of inhabitants, there is an annual augmentation of 1000;
consequently, every thousand men slain in war must destroy all
the augmentation of a million of inhabitants during a year. Consequently
France, which contains 14 millions, according to Sir
William Petty, having lost above 14,000 men a-year, during the
same 66 years, cannot have augmented in population.
Prop. VIII. That the progress of trade and navigation augmenting
the loss of people by sea, must consequently have diminished
population over all Europe.
97Prop. IX. The exportation of our corn proves what the above
propositions have demonstrated. For supposing the progress of
agriculture to compensate the additional quantity distilled of late
years, there is still 1⁄6 of the crop exported, which proves that our
numbers are small, and that they do not augment.
From these propositions our author concludes, that what stops
multiplication in the British isles is, 1st, That living in celibacy is
become a-la-mode: 2dly, That wars have been carried on beyond
the nation’s force: 3dly, That the use of spirituous liquors destroys
great numbers of inhabitants.
I shall now shortly apply the principles I have been laying
down, in order to resolve every phenomenon here described, as
to the population of Great Britain. These I shall willingly take
for granted, as it is of no consequence to my reasoning, whether
they be exact or not: it is enough that they may be so; and the
question here is only to account for them.
England, says he, would diminish in numbers, were it not recruited
from Scotland and Ireland. This, I say, is a contingent,
not a certain consequence: for did those grown-up adventurers
cease to come in, the inhabitants of England themselves would
undoubtedly multiply, provided an additional number of breeders
could be found, able to bring up their children. Now the importation
of grown men into a country in so far resembles the importation
of slaves into our colonies, that the one and the other
diminishes the price of labour, and thereby prevents marriage
among certain classes of the natives, whose profits are not sufficient
for bringing up a family: and when any such do marry notwithstanding,
they do not multiply, as has been said. Now were
the Scots and Irish to come no more into England, the price of
labour would rise; those who now cannot bring up children,
might then be enabled to do it, and this would make the English
multiply themselves; that is, it would augment the number of
their own breeders. On the other hand, did the price of labour
continue too low to prove a sufficient encouragement for an additional
98number of English breeders, the contingent consequence
would take place; that is, numbers would diminish, according to
our author’s supposition, and the exportation of grain would increase,
in proportion to that diminution; and did foreign demand
for grain also diminish, then agriculture would suffer, and every
thing would decline: but of this more as we go along.
The representation he gives of the state of population in these
countries, is one modification of what I have called a moral incapacity
of a people’s increasing in numbers. It is just so in Africa,
where the inhabitants are sold; just so in Switzerland, and in many
mountainous countries, where inhabitants desert, in order to
seek their fortunes elsewhere. The national stock remains at an
equal standard, and the augmentation upon births above burials is
constantly in proportion to the exportation of inhabitants. Let this
proportion rise ever so high, an increase of national population is
noways essentially to be implied from this phenomenon alone,
but must proceed from other causes.
I can find nothing advanced by our author to prove, or even to
induce one to believe, that had the lives of those eight thousands
been yearly preserved from extraordinary dangers, numbers would
have augmented. England enjoyed in a manner 26 years peace
after the treaty of Utrecht. For many years before, a very destructive
war had been carried on. Had the bills of births been produced
from 1701 to 1713, had they been compared with those from
this last period to 1739, when the Spanish war began, had we
seen a gradual augmentation from year to year during those last
26 years, such as might be expected from the preservation of a
considerable number at least of the 8,250 able healthy men, just in
the period of life fit for propagation, one might be tempted to
conclude, that the preceding war had done hurt to population, by
interrupting the propagation of the species. But if, by comparing
the bills of births for a considerable number of years, in war and
in peace, one can discover no sensible difference, it is very natural
to conclude, either that those wars did not destroy many breeders,
99or that others must have slipt in directly, and bred in the place of
those who had been killed. What otherwise can be the reason
why the number which our author supposes to have been destroyed
abroad, should so exactly compensate the annual augmentation,
but only that those nations are stocked to the full proportion of
their subsistence: and what is the reason why, after a destructive
war, which, by the suddenness of the revolution, sweeps off numbers
of the grown men, and diminishes the original stock, numbers
should in a few years get up to the former standard, and then
stop a-new.
From our author’s representation of the bills of births and deaths,
I should be apt to suspect, in consequence of my principles, that
upon a proper examination it would be found, that, in those years
of war, the proportion of births to deaths had been higher than
in years of peace, because more had died abroad. And, had the
slaughter of the inhabitants gone gradually on, increasing every
year beyond the 8,250, I am of opinion, that the proportion of
births might very possibly have kept pace with it. On the contrary,
during the years of peace, the proportion should have diminished,
and had nobody died out of the country at all, the births
and deaths would have become exactly equal.
From what I have here said, the reader may perceive, that it is
not without reason that I have treated the principles relating to
my subject in general, and that I avoid as much as possible to reason
from facts alledged as to the state of particular countries.
Those our author builds upon may be true, and may be false: the
proportion of births and deaths in one place is no rule for another;
we know nothing exactly about the state of this question in
the British isles; and it may even daily vary, from a thousand circumstances.
War may destroy population as well as agriculture,
and it may not, according to circumstances. When the calamity falls
upon the breeders, and when these are supposed the only people
in the country in a capacity of bringing up their children, births
will soon diminish. When it destroys the indigent, who cannot
100bring up their children, or who do not marry, births will remain
the same. The killing the wethers of a flock of sheep does not
diminish the brood of lambs next year; the killing of old pigeons
makes a pigeon-house thrive. When the calamity falls upon the
farmers, who make our lands produce, agriculture is hurt, no
doubt: does it fall upon the superfluities of cities, and other classes
of the free hands, it may diminish manufacturers, but agriculture
will go on, while there is a demand for its produce; and if a
diminution of consumption at home be a consequence of the war,
the augmentation upon exportation will more than compensate it.
I do not find that war diminishes the demand for subsistence.
The long wars in Flanders in the beginning of this century interrupted
agriculture now and then, but did not destroy it. That
in the Palatinate in the end of the last ruined the country so, that
it has hardly as yet recovered it. War has different effects, according
to circumstances.
Obj. The population of the British isles is not stopt for want of
food, because one-sixth part of the crop is annually exported.
I answer, That it is still stopt for want of food, for the exportation
only marks that the home demand is satisfied; but this does not
prove that the inhabitants are full fed, although they can buy no
more at the exportation-price. Those who cannot buy, are exactly
those who I say die for want of subsistence: could they buy,
they would live and multiply, and no grain perhaps would be exported.
This is a plain consequence of my reasoning; and my
principal point in view throughout this whole book, is to find out
a method for enabling those to buy who at present cannot, and
who therefore do not multiply; because they can give no equivalent
to the farmers for their superfluity, which consequently they
export. By this application of our principles, I have no occasion
to call in question our author’s facts. It is no matter what be the
state of the case: if the principles I lay down be just, they must
resolve every phenomenon.
101
This question comes immediately under the influence of the
principles already laid down, and must be resolved in consequence
of them. It is with a view to make the application of
these, that I have proposed it; and, in the examination, we shall
prove their justness, or discover their defects.
It may be answered in general, that every such difference must
proceed from what I call the spirit of the government and of the
people, which will not only decide as to numbers, but as to many
other things. I must however observe, that the question in itself
is of little importance, if nothing but numbers be considered;
for of what consequence is it to know how many people are in a
country, when the employment of them does not enter into the
inquiry? Besides, it is only by examining the employment of a
people, that I can form any judgment as to this particular. But
as the numbers of mankind have been thought a point worthy of
examination, I have chosen this title for a chapter, which might
perhaps have more properly stood under another.
While slavery prevailed, I see no reason to conclude against the
numbers of mankind, as I have said already: when slavery was
abolished, and before industry took place, if my principles be true
that period I think should mark the time of the thinnest population
in Europe; for I believe it will be found, that there never
was an example of a country, however fertile by nature, where
every one was absolutely free; where there was little or no industry,
nor labour, but in agriculture; and where, at the same
time, there were many inhabitants, not beggars, nor living upon
charity. I have mentioned this so often, that I am afraid of tiring
102my reader with useless repetitions. I have brought it in here,
only to give him an opportunity of applying this principle to the
solution of the question before us.
I shall begin my inquiry by asking what is understood by a
country’s being populous; for that term presents different ideas,
if circumstances are not attended to. I have heard it said, that
France was a desert, and that there was nobody found in it but in
towns; while in England one cannot travel half a mile without
finding a farm, perhaps two together; and in looking round, one
sees the whole country divided into small possessions. The difference
here found, I apprehend, decides nothing in favour of, or
against the real populousness of the one or the other, but proceeds
entirely from circumstances relative to agriculture, and to
the distribution of free hands. These circumstances will be better
understood from the examination of facts, than from the best
theory in the world. Let one consider the state of agriculture in
Picardy and in Beauce, and then compare it with the practice in
many provinces in England, and the contrast will appear striking.
Were there more forest in England, to supply the inhabitants with
fuel, I imagine many inclosures, useful at first for improving
the grounds, would be taken away, and the country laid more
open; were wolves less common in France, there would be found
more scattered farms. Cattle there must be shut up in the night,
and cannot be left in the fields; this is a great discouragement to
inclosing. Where there are no inclosures, there are few advantages
to be found from establishing the farm-house exactly upon
the spot of ground to be laboured; and then the advantages which
result to certain classes of inhabitants, from being gathered together,
the farmers with the tradesmen, are found to preponderate.
Thus the French farmers are gathered into villages, and the English
remain upon their fields. But farther, in Picardy and Beauce agriculture
has been long established, and, I imagine, that, at the
time when lands were first broken up, or rather improved, their
habitations must have been closer together.
103This drawing together of inhabitants must leave many ruinous
possessions, and this, by the by, is one reason why people cry out
upon the desolation of France, because ruinous houses (which may
often times be a mark of improvement, not of desertion) are found
in different places in the country. Paris has grown considerably in
bulk, and from this it naturally happens, that the country round
is purged of idle mouths. If this makes labour dear in the country,
it is the city alone which suffers by it, the country must certainly
be the gainers. So much for two species of population in two of
the best inhabited countries of Europe. I now come to another in
one of the worst.
In some countries you find every farm-house surrounded with
small huts, possessed by numbers of people, supposed to be useful
to the farmer. These in Scotland are called cottars, (cottagers) because
they live in cottages. If you consider them in a political
light, they will appear to be inhabitants appropriated for agriculture.
In one sense they are so, if by that you understand the gathering
in of the fruits; in another they are not, if by agriculture
you understand the turning up the surface. I bring in this example,
and shall enlarge a little upon it, because I imagine it to be, less or
more, the picture of Europe 400 years ago.
The Scotch farmer must have hands to gather in a scanty produce,
spread over a large extent of ground. He has six cottars, I shall suppose;
but these cottars must have wives, and these wives will have
children, and all must be fed before the master’s rent can be paid.
It never comes into the cottar’s head to suppose that his children
can gain money by their labour; the farmer never supposes that it
is possible for him to pay his rent without the assistance of his
cottars to tend his cattle, and gather in his crop; and the master
cannot go against the custom of the country, without laying his
land waste. All these children are ready at the farmer’s disposal;
he can, without any expence, send what parcels of sheep he
pleases, to different distances of half a mile or more, to feed upon
spots of ground which, without the conveniency of these children,
104would be entirely lost. By this plan of farming, landlords who
have a great extent of country which they are not able to improve,
can let the whole in a very few farms, and at the same time all the
spontaneous produce of the earth is gathered in and consumed. If
you compare the rent of these lands with the extent, it appears very
small; if you compare it with the numbers fed upon the farm,
you will find that an estate in the highlands maintains, perhaps,
ten times as many people as another of the same value in a good
and fertile province. Thus it is in some estates as in some convents
of the begging order, the more mouths the better cheer.
I shall now suppose our modern policy to inspire an ingenious or
public spirited lady to set up a weaver or two at a farm-house. The
cottars begin to spin; they will be a long time in attaining to a dexterity
sufficient to appear at the weaver’s house, in competition with
others who are accustomed to the trade; consequently this manufacture
will be long in a languishing condition; but if the undertaking
is supported with patience, these obstacles will be got the
better of. Those who tended herds of cattle for a poor maintenance,
will turn themselves to a more profitable occupation; the farmer
will find more difficulty in getting hands, he will complain, perhaps
give way; the master will lose a year’s rent, and no body will
take so extensive a farm; it must be divided, then it must be improved,
and then it produces more grain upon one tenth, than perhaps
formerly was produced upon the whole. This grain is bought
with the price of spinning; the parents divide with the children,
who are fed, and spin in their turn. When this is accomplished,
what is the revolution? Why, formerly the earth fed all the inhabitants
with her spontaneous productions, as I may call them;
now more labour is exercised upon turning up her surface, this she
pays in grain, which belongs to the strong man for his labour and
toil; women and children have no direct share, because they have
not contributed thereto, as they did in feeding cattle. But they
spin, and have money to buy what they have not force to produce;
105consequently they live; but as they become useless as cottars, they
remove from their mother earth, and gather into villages. When
this change is effected the lands appear less inhabited; ruinous
huts (nay, villages I may call them) are found frequently, and
many would be apt to conclude, that the country is depopulated;
but this is by no means found to be the case, when the whole is
taken together.
The spirit therefore of the principal people of a country determines
the employment of the lower classes; the employment of
these determines their usefulness to the state, and their usefulness,
their multiplication. The more they are useful, the more they gain,
according to the definition of the contract of society; the more they
gain, the more they can feed; and consequently the more they will
marry and divide with their children. This increases useful population,
and encourages agriculture. Compare the former with
the present situation, as to numbers, as to ease, as to happiness!
Is it not plain, that when the earth is not improved it cannot produce
so much nourishment for man as when it is? On the other
hand, if industry does not draw into the hands of the indigent,
wherewith to purchase this additional nourishment, no body will
be at a considerable first expence to break up grounds in order to
produce it. The withdrawing therefore a number of hands from
a trifling agriculture forces, in a manner, the husbandman to work
the harder; and by hard labour upon a small spot, the same effect
is produced as with slight labour upon a great extent.
I have said, that I imagined the state of agriculture in the Scotch
farm, was a pretty just representation of the general state of Europe
about 400 years ago: if not in every province of every country, at
least in every country for the most part. Several reasons induce me
to think so: first, where there is no industry, nothing but the earth
directly can feed her children, little alienation of her fruits can
take place. Next, because I find a wonderful analogy between the
way of living in some provinces of different countries with what I
have been describing. Pipers, blue bonnets, and oat meal, are
106known in Swabia, Auvergne, Limousin, and Catalonia, as well as
in Lochaber: numbers of idle, poor, useless hands, multitudes of
children, whom I have found to be fed, no body knows how,
doing nothing at the age of fourteen, keeping of cattle and going
to school, the only occupations supposed possible for them. If you
ask why they are not employed, they tell you because commerce is
not in the country: they talk of commerce as if it was a man, who
comes to reside in some countries in order to feed the inhabitants.
The truth is, it is not the fault of these poor people, but of those
whose business it is to find out employment for them.
Another reason I derive from the nature of the old tenures, where
we find lands which now produce large quantities of grain, granted
for a mere trifle, when at the same time others in the neighbourhood
of cities and abbies are found charged with considerable
prestations. This I attribute to the bad cultivation of lands at that
time, From which I infer, a small population. In those days of
trouble and confusion, confiscations were very frequent, large tracts
of lands were granted to the great lords upon different revolutions,
and these finding them often deserted, as is mentioned in history,
(the vassals of the former, being either destroyed or driven out to
make place for the new comers) used to parcel them out for small
returns in every thing but personal service. Such sudden and violent
revolutions must dispeople a country; and nothing but tranquillity,
security, order and industry, for ages together, can render
it populous.
Besides these natural causes of population and depopulation
(which proceed, as we have observed, from a certain turn given to
the spirit of a people) there are others which operate with irresistible
force, by sudden and violent revolutions. The King of Prussia, for
example, attempted to people a country all at once, by profiting of
the desertion of the Saltzburgers. America is become very poorly
peopled in some spots upon the coast, and in some islands, at the
expence of the exportation of millions from Europe and from Africa;
such methods never can succeed in proportion to the attempt. Spain,
107on the other hand, was depopulated by the expulsion of its anti-christian
inhabitants. These causes work evident effects, which
there is little occasion to explain, although the more remote consequences
of them may deserve observation. I shall, in another
place, have occasion to examine the manner of our peopling America.
In this place, I shall make a few observations upon the depopulation
of Spain, and finish my chapter.
That country is said to have been antiently very populous under
the government of the Moors. I am not sufficiently versed in the
politics, oeconomy and manners of that people, to judge how far
these might be favourable to population: what seems, however, to
confirm what we are told, is, the large repositories they used for
preserving grain, which still remain entire, though never once
made use of. They watered the kingdoms of Valencia, Murcia and
Granada. They gathered themselves into cities of which we still
can discover the extent. The country which they now possess
(though drier than Spain) furnishes Europe with considerable quantities
of grain. The palace of the Moorish King at Granada, shews
a taste for luxury. The mosque of Cordoua speaks a larger capital.
All these are symptoms of population, but they only help one to
guess. The numbers which history mentions to have been driven
out, is a better way still of judging, if the fidelity of historians
could be depended upon, when there is any question about
numbers.
Here was an example of a country depopulated in a very
extraordinary manner: yet I am of opinion, that the scarcity of
inhabitants complained of in that country, for a long time after
the expulsion, did not so much proceed from the effects of the loss
sustained, as from the contract between the spirit of those christians
who remained after the expulsion, and their catholic deliverers. The
christians who lived among the Moors, were really Moors as to manners,
though not as to religion. Had they adopted the spirit of the
subjects of Castile, or had they been governed according to their
own, numbers would soon have risen to the former standard. But as
108the christian lord governed his Murcian, Andalousian, and Granada
subjects, according to the principles of christian policy, was it any
wonder that in such an age of ignorance, prejudice, and superstition,
the country (one of the finest in the world) should be long in recovering?
Recover, however, it did; and sooner perhaps than is commonly
believed: for I say it was recovered so soon as all the flat and
watered lands were brought into cultivation; because I have reason
to believe that the Moors never carried their agriculture farther
in these southern provinces.
From this I still conclude, that no destruction of inhabitants by
expulsion, captivity, war, pestilence or famine, is so permanently
hurtful to population, as a revolution in that spirit which is necessary
for the increase and support of numbers. Let that spirit
be kept up, and let mankind be well governed, numbers will
quickly increase to their former standard, after the greatest reduction
possible: and while they are upon the augmenting hand, the
state will be found in more heart and more vigour, than when
arrived even at the former height; for so soon as a state ceases to
grow in prosperity, I apprehend it begins to decay both in health
and vigour.
109
In a former chapter I have examined this question, relatively
to mankind fed by the hand of nature: I now come nearer
home, and shall keep close to modern times, considering circumstances
and effects which by daily experience we see and feel.
I have often said, that numbers are in proportion to the produce
of the earth. I now say, that in most countries of Europe, the food
produced in the country is nearly consumed by the inhabitants: and
by nearly I understand, that the part exported bears a small proportion
to the home-consumption. I do by no means establish this as an
universal proposition; but I say it is true for the most part: and the intention
of this chapter is to enable us to judge how far these limitations
should extend. I allow, for example, that Holland, not
producing food for its inhabitants, must draw it from some country
which produces a superfluity, regularly: but let it be observed that
Poland, Germany, Flanders, and England, with many other countries,
contribute their contingents to supply the demand of the
Dutch; and of several large trading towns which have small territories.
This being the case, the quota furnished by each country,
must be in a small proportion to the respective quantity growing in
it. But these are general conclusions upon vague suppositions,
which throw no light on the question. I shall therefore endeavour
to apply our reasoning to facts, and then examine consequences.
There are few countries, I believe, in Europe more abounding in
grain than England: I shall therefore keep that kingdom in my eye
while I examine this matter. Nothing is more common than to
hear that an abundant crop furnishes more than three years subsistence:
110nay, I have found it advanced by an author of consideration,
(Advantages and disadvantages of France and Great Britain,
&c. article Grain) that a plentiful year produces five years nourishment
for the inhabitants. If this be a mistake, it may prove a very
hurtful one in many respects. I am, on the contrary, apt to believe,
that no annual produce of grain ever was so great in England as to
supply its inhabitants fifteen months, in that abundance with which they
feed themselves in a year of plenty. If this be the case, at what may we
compute the surplus in ordinary good years? I believe it will be
thought a very good year which produces full subsistence for fifteen
months; and crops which much exceed this are, I believe, very
rare. Here follow my reasons for differing so widely from the
gentleman whom I have cited. If I am in the wrong, I shall
have the most sensible pleasure in being set right; and nothing will
be so easy to any one who has access to be better informed as to
facts than I can pretend to be.
I consider all the yearly crop of grain in England as consumed at
home, except what is exported; for I cannot admit that any considerable
quantity is lost: that it may be abused, misapplied, drank when
it should be eat, I do not deny. These are questions which do not
regard the present inquiry. Whether therefore it be consumed in
bread, beer, spirits, or by animals, I reckon it consumed; and in a
year when the greatest consumption is made at home, this I call the
abundance with which the inhabitants feed themselves in years of plenty.
Now I find in the performance above cited, a state of exportations
for five years, from 1746 to 1750 inclusive, where the quantity exported
amounts in all to 5,289,847 quarters of all sorts of grain.
This is not one year’s provision, according to Sir William Petty’s calculation,
of which we have made mention above. The bounties upon
corn (continues the author abovementioned) have amounted in one
year to 500,000l. sterling. He does not mention the year, and I am
little able to dispute that matter with him. I suppose it to be true;
and still farther, let it be understood that the whole exportation was
made out of the produce of one crop. I do not find that this sum
111answers to the bounty upon 3,000,000 of quarters, which, according
to Sir William Petty, make six months provision. I calculate thus.
The bounty upon wheat is 5s. a quarter, that upon rye 3s. 6d. that
upon barley 2s. 6d. these are the species of grain commonly exported:
cast the three premiums together, and divide by three, the
bounty will come to 3s. 8d. at a medium; at which rate 500,000l.
sterling will pay the bounty of 2,727,272 quarters of grain. An immense
quantity to be exported! but a very inconsiderable part of a crop
supposed capable to maintain England for five years. It may be answered,
that the great abundance of a plentiful year is considerably
diminished when a scanty crop happens to preceed it, or to follow
upon it. In the first case, it is sooner begun upon; in the last, it
supplies the consumption in the year of scarcity, considerably. This
I allow to be just; but as it is not uncommon to see a course of
good years follow one another, the state of exportation at such times
must certainly be the best, nay, the only method of judging of the
real extent of superfluity.
On the other hand, I am apt to believe, that there never was
a year of such scarcity as that the lands of England did not produce
greatly above six months subsistence, such as the people are used
to take in years of scarcity. Were six months of the most slender subsistence
to fail, I imagine all Europe together might perhaps be at
a loss to supply a quantity sufficient to prevent the greatest desolation
by famine.
As I have no access to look into records, I content myself with
less authentic documents. I find then by the London news-papers,
that, from the 9th of April to the 13th of August 1757, while
great scarcity was felt in England, there were declared in the port
of London no more than 71,728 quarters of wheat, of which
15,529 were not then arrived. So that the whole quantity there imported
to relieve the scarcity, was 56,199 quarters. Not one month’s
provision for the inhabitants of that city, reckoning them at 800,000
souls! One who has access to look into the registers of the trade
in grain, might in a moment determine this question.
112Another reason which induces me to believe what the above arguments
seem to prove, I draw from what I see at present passing
in Germany; I mean the universal complaints of scarcity in those
armies which are now assembled, [1757] When we compare the
numbers of an army, let it be of a hundred thousand men, suppose
the suite of it to be as many more, and forty thousand horses,
all strangers, (for the others I reckon nothing extraordinary)
what an inconsiderable number does this appear, in proportion to
the inhabitants of this vast country of Germany! Yet let us observe
the quantity of provisions of all sorts constantly coming down
the Rhine, the Moselle, and many other rivers, collected from foreign
provinces on all hands; the numbers of cattle coming from
Hungary; the loads of corn from Poland; and all this in a year
which has produced what at any other time would have been
called an excellent crop. After these foreign supplies, must not
one be astonished to find scarcity complained of in the provinces
where the war is carried on, and high prices every where else.
From such circumstances I must conclude, that people are generally
very much deceived in their estimation of plenty and scarcity,
when they talk of two or three years subsistence for a country
being found upon their lands at once. I may indeed be mistaken
in my conclusions; but the more I have reflected upon this subject,
the more I find myself confirmed in them, even from the familiar
examples of the sudden rise of markets from very inconsiderable
monopolies, and of their sudden fall by inconsiderable
quantities imported. I could cite many examples of these vicissitudes,
were it necessary, to prove what every one must observe.
I come now to resolve a difficulty which naturally results from
this doctrine, and with which I shall close the chapter.
If it be true, that a crop in the most plentiful year is nearly consumed
by the inhabitants, what becomes of them in years of
scarcity; for nobody can deny, that there is a great difference between
one crop and another. To this I answer, first, That I believe
there is also a very great deceit, or common mistake, as to
113the difference between crops: a good year for one soil, is a bad
one for another. But I shall not enlarge on this; because I have
no sufficient proof of my opinion. The principal reason upon
which I found it, is, that it is far from being true, that the
same number of people consume always the same quantity of
food. In years of plenty every one is well fed; the price of the
lowest industry can procure subsistence sufficient to bear a division;
food is not so frugally managed; a quantity of animals are fatted
for use; all sorts of cattle are kept in good heart; and people
drink more largely, because all is cheap. A year of scarcity comes,
the people are ill fed, and when the lower classes come to divide
with their children, the portions are brought to be very small;
there is great oeconomy upon consumption, few animals are fatted
for use, cattle look miserably, and a poor man cannot indulge
himself with a cup of generous ale. Add to all these circumstances,
that in England the produce of pasture is very considerable, and it
commonly happens, that a bad year for grain, which proceeds
from rains, is for the same reason a good year for pasture; and in
the estimation of a crop, every circumstance must be allowed to
enter.
From what has been said I must conclude in general, that the
best corn country in the world, provided slavery be not established,
does not produce wherewithal fully to maintain, as in years of
plenty, one third more than its own inhabitants; for if this should
be the case, all the policy of man would not be able to prevent the
multiplication of them, until they arose nearly up to the mean
proportion of the produce in ordinary years, and it is only what
exceeds this standard, and proceeds from unusual plenty, which
can be exported. Were plentiful years more common, mankind
would be more numerous; were scarcity more frequent, numbers
would be less. Numbers therefore must ever be, in my humble
opinion, in the ratio of food, and multiplication will never stop
until the balance comes to be nearly even.
114
In the titles of my chapters, I rather seek to communicate a
rough idea of the subject than a correct one. In truth and in reason,
there is no such thing as a country actually peopled to the full,
if by this term numbers only are meant, without considering the
proportion they bear to the consumption they make of the productions
of their country. I have in a former chapter established
a distinction between the physical and moral impossibility of increasing
numbers. As to the physical impossibility, the case can
hardly exist, because means of procuring subsistence from other
countries, when the soil refuses to give more, seem, if not inexhaustible,
at least very extensive. A country therefore fully
peopled, that is, in a physical impossibility of increasing their numbers,
is a chimerical and useless supposition. The subject here
under consideration is, the situation of a people, who find it
their interest to seek for subsistence from abroad. This may happen,
and commonly does, long before the country itself is fully
improved: it decides nothing as to the intrinsic fertility of the
soil, and proves no more, than that the industry of the free hands
has made a quicker progress in multiplying mouths, than that of
the farmers in providing subsistence. To illustrate this idea, let
me propose the following question.
Is multiplication the efficient cause of agriculture, or is agriculture
that of multiplication?
I answer, that multiplication is the efficient cause of agriculture,
though I allow, that, in the infancy of society, the spontaneous
fruits of the earth, which are free to all, are the efficient cause of
a multiplication, which may rise to the exact proportion of them;
as has been said above. This must be explained.
115I have already distinguished the fruits of agriculture from the
earth’s spontaneous production: I must farther take notice, that
when I employ the term agriculture in treating of modern policy,
I always consider it to be exercised as a trade, and producing a
surplus, and not as the direct means of subsisting, where all is consumed
by the husbandman, as has been fully explained above.
We have said, that it is the surplus produced from it, which proves
a fund for multiplying inhabitants. Now there must be a demand
for this surplus. Every person who is hungry will make a demand,
but every such demand will not be answered, and will consequently
have no effect. The demander must have an equivalent
to give: it is this equivalent which is the spring of the whole machine;
for without that the farmer will not produce any surplus,
and consequently he will dwindle down to the class of those who
labour for actual subsistence. The poor, who produce children,
make an ineffectual demand, and when they cannot increase the
equivalent, they divide the food they have with the new comers,
and prove no encouragement to agriculture. By dividing, the
whole become ill fed, miserable, and thus extinguish. Now because
it is the effectual demand, as I may call it, which makes the
husbandman labour for the sake of the equivalent, and because
this demand increases, by the multiplication of those who have an
equivalent to give, therefore I say that multiplication is the cause,
and agriculture the effect. On the other hand, I think the spontaneous
fruits of the earth, as in the supposition, may be considered
as the cause of a certain limited multiplication; because in
that case there is no equivalent demanded. The earth produces,
whether her fruits be consumed or not: mankind are fed upon
these gratuitously, and without labour, and the existence of the
fruits is anterior to the production of those who are to consume
them. Those who are first fed, draw their vigour from their food,
and their multiplication from their vigour. Those who are produced,
live freely upon their parent earth, and multiply until all
the produce be consumed: then multiplication stops, as we have
said; but establish agriculture, and multiplication will go on a-new.
116Consequently, my reader will say, agriculture is as much the cause
of this new multiplication, as the spontaneous fruits were of the
first. Here is a very natural conclusion, which seems directly to
contradict what we have been endeavouring to prove; but the knot
is easily untied. We have seen how the existence of agriculture
must depend upon the industry of man; that is, on the only
means of establishing agriculture: now, as this industry is chiefly promoted
by the motive of providing for our children, the procreation
of them must be considered as the first, or at least the most
palpable political cause of setting mankind to work, and therefore
may be considered as anterior to agriculture; whereas, on the
other hand, the earth’s spontaneous productionsspontaneous productions being in small quantity, and
quite independent of man, appear, as it were, to be furnished by
nature, in the same way as a small sum is given to a young man,
in order to put him in a way of industry, and of making his fortune.
The small sum sets him a-going, but it is his industry which
makes the fortune. From this illustration it appears, that if the
demand for food can be more readily supplied from abroad than
from home, it will be the foreign subsistence, which will preserve
numbers, produced from industry, not from domestic agriculture; and
these numbers will, in their turn, produce an advancement of it
at home, by inspiring a desire in the husbandman to acquire the
equivalent which their countrymen give to strangers.
Such nations, whose statesmen have not the talent to engage the
husbandmen to wish for the equivalent, which the labour of their
fellow-citizens can produce; or, in other words, who cannot create
reciprocal wants and dependencies among their subjects, must
stand in a moral incapacity of augmenting in numbers. Of such
states we have no occasion to treat in this chapter, any more than
of those who are supposed to be in the physical incapacity of multiplying:
our point of view is, to examine the natural consequences
resulting from a demand for subsistence extending itself to foreign
countries. This I take to be the mother of industry at home,
as well as of trade abroad; two objects which come to be treated
of in the second book.
117A country may be fully peopled (in the sense we understand this
term) in several different ways. It may be fully stocked at one time
with six millions, and at another may maintain perhaps eight or even
nine millions with ease, without the soil’s being better cultivated
or improved. On the other hand, a country may maintain twenty
millions with ease, and by being improved as to the soil, become
overstocked with fifteen millions. These two assertions must be explained.
The more frugal a people are, and the more they feed upon the
plentiful productions of the earth, the more they may increase
in numbers.
Were the people of England to come more into the use of living
upon bread, and give over consuming so much animal food, inhabitants
would certainly increase, and many rich grass fields would
be thrown into tillage. Were the French to give over eating so
much bread, the Dutch so much fish, the Flemish so much garden
stuff, and the Germans so much sourkraut, and all take to the English
diet of pork, beef, and mutton, their respective numbers would
soon decay, let them improve their grounds to the utmost. These
are but reflections, by the by, which the reader may enlarge upon
at pleasure. The point in hand is, to know what are the consequences
of a country’s being so peopled, no matter from what cause,
that the soil, in its actual state of fertility, refuses to supply a
sufficient quantity of such food as the inhabitants incline to live
upon. These are different according to the diversity of spirit in the
people.
If they be of an indolent disposition, directed in their political
oeconomy by established habits and old prejudices, which prevent
innovations, although a change of circumstances may demand
them, the effect will be to put a stop to population; which cannot
augment without an increase of food on one hand, and of industry
on the other, to make the first circulate. These must go
hand in hand: the precedence between them is a matter of mere
curiosity and speculation.
118If, on the contrary, a spirit of industry has brought the country
to a certain degree of population, this spirit will not be stopt by the
want of food; it will be brought from foreign countries, and this
new demand, by diminishing among them the quantity usually produced
for their own subsistence, will prompt the industrious to improve
their lands, in order to supply the new demand without any
hurt to themselves. Thus trade has an evident tendency towards
the improvement of the world in general, by rendering the inhabitants
of one country industrious, in order to supply the wants of
another, without any prejudice to themselves. Let us make a step
further.
The country fully stocked can offer in exchange for this food,
nothing but the superfluity of the industry of the free hands, for
that of the farmers is supposed to be consumed by the society; except
indeed some species of nourishment or productions, which,
being esteemed at a higher value in other countries than in those
which produce them, bring a more considerable return than the
value of what is exported, as when raw silk and delicate wines, &c.
are given in exchange for grain and other provisions.
The superfluity of industry must, therefore, form the principal
part of exportation, and if the nation fully stocked be surrounded
by others which abound in grain and articles of subsistence, where
the inhabitants have a taste for elegance, and are eager of acquiring
the manufactures and improvements of their industrious neighbours;
it is certain, that a trade with such nations will very considerably
increase the inhabitants of the other, though fully stocked,
relatively to the production of their own soil; and the additional
numbers will only increase that of manufacturers, not of husbandmen.
This is the case with Holland, and with many large trading
cities which are free and have but a small territory.
If, on the contrary, the nation fully stocked be in the neighbourhood
of others who take the same spirit as itself, this supply
of food will become in time more difficult to be had, in proportion
as their neighbours come to supply their own wants. They must
119therefore seek for it at a greater distance, and as soon as the expence
of procuring it comes to exceed the value of the labour of the free
hands employed in producing the equivalent, their work will cease
to be exported, and the number of inhabitants will be diminished
to the proportion of the remaining food.
I do not say that trade will cease on this account; by no means.
Trade may still go on, and even be more considerable than before; but
it will be a trade which never can increase inhabitants, because for
this purpose there must be subsistence. It may have however numberless
and great advantages: it may greatly advance the wealth of
the state, and this will purchase even power and strength. A trading
nation may live in profound peace at home, and send war and confusion
among her enemies, without even employing her own subjects.
Thus trade without increasing the inhabitants of a country
can greatly add to its force, by arming those hands which she has
not fed, and employing them for her service.
This I find has been made a question in modern times. The
antients held in great veneration the inventors of the saw, of
the lathe, of the wimble, of the potters wheel; but some moderns
find an abuse in bringing mechanism to perfection: (see Les Interets
de la France mal entendus, p. 272. 313.) the great Montesquieu finds
fault with water mills, though I do not find that he has made any
objection against the use of the plow.
Did people understand one another, it would be impossible that
such points could suffer a dispute among men of sense; but the circumstances
120referred to, or presupposed, which authors almost always
keep in their eye, though they seldom express them, render the
most evident truths susceptible of opposition.
It is hardly possible suddenly to introduce the smallest innovation
into the political oeconomy of a state, let it be ever so reasonable,
nay ever so profitable, without incurring some inconveniencies. A
room cannot be swept without raising dust, one cannot walk
abroad without dirtying one’s shoes; neither can a machine, which
abridges the labour of men, be introduced all at once into an extensive
manufacture, without throwing many people into idleness.
In treating every question of political oeconomy, I constantly suppose
a statesman at the head of government, systematically conducting
every part of it, so as to prevent the vicissitudes of manners,
and innovations, from hurting any interest within the commonwealth,
by their natural and immediate effects or consequences.
When a house within a city becomes crazy, it is taken down; this I
call systematical ruin: were it allowed to fall, the consequences
might be fatal in many respects. In like manner, if a number of
machines are all at once introduced into the manufactures of an
industrious nation, (in consequence of that freedom which must
necessarily be indulged to all sorts of improvement, and without
which a state cannot thrive) it becomes the business of the statesman
to interest himself so far in the consequences, as to provide a remedy
for the inconveniencies resulting from the sudden alteration. It is
farther his duty to make every exercise even of liberty and refinement
an object of government and administration; not so as to discourage
or to check them, but to prevent the revolution from affecting
the interests of the different classes of the people, whose welfare
he is particularly bound to take care of.
The introduction of machines can, I think, in no other way prove
hurtful by making people idle, than by the suddenness of it: and I
have frequently observed, that all sudden revolutions, let them be
ever so advantageous, must be accompanied with inconveniencies.
A safe, honourable, and lasting peace, after a long, dangerous, and
expensive war, forces a number of hands to be idle, and deprives
121them of bread. Peace then may be considered as a machine for defending
a nation, at the political loss of making an army idle; yet
no body, I believe, will alledge that in order to give bread to soldiers,
sutlers, and undertakers, the war should be continued. But
here I must observe, that it seems to be a palpable defect in policy,
if a statesman shall neglect to find out a proper expedient (at whatever
first expence it may be procured) for giving bread to those who,
at the risk of their lives, have gone through so many fatigues for
the service of their country. This expence should be charged to
the account of the war, and a state ought to consider, that as their
safety required that numbers should be taken out of the way of
securing to themselves a lasting fund of subsistence, which would
have rendered them independent of every body, (supposing that to
have been the case) she becomes bound by the contract of society,
which ties all together, to find them employment. Let me seek
for another illustration concerning this matter.
I want to make a rampart cross a river, in order to establish a
bridge, a mill, a sluice, &c. For this purpose, I must turn off the
water, that is, stop the river; would it be a good objection against
my improvement to say, that the water would overflow the neighbouring
lands, as if I could be supposed so improvident as not to
have prepared a new channel for it? Machines stop the river; it is
the business of the state to make the new channel, as it is the public
which is to reap the benefit of the sluice: I imagine what I have
said will naturally suggest an answer to all possible objections
against the introduction of machines; as for the advantages of
them, they are so palpable that I need not insist upon them. There
is however one case in which I think they may be disapproved of;
but it seems a chimerical supposition, and is brought in here for no
other purpose than to point out and illustrate the principle which,
influences this branch of our subject.
If you can imagine a country peopled to the utmost extent of
the fertility of the soil, and absolutely cut off from any communication
with other nations; all the inhabitants fully employed in
122supplying the wants of one another, the circulation of money going
forward regularly, proportionally, and uniformly through every
vein, as I may call it, of the political body; no hidden or extraordinary
demand at any time for any branch of industry; no redundancy
of any employment; no possibility of increasing either circulation,
industry, or consumption. In such a situation as that I
should disapprove of the introduction of machines, as I disapprove
of taking physic in an established state of perfect health. I disapprove
of a machine only because it is an innovation in a state absolutely
perfect in these branches of its political oeconomy; and
where there is perfection there can be no improvement. I farther
disapprove of it because it might force a man to be idle, who would
be found thereby in a physical impossibility of getting his bread,
in any other way than that in which he is supposed to be actually
employed.
The present situation of every country in Europe, is so infinitely
distant from this degree of perfection, that I must consider the introduction
of machines, and of every method of augmenting the
produce or facilitating the labour and ingenuity of man, as of the
greatest utility. Why do people wish to augment population, but
in order to compass these ends? Wherein does the effect of a machine
differ from that of new inhabitants?
As agriculture, exercised as a trade, purges the land of idle
mouths, and pushes them to a new industry which the state may
turn to her own advantage; so does a machine introduced into a
manufacture, purge off hands which then become superfluous in
that branch, and which may quickly be employed in another.
If therefore the machine proves hurtful, it can only be because it
presents the state with an additional number of hands bred to labour;
consequently, if these are afterwards found without bread,
it must proceed from a want of attention in the statesman: for an
industrious man made idle, may constantly be employed to advantage,
and with profit to him who employs him. What could an
act of naturalization do more, than furnish industrious hands forced
123to be idle, and demanding employment? Machines therefore I consider
as a method of augmenting (virtually) the number of the
industrious, without the expence of feeding an additional number:
this by no means obstructs natural and useful population, for the
most obvious reasons.
We have shewn how population must go on, in proportion to
subsistence, and in proportion to industry: now the machine eats
nothing, so does not diminish subsistence, and industry (in our age
at least) is in no danger of being overstocked in any well governed
state; for let all the world copy your improvements, they still will
be the scholars. And if, on the contrary, in the introduction of
machines you are found to be the scholars of other nations, in that
case you are brought to the dilemma of accepting the invention with
all its inconveniencies, or of renouncing every foreign communication.
In speculations of this kind, one ought not, I think, to conclude,
that experience must of necessity prove what we imagine our reasoning
has pointed out.
The consequences of innovations in political oeconomy, admit of
an infinite variety, because of the infinite variety of circumstances
which attend them: no reasoning, therefore, however refined, can
point out a priori, what upon such occasions must indispensably
follow. The experiment must be made, circumstances must be
allowed to operate; inconveniencies must be prevented or rectified
as far as possible; and when these prove too many, or too great to
be removed, the most rational, the best concerted scheme in theory
must be laid aside, until preparatory steps be taken for rendring it
practicable.
Upon the whole, daily experience shews the advantage and improvement
acquired by the introduction of machines. Let the inconveniencies
complained of be ever so sensibly felt, let a statesman
be ever so careless in relieving those who are forced to be idle, all
these inconveniencies are only temporary; the advantage is permanent,
124and the necessity of introducing every method of abridging
labour and expence, in order to supply the wants of luxurious mankind,
is absolutely indispensable, according to modern policy, according
to experience, and according to reason.
I have hitherto considered the object of agriculture, as no more
than the raising of grain; the food of mankind has been estimated
by the quantity they consume of that production; and husbandmen
have been supposed to have their residence in the country.
As my subject has but an indirect connection with the science of
agriculture, I have simplified many things complex in themselves,
the better to adapt them to the principal object of my inquiry, and
the better to keep my attention fixed upon one idea at a time. I am
now going to return to some parts of my subject, which I think I
have treated too superficially; and to examine, as I go along, some
miscellaneous questions which will naturally arise from what is to
be said.
Almost every one who has writ upon population, and upon agriculture,
considered as an essential concomitant of it, has recommended
the equal distribution of the property of lands as useful to
both: a few reflections upon this question, after what has been
thrown out in the course of the foregoing chapters, may not be
improper; more in order to examine and apply the principles laid
down, than with a view to combat the opinion of others.
I have already, upon several occasions, taken notice of the great
difference between the political oeconomy of the antients, and that
125of modern times; for this reason, among others, that I perceive
the sentiments of the antients, which were founded upon
reason and common sense, relative to their situation, have been
adopted by some moderns, who have not perhaps sufficiently
attended to the change of our manners, and to the effects which
this change must operate upon every thing relative to our oeconomy.
The antients recommended strongly an equal distribution
of lands as the best security for liberty, and the best method, not
only to preserve an equality among the citizens, but also to increase
their number.
In those days, the citizens did not compose one half of the state
relatively to numbers; and there was almost no such thing as an
established monied interest, which can no where be founded but
upon trade, and an extensive industry. In those days there was no
solid income but in land: and that being equally divided among
the citizens, was favourable to their multiplication and produced
equality. But in our days, riches do not consist in lands only; nay
we sometimes find the most considerable proprietor of these in very
indifferent circumstances; loaded with debts, and depending upon
the indulgence of men who have not an acre, and who are their
creditors. Let us therefore divide our lands as we please, we shall
never produce equality by it. This is an essential difference between
us and the antients, with respect to one point. Now as to
the other, population.
The equal division of lands, no doubt, greatly tends to increase
the numbers of one class of inhabitants, to wit, the landlords. In
antient times, as has been observed, the chief attention was to increase
the citizens, that is the higher classes of the state; and the
equal division of property so effectually produced this effect, that
the Greek states were obliged to allow the exposition of children;
and Aristotle looked upon it as a thing indispensably necessary, as
M. de Montesquieu has very judiciously observed. The multiplication
of the lowest classes, that is of the slaves, never entered into
the consideration of the public, but remained purely a matter of
126private concern; and we find it was a question with some, whether
or not it was worth while to breed from them at all. But in our
days the principal object is to support the lower classes from their
own multiplication, and for this purpose, an unequal division of
property seems to me the more favourable scheme; because the
wealth of the rich falls naturally into the pockets of the industrious
poor; whereas the produce of a very middling fortune, does no
more than feed the children of the proprietor, who in course become
very commonly and very naturally an useless burthen upon
the land. Let me apply this to an example. Do we not familiarly
observe, that the consolidation of small estates, and the diminution
of gentlemens families of middling fortunes, do little harm to a
modern state. There are always abundance of this class of inhabitants
to be found whenever there is occasion for them. When
a great man buys up the lands of the neighbouring gentry,
or small proprietors, all the complaints which are heard, turn
upon the distress which thence result to the lower classes, from the
loss of their masters and protectors; but never one word is heard
of that made by the state, from the extinction of the former proprietor’s
family. This abundantly shews that the object of modern
attention is the multiplication of the lower classes, consequently it
must be an inconsistency to adopt the practice of the antients, when
our oeconomy is entirely opposite to theirs.
Quest. II.
Let this suffice to point out how far the difference of our manners
should influence the division of our lands. I shall now examine a
question relative to the science of agriculture, not considered as a
method of improving the soil, (this will come in more naturally
afterwards) but of making it produce to the best advantage, supposing
it to be already improved.
In treating of the productions of the earth, in consequence of
agriculture, I have all along distinguished them from those which
spontaneously proceed from the force of nature: these are the immediate
gift of God, those are the return of the labour of his creatures.
Every one knows that the labour of mankind is not in proportion
127to their numbers, but to their industry. The produce
therefore of agriculture must be estimated, not according to the
quantity of fruits only, but also according to the labour employed
to produce them. These things premised, the question here proposed
to be examined arises, viz. Which species of agriculture is
the most advantageous to a modern society, that which produces
the greatest quantity of fruits absolutely taken, or that which produces
the greatest quantity relatively taken, I mean to the labour
employed?
This question might easily be resolved, in general, by the application
of principles already deduced; although it cannot admit of
a direct answer, in the manner I have put it. One, therefore, may
say indeterminately, that species is the best which produces a surplus
the best proportioned to the industry, and to the demands of
all the free hands of the state. But as this solution would not lead
me to the object I have in view, I have thrown in an alternative in
order to gain attention to the principles which I am going to
examine, and which influence and determine the establishment of
the one or the other species of agriculture.
The principal difficulty I find in the examination of this question,
is to distinguish the effects of agriculture from those of the spontaneous
production of the earth. The returns from pasture, for
example, relatively taken, are, as we have observed, both from
reason and from experience, far greater than those of corn fields,
(vid. supra, chap. 8.) though I little doubt but that, absolutely
taken, the case is quite otherwise; that is to say, that an acre of
the finest corn land will produce more nourishment for man, than
an equal portion of the finest pasture: but here we are following
the proportion of space and produce, not of labour; for if the produce
of both acres be considered relatively to the labour necessary for
the cultivation, as well as to the extent; the produce of pasture will
be found far greater: this however I ascribe to the spontaneous
operation of nature, and not to the superior utility of this kind of
agriculture.
128Since therefore it is impossible, rightly to separate the effects of
nature from those of art and industry, in this species of improvement,
let us confine our speculations to those only which have for
their object the turning up the surface, and the sowing or cultivating
annual vegetables. For the better conveying our ideas, let us
take an example, and reason from a supposition.
Let me suppose an island of a small extent and fruitful soil, sufficiently
improved, and cultivated after the manner of the best
lands of England, in the ordinary method of farming.
In that case we may infer, from what was laid down in the 8th
chapter, that the number of people employed about farming may
be nearly about one half of the whole society. Let the whole inhabitants
of the island be called 1000, that is 500 farmers, and as
many free hands. The 500 farmers must then feed 1000; the 500
free hands must provide for all the other wants of 1000. By this
supposition, and allowing that there is an equal degree of industry
in these two classes, the providing of food will appear to be an occupation
just equal to that of providing for all other wants. From
this let me draw a few consequences, by the by, before I proceed.
Experience shews that in all countries there are found many who
are here understood to be included in the class of free hands, who
consumed infinitely more of other things than of food; consequently
we must conclude, that as the wants of some do far exceed
the proportion of their food, so in order to bring the balance even,
the wants of others must fall far below it. That this is the case, I
believe, will be found by experience. Let me follow this thought
a little farther.
In proportion as a greater number than one half of the people
becomes employed in agriculture, must it not follow, that all other
work must come to bear a smaller proportion than formerly to the
food consumed; consequently the manner of living must become
more simple. Now we have shewn that what we call wants, in contradistinction
to food, can only be supplied by the free hands, and
that these again can only be fed from the surplus of the farmers;
129consequently the fewer wants, and the fewer free hands, the less
surplus, which of course infers an agriculture less productive, relatively
to the number of farmers. Were, therefore, a whole society
employed in agriculture, carried on as a direct method of subsisting,
there would be no surplus, consequently no free hands; consequently
no work for supplying any want but food. This may be
thought an impossible supposition. If you suppose agriculture
exercised as a trade, I allow it to be so, but not if it be carried on
as a method of subsisting only; and if you throw away the idea of
labour altogether, and suppose mankind in its infancy, that is in
paradise, living upon the spontaneous fruits of the earth, and quite
naked, you will find the case not only supposable, but exactly so.
It is exactly so among the cattle: every one of them may be considered
in a parallel situation with a husbandman who works for
his own nourishment. They feed upon the spontaneous fruits of
the earth, and have no surplus; and having no other want, they
are freed from every other care. Let me return now to the island.
The 500 farmers feed 1000; and we suppose the lands laboured
as in a good English farm. One of the society proposes to augment
the number of inhabitants by introducing a more operose species
of agriculture, the produce of which may be absolutely greater,
though relatively less.
The first question the statesman would naturally put to this reformer
would be, What is your view in increasing the number of our
inhabitants, is it to defend us against our enemies, is it to supply the
wants of strangers, and thereby to enrich ourselves, is it to supply
our own wants with more abundance, or is it to provide us more
abundantly with food? I can hardly find out any other rational view
in wishing for an additional number of people in any country
whatsoever. Let it be answered, that all these ends may be thereby
obtained: and now let us examine how far this reformation upon
agriculture will have the effect of increasing inhabitants, how far
such increase will procure the ends proposed, and how far the execution
130of such a plan is a practicable scheme to an industrious
people.
If the inhabitants be not sufficiently fed, which is the only thing
that can prevent their multiplication, it must proceed from one of
two causes. Either first, that those do procreate who cannot produce
an equivalent for the food of their children; or secondly, that
industry making a quicker progress than agriculture, the industrious
come too strongly in competition with one another, for the surplus
of food to be found; which has the effect of raising the prices of
it, and reducing the portions too low to suffer a division; and
thereby of preventing marriage and multiplication in the lower
classes of the free hands.
In the first case, it is to no purpose to increase the produce of
agriculture, by rendering it more expensive; for those who have
no equivalent to give when food is cheap, will still be in greater
necessity when it rises in the price. In the second case, it is to no
purpose to diminish the surplus of the farmers, because the supposition
proves that the balance is already too heavy upon the side
of the free hands, that is, that the surplus of the farmers is already
become insufficient fully to feed them.
Two remedies may be proposed for this inconveniency, the one
tending to population, the other to depopulation; and as the end
to be compassed is to set the balance even between husbandmen and
free hands, I shall explain both, and point out how far from principles
it appears, that in either way the end may be attained.
That tending to increase population is the remedy proposed, and,
no doubt, was it possible to introduce a new system of agriculture
of a larger absolute production, although the relative production
should be less, the inhabitants of the state becoming thereby better
fed, though at a greater cost, would infallibly multiply. Let me
therefore examine this first part before I say any thing of the other;
and for the greater distinctness I shall return to my example, and
examine both the consequences and the possibility of putting such
a plan in execution.
131Let me suppose, that by using the spade and rake, instead of the
plow and harrow, the lands of our island might be brought to produce
with more abundance; this is a method of increasing the
expence of agriculture, which would require an additional number
of husbandmen.
Now, by the supposition, 500 farmers fed, though scantily, the
whole of the inhabitants, that is 1000 persons. If therefore 100 of
the free hands can be engaged to become farmers, the end may be
attained: more nourishment will be produced; the people will be
better fed; they will multiply; that is, their number will rise
above 1000. Let us next endeavour to form a judgment of this increase,
and of the consequence of the revolution.
The society will now be composed of 600 farmers and 400 free
hands. The 600 will certainly produce more fruits than formerly;
but as their labour is relatively less productive by the supposition,
it will be impossible for them to furnish surplus equal to their own
consumption; consequently, the free hands never will be able to
rise to a number equal to theirs; that is, the society will never get
up to 1200. But we supposed, that the other wants of the society
required the industry of one half of the inhabitants to supply them;
that is, of all the 500 free hands; and, as the number of these has
been already reduced, and can never more rise to that proportion,
as has been said, must not either the people voluntarily adopt a
more simple way of living; or must not the demand for work rise
very considerably? Let me consider the consequences in both cases.
In the first, you perceive, that if the inhabitants themselves are
obliged to simplify their way of living, for want of hands to supply
what they formerly consumed, three of the four objects proposed
by the reformation become impossible to be attained; to wit, the
defending themselves against their enemies, the supplying the
wants of strangers, and the supplying their own with more abundance.
And with regard to the fourth, the being better fed, that
must cease to be the case, the moment the end is obtained; that
is, the moment the inhabitants are multiplied up to the proportion
of additional food. Consequently, by simplifying their way of life,
132and allowing farming to stand upon the new footing, they compass
not any one of the ends they proposed.
Next, if we suppose, that the inhabitants do not incline to simplify
their way of life, but that the wealthy among them insist
upon purchasing all the instruments of luxury which they formerly
were used to enjoy, must not demand for work greatly rise, and
must not, of consequence, an additional encouragement be given
to that species of labour which had been diminished, in taking
100 persons from industry, to throw them into the class of farmers?
Will not this make them quickly desert their spade, and the
rather, as they have taken to an employment less lucrative than
that of farming, according to the former systems?
So much for the consequences which would follow, in case the
plan proposed was found practicable; that is, supposing it to be a
thing possible to transport into agriculture a part of an industrious
society, already otherwise employed, and to change all at once the
relative proportion between those who supply food, and those who
purchase it with their industry. We have begun, by taking that
first step for granted; and now I am to shew what obstacles will be
found in the execution.
We have said, that it is the multiplicity and complexity of wants
which give an encouragement to agriculture, and not agriculture,
or an abundance of food, which inspires mankind with a disposition
to labour. Now, if this principle be true, the supposition we
have proceeded upon is absurd. I am afraid, both reason and experience
will abundantly prove that it is so.
The natural and necessary effect of industry, in trades and manufactures,
is to promote the increase of relative husbandry;
which, by augmenting the surplus, tends of course to increase the
proportion of the free hands relatively to the farmers. A river
may as easily ascend to its source, as a people voluntarily adopt a
more operose agriculture than that already established, supposing
the lands to be fully improved, the spirit of industry to prevail on
one hand, and the farmers to have profit only in view on the
other.
133What farmer could sell the surplus of an expensive agriculture
in competition with another who exercised a species relatively
more productive?
When lands are improved, the simplification of agriculture is a
necessary concomitant of industry, because diminishing expence is
the only method of gaining a preference at market.
Quest. III.
Whether industry has done hurt to population, by augmenting
the relative, and diminishing the absolute produce of agriculture;
or whether it has done good to it, by encouraging the science in
general, and extending the exercise of it over the face of the earth,
is a matter of fact which I shall leave to others, better informed
than I am, to determine. For my own part, I believe that thousands
of examples may be found of the one and the other. I know
corn fields, where villages formerly stood, the inhabitants of
which fed themselves with the pure produce of absolute agriculture;
that is, with a bit of garden ground, and the milk of a cow:
there surely is depopulation: but, at a small distance from the
place where those villages stood, I see corn fields, where nothing
but heath was to be met with; this marks population. I seek no
more than to explain from facts the principles I am endeavouring
to discover, and shall leave general conclusions to others, as I have
already said.
There is a maxim in law, which may be extended almost to
every thing in this world, unum quodque eodem modo solvitur quo colligatum
est. Industry forms this species of absolute agriculture; industry
destroys it. A military force raised the Roman greatness; a
military force destroyed it. A spirit of liberty may form a noble
constitution, and a spirit of liberty may break the same to pieces.
The States of Denmark restrained the royal power and established a
free government; the same States rendered that very power unlimited,
and established there the purest monarchy in Christendom.
But these reflections are foreign to our subject: Ne sutor ultra crepidam.
I return.
134When industry is set on foot, it gives encouragement to agriculture
exercised as a trade: and by the allurements of ease, which a
large surplus procures to the farmers, it does hurt to that species
which is exercised as a method of subsistence. Lands become more
generally and less thoroughly laboured. In some countries tillage
is set on foot and encouraged; this is an operose agriculture. While
industry goes forward, and while a people can remain satisfied
with a nourishment consisting chiefly of bread, this system of agriculture
will subsist, and will carry numbers very high. If wealth
increases, and if those who have it begin to demand a much greater
proportion of work than formerly, while they consume no more
food, then I believe numbers may diminish from the principles I
am now going in quest of.
I return to the council of the island where the proposition laid
down upon the carpet is, The scanty subsistence of the inhabitants requires
redress.
A Machiavelian stands up (of such there are some in every country)
and proposes, in place of multiplying the inhabitants, by rendering
agriculture more operose, to diminish their number, by
throwing a quantity of corn fields into grass. What is the intention
of agriculture, says he, but to nourish a state? By our operose method
of plowing and sowing, one half of the whole produce is consumed
by those who raise it; whereas by having a great part of our
island in pasture, one half of the husbandmen may be saved. Pray
what do you propose to do with those whom you intend to make
idle? replies a citizen. Let them betake themselves to industry.
But industry is sufficiently, nay more than sufficiently stocked
already. If, says Machiavel, the supernumerary husbandmen be
thrown out of a way of living, they may go where they please;
we have no occasion for them, nor for any one who lives only to
feed himself. But you diminish the number of your people, replies
the citizen, and consequently your strength; and if afterwards you
come to be attacked by your enemies, you will wish to have those
back again for your defence, whom in your security you despised.
135To this the other makes answer: there you trust to the Egyptian
reed. If they be necessary for feeding us at present, how shall we
be able to live while we employ them as soldiers? We may live
without many things, but not without the labour of our husbandmen.
Whether we have our grounds in tillage or in pasture, if
that class be rightly proportioned to the labour required, we never
can take any from it. In those countries where we see princes have
recourse to the land to recruit their armies, we may safely conclude,
that there the land is overstocked; and that industry has not as yet
been able to purge off all the superfluous mouths: but with us
the case is different, where agriculture is justly proportioned to the
number of husbandmen. If I propose a reform, it is only to augment
the surplus, upon which all the state, except the husbandmen,
are fed; if the surplus after the reform is greater than at present,
the plan is good, although 250 of our farmers should thereby be
forced to starve for hunger.
Though no man is, I believe, capable to reason in so inhuman a
style, and though the revolution here proposed be an impossible
supposition, if meant to be executed all at once, the same effects
however must be produced, in every country where we see corn
fields by degrees turned into pasture; only the change is gradual,
industry is not overstocked any where, and subsistence may be
drawn from other countries, where the operose species of agriculture
can be carried on with profit.
Familiar experience proves the truth of this. I have a corn farm,
where I maintain ten horses and four servants for the cultivation
alone: at the end of the year I find my surplus equal to 40l. sterling.
If, by throwing my grounds into grass, I can dismiss three servants
and eight horses, and at the end of the year raise my surplus
to 50l. sterling, who doubts of my doing it? Is not this following
the doctrine above laid down? But there is nothing odious in this;
because I do not see these three servants die for hunger, nor is it a
consequence they should, as states are formed. They turn themselves
to industry, and food comes from abroad, in proportion as
136the country itself produces a less quantity. Fact and experience prove
this assertion, and I cite Holland as an example, where every branch
of operose agriculture is exploded, except for such productions as
cannot be brought from other countries. I introduced the rough
Machiavelian only to set principles in a strong light, and particularly
that concerning the recruiting of armies from the land, which I take
to be both a true one, and one necessary to be attended to, to wit,
that those who must labour for the subsistence of the society, can
be of little use for the defence of a state, in case of any emergency.
Princes have found out the truth of this, and in proportion as
industry has extended itself, regular armies have been found necessary
to be kept up in times of peace, in order to be had in times of
war. A militia composed of people truly industrious, I take to be
far better in speculation than in practice. How would a militia do
in Holland? how admirable was it not formerly in Scotland, Poland,
and Catalonia? And how admirably does it still succeed in the
armies of the house of Austria? I may however be mistaken; for a
military and an industrious spirit may be found compatible with
one another in some particular nations: time perhaps will clear up
this matter. Thus much with regard to a militia. Now as to
recruiting a regular army.
The more they are recruited from the land, the less they desert.
The army of the Russians, for example, now assembled (1758)
hardly knows desertion, those of the house of Austria, taken from
certain provinces where there is almost no industry, are in the same
case, also the militia of France which I consider as regular troops.
On the other hand, those armies which are raised in the countries
where industry has taken root are chiefly composed of loose fellows,
the excrements of populous cities, the sons of vice and idleness,
who have neither domicil nor attachment. These are soldiers truly
by trade, and make a trade of it; how many thousands of such are
now to be found? they come to market every season, and the best
bidder has them while he can hold them. Some princes make a
point not to receive their own deserters back, but accept of those
137who have committed the same infidelity to others; while others
content themselves with punishing those who fail in their attempt
to desert, but receive them back when they return of their own
accord, after having accomplished their desertion. All is now become
commerce, and seems to be regulated by the principles of
it. I return to our agriculture.
Does not the exposition we have now given of these principles
tend to cast a light upon the first question dismissed in this chapter,
to wit, the effects of an equal and an unequal distribution of the
property of lands?
When these are once well cultivated and improved, it is of no
consequence to whom the property belongs; for by the property of
such lands I only can mean the surplus, as we have abundantly
explained elsewhere. Let therefore the property of all the lands
of a kingdom, fully improved, belong to the state, or to any number
of individuals, however few, there is no question of improvement;
no difference as to agricultureagriculture, no difference as to population,
according to modern policy. So long as the whole is well cultivated
and made to produce, by a set of men I call farmers, the end
is fully obtained; and according to the nature of the agriculture,
which many different circumstances of taste and manner of living
has introduced, larger or smaller portions of land must be allotted
to each of them.
If you suppose a country not as yet improved, as many are, then,
the case becomes quite different, and small possessions are necessary,
both for multiplying the inhabitants and for improving the soil. In
this supposition the most operose agriculture may be carried on in
competition with the most lucrative; because when there is a
question of improvement, there is frequently a considerable outgoing
instead of any surplus after paying the labour.
Agriculture for improvement can be carried on by none but those
who have wealth and superfluity, and is prosecuted with a view to
future, not to present advantage: of this we shall treat in another
place. For I consider it as a quite different operation, influenced by
138different principles, and no ways to be confounded with the present
subject of inquiry. But I have insensibly been wandering through
an extensive subject, and it is now time to return.
I have said above that a river might as easily ascend to its source,
as an industrious people voluntarily adopt a more operose system of
agriculture than that already established, while the spirit of industry
prevails on one hand, and while farmers have profit only in view
on the other. In consequence of this position, I have treated the
plan proposed for augmenting the inhabitants of the island, by
the introduction of a more operose agriculture as absurd, and so it
certainly is: but let me throw in a circumstance which affects the
spirit of that people, and the plan becomes plausible and easy.
Let a part of the wealthy proprietors of the lands take a taste for
agriculture. Let a Tull, a Du Hamel turn agriculture into an object
of luxury, of amusement. Let this science be turned into a Missisippi,
or South Sea scheme. Let the rich be made to believe that
treasures are to be found at a small expence, laid at first out upon
farming, and you will soon see the most operose species of the
science go forward, and the produce of it come to market and be
sold, in spite of all competition. My Lady Duchess’s knotting may
be sold at so much a pound, as well as that performed by a girl
who does not spend six pence a day; but if the one and the other
be considered relatively to the expence of the manufacturer, every
knot of my Lady’s will be found to have cost as much as a pound
of the other. The Duchess’s pound, however, increases the quantity
of knots; and so does my Lord’s farm the mass of subsistence
for the whole society. The nation also gains by his extravagance
having taken a turn, which may produce the permanent good
effect of improving a part of the country, though at an expence infinitely
beyond the value of it. I must now again touch upon another
part of my subject, which I think has been treated too superficially.
In a former chapter I have shewn how industry has the natural
effect of collecting into towns and cities the free hands of a state,
leaving the farmers in their farms and villages. This distribution
139served the purpose of explaining certain principles; but when
examined relatively to other circumstances which at that time I had
not in my eye, it will be found by far too general. Let me therefore
add some farther observations upon that matter.
The extensive agriculture of plowing and sowing, is the proper
employment of the country, and is the foundation of population
in every nation fed upon its own produce. Cities are commonly surrounded
by kitchen gardens, and rich grass fields; these are the proper
objects of agriculture for those who live in suburbs, or who are
shut up within the walls of small towns. The gardens produce
various kinds of nourishment, which cannot easily be brought
from a distance, in that fresh and luxuriant state which pleases the
eye, and conduces to health. They offer a continual occupation
to man, and very little for cattle, therefore are properly situated in
the proximity of towns and cities. The grass fields again are commonly
either grazed by cows, for the production of milk, butter,
cream, &c. which suffer by long carriage; or kept in pasture for
preserving fatted animals in good order until the markets demand
them; or they are cut in grass for the cattle of the city. They may
also be turned into hay with profit; because the carriage of a bulky
commodity from a great distance is sometimes too expensive. Thus
we commonly find agriculture disposed in the following manner.
In the center stands the city surrounded by kitchen gardens; beyond
these lies a belt of fine luxuriant pasture or hay fields; stretch
beyond this and you find the beginning of what I call operose
farming, plowing and sowing; beyond this lie grazing farms for
the fattening of cattle; and last of all come the mountainous and
large extents of unimproved or ill improved grounds, where animals
are bred. This seems the natural distribution, and such I have
found it almost every where established, when particular circumstances
do not invert the order.
The poorness of the soil near Paris, for example, presents you
with fields of rye corn at the very gates, and with the most extensive
kitchen gardens and orchards, even for cherries and peaches,
140at a considerable distance from town. Other cities I have found,
and I can cite the example of that which I at present inhabit, Padoua,
where no kitchen garden is to be found near it, but every
spot is covered with the richest grain; two thirds with wheat, and
the remaining third with Indian corn. The reason of this is palpable.
The town is of a vast extent, in proportion to the inhabitants;
the gardens are all within the walls, and the dung of the
city enables the soil to produce constantly. Hay is brought from
a greater distance, because the expence of distributing the dung
over a distant field, would be greater than that of transporting
the hay by water-carriage. The farm houses here appear no larger
than huts, as they really are, built by the farmers, because the
space to be laboured is very small, in proportion to the produce;
hence it is, that a farmer here pays the value of the full half of
the crop to the landlord, and out of the remaining half, not only
sows the ground and buys the dung, but furnishes the cattle and
labouring instruments, nay even rebuilds his house, when occasion
requires.
When first I examined these fertile plains, I began to lament the
prodigal consumption of such valuable lands, in a multitude of
very broad high-ways, issuing to all quarters; many of which I
thought might be saved, in consideration of the vast advantage accruing
upon such oeconomy: but upon farther reflection I perceived,
that the loss was inconsiderable; for the fertility of the soil
proceeding chiefly from the manure laid upon it, the loss sustained
from the roads ought to be computed at no more than the value of
the land when uncultivated. The case would be very different,
were roads now to be changed, or new ones carried through the
corn fields; the loss then would be considerable, though even that
would be temporary, and only affect particular persons: for the
same dung, which now supports these lands in their fertility, would
quickly fertilize others in their places and in a few years matters
would stand as at present.
141These last reflections lead me naturally to examine a question
which has been treated by a very polite French writer, the author
of l’Ami de l’homme, and which comes in here naturally enough, before
I put an end to this first book. Here it is.
Quest. IV.
Does an unnecessary consumption of the earth’s productions,
either in food, cloathing, or other wants; and a prodigal employment
of fine rich fields, in gardens, avenues, great roads, and
other uses which give small returns, hurt population, by rendering
food and necessaries less abundant, in a kingdom such as France,
in its present situation?
My answer is, That if France were fully cultivated and peopled,
the introduction of superfluous consumption would be an abuse,
and would diminish the number of inhabitants; as the contrary is
the case, it proves an advantage. I shall now give my reasons for
differing in opinion from the gentleman whose performance I
have cited.
As the question is put, you perceive the end to be compassed is,
to render food and necessaries abundant; because the abuse is considered
in no other light, than relatively to the particular effect of
diminishing the proper quantity of subsistence, which the king
would incline to preserve, for the nourishment and uses of his
people. I shall therefore confine myself chiefly to this object, and
if I shew, that these superfluous employments of the surface of
the earth, and prodigal consumptions of her fruits, are really no
harm, but an encouragement to the improvement of the lands of
France in her present state, I shall consider the question as sufficiently
resolved: because if the abuse, as it is called, proves favourable to
agriculture, it can never prove hurtful to population. However,
from the inattention of the government, it may affect foreign trade,
but this is an object entirely foreign to the question. But before
I enter upon the subject, it is proper to observe, that I am of
opinion, that any system of oeconomy which necessarily tends to
corrupt the manners of a people, ought by every possible means to
142be discouraged, although no particular prejudice should result from
it, either to population, or to plentiful subsistence.
Now, in the question before us, the only abuse I can find in these
habits of extraordinary consumption, appears relative to the character
of the consumers, and seems in no way to proceed from
the effects of the consumption. The vices of men may no doubt
prove the cause of their making a superfluous consumption, but
the consumption they make can hardly ever be the cause of this
vice. The most virtuous man in France may have the most splendid
table, the richest clothes, the most magnificent equipages, the
greatest number of useless horses, the most pompous palace, and
most extensive gardens. The most enormous luxury to be conceived,
in our acceptation of the term, so long as it is directed to
no other object than the consumption of the labour and ingenuity
of man, is compatible with virtue as well as with vice. This
being premised, I come to the point in hand.
France, at present, is in her infancy as to improvement, although
the advances she has made within a century excite the admiration
of the world. I shall not go far in search of the proof of this assertion.
Great tracts of her lands are still uncultivated, millions of
her inhabitants are idle. When all comes to be cultivated, and all
are employed, then she will be in a state of perfection, relatively
to the moral possibility of being improved. The people are free,
slavery is unknown, and every man is charged with feeding himself,
and bringing up his children. The ports of the country are
open to receive subsistence, and that nation, as much as any other,
may be considered as an individual in the great society of the
world; that is, may increase in power, wealth, and ease, relatively
to others, in proportion to the industry of her inhabitants. This
being the case, all the principles of political oeconomy, which we
have been inquiring after, may freely operate in this kingdom.
France has arrived at her present pitch of luxury, relatively to
consumption, by slow degrees. As she has grown in wealth, her
desire of employing it has grown also. In proportion as her demands
143have increased, more hands have been employed to supply
them; for no article of expence can be increased, without increasing
the work of those who supply it. If the same number of
inhabitants in the city of Paris consume four times as much of
any necessary article as formerly, I hope it will be allowed, that
the production of such necessaries must be four times as abundant,
and consequently, that many more people must be employed in
providing them.
What is it that encourages agriculture, but a great demand for
its productions? What encourages multiplication, but a great demand
for people; that is, for their work? Would any one complain
of the extravagant people in Paris, if, instead of consuming
those vast superfluities, they were to send them over to Dover, for
a return in English gold? What is the difference between the prodigal
consumption, and the sale? The one brings in money, the
other brings in none: but as to food and necessaries, for providing
the poor and frugal, their contingent, in either case, stands exactly
the same.
But, says one, were it not for this extraordinary consumption,
every thing would be cheaper. This I readily allow; but will any
body say, that reducing the price of the earth’s productions is a
method to encourage agriculture, especially in a country where
grounds are not improved, and where they cannot be improved;
chiefly, because the expence surpasses all the profits which possibly
can be drawn from the returns? High prices therefore, the effect
of great consumption, are certainly advantageous to the extension
of agriculture. If I throw my rich corn fields into gravel-walks
and gardens, I suppose they will no more come into competition
with those of my neighbour, the laborious husbandman. Who will
then lose by my extravagance? Not the husbandman. It will perhaps
be said, the nation in general will lose; because you deprive
them of their food. This might be true, were the laying waste
the corn fields a sudden revolution, and extensive enough to affect
the whole society; and were the sea-ports and barriers of the
144kingdom shut: but that not being the case, the nation, upon the
smallest deficiency, goes to market with her money, and loses none
of her inhabitants.
Obj. But if living is made dear, manufacturers must starve, for
want of employment.
Answ. Not those who supply home consumption, but only those
who supply foreigners living more cheaply; and of such I know
but few. The interest of this class shall be fully examined in another
place. At present I shall only observe, that the laying waste
corn fields in an industrious country, where refinement has set on
foot a plan of useful husbandry, will have no other effect, than
that of rendring grain for a while proportionally dearer: consequently,
agriculture will be thereby encouraged; and in a few years
the loss will be repaired, by a farther extension of improvement.
This will make food plentiful and cheap: then numbers will increase,
until it become scarce again. It is by such alternate vicissitudes,
that improvement and population are carried to their
height. While the improvement of lands goes forward, I must
conclude, that demand for subsistence is increasing; and if this be
not a proof of population, I am much mistaken.
I can very easily suppose, that a demand for work may increase
considerably, in consequence of an augmentation of riches only;
because there is no bounds to the consumption of work; but as
for articles of nourishment the case is quite different. The most
delicate liver in Paris will not put more of the earth’s productions
into his belly, than another: he may pick and choose, but he will
always find, that what he leaves will go to feed another: victuals
are not thrown away in any country I have ever been in. It is
not in the most expensive kitchens where there is found the most
prodigal dissipation of the abundant fruits of the earth; and it is
with such that a people is fed, not with ortolans, truffles, and oysters,
sent from Marenne.
145Obj. Roads of a superfluous breadth are carried many times
through the finest fields, belonging to the poor and industrious,
without a proper indemnity being given.
Answ. The with-holding the indemnity is an abuse; the loss of
the fields is none to the state, except in such countries where the
quantity of arable lands is small, as in mountainous provinces;
there a proper consideration should be had to the breadth, because
the loss cannot be made up. In such countries as I here describe,
and I cite the TirolTirol for an example, I have found all the inhabitants
in a manner employed in that species of agriculture, which
is exercised as a method of subsisting. The little ground that is
arable, is divided into very small lots; the people multiply very
much, and leave the country. Those who remain are usually employed
in cutting wood, for building and burning, which they
send down the rivers, and in return buy corn, which comes from
the south and from the north. This is the best plan of industry
they can follow, without the assistance of their sovereign. Roads
here are executed to great perfection, with abundance of solidity,
and with a tender regard for the little ground there is. I return
to France.
Obj. A multitude of superfluous horses are kept in Paris, which
consume what would feed many more inhabitants.
Answ. True: but he who feeds the horses, because he thinks he
has use for them, would not feed those inhabitants, because he is
sure he has no use for them: and did he, in complaisance for the
public, dismiss his cattle, the farmer, who furnishes the hay and
oats, would lose a customer, and nobody would gain. These articles
are produced, because they are demanded: when additional
inhabitants are produced, who will demand and can pay, their demand
will be answered also, as long as there is an unemployed acre
in France.
Obj. The increase of the consumption of wood for firing is
hurtful to population, because it marks the extension of forests.
146Answ. This consequence I deny; both from fact and reason.
From fact, because forests are not extended, and that nothing but
the hand of nature, in an ill-inhabited country, seems capable of
forming them. In France, forests are diminishing daily; and were
it not for the jurisdiction of the Table de marbre, they would have
been more diminished than they are. I agree, that the consumption
of wood is at present infinitely greater than formerly, and
likewise, that the price of it is greatly risen every where. These
two circumstances rather seem to mark the contraction, than the
extension of forests. But the increase of consumption and price
proceed from other causes, as I shall shew, in order to point out
some new principles relative to this extensive subject. 1. The increase
of consumption proceeds from the increase of wealth.
2. The increase of price proceeds from the increase upon the value
of labour, and not from the scarcity of forest, nor the height
of the demand for firing. As to the first, I believe the fact will
not be called in question, as it is one of the superfluities of consumption
complained of, and put down to the account of luxury
and extravagance. As to the second, the true cause of the rise of
the price of that commodity demands a little more attention, and
in order to point it out with some distinctness, I must first shew the
political impossibility of forests becoming extended over the arable
lands of France in her present situation.
The best proof I can offer to support my opinion is, to compare
the inconsiderable value of an acre of standing forest in the king’s
adjudications, where thousands are sold at a time, with the value
of an acre of tolerable corn lands, and then ask, if the present
value of forests is so considerable, as to engage any proprietor to
sow such a field for raising wood, when he must wait, perhaps 40
years, before it be fit for cutting? Add to this, that whoever plants
a tree in France, comes under the jurisdiction above-mentioned,
and is not at liberty to cut it down, and dispose of it, without
their permission. It is in a great measure for this reason, that so
few trees are seen about French villages; and I never heard of one
147example, of corn lands being sown with the seeds of forest-trees,
with a view to improvement. That forests, which are well kept,
may extend themselves over grounds not worth the cultivation, I
do not deny; but this surely can do no harm to agriculture; and
it is only in that respect, I pretend that forests in France are not at
present in a way of gaining ground.
Now as to the rise in the price of wood for burning, I say, it
proceeds not from the rise of the price of timber growing in forests,
so much as from the increase of the price of labour, and
principally of the price of transportation. This is not peculiar to
France alone, but is common to all Europe almost, for the reasons
I shall presently give. But in the first place, as to the matter of
fact, that the rise in the price proceeds from the cause assigned,
may be seen, by comparing the low price of an acre of standing
forest, with the great value of the timber when brought to market:
the first is the neat value of the wood; the last includes that of
the labour.
Next as to the price of labour; the rise here is universal in all
industrious nations, from a very plain reason, easily deducible from
the principles above laid down.
While the land remained loaded with a number of superfluous
mouths, while numbers were found in every province employed
in agriculture, for the sake of subsistence, merely, such people were
always ready to employ their idle hours and days, for a very small
consideration from those who employed them. They did not then
depend upon this employment for their subsistence; and a penny
in their pocket purchased some superfluity for them. But when
modern policy has by degrees drawn numbers from the country,
the few that remain for the service of the public must now labour
for theirtheir subsistence; and he who employs them, must feed them, clothe
them, and provide for all their other wants. No wonder then, if
labour be dearer: there is a palpable reason for the augmentation.
The price of all necessaries has risen, no doubt, partly for the
same reason, and this circumstance certainly enters into the combination:
148but work, in the country especially, has risen far beyond
the proportion of the price of necessaries, and will rise still more
as the lands become better purged of superfluous mouths.
Notwithstanding what I have said, I readily allow, that the
great consumption of wood for burning, but more particularly for
forges, has considerably raised the intrinsic value of forest lands;
but the consequence has not been, to extend the forests, as we
have shewn, but to produce a general revenue from them all over
the kingdom; whereas formerly, in many provinces, they produced
almost nothing. When they were cut, cattle were turned in, and
by eating up the tender shoots from year to year, the forest ran
into a wild, neither producing timber, nor pasture. This practice
was established upon the ruling principle of private interest. The
land was not worth the expence of grubbing up the timber; the
timber when grown, did not compensate the loss of a few years
pasture. No jurisdiction, however well administred, can check the
operation of that principle; and a statesman who would attempt
it, would be called a tyrant: he would distress the husbandman,
and do no service to the state.
From what has been said, I must conclude, that while the consumption
of the earth’s produce, and of the work of man tend to
excite industry, in providing for extraordinary demands; when
the interest of foreign trade does not enter into the question; and
while there are lands enough remaining unimproved, to furnish
the first matter; there can be no political abuse from the misapplication
or unnecessary destruction of either fruits or labour. The
misapplier, or dissipator, is punished by the loss of his money;
the industrious man is rewarded by the acquisition of it. We have
said, that vice is not more essentially connected with superfluity,
than virtue with industry and frugality. But such questions are
foreign to my subject. I would however recommend it to moralists,
to study circumstances well, before they carry reformation so
far, as to interrupt an established system in the political oeconomy
of their country.
149
Introd.
I set out by distinguishing government from political oeconomy;
calling, the first the power to command, the second the talent
to execute. Thus the governor may restrain, but the steward must
lead, and, by direct motives of self-interest, gently conduct free
and independent men to concur in certain schemes ultimately calculated
for their own proper benefit.
The object is, to provide food, other necessaries and employment,
not only for those who actually exist, but also for those who are to be
brought into existence. This is accomplished, by engaging every
one of the society to contribute to the service of others, in proportion
only as he is to reap a benefit from reciprocal services. To
render this practicable, the spirit of the people must be studied, the
different occupations prescribed to each must first be adapted to
their inclinations, and when once they have taken a taste for labour,
these inclinations must be worked upon by degrees, so as to
be bent towards such pursuits as are most proper for attaining the
end desired.
Chap. I.
He who sits at the head of this operation, is called the statesman.
I suppose him to be constantly awake, attentive to his employment,
able and uncorrupted, tender in his love for the society
he governs, impartially just in his indulgence for every class of inhabitants,
and disregardful of the interest of individuals, when
that regard is inconsistent with the general welfare.
Did I propose a plan of execution, I confess this supposition
would be absurd; but as I mean nothing farther than the investigation
of principles, it is no more so, than to suppose a point, a
straight line, a circle, or an infinite, in treating of geometry.
Chap. II.
150To prepare the way for treating this subject, in that order which
the revolutions of the last centuries have pointed out as the most
natural, I have made the distribution of my plan in the following
order. Population and agriculture are the foundations of the
whole. Civil and domestic liberty, introduced into Europe by the
dissolution of the feudal form of government, set trade and industry
on foot; these produced wealth and credit; these again
debts and taxes; and all together established a perfectly new system
of political oeconomy, the principles of which it is my intention
to deduce and examine.
Population and agriculture, as I have said, must be the basis of
the whole, in all ages of the world; and as they are so blended
together in their connections and relations, as to make the separation
of them quite incompatible with perspicuity and order, they
have naturally been made the subject of the first book.
Chap. III.
I have shewn, that the first principle of multiplication is generation;
the second is food: the one gives existence and life; the
other preserves them.
The earth’s spontaneous fruits being of a determined quantity,
never can feed above a determined number. Labour is a method
of augmenting the productions of nature, and in proportion to the
augmentation, numbers may increase. From these positions, I
conclude,
Chap. IV.
That the numbers of mankind must ever have been in proportion
to the produce of the earth; and this produce must constantly
be in the compound ratio of the fertility of the soil, and labour of
the inhabitants. Consequently, there can be no determined universal
proportion over the world, between the number of those necessary
for labouring the soil, and of those who may be maintained
by its produce. Here I am led to examine the motives
which may induce one part of a free people to labour, in order
to feed the other.
This I shew to proceed from the different wants to which mankind
are liable.
Chap. V.
151Here I introduce a statesman, as being necessary to model the
spirit of a society. He contrives and encourages reciprocal objects
of want, which have each their allurement. This engages
every one in a different occupation, and must hurt the former simplicity
of manners. I shew how essential it is, to keep a just balance
throughout every part of industry, that no discouragement
may be cast upon any branch of it, either from superfluity, or want;
and I have pointed out, how the dividing of food between parents
and children, is the means of bringing on scarcity, which inconveniency
can only be removed by an augmentation of labour.
If a society does not concur in this plan of reciprocal industry,
their numbers will cease to increase; because the industrious will
not feed the idle. This I call a state of a moral impossibility of
increase in numbers, and I distinguish it from the physical impossibility,
which can take place only when nature itself, not man,
refuses to produce subsistence. From this I apply to each particular
society what I had before found applicable to mankind in general;
to wit,
That the inhabitants of every country must be in the compound
proportion of the quantity of food produced in it, and of the industry
of the lower classes. If the food produced surpass the proportion
of industry, the balance of food will be exported; if the
industry surpasses the proportion of food, its deficiency must be
supplied by imports.
Reciprocal wants excite to labour; consequently, those whose labour
is not directed towards the cultivation of the soil, must live
upon a surplus produced by those who do. This divides the society
into two classes. The one I call farmers, the other free hands.
As the creating these reciprocal wants was what set the society
to work, and distributed them naturally into the two classes we have
mentioned; so the augmentation of wants will require an augmentation
of free hands, and their demand for food will increase
agriculture.
Chap. VI.
152Here I define luxury to mean no more than the consumption of superfluity,
or the supplying of wants not essentially necessary to life;
and, I say, that a taste for superfluity will introduce the use of money,
which I represent as the general object of want, that is of
desire, among mankind; and I shew how an eagerness to acquire
it becomes an universal passion, a means of increasing industry
among the free hands; consequently, of augmenting their numbers;
consequently, of promoting agriculture for their subsistence.
The whole operation I have been describing proceeds upon one
supposition, to wit, that the people have a taste for labour, and the
rich for superfluity. If these be covetous and admirers of simplicity;
or those be lazy and void of ambition, the principles laid
down will have no effect: and so in fact we find, that it is not in
the finest countries in the world where most inhabitants are found,
but in the most industrious.
Let it therefore never be said, there are too many manufacturers
in a free country. It is the same thing as if it was said, there are
too few idle persons, too few beggars, and too many husbandmen.
Chap. VII.
Here I break off my subject, to answer an objection arising from
these principles.
Obj. How could the simplicity of the antients be compatible with
a great multiplication?
Answ. In antient times men were forced to labour the ground
because they were slaves to others. In modern times the operation
is more complex, and as a statesman cannot make slaves of his subjects,
he must engage them to become slaves to their own passions
and desires; this is the only method to make them labour the
ground, and provided this be accomplished, by whatever means
it is brought about, mankind will increase.
Chap. VIII.
This question being dismissed, I point out a method of estimating
the proportion of numbers between the farmers and free hands of
a country, only as an illustration of the principle already laid down,
153to wit, that it is the surplus of the farmers which goes for the subsistence
of the others.
This surplus I shew to be the same thing as the value of the
land rents; and hence I conclude,
1st, That the rising of the rents of lands proves the augmentation
of industry, and the multiplication of free hands; but as rents
may rise, and yet the number of inhabitants continue the same as
before, I infer,
2dly, That the revolution must then mark the purging of the
lands of superfluous mouths, and forcing these to quit their mother
earth, in order to retire to towns and villages, where they may
usefully swell the number of the free hands and apply to industry.
3dly, That the more a country is in tillage, the more it is inhabited,
and the fewer free hands are to be found: that the more
it is laid into pasture, the less it is inhabited, and the greater is the
proportion of free hands.
Chap. IX.
Next I consider the principles which determine the place of residence.
The farmers must live upon, or near the spot they labour; that
is, either upon their farms or in their villages.
The free hands I divide into two conditions. The first composed
of the proprietors of the surplus of food, that is the landlords;
together with those who can purchase it with a revenue already
acquired, that is, the monied interest. The second condition is
composed of those who must purchase some of this surplus with
their daily labour.
Those of the first condition may live where they please; those of
the second must live where they can.
When those of the first choose to live together, a considerable
number of those of the second must follow them, in order to supply
their consumption. This forms towns and cities.
When a statesman places the whole administration of public
affairs in the same city, this swells a capital.
154When manufacturers get together in bodies, they depend not
directly upon consumers, but upon merchants. The situation of
their residence depends upon circumstances relative to their occupation,
provision and transportation of their work. From this hamlets
swell into villages, and villages into towns. Sea ports owe
their establishment to the increase of foreign trade.
Chap. X.
As the collecting such numbers of inhabitants together is a late
revolution in the political oeconomy of Europe, I endeavour to give
a short historical representation of it, and examine the consequences
which result from it, both to the state from the growth of cities,
and to the land proprietors from the desertion, as I may call it, of
so many vassals and dependents. One principal effect I observe to
be, the additional occupation it has given to statesmen; that is to
say, political oeconomy is thereby become more complex.
Chap. XI.
Formerly the inhabitants were dispersed, and by sucking, as it
were, their mother earth, were more easily subsisted: now industry
has gathered them together, and industry must support them. The
failing of industry, is like the cutting off the subsistence of an
army. This is the care of a general to prevent, that the care of a
statesman.
The supporting industry means no more than employing those
who must live by it; and keeping their numbers in proportion to
their work. The first point, therefore, is to find work for the present
inhabitants; the second is, to make them multiply, if the
demand for their labour increases.
Increasing numbers will never remove, but rather augment such
inconveniencies, as proceed from the abuses of those already
existing.
In order to employ a people rightly, it is proper to know the
exact state of numbers necessary for supplying the demand for
every occupation; to distribute those who must live by their industry
into proper classes; and to make every class (as far as possible) at
least, support their own numbers by propagation.
Chap. XII.
155Where the value of any species of industry is not sufficient for
that purpose, a proper remedy must be applied. When any are
found incapable, from age or infirmities, to gain their livelihood,
they must be maintained. Infants exposed by their parents must
be taken care of, and thrown back into the lowest classes of the
people; the most numerous always, and the most difficult to be
supported by their own propagation. Marriage, without assistance,
will not succeed in a class who gain no more by their industry
than a personal physical necessary. Here our oeconomy differs
widely from that of the antients. Among them marriage was encouraged
in many ways; but it was only for the free. These did
not amount to one half of the people. The slaves who represented
our lower classes were recruited from other countries, as they are
at present in America.
If, therefore, according to modern oeconomy, the lowest species
of labour must be kept cheap, in order to make manufactures flourish,
the state must be at the expence of the children; for as matters
stand, either the unmarried gain as much as the married should
do, and become extravagant; or the married gain no more than
the unmarried can do, and become miserable. An unequal competition
between people of the same class, always implies one of
these inconveniencies; and from these principally proceeds the
decay and misery of such numbers in all modern states, as well as
the constant complaints of the augmentation of the price of labour.
Every individual is equally inspired with a desire to propagate.
A people can no more remain without propagating, than a tree
without growing: but no more can live than can be fed; and as all
augmentations of food must come at last to a stop, so soon as this
happens, a people increase no more; that is to say, the proportion
of those who die annually increases. This insensibly deters from
propagation, because we are rational creatures. But still there are
some who, though rational, are not provident; these marry and
produce. This I call vicious propagation. Hence I distinguish propagation
into two branches, to wit, multiplication, which goes on
156among these who can feed what they breed, and mere procreation,
which takes place among those who cannot maintain their offspring.
This last produces a political disease, which mortality cures at
the expence of much misery; as forest trees which are not pruned,
dress themselves and become vigorous at the expence of numbers
which die all around. How to propose a remedy for this inconveniency,
without laying some restraint upon marriage; how to lay
a restraint upon marriage without shocking the spirit of the times,
I own I cannot find out; so I leave every one to conjecture.
Chap. XIII.
Although a complete remedy cannot be obtained against the effects
of abusive procreation; yet with the help of accurate lists of
births and deaths for every class of people, many expedients may
be fallen upon to preserve the few who escape the dangers of their
infancy, from falling back into the unhappy class which produced
them. From these lists the degree of mortality and nature of diseases,
as well as the difference between the propagation of the
easy and of the miserable, will plainly appear; and if it be the
duty of a statesman to keep all his people busy, he certainly should
acquire the most exact knowledge possible of the numbers and propagation
of those of every denomination, that he may prevent any
class from rising above or sinking below the standard, which is best
proportioned to the demand for their respective industry.
Chap. XIV.
Population and agriculture have so close a connexion with one
another, that I find even the abuses to which they are severally
liable, perfectly similar. I have observed how naturally it must
happen, that when too many of a society propagate, a part must
starve; when too many cultivate, a part must starve also. Here is
the reason:
The more of a people cultivate a country, the smaller portion of
it must fall to every man’s share; and when these portions are
reduced so low as to produce no more than what is necessary to feed
the labourers, then agriculture is stocked to the utmost.
From this I divide agriculture into two branches; the one useful,
the other abusive. The first is a trade, that is, a method of producing
157not only subsistence for the labourers, but also a surplus to
be provided for the free hands of the state, for their subsistence, and
for an equivalent either in work itself, or for the produce of it. The
second is no trade, because it implies no alienation, but is purely a
method of subsisting. If, therefore, in any country where agriculture
is exercised as a trade, and where there are many free hands, the
farmers should be allowed to multiply up to the proportion of the
whole produce; would not all the free hands be forced to starve?
What would be the advantage of having so many farmers; for there
is one evident loss? Every one would be entirely taken up in feeding
himself, wants would disappear; life indeed would be simplified to
the last degree, but the bond of society, mutual dependence, would
be dissolved: therefore I call this species abusive, in proportion as
these effects are produced. I cite several examples of this abusive
agriculture in different countries, where I take occasion to observe,
that the christian virtue, charity, in proportion to its extent, is as
conducive to multiplication as either slavery, or industry: whatever
gives food must give numbers. I do not say that charity is conducive
to industry.
Chap. XV.
I next apply these general principles to a particular representation
given of the state of population in the British isles; from which I
conclude, that population there is not obstructed, either by losses
sustained from war and commerce, or from the exportation of their
subsistence, but from the political situation of that country, which
throws it at present into a moral incapacity of augmenting in numbers.
Chap. XVI.
The establishment of trade and industry naturally rectifies this
misapplication of agriculture, by purging the land of superfluous
mouths, and thereby reduces it, as it ought to be, to a trade calculated
to furnish a surplus, which comes to be sold for the labour
of all the industrious. It is this alone which can rivet the bond of
general dependence among free men who must live by their
industry; by making one part laborious farmers, and the other ingenious
tradesmen and manufacturers. It is by the vibration of
the balance between these two classes, that multiplication and agriculture
158are carried to their height. When industry goes on too fast,
free hands multiply above the standard, that is, their scale sinks;
this raises the price of food, and gives an additional encouragement
to agriculture: when this again becomes the more weighty, food
becomes plentiful and cheap, then numbers augment a-new. These
reflections lead me to consider the effects of plentiful and scarce
years in modern times, when famines are almost things unknown;
and I conclude,
Chap. XVII.
That were plentiful years more common, mankind would be
more numerous; that were scarce years more frequent, numbers
would diminish. Then applying this observation to the state of exportations
of grain from England, I am tempted to infer, that this
kingdom, the most fertile perhaps in Europe, has never been found
to produce, in one year, eighteen months full subsistence for all its
inhabitants; nor ever less than ten months scanty provision in the
years of the greatest sterility.
Chap. XVIII.
When a country is fully peopled and continues to be industrious,
food will come from abroad. When a loaf is to be had, the rich
will eat it, though at the distance of a mile; and the poor may
starve, though at the next door. It is the demand of the rich, who
multiply as much as they incline, which encourages agriculture
even in foreign nations; therefore I conclude, that this multiplication
is the cause, and that the progress of agriculture is but the
effect of it.
A country once fully stocked may diminish in numbers, and still
remain stocked. This must proceed from a change in the manner
of living; as when an indolent people quit the consumption of the
more abundant productions of the earth, to seek after delicacies.
On the other hand, the industrious bring an additional supply
from abroad, and by furnishing strangers with the produce of their
labour, they still go on and increase in numbers. This is the case of
Holland: and this scheme will go on, until abuses at home raise
the price of labour; and experience abroad, that universal school
mistress, teaches foreigners to profit of their own advantages.
When food ceases to be augmented, numbers come to a stand;
but trade may still go on and increase wealth: this will hire armies
159of foreigners; so the traders may read of their own battles, victories,
and trophies, and by spending their money, never smell gunpowder.
Chap. XIX.
When they cannot augment their numbers, they will introduce
machines into many manufactures; and these will supply the want,
without adding to the consumption of their food. Foreigners,
astonished at a novelty which lowers prices, and checks their growing
industry, will copy the inventions; but being no more than
scholars, who go aukwardly to work, this improvement will throw
many of their hands into idleness: the machines will be cried
down, and the traders will laugh in their sleeves, well knowing
that nothing is more easy than to put work into the hands of an
industrious man made idle. Wit and genius, in short, will always
set him who possesses them above the level of his fellows, and when
one resource fails him, he will contrive another.
Chap. XX.
The wit I here mention is not that acquired in the closet; for
there one may learn, that an equal distribution of lands was so
favourable to multiplication in antient times, that it must be owing
to a contrary practice, that our numbers now are so much smaller.
But he who walks abroad, and sees millions who have not one
moment’s time to put a spade in the ground, so busily are they
employed in that branch of industry which is put into their hands,
must readily conclude, that circumstances are changed, and that
the fewer people are necessary for feeding the whole society, the
more must remain free to be employed in providing every other
thing that can make life agreeable, both to themselves and to
strangers; who in return deliver into the hands of their industrious
servants, the ensigns of superiority and dominion, money. Who
is best employed, he who works to feed himself, or he who works
to be fed, cloathed, and supplied, disposing only of his superfluities
to those whom, consequently, he shortly must command. This is
obtained by the introduction of the useful species of agriculture,
and by the explosion of the abusive. And when strangers are so
kind as to allow their neighbours the privilege of clothing and
adorning them, good nature, not to say self-interest, demands, in
160return, that the first be indulged in a permission to exercise those
branches of toil and labour which are the least profitable, though
the most necessary for the subsistence of the latter.
When the eye of humanity considers the toil of the farmer, and
the indifference of his rich countryman in squandering, the abuse
appears offensive. The rich man is advised to consider of the pain
incurred by the poor husbandman, in consequence of his dissipation.
Upon this the rich, touched with compassion, simplifies
his way of life. The husbandman in a fury falls upon the reformer,
and, in his rough way, gives him to understand, that he by no
means looks upon him as his friend: for, says he, do you take me
for the rich man’s slave; or do you imagine that I toil as I do,
either by his command, or for any consideration for him? Not in
the least, it is purely for his money; and from the time you persuaded
him to become an oeconomist, here am I, and my poor
family, starving. We are not the only people in this situation;
there is my neighbour who has all his hay and oats upon hand,
since, by your instigation, likewise, he dismissed his useless horses.
Do you think he will give his oats in charity to feed the poor? He
is poor enough himself, and all those who have been working to
get this provision together are in no better humour than I am.
Hold your tongue, says the reformer, you are a parcel of extravagant
fellows, you labourers. A hundred years ago, one could have
got as many of you as one pleased, for the half of what you cost
us at present. Give us back our lands, says the other, at the rate
we had them; and let us all be well fed before we give you a farthing,
and you shall have us as cheap as ever. But do you think
that after you have chased one half of us into towns, and raised
your rents with the price of their food, that we can work twice as
hard, and serve you as formerly? No, Sir! you ought to have
more sense than to expect it.
This is a sketch of the first book; I thought a short abridgment
of it might be of service for recollecting ideas, and ranging them
in order before I proceed.
161AN
INQUIRY
INTO THE
PRINCIPLES OF POLITICAL OECONOMY.
Before I enter upon this second book, I must premise a word
of connexion, in order to conduct the ideas of my reader by
the same way through which the chain of my own thoughts, and
the distribution of my plan have naturally led me.
My principal view hitherto has been to prepare the way for an
examination of the principles of modern politics, by inquiring into
those which have, less or more, operated regular effects in all the
ages of the world.
In doing this, I confess, it has been impossible for me not to anticipate
many things which, according to the plan I have laid down,
will in some measure involve me in repetitions.
I propose to investigate principles which are all relative and
depending upon one another. It is impossible to treat of these with
162distinctness, without applying them to the objects on which they
have an influence; and as the same principles extend their influence
to several branches of my subject, those of my readers who
keep them chiefly in their eye, will not find great variety in the
different applications of them.
In all compositions of this kind, two things are principally requisite.
The first is, to represent such ideas as are abstract, clearly,
simply, and uncompounded. This part resembles the forging out
the links of a chain. The second is, to dispose those ideas in a
proper order; that is, according to their most immediate relations.
When such a composition is laid before a good understanding, memory
finishes the work, by cementing the links together; and providing
any one of them can be retained, the whole will follow of
course.
Now the relations between the different principles of which I
treat, are indeed striking to such as are accustomed to abstract
reasoning, but not near so much so, as when the application of
them is made to different examples.
The principle of self-interest will serve as a general key to this inquiry;
and it may, in one sense, be considered as the ruling principle
of my subject, and may therefore be traced throughout the
whole. This is the main spring, and only motive which a statesman
should make use of, to engage a free people to concur in the
plans which he lays down for their government.
I beg I may not here be understood to mean, that self-interest
should conduct the statesman: by no means. Self-interest, when
considered with regard to him, is public spirit; and it can only be
called self-interest, when it is applied to those who are to be governed
by it.
From this principle men are engaged to act in a thousand different
ways, and every action draws after it certain necessary consequences.
The question therefore constantly under consideration
comes to be, what will mankind find it their interest to do, under
such and such circumstances?
163In order to exhaust the subject of political oeconomy, I have
proposed to treat the principles of it in relation to circumstances;
and as these are infinite, I have taken them by categories; that
is, by the more general combinations, which modern policy has
formed. These, for the sake of order, I have represented as all
hanging in a chain of consequences, and depending on one another.
See Book I. Chap. ii.
I found this the best method for extending my plan, from which
it is natural to infer, that it will also prove the best for enabling
my readers to retain it.
I shall do what I can to diversify, by various circumstances, the
repetitions which this disposition must lead me into. There is no
seeing a whole kingdom, without passing now and then through
a town which one has seen before. I shall therefore imitate the
traveller, who, upon such occasions, makes his stay very short,
unless some new curiosity should happen to engage his attention.
I have said, that self-interest is the ruling principle of my subject,
and I have so explained myself, as to prevent any one from
supposing, that I consider it as the universal spring of human
actions. Here is the light in which I want to represent this matter.
The best way to govern a society, and to engage every one to
conduct himself according to a plan, is for the statesman to form
a system of administration, the most consistent possible with the interest
of every individual, and never to flatter himself that his
people will be brought to act in general, and in matters which
purely regard the public, from any other principle than private interest.
This is the utmost length to which I pretend to carry my
position. As to what regards the merit and demerit of actions in
general, I think it fully as absurd to say, that no action is truly
virtuous, as to affirm, that none is really vitious.
It might perhaps be expected, that, in treating of politics, I should
have brought in public spirit also, as a principle of action; whereas
all I require with respect to this principle is, only a restraint from it;
164and even this is, perhaps, too much to be taken for granted. Were
public spirit, instead of private utility, to become the spring of
action in the individuals of a well-governed state, I apprehend, it
would spoil all. I explain myself.
Public spirit, in my way of treating this subject, is as superfluous
in the governed, as it ought to be all-powerful in the statesman;
at least, if it is not altogether superfluous, it is fully as much so,
as miracles are in a religion once fully established. Both are admirable
at setting out, but would shake every thing loose were
they to continue to be common and familiar. Were miracles
wrought every day, the laws of nature would no longer be laws:
and were every one to act for the public, and neglect himself, the
statesman would be bewildered, and the supposition is ridiculous.
I expect, therefore, that every man is to act for his own interest
in what regards the public; and, politically speaking, every one
ought to do so. It is the combination of every private interest
which forms the public good, and of this the public, that is, the
statesman, only can judge. You must love your country. Why?
Because it is yours. But you must not prefer your own interest to
that of your country. This, I agree, is perfectly just and right:
but this means no more, than that you are to abstain from acting
to its prejudice, even though your own private interest should demand
it; that is, you should abstain from unlawful gain. Count
Julian, for example, who, from private resentment, it is said,
brought the Moors into Spain, and ruined his country, transgressed
this maxim. A spy in an army, or in a cabinet, who betrays
the secrets of his country, and he who sells his trust, are
in the same case: defrauding the state is, among many others,
a notorious example of this. To suppose men, in general, honest
in such matters, would be absurd. The legislature therefore
ought to make good laws, and those who transgress them ought to
be speedily, severely, and most certainly punished. This belongs
to the coercive part of government, and falling beyond the
limits of my subject, is ever taken for granted.
165Were the principle of public spirit carried farther; were a
people to become quite disinterested, there would be no possibility
of governing them. Every one might consider the interest of his
country in a different light, and many might join in the ruin of it,
by endeavouring to promote its advantages. Were a rich merchant
to begin and sell his goods without profit, what would become of
trade? Were another to defray the extraordinary expence of some
workmen in a hard year, in order to enable them to carry on
their industry, without raising their price, what would become of
others, who had not the like advantages? Were a man of a large
landed estate to distribute his corn rents at a low price in a year
of scarcity, what would become of the poor farmers? Were people
to feed all who would ask charity, what would become of industry?
These operations of public spirit ought to be left to the public, and
all that is required of individuals is, not to endeavour to defeat
them.
This is the regular distribution of things, and it is only this
which comes under my consideration.
In ill-administred governments I admire as much as any one
every act of public spirit, every sentiment of disinterestedness, and
nobody can have a higher esteem for every person remarkable for
them.
The less attentive any government is to do their duty, the more
essential it is that every individual be animated by that spirit, which
then languishes in the very part where it ought to flourish with
the greatest strength and vigour; and on the other hand, the more
public spirit is shewn in the administration of public affairs, the
less occasion has the state for assistance from individuals.
Now as I suppose my statesman to do his duty in the most minute
particulars, so I allow every one of his subjects to follow the
dictates of his private interest. All I require is an exact obedience
to the laws. This also is the interest of every one; for he
who transgresses ought most undoubtedly to be punished: and this
is all the public spirit which any perfect government has occasion
for.
166
I am now going to treat of trade and industry, two different
subjects, but which are as thoroughly blended together, as
those we have discussed in the first book. Similar to these in their
mutual operations, they are reciprocally aiding and assisting to
each other, and it is by the constant vibration of the balance between
them, that both are carried to their height of perfection and
refinement.
Trade is an operation, by which the wealth, or work, either of individuals,
or of societies, may be exchanged, by a set of men called merchants,
for an equivalent, proper for supplying every want, without any interruption
to industry, or any check upon consumption.
Industry is the application to ingenious labour in a free man, in order to
procure, by the means of trade, an equivalent, fit for the supplying every
want.
I must observe, that these definitions are only just, relatively to
my subject, and to one another: for trade may exist without industry,
because things produced partly by nature may be exchanged between
men; industry may be exercised without trade, because a man
may be very ingenious in working to supply his own consumption,
and where there is no exchange, there can be no trade. Industry likewise
is different from labour. Industry, as I understand the term, must
be voluntary; labour may be forced: the one and the other may produce
the same effect, but the political consequences are vastly different.
Industry, therefore, is only applicable to free men; labour may be
performed by slaves.
Let me examine this last distinction a little more closely, the better
to try whether it be just, and to point out the consequences
which result from it.
167I have said, that without the assistance of one of the three principles
of multiplication, to wit, slavery, industry, or charity, there
was no possibility of making mankind subsist, so as to be serviceable
to one another, in greater numbers than those proportioned to
the spontaneous fruits of the earth. Slavery and industry are quite
compatible with the selfish nature of man, and may therefore be
generally established in any society: charity again is a refinement
upon humanity, and therefore, I apprehend, it must ever be precarious.
Now I take slavery and industry to be equally compatible with
great multiplication, but incompatible with one another, without
great restrictions laid upon the first. It is a very hard matter to
introduce industry into a country where slavery is established; because
of the unequal competition between the work of slaves and
that of free men, supposing both equally admitted to market.
Here is the reason:
The slaves have all their particular masters, who can take better
care of them, than any statesman can take of the industrious
freemen; because their liberty is an obstacle to his care. The
slaves have all their wants supplied by the master, who may
keep them within the limits of sobriety. He may either recruit
their numbers from abroad, or take care of the children, just as
he finds it his advantage. If the latter should prove unprofitable,
either the children die for want of care, or by promiscuous living
few are born, or by keeping the sexes asunder, they are prevented
from breeding at all. A troop of manufacturing slaves, considered
in a political light, will be found all employed, all provided for,
and their work, when brought to market by the master, may be
afforded much cheaper, than the like performed by freemen, who
must every one provide for himself, and who may perhaps have
a separate house, a wife, and children, to maintain, and all this
from an industry, which produces no more, nay not so much, as
that of a single slave, who has no avocation from labour. Why
do large undertakings in the manufacturing way ruin private industry,
168but by coming nearer to the simplicity of slaves. Could
the sugar islands be cultivated to any advantage by hired labour?
Were not the expences of rearing children supposed to be great,
would slaves ever be imported? Certainly not: and yet it is still a
doubt with me, whether or not a proper regulation for bringing
up the children of slaves might not turn this expedient to a better
account, than the constant importation of them. But this is
foreign to the present purpose. All I intend here to observe is, the
consequences of a competition between the work of slaves and of
free men; from which competition I infer, that, without judicious
regulations, it must be impossible for industry ever to get the better
of the disadvantages to which it will necessarily be exposed at first,
in a state where slavery is already introduced.
These regulations ought to prevent the competition between the
industrious freemen and the masters of slaves, by appropriating the
occupation of each to different objects: to confine slavery, for example,
to the country; that is, to set the slaves apart for agriculture,
and to exclude them from every other service of work. With
such a regulation perhaps industry might succeed. This was not
the case of old; industry did not succeed as at present: and to this
I attribute the simplicity of those times.
It is not so difficult to introduce slavery into a state where liberty
is established; because such a revolution might be brought about
by force and violence, which make every thing give way; and, for
the reasons above-mentioned, I must conclude, that the consequences
of such a revolution would tend to extinguish, or at least,
without the greatest precaution, greatly check the progress of
industry: but were such precautions properly taken; were slavery
reduced to a temporary and conditional service, and put under proper
regulations; it might prove, of all others, the most excellent
expedient for rendering the lower classes of a people happy and
flourishing; and for preventing that vitious procreation, from which
the great misery to which they are exposed at present chiefly proceeds.
But as every modification of slavery is quite contrary to
169the spirit of modern times, I shall carry such speculations no farther.
Thus much I have thought it necessary to observe, only by
the way, for the sake of some principles which I shall have occasion
afterwards to apply to our own oeconomy; for wherever any
notable advantage is found accompanying slavery, it is the duty of
a modern statesman to fall upon a method of profiting by it, without
wounding the spirit of European liberty. And this he may
accomplish in a thousand ways, by the aid of good laws, calculated
to cut off from the lower classes of a people any interest they can
have in involving themselves in want and misery, opening to them
at the same time an easy progress towards prosperity and ease.
Here follows an exposition of the principles, from which I was
led to say, in a former chapter, that the failure of the slavish form
of feudal government, and the extension thereby given to civil
and domestic liberty, were the source from which the whole system
of modern polity has sprung.
Under the feudal form, the higher classes were perhaps more
free than at present, but the lower classes were either slaves, or
under a most servile dependence, which is entirely the same thing
as to the consequence of interrupting the progress of private
industry.
I cannot pretend to advance, as a confirmation of this doctrine,
that the establishment of slavery in our colonies in America was
made with a view to promote agriculture, and to curb manufactures
in the new world, because I do not know much of the sentiments
of politicians at that time: but if it be true, that slavery
has the effect of advancing agriculture, and other laborious operations
which are of a simple nature, and at the same time of discouraging
invention and ingenuity; and if the mother-country
has occasion for the produce of the first, in order to provide or to
employ those who are taken up at home in the prosecution of
the latter; then I must conclude, that slavery has been very luckily, if
not politically, established to compass such an end: and therefore, if
any colony, where slavery is not common, shall ever begin to rival
170the industry of the mother-country, a very good way of frustrating
the attempt will be, to encourage the introduction of slaves into
such colonies without any restrictions, and allow it to work its natural
effect.
Having given the definition of trade and industry, as relative to
my inquiry, I come now to examine their immediate connections,
the better to cement the subject of this book, with the principles
deduced in the former.
In treating of the reciprocal wants of a society, and in shewing
how their being supplied by labour and ingenuity naturally tends
to increase population on one hand, and agriculture on the other,
the better to simplify our ideas, we supposed the transition to be
direct from the manufacturer to the consumer, and both to be
members of the same society. Matters now become more complex,
by the introduction of trade among different nations, which
is a method of collecting and distributing the produce of industry,
by the interposition of a third principle. Trade receives from a
thousand hands, and distributes to as many.
To ask, whether trade owes its beginning to industry, or industry
to trade, is like asking, whether the motion of the heart is owing
to the blood, or the motion of the blood to the heart. Both the
one and the other, I suppose, are formed by such insensible degrees,
that it is impossible to determine where the motion begins.
But so soon as the body comes to be perfectly formed, I have little
doubt of the heart’s being the principle of circulation. Let me apply
this to the present question.
A man must first exist, before he can feel want; he must want,
that is, desire, before he will demand; and he must demand, before
he can receive. This is a natural chain, and from it we have
concluded in Book I. that population is the cause, and agriculture
the effect.
By a parallel reason it may be alledged, that as wants excite to
industry, and are considered as the cause of it; and as the produce
of industry cannot be exchanged without trade; so trade must be
171an effect of industry. To this I agree: but I must observe, that
this exchange does not convey my idea of trade, although I admit,
that it is the root from which the other springs; it is the seed, but
not the plant; and trade, as we have defined it, conveys another
idea. The workman must not be interrupted, in order to seek for
an exchange, nor the consumer put to the trouble of finding out
the manufacturer. The object of trade therefore is no more than
a new want, which calls for a set of men to supply it; and trade
has a powerful effect in promoting industry, by facilitating the
consumption of its produce.
While wants continue simple and few, a workman finds time
enough to distribute all his work: when wants become more multiplied,
men must work harder; time becomes precious; hence
trade is introduced. They who want to consume, send the merchant,
in a manner, to the workman, for his labour, and do not
go themselves; the workman sells to this interposed person, and
does not look out for a consumer. Let me now take a familiar instance
of infant trade, in order to shew how it grows and refines:
this will illustrate what I have been saying.
I walk out of the gates of a city in a morning, and meet with
five hundred persons, men and women, every one bringing to
market a small parcel of herbs, chickens, eggs, fruit, &c. It occurs
to me immediately, that these people must have little to
do at home, since they come to market for so small a value. Some
years afterwards, I find nothing but horses, carts, and waggons,
carrying the same provisions. I must then conclude, that either
those I met before are no more in the country, but purged off, as
being found useless, after a method has been found of collecting
all their burdens into a few carts; or that they have found out a
more profitable employment than carrying eggs and greens to
market. Which ever happens to be the case, there will be the introduction
of what I call trade; to wit, this collecting of eggs,
fruit, fowl, &c. from twenty hands, in order to distribute it to as
many more within the walls. The consequence is, that a great
172deal of labour is saved; that is to say, the cartcart gives time to
twenty people to labour, if they incline; and when wants increase,
they will be ready to supply them.
We cannot therefore say, that trade will force industry, or that
industry will force trade; but we may say, that trade will facilitate
industry, and that industry will support trade. Both the one and
the other however depend upon a third principle; to wit, a taste
for superfluity, in those who have an equivalent to give for it.
This taste will produce demand, and this again will become the
main spring of the whole operation.
This is no new subject; it is only going over what has been
treated of very extensively in the first book under another
name, and relatively to other circumstances. These ideas were there
kept as simple as possible; here they take on a more complex form,
and appear in a new dress.
The wants of mankind were said to promote their multiplication,
by augmenting the demand for the food of the free hands, who,
by supplying those wants, are enabled to offer an equivalent for
their food, to the farmers who produced it; and as this way of
bartering is a representation of trade in its infancy, it is no wonder
that trade, when grown up, should still preserve a resemblance
to it.
Demand, considered as a term appropriated to trade, will now be
used in place of wants, the term used in the first book relatively to
bartering; we must therefore expect, that the operations of the
same principle, under different appellations, will constantly appear
173similar, in every application we can make of it, to different circumstances
and combinations.
Whether this term be applied to bartering or to trade, it must
constantly appear reciprocal. If I demand a pair of shoes, the
shoemaker either demands money, or something else for his own
use. To prevent therefore the ambiguity of a term, which, from
the sterility of language, is taken in different acceptations, according
to the circumstances which are supposed to accompany it, I
shall endeavour shortly to analyze it.
1mo. Demand is ever understood to be relative to merchandize.
A demand for money, except in bills of exchange, is never called
demand. When those who have merchandize upon hand, are desirous
of converting them into money, they are said to offer to sale;
and if, in order to find a buyer, they lower their price, then, in
place of saying the demand for money is high, we say the demand
for goods is low.
2do. Suppose a ship to arrive at a port loaded with goods, with an
intention to purchase others in return, the operation only becomes
double. The ship offers to sale, and the demand of the port is said
to be high or low, according to the height of the price offered,
not according to the quantity demanded, or number of demanders.
When all is sold, then the ship becomes demander; and if his demand
be proportionally higher than the former, we say upon the
whole, that the demand is for the commodities of the port; that
is, the port offers, and the ship demands. This I call reciprocal
demand.
3tio. Demand is either simple or compound. Simple, when the
demander is but one, compound, when they are more. But this is not
so much relative to persons as to interests. Twenty people demanding
from the same determined interest form but a simple demand;
it becomes compound or high, when different interests produce a
competition. It may therefore be said, that when there is no competition
among buyers, demand is simple, let the quantity demanded
be great or small, let the buyers be few or many. When
174therefore in the contract of barter the demand upon one side is
simple, upon the other compound, that which is compound is constantly
called the demand, the other not.
4to. Demand is either great or small: great, when the quantity
demanded is great; small, when the quantity demanded is small.
5to. Demand is either high or low: high, when the competition
among the buyers is great; low, when the competition among the
sellers is great. From these definitions it follows, that the consequence
of a great demand, is a great sale; the consequence of a
high demand, is a great price. The consequence of a small demand,
is a small sale; the consequence of a low demand, is a small
price.
6to. The nature of demand is to encourage industry; and when
it is regularly made, the effect of it is, that the supply for the
most part is found to be in proportion to it, and then the demand
is commonly simple. It becomes compound from other circumstances.
As when it is irregular, that is, unexpected, or when the
usual supply fails; the consequence of which is, that the provision
made for the demand, falling short of the just proportion, occasions
a competition among the buyers, and raises the current, that
is, the ordinary prices. From this it is, that we commonly say,
demand raises prices. Prices are high or low according to demand.
These expressions are just; because the sterility of language
obliges us there to attend to circumstances which are only implied.
Demand is understood to be high or low, relatively to the common
rate of it, or to the competition of buyers, to obtain the provision
made for it. When demand is relative to the quantity demanded,
it must be called great or small, as has been said.
7mo. Demand has not always the same effect in raising prices:
we must therefore carefully attend to the difference between a demand
for things of the first necessity for life, and for things indifferent;
also between a demand made by the immediate consumers,
and one made by merchants, who buy in order to sell again. In
175both cases the competition will have different effects. Things of
absolute necessity must be procured, let the price be ever so great:
consumers who have no view to profit, but to satisfy their desires,
will enter into a stronger competition than merchants, who are
animated by no passion, and who are regulated in what they offer
by their prospect of gain. Hence the great difference in the price
of grain in different years; hence the uniform standard of the
price of merchandize, in fairs of distribution, such as Frankfort,
Beaucaire, &c. hence, also, the advantage which consumers find
in making their provision at the same time that merchants make
theirs; hence the sudden rise and fall in the price of labouring
cattle in country markets, where every one provides for himself.
Let what has been said suffice at setting out: this principle will
be much better explained by its application as we advance, than
by all the abstract distinctions I am capable to give of it.
I must now begin by tracing trade to its source, in order to
reduce it to its first principles.
The most simple of all trade, is that which is carried on by bartering
the necessary articles of subsistence. If we suppose the earth
free to the first possessor, this person who cultivates it will first draw
from it his food, and the surplus will be the object of barter: he
will give this in exchange to any one who will supply his other
wants. This (as has been said) naturally supposes both a surplus
quantity of food produced by labour, and also free hands; for he
who makes a trade of agriculture cannot supply himself with all
other necessaries, as well as food; and he who makes a trade of
176supplying the farmers with such necessaries, in exchange for his
surplus of food, cannot be employed in producing that food. The
more the necessities of man increase, cæteris paribus, the more free
hands are required to supply them; and the more free hands are
required, the more surplus food must be produced by additional
labour, to supply their demand.
This is the least complex kind of trade, and may be carried on
to a greater or less extent, in different countries, according to the
different degrees of the wants to be supplied. In a country where
there is no money, nor any thing equivalent to it, I imagine the
wants of mankind will be confined to few objects; to wit, the removing
the inconveniencies of hunger, thirst, cold, heat, danger,
and the like. A free man who by his industry can procure all the
comforts of a simple life, will enjoy his rest, and work no more:
And, in general, all increase of work will cease, so soon as the demand
for the purposes mentioned comes to be satisfied. There is
a plain reason for this. When the free hands have procured, by
their labour, wherewithal to supply their wants, their ambition is
satisfied: so soon as the husbandmen have produced the necessary
surplus for relieving theirs, they work no more. Here then is a
natural stop put to industry, consequently to bartering. This, in the
first book, we have called the moral impossibility of augmenting numbers.
The next thing to be examined, is, how bartering grows into
trade, properly so called and understood, according to the definition
given of it above; how trade comes to be extended among men;
how manufactures, more ornamental than useful, come to be established;
and how men come to submit to labour, in order to
acquire what is not absolutely necessary for them.
This, in a free society, I take to be chiefly owing to the introduction
of money, and a taste for superfluities in those who possess it.
In antient times, money was not wanting; but the taste for
superfluities not being in proportion to it, the specie was locked up.
This was the case in Europe four hundred years ago. A new taste
for superfluity has drawn, perhaps, more money into circulation,
177from our own treasures, than from the mines of the new world.
The poor opinion we entertain of the riches of our forefathers, is
founded upon the modern way of estimating wealth, by the quantity
of coin in circulation, from which we conclude, that the greatest
part of the specie now in our hands must have come from America.
It is more, therefore, through the taste of superfluity, than in
consequence of the quantity of coin, that trade comes to be established;
and it is only in consequence of trade that we see industry
carry things in our days to so high a pitch of refinement and delicacy.
Let me illustrate this by comparing together the different
operations of barter, sale, and commerce.
When reciprocal wants are supplied by barter, there is not the
smallest occasion for money: this is the most simple of all combinations.
When wants are multiplied, bartering becomes (for obvious reasons)
more difficult; upon this money is introduced. This is the
common price of all things: it is a proper equivalent in the hands
of those who want, perfectly calculated to supply the occasions of
those who, by industry, can relieve them. This operation of buying
and selling is a little more complex than the former; but still
we have here no idea of trade, because we have not introduced the
merchant, by whose industry it is carried on.
Let this third person be brought into play, and the whole operation
becomes clear. What before we called wants, is here represented
by the consumer; what we called industry, by the manufacturer;
what we called money, by the merchant. The merchant here
represents the money, by substituting credit in its place; and as
the money was invented to facilitate barter, so the merchant, with
his credit, is a new refinement upon the use of money. This renders
it still more effectual in performing the operations of buying
and selling. This operation is trade: it relieves both parties of the
whole trouble of transportation, and adjusting wants to wants, or
wants to money; the merchant represents by turns both the consumer,
the manufacturer, and the money. To the consumer he
178appears as the whole body of manufacturers; to the manufacturers
as the whole body of consumers; and to the one and the other class
his credit supplies the use of money. This is sufficient at present
for an illustration. I must now return to the simple operations of
money in the hands of the two contracting parties, the buyer and
the seller, in order to show how men come to submit to labour in
order to acquire superfluities.
So soon as money is introduced into a country it becomes, as we
have said above, an universal object of want to all the inhabitants.
The consequence is, that the free hands of the state, who before
stopt working, because all their wants were provided for, having
this new object of ambition before their eyes, endeavour, by refinements
upon their labour, to remove the smaller inconveniencies
which result from a simplicity of manners. People, I shall suppose,
who formerly knew but one sort of cloathing for all seasons, willingly
part with a little money to procure for themselves different
sorts of apparel properly adapted to summer and winter, which the
ingenuity of manufacturers, and their desire of getting money,
may have suggested to their invention.
I shall not here pursue the gradual progress of industry, in bringing
manufactures to perfection; nor interrupt my subject with
any further observations upon the advantages resulting to industry,
from the establishment of civil and domestic liberty, but shall only
suggest, that these refinements seem more generally owing to the
industry and invention of the manufacturers (who by their ingenuity
daily contrive means of softening or relieving inconveniencies,
which mankind seldom perceive to be such, till the way of removing
them is contrived) than to the taste for luxury in the rich,
who, to indulge their ease, engage the poor to become industrious.
Let any man make an experiment of this nature upon himself,
by entring into the first shop. He will no where so quickly discover
his wants as there. Every thing he sees appears either necessary,
or at least highly convenient; and he begins to wonder
(especially if he be rich) how he could have been so long without
179that which the ingenuity of the workman alone had invented,
in order that from the novelty it might excite his desire; for
perhaps when it is bought, he will never once think of it more,
nor ever apply it to the use for which it at first appeared so necessary.
Here then is a reason why mankind labour though not in want.
They become desirous of possessing the very instruments of luxury,
which their avarice or ambition prompted them to invent for the
use of others.
What has been said represents trade in its infancy, or rather the
materials with which that great fabric is built.
We have formed an idea of the wants of mankind multiplied
even to luxury, and abundantly supplied by the employment of all
the free hands set apart for that purpose. But if we suppose the
workman himself disposing of his work, and purchasing, with it,
food from the farmer, cloaths from the clothier, and in general
seeking for the supply of every want from the hands of the person
directly employed for the purpose of relieving it; this will not convey
an idea of trade, according to our definition.
Trade and commerce are an abbreviation of this long process; a
scheme invented and set on foot by merchants, from a principle of
gain, supported and extended among men, from a principle of
general utility to every individual, rich or poor, to every society,
great or small.
Instead of a pin-maker exchanging his pins with fifty different
persons, for whose labour he has occasion, he sells all to the merchant
for money or for credit; and, as occasion offers, he purchases
all his wants, either directly from those who supply them, or from
other merchants who deal with manufacturers in the same way
his merchant dealt with him.
Another advantage of trade is, that industrious people in one
part of the country, may supply customers in another, though
distant. They may establish themselves in the most commodious
places for their respective business, and help one another reciprocally,
180without making the distant parts of the country suffer for
want of their labour. They are likewise exposed to no avocation
from their work, by seeking for customers.
Trade produces many excellent advantages; it marks out to the
manufacturers when their branch is under or overstocked with
hands. If it is understocked, they will find more demand than they
can answer: if it is overstocked, the sale will be slow.
Intelligent men, in every profession, will easily discover when
these appearances are accidental, and when they proceed from the
real principles of trade; which are here the object of our inquiry.
Posts, and correspondence by letters, are a consequence of trade,
by the means of which merchants are regularly informed of every
augmentation or diminution of industry in every branch, in every
part of the country. From this knowledge they regulate the prices
they offer; and as they are many, they serve as a check upon one
another, from the principles of competition which we shall hereafter
examine.
From the current prices the manufacturers are as well informed
as if they kept the correspondence themselves: the statesman feels
perfectly where hands are wanting, and young people destined to
industry, obey, in a manner, the call of the public, and fall naturally
in to supply the demand.
Two great assistances to merchants, especially in the infancy of
trade, are public markets for collecting the work of small dealers,
and large undertakings in the manufacturing way by private hands.
By these means the merchants come at the knowledge of the quantity
of work in the market, as on the other hand the manufacturers
learn, by the sale of the goods, the extent of the demand for them.
These two things being justly known, the price of goods is easily
fixt, as we shall presently see.
Public sales serve to correct the small inconveniencies which proceed
from the operations of trade. A set of manufacturers got all
together into one town, and entirely taken up with their industry,
are thereby as well informed of the rate of the market as if every
181one of them carried thither his work, and upon the arrival of the
merchant, who readily takes it off their hands, he has not the least
advantage over them from his knowledge of the state of demand.
This man both buys and sells in what is called wholesale (that is by
large parcels) and from him retailers purchase, who distribute the
goods to every consumer throughout the country. These last buy
from wholesale merchants in every branch, that proportion of every
kind of merchandize which is suitable to the demand of their borough,
city, or province.
Thus all inconveniencies are prevented, at some additional cost
to the consumer, who, for reasons we shall afterwards point out,
must naturally reimburse the whole expence. The distance of the
manufacturer, the obscurity of his dwelling, the caprice in selling
his work, are quite removed; the retailer has all in his shop, and
the public buys at a current price.
In the price of goods, I consider two things as really existing,
and quite different from one another; to wit, the real value of
the commodity, and the profit upon alienation. The intention of
this chapter is to establish this distinction, and to shew how the
operation of trade severally influences the standard of the one and
the other; that is to say, how trade has the effect of rendering fixt
and determined, two things which would otherwise be quite vague
and uncertain.
I. The first thing to be known of any manufacture when it comes
to be sold, is, how much of it a person can perform in a day, a
week, a month, according to the nature of the work, which may
182require more or less time to bring it to perfection. In making such
estimates, regard is to be had only to what, upon an average, a
workman of the country in general may perform, without supposing
him the best or the worst in his profession; or having any
peculiar advantage or disadvantage as to the place where he works.
Hence the reason why some people thrive by their industry, and
others not; why some manufactures flourish in one place and not
in another.
II. The second thing to be known, is the value of the workman’s
subsistence and necessary expence, both for supplying his personal
wants, and providing the instruments belonging to his profession,
which must be taken upon an average as above; except when the
nature of the work requires the presence of the workman in the
place of consumption: for although some trades, and almost every
manufacture, may be carried on in places at a distance, and therefore
may fall under one general regulation as to prices, yet others
there are which, by their nature, require the presence of the workman
in the place of consumption; and in that case the prices must
be regulated by circumstances relative to every particular place.
III. The third and last thing to be known, is the value of the materials,
that is the first matter employed by the workman; and if
the object of his industry be the manufacture of another, the same
process of inquiry must be gone through with regard to the first,
as with regard to the second: and thus the most complex manufactures
may be at last reduced to the greatest simplicity. I have
been more particular in this analysis of manufactures than was
absolutely necessary in this place, that I might afterwards with the
greater ease point out the methods of diminishing the prices of
them.
These three articles being known, the price of manufacture is
determined. It cannot be lower than the amount of all the three,
that is, than the real value; whatever it is higher, is the manufacturer’s
profit. This will ever be in proportion to demand, and therefore
will fluctuate according to circumstances.
183Hence appears the necessity of a great demand, in order to promote
flourishing manufactures.
By the extensive dealings of merchants, and their constant application
to the study of the balance of work and demand, all the
above circumstances are known to them, and are made known to
the industrious, who regulate their living and expence according
to their certain profit. I call it certain, because under these circumstances
they seldom overvalue their work, and by not overvaluing
it, they are sure of a sale: a proof of this may be had from daily
experience.
Employ a workman in a country where there is little trade or
industry, he proportions his price always to the urgency of your
want, or your capacity to pay; but seldom to his own labour.
Employ another in a country of trade, he will not impose upon
you, unless perhaps you be a stranger, which supposes your being
ignorant of the value; but employ the same workman in a work
not usual in the country, consequently not demanded, consequently
not regulated as to the value, he will proportion his price as in the
first supposition.
We may therefore conclude from what has been said, that in a
country where trade is established, manufactures must flourish,
from the ready sale, the regulated price of work, and certain profit
resulting from industry. Let us next inquire into the consequences
of such a situation.
184
The first consequence of the situation described in the preceding
chapter, is, that wants are easily supplied, for the adequate
value of the thing wanted.
The next consequence is, the opening of foreign trade under its
two denominations of passive and active. Strangers and people of
distant countries finding the difficulty of having their wants supplied
at home, and the ease of having them supplied from this
country, immediately have recourse to it. This is passive trade.
The active is when merchants, who have executed this plan at
home with success, begin to transport the labour of their countrymen
into other regions, which either produce, or are capable of
producing such articles of consumption, proper to be manufactured,
as are most demanded at home; and consequently will meet with
the readiest sale, and fetch the largest profits.
Here then is the opening of foreign trade, under its two denominations
of active and passive: but as our present point of view is
the consequences of this revolution to the merchants, we shall take
no farther notice, in this place, of that division: it will naturally
come in afterwards.
What then are the consequences of this new commerce to our
merchants, who have left their homes in quest of gain abroad?
The first is, that arriving in any new country, they find themselves
in the same situation, with regard to the inhabitants, as the
workman in the country of no trade, with regard to those who employed
him; that is, they proportion the price of their goods to the
eagerness of acquiring, or the capacity of paying, in the inhabitants,
but never to their real value.
185The first profits then, upon this trade, must be very considerable;
and the demand from such a country will be high or low, great or
small, according to the spirit, not the real wants of the people: for
these in all countries, as has been said, must first be supplied by the
inhabitants themselves, before they cease to labour.
If the people of this not-trading country (as we shall now call it)
be abundantly furnished with commodities useful to the traders,
they will easily part with them, at first, for the instruments of luxury
and ease; but the great profit of the traders will insensibly increase
the demand for the productions of their new correspondents; this
will have the effect of producing a competition between themselves,
and thereby of throwing the demand on their side, from the
principles I shall afterwards explain. This is perpetually a disadvantage
in traffic: the most unpolished nations in the world quickly
perceive the effects of it; and are taught to profit of the discovery,
in spite of the address of those who are the most expert in commerce.
The traders will, therefore, be very fond of falling upon every
method and contrivance to inspire this people with a taste of refinement
and delicacy. Abundance of fine presents, consisting of every
instrument of luxury and superfluity, the best adapted to the genius
of the people, will be given to the prince and leading men among
them. Workmen will even be employed at home to study the taste
of the strangers, and to captivate their desires by every possible
means. The more eager they are of presents, the more lavish the
traders will be in bestowing and diversifying them. It is an animal
put up to fatten, the more he eats the sooner he is fit for slaughter.
When their taste for superfluity is fully formed, when the relish
for their former simplicity is sophisticated, poisoned, and obliterated,
then they are surely in the fetters of the traders, and the deeper
they go, the less possibility there is of their getting out. The presents
then will die away, having served their purpose; and if afterwards
they are found to be continued, it will probably be to support
186the competition against other nations, who will incline to
share of the profits.
If, on the contrary, this not-trading nation does not abound with
commodities useful to the traders, these will make little account of
trading with them, whatever their turn may be; but if we suppose
this country inhabited by a laborious people, who, having taken a
taste for refinement from the traders, apply themselves to agriculture,
in order to produce articles of subsistence, they will sollicit the
merchants to give them part of their manufactures in exchange
for those; and this trade will undoubtedly have the effect of multiplying
numbers in the trading nation. But if food cannot be
furnished, nor any other branch of production found out to support
the correspondence, the taste for refinement will soon die
away, and trade will stop in this quarter.
Had it not been for the furs in those countries adjacent to Hudson’s
Bay, and in Canada, the Europeans never would have thought
of supplying instruments of luxury to those nations; and if the
inhabitants of those regions had not taken a taste for the instruments
of luxury furnished to them by the Europeans, they never
would have become so indefatigable nor so dexterous hunters. At
the same time we are not to suppose, that ever these Americans
would have come to Europe in quest of our manufactures. It is
therefore owing to our merchants, that these nations are become
in any degree fond of refinement; and this taste, in all probability,
will not soon exceed the proportion of the productions of their
country. From these beginnings of foreign trade it is easy to
trace its increase.
One step towards this, is the establishing correspondences in foreign
countries; and these are more or less necessary in proportion
as the country where they are established is more or less polished
or acquainted with trade. They supply the want of posts, and point
out to the merchants what proportion the productions of the
country bear to the demand of the inhabitants for manufactures.
This communicates an idea of commerce to the not-trading nation,
187and they insensibly begin to fix a determined value upon their
own productions, which perhaps bore no determined value at all
before.
Let me trace a little the progress of this refinement in the savages,
in order to shew how it has the effect of throwing the demand upon
the traders, and of creating a competition among them, for the
productions of the new country.
Experience shews, that in a new discovered country, merchants
constantly find some article or other of its productions, which
turns out to a great account in commerce; and we see that the
longer such a trade subsists, and the more the inhabitants take a
taste for European manufactures, the more their own productions
rise in their value, and the less profit is made by trading with
them, even in cases where the trade is carried on by companies;
which is a very wise institution for one reason, that it cuts off a
competition between our merchants.
This we shall shew, in its proper place, to be the best means of
keeping prices low in favour of the nation; however it may work
a contrary effect with respect to individuals who must buy from
these monopolies.
When companies are not established, and when trade is open,
our merchants, by their eagerness to profit of the new trade, betray
the secrets of it, they enter into competition for the purchase of the
foreign produce, and this raises prices and favours the commerce
of the most ignorant savages.
Some account for this in a different manner. They alledge that
it is not this competition which raises prices; because there is also
a competition among the savages as to which of them shall get the
merchandize; and this may be sufficient to counterbalance the
other, and in proportion as the quantity of goods demanded by the
savages, as an exchange for the produce of their country, becomes
greater, a less quantity of this produce must be given for every
parcel of the goods.
188To this I answer, That I cannot admit this apparent reason to be
consistent with the principles of trade, however ingenious the conceit
may be.
The merchant constantly considers his own profit in parting with
his goods, and is not influenced by the reasons of expediency
which the savages may find, to offer him less than formerly; for
were this principle of proportion admitted generally, the price of
merchandize would always be at the discretion of the buyers.
The objection here stated is abundantly plain; but it must be
resolved in a very different manner. Here are two solutions:
1. Prices, I have said, are made to rise, according as demand is
high, not according as it is great. Now, in the objection, it is said,
that, in proportion as the demand is great, a less proportion of the
equivalent must go to every parcel of the merchandize; which I
apprehend to be false: and this shews the necessity of making a
distinction between the high and the great demand, which things
are different in trade, and communicate quite different ideas.
2. In all trade there is an exchange, and in all exchange, we have
said, there is a reciprocal demand implied: it must therefore be
exactly inquired into, on which hand the competition between the
demanders is found; that is to say, on which hand it is strongest;
according to the distinction in the second chapter.
If the inhabitants of the country be in competition for the manufactures,
goods will rise in their price most undoubtedly, let the
quantity of the produce they have to offer be large or small; but
so soon as these prices rise above the faculties, or desire of buying,
in certain individuals, their demand will stop, and their equivalent
will be prevented from coming into commerce. This will
disappoint the traders; and therefore, as their gains are supposed
to be great, either a competition will take place among themselves,
who shall carry off the quantity remaining, supposing them to have
separate interests; or, if they are united, they may, from a view
of expediency, voluntarily sink their price, in order to bring it
189within the compass of the faculties, or intention, to buy in those
who are still possessed of a portion of what they want.
It is from the effects of competition among sellers that I apprehend
prices are brought down, not from any imaginary proportion
of quantity to quantity in the market. But of this more afterwards,
in its proper place.
So soon as the price of manufactures is brought as low as possible,
in the new nation; if the surplus of their commodities does
not suffice to purchase a quantity of manufactures proportioned
to their wants, this people must begin to labour: for labour is the
necessary consequence of want, real or imaginary; and by labour
it will be supplied.
When this comes to be the case, we immediately find two trading
nations in place of one; the balance of which trade will always
be in favour of the most industrious and frugal; as shall be
fully explained in another place.
Let me now direct my inquiry more particularly towards the consequences
of this new revolution produced by commerce, relative
to the not-trading nation, in order to shew the effect of a passive
foreign trade. I shall spare no pains in illustrating, upon every occasion,
as I go along, the fundamental principles of commerce,
demand, and competition, even perhaps at the expence of appearing
tiresome to some of my readers.
190
We now suppose the arrival of traders, all in one interest,
with instruments of luxury and refinement, at a port in a
country of great simplicity of manners, abundantly provided by
nature with great advantages for commerce, and peopled by a
nation capable of adopting a taste for superfluities.
The first thing the merchants do, is to expose their goods, and
point out the advantages of many things, either agreeable or useful
to mankind in general, such as wines, spirits, instruments of agriculture,
arms, and ammunition for hunting, nets for fishing, manufactures
for clothing, and the like. The advantages of these are
presently perceived, and such commodities are eagerly sought
after.
The natives on their side produce what they most esteem, generally
something superfluous or ornamental. The traders, after
examining all circumstances, determine the object of their demand,
giving the least quantity possible in return for this superfluity,
in order to impress the inhabitants with a high notion of the
value of their own commodities; but as this parsimony may do
more hurt than good to their interest, they are very generous in
making presents, from the principles mentioned above.
When the exchange is completed, and the traders depart, regret is
commonly mutual; the one and the other are sorry that the superfluities
of the country fall short. A return is promised by the
traders, and assurances are given by the natives, of a better provision
another time.
What are the first consequences of this revolution?
191It is not evident, that, in order to supply an equivalent for this
new want, more hands must be set to work than formerly. And
it is evident also, that this augmentation of industry will not essentially
increase numbers, as was supposed to be the effect of it
through the whole train of our reasoning in the first book. Why?
Because there the produce of the industry was supposed to be consumed
at home; and here it is intended to be exported. But if we
can find out any additional consumption at home even implied by
this new trade, I think it will have the effect of augmenting numbers.
An example will make this plain.
Let me suppose the superfluity of this country to be the skins of
wild beasts, not proper for food; the manufacture sought for,
brandy. The brandy is sold for furs. He who has furs, or he
who can spare time to hunt for them, will drink brandy in proportion:
but I cannot find out any reason to conclude from this
simple operation, that one man more in the country must necessarily
be fed, (for I have taken care to suppose, that the flesh of the
animals is not proper for food) or that any augmentation of agriculture
must of consequence ensue from this new traffic.
But let me throw in a circumstance which may imply an additional
consumption at home, and then examine the consequences.
A poor creature, who has no equivalent to offer for food, who
is miserable, and ready to perish for want of subsistence, goes a-hunting,
and kills a wolf; he comes to a farmer with the skin, and
says; You are well fed, but you have no brandy; if you will give
me a loaf, I will give you this skin, which the strangers are so fond
of, and they will give you brandy. But, says the farmer, I have
no more bread than what is sufficient for my own family. As for
that, replies the other, I will come and dig in your ground, and
you and I will settle our account as to the small quantity I desire of
you. The bargain is made; the poor fellow gets his loaf, and
lives at least; perhaps he marries, and the farmer gets a dram.
But had it not been for this dram, (that is, this new want) which
192was purchased by the industry of this poor fellow, by what argument
could he have induced the farmer, to part with a loaf.
I here exclude the sentiment of charity. This alone, as I have
often observed, is a principle of multiplication, and if it was admitted
here, it would ruin all my supposition; but as true it is, on
the other hand, that could the poor fellow have got bread by begging,
he would not probably have gone a-hunting.
Here then it appears, that the very dawning of trade, in the
most unpolished countries, implies a multiplication. This is
enough to point out the first step, and to connect the subject of our
present inquiries with what has been already discussed in relation
to other circumstances. I proceed.
So soon as all the furs are disposed of, and a taste for superfluity
introduced, both the traders and the natives will be equally interested
in the advancement of industry in this country. Many new
objects of profit for the first will be discovered, which the proper
employment of the inhabitants, in reaping the natural advantages
of their soil and climate, will make effectual. The traders will
therefore endeavour to set on foot many branches of industry
among the savages, and the allurements of brandy, arms, and
clothing, will animate these in the pursuit of them. Let me here
digress for a few lines.
If we suppose slavery to be established in this country, then all
the slaves will be set to work, in order to provide furs and other
things demanded by the traders, that the masters may thereby be
enabled to indulge themselves in the superfluities brought to them
by the merchants. When liberty is the system, every one, according
to his disposition, becomes industrious, in order to procure such
enjoyments for himself.
In the first supposition, it is the head of the master which conducts
the labour of the slave, and turns it towards ingenuity: in
the second, every head is at work, and every hand is improving in
dexterity. Where hands therefore are principally necessary, the
slaves have the advantage; where heads are principally necessary,
193the advantage lies in favour of the free. Set a man to labour at
so much a day, he will go on at a regular rate, and never seek to
improve his method: let him be hired by the piece, he will find a
thousand expedients to extend his industry. This is exactly the
difference between the slave and the free man. From this I account
for the difference between the progress of industry in antient
and modern times. Why was a peculium given to slaves, but to engage
them to become dextrous? Had there been no peculium and no
libertini, or free men, who had been trained to labour, there would
have been little more industry any where, than there was in the
republic of Lycurgus, where, I apprehend, neither the one or the
other was to be found. I return.
When once this revolution is brought about; when those who
formerly lived in simplicity become industrious; matters put on
a new face. Is not this operation quite similar to that represented
in the fifth chapter of the first book? There I found the greatest
difficulty, in shewing how the mutual operations of supplying food
and other wants could have the effect of promoting population and
agriculture, among a people who were supposed to have no idea
of the system proposed to be put in execution. Here the plan appears
familiar and easy. The difference between them seems
to resemble that of a child’s learning a language by grammar, or
learning it by the ear in the country where it is spoken. In the
first case, many throw the book aside, but in the other none ever
fail of success.
I have said, that matters put on a new face; that is to say, we
now find two trading nations instead of one, with this difference,
however, that as hitherto we have supposed the merchants all in
one interest, the compound demand, that is, the competition of the
buyers, has been, and must still continue on the side of the natives.
This is a great prejudice to their interest, but as it is not
supposed sufficient to check their industry, nor to restrain their
consumption of the manufactures, let me here examine a little
more particularly the consequences of the principle of demand in
194such a situation; for although I allow, that it can never change
sides, yet it may admit of different modifications, and produce different
effects, as we shall presently perceive.
The merchants we suppose all in one interest, consequently there
can be no competition among them; consequently no check can
be put upon their raising their prices, as long as the prices they
demand are complied with. So soon as they are raised to the full
extent of the abilities of the natives, or of their inclination to buy,
the merchants have the choice of three things, which are all
perfectly in their option, and the preference to be given to the
one or the other depends intirely upon themselves, and upon the
circumstances I am going to point out.
First, they may support the high demand; that is, not lower their
price; which will preserve a high estimation of the manufactures
in the opinion of the inhabitants, and render the profits upon
their trade the greatest possible. This part they may possibly take,
if they perceive the natives doubling their diligence, in order to
become able, in time, to purchase considerable cargoes at a high
value; from which supposition is implied a strong disposition in the
people to become luxurious, since nothing but want of ability
prevents them from complying with the highest demand: but still
another circumstance must concur, to engage the merchants not to
lower their price. The great proportion of the goods they seek
for, in return, must be found in the hands of a few. This will
be the case if slavery be established; for then there must be many
poor, and few rich: and they are commonly the rich consumers
who proportion the price they offer, rather to their desires, than to
the value of the thing.
The second thing which may be done is, to open the door to a
great demand; that is, to lower their prices. This will sink the
value of the manufactures in the opinion of the inhabitants, and
render profits less in proportion, although indeed, upon the voyage,
the profits may be greater.
195This part they will take, if they perceive the inhabitants do not
incline to consume great quantities of the merchandize at a high
value, either from want of abilities or inclination; and also, if
the profits upon the trade depend upon a large consumption, as
is the case in merchandize of a low value, and suited chiefly to
the occasions of the lower sort. Such motives of expediency will
be sufficient to make them neglect a high demand, and prefer a
great one; and the more, when there is a likelihood that the consumption
of low-priced goods in the beginning may beget a
taste for others of a higher value, and thus extend in general the
taste of superfluity.
A third part to be taken, is the least politic, and perhaps the
most familiar. It is to profit by the competition between the buyers,
and encourage the rising of demand as long as possible;
when this comes to a stop, to make a kind of auction, by first
bringing down the prices to the level of the highest bidders, and
so to descend by degrees, in proportion as demand sinks. Thus
we may say with propriety, according to our definitions of demand,
that it commonly becomes great, in proportion as prices sink. By
this operation, the traders will profit as much as possible, and
sell off as much of their goods as the profits will permit.
I say, this plan, in a new discovered country, is not politic, as
it both discovers a covetousness and a want of faith in the merchants,
and also throws open the secrets of their trade to those
who ought to be kept ignorant of them.
Let me next suppose, that the large profits of our merchants
shall be discovered by others, who arrive at the same ports in a
separate interest, and who enter into no combination which might
prevent the natural effects of competition.
Let the state of demand among the natives be supposed the same
as formerly, both as to height and greatness, in consequence of the
operation of the different principles, which might have induced
our merchants to follow one or other of the plans we have been
196describing; we must however still suppose, that they have been
careful to preserve considerable profits upon every branch.
If we suppose the inhabitants to have increased in numbers,
wealth, and taste for superfluity, since the last voyage, demand will
be found rather on the rising hand. Upon the arrival of the merchants
in competition with the former, both will offer to sale; but
if both stand to the same prices, it is very natural to suppose, that
the former dealers will obtain a preference; as cæteris paribus, it is
always an advantage to know and to be known. The last comers,
therefore, have no other way left to counterbalance this advantage,
but to lower their prices.
This is a new phoenomenon: here the fall of prices is not voluntary
as formerly; not consented to from expediency; not owing
to a failure of demand, but to the influence of a new principle of
commerce, to wit, a double competition. This I shall now examine
with all the care I am capable of.
When competition is much stronger on one side of the contract
than on the other, I call it simple, and then it is a term synonimous
with what I have called compound demand. This is the
species of competition which is implied in the term high demand, or
when it is said, that demand raises prices.
Double competition is, when, in a certain degree, it takes place on
both sides of the contract at once, or vibrates alternately from one
to the other. This is what restrains prices to the adequate value
of the merchandize.
197I frankly confess I feel a great want of language to express my
ideas, and it is for this reason I employ so many examples, the better
to communicate certain combinations of them, which otherwise
would be inextricable.
The great difficulty is to distinguish clearly between the principles
of demand, and those of competition: here then follows the principal
differences between the two, relatively to the effects they produce
severally in the mercantile contract of buying and selling, which
I here express shortly by the word contract.
Simple demand is what brings the quantity of a commodity to market.
Many demand, who do not buy; many offer, who do not
sell. This demand is called great or small; it is said to increase, to
augment, to swell; and is expressed by these and other synonimous
terms, which mark an augmentation or diminution of quantity.
In this species, two people never demand the same thing, but a
part of the same thing, or things quite alike.
Compound demand is the principle which raises prices, and never
can make them sink; because in this case more than one demands
the very same thing. It is solely applicable to the buyers,
in relation to the price they offer. This demand is called high or
low, and is said to rise, to fall, to mount, to sink, and is expressed by
these and other synonimous terms.
Simple competition, when between buyers, is the same as compound
or high demand, but differs from it in so far, as this may equally
take place among sellers, which compound demand cannot, and then
it works a contrary effect: it makes prices sink, and is synonimous
with low demand: it is this competition which overturns the balance
of work and demand; of which afterwards.
Double competition is what is understood to take place in almost
every operation of trade; it is this which prevents the excessive
rise of prices; it is this which prevents their excessive fall. While
double competition prevails, the balance is perfect, trade and industry
flourish.
198The capital distinction, therefore, between the terms demand and
competition is, that demand is constantly relative to the buyers, and
when money is not the price, as in barter, then it is relative to that
side upon which the greatest competition is found.
We therefore say, with regard to prices, demand is high or low.
With regard to the quantity of merchandize, demand is great or small.
With regard to competition, it is always called great or small, strong or
weak.
Competition, I have said, is, with equal propriety, applicable to
both parties in the contract. A competition among buyers is a proper
expression; a competition among sellers, who have the merchandize,
is fully as easily understood, though it be not quite so striking,
for reasons which an example will make plain.
You come to a fair, where you find a great variety of every kind
of merchandize, in the possession of different merchants. These,
by offering their goods to sale, constitute a tacit competition; every
one of them wishes to sell in preference to another, and at the
same time with the best advantage to himself.
The buyers begin, by cheapning at every shop. The first price
asked marks the covetousness of the seller; the first price offered,
the avarice of the buyer. From this operation, I say, competition
begins to work its effects on both sides, and so becomes double.
The principles which influence this operation are now to be deduced.
It is impossible to suppose the same degree of eagerness, either
to buy or to sell, among several merchants; because the degree of
eagerness I take to be exactly in proportion to their view of profit;
and as these must necessarily be influenced and regulated by different
circumstances, that buyer, who has the best prospect of selling
again with profit, obliges him, whose prospect is not so good,
to content himself with less; and that seller, who has bought to
the best advantage, obliges him, who has paid dearer for the merchandize,
to moderate his desire of gain.
199It is from these principles, that competition among buyers and
sellers must take place. This is what confines the fluctuation of
prices within limits which are compatible with the reasonable profits
of both buyers and sellers; for, as has been said, in treating
of trade, we must constantly suppose the whole operation of buying
and selling to be performed by merchants; the buyer cannot
be supposed to give so high a price as that which he expects to receive,
when he distributes to the consumers, nor can the seller be
supposed to accept of a lower than that which he paid to the manufacturer.
This competition is properly called double, because of
the difficulty to determine upon which side it stands; the same
merchant may have it in his favour upon certain articles, and
against him upon others; it is continually in vibration, and the
arrival of every post may less or more pull down the heavy scale.
In every transaction between merchants, the profit resulting from
the sale must be exactly distinguished from the value of the merchandize.
The first may vary, the last never can. It is this profit
alone which can be influenced by competition; and it is for that
reason we find such uniformity every where in the prices of goods
of the same quality.
The competition between sellers does not appear so striking, as
that between buyers; because he who offers to sale, appears only
passive in the first operation; whereas the buyers present themselves
one after another; they make a demand, and when the
merchandize is refused to one at a certain price, a second either
offers more, or does not offer at all: but so soon as another seller
finds his account in accepting the price the first had refused, then
the first enters into competition, providing his profits will admit
his lowering the first price, and thus competition takes place among
the sellers, until the profits upon their trade prevent prices from
falling lower.
In all markets, I have said, this competition is varying, though
insensibly, on many occasions; but in others, the vibrations are
200very perceptible. Sometimes it is found strongest on the side of
the buyers, and in proportion as this grows, the competition between
the sellers diminishes. When the competition between the
former has raised prices to a certain standard, it comes to a stop;
then the competition changes sides, and takes place among the
sellers, eager to profit of the highest price. This makes prices
fall, and according as they fall, the competition among the buyers
diminishes. They still wait for the lowest period. At last it comes;
and then perhaps some new circumstance, by giving the balance
a kick, disappoints their hopes. If therefore it ever happens, that
there is but one interest upon one side of the contract, as in the
example in the former chapter, where we supposed the sellers
united, you perceive, that the rise of the price, occasioned by the
competition of the buyers, and even its coming to a stop, could
not possibly have the effect of producing any competition on the
other side; and therefore, if prices come afterwards to sink, the
fall must have proceeded from the prudential considerations of
adapting the price to the faculties of those, who, from the height
of it, had withdrawn their demand.
From these principles of competition, the forestalling of markets
is made a crime, because it diminishes the competition which
ought to take place between different people, who have the same
merchandize to offer to sale. The forestaller buys all up, with an
intention to sell with more profit, as he has by that means taken
other competitors out of the way, and appears with a single interest
on one side of the contract, in the face of many competitors
on the other. This person is punished by the state, because he has
prevented the price of the merchandize from becoming justly proportioned
to the real value; he has robbed the public, and enriched
himself; and in the punishment, he makes restitution. Here occur
two questions to be resolved, for the sake of illustration.
Can competition among buyers possibly take place, when the
provision made is more than sufficient to supply the quantity demanded?
201On the other hand, can competition take place among
the sellers, when the quantity demanded exceeds the total provision
made for it?
I think it may in both cases; because in the one and the other,
there is a competition implied on one side of the contract, and the
very nature of this competition implies a possibility of its coming
on the other, provided separate interests be found upon both sides.
But to be more particular.
1. Experience shews, that however justly the proportion between
the demand and the supply may be determined in fact, it is still
next to impossible to discover it exactly, and therefore buyers can
only regulate the prices they offer, by what they may reasonably
expect to sell for again. The sellers, on the other hand, can only
regulate the prices they expect, by what the merchandize has cost
them when brought to market. We have already shewn, how,
under such circumstances, the several interests of individuals affect
each other, and make the balance vibrate.
2. The proportion between the supply and the demand is seldom
other than relative among merchants, who are supposed to buy and
sell, not from necessity, but from a view to profit. What I mean
by relative is, that their demand is great or small, according to prices:
there may be a great demand for grain at 35 shillings per quarter,
and no demand at all for it at 40 shillings; I say, among merchants.
Here I must observe, how essential it is, to attend to the smallest
circumstance in matters of this kind. The circumstance I here
have in my eye, is the difference I find in the effect of competition,
when it takes place purely among merchants on both sides of the
contract, and when it happens, that either the consumers mingle
themselves with the merchant-buyers, or the manufacturers, that
is, the furnishers, mingle themselves with the merchant-sellers.
This combination I shall illustrate, by the solution of another
202question, and then conclude my chapter with a few reflections
upon the whole.
Can there be no case formed, where the competition upon one
side may subsist, without a possibility of its taking place on the
other, although there should be separate interests upon both?
I answer. The case is hardly supposable among merchants, who
buy and sell with a view to profit; but it is absolutely supposable,
and that is all, when the direct consumers are the buyers;
when the circumstances of one of the parties is perfectly known;
and when the competition is so strong upon one side, as to prevent
a possibility of its becoming double, before the whole provision is
sold off, or the demand satisfied. Let me have recourse to examples.
Grain arriving in a small quantity, at a port where the inhabitants
are starving, produces so great a competition among the consumers,
who are the buyers, that their necessity becomes evident;
all the grain is generally bought up before prices can rise so
high as to come to a stop; because nothing but want of money,
that is, an impossibility of complying with the prices demanded
by the merchants, can restrain them: but if you suppose, even
here, that prices come naturally to a stop; or that, after some time,
they fall lower, from prudential considerations, then there is a
possibility of a competition taking place among the sellers, from
the principles above deduced. If, on the contrary, the stop is not
natural, but occasioned by the interposition of the magistrate, from
humanity, or the like, there will be no competition, because then
the principles of commerce are suspended; the sellers are restrained
on one side, and they restrain the buyers on the other.
Or rather, indeed, it is the magistrate, or compassion, who in a
manner fixes the price, and performs the office of both buyer and
seller.
A better example still may be found, in a competition among
sellers; where it may be so strong, as to render a commodity in a
203manner of no value at all, as in the case of an uncommon and
unexpected draught of fish, in a place of small consumption, when
no preparations have been made for salting them. There can be
then no competition among the buyers; because the market cannot
last, and they find themselves entirely masters, to give what
price they please, being sure the sellers must accept of it, or lose
their merchandize. In the first example, humanity commonly
stops the activity of the principle of competition; in the other it
is stopt by a certain degree of fair-dealing, which forbids the accepting
of a merchandize for nothing.
In proportion therefore as the rising of prices can stop demand,
or the sinking of prices can increase it, in the same proportion will
competition prevent either the rise or the fall from being carried
beyond a certain length: and if such a case can be put, where the
rising of prices cannot stop demand, nor the lowering of prices
augment it, in such cases double competition has no effect; because
these circumstances unite the most separate interests of buyers
and sellers in the mercantile contract, and when upon one side
there is no separate interest, there can then be no competition.
From what has been said, we may form a judgment of the various
degrees of competition. A book not worth a shilling, a fish
of a few pounds weight, are often sold for considerable sums.
The buyers here are not merchants. When an ambassador leaves
a court in a hurry, things are sold for less than the half of their
value: he is no merchant, and his situation is known. When, at
a public market, there are found consumers, who make their provision;
or manufacturers, who dispose of their goods for present
subsistence; the merchants, who are respectively upon the opposite
side of the contract to these, profit of their competition; and those
who are respectively upon the same side with them, stand by with
patience, until they have finished their business. Then matters
come to be carried on between merchant and merchant, and then,
I allow, that profits may rise and fall, in the proportion of quantity
204to demand; that is to say, if the provision is less than the demand,
the competition among the demanders, or the rise of the
price, will be in the compound proportion of the falling short of
the commodity, and of the prospect of selling again with profit.
It is this combination which regulates the competition, and keeps
it within bounds. It can affect but the profits upon the transaction;
the intrinsic value of the commodity stands immoveable: nothing
is ever sold below the real value; nothing is ever bought for more
than it may probably bring. I mean in general. Whereas so soon
as consumers and needy manufacturers mingle in the operation,
all proportion is lost. The competition between them is too strong
for the merchants; the balance vibrates by jerks. In such markets
merchants seldom appear: the principal objects there, are
the fruits and productions of the earth, and articles of the first
necessity for life, not manufactures strictly so called. A poor fellow
often sells, to purchase bread to eat; not to pay what he did
eat, while he was employed in the work he disposes of. The consumer
often measures the value of what he is about to purchase,
by the weight of his purse, and his desire to consume.
As these distinctions cannot be conveyed in the terms by which
we are obliged to express them, and as they must frequently be
implied, in treating of matters relating to trade and industry, I
thought the best way was, to clear up my own ideas concerning
them, and to lay them in order before my reader, before I entred
farther into my subject.
All difference of opinion upon matters of this nature proceeds,
as I believe, from our language being inadequate to express our
ideas, from our inattention, in using terms which appear synonimous,
and from our natural propensity to include, under general
rules, things which, upon some occasions, common reason requires
to be set asunder.
205
As we have been employed in explaining of terms, it will
not be amiss to say a word concerning those which stand in
the title of this chapter.
The term expence, when simply expressed, without any particular
relation, is always understood to be relative to money. This kind
I distinguish under the three heads, of private, public, and national.
1. Private expence is, what a private person, or private society,
lays out, either to provide articles of consumption, or something
more permanent, which may be conducive to their ease, convenience,
or advantage. Thus we say, a large domestic expence, relative
to one who spends a great income. We say, a merchant has been
at great expence for magazines, for living, for clerks, &c. but never
that he has been at any in buying goods. In the same way a manufacturer
may expend for building, machines, horses, and carriages,
but never for the matter he manufactures. When a thing
is bought, in order to be sold again, the sum employed is called
money advanced; when it is bought not to be sold, it may be said
to be expended.
2. Public expence is, the employment of that money, which has
been contributed by individuals, for the current service of the
state. The contribution, or gathering it together, represents the
effects of many articles of private expence; the laying it out when
collected, is public expence.
3. National expence, is what is expended out of the country: this
is what diminishes national wealth. The principal distinction to
be here attended to, is between public expence, or the laying out of
public money, and national expence, which is the alienating the
206nation’s wealth in favour of strangers. Thus the greatest public
expence imaginable, may be no national expence; because the money
may remain at home. On the other hand, the smallest public,
or even private expence, may be a national expence; because the money
may go abroad.
Profit, and loss, I divide into positive, relative, and compound. Positive
profit, implies no loss to any body; it results from an augmentation
of labour, industry, or ingenuity, and has the effect of swelling or
augmenting the public good.
Positive loss, implies no profit to any body; it is what results from
the cessation of the former, or of the effects resulting from it, and
may be said to diminish the public good.
Relative profit, is what implies a loss to some body; it marks a
vibration of the balance of wealth between parties, but implies no
addition to the general stock.
Relative loss, is what, on the contrary, implies a profit to some
body; it also marks a vibration of the balance, but takes nothing
from the general stock.
The compound is easily understood; it is that species of profit and
loss which is partly relative, and partly positive. I call it compound,
because both kinds may subsist inseparably in the same transaction.
Did I not intend to confine myself to very general topics in
this chapter, I might in a manner exhaust the whole subject
of modern oeconomy under this title; for I apprehend that the
207whole system of modern politics is founded upon the basis of an
active foreign trade.
A nation which remains passive in her commerce, is at the mercy
of those who are active, and must be greatly favoured, indeed, by
natural advantages, or by a constant flux of gold and silver from
her mines, to be able to support a correspondence, not entirely
hurtful to the augmentation of her wealth.
These things shall be more enlarged upon as we go along: the
point in hand, is, to consider the consequences of this trade, relatively
to those who are the actors in the operation.
When I look upon the wide field which here opens to my view,
I am perplexed with too great a variety of objects. In one part, I
see a decent and comely beginning of industry; wealth flowing
gently in, to recompence ingenuity; numbers both augmenting,
and every one becoming daily more useful to another; agriculture
proportionally extending itself; no violent revolutions; no exorbitant
profits; no insolence among the rich; no excessive misery
among the poor; multitudes employed in producing; great oeconomy
upon consumption; and all the instruments of luxury, daily
produced by the hands of the diligent, going out of the country
for the service of strangers; not remaining at home for the gratification
of sensuality. At last the augmentations come insensibly to
a stop. Then these rivers of wealth, which were in brisk circulation
through the whole world, and which returned to this trading
nation as blood returns to the heart, only to be thrown out again
by new pulsations, begin to be obstructed in their course; and flowing
abroad more slowly than before, come to form stagnations at
home. These, impatient of restraint, soon burst out into domestic
circulation. Upon this cities swell in magnificence of buildings;
the face of the country is adorned with palaces, and becomes
covered with groves; luxury shines triumphant in every part;
inequality becomes more striking to the eye; and want and misery
appear more deformed, from the contrast: even fortune grows
208more whimsical in her inconstancy; the beggar of the other day,
now rides in his coach; and he who was born in a bed of state, is
seen to die in a gaol, or in an alms-house. Such are the effects of
great domestic circulation.
The statesman looks about with amazement; he, who was wont to
consider himself as the first man in the society in every respect, perceives
himself, perhaps, eclipsed by the lustre of private wealth, which
avoids his grasp when he attempts to seize it. This makes his government
more complex and more difficult to be carried on; he
must now avail himself of art and address as well as of power and
force. By the help of cajoling and intrigues, he gets a little into
debt; this lays a foundation for public credit, which, growing by
degrees, and in its progress assuming many new forms, becomes,
from the most tender beginnings, a most formidable monster,
striking terror into those who cherished it in its infancy. Upon
this, as upon a triumphant war-horse, the statesman gets a-stride,
he then appears formidable a-new; his head turns giddy; he is
choaked with the dust he has raised; and at the moment he is
ready to fall, to his utter astonishment and surprize, he finds a strong
monied interest, of his own creating, which, instead of swallowing
him up as he apprehended, flies to his support. Through this he
gets the better of all opposition, he establishes taxes, multiplies
them, mortgages his fund of subsistence, either becomes a bankrupt,
and rises again from his ashes; or if he be less audacious, he
stands trembling and tottering for a while on the brink of the
political precipice. From one or the other of these perilous situations,
he begins to discover an endless path which, after a multitude of
windings, still returns into its self, and continues an equal course
through this vast labyrinth: but of this last part, more in the fourthfourth
book.
It is now full time to leave off rhapsody, and return to reasoning
and cool inquiry, concerning the more immediate and more general
209effects and revolutions produced by the opening of a foreign
trade in a nation of industry.
The first and most sensible alteration will be an increase of demand
for manufacturers, because by supplying the wants of strangers,
the number of consumers will now be considerably augmented.
What again will follow upon this, must depend upon circumstances.
If this revolution in the state of demand should prove too violent,
the consequence of it will be to raise demand; if it should prove
gradual, it will increase it. I hope this distinction is well understood,
and that the consequence appears just: for, if the supply
do not increase in proportion to the demand, a competition will
ensue among the demanders; which is the common effect of such
sudden revolutions. If, on the other hand, a gentle increase of
demand should be accompanied with a proportional supply, the
whole industrious society will grow in vigour, and in wholsome
stature, without being sensible of any great advantage or inconveniency;
the change of their circumstances will even be imperceptible.
The immediate effects of the violent revolution will, in this
example, be flattering to some, and disagreeable to others. Wealth
will be found daily to augment, from the rising of prices, in many
branches of industry. This will encourage the industrious classes,
and the idle consumers at home will complain. I have already
dwelt abundantly long upon the effects resulting from this to the
lower classes of the people, in providing them with a certain
means of subsistence. Let me now examine in what respect even the
higher classes will be made likewise to feel the good effects of this
general change, although at first they may suffer a temporary inconveniency
from it.
Farmers, as has been observed, will have a greater difficulty in
finding servants, who, instead of labouring the ground, will choose
to turn themselves to manufactures. This we have considered in
210the light of purging the lands of superfluous mouths; but every
consequence in this great chain of politics draws other consequences
after it, and as they follow one another, things put on different
faces, which affect classes differently. The purging of the land
is but one of the first; here follows another.
The desertion of the handshands employed in a trifling agriculture
will at first, no doubt, embarrass the farmers; but in a little time
every thing becomes balanced in a trading nation, because here
every industrious man must advance in prosperity, in spite of all general
combinations of circumstances.
In the case before us, the relative profits upon farming must soon
become greater than formerly, because of this additional expence
which must affect the whole class of farmers; consequently, this
additional expence, instead of turning out to be a loss to either
landlord or farmer, will, after some little time, turn out to the
advantage of both: because the produce of the ground, being indispensably
necessary to every body, must in every article increase
in its value. Thus in a short time accounts will be nearly balanced
on all hands; that is to say, the same proportion of wealth will, cæteris
paribus, continue the same among the industrious. I say among
the industrious; for those who are either idle, or even negligent,
will be great losers.
A proprietor of land, inattentive to the causes of his farmer’s
additional expence, may very imprudently suffer his rents to fall,
instead of assisting him on a proper occasion, in order to make them
afterwards rise the higher.
Those who live upon a determined income in money, and who
are nowise employed in traffic, nor in any scheme of industry,
will, by the augmentation of prices, be found in worse circumstances
than before.
In a trading nation every man must turn his talents to account,
or he will undoubtedly be left behind in this universal emulation,
211in which the most industrious, the most ingenious, and the most
frugal will constantly carry off the prize.
This consideration ought to be a spur to every body. The richest
men in a trading nation have no security against poverty, I mean
proportional poverty; for though they diminish nothing of their
income, yet by not increasing it in proportion to others, they lose their
rank in wealth, and from the first class in which they stood, they
will slide insensibly down to a lower.
There is one consequence of an additional beneficial trade, which
raises demand and increases wealth; but if we suppose no proportional
augmentation of supply, it will prove at best but an airy
dream which lasts for a moment, and when the gilded scene is
passed away, numberless are the inconveniencies which are seen to
follow.
I shall now point out the natural consequences of this augmentation
of wealth drawn from foreign nations, when the statesman
remains inattentive to increase the supply both of food and manufactures,
in proportion to the augmentation of mouths, and of the
demand for the produce of industry.
In such a situation profits will daily swell, and every scheme for
reducing them within the bounds of moderation, will be looked
upon as a hurtful and unpopular measure: be it so; but let us
examine the consequences.
We have said, that the rise of demand for manufactures naturally
increases the value of work: now I must add, that under such circumstances,
the augmentation of riches, in a country, either not
capable of improvement as to the soil, or where precautions have not been
taken for facilitating a multiplication of inhabitants, by the importation of
subsistence, will be productive of the most calamitous consequences.
On one side, this wealth will effectually diminish the mass of
the food before produced; and on the other, will increase the number
of useless consumers. The first of these circumstances will raise
the demand for food; and the second will diminish the number of
212useful free hands, and consequently raise the price of manufactures:
here are shortly the outlines of this progress.
The more rich and luxurious a people are, the more delicate they
become in their manner of living; if they fed on bread formerly,
they will now feed on meat; if they fed on meat, they will now feed
on fowl. The same ground which feeds a hundred with bread,
and a proportional quantity of animal food, will not maintain an
equal number of delicate livers. Food must then become more
scarce; demand for it rises; the rich are always the strongest in the
market; they consume the food, and the poor are forced to starve.
Here the wide door to modern distress opens; to wit, a hurtful
competition for subsistence. Farther, when a people become rich,
they think less of oeconomy; a number of useless servants are
hired, to become an additional dead weight on consumption; and
when their starving countrymen cannot supply the extravagance of
the rich so cheaply as other nations, they either import instruments
of foreign luxury, or seek to enjoy them out of their own country,
and thereby make restitution of their gains.
Is it not therefore evident, that if, before things come to this pass,
additional subsistence be not provided by one method or other, the
number of inhabitants must diminish; although riches may daily
increase by a balance of additional matter, supposed to be brought
into the country in consequence of the hitherto beneficial foreign
trade. This is not all. I say farther, that the beneficial trade will
last for a time only. For the infallible consequence of the rise of
prices at home will be, that those nations which at first consumed
your manufactures, perceiving the gradual increase of their price,
will begin to work for themselves; or finding out your rivals who
can supply them cheaper, will open their doors to them. These
again, perceiving the great advantages gained by your traders,
will begin to supply the market; and since every thing must be
cheaper in countries where we do not suppose the concurrence of
all the circumstances mentioned above, these nations will supplant
you, and be enriched in their turn.
213Here comes a new revolution. Trade is come to a stop: what
then becomes of all the hands which were formerly employed in
supplying the foreign demands?
Were revolutions so sudden as we are obliged to represent them,
all would go to wreck; in proportion as they happen by quicker
or slower degrees, the inconveniencies are greater or smaller.
Prices, we have said, are made to rise by competition. If the
competition of the strangers was what raised them, the distress
upon the manufacturers will be in proportion to the suddenness of
their deserting the market. If the competition was divided between
the strangers and the home consumers, the inconveniencies which
ensue will be less; because the desertion of the strangers will be in
some measure made up by an increase of home consumption which
will follow upon the fall of prices. And if, in the third case, the
natives have been so imprudent as not only to support a competition
with the strangers, and thereby disgust them from coming any
more to market, but even to continue the competition between
themselves, the whole loss sustained by the revolution will be national.
Wealth will cease to augment, but the inconveniencies,
in place of being felt by the manufacturers, will only affect the
state; those will continue in affluence, extolling the generosity of
their countrymen, and despising the poverty of the strangers who
had enriched them.
Domestic luxury will here prove an expedient for preserving from
ruin the industrious part of a people, who, in subsisting themselves,
had enriched their country. No change will follow in their
condition; they will go on with a painful assiduity to labour, and
if the consequences of it become now hurtful to one part of the
state, they must, at least, be allowed to be essentially necessary for
the support of the other.
But that luxury is no necessary concomitant of foreign trade, in
a nation where the true principles of it are understood, will appear
very plain, from a contrast I am now going to point out, in the
214example of a modern state, renowned for its commerce and frugality.
The country I mean, is Holland.
A set of industrious and frugal people were assembled in a country,
by nature subject to many inconveniencies, the removingremoving of which
necessarily employed abundance of hands. Their situation upon
the continent, the power of their former masters, and the ambition
of their neighbours, obliged them to keep great bodies of troops.
These two articles added to the numbers of the community, without
either enriching the state by their labour exported, or producing
food for themselves or countrymen.
The scheme of a commonwealth was calculated to draw together
the industrious; but it has been still more useful in subsisting
them: the republican form of government, being there greatly subdivided,
vests authority sufficient in every part of it, to make suitable
provision for their own subsistence; and the tye which unites
them, regards only matters of public concern. Had the whole
been governed by one sovereign, or by one council, this important
matter never could have been effectuated.
I imagine it would be impossible for the most able minister that
ever lived, to provide nourishment for a country so extended as
France, or even as England, supposing these as fully peopled as
Holland is: even although it should be admitted that a sufficient
quantity of food might be found in other countries for their subsistence.
The enterprise would be too great, abuses would multiply;
the consequence would be, that the inhabitants would die
for want. But in Holland the case is different, every little town
takes care of its own inhabitants; and this care, being the object
of application and profit to so many persons, is accomplished with
success.
When once it is laid down as a maxim in a country, that food
must of necessity be got from abroad, in order to feed the inhabitants
at home, the corn trade becomes considerable, and at the
same time certain, regular, and permanent. This was the case in
215Holland: as the inhabitants were industrious, the necessary consequence
has been, a very extraordinary multiplication; and at the
same time such an abundance of grain, that instead of being in
want themselves, they often supply their neighbours. There are
many examples of England’s being supplied with grain from thence,
and, which is still more extraordinary, from the re-exportation of
the very produce of its own fruitful soil.
It is therefore evident, that the only way to support industry, is
to provide a supply of subsistence, constantly proportional to the
demand that may be made for it. This is a precaution indispensably
necessary for preventing hurtful competition. This is the
particular care of the Dutch: so long as it can be effectual, their
state can fear no decline; but whenever they come to be distressed
in the markets, upon which they depend for subsistence, they will
sink into ruin. It is by mere dint of frugality, cheap and parsimonious
living, that the navigation of this industrious people is supported.
Constant employment, and an accumulation of almost
imperceptible gains, fills their coffers with wealth, in spight of the
large outgoings to which their own proper nourishment yearly
forces them. The large profits upon industry in other countries,
which are no proof of generosity, but a fatal effect of a scanty subsistence,
is far from dazzling their eyes. They seldom are found
in the list of competitors at any foreign port; if they have their
cargo to dispose of, they wait with pleasure in their own vessels,
consuming their own provisions, and at last accept of what others
have left. It may be said, that many other circumstances concur
in favour of the Dutch, besides the article of subsistence. I shall
not dispute this matter; but only remind my reader of what was
said in the first book; to wit, that if a computation be made of the
hands employed in providing subsistence, and of those who are severally
taken up in supplying every other want, their numbers will be
found nearly to balance one another in the most luxurious countries.
From this I conclude, that the article of food, among the
216lower classes, must bear a very high proportion to all the other
articles of their consumption; and therefore a diminution upon the
price of subsistence, must be of infinite consequence to manufacturers,
who are obliged to buy it. From this consideration, let us
judge of the consequence of such augmentations upon the price of
grain, as are familiar to us; 30 or 40 per cent. seems nothing.
Now this augmentation operates upon two thirds, at least, of the
whole expence of a labouring man: let any one who lives in tolerable
affluence make the application of this to himself, and examine
how he would manage his affairs if, by accidents of rains or
winds, his expences were to rise 30 per cent. without a possibility of
restraining them; for this is unfortunately the case with all the
lower classes. From whence I conclude, that the keeping food
cheap, and still more the preserving it at all times at an equal
standard, is the fountain of the wealth of Holland; and that any
hurtful competition in this article must beget a disorder which will
affect the whole of the manufacturers of a state.
It is quite impossible to go methodically through the subject of
political oeconomy, without being led into anticipations. We
have frequently mentioned this balance of work and demand, and
shewed how important a matter it is for a statesman to attend to it.
The thing, therefore, in general is well understood; and all that
remains to be done, is to render our ideas more determined concerning
it, and more adequate, if possible, to the principles we
have been laying down.
217We have treated fully of demand, and likewise of competition.
We have observed how different circumstances influence these termsterms,
so as to make them represent ideas entirely different; and we have
said that double competition supports the balance we are now to
speak of, and that single competition overturns it.
The word demand in this chapter is taken in the most simple acceptation;
and when we say that the balance between work and
demand is to be sustained in equilibrio, as far as possible, we mean
that the quantity supplied should be in proportion to the quantity
demanded, that is, wanted. While the balance stands justly poised,
prices are found in the adequate proportion of the real expence of
making the goods, with a small addition for profit to the manufacturer
and merchant.
I have, in the fourth chapter, observed how necessary a thing it
is to distinguish the two constituent parts of every price; the value,
and the profit. Let the number of persons be ever so great, who,
upon the sale of a piece of goods, share in the profits; it is still
essential, in such enquiries as these, to suppose them distinctly
separate from the real value of the commodity; and the best way
possible to discover exactly the proportion between the one and the
other, is by a scrupulous watchfulness over the balance we are now
treating of, as we shall presently see.
The value and profits, combined in the price of a manufacture
produced by one man, are easily distinguished, by means of the
analysis we have laid down in the fourth chapter. As long as any
market is fully supplied with this sort of work, and no more; those
who are employed in it live by their trade, and gain no unreasonable
profit: because there is then no violent competition upon one
side only, neither between the workmen, nor between those who
buy from them, and the balance gently vibrates under the influence
of a double competition. This is the representation of a
perfect balance.
218This balance is overturned in four different ways.
Either the demand diminishes, and the work remains the same:
Or the work diminishes, and the demand remains:
Or the demand increases, and the work remains:
Or the work increases, and the demand remains.
Now each of these four combinations may, or may not, produce
a competition upon one side of the contract only. This must be
explained.
If demand diminishes, and work remains the same, which is the
first case, either those who furnish the work will enter into competition,
in which case they will hurt each other, and prices will
fall below the reasonable standard of the even balance; or they
will not enter into competition, and then prices continuing as formerly,
the whole demand will be supplied, and the remainder of
the work will lie upon hand.
This is a symptom of decaying trade.
Let us now, on the other hand, suppose demand to increase, and
work to remain as before.
This example points out no diminution on either side, as was
the case before, but an augmentation upon one; and is either a
symptom of growing luxury at home, or of an increase in foreign
trade.
Here the same alternation of circumstances occurs. The demanders
will either enter into competition and raise the price of
work, or they will enter into no competition; but being determined
not to exceed the ordinary standard of the perfect balance,
will defer making their provision till another time, or supply themselves
in another market; that is to say, the new demand will
cease as soon as it is made, for want of a supply.
Whenever, therefore, this perfect balance of work and demand
is overturned by the force of a simple competition, or by one of
the scales preponderating, one of two things must happen; either a
part of the demand is not answered, or a part of the goods is not sold.
219These are the immediate effects of the overturning of the balance.
Let me next point out the object of the statesman’s care, relatively
to such effects, and shew the consequences of their being neglected.
We may now simplify our ideas, and instead of the former combinations,
make use of other expressions which may convey them.
Let us therefore say, that the fall or rise upon either side of the
balance, is positive, or relative. Positive, when the side we talk of
really augments beyond, or diminishes below the usual standard.
Relative, when there is no alteration upon the side we speak of, and
that the subversion of the balance is owing to an alteration on the
other side. As for example:
Instead of saying demand diminishes, and work remains the
same, let us say, demand diminishes positively, or work increases
relatively; according as the subject may lead us to speak either of
the one or of the other. This being premised,
If the scale of work shall preponderate positively, it should be inquired,
whether the quantity furnished has really swelled, in all
respects, beyond the proportion of the consumption, (in which case
the statesman should diminish the number of hands, by throwing a
part of them into a new channel) or whether the imprudence of
the workmen has only made them produce their work unseasonably;
in which case, proper information, and even assistance should
be given them, to prevent merchants from taking the advantage of
their want of experience: but these last precautions are necessary
only in the infancy of industry.
If a statesman should be negligent on this occasion; if he should
allow natural consequences to follow upon one another; just as circumstances
shall determine; then it may happen, that workmen
will keep upon hand that part of their goods which exceeds the
demand, until necessity forces them to enter into competition with
one another, and sell for what they can get. Now this competition
is hurtful, because it is all on one side, and because we have
220supposed the preponderating of the scale of work to be an overturning
of a perfect balance, which can by no means be set right,
consistently with a scheme of thriving, but by the scale of demand
becoming heavier, and re-establishing a double competition. Were
this to happen before the workmen come to sell in competition,
then the balance would again be even, after what I call a short vibration,
which is no subversion; but when the scale of work remains
too long in the same position, and occasions a strong, hurtful, and
lasting competition, upon one side only, then, I say, the balance is
overturned; because this diminishes the reasonable profits, or perhaps,
indeed, obliges the workmen to sell below prime cost. The
effect of this is, that the workmen fall into distress, and that industry
suffers a discouragement; and this effect is certain.
But it may be asked, Whether, by this fall of prices, demand
will not be increased? That is to say, will not the whole of the
goods be sold off?
I answer, That this may, or may not, be the effect of the fall,
according to circumstances: it is a contingent consequence of the
simple, but not the effect of the double competition: the distress
of the workmen is a certain and unavoidable consequence of the
first.
But supposing this contingent consequence to happen, will it not
set the balance even, by increasing the demand? I answer, the balance
is then made even by a violent shock given to industry, but
it is not set even from any principle which can support it, or make
it flourish. Here is the criterion of a perfect balance: A positive
moderate profit must balance a positive moderate profit; the balance must vibrate,
and no loss must be found on either side. In the example before us,
the balance stands even, it is true; the work and the demand are
equally poised as to quantity; but it is a relative profit, which hangs
in the scale, opposite to a relative loss. I wish this may be well understood;
farther illustrations will make it clear.
221Next, let me suppose the scale of demand to preponderate positively.
In this case, the statesman should be still more upon his
guard, to provide a proportional supply; because the danger here
may at first put on a shew of profit, and deceive him.
The consequences of this subversion of the balance are either,
1st, That a competition will take place among the demanders
only, which will raise profits. Now if, after a short vibration,
the supply comes to be increased by the statesman’s care, no harm
will ensue; competition will change sides, and profits will come
down again to the perfect standard. But if the scale of demand
remains preponderating, and so keeps profits high, the consequence
will be, that, in a little time, not only the immediate seller of the
goods, but also every one who has contributed to the manufacture,
will insist upon sharing these new profits. Now the evil is not,
that every one should share, or that the profits should swell, as
long as they are supported by demand, and as long as they can
truly be considered as precarious; but the mischief is, that, in consequence
of this wide repartition, and by such profits subsisting for
a long time, they insensibly become consolidated, or, as it were,
transformed into the intrinsic value of the goods. This, I say, is
brought about by time; because the habitual extraordinary gains
of every one employed induce the more luxurious among them to
change their way of life insensibly, and fall into the habit of
making greater consumptions, and engage the more slothful to remain
idle, till they are exhausted. When therefore it happens, that
large profits have been made for a considerable time, and that they
have had the effect of forming a taste for a more expensive way of
living among the industrious, it will not be the cessation of the
demand, nor the swelling of the supply, which will engage them
to part with their gains. Nothing will operate this effect but
sharp necessity; and the bringing down of their profits, and the
throwing the workmen into distress, are then simultaneous; which
proves the truth of what I have said, that these profits become, by
222long habit, virtually consolidated with the real value of the merchandize.
These are the consequences of a neglected simple competition,
which raises the profits upon industry, and keeps the balance
overturned for a considerable time.
2dly, Let me examine the consequences of this overturn in the
actual preponderancy of demand, when it does not occasion a competition
among the demanders, and consequently, when it does
not increase the profits upon industry.
This case can only happen, when the commodity is not a matter
of great necessity, or even of great use; since the desire of procuring
it is not sufficient to engage the buyers to raise their price;
unless, indeed, this difference should proceed from the ease of
providing the same, in other markets, as cheap as formerly. This
last is a dangerous circumstance, and loudly calls for the attention
of the statesman. He must prevent, by all possible means,
the desertion of the market, by a speedy supply for all the demand,
and must even perhaps give encouragements to manufacturers, to
enable them to diminish the prices fixed by the regular standard.
This is the situation of a nation which is in the way of losing
branches of her foreign trade; of which afterwards.
Whatever therefore be the consequence of the actual preponderancy
of the scale of demand; that is, whether it tend to raise
profits, or to discredit the market; the statesman’s care should be
directed immediately towards making the balance come even of
itself, without any shock, and that as soon as possible, by increasing
the supply. For if it be allowed to stand long in this overturned
state, natural consequences will operate a forced restitution;
that is, the rise in the price, or the call of a foreign market, will
effectually cut off a proportional part of the demand, and leave
the balance in an equilibrium, disadvantageous to trade and industry.
In the former case, the manufacturers were forced to starve, by
an unnatural restitution, when the relative profit and loss of individuals
223balanced one another. Here the manufacturers are inriched
for a little time, by a rise of profits, relative to the loss the
nation sustains, by not supplying the whole demand. This results
from the competition of their customers; but so soon as these profits
become consolidated with the intrinsic value, they will cease to
have the advantage of profits, and, becoming in a manner necessary
to the existence of the goods, will cease to be considered as
advantageous. These forced restitutions then, brought about, as
we have said, by selling goods below their value, by cutting off a
part of the demand, or by sending it to another market, resembles
the operation of a carrier, who sets his ass’s burden even, by laying
a stone upon the lightest end of it. He however loses none of
his merchandize; but the absurdity of the statesman is still greater,
for he appears willingly to open the heavy end of the load, and to
throw part of his merchandize into the high-way.
I hope, by this time, I have sufficiently shewn the difference in
effect between the simple and the double competition; between the
vibrations of this balance of work and demand, and the overturning
of it. When it vibrates in moderation, and by short alternate
risings and sinkings, then industry and trade go on prosperously,
and are in harmony with each other; because both parties gain.
The industrious man is recompenced in proportion to his ingenuity;
the intrinsic value of goods does not vary, nor deceive the
merchant; profits on both sides fluctuate according to demand,
but never get time to consolidate with, and swell the real value,
and never altogether disappear, and starve the workman.
This happy state cannot be supported but by the care of the statesman;
and when he is found negligent in the discharge of this part
of his duty, the consequence is, that either the spirit of industry,
which, it is supposed, has cost him much pains to cultivate, is extinguished,
or the produce of it rises to so high a value, as to be
out of the reach of a multitude of purchasers.
224The progress towards the one or the other of these extremes is
easily perceived, by attending to the successive overturnings of the
balance. When these are often repeated on the same side, and the
balance set right, by a succession of forced restitutions only, the
same scale preponderating a-new, then is the last period soon accomplished.
When, on the contrary, the overturnings are alternate,
sometimes the scale of demand overturning the balance,
sometimes the scale of work, the last period is more distant.
Trade and industry subsist longer, but they remain in a state of
perpetual convulsion. On the other hand, when the balance gently
vibrates, then work and demand, that is, trade and industry, like
agriculture and population, prove mutually assisting to each other,
in promoting their reciprocal augmentation.
In order therefore to preserve a trading state from decline, the
greatest care must be taken, to support a perfect balance between
the hands employed in work and the demand for their labour.
That is to say, according to former definitions, to prevent demand
from ever standing long at an immoderate height, by providing at
all times a supply, sufficient to answer the greatest that ever can
be made: or, in other words, still, in order to accustom my readers
to certain expressions, to encourage the great, and to discourage
the high demand. In this case, competition will never be
found too strong on either side of the contract, and profits will be
moderate, but sure, on both.
If, on the contrary, there be found too many hands for the
demand, work will fall too low for workmen to be able to live;
or, if there be too few, work will rise, and manufactures will not
be exported.
For want of this just balance, no trading state has ever been of
long duration, after arriving at a certain height of prosperity. We
perceive in history the rise, progress, grandeur, and decline of Sydon,
Tyre, Carthage, Alexandria, and Venice, not to come nearer
home. While these states were on the growing hand, they were
225powerful; when once they came to their height, they immediately
found themselves labouring under their own greatness. The reason
of this appears from what has been said.
While there is a demand for the trade of any country, inhabitants
are always on the increasing hand. This is evident from
what has been so often repeated in the first book, and confirmed by
thousands of examples. There never was any branch of trade
established in any kingdom, province, city, or even village; but
such kingdom, province, &c. increased in inhabitants. While this
gradual increase of people is in proportion to the growing demand
for hands, the balance between work and demand is exactly
kept up: but as all augmentations must at last come to a stop,
when this happens, inconveniencies must ensue, greater or less,
according to the negligence of the statesman, and the violence or
suddenness of the revolution.
Now let us examine what may be the reason why, in a trading
and industrious nation, time necessarily destroys the perfect
balance between work and demand.
We have already pointed out one general cause, to wit, the natural
stop which must at last be put to augmentations of every
kind.
Let us now apply this to circumstances, in order to discover in
what manner natural causes operate this stop, either by preventing
the increase of work, on one side of the balance, or the increase
of demand, on the other. When once we discover how the
226stop is put to augmentations, we may safely conclude, that the
continuation of the same, or similar causes, will soon produce a diminution,
and operate a decline.
We have traced the progress of industry, and shewn how it goes
hand in hand with the augmentation of subsistence, which is the
principal allurement to labour. Now the augmentation of food is
relative to the soil, and as long as this can be brought to produce,
at an expence proportioned to the value of the returns, agriculture,
without any doubt, will go forward in every country of industry.
But so soon as the progress of agriculture demands an additional
expence, which the natural return, at the stated prices of
subsistence, will not defray, agriculture comes to a stop, and so
would numbers, did not the consequences of industry push them
forward, in spite of small difficulties. The industrious then, I say,
continue to multiply, and the consequence is, that food becomes
scarce, and that the inhabitants enter into competition for it.
This is no contingent consequence, it is an infallible one; because
food is an article of the first necessity, and here the provision
is supposed to fall short of the demand. This raises the profits of
those who have food ready to sell; and as the balance upon this
article must remain overturned for some time, without the interposition
of the statesman, these profits will be consolidated with the price,
and give encouragement to a more expensive improvement of the
soil. I shall here interrupt the examination of the consequences
of this revolution as to agriculture, until I have examined the effects
which the rise of the price of food produces on industry,
and on the demand for it.
This augmentation on the value of subsistence must necessarily
raise the price of all work, because we are here speaking of an
industrious people fully employed, and because subsistence is one
of the three articles which compose the intrinsic value of their
work, as has been said.
227The rise therefore, upon the price of work, not being any augmentation
of that part of the price which we call profits, as happens
to be the case when a rise in demand has produced a competition
among the buyers, cannot be brought down but by increasing
the supply of subsistence; and were a statesman to mistake
the real cause of the rise, and apply the remedy of increasing
the quantity of work, in order to bring down the market, instead
of augmenting the subsistence, he would occasion a great disorder;
he would introduce the hurtful simple competition between people
who labour for moderate profits, mentioned in the last chapter,
and would throw such a discouragement upon their industry, as
would quickly extinguish it altogether.
On the other hand, did he imprudently augment the subsistence,
by large importations, he would put an end to the expensive
improvements of the soil, and this whole enterprize would fall to
nothing. Here then is a dilemma, out of which he can extricate
himself by a right application of public money, only.
Such a necessary rise in the price of labour may either affect foreign
exportation, or it may not, according to circumstances. If
it does, the price of subsistence, at any rate, must be brought down
at least to those who supply the foreign demand; if it does not affect
foreign exportation, matters may be allowed to go on; but
still the remedy must be ready at hand, to be applied the moment
it becomes expedient.
There is one necessary augmentation upon the prices of industry,
brought about by a very natural cause, viz. the increase of
population, which may imply a more expensive improvement of
the soil; that is, an extension of agriculture. This augmentation
may very probably put a stop to the augmentation of demand for
many branches of manufactures, consequently may stop the progress
of industry; and if the same causes continue to operate in
a greater degree, it may also cut off a part of the former demand,
may discredit the market, open a door to foreign consumption, and
228produce the inconveniencies of poverty and distress, in proportion
to the degree of negligence in the statesman.
I shall now give another example, of a very natural augmentation
upon the intrinsic value of work, which does not proceed
from the increase of population, but from the progress of industry
itself; which implies no internal vice in a state, but which is the
necessary consequence of the reformation of a very great one.
This augmentation must be felt less or more in every country, in
proportion as industry becomes extended.
We have said, that the introduction of manufactures naturally
tends to purge the lands of superfluous mouths: now this is a
very slow and gradual operation. A consequence of it was said to
be (Book I. Chap. xx.) an augmentation of the price of labour,
because those who have been purged off, must begin to gain their
whole subsistence at the expence of those who employ them.
If therefore, in the infancy of industry, any branch of it shall
find itself assisted in a particular province, by the cheap labour
of those mouths superfluously fed by the land, examples of which
are very frequent, this advantage must diminish, in proportion as
the cause of it ceases; that is, in proportion as industry is extended,
and as the superfluous mouths are of consequence purged
off.
This circumstance is of the last importance to be attended to by
a statesman. Perhaps it was entirely owing to it, that industry was
enabled to set up its head in this corner. How many examples
could I give, of this assistance given to manufactures in different
provinces, where I have found the value of a day’s work, of spinning,
for example, not equal to half the nourishment of the person.
This is a great encouragement to the making of cloths; and
accordingly we see some infant manufactures dispute the market
with the produce of the greatest dexterity; the distaff dispute
prices with the wheel. But when these provinces come to be
purged of their superfluous mouths, spinning becomes a trade,
229and the spinners must live by it. Must not then prices naturally
rise? And if these are not supported by the statesman, or if assistance
is not given to these poor manufacturers, to enable them to
increase their dexterity, in order to compensate what they are losing
in cheapness, will not their industry fail? Will not the poor spinners
be extinguished? For it is not to be expected, that the landlord
will receive them back again from a principle of charity,
after he has discovered their former uselesnessuselesness.
A third cause of a necessary augmentation upon the intrinsic value
of goods proceeds from taxes. A statesman must be very negligent
indeed, if he does not attend to the immediate consequences
of his own proper operations. I shall not enlarge on this
at present, as it would be an unnecessary anticipation; but I shall
return, to resume the part of my reasoning which I broke off abruptly.
I have observed, how the same cause which stops the progress of
industry, gives an encouragement to agriculture: how the rise in
the price of subsistence necessarily increases the price of work to
an industrious and well-employed people: how this cuts off a
part of the demand for work, or sends it to a foreign market.
Now all these consequences are entirely just, and yet they seem
contradictory to another part of my reasoning, (Book I. Chap. xvi.)
where I set forth the advantages of a prodigal consumption of the
earth’s produce as advantageous to agriculture, by increasing the
price of subsistence, without taking notice, on the other hand, of
the hurt thereby done to industry, which supports the consumption
of that produce.
The one and the other chain of consequences is equally just,
and they appear contradictory only upon the supposition, that there
is no statesman at the helm. These contradictions represent the alternate
overturn of the balance. The duty of the statesman is, to
support the double competition every where, and to permit only
the gentle alternate vibrations of the two scales.
230When the progress of industry has augmented numbers, and
made subsistence scarce, he must estimate to what height it is expedient
that the price of subsistence should rise. If he finds, that,
in order to encourage the breaking up of new lands, the price of
it must rise too high, and stand high too long, to preserve the intrinsic
value of goods at the same standard as formerly; then he
must assist agriculture with his purse, in order that exportation
may not be discouraged. This will have the effect of increasing
subsistence, according to the true proportion of the augmentation
required, without raising the price of it too high. And if that
operation be the work of time, and the demand for the augmentation
be pressing, he must have subsistence imported, or
brought from abroad, during that interval. This supply he may
cut off whenever he pleases, that is, whenever it ceases to be necessary.
If the supply comes from a sister country, it must be so taken,
as to occasion no violent revolution when it comes to be interrupted
a-new. As for example: One province demands a supply
of grain from another, only for a few years, until their own soil
can be improved, so as to provide them sufficiently. The statesman
should encourage agriculture, no doubt, in the province furnishing,
and let the farmers know the extent of the demand, and the
time it may probably last, as near as possible; but he must discourage
the plucking up of vineyards, and even perhaps the breaking
up of great quantities of old pasture; because, upon the ceasing
of the demand, such changes upon the agriculture of the province
furnishing, may occasion a hurtful revolution.
While this foreign supply is allowed to come in, the statesman
should be closely employed in giving such encouragement to agriculture
at home, according to the principles hereafter to be deduced,
as may nearly balance the discouragement given to it by
this newly permitted importation. If this step be neglected, the
consequence may be, that the foreign supply will go on increasing
231every year, and will extinguish the agriculture already established
in the country, in place of supplying a temporary exigency, which
is within the power of the country itself to furnish. These, I
suppose, were the principles attended to by the government of
England, upon opening their ports for the importation of provisions
from Ireland.
The principle, therefore, being to support a gentle increase of
food, inhabitants, work, and demand, the statesman must suffer
small vibrations in the balance, which, by alternate competition,
may favour both sides of the contract; but whenever the competition
stands too long upon either side, and threatens a subversion of
the balance, then, with an artful hand, he must endeavour to load
the lighter scale, and never, but in cases of the greatest necessity,
have recourse to the expedient of taking any thing from the heaviest.
In treating of the present state of France, we observed, in the
chapter above-cited, how the vibration of the balance of agriculture
and population may carry food and numbers to their height;
but as foreign trade was not there the direct object of inquiry, I
did not care to introduce this second balance of work and demand,
for fear of perplexing my subject. I hope I have now abundantly
shewn the force of the different principles, and it must depend
upon the judgment of the statesman to combine them together,
and adapt them to his plan: a thing impossible to be even chalked
out by any person who is not immediately at the head of the affairs
of a nation. My work resembles the formation of the pure colours
for painting, it is the artist’s business to mix them: all I can pretend
to, is to reason consequentially from suppositions. If I go at any
time farther, I exceed my plan, and I confess the fault.
I shall now conclude my chapter by introducing a new subject.
I have been at pains to shew how the continued neglect of a statesman,
in watching over the vibrations of the balance of work and
232demand, naturally produces a total subversion of it; but this is not,
of itself, sufficient to undo an industrious people. Other nations
must be taught to profit of the disorder; and this is what I call the
competition between nations.
Mankind daily profit by experience, and acquire knowledge
at their own cost.
We have said that what lays the foundation of foreign trade, is
the ease and conveniency which strangers find in having their
wants supplied by those who have set industry on foot. The natural
consequence of this foreign demand is to bring in wealth, and to
promote augmentations of every kind. As long as these go on, it
will be impossible for other nations to rival the traders, because
their situation is every day growing better: dexterity increasing,
diminishes the price of work; every circumstance, in short, becomes
more favourable; the balance never vibrates, but by one of
the scales growing positively heavier, and it is constantly coming
even by an increase of weight on the other side. We have seen
how these revolutions never can raise the intrinsic value of goods,
and have observed that this is the road to greatness.
The slower any man travels, the longer he is in coming to his
journey’s end; and when his health requires travelling, and that
he cannot go far from home, he rides out in a morning and comes
home to dinner.
This represents another kind of vibration of the balance, and
when things are come to such a height as to render a train of augmentations
233impossible, the next best expedient is, to permit alternate
vibrations of diminution and augmentation.
Work augments, I shall suppose, and no more demand can be
procured; it may then be a good expedient to diminish hands, by
making soldiers of them; by employing them in public works;
or by sending them out of the country to become useful in its
colonies. These operations give a relative weight to the scale
of demand, and revive a competition on that side. Then the industrious
hands must be gently increased a-new, and the balance
kept in vibration as long as possible. By these alternate augmentations
and diminutions, hurtful revolutions, and the subversion of
the balance, may be prevented. This is an expedient for standing
still without harm, when one cannot go forward to advantage.
If such a plan be followed, an industrious nation will continue
in a situation to profit of the smallest advantage from revolutions
in other countries, occasioned by the subversion of their balance;
which may present an opportunity of new vibrations by alternate
augmentations.
On such occasions, the abilities of a statesman are discovered, in
directing and conducting what I call the delicacy of national competition.
We shall then observe him imitating the mariners, who
do not take in their sails when the wind falls calm, but keep them
trimmed and ready to profit of the least breath of a favourable
gale. Let me follow my comparison. The trading nations of
Europe represent a fleet of ships, every one striving who shall get
first to a certain port. The statesman of each is the master. The
same wind blows upon all; and this wind is the principle of self-interest,
which engages every consumer to seek the cheapest and
the best market. No trade wind can be more general, or more constant
than this; the natural advantages of each country represent
the degree of goodness of each vessel; but the master who sails his
ship with the greatest dexterity, and he who can lay his rivals under
234the lee of his sails, will, cæteris paribus, undoubtedly get before
them, and maintain his advantage.
While a trading nation, which has got an established advantage
over her rivals, can be kept from declining, it will be very difficult,
if not impossible, for any other to enter into competition with her:
but when the balance begins to vibrate by alternate diminutions;
when a decrease of demand operates a failure of supply; when
this again is kept low, in order to raise the competition of consumers;
and when, instead of restoring the balance by a gentle
augmentation, a people are engaged, from the allurements of
high profits, to discourage every attempt to bring down the market;
then the cissars of foreign rivalship will fairly trim off the
superfluity of demand; the simple competition will cease; prices
will fall, and a return of the same circumstances will prepare the
way for another vibration downwards.
Such operations as these, are just what is requisite for facilitating
the competition of rival nations; and the only means possible to
engage those who did not formerly work, to begin and supply themselves.
Did matters stand so, the evil would be supportable; strangers
would only supply the superfluities of demand, and the balance
would still be found in a kind of equilibrium at home. But, alas!
even this happy state can only be of short duration. The beginnings
of trade with the strangers will prove just as favourable to the
vibration of their balance, by augmentations, as it was formerly
to the home-traders; and now every augmentation to those, must
imply a diminution to the others. What will then become of those
hands, in the trading nation, who subsist only by supplying the
foreign market? Will not this revolution work the same effect, as
to them, as if an additional number of hands had been employed
to supply the same consumption? And will not this utterly destroy
the balance among the traders, by throwing an unsurmountable
235competition on the side of the supply? It will however have a different
effect from what might have happened, if the same number
of hands had been thrown into the trading nation; for, in this
case, they might only destroy the consolidated profits upon labour,
and perhaps restore the balance: the inconveniency would be
equally felt by every workman, but profit would result to the public.
But in the other case, the old traders will find no foreign sale
for their work; these branches of industry will fall below the price
of subsistence, and the new beginners will have reasonable profits in
supplying their own wants. I say reasonable, because this transition
of trade from one nation to another, never can be sudden or easy;
and can only take place in proportion to the rise in the intrinsic
value of goods in that which is upon the decline, not in proportion
to the rise in their profits upon the sale of them: for as long as the
most extravagant profits do not become consolidated, as we have
said, with the value of the work, a diminution of competition
among the consumers, which may be occasioned by a beginning
of foreign industry, will quickly make them disappear; and this
will prove a fatal blow to the first undertakings of the rival nations.
But when once they are fairly so consolidated, that prices can no
more come down of themselves, and that the statesman will not
lend his helping hand, then the new beginners pluck up courage,
and set out by making small profits: because in all new undertakings
there is mismanagement and considerable loss; and nothing discourages
mankind from new undertakings more than difficult
beginnings.
As long, therefore, as a trading state is upon the rising hand, or
even not upon the decline, and while the balance is kept right without
the expedient of alternate diminutions, work will always be supplied
from that quarter, cheaper than it possibly can be furnished
from any other, where the same dexterity does not prevail. But
when a nation begins to lose ground, then the very columns which
supported her grandeur, begin, by their weight, to precipitate her
236decline. The wealth of her citizens will support and augment
home demand, and encourage that blind fondness for high profits,
which it is impossible to preserve. The moment these consolidate
to a certain degree, they have the effect of banishing from the
market the demand of strangers, who only can enrich her. It is
in vain to look for their return after the nation has discovered her
mistake, although she should be able to correct it; because, before
this can happen, her rivals will have profited of the golden opportunity,
and during the infatuation of the traders, will, even by
their assistance, have got fairly over the painful struggle against
their superior dexterity.
Thus it happens, that so soon as matters begin to go backward
in a trading nation, and that by the increase of their riches, luxury
and extravagance take place of oeconomy and frugality among the
industrious; when the inhabitants themselves foolishly enter into
competition with strangers for their own commodities; and when
a statesman looks cooly on, with his arms across, or takes it into
his head, that it is not his business to interpose, the prices of the
dextrous workman will rise above the amount of the mismanagementmismanagement,
loss, and reasonable profits, of the new beginners; and
when this comes to be the case, trade will decay where it flourished
most, and take root in a new soil. This I call a competition
between nations.
237
The question before us, though relative to another science, is
not altogether foreign to this. I introduce it in this place,
not so much for the sake of connexion, as by way of digression,
which at the same time that it has a relation to general principles,
may also prove a relaxation to the mind, after so long a chain of
close reasoning.
In setting out, I informed my readers that I intended to treat of
the political oeconomy of free nations only; and upon every occasion
where I have mentioned slavery, I have pointed out how far
the nature of it is contrary to the advancement of private industry,
the inseparable concomitant of foreign and domestic trade.
No term is less understood than that of liberty, and it is not my
intention, at present, to enter into a particular inquiry into all the
different acceptations of it.
By a people’s being free, I understand no more than their being
governed by general laws, well known, not depending upon the
ambulatory will of any man, or any set of men, and established
so as not to be changed, but in a regular and uniform way; for
reasons which regard the body of the society, and not through
favour or prejudice to particular persons, or particular classes. In
so far as a power of dispensing with, restraining or extending general
laws, is left in the hands of any governor, in so far, I consider
public liberty as precarious. I do not say it is hereby hurt; this
will depend upon the use made of such prerogatives. According to
this definition of liberty, a people may be found to enjoy freedom
238under the most despotic forms of government; and perpetual service
itself, where the master’s power is limited according to natural
equity, is not altogether incompatible with liberty in the servant.
Here new ideas present themselves concerning the general principles
of subordination and dependence among mankind; which I shall
lay before my reader before I proceed, submitting the justness of
them to his decision.
As these terms are both relative, it is proper to observe, that by
subordination is implied an authority which superiors have over inferiors;
and by dependence, is implied certain advantages which the
inferiors draw from their subordination: a servant is under subordination
to his master, and depends upon him for his subsistence.
Dependence is the only bond of society; and I have observed, in
the fourth chapter of the first book, that the dependence of one
man upon another for food, is a very natural introduction to slavery.
This was the first contrivance mankind fell upon, in order
to become useful to one another.
Upon the abolishing of slavery, from a principle of christianity,
the next step taken, was the establishment of an extraordinary subordination
between the different classes of the people; this was the
principle of the feudal government.
The last refinement, and that which has brought liberty to be
generally extended to the lowest denominations of a people, without
destroying that dependence necessary to serve as a band of
society, was the introduction of industry: by this is implied, the
circulation of an adequate equivalent for every service, which procures
to the rich, every advantage they could expect to reap, either
from the servitude or dependence of the poor; and to these again,
every comfort they could wish to enjoy under the mildest slavery,
or most gentle subordination.
From this exposition, I divide dependence into three kinds. The
first natural, between parents and children; the second political,
between masters and servants, lords and vassals, Princes and subjects;
239the third commercial, between the rich and the industrious.
May I be allowed to transgress the limits of my subject for a few
lines, and to dip so far into the principles of the law of nature, as
to enquire, how far subordination among men is thereby authorized?
I think I may decide, that in so far as the subordination is in proportion
to the dependence, in so far it is reasonable and just. This represents
an even balance. If the scale of subordination is found too weighty,
tyranny ensues, and licentiousness is implied, in proportion as it
rises above the level. From this let me draw some conclusions.
1mo. He who depended upon another, for the preservation of a
life justly forfeited, and at all times in the power of him who
spared it, was, by the civil law, called a slave. This surely is the
highest degree of dependence.
2do. He who depends upon another for every thing necessary for
his subsistence, seems to be in the second degree; this is the dependence
of children upon their parents.
3tio. He who depends upon another for the means of procuring
subsistence to himself by his own labour, stands in the third degree:
this I take to have been the case between the feudal lords, and the
lowest classes of their vassals, the labourers of the ground.
4to. He who depends totally upon the sale of his own industry,
stands in the fourth degree: this is the case of tradesmen and manufacturers,
with respect to those who employ them.
These I take to be the different degrees of subordination between
man and man, considered as members of the same society.
In proportion, therefore, as certain classes, or certain individuals
become more dependent than formerly, in the same proportion
ought their just subordination to increase: and in proportion as
they become less dependent than formerly, in the same proportion
ought this just subordination to diminish. This seems to be a rational
principle: next for the application.
240I deduce the origin of the great subordination under the feudal
government, from the necessary dependence of the lower classes
for their subsistence. They consumed the produce of the land, as
the price of their subordination, not as the reward of their industry
in making it produce.
I deduce modern liberty from the independence of the same
classes, by the introduction of industry, and circulation of an adequate
equivalent for every service.
If this doctrine be applied in order to resolve the famous question
so much debated, concerning the origin of supreme authority, in
so far as it is a question of the law of nature, I do not find the decision
so very difficult: All authority is in proportion to dependence, and
must vary according to circumstances.
I think it is as rational to say, that the fatherly power proceeded
originally from the act of the children, as to say, that the great
body of the people who were fed, and protected by a few great
lords, was the fountain of power, and creator of subordination.
Those who have no other equivalent to give for their food and protection,
must pay in personal service, respect, and submission; and
so soon as they come to be in a situation to pay a proper equivalent
for these dependencies, in so far they acquire a title to liberty
and independence. The feudal lords, therefore, who, with reason,
had an entire authority over many of their vassals, being subdued
by their King; the usurpation was upon their rights, not upon the
rights of the lower classes: but when a King came to extend the
power he had over the vassals of the lords, to the inhabitants of
cities, who had been independent of that subordination, his usurpation
became evident.
The rights of Kings, therefore, are to be sought for in history; and
not founded upon the supposition of tacit contracts between them
and their people, inferred from the principles of an imaginary law
of nature, which makes all mankind equal: nature can never be in opposition
to common reason.
241The general principle I have laid down, appears, in my humble
opinion, more rational than that imaginary contract; and as
consonant to the full with the spirit of free government. If the
original tacit contract of government between Prince and people is
admitted universally, then all governments ought to be similar;
and every subordination, which appears contrary to the entire
liberty and independence of the lowest classes, ought to be construed
as tyrannical: whereas, according to my principle, the subordination
of classes may, in different countries, be vastly different;
the prerogative of one sovereign may, from different circumstances,
be far more extended than that of another.
May not one have attained the sovereignty (by the free election
of the people, I suppose) because of the great extent of his possessions,
number of his vassals and dependents, quantity of wealth,
alliances and connexions with neighbouring sovereigns? Had not,
for example, such a person as Hugh Capet, the greatest feudal Lord
of his time, a right to a much more extensive jurisdiction over his
subjects, than could reasonably be aspired to by a King of Poland,
sent from France, or from Germany, and set at the head of a republic,
where he has not one person depending upon him for any
thing?
The power of Princes, as Princes, must then be distinguished
from the power they derive from other circumstances, which do
not necessarily follow in consequence of their elevation to the
throne. It would, I think, be the greatest absurdity to advance,
that the title of King abolishes, of itself, the subordination due to
the person who exercises the office of that high magistracy.
Matter of fact, which is stronger than all reasoning, demonstrates
the force of the principle here laid down. Do we not see how subordination
rises and falls under different reigns, under a rich Elizabeth,
and a necessitous Charles, under a powerful Austrian, and a
distressed Bavarian Emperor? I proceed no farther in the examination
242of this matter: perhaps my reader has decided that I have
gone too far already.
From these principles may be deduced the boundaries of subordination.
A people who depend upon nothing but their own industry
for their subsistence, ought to be under no farther subordination
than what is necessary for their protection. And as the
protection of the whole body of such a people implies the protection
of every individual, so every political subordination should there
be general and equal: no person, no class should be under a greater
subordination than another. This is the subordination of the laws;
and whenever laws establish a subordination more than what is
proportionate to the dependence of those who are subordinate, in
so far such laws may be considered as contrary to natural equity,
and arbitrary.
These things premised, I come to the question proposed, namely,
How far particular forms of government are favourable or unfavourable
to a competition with other nations, in point of commerce?
If we reason from facts, and from experience, we shall find, that
trade and industry have been found mostly to flourish under the
republican form, and under those which have come the nearest to
it. May I be allowed to say, that, perhaps, one principal reason for
this has been, that under these forms the administration of the
laws has been the most uniform, and consequently, that most
liberty has actually been there enjoyed: I say actually, because I
have said above, that in my acceptation of the term, liberty is
equally compatible with monarchy as with democracy; I do not say
the enjoyment of it is equally secure under both; because under
the first it is much more liable to be destroyed.
The life of the democratical system is equality. Monarchy conveys
the idea of the greatest inequality possible. Now if, on one
side, the equality of the democracy secures liberty; on the other,
243the moderation in expence discourages industry; and if, on one
side, the inequality of the monarchy endangers liberty, the progress
of luxury encourages industry on the other. From whence we
may conclude, that the democratical system is naturally the best
for giving birth to foreign trade; the monarchical, for the refinement
of the luxurious arts, and for promoting a rapid circulation
of inland commerce.
The danger which liberty is exposed to under monarchy, and the
discouragement to industry, from the frugality of the democracy,
are only the natural and immediate effects of the two forms of
government; and these inconveniencies will only take place while
statesmen neglect the interest of commerce, so far as not to make it
an object of administration.
The disadvantage, therefore, of the monarchical form, in point
of trade and industry, does not proceed from the inequality it establishes
among the citizens, but from the consequence of this inequality,
which is very often accompanied with an arbitrary and
undetermined subordination between the individuals of the higher
classes, and those of the lower; or between those vested with the
execution of the laws, and the body of the people. The moment
it is found that any subordination within the monarchy, between
subject and subject, is left without proper bounds prescribed, liberty
is so far at an end. Nay monarchy itself is thereby hurt, as this
undetermined subordination implies an arbitrary power in the state,
not vested in the monarch. Arbitrary power never can be delegated;
for if it be arbitrary, it may be turned against the monarch, as well
as against the subject.
I might therefore say, that when such a power in individuals is
constitutional in the monarchy, such monarchy is not a government,
but a tyranny, and therefore falls without the limits of our
subject; and when such a power is anti-constitutional, and yet is
exercised, that it is an abuse, and should be overlooked. But as
the plan of this inquiry engages me to investigate the operations
244of general principles, and the consequences they produce, I cannot
omit, in this place, to point out those which flow from an undetermined
subordination, from whatever cause it may proceed.
Whether this undetermined subordination between individuals,
be a vice in the constitution of the government, or an abuse, it is
the same thing as to the consequences which result from it. It is
this which checks and destroys industry, and which in a great
measure prevents its progress from being equal in all countries.
This difference in the form or administration of governments, is
the only one which it is essentially necessary to examine in this
inquiry; and so essential it is, in my opinion, that I imagine it
would be less hurtful, in a plan for the establishment of commerce,
fairly, and at once, to enslave the lower classes of the inhabitants,
and to make them vendible like other commodities, than to leave
them nominally free, burthened with their own maintenance,
charged with the education of their children, and at the same time
under an irregular subordination; that is, liable at every moment
to be loaded with new prestations or impositions, either in work or
otherwise, and to be fined or imprisoned at will by their superiors.
It produces no difference, whether these irregularities be exercised
by those of the superior classes, or by the statesman and his
substitutes. It is the irregularity of the exactions more than the
extent of them which ruins industry. It renders living precarious,
and the very idea of industry should carry along with it, not only
an assured livelihood, but a certain profit over and above.
Let impositions be ever so high, provided they be proportional,
general, gradually augmented, and permanent, they may have
indeed the effect of stopping foreign trade, and of starving the idle,
but they never will ruin the industrious, as we shall have occasion
to shew in treating of taxation. Whereas, when they are arbitrary,
falling unequally upon individuals of the same condition, sudden,
and frequently changing their object, it is impossible for industry
to stand its ground. Such a system of oeconomy introduces an
245unequal competition among those of the same class, it stops industrious
people in the middle of their career, discourages others from
exposing to the eyes of the public the ease of their circumstances, consequently
encourages hoarding; this again excites rapaciousness
upon the side of the statesman, who sees himself frustrated in his
schemes of laying hold of private wealth.
From this a new set of inconveniencies follow. He turns his
views upon solid property. This inspires the landlords with indignation
against him who can load them at will; and with envy against
the monied interest, who can baffle his attempts. This class again is
constantly upon the catch to profit of the public distress for want
of money. What is the consequence of all this? It is, that the
lowest classes of the people, who ought by industry to enrich the
state, find on one hand the monied interest constantly amassing,
in order to lend to the state, instead of distributing among them, by
seasonable loans, their superfluous income, with a view to share
the reasonable profits of their ingenuity; and on the other hand,
they find the emissaries of taxation robbing them of the seed before
it is sown, instead of waiting for a share in the harvest.
Under the feudal form of government, liberty and independence
were confined to the nobility. Birth opened the door of preferment
to some, and birth as effectually shut it against others. I have often
observed how, by reason and from experience, such a form of government
must be unfavourable both to trade and industry.
From reason it is plain, that industry must give wealth, and
wealth will give power, if he who possesses it be left the master to
employ it as he pleases. A government could not therefore encourage
a system which tended to throw power into the hands of those
who were only made to obey. It was consequently very natural
for the nobility to be jealous of wealthy merchants, and of every
one who became easy and independent by means of their own industry;
experience proved how exactly this principle regulated their
administration.
246A statesman ought, therefore, to consider attentively every circumstance
of the constitution of his country, before he sets on foot
the modern system of trade and industry. I am far from being of
opinion that this is the only road to happiness, security, and ease;
though, from the general taste of the times I live in, it be the system
I am principally employed to examine. A country may be abundantly
happy, and sufficiently formidable to those who come to
attack it, without being extremely rich. Riches indeed are forbid
to all who have not mines, or foreign trade.
If a country be found labouring under many natural disadvantages
from inland situation, barren soil, distant carriage, it would
be in vain to attempt a competition with other nations in foreign
markets. All that can be then undertaken is a passive trade, and
that only in so far as it can bring in additional wealth. When little
money can be acquired, the statesman’s application must be, to
make that already acquired to circulate as much as possible, in order
to give bread to every one in the society.
In countries where the government is vested in the hands of
the great lords, as is the case in all aristocracies, as was the
case under the feudal government, and as it still is the case in
many countries in Europe, where trade, however, and industry
are daily gaining ground; the statesman who sets the new system
of political oeconomy on foot, may depend upon it, that either his
attempt will fail, or the constitution of the government will change.
If he destroys all arbitrary dependence between individuals, the
wealth of the industrious will share, if not totally root out the
power of the grandees. If he allows such a dependence to subsist,
his project will fail.
While Venice and Genoa flourished, they were obliged to open
the doors of their senate to the wealthy citizens, in order to prevent
their being broken down. What is venal nobility? The child
of commerce, the indispensible consequence of industry, and a
middle term, which our Gothic ancestors found themselves obliged
247to adopt, in order not entirely to lose their own rank in the state.
Money, they found, must carry off the fasces, so they chose rather
to adopt the wealthy plebeians, and to clothe ignoble shoulders
with their purple mantle, than to allow these to wrest all authority
out of the hands of the higher class. By this expedient, a sudden
revolution has often been prevented. Some kingdoms have been
quit for a bloody rebellion, or a long civil war. Other countries
have likewise demonstrated the force of the principles here laid
down: a wealthy populace has broken their chains to pieces, and
overturned the very foundations of the feudal system.
All these violent convulsions have been owing to the short-sightedness
of statesmen; who, inattentive to the consequences of growing
wealth and industry, foolishly imagined that hereditary subordination
was to subsist among classes, whose situation, with respect
to each other, was entirely changed.
The pretorian cohorts were at first subordinate to the orders of
the Emperors, and were the guards of the city of Rome. The
Janissaries are understood to be under the command of the principal
officers of the Port. So soon as the leading men of Rome and Constantinople,
who naturally were entitled to govern the state, applied
to these tumultuous bodies for their protection and assistance, they
in their turn, made sensible of their own importance, changed the
constitution, and shared in the government.
A milder revolution, entirely similar, is taking place in modern
times; and an attentive spectator may find amusement in viewing
the progress of it in many states of Europe. Trade and industry are
in vogue; and their establishment is occasioning a wonderful
fermentation with the remaining fierceness of the feudal constitution.
Trade and industry owed their establishment to war and to ambition;
and perhaps mankind may hope to see the day when they
will put an end to the first, by exposing the expensive folly of the
latter.
248Trade and industry, I say, owed their establishment to the ambition
of princes, who supported and favoured the plan in the beginning,
principally with a view to enrich themselves, and thereby to
become formidable to their neighbours. But they did not discover,
until experience taught them, that the wealth they drew
from such fountains was but the overflowing of the spring; and
that an opulent, bold, and spirited people, having the fund of the
prince’s wealth in their own hands, have it also in their own power,
when it becomes strongly their inclination, to shake off his authority.
The consequence of this change has been the introduction
of a more mild, and a more regular plan of administration. The
money gatherers are become more useful to princes, than the great
lords; and those who are fertile in expedients for establishing public
credit, and for drawing money from the coffers of the rich, by
the imposition of taxes, have been preferred to the most wise and
most learned counsellors.
As this system is new, no wonder if it has produced phenomena
both new and surprizing. Formerly, the power of Princes was
employed to destroy liberty, and to establish arbitrary subordination;
but in our days, we have seen those who have best comprehended
the true principles of the new plan of politics, arbitrarily limiting
the power of the higher classes, and thereby applying their authority
towards the extension of public liberty, by extinguishing every
subordination, other than that due to the established laws.
The fundamental maxim of some of the greatest ministers, has
been to restrain the power of the great lords. The natural inference
that people drew from such a step, was, that the minister
thereby intended to make every thing depend on the prince’s
will only. This I do not deny. But what use have we seen made
of this new acquisition of power? Those who look into events with
a political eye, may perceive several acts of the most arbitrary authority
exercised by some late European sovereigns, with no other
view than to establish public liberty upon a more extensive bottom.
249And although the prerogative of some princes be increased considerably
beyond the bounds of the antient constitution, even to such
a degree as perhaps justly to deserve the name of usurpation; yet
the consequences resulting from the revolution, cannot every where
be said, upon the whole, to have impaired what I call public liberty.
I should be at no loss to prove this assertion from matters of fact,
and by examples, did I think it proper: it seems better to prove it
from reason.
When once a state begins to subsist by the consequences of industry,
there is less danger to be apprehended from the power of
the sovereign. The mechanism of his administration becomes
more complex, and, as was observed in the introduction to the first
book, he finds himself so bound up by the laws of his political
oeconomy, that every transgression of them runs him into new
difficulties.
I only speak of governments which are conducted systematically,
constitutionally, and by general laws; and when I mention princes,
I mean their councils. The principles I am enquiring into, regard
the cool administration of their government; it belongs to another
branch of politics, to contrive bulwarks against their passions, vices
and weaknesses, as men.
I say, therefore, that from the time states have begun to be supported
by the consequences of industry, the plan of administration
has become more moderate; has been changing and refining by
degrees; and every change, as has been often observed, must be
accompanied with inconveniencies.
It is of governments as of machines, the more they are simple,
the more they are solid and lasting; the more they are artfully
composed, the more they become useful; but the more apt they
are to be out of order.
The Lacedemonian form may be compared to the wedge, the
most solid and compact of all the mechanical powers. Those of
modern states to watches, which are continually going wrong;
250sometimes the spring is found too weak, at other times too strong
for the machine: and when the wheels are not made according to
a determined proportion, by the able hands of a Graham, or a
Julien le Roy, they do not tally well with one another; then the
machine stops, and if it be forced, some part gives way; and the
workman’s hand becomes necessary to set it right.
The republic of Lycurgus represents the most perfect plan of
political oeconomy, in my humble opinion, anywhere to be
met with, either in antient or modern times. That it existed cannot
be called in question, any more than that it proved the most
durable of all those established among the Greeks; and if at last it
came to fail, it was more from the abuses which gradually were
introduced into it, than from any vice in the form.
The simplicity of the institution made the solidity of it; and had
the Lacedemonians at all times adhered to the principles of their
government, and spirit of their constitution, they might have perhaps
subsisted to this very day.
My intention, in this chapter, is not to enter into a critical disquisition
concerning the mechanism of every part of the Spartan
republic; but to compare the general plan of Lycurgus’s political
oeconomy with the principles we have been laying down.
Of this plan we have a description in the life of that legislator
written by Plutarch, one of the most judicious authors to be met
with in any age.
251This historian flourished at least 800 years after the institution of
the plan he describes. A plan never reduced into a system of
written laws, but stamped at first upon the minds of the Spartans
by the immediate authority of the gods, which made them submit
to the most violent revolution that perhaps ever took place in any
nation, and which they supported for so many ages by the force of
education alone.
As the whole of Lycurgus’s laws was transmitted by tradition
only, it is not to be supposed, that the description Plutarch, or indeed
any of the antients, have given us of this republic, can be
depended on with certainty as a just representation of every part of
the system laid down by that great statesman. But on the other hand,
we may be very sure, that as to the outlines of the institution,
we have them transmitted to us in all their purity; and, in what
relates to my subject, I have no occasion to launch out into any
particulars which may imply the smallest controversy, as to the
matter of fact.
Property among the Lacedemonians, at the time when Lycurgus
planned his institution, was very unequally divided: the consequence
of which, says our historian, was to draw many poor people
into the city, where the wealth was gathered into few hands; that
is, according to our language, the luxury of the rich, who lived in the
city, had purged the lands of useless mouths, and the instability of the
government had rendered industry precarious, which must have opened the
door to general distress among all the lower classes.
The first step our legislator took, was to prepare the spirit of the
people, so as to engage them to submit to a total reform, which
could not fail of being attended with innumerable inconveniencies.
For this purpose he went to Delphi, without having communicated
his design to any body. The Pythia declared him to be
the darling of the gods, and rather a god than a man; and publicly
gave out, that Apollo had delivered to him alone the plan of
a republic which far exceeded every other in perfection.
252What a powerful engine was this in the hands of a profound
politician, who had travelled over the world with a previous intention
to explore the mysteries of the science of government! and
what advantages did such an authentic recommendation, coming
directly (as was believed) from the voice of the Divinity, give him
over a superstitious people, in establishing whatever form of government
he thought most proper!
The sagacious Lacedemonian did not, however, entirely depend
upon the blind submission of his countrymen to the dictates of the
oracle; but wisely judged that some preparatory steps might still
be necessary. He communicated, therefore, his plan, first to his
friends, and then by degrees to the principal people of the state,
who certainly never could have been brought to relish an innovation
so prejudicial to their interest, had it not been from the
deepest reverence and submission to the will of the gods. Assured
of their assistance, he appeared in the market place, accompanied
by his party, all in arms; and having imposed respect, he laid the
foundation of his government by the nomination of a senate.
Whatever regards any other object than his plan of political
oeconomy, shall be here passed over in silence. It is of no consequence
to my inquiry, where the supreme power was vested: it is
sufficient to know that there was an authority in the state sufficient
to support the execution of his plan.
He destroyed all inequality at one stroke. The property of all the
lands of the state was thrown together, and became at the disposal
of the legislator. Every branch of industry was proscribed to the
citizens. And a monied interest was made to disappear, by the introduction
of iron coin. The lands he divided into equal lots,
according to the number of citizens.
Thus all were rendred entirely equal in point of fortune, as neither
wealth, industry, or lands, could give a superiority to any
body. From this part of the plan I conclude, that Lycurgus discovered
the utter insufficiency of an agrarian law for establishing
253equality among the individuals of a state, without proscribing, at
the same time, both wealth and industry. A circumstance which
seems to have escaped every other statesman in antient times, as
well as the modern patrons of equality and simplicity of manners.
The lands were cultivated by the Helotes, who were nourished
from them, and who were obliged to deliver the surplus, that is,
a determined quantity of fruits, to the proprietor of the lot. Every
necessary mechanic art was likewise exercised by this body of
slaves.
By this distribution, the produce of the earth (that is every article
of nourishment) came free and without cost to every individual of
the state. The Spartan landlords were rather overseers of the slaves,
and collectors of the public subsistence, than direct proprietors of
the soil which produced it. For although every man was fed from
his own lands, and provided his own portion, yet this portion was
regulated, and was to be consumed in public; and any one who
pretended to eat alone, or before he came to the public hall, was
held in the utmost contempt.
Their cloathing was the most simple possible, perfectly alike, and
could be purchased for a small value. This frugality produced no
bad effect; because no man lived by his industry. Arts, as has
been said, were exercised by the Helotes, the property of private
citizens; and if such masters as entertained manufacturing slaves
gained by that traffic (as some must do) every method of profiting
of their superior riches was cut off.
The Spartans were continually together, they had nothing to do
but to divert themselves; and their amusements were mostly martial
exercises. The regulations of these numerous assemblies (which
were compared, with great elegance and justness, to swarms of
bees) cut off all outward marks of distinction. There was not a
possibility for luxury to introduce itself, either in eating, drinking,
cloathing, furniture, or any other expence.
254Here then was a whole nation fed and provided for gratuitously;
there was not the least occasion for industry; the usefulness of
which we have shewn principally to consist in its proving an expedient
for procuring for the necessitous, what the Spartans found
provided for them without labour.
Under such circumstances we may conclude, from the principles
we have laid down, that a people thus abundantly nourished, must
have multiplied exceedingly. And so no doubt they did. But the
regulation of the lots permitted no more than a fixt number of citizens.
Whenever, therefore, numbers were found to exceed this
standard, the supernumeraries were dismissed, and sent to form
colonies. And when the Helotes increased too much, and thereby
began to rise above the proportion of the labour required of them,
in order to prevent the consuming the food of their masters, which
they had among their hands, and thereby becoming idle, licentious,
and consequently dangerous to the state, it was permitted to destroy
them by way of a military exercise, conducted by stratagem and
address; arts which this people constantly preferred in war, to
labour, strength, and intrepidity.
This appears a very barbarous custom, and I shall not offer any
thing as an apology for it, but the ferocity of the manners of those
times. Abstracting from the cruelty, the restraining the numbers
of that class within certain limits, was absolutely necessary. The
Lacedemonian slaves were in many respects far happier than those
of other nations. They were in reality a body of farmers, which
paid a certain quantity of fruits out of every lot; to wit, 70 medimni
of barley: their numbers were not recruited from abroad, as
elsewhere, but supported by their own propagation; consequently
there was an absolute necessity either to prevent the over multiplication
of them, or to diminish an income proportioned exactly to
the necessities of the state: and what expedient could be fallen
upon? They were slaves, and therefore could not be inrolled in the
number of citizens; they could not be sold to strangers, for money
255which was forbid; and they were of no use to industry. No
wonder then if the fierceness of the manners of those days permitted
the inhuman treatment they received; which, however,
Plutarch is far from attributing to the primitive institution of Lycurgus.
Besides, when we see that the freemen themselves were
obliged to quit the country the moment their numbers exceeded a
certain standard, it was not to be expected, that useless slaves should
be permitted to multiply at discretion.
From this sketch of Lycurgus’s political oeconomy, we find the
state abundantly provided with every necessary article; an effectual
stop put to vicious procreation among the citizens; and a corrective
for the over multiplication of the slaves. The next care of a
statesman is to regulate the employment of a people.
Every freeman in the state was bred up from his infancy to arms.
No family care could prevent him from serving the state as a soldier;
his children were no load upon him; it was the business of
the Helotes to supply them with provisions; of the servants in town
to prepare these, and the public tables were always ready furnished.
The whole youth of Sparta was educated not as the children of
their parents, but of the state. They imbibed the same sentiments
of frugality, temperance, and love of simplicity. They exercised
the same employment, and were occupied in the same way in every
respect. The simplicity of Lycurgus’s plan, rendered this a practicable
scheme. The multiplicity and variety of employments
among us, makes it absolutely necessary to trust the parents with
the education of their children; whereas in Sparta, there were not
two employments for a free man; there was neither orator, lawyer,
physician, or politician, by profession to be found. The institutions
of their lawgiver were constantly inculcated by the old upon
the minds of the young; every thing they heard or saw, was relative
to war. The very gods were represented in armour, and every
precept they were taught, tended to banish superfluity, and to establish
moderation and hard living.
256The youth were continually striving together in all military
exercises; such as boxing and wrestling. To keep up, therefore,
a spirit of emulation, and to banish animosity at the same time,
sharp, satirical expressions were much encouraged; but these were
always to be seasoned with something gracious or polite. The grave
demeanour likewise, and down-cast look which they were ordered
to observe in the streets, and the injunction of keeping their hands
within their robes, might very naturally be calculated to prevent
quarrels, and especially blows, at times when the authority of a
public assembly could not moderate the vivacity of their passions.
By these arts, the Spartans lived in great harmony in the midst of a
continual war.
Under such regulations a people must enjoy security from foreign
attacks; and certainly the intention of the legislator never was to
extend the limits of Laconia by conquest. What people could ever
think of attacking the Lacedemonians, where nothing but blows
could be expected?
They enjoyed ease in the most supreme degree; they were abundantly
provided with every necessary of life; although, I confess,
the enjoyment of them in so austere a manner, would not be relished
by any modern society. But habit is all in things of this kind. A
course meal to a good stomach, has more relish than all the delicacies
of the most exquisite preparation to a depraved appetite; and
if sensuality be reckoned among the pleasures of life, enough of it
might have been met with in the manners of that people. It does
not belong to my subject to enter into particular details on this
head. But the most rational pleasure among men, the delightful
communication of society, was here enjoyed to the utmost extent.
The whole republic was continually gathered together in bodies,
and their studies, their occupations, and their amusements, were the
same. One taste was universal; and the young and the old being
constantly together, the first under the immediate inspection and
authority of the latter, the same sentiments were transmitted from
257generation to generation. The Spartans were so pleased, and so
satisfied with their situation, that they despised the manners of
every other nation. If this does not transmit an idea of happiness,
I am at a loss to form one. Security, ease, and happiness, therefore,
are not inseparable concomitants of trade and industry.
Lycurgus had penetration enough to perceive the weak side of
his institution. He was no stranger to the seducing influence of
luxury; and plainly foresaw, that the consequences of industry,
which procures to mankind a great variety of new objects of desire,
and a wonderful facility in satisfying them, would easily root out
the principles he had endeavoured to instil into his countrymen, if
the state of simplicity should ever come to be sophisticated by foreign
communications. He affected, therefore, to introduce several
customs which could not fail of disgusting and shocking the delicacy
of neighbouring states. He permitted the dead to be buried
within the walls; the handling of dead bodies was not reckoned
pollution among the Lacedemonians. He forbade bathing, so necessary
for cleanliness in a hot country: and the coarseness and
dirtiness of their cloaths, and sweat from their hard exercises, could
not fail to disgust strangers from coming among them. On the
other hand, nothing was found at Sparta which could engage a
stranger to wish to become one of their number. And to prevent
the contagion of foreign customs from getting in, by means of the
citizens themselves, he forbade the Spartans to travel; and excluded
from any employment in the state, those who had got a foreign
education. Nothing but a Spartan breeding could have fitted a person
to live among them.
The theft encouraged among the Lacedemonians was calculated
to make them artful and dextrous; and contained not the smallest
tincture of vice. It was generally of something eatable, and the
frugality of their table, prompted them to it; while on the other
hand, their being exposed to the like reprisals, made them watchful
and careful of what belonged to themselves; and the pleasure
258of punishing an unsuccessful attempt, in part indemnified them
for the trouble of being constantly upon their guard. A Lacedemonian
had nothing of any value that could be stolen; and it is the
desire and intention of making unlawful gain, which renders theft
either criminal or scandalous.
The hidden intercourse between the Spartans and their young
wives was, no doubt, calculated to impress upon the minds of the
fair sex, the wide difference there is between an act of immodesty,
and that of simply appearing naked in the public exercises; two
things which we are apt to confound, only from the impression of
our own customs. I am persuaded that many a young person has
felt her modesty as much hurt by taking off her handkerchief, the
first time she appeared at court, as any Lacedemonian girl could
have done by stripping before a thousand people; yet both her reason
and common sense, must make her sensible of the difference
between a compliance with a custom in a matter of dress, and a
palpable transgression against the laws of her honour, and the modesty
of her sex.
I have called this Lacedemonian republic a perfect plan of political
oeconomy; because it was a system, uniform and consistent
in all its parts. There, no superfluity was necessary, because there
was no occasion for industry, to give bread to any body. There, no
superfluity was permitted, because the moment the limits of the
absolutely necessary are transgressed, the degrees of excess are quite
indeterminate, and become purely relative. The same thing which
appears superfluity to a peasant, appears necessary to a citizen; and
the utmost luxury of this class, frequently does not come up to
what is thought the mere necessary for one in a higher rank. Lycurgus
stopt at the only determined frontier, the pure physical
necessary. All beyond this was considered as abusive.
The only things in commerce among the Spartans were,
1mo. What might remain to them of the fruits of their lot, over
their own consumption; and 2do. The work of the slaves employed
259in trades. The numbers of these could not be many, as the
timber of their houses was worked only with the saw and ax; and
every utensil was made with the greatest simplicity. A small quantity,
therefore, of iron coin, as I imagine, must have been sufficient
for carrying on the circulation at Sparta. The very nature of their
wants must, as I have said, terminate all their commerce, in the
exchange of their surplus-food of their portions of land, with the
work of the manufacturing slaves, who must have been fed from it.
As the Lacedemonians had no mercantile communication with
other nations, the iron coin was no more than a bank note of no
intrinsic value, as I suppose, but a middle term introduced for
keeping accounts, and for facilitating barter. An additional argument
for this opinion of the coin being of no intrinsic value, is,
that it is said to have been rendred unserviceable for other uses,
by being slaked in vinegar. In order consequently to destroy, as
they imagined, any intrinsic value which might therein otherwise
remain. If this coin, therefore, was made of an extraordinary
weight, it must have been entirely with a political view of discouraging
commerce and circulation, an institution quite consistent
with the general plan, and nowise a consequence of the baseness of
the metal of which it was made: a small quantity of this, with the
stamp of public authority for its currency and value, would have
answered every purpose equally well.
Let me now conclude this chapter by an illustration of the subject,
which will still more clearly point out the force of the principles
upon which this Lacedemonian republic was established.
Were any Prince in Europe, whose subjects, I shall suppose, may
amount to six millions of inhabitants, one half employed in agriculture,
the other half employed in trade and industry, or living
upon a revenue already acquired; were such a Prince, I say, supposed
to have authority sufficient to engage his people to adopt a new
plan of oeconomy, calculated to secure them against the designs of
260a powerful neighbour, who, I shall suppose, has formed schemes
of invading and subduing them.
Let him engage the whole proprietors of land to renounce their
several possessions: or if that supposition should appear too absurd,
let him contract debts to the value of the whole property of the
nation; let the land-tax be imposed at twenty shillings in the pound,
and then let him become bankrupt to the creditors. Let the income
of all the lands be collected throughout the country for the use of
the state; let all the luxurious arts be proscribed; and let those
employed in them be formed, under the command of the former
land proprietors, into a body of regular troops, officers and soldiers,
provided with every thing necessary for their maintenance, and that
of their wives and families at the public expence. Let me carry
the supposition farther. Let every superfluity be cut off; let the
peasants be enslaved, and obliged to labour the ground with no
view of profit to themselves, but for simple subsistence; let the use
of gold and silver be proscribed; and let all these metals be shut
up in a public treasure. Let no foreign trade, and very little domestic
be encouraged, but let every man, willing to serve as a soldier,
be received and taken care of; and those who either incline
to be idle, or who are found superfluous, be sent out of the country.
I ask, what combination, among the modern European Princes,
would carry on a successful war against such a people? What
article would be wanting to their ease, that is, to their ample subsistence?
Their happiness would depend upon the temper of their
mind. And what country could defend themselves against the attack
of such an enemy? Such a system of political oeconomy, I readily
grant, is not likely to take place: but if ever it did, would it not
effectually dash to pieces the whole fabric of trade and industry,
which has been forming for so many years? And would it not
quickly oblige every other nation to adopt, as far as possible, a
similar conduct, from a principle of self-preservation.
261
The two preceding chapters I have introduced purposely to
serve as a relaxation to the mind, like a farce between the
acts of a serious opera. I now return to the place where I broke
off my subject, at the end of the twelfth chapter.
It is a great assistance to memory, now and then to assemble our
ideas, after certain intervals, in going through an extensive subject.
No part of it can be treated of with distinctness, without banishing
combinations; and no part of it can be applied to practice, or
adapted to any plan, without attending to combinations almost infinite.
For this reason nothing can appear more inconsistent than the
spirit which runs through some parts of this book, if compared
with that which prevailed in the first. There luxury was looked
on with a favourable eye, and every augmentation of superfluity
was considered as a method of advancing population. We were then
employed in drawing mankind, as it were, out of a state of idleness,
in order to increase their numbers, and engage them to cultivate
the earth. We had no occasion to divide them into societies
having separate interests, because the principles we treated of were
common to all. We therefore considered the industrious, who are
the providers, and the luxurious, who are the consumers, as children
of the same family, and as being under the care of the same
father.
We are now engaged in a more complex operation; we represent
different societies animated with a different spirit; some given to
262industry and frugality, others to dissipation and luxury. This
creates separate interests among nations, and every one must be
supposed under the government of a statesman, who is wholly taken
up in advancing the good of those he governs, though at the expence
of other societies which lie round him.
This presents a new idea, and gives birth to new principles. The
general society of mankind treated of in the first book, is here in a
manner divided into two. The industrious providers are supposed
to live in one country, the luxurious consumers in another. The
principles of the first book remain here in full vigour. Luxury still
tends as much as ever to the advancement of industry; the statesman’s
business is only to remove the seat of it from his own country.
When that can be accomplished without detriment to industry at
home, he has an opportunity of joining all the advantages of antient
simplicity, to the wealth and power which attend upon the
luxury of modern states. He may preserve his people in sobriety,
and moderation as to every expence, as to every consumption, and
make them enjoy, at the same time, riches and superiority over all
their neighbours.
Such would be the state of trading nations, were they only employed
in supplying the wants or extravagant consumption of strangers;
and did they not insensibly adopt the very manners with
which they strive to inspire others.
As often, therefore, as we suppose a people applying themselves
to the advancement of foreign trade, we must simplify our ideas,
by dismissing all political combinations of other circumstances;
that is to say, we must suppose the spirit universal, and then point
out the principles which influence the success of it.
We must encourage oeconomy, frugality, and a simplicity of
manners, discourage the consumption of every thing that can be
sold out of the country, and excite a taste for superfluity in neighbouring
nations. When such a system can no more be supported
to its full extent, by the scale of foreign demand becoming positively
263lighter; then in order to set the balance even again, without
taking any thing out of the heavy scale, and to preserve and give
bread to those who have enriched the state, an additional home
consumption, proportioned to the deficiency of foreign demand,
must be encouraged. For were the same simplicity of manners
still kept up, the infallible consequence would be a forced restitution
of the balance, by the distress, misery, and at last extinction
of the supernumerary workmen.
I must therefore, upon such occasions, consider the introduction
of luxury, or superfluous consumption, as a rational and moral consequence
of the deficiency of foreign trade.
I am, however, far from thinking that the luxury of every modern
state, is only in proportion to such failure; and I readily admit,
that many examples may be produced where the progress of
luxury, and the domestic competitions with strangers who come to
market, have been the cause both of the decline and extinction of
their foreign trade; but as my business is chiefly to point out principles,
and to shew their effects, it is sufficient to observe, that in
proportion as foreign trade declines, either a proportional augmentation
upon home consumption must take place, or a number of
the industrious, proportioned to the diminution of former consumption,
must decrease. By the first, what I call a natural restitution
of the balance is brought about, from the principles above
deduced; by the second, what I call a forced one.
Here then is an example, where the introduction of luxury may
be a rational and prudent step of administration; and as long as
the progress of it is not accelerated from any other principle, but
that of preserving the industrious, by giving them employment,
the same spirit, under the direction of an able statesman, will soon
throw industry into a new channel, better calculated for reviving
foreign trade, and for promoting the public good, by substituting
the call of foreigners in place of that of domestic luxury.
264I hope, from what I have said, the political effects of luxury, or
the consumption of superfluity, are sufficiently understood. These
I have hitherto considered as advantageous only to those classes who
are made to subsist by them; I reserve for another occasion the
pointing out how they influence the imposition of taxes, and how
the abuse of consumption in the rich may affect the prosperity of a
state.
So soon as all foreign trade comes to a stop, without a scheme
for recalling it, and that domestic consumption has filled up its
place in consuming the work, and giving bread to the industrious,
we find ourselves obliged to reason again upon the principles of the
first book. The statesman has once more both the producers and
the consumers under his care. The consumers can live without
employment, the producers cannot. The first seldom have occasion
for the statesman’s protection; the last constantly stand in need of it.
There is a perpetual fluctuation in the balance between these two
classes, from which a multitude of new principles arise; and these
render the administration of government infinitely more difficult,
and require superior talents in the person who is at the helm. I
shall here only point out the most striking effects of the fluctuation
and overturn of this new balance, which in the subsequent chapters
shall be more fully illustrated.
1mo. In proportion as the consumers become extravagant, the producers
become wealthy; and when the former become bankrupts,
the latter fill their place.
2do. As the former become frugal and oeconomical, the latter
languish; when those begin to hoard, and to adopt a simple life,
these are extinguished: all extremes are vicious.
3tio. If the produce of industry consumed in a country, surpass
the income of those who do not work, the balance due by the consumers
must be paid to the suppliers by a proportional alienation of
their funds. This vibration of the balance, gives a very correct
265idea of what is meant by relative profit and loss. The nation here loses
nothing by the change produced.
4to. When, on the other hand, the annual produce of industry
consumed in a country, does not amount to the value of the income
of those who do not work, the balance of income saved, must either
be locked up in chests, made into plate, lent to foreigners, or fairly
exported as the price of foreign consumption.
5to. The scales stand even when there is no balance on either
side; that is, when the domestic consumption is just equivalent to
the annual income of the funds. I do not pretend to decide at present
whether this exact equilibrium marks the state of perfection
in a country where there is no foreign trade, (of which we are now
treating) or whether it be better to have small vibrations between
the two scales; but I think I may say, that all subversions of the
balance on either side cannot fail to be hurtful, and therefore should
be prevented.
Let this suffice at present, upon a subject which shall be more
fully treated of afterwards. Let us now fix our attention upon the
interests of a people entirely taken up in the prosecution of foreign
trade. So long as this spirit prevails, I say, it is the duty of a statesman
to encourage frugality, sobriety, and an application to labour
in his own people, and to excite in foreign nations a taste for superfluities
as much as possible.
While a people are occupied in the prosecution of foreign trade,
the mutual relations between the individuals of the state, will not
be so intimate as when the producers and consumers live in the
same society; such trade implies, and even necessarily creates a
chain of foreign dependencies; which work the same effect, as
when the mutual dependence subsisted among the citizens. Now
the use of dependencies, I have said, is to form a band of society,
capable of making the necessitous subsist out of the superfluities of
the rich, and to keep mankind in peace and harmony with one
another.
266Trade, therefore, and foreign communications, form a new kind
of society among nations; and consequently render the occupation
of a statesman more complex. He must, as before, be attentive to
provide food, other necessaries and employment for all his people;
but as the foreign connections make these very circumstances depend
upon the entertaining a good correspondence with neighbouring
nations, he must acquire a proper knowledge of their domestic
situation, so as to reconcile, as much as may be, the interests of
both parties, by engaging the strangers to furnish articles of the first
necessity, when the precious metals cannot be procured; and to
accept, in return, the most consumable superfluities which industry
can invent. And, last of all, he must inspire his own people with
a spirit of emulation in the exercise of frugality, temperance, oeconomy,
and an application to labour and ingenuity. If this spirit
of emulation is not kept up, another will take place; for emulation
is inseparable from the nature of man; and if the citizens are not
made to vie with one another, in the practice of moderation, the
wealth they must acquire, will soon make them vie with strangers,
in luxury and dissipation.
While a spirit of moderation prevails in a trading nation, it may
rest assured, that in as far as it excels the nations with whom it correspondsit corresponds
in this particular, so far will it increase the proportion
of its wealth, power, and superiority, over them. These are lawful
pursuits among men, when purchased by success in so laudable
an emulation.
If it be said, that superfluity, intemperance, prodigality, and
idleness, qualities diametrically opposite to the former, corrupt the
human mind, and lead to violence and injustice; is it not very
wisely calculated by the Author of all things, that a sober people,
living under a good government, should by industry and moderation,
necessarily acquire wealth, which is the best means of warding
off the violence of those with whom they are bound in the
great society of mankind? And is it not also most wisely ordained,
267that in proportion as a people contract vicious habits, which may
lead to excess and injustice, the very consequence of their dissipation
(poverty) should deprive them of the power of doing harm? But
such reflections seem rather to be too great a refinement on my subject,
and exceed the bounds of political oeconomy.
When we treat of a virtuous people applying to trade and industry,
let us consider their interest only, in preserving those sentiments;
and examine the political evil of their falling off from
them. When we treat of a luxurious nation, where the not-working
part is given to excesses in all kinds of consumption, and the working
part to labour and ingenuity, in order to supply them, let us
examine the consequences of such a spirit, with respect to foreign
trade: and if we find, that a luxurious turn in the rich is prejudicial
thereto, let us try to discover the methods of engaging the
inhabitants to correct their manners from a motive of self-interest.
These things premised,
I shall now give a short sketch of the general principles upon
which a system of foreign trade may be established and preserved
as long as possible, and of the methods by which it may be again
recovered, when, from the natural advantages and superior ability
of administration in rival nations, (not from vices at home) a people
have lost for a time every advantage they used to draw from their
foreign commerce.
The first general principle is to employ, as usefully as possible,
a certain number of the society, in producing objects of the first
necessity, always more than sufficient to supply the inhabitants;
and to contrive means of enabling every one of the free hands to
procure subsistence for himself, by the exercise of some species of
industry.
These first objects compassed, I consider the people as abundantly
provided with what is purely necessary; and also with a surplus
prepared for an additional number of free hands, so soon as a demand
can be procured for their labour. In the mean time, the
268surplus will be an article of exportation; but no sooner will demand
come from abroad, for a greater quantity of manufactures than
formerly, than such demand will have the effect of gradually multiplying
the inhabitants up to the proportion of the surplus above
mentioned, provided the statesman be all along careful to employ
these additional numbers, which an useful multiplication must produce,
in supplying the additional demand: then with the equivalent
they receive from strangers, they will at the same time enrich
the country, and purchase for themselves that part of the national
productions which had been permitted to be exported, only for
want of a demand for it at home.
He must, at the same time, continue to give proper encouragement
to the advancement of agriculture, that there may be constantly
found a surplus of subsistence (for without a surplus there
can never be enough) this must be allowed to go abroad, and ought
to be considered as the provision of those industrious hands which
are yet unborn.
He must cut off all foreign competition, beyond a certain standard,
for that quantity of subsistence which is necessary for home
consumption; and, by premiums upon exportation, he must discharge
the farmers of any superfluous load, which may remain upon
their hands when prices fall too low. This important matter shall
be explained at large in another place, when we come to treat of
the policy of grain.
If natural causes should produce a rise in the price of subsistence,
which cannot be brought down by extending agriculture, he must
then lay the whole community under contribution, in order to indemnify
those who work for strangers, for the advance upon the
price of their food; or he must indemnify the strangers in another
way, for the advance in the price of manufactures.
He must consider the manufactures of superfluity, as worked up
for the use of strangers, and discourage all domestic competition
for them, by every possible means.
269He must do what he can, constantly to proportion the supply to
the demand made for them; and when the first necessarily comes
to exceed the latter, in spight of all his care, he must then consider
what remains over the demand, as a superfluity of the strangers;
and for the support of the equal balance between work and demand,
he must promote the sale of them even within the country, under
certain restrictions, until the hands employed in such branches
where a redundancy is found, can be more usefully set to work
in another way.
He must consider the advancement of the common good as a direct
object of private interest to every individual, and by a disinterested
administration of the public money, he must plainly make
it appear that it is so.
From this principle flows the authority, vested in all governments,
to load the community with taxes, in order to advance the prosperity
of the state. And this object can be nowise better obtained
than by applying the amount of them to the keeping an even balance
between work and demand. Upon this the health of a
trading state principally depends.
If the failure of foreign demand be found to proceed from the
superior natural advantages of other countries, he must double his
diligence to promote luxury among his neighbours; he must support
simplicity at home; he must increase his bounties upon exportation;
and his expence in relieving manufactures, when the price
of their industry falls below the expence of their subsistence.
While these operations are conducted with coolness and perseverance,
while the allurements of the wealth acquired do not
frustrate the execution, the statesman may depend upon seeing
foreigners return to his ports, so soon as their own dissipation, and
want of frugality, come to compensate the advantages which nature
had given them over their frugal and industrious neighbours.
If this plan be pursued, foreign trade will increase in proportion
to the number of inhabitants; and domestic luxury will serve
270only as an instrument in the hands of the statesman to increase
demand when the home supply becomes too great for foreign consumption.
In other words, the rich citizens will be engaged to
consume what is superfluous, in order to keep the balance even in
favour of the industrious, and in favour of the nation.
The whole purport of this plan is to point out the operation of
three very easy principles.
The first, That in a country entirely taken up with the object of
promoting foreign trade, no competition should be allowed to come
from abroad for articles of the first necessity, and principally for
food, so as to raise prices beyond a certain standard.
The second, That no domestic competition should be allowed
upon articles of superfluity, so as to raise prices beyond a certain
standard.
The third, That when these standards cannot be preserved, and
that from natural causes, prices get above them, public money
must be thrown into the scale to bring prices to the level of those
of exportation.
The greater the extent of foreign trade in any nation, the lower
these standards must be kept; the less the extent of it, the higher
they may be allowed to rise. Consequently,
Were no man in a nation employed in producing the necessaries
of life, but every man in supplying articles of foreign consumption,
the prices of necessaries might be allowed to fall as low as possible.
There would be no occasion for a standard in favour of those who
live by producing them.
Were no man in the state employed in supplying strangers, the
prices of superfluities might be allowed to rise as high as possible,
and a standard would also become useless, as the sole design of it is
to favour exportation.
But as neither of these suppositions can ever take place, and as
in every nation there is a part employed in producing, and a part
in consuming, and that it is only the surplus of industry which
271can be exported; a standard is necessary for the support of the reciprocal
interests of both parties at home; and the public money must
be made to operate only upon the price of the surplus of industry so
as to make it exportable, even in cases where the national prices
upon home consumption have got up beyond the standard. Let
me set this matter in another light, the better to communicate an
idea which I think a little obscure.
Were food and other necessaries the pure gift of nature in any
country, I should have laid it down as a principle to discourage all
foreign competition for them, either below or above any certain
standard; because in this case the lower the price the better, since
no inconveniency could result from thence to any industrious person.
But when the production of these is in itself a manufacture,
or an object of industry, a certain standard must be kept up in favour
of those who live by producing them.
On the other hand, as to the manufactures of superfluity, domestic
competition should be discouraged, beyond a certain standard,
in order that prices may not rise above those offered by
foreigners; but it might be encouraged below the standard, in order
to promote consumption and give bread to manufacturers. But
were there no foreign demand at all, there would be no occasion
for any standard, and the nation’s wealth would thereby only circulate
in greater or less rapidity in proportion as prices would rise
or fall. The study of the balance between work and demand,
would then become a principal object of attention in the statesman,
not with a view to enrich the state, but in order to preserve every
member of it in health and vigour. On the other hand, the object
of a standard regards foreign trade, and the acquisition of new
wealth, at the expence of other nations. The rich, therefore, at
home must not be allowed to increase their consumption of superfluities
beyond the proportion of the constant supply; because these
being intended for strangers, the only way of preventing them from
272supplying themselves, is to prevent prices from getting up beyond
the standard, at which strangers can produce them.
Farther, were every one of the society in the same pursuit of industry,
there would be no occasion for the public to be laid under
contribution for advancing the general welfare; but as there is a
part employed in enriching the state, by the sale of their work to
strangers, and a part employed in making these riches circulate at
home, by the consumption of superfluities, I think it is a good
expedient to throw a part of domestic circulation into the public
coffers; that when the consequences of private wealth come necessarily
to raise prices, a statesman may be enabled to defray the expence
of bounties upon that part which can be exported, and
thereby enable the nation to continue to supply foreigners at the
same price as formerly.
The farther these principles can be carried into execution, the
longer a state will flourish; and the longer she will support her
superiority. When foreign demand begins to fail, so as not to be
recalled, either industry must decline, or domestic luxury must begin.
The consequences of both may be easily guessed at, and the
principles which influence them shall be particularly examined in
the following chapter.
I am now to give an illustration of some things laid down, I
think, in too general terms in the former chapter, relating to
that species of trade which is carried on with other nations.
273I have constantly in view to separate and distinguish the principles
of foreign trade, from those which only influence the advancement
of an inland commerce, and a brisk circulation: operations
which produce very different effects, equally meriting the
attention of a statesman.
The very existence of foreign trade, implies a separate interest
between those nations who are found on the opposite side of the
mercantile contract, as both endeavour to make the best bargain
possible for themselves. These transactions imply a mutual dependence
upon one another, which may either be necessary or contingent.
It is necessary, when one of the nations cannot subsist without
the assistance of the other, as is the case between the province
of Holland, and those countries which supply it with grain; or contingent,
when the wants of a particular nation cannot be supplied
by their own inhabitants, from a want of skill and dexterity, only.
Wherever, therefore, one nation finds another necessarily depending
upon her for particular branches of traffic, there is a certain
foundation for foreign trade; where the dependence is contingent,
there is occasion for management, and for the hand of an able
statesman.
The best way to preserve every advantage, is, to examine in how
far they are necessary, and in how far they are only contingent, to
consider in what respect the nation may be most easily rivalled by her
neighbours, and in what respect she has natural advantages which
cannot be taken from her.
The natural advantages are chiefly to be depended on: France,
for example, can never be rivalled in her wines. Other countries
may enjoy great advantages from their situation, mines, rivers,
sea ports, fishing, timber, and certain productions proper to the
soil. If you abstract from these natural advantages, all nations are
upon an equal footing as to trade. Industry and labour are no properties
attached to place, any more than oeconomy and sobriety.
274This proposition may be called in question, upon the principles
of M. de Montesquieu, who deduces the origin of many laws, customs,
and even religions, from the influence of the climate. That
great man reasoned from fact and from experience, and from the
power and tendency of natural causes, to produce certain effects
when not checked by other circumstances; but in my method of
treating this subject, I suppose these causes never to be allowed to
produce their natural and immediate effects, when such effects
would be followed by a political inconvenience: because I constantly
suppose a statesman at the head of government, who makes
every circumstance concur in promoting the execution of the plan
he has laid down.
1mo. If a nation then has formed a scheme of being long great
and powerful by trade, she must first apply closely to the manufacturing
every natural produce of the country. For this purpose a
sufficient number of hands must be employed: for if hands be
found wanting, the natural produce will be exported without receiving
any additional value from labour; and so the consequences
of this natural advantage will be lost.
The price of food, and all necessaries for manufacturers, must be
found at an easy rate.
And, in the last place, if oeconomy and sobriety in the workmen,
and good regulations on the part of the statesman, are not kept up,
the end will not be obtained: for if the manufacture, when brought
to its perfection, does not retain the advantages which the manufacturer
had in the beginning, by employing the natural produce
of the country; it is the same thing as if the advantage had not
existed. I shall illustrate this by an example.
I shall suppose wool to be better, more plentiful, and cheaper,
in one country than in another, and two nations rivals in that
trade. It is natural that the last should desire to buy wool of the
first, and that the other should desire to keep it at home, in order
to manufacture it. Here then is a natural advantage which the first
275country has over the latter, and which cannot be taken from her.
I shall suppose that subsistence is as cheap in one country as in
the other; that is to say, that bread and every other necessary of
life is at the same price. If the workmen of the first country (by
having been the founders of the cloth manufacture, and by having
had, for a long tract of years, so great a superiority over other
nations, as to make them, in a manner, absolutely dependent upon
them for cloths) shall have raised their prices from time to time;
and if, in consequence of large profits, long enjoyed without rivalship,
these have been so consolidated with the real value, by an
habitual greater expence in living, which implies an augmentation
of wages; that country may thereby lose all the advantages it had
from the low price and superior quality of its wool. But if, on
the other hand, the workmen in the last country work less, be less
dextrous, pay extravagant prices for wool at prime cost, and be at
great expence in carriage; if manufactures cannot be carried on
successfully, but by public authority, and if private workmen be
crushed with excessive taxes upon their industry; all the accidental
advantages which the last country had over the first, may come to
be more than balanced, and the first may regain those which nature
first had given her. But this should by no means make the first
country rest secure. These accidental inconveniencies found in the
last may come to cease; and therefore the only real security of the
first for that branch, is the cheapness of the workmanship.
2do. In speaking of a standard, in the last chapter, I established
a distinction between one regulated by the height of foreign demand,
and another kept as low as the possibility of supplying the
manufacture can admit. This requires a little explanation.
It must not here be supposed that a people will ever be brought
from a principle of public spirit, not to profit of a rise in foreign
demand; and as this may proceed from circumstances and events
which are entirely hid from the manufacturers, such revolutions
are unavoidable. We must therefore restrain the generality of our
276proposition, and observe, that the indispensible vibrations of this
foreign demand do no harm; but that the statesman should be constantly
on his guard to prevent the subversion of the balance, or the
smallest consolidation of extraordinary profits with the real value. This he
will accomplish, as has been observed, by multiplying hands in
those branches of exportation, upon which profits have risen. This
will increase the supply, and even frustrate his own people of extraordinary
gains, which would otherwise terminate in a prejudice
to foreign trade.
A statesman may sometimes, out of a principle of benevolence,
perhaps of natural equity towards the classes of the industrious, as
well as from sound policy, permit larger profits, as an encouragement
to some of the more elegant arts, which serve as an ornament
to a country, establish a reputation for taste and refinement
in favour of a people, and thereby make strangers prefer articles
of their production, which have no other superior merit than the
name of the country they come from: but even as to these, he
ought to be upon his guard, never to allow them to rise so high,
as to prove an encouragement to other nations, to establish a successful
rivalship.
3tio. The encouragement recommended to be given to the domestic
consumption of superfluities, when foreign demand for
them happens to fall so low as to be followed with distress in the
workmen, requires a little farther explanation.
If what I laid down in the last chapter be taken literally, I own
it appears an absurd supposition, because it implies a degree of public
spirit in those who are in a capacity to purchase the superfluities,
no where to be met with, and at the same time a self-denial,
in discontinuing the demand, so soon as another branch of foreign
trade is opened for the employment of the industrious, which contradicts
the principles upon which we have founded the whole
scheme of our political oeconomy.
277I have elsewhere observed, that were revolutions to happen as
suddenly as I am obliged to represent them, all would go into confusion.
What, therefore, is meant in this operation comes to this, that
when a statesman finds, that the natural taste of his people does
not lead them to profit of the surplus of commodities which lie
upon hand, and which were usually exported, he should interpose
his authority and management in such a way as to prevent
the distress of the workmen, and when, by a sudden fall in a foreign
demand, this distress becomes unavoidable, without a more
powerful interposition, he should then himself become the purchaser,
if others will not; or, by premiums or bounties on the surplus
which lies upon hand, promote the sale of it at any rate, until
the supernumerary hands can be otherwise provided for. And although
I allow that the rich people of a state are not naturally led,
from a principle either of public spirit or self-denial, to render such
political operations effectual to promote the end proposed, yet we
cannot deny, that it is in the power of a good governor, by exposing
the political state of certain classes of the people, to gain
upon men of substance to concur in schemes for their relief; and
this is all I intend to recommend in practice. My point of view is
to lay down the principles, and I never recommend them farther
than they are rendered possible in execution, by preparatory steps,
and by properly working on the spirit of the people.
278
If manufacturers are found to be without employment, we are
not immediately to accuse the statesman, or conclude this to proceed
from a decay of trade, until the cause of it be inquired into.
If upon examination it be found, that for some years past food has
been at a higher rate than in neighbouring countries, the statesman
may be to blame: for it is certain, that a trading nation, by turning
part of her commerce into a proper channel, may always be
able to establish a just balance in this particular. And though it be
not expedient in years of scarcity to bring the price of grain very
low, yet it is generally possible to raise the price of it in all rival
nations, which, with regard to the present point, is the same
thing.
If this want of employment for manufacturers do not proceed
from the high prices of living, but for want of commissions from
the merchants, the causes of this diminution of demand must be
examined into. It may be accidental, and happen from causes
which may cease in a little time, and trade return to flourish as
before. It may also happen upon the establishment of new undertakings
in different places of the country, from which, by reason
of some natural advantage, or a more frugal disposition in the
workmen, or from the proximity of place, markets may be supplied,
which formerly were furnished by those industrious people
who are found without employment. In these last suppositions,
the distress of the manufacturers does not prove any decay of trade
in general, but, on the contrary, may contribute to destroy the bad
effects of consolidated profits, by obliging those who formerly
shared them, to abandon the ease of their circumstances, and submit
279a-new to a painful industry, in order to procure subsistence.
When such revolutions are sudden, they prove hard to bear, and
throw people into great distress. It is partly to prevent such inconveniencies,
that we have recommended the lowest standard possible,
upon articles of exportation.
Two causes there are, which very commonly mark a decline of
trade, to wit; 1. When foreign markets, usually supplied by a
trading nation, begin to be furnished, let it be in the most trifling
article, by others, not in use to supply them. Or, 2. When the
country itself is furnished from abroad with such manufactures as
were formerly made at home.
These circumstances prove one of two things, either that there
are workmen in other countries, who, from advantages which
they have acquired by nature, or by industry and frugality, finding
a demand for their work, take the bread out of the mouths of
those formerly employed, and deprive them of certain branches of
their foreign trade: or, that these foreign workmen, having profited
of the increased luxury and dissipation of the former traders, have
begun to supply the markets with certain articles of consumption,
the profits upon which being small, are, without much rivalship,
insensibly yielded up to them by the workmen of the other trading
nation, who find better bread in serving their own wealthy countrymen.
Against the first cause of decline, I see no better remedy than
patience, as I have said already, and a perseverance in frugality
and oeconomy, until the unwary beginners shall fall into the inconveniencies
generally attending upon wealth and ease.
The second cause of decline is far more difficult to be removed.
The root of it lies deep, and is ingrafted with the spirit and manners
of the whole people, high and low. The lower classes have
contracted a taste for superfluity and expence, which they are enabled
to gratify, by working for their countrymen; while they
despise the branches of foreign trade as low and unprofitable.
280The higher classes again depend upon the lower classes, for the
gratification of a thousand little trifling desires, formed by the
taste of dissipation, and supported by habit, fashion, and a love of
expence.
Here then is a system set on foot, whereby the poor are made
rich, and the rich are made happy, in the enjoyment of a perpetual
variety of every thing which can remove the inconveniencies
to which human nature is exposed. Thus both parties become interested
to support it, and vie with one another in the ingenuity of
contriving new wants; the one from the immediate satisfaction of
removing them; the other from the profit of furnishing the means,
and the hopes of one day sharing in them.
But even for this great evil, the very nature of man points out a
remedy. It is the business of a statesman to lay hold of it. The
remedy flows from the instability of every taste not founded upon
rational desires.
In every country of luxury, we constantly find certain classes of
workmen in distress, from the change of modes. Were a statesman
upon his guard to employ such as are forced to be idle, before
they betake themselves to new inventions, for the support of
the old plan, or before they contract an abandoned and vitious
life, he would get them cheap, and might turn their labour both
to the advantage of the state and to the discouragement of luxury.
I confess, however, that while a luxurious taste in the rich subsists,
industrious people will always be found to supply the instruments
of it to the utmost extent; and I also allow, that such a taste
has infinite allurements, especially while youth and health enable
a rich man to indulge in it. Those, however, who are systematically
luxurious, that is, from a formed taste and confirmed habit, are but
few, in comparison of those who become so from levity, vanity, and
the imitation of others. The last are those who principally support
and extend the system; but they are not the most incorrigible.
Were it not for imitation, every age would seek after, and be satisfied
281with the gratification of natural desires. Twenty-five might
think of dress, horses, hunting, dogs, and generous wines: forty,
of a plentiful table, and the pleasures of society: sixty, of coaches,
elbow-chairs, soft carpets, and instruments of ease. But the taste
for imitation blends all ages together. The old fellow delights in
horses and fine clothes; the youth rides in his chariot on springs,
and lolls in an easy chair, large enough to serve him for a bed.
All this proceeds from the superfluity of riches and taste of imitation,
not from the real allurements of ease and taste of luxury, as
every one must feel, who has conversed at all with the great and
rich. Fashion, which I understand here to be a synonimous term
for imitation, leads most people into superfluous expence, which is
so far from being an article of luxury, that it is frequently a load
upon the person who incurs it. All such branches of expence, it
is in the power of a statesman to cut off, by setting his own example,
and that of his favourites and servants, above the caprice
of fashion.
The levity and changeableness of mankind, as I have said, will
even assist him. A generation of oeconomists is sometimes found
to succeed a generation of spendthrifts; and we now see, almost
over all Europe, a system of sobriety succeeding an habitual system
of drunkenness. Drunkenness, and a multitude of useless servants,
were the luxury of former times.
Every such revolution may be profited of by an able statesman,
who must set a good example on one hand, while, on the other, he
must profit of every change of taste, in order to re-establish the foreign
trade of his subjects. An example of frugality, in the head
of a luxurious people, would do infinite harm, were it only intended
to reform the morals of the rich, without indemnifying the
poor for the diminution upon their consumption.
At the same time, therefore, that luxury comes to lose ground
at home, a door must be opened, to serve as an out-let for the work
282of those hands which must be thereby made idle; and which, consequently,
must fall into distress.
This is no more than the principle before laid down, in the fifteenth
chapter, reversed: there we said, that when foreign demand begins
to decline, domestic luxury must be made to increase, in order to
soften the shock of the sudden revolution in favour of the industrious.
For the same reason here we say, that foreign trade must
be opened upon every diminution of domestic luxury.
How few Princes do we find either frugal or magnificent from
political considerations! And, this being the case, is it not necessary
to lay before them the natural consequences of the one and
the other? And it is still more necessary to point out the methods
to be taken in order to avoid the inconveniencies which may proceed
from either.
Under a prodigal administration, the number of people will increase.
The statesman therefore should keep a watchful eye upon
the supplying of subsistence. Under a frugal reign, numbers will
diminish, if the statesman does not open every channel which may
carry off the superfluous productions of industry. Here is the reason:
a diminution of expence at home, is a diminution of employment;
and this again implies a diminution of people; because it
interrupts the circulation of the subsistence which made them live;
but if employment is sent far from abroad, the nation will preserve
its people, and the savings of the Prince may be compensated by the
balance coming in from strangers.
These topics are delivered only as hints; and the amplification of
them might not improperly have a place here; but I expect to bring
them in elsewhere to greater advantage, after examining the principles
of taxation, and pointing out those which direct the application
of public money.
283
The multiplicity of relations between the several parts of political
oeconomy, forces me to a frequent repetition of principles.
I have no other rule to judge whether such relations be superfluous,
or necessary, but by the tendency they have to give me a
more distinct view of my subject. This is the case when the same
principles are applied to different combinations of circumstances.
Almost every thing to be said on the head mentioned in the
title of this chapter, has been taken notice of elsewhere; and my
present intention is only to lay together ideas which appear scattered,
because they have been occasionally brought in by their relations
to other matters.
The methods of lowering the price of manufactures, so as to render
them exportable, are of two kinds.
The first, such as proceed from a good administration, and which
bring down prices within the country, in consequence of natural
causes.
The second, such as operate only upon that part which comes to
be exported, in consequence of a proper application of public
money.
As I have not yet inquired into the methods of providing a public
fund, it would, I think, be contrary to order to enter on the disposal
of it, for bringing down the price of manufactures. This
operation will come in more naturally afterwards, and the general
distinction here mentioned, is only introduced by the by, that my
readers may retain it and apply it as we go along.
284The end proposed is to lower the price of manufactures, so that
they may be exported. The first thing therefore to be known, is
the cause from whence it happens, that certain manufactures cannot
be furnished at home so cheap as in other countries; the second,
how to apply the proper remedy for lowering the price of them.
The causes of high prices, that is, of prices relatively high to
what they are found to be in other nations, are reducible to four
heads; which I shall lay down in their order, and then point out
the methods of removing them likewise, in their order.
1mo. The consolidation of high profits with the real value of the
manufacture. This cause operates in countries where luxury has
gained ground, and when domestic competition has called off too
many of the hands, which were formerly content to serve at a low
price, and for small gains.
2do. The rise in the price of articles of the first necessity. This
cause operates when the progress of industry has been more rapid
than that of agriculture. The progress of industry we have shewn
necessarily implies an augmentation of useful inhabitants; and as
these have commonly wherewithal to purchase subsistence, the moment
their numbers swell above the proportion of the quantity of
it produced by agriculture, or above what is found in the markets
of the country, or brought from abroad, they enter into competition
and raise the price of it. Here then let it be observed, by the by,
that what raises the price of subsistence is the augmentation of the
numbers of useful inhabitants, that is, of such as are easy in their
circumstances. Let the wretched be ever so many, let the vicious
procreation go on ever so far, such inhabitants will have little effect
in raising price, but a very great one in increasing misery. A proof
of this is to be met with in many provinces where the number of
poor is very great, and where at the same time the price of necessaries
is very low; whereas no instance can be found where a number
of the industrious being got together, do not occasion an immediate
rise on most of the articles of subsistence.
2853tio. The natural advantages of other countries. This operates
in spight of all the precautions of the most frugal and laborious
people. Let them deprive themselves of every superfluity; let them
be ever so diligent and ingenious; let every circumstance be improved
by the statesman to the utmost for the establishment of foreign
trade; the advantage of climate and situation may give such
a superiority to the people of another country, as to render a direct
competition with them impossible.
4to. The superior dexterity of other nations in working up their
manufactures, their knowledge in the science of trade, the advantage
they have in turning their money to account in the intervals
of their own direct circulation, the superior abilities of their statesman,
the application of their public money, in one word, the perfection
of their political oeconomy.
Before I enter upon the method of removing these several inconveniencies,
I must observe, that as we are at present treating of the
relative height of the price of manufactures, a competition between
nations is constantly implied. It is this which obliges a statesman
to be principally attentive to the rise of prices. The term competition
is relative to, and conveys the idea of emulation between two parties
striving to compass the same end. I must therefore distinguish between
the endeavours which a nation makes to retain a superiority
already got, and those of another which strives to get the better of
it. The first I shall call a competition to retain; the second, a competition
to acquire.
The first three heads represent the inconveniencies to which the
competitors to retain are liable; and the fourth comprehends those
to which the competitors to acquire are most commonly exposed.
Having digested our subject into order, I shall run through the
principles which severally influence the removing of every inconvenience,
whether incident to a nation whose foreign trade is already
well established, or to another naturally calculated for entring
into a competition for the acquisition of it.
286In proposing a remedy for the particular causes of augmentation
here set down, we must suppose every one entirely simple, and uncompounded
with the others; a thing which in fact seldom happens.
This I do for the sake of distinctness; and the principal difficulty
in practice is to combine the remedies in proportion to the
complication of the disease. I now come to the first of the four
causes of high prices, to wit, consolidated profits.
The whole doctrine of these has been abundantly set forth in
the 10th chapter. We there explained the nature of them, shewed
how the subversion of the balance, by a long preponderancy of the
scale of demand, had the effect of consolidating profits in a country
of luxury; and observed, that the reducing them to the proper
standard could never fail of bringing those who had long enjoyed
them, into distress.
The question here is to reduce them, when foreign trade cannot
otherwise be retained, let the consequences be ever so hurtful to
certain individuals. When the well being of a nation comes in
competition with a temporary inconvenience to some of the inhabitants,
the general good must be preferred to particular considerations.
I have observed above, that domestic luxury, by offering high
prices upon certain species of industry, calls off many hands employed
to supply the articles of exportation, upon which profits are
generally very moderate. The first natural and immediate effect
of this, is, to diminish the hands employed in furnishing the foreign
demand; consequently, to diminish the supply; consequently,
to occasion a simple competition on the side of the strangers, who are
the purchasers; consequently, to augment profits, until by their
rise and consolidation the market is deserted.
The very progress here laid down, points out the remedy. The
number of hands employed in these particular branches must be
multiplied; and if the luxurious taste and wealth of the country
prevent any one who can do better, from betaking himself to a
287species of industry lucrative to the nation, but ungrateful to those
who exercise it, the statesman must collect the children of the
wretched into workhouses, and breed them to this employment,
under the best regulations possible for saving every article of unnecessary
expence; here likewise may be employed occasionally those
above mentioned, whom the change of modes may have cast out
of employment, until they can be better provided for. This is also
an outlet for foundlings, since many of those who work for foreign
exportation, are justly to be ranked in the lowest classes of the
people; and in the first book we proposed, that every one brought
up at the expence of public charity, should be thrown in for recruiting
these classes, which can with greatest difficulty support
their own propagation.
Here let me observe, that although it be true in general, that the
greatest part of exportable manufactures do yield but very middling
profits, from the extension of industry in different countries, yet
sundry exceptions may be found; especially in nations renowned
for their elegance of taste. But how quickly do we see these
lucrative branches of foreign trade cut off, from the very inconvenience
we here seek a remedy for. The reason is plain. When
strangers demand such manufactures, they only share in the instruments
of foreign luxury, which bring every where considerable
profits to the manufacturer. These high profits easily establish a
rivalship in favour of the nation to whom they are supplied; because
a hint is sufficient to enable such as exercise a similar profession
in that country, to supply their own inhabitants. This being
the case, an able statesman should be constantly attentive to every
growing taste in foreign nations for the inventions of his people;
and so soon as his luxurious workmen have set any one on foot, he
may throw that branch into the hands of the most frugal, in order
to support it, and give them such encouragement as to prevent, at
least, the rivalship of those strangers who are accustomed to work
for large profits. This is one method of turning a branch of luxury
288into an article of foreign trade. Let me illustrate this by an
example.
What great advantages do not the French reap from the exportation
of their modes? But we quickly find their varnishes, gauzes, ribbands,
and colifichets, imitated by other nations, for no other reason
but because of the large, or at least consolidated profits enjoyed
by the French workmen themselves, who, fertile in new inventions,
and supported by their reputation for elegance of dress, have got
into possession of the right of prescribing to all Europe the standard
of taste in articles of mere superfluity. This however is no permanent
prerogative; and that elegant people, by long setting the
example, and determining the standard of refinement in some luxurious
arts, will at last inspire a similar taste into their scholars, who
will thereby be enabled to supplant them. Whereas were they
careful to supply all their inventions at the lowest prices possible,
they would ever continue to be the only furnishers.
The method therefore of reducing consolidated profits, whether
upon articles of exportation, or home consumption, is to increase
the number of hands employed in supplying them; and the more
gradually this revolution is made to take place, the fewer inconveniencies
will result to those who will thereby be forced to renounce
them.
A country which has an extensive territory, and great opportunities
of extending her agriculture (such as I supposed the present
situation of France to be) may, under a good administration, find
the progress of luxury very compatible with the prosperity of her
foreign trade; because inhabitants may be multiplied at discretion.
But so soon as subsistence becomes hard to be obtained, this expedient
is cut off. A statesman must then make the best of the inhabitants
he has, luxury must suffer a check; and those who are employed
in supplying home consumption at high prices, must be
made to reduce their consolidated profits, in order to bring the total
289amount of their manufactures within such bounds as to make them
vendible in foreign markets.
If manufacturers become luxurious in their way of living, it
must proceed from their extraordinary profits. These they may still
continue to have, as long as the produce of their work is consumed
at home. But no merchant will pretend to sell it out of the
country; because, in this case, he will find the labour of other
people who are less luxurious, and consequently work cheaper, in
competition with him.
To re-establish then the foreign trade, these consolidated profits
must be put an end to, by attacking luxury when circumstances
render an augmentation of people inconvenient, and prices will
fall of course.
This will occasion great complaints among all sorts of tradesmen.
The cry will be, that trade is ruined, manufacturers are starving,
and the state is undone: but the truth will be, that manufacturers
will, by their labour, begin to enrich their own nation, at the expence
of all those who trade with her, instead of being enriched at
the expence of their own countrymen; and only by a revolution in
the balance of wealth at home.
It will prove very discouraging to any statesman to attempt a sudden
reform of this abuse of consolidated profits, when he is obliged
to attack the luxury of his own people. The best way therefore is
to prevent matters from coming to such a pass, as to demand so
dangerous and difficult a remedy.
There is hardly a possibility of changing the manners of a people,
but by a proper attention to the education of the youth. All methods,
therefore, should be fallen upon to supply manufactures with new
hands; and lest the corruption of example should get the better of
all precautions, the seat of manufactures might be changed; especially
when they are found in great and populous cities, where
living is dear: in this case, others should be erected in the provinces
where living is cheap. The state must encourage these new undertakings,
290numbers of children must be taken in, in order to be
bred earlybred early to industry and frugality; this again will encourage
people to marry and propagate, as it will contribute towards discharging
them of the load of a numerous family. If such a plan
as this be followed, how inconsiderable will the number of poor
people become in a little time; and as it will insensibly multiply
the useful inhabitants, out of that youth which recruited and supported
the numbers of the poor, so the taxes appropriated for the
relief of poverty may be wholly applied, in order to prevent it.
Laws of naturalization have been often proposed in a nation
where consolidated profits have occasioned the inconveniencies for
which we have here been proposing a remedy. By this expedient
many flatter themselves to draw industrious strangers into the
country, who being accustomed to live more frugally, and upon
less profits, may, by their example and competition, beat down the
price of work among the inhabitants.
Several circumstances concur to defeat the success of this scheme.
The first is, that consolidated profits are not the only inconvenience
to be removed: there is also a complication of high prices upon
many necessaries. The second, as no real change is supposed to be
made within the country, either as to the increase of subsistence, or
the regulation of its price, or manner of living, these strangers,
who, as such, must be exposed to extraordinary expence, are not
able to subsist, nor consequently to work so cheap as they did at
home. Besides, what can be supposed to be their motive of coming,
if it be not to have higher wages, and to live better?
Here then is a nation sending for strangers, in order that they
may work cheaper; and strangers flocking into the country in hopes
of selling their work dearer. This is just the case with two friends
who are about making a bargain; the seller imagines that his friend
will not grudge a good price. The buyer, on the other hand, flatters
himself that his friend will sell to him cheaper than to another.
This seldom fails to produce discontent on both sides.
291Besides, unless the quantity of food be increased, if strangers are
imported to eat part of it, natives must in some degree starve; and
if you augment the quantity of food, and keep it at a little lower
price than in neighbouring nations, your own inhabitants will multiply;
the state may take great numbers of them into their service
when young; they soon come to be able to do something in the
manufacturing way; they may be bound for a number of years,
sufficient to indemnify the public for the first expence; and the
encouragement alone of having bread cheaper than elsewhere, will
bring you as many strangers as you incline to receive, provided a
continual supply of food can be procured in proportion to the increase
of the people.
But I imagine that it is always better for a state to multiply by
means of its own inhabitants, than by that of strangers; for many
reasons which to me appear obvious.
We come now to the second cause of high prices, to wit, a rise
in the value of the articles of the first necessity, which we have said
proceeds from the progress of industry having outstripped the progress
of agriculture. Let me set this idea in a clearer light; for
here it is shut up in too general terms to be rightly viewed on all
sides.
The idea of inhabitants being multiplied beyond the proportion
of subsistence, seems to imply that there are too many already; and
the demand for their industry having been the cause of their multiplication,
proves that formerly there were too few. Add to this,
that if, notwithstanding the rise upon the price of work proceeding
from the scarcity of subsistence, the scale of home demand is found
to preponderate, at the expence of foreign trade, this circumstance
proves farther, that however the inhabitants may be already multiplied
above the proportion of subsistence, their numbers are still
too few for what is demanded of them at home; and for what is
required of them towards promoting the prosperity of their country,
in supporting their trade abroad.
292From this exposition of the matter, the remedy appears evident:
both inhabitants and subsistence must be augmented. The question
comes to be, in what manner, and with what precautions, must
these operations be performed?
Inhabitants are multiplied by reducing the price of subsistence,
to the value which demand has fixed upon the work of those who
are to consume it. This is only to be accomplished by augmenting
the quantity, by importation from foreign parts, when the country
cannot be made to produce more of itself.
Here the interposition of a statesman is absolutely necessary; since
great loss may often be incurred by bringing down the price of
grain in a year of scarcity. Premiums, therefore, must be given
upon importation, until a plan can be executed for the extending of
agriculture; of which in another place. This must be gone about with
the greatest circumspection; for if grain be thereby made to fall
too low, you ruin the landed interest, and although (as we have
said above) all things soon become balanced in a trading nation,
yet sudden and violent revolutions, such as this must be, are always
to be apprehended. They are ever dangerous; and the spirit of
every class of inhabitants must be kept up.
By a discredit call upon any branch of industry, the hands employed
in it may be made to abandon it, to the great detriment of
the whole. This will infallibly happen, when violent transitions
do not proceed from natural causes, as in the example here before
us, when the price of grain is supposed to be brought down, from
the increase of its quantity by importation, and not by plenty.
Because, upon the falling of the market by importation, the poor
farmer has nothing to make up for the low price he gets for his
grain; whereas, when it proceeds from plenty, he has an additional
quantity.
In years, therefore, of general scarcity, a statesman should not,
by premiums given, reduce the price of grain, but in a reciprocal
293proportion to the quantity wanted: that is to say, the more grain
is wanted, the less the price should be diminished.
It may appear a very extensive project for any government to undertake
to keep down the prices of grain, in years of general
scarcity. I allow it to be politically impossible to keep prices low;
because if all Europe be taken together, the produce of the whole
is consumed one year with another, by the inhabitants; and in a
year when there is a general scarcity, it would be very hard, if not
impossible, (without having previously established a plan for this
purpose) to make any nation live in plenty while others are starving.
All therefore that is proposed, is to keep the prices of grain
in as just a proportion as possible to the plenty of the year.
Now if a government does not interpose, this never is the case.
I shall suppose the inhabitants of a country to consume, in a year
of moderate plenty, six millions of quarters of grain; if in a year
of scarcity it shall be found, that one million of quarters, or indeed
a far less quantity, be wanting, the five millions of quarters produced,
will rise in their price to perhaps double the ordinary value,
instead of being increased only by one fifth. But if you examine
the case in countries where trade is not well established, as in some
inland provinces on the continent, it is no extraordinary thing
to see grain bearing three times the price it is worth in ordinary
years of plenty, and yet if in such a year there were wanting six
months provisions for the inhabitants of a great kingdom, all the
rest of Europe would perhaps hardly be able to keep them from
starving.
It is the fear of want, and not real want, which makes grain rise
to immoderate prices. Now as this extraordinary revolution in the
rise of it, does not proceed from a natural cause, to wit, the degree
of scarcity, but to the avarice and evil designs of men who hoard
it up, it produces as bad consequences to that part of the inhabitants
of a country employed in manufactures, as the fall of grain
would produce to the farmers, in case the prices should be, by
294importation, brought below the just proportion of the quantity
produced in the nation.
Besides the importation of grain, there is another way of increasing
the quantity of it very considerably, in some countries of Europe.
In a year of scarcity, could not the quantity of food be considerably
augmented by a prohibition to make malt liquors, allowing
the importation of wines and brandies; or indeed without laying
any restraint upon the liberty of the inhabitants as to malt
liquors, I am persuaded that the liberty of importing wines duty
free, would, in years of scarcity, considerably augment the quantity
of subsistence.
This is not a proper place to examine the inconvenience which
might result to the revenue by such a scheme; because we are here
only talking of those expedients which might be fallen upon to
preserve a balance on foreign trade. An exchequer which is filled
at the expence of this, will not continue long in a flourishing condition.
These appear to be the most rational temporary expedients to diminish
the price of grain in years of scarcity; we shall afterwards
examine the principles upon which a plan may be laid down to
destroy all precariousness in the price of subsistence.
Precautions of another kind must be taken in years of plenty;
for high prices occasioned by exportation are as hurtful to the poor
tradesman as if they were occasioned by scarcity. And low prices
occasioned by superfluity are as hurtful to the poor husbandman as
if his crop had failed him.
A statesman therefore, should be very attentive to put the inland
trade in grain upon the best footing possible, to prevent the frauds
of merchants, and to promote an equal distribution of food in all
corners of the country: and by the means of importation and exportation,
according to plenty and scarcity, to regulate a just proportion
between the general plenty of the year in Europe, and the
price of subsistence; always observing to keep it somewhat lower at
295home, than it can be found in any rival nation in trade. If this
method be well observed, inhabitants will multiply; and this is a
principal step towards reducing the expence of manufactures; because
you increase the number of hands, and consequently diminish
the price of labour.
Another expedient found to operate most admirable effects in reducing
the price of manufactures (in those countries where living
is rendred dear, by a hurtful competition among the inhabitants
for the subsistence produced) is the invention and introduction of
machines. We have, in a former chapter, answered the principal
objections which have been made against them, in countries where
the numbers of the idle, or trifling industrious, are so great, that
every expedient which can abridge labour, is looked upon as a
scheme for starving the poor. There is no solidity in this objection;
and if there were, we are not at present in quest of plans for feeding
the poor; but for accumulating the wealth of a trading nation,
by enabling the industrious to feed themselves at the expence of
foreigners. The introduction of machines is found to reduce prices
in a surprizing manner. And if they have the effect of taking
bread from hundreds, formerly employed in performing their
simple operations, they have that also of giving bread to thousands,
by extending numberless branches of ingenuity, which, without
the machines, would have remained circumscribed within very
narrow limits. What progress has not building made within these
hundred years? Who doubts that the conveniency of great iron
works, and saw mills, prompts many to build? And this taste has
greatly contributed to increase, not diminish, the number both of
smiths and carpenters, as well as to extend navigation. I shall only
add in favour of such expedients, that experience shews the advantage
gained by certain machines, is more than enough to compensate
every inconvenience arising from consolidated profits, and expensive
living; and that the first inventors gain thereby a superiority
which nothing but adopting the same invention can counterbalance.
296The third cause of high prices we have said to be owing to the
natural advantages which neighbouring nations reap from their
climate, soil, or situation.
Here no rise of prices is implied in the country in question, they
are only supposed to have become relatively high by the opportunity
other nations have had to furnish the same articles at a lower
rate, in consequence of their natural advantages.
There are two expedients to be used, in order to defeat the bad
effects of a competition which cannot be got the better of in the ordinary
way. The first to be made use of, is, to assist the branches
in distress with the public money. The other is patience, and perseverance
in frugality, as has been already observed. A short
example of the first will be sufficient in this place to make the thing
fully understood. I have already said, that I purposely postpone
an ample dissertation upon the principles which influence such
operations.
Let me suppose a nation accustomed to export to the value of
a million sterling of fish every year, undersold in this article
by another which has found a fishery on its own coasts, so abundant
as to enable it to undersellundersell the first by 20 per cent. This being
the case, the statesman may buy up all the fish of his subjects, and
undersell his competitors at every foreign market, at the loss of
perhaps 250,000l. What is the consequence? That the million
he paid for the fish remains at home, and that 750,000l. comes
in from abroad for the price of them. How is the 250,000l. to be
made up? By a general imposition upon all the inhabitants. This
returns into the public coffers, and all stands as it was. If this expedient
be not followed, what are the consequences? That those
employed in the fishery are forced to starve; that the fish taken
either remain upon hand, or if sold by the proprietors, at a great
loss; these are undone, and the nation for the future loses the acquisition
of 750,000l. a year.
297To abridge this operation, premiums are given upon exportation,
which comes to the same thing, and is a refinement on the application
of this very principle: but premiums are often abused. It
belongs to the department of the coercive power of government to
put a stop to such abuse. All I shall say upon the matter is, that
if there be crimes called high treason, which are punished with
greater severity than highway robbery, and assassination, I should
be apt (were I a statesman) to put at the head of that bloody list, every
attempt to defeat the application of public money, for the purposes
here mentioned. The multiplicity of frauds alone, discourages a
wise government from proceeding upon this principle, and disappoints
the scheme. If severe punishment can in its turn put a stop
to frauds, I believe it will be thought very well applied.
While a statesman is thus defending the foreign trade of his
country, by an extraordinary operation performed upon the circulation
of its wealth, he must at the same time employ the second
expedient with equal address. He must be attentive to support sobriety
at home, and wait patiently until abuses among his neighbours
shall produce some of the inconveniencies we have already
mentioned. So soon as this comes to be the case, he has gained
his point; the premiums then may cease; the public money may
be turned into another channel; or the tax may be suppressed altogether,
according as circumstances may require.
I need not add, that the more management and discretion is used
in such operations, the less jealousy will be conceived by other rival
nations. And as we are proposing this plan for a state already in possession
of a branch of foreign trade, ready to be disputed by others,
having superior natural advantages, it is to be supposed that the
weight of money, at least, is on her side. This, if rightly employed,
will prove an advantage, more than equal to any thing which can
be brought against it; and if such an operation comes to raise the
indignation of her rival, it will, on the other hand, reconcile the
favour of every neutral state, who will find a palpable benefit from
298the competition, and will never fail giving their money to those
who sell the cheapest. In a word, no private trader can stand in
competition with a nation’s wealth. Premiums are an engine in
commerce, which nothing can resist but a similar operation.
Hitherto we have been proposing methods for removing the inconveniencies
which accompany wealth and superiority, and for
preserving the advantages which result from foreign trade already
established: we must now change sides, and adopt the interest of
those nations who labour under the weight of a heavy competition
with their rich neighbours, versed in commerce, dextrous in every
art and manufacture, and conducted by a statesman of superior
abilities, who sets all engines to work, in order to make the most
of every favourable circumstance.
It is no easy matter for a state unacquainted with trade and industry,
even to form a distant prospect of rivalship with such a nation,
while the abuses attending upon their wealth are not supposed
to have crept in among them. Consequently, it would be the highest
imprudence to attempt (at first setting out) any thing that could
excite their jealousy.
The first thing to be inquired into, is the state of natural advantages.
If any branch of natural produce, such as grain, cattle,
wines, fruits, timber, or the like, are here found of so great importance
to the rival nation, that they will purchase them with
money, not with an exchange of their manufactures, such branches
of trade may be kept open with them. If none such can be found,
the first step is to cut off all communication of trade by exchange
with such a people; and to apply closely to the supply of every
want at home, without having recourse to foreigners.
So soon as these wants begin to be supplied, and that a surplus
is found, other nations must be fought for, who enjoy less advantages;
and trade may be carried on with them in a subaltern way.
People here must glean before they can expect to reap. But by
gleaning every year they will add to their stock of wealth, and
299the more it is made subservient to public uses, the faster it will increase.
The beginners will have certain advantages inseparable from
their infant state; to wit, a series of augmentations of all kinds, of
which we have so frequently made mention. If these can be preserved
in an equable progression; if the balance of work and demand,
and that of population and agriculture, can be kept in a
gentle vibration, by alternate augmentations; and if a plan of
oeconomy, equally good with that of the rivals, be set on foot and
pursued; time will bring every natural advantage of climate, soil,
situation, and extent, to work their full effects; and in the end
they will decide the superiority.
I shall now conclude my chapter, with some observations on the
difference between theory and practice, so far as regards the present
subject.
In theory, we have considered every one of the causes which produce
high prices, and prevent exportation, as simple and uncompounded:
in practice they are seldom ever so. This circumstance
makes the remedies difficult, and sometimes dangerous. Difficult,
from the complication of the disease; dangerous, because the remedy
against consolidated profits will do infinite harm, if applied
to remove that which proceeds from dear subsistence, as has been
said.
Another great difference between theory and practice occurs in
the fourth case; where we suppose a nation unacquainted with
trade, to set out upon a competition with those who are in possession
of it. When I examine the situation of some countries of
Europe (Spain perhaps) to which the application of these principles
may be made, I find that it is precisely in such nations, where the
other disadvantages of consolidated profits, and even the high
prices of living, are carried to the greatest height; and that the
only thing which keeps one shilling of specie among them, is the
infinite advantage they draw from the mines, and from the sale of
300their pure and unmanufactured natural productions, added to their
simplicity of life, occasioned by the wretchedness of the lower
classes, which alone prevents these also from consuming foreign
commodities. Were money in these countries as equally distributed
as in those of trade and industry, it would quickly be exported.
Every one would extend his consumption of foreign commodities,
and the wealth would disappear. But this is not the case; the rich
keep their money in their coffers; because lending at interest, there,
is very wisely laid under numberless obstructions. The vice, therefore,
is not that the lending of money at interest is forbid, but that
the people are not put in a situation to have any pressing occasion
for it, as a means of advancing their industry. Were they taught
to supply their own wants, the state might encourage circulation
by loan; but as they run to strangers for that supply, money is
better locked up.
Upon a right use and application of these general principles, according
to the different combinations of circumstances, in a nation
whose principal object is an extensive and profitable foreign trade,
I imagine a statesman may both establish and preserve, for a very
long time, a great superiority in point of commerce; provided
peace can be preserved: for in time of war, every populous nation,
if great and extended, will find such difficulties in procuring food,
and such numbers of hands to maintain, that what formerly made
its greatness, will hasten its ruin.
301
I have always found the geography of a country easier to
retain, from the inspection of maps, after travelling over thethe
regions there represented, than before; as most prefaces are best
understood, after reading the book, which they are calculated to introduce.
I intend this as an apology for presenting my readers with
a chapter of distribution in the middle of my subject.
My intention, at present, is to take a view of the whole region
of trade, divided into its different districts, in order to point out a
ruling principle in each, from which every other must naturally
flow, or may be deduced by an easy reasoning. These I shall lay
before my reader, that from them he may distribute his ideas in
the same order I have done. Hence the terms I shall be obliged to
use will be rendred more adequate, in expressing the combinations
I may have occasion to convey by them.
I divide trade into infant, foreign, and inland.
1mo. Infant trade, taken in a general acceptation, may be understood
to be that species, which has for its object the supplying the
necessities of the inhabitants of a country; because it is commonly
antecedent to the supplying the wants of strangers. This species
has been known in all ages, and in all countries, in a less, or greater
degree, in proportion to the multiplication of the wants of mankind,
and in proportion to the numbers of those who depend on
their ingenuity for procuring subsistence.
The general principles which direct a statesman in the proper
encouragement of this commerce, relate to two objects.
3021. To promote the ease and happiness of the higher classes in making
their wealth subservient to their wants and inclinations.
2. To promote the ease and happiness of the lower classes, by
turning their natural faculties to an infallible means of relieving
their necessities.
This communicates the idea of a free society; because it implies
the circulation of a real equivalent for every service; to acquire
which, mankind submit with pleasure to the hardest labour.
In the first book, I had little occasion to consider trade under different
denominations; or as influenced by any other principle than
that of promoting the multiplication of mankind, and the extension
of agriculture, by drawing the wealth of the rich into the hands of the
industrious. This operation, when carried no farther, is a true
representation of infant trade.
But now I must set the matter in a new light: and consider this
infant trade as a basis for establishing a foreign commerce. In itself
it is only a means of gratifying the desires of those who have the
equivalent; and of providing it for those who have it not. We are
next to examine how, by the care of a statesman, it may prove a
method whereby one society may be put in a situation to acquire a
superiority over others; by diminishing, on one hand, the quantity
they have of that general equivalent, and by increasing, on
the other, the absolute quantity of it at home; in such a manner
as not only to promote the circulation of that part of it which is
necessary to supply the wants of all the citizens; but by a surplus
of it, to render other nations dependent upon them, in most operations
of their political oeconomy.
The statesman who resolves to improve this infant trade into foreign
commerce, must examine the wants of other nations, and
consider the productions of his own country. He must then determine,
what kinds of manufactures are best adapted for supplying
the first, and for consuming the latter. He must introduce the use
of such manufactures among his subjects; and endeavour to extend
303his population, and his agriculture, by encouragements given to
these new branches of consumption. He must provide his people
with the best masters; he must supply them with every useful machine;
and above all, he must relieve them of their work, when
home demand is not sufficient for the consumption of it.
A considerable time must of necessity be required to bring a people
to a dexterity in manufactures. The branches of these are many;
and every one requires a particular slight of hand, and a particular
master, to point out the rudiments of the art. People do not perceive
this inconveniency, in countries where they are already introduced;
and many a projector has been ruined for want of attention
to it.
In the more simple operations of manufacturing, where apprenticeships
are not in use, every one teaches another. The new beginners
are put among a number who are already perfect: all the
instructions they get, is, do as you see others do before you. This is an
advantage which an established industry has over another newly set
on foot; and this I apprehend to be the reason why we see certain
manufactures, after remaining long in a state of infancy, make in
a few years a most astonishing progress. What loss must be at first
incurred! what numbers of aspiring geniuses overpowered by unsuccessful
beginnings, when a statesman does not concern himself
in the operation! If he assists his subjects, by a prohibition upon foreign
work, how often do we see this expedient become a means
of extending the most extravagant profits? Because he neglects, at
the same time, to extend the manufacture by multiplying the
hands employed in it. I allow, that as long as the gates of a kingdom
are kept shut, and that no foreign communication is permitted,
large profits do little harm; and tend to promote dexterity and refinement.
This is a very good method for laying a foundation for
manufactures: but so soon as the dexterity has been sufficiently encouraged,
and that abundance of excellent masters are provided,
then the statesman ought to multiply the number of scholars; and
304a new generation must be brought up in frugality, and in the enjoyment
of the most moderate profits, in order to carry the plan into
execution.
The ruling principle, therefore, which ought to direct a statesman
in this first species of trade, is to encourage the manufacturing
of every branch of natural productions, by extending the home-consumption
of them; by excluding all competition with strangers;
by permitting the rise of profits, so far as to promote dexterity and
emulation in invention and improvement; by relieving the industrious
of their work, as often as demand for it falls short. And
until it can be exported to advantage, it may be exported with loss,
at the expence of the public. To spare no expence in procuring the
ablest masters in every branch of industry, nor any cost in making
the first establishments; providing machines, and every other thing
necessary or useful to make the undertaking succeed. To keep
constantly an eye upon the profits made in every branch of industry;
and so soon as he finds, that the real value of the manufacture
comes so low as to render it exportable, to employ the hands,
as above, and to put an end to these profits he had permitted only
as a means of bringing the manufacture to its perfection. In proportion
as the prices of every species of industry are brought down
to the standard of exportation, in such proportion does this species
of trade lose its original character, and adopt the second.
2do. Foreign trade has been explained sufficiently: the ruling principles
of which are to banish luxury; to encourage frugality; to fix
the lowest standard of prices possible; and to watch, with the greatest
attention, over the vibrations of the balance between work and demand.
While this is preserved, no internal vice can affect the prosperity
of it. And when the natural advantages of other nations
constitute a rivalship, not otherwise to be overcome, the statesman
must counterbalance these advantages, by the weight and influence
of public money; and when this expedient also becomes ineffectual,
305foreign trade is at an end; and out of its ashes arises the third species,
which I call inland commerce.
3tio. The more general principles of inland trade have been occasionally
considered in the first book, and more particularly hinted
at in the 15th chapter of this; but there are still many new relations
to be examined, which will produce new principles, to be illustrated
in the subsequent chapters of this book. I shall, here only point
out the general heads, which will serve to particularize and distinguish
this third species of trade, from the two preceding.
Inland commerce, as here pointed out, is supposed to take place
upon the total extinction of foreign trade. The statesman must
in such a case, as in the other two species, attend to supplying the
wants of the rich, in relieving the necessities of the poor, by the
circulation of the equivalent as above; but as formerly he had it
in his eye to watch over the balance of work and demand, so now
he must principally attend to the balance of wealth, as it vibrates
between consumers and manufacturers; that is, between the rich
and the industrious. The effects of this vibration have been shortly
pointed out, Chap. xv.
In conducting a foreign trade, his business was to establish the
lowest standard possible as to prices; and to confine profits within
the narrowest bounds: but as now there is no question of exportation,
this object of his care in a great measure disappears; and
high profits made by the industrious will have then no other effect
than to draw the balance of wealth more speedily to their side.
The higher the profits, the more quickly will the industrious be
enriched, the more quickly will the consumers become poor, and
the more necessary will it become to cut off the nation from every
foreign communication in the way of trade.
From this political situation of a state arises the fundamental
principle of taxation; which is, that, at the time of the vibration of the
balance between the consumer and the manufacturer, the state should advance
the dissipation of the first, and share in the profits of the latter. This
306branch of our subject I shall not here anticipate; but I shall, in the
remaining chapters of this book, make it sufficiently evident, that
so soon as the wealth of a state becomes considerable enough to introduce
luxury, to put an end to foreign trade, and from the excessive
rise of prices to extinguish all hopes of restoring it, then taxes
become necessary, both for preserving the government on the one
hand, and on the other, to serve as an expedient for recalling foreign
trade in spite of all the pernicious effects of luxury to extinguish
it.
I hope from this short recapitulation and exposition of principles,
I have sufficiently communicated to my reader the distinctions I
wanted to establish, between what I have called infant, foreign, and
inland trade. Such distinctions are very necessary to be retained;
and it is proper they should be applied in many places of this treatise,
in order to qualify general propositions: these cannot be
avoided, and might lead into error, without a perpetual repetition
of such restrictions, which would tire the reader, appear frivolous
to him, perhaps, and divert his attention.
I only add, that we are not to suppose the commerce of any nation
restricted to any one of the three species. I have considered
them separately, according to custom, in order to point out their different
principles. It is the business of statesmen to compound them
according to circumstances.
My reader may perhaps be surprized to find this subject
formally introduced, after all I have said of it in the first
book, under a definition which renders the term sufficiently clear,
307by distinguishing it from sensuality and excess; and by confining
it to the providing of superfluities, in favour of a consumption, which necessarily
must produce the good effects of giving employment and
bread to the industrious.
The simple acceptation of the term, was the most proper for explaining
the political effects of extraordinary consumption. I cannot
however deny, that the wordword luxury commonly conveys a more
complex idea; and did I take no notice of this circumstance, it
might be thought that I had purposely restrained a general term to
a particular acceptation, in order to lead to error, and to suppress
the vicious influence of modern oeconomy over the minds of mankind;
which influence, if vicious, cannot fail to affect even their
political happiness.
My intention therefore, in this chapter, is to amuse, and to set
my ideas concerning luxury (in the most extensive acceptation of
the word) in such an order, as first to vindicate the definition I have
given of it, by shewing that it is a proper one; and secondly, to reconcile
the sentiments of those who appear to combat one another,
on a subject wherein all must agree, when terms are fully understood.
For this purpose I must distinguish luxury as it affects our different
interests, by producing hurtful consequences; from luxury, as it regards
the moderate gratification of our natural or rational desires.
I must separate objects which are but too frequently confounded,
and analyze this complicated term, by specifying the ideas it contains,
under partial definitions.
The interests affected by luxury, I take to be four; 1mo. the moral,
in so far as it does hurt to the mind; 2do. the physical, as it hurts the
body; the domestic, as it hurts the fortune; and the political, as it
hurts the state.
The natural desires which proceed from our animal oeconomy,
and which are gratified by luxury, may be also reduced to four;
viz. hunger, thirst, love, and ease or indolence. The moderate gratification
308of these desires, and physical happiness, is the same thing.
The immoderate gratification of them is excess; and if this also be
implied by luxury, no man, I believe, ever seriously became its
apologist.
The first point to be explained, is what is to be understood by excess.
What appears an excess to one man, may appear moderation
to another. I therefore measure the excess by the bad effects it produces
on the mind, the body, the fortune, and the state: and when we
speak of luxury as a vice, it is requisite to point out the particular
bad effects it produces, to one, more, or all the interests which
may be affected by it: when this is neglected, ambiguities ensue,
which involve people in inextricable disputes.
In order to communicate my thoughts upon this subject with the
more precision, I shall give an example of the harm resulting to the
mind, the body, the fortune, and the state, from the excessive gratification
of the several natural desires above-mentioned.
1mo. As to the mind, eating to excess produces the inconvenience of
rendring the perceptions dull, and of making a person unfit for
study or application.
Drinking confounds the understanding, and often prevents our
discovering the most palpable relations of things.
Love fixes our ideas too much upon the same object, makes all
our pursuits and pleasures analogous to it, and consequently renders
them trifling and superficial.
Ease, that is, too great a fondness for it, destroys activity, damps
our resolutions, and misleads the decisions of our judgment on
every occasion, where one side of the question implies an obstacle
to the enjoyment of a favourite indolence.
These are examples of the evils proceeding from luxury in the
most general acceptation of the term. While the gratification of
those desires is accompanied by no such inconveniencies, I think it
is a proof, that there has been no moral excess, or that no moral evil
has been directly implied in the gratification. But I cannot equally
309determine, that there has been no luxury in the enjoyment of superfluity.
2do. The physical inconveniencies which follow from all the four,
terminate in the hurt they do the body, health or constitution. If
no such harm follows upon the gratification of our desires, I find
no physical evil: but still luxury, I think, may be applied in every acceptation
in which the term can be taken.
3tio. If the domestic inconveniences of the four species be examined,
they all center in one, viz. the dissipation of fortune, upon which depends
the future ease of the proprietor, and the well-being of his
posterity. When luxury is examined with respect to this object, the
idea we conceive of it admits of a new modification. An excess
here, is compatible with a very moderate gratification of our most
natural desires. It is not eating, nor drinking, love, nor indolence
which are hurtful to the fortune, but the expence attending such
gratifications. All these are frequently indulged even to excess, in
a moral and physical sense, by people who are daily becoming more
wealthy by these very means.
4to. Some political inconveniencies of luxury have been already
pointed out. The extinction of foreign trade is the most striking.
But the loss of trade, conveys no ideas of any moral, physical, or domestic
excess; and still it is vicious in so far as it affects the well-being
of a state. Besides this particular evil, I very willingly agree, that
in as far as the good government of a state depends upon the application
and capacity, as well as the integrity of those who sit at the
helm, or who are employed in the administration, or direction of
public affairs, in so far may the moral inconveniencies of luxury
mentioned above, affect the prosperity of a state. The consequences
of excessive luxury, moral and physical, as well as the dissipation of
private fortunes, may render both the statesman, and those whom
he employs, negligent in their duty, unfit to discharge it, rapacious
and corrupt. These may, indirectly, be reckoned among the
political evils attending luxury, in so far as they take place. But on
310the other hand, as they cannot be called the necessary effects of the
cause to which they are here ascribed, that is, to moral, physical, and
domestic luxury, I do not think they can with propriety be implied in
the definition of the term. They are rather to be attributed to the
imperfection of the human mind, than to any other second cause,
which might occasionally contribute to their production. They
may proceed from avarice, as well as from prodigality.
I hope this short exposition of a matter, not absolutely falling
within the limits of my subject, will suffice to prove that my definition
of luxury, describes at least the most essential requisite towards
determining it: the providing of superfluity with a view to consumption.
This is inseparable from our ideas of luxury; but vicious excess certainly
is not. A sober man may have a most delicate table, as well as
a glutton; and a virtuous man may enjoy the pleasures of love and
ease with as much sensuality as Heliogabalus. But no man can
become luxurious, in our acceptation of the word, without giving
bread to the industrious, without encouraging emulation, industry,
and agriculture; and without producing the circulation of an adequate
equivalent for every service. This last is the palladium of liberty,
the fountain of gentle dependence, and the agreeable band
of union among free societies.
Let me therefore conclude my chapter, with a metaphysical observation.
The use of words, is to express ideas; the more simple
any idea is, the more easy it is to convey it by a word. Whenever,
therefore, language furnishes several words, which are called synonimous,
we may conclude, that the idea conveyed by them is not
simple. On every such occasion, it is doing a service to learning, to
render them as little synonimous as possible, and to point out the
particular differences between the ideas they convey.
Now as to the point under consideration. I find the three terms,
luxury, sensuality, and excess, generally considered in a synonimous
light, notwithstanding the characteristic differences which distinguish
them. Luxury consists in providing the objects of sensuality, in so far
311as they are superfluous. Sensuality consists in the actual enjoyment of them;
and excess implies an abuse of enjoyment. A person, therefore, according
to these definitions, may be very luxurious from vanity, pride,
ostentation, or with a political view of encouraging consumption,
without having a turn for sensuality, or a tendency to fall into excess.
Sensuality, on the other hand, might have been indulged in
a Lacedemonian republic, as well as at the court of Artaxerxes.
Excess, indeed, seems more closely connected with sensuality, than
with luxury; but the difference is so great, that I apprehend sensuality
must in a great measure be extinguished, before excess can begin.
After having cleared up our ideas concerning luxury, it comes
very naturally in, to examine what is meant by physical
necessary.
I have observed in the third chapter of the first book, that in most
countries where food is limited to a determined quantity, inhabitants
are fed in a regular progression down from plenty and ample
subsistence, to the last period of want, and dying from hunger. It
is ample subsistence where no degree of superfluity is implied, which communicates
an idea of the physical-necessary. It is the top of this ladder; it
is the first rank among men who enjoy no superfluity whatsoever.
A man enjoys the physical-necessary as to food, when he is fully
fed; if he is likewise sufficiently clothed, and well defended against
every thing which may hurt him, he enjoys his full physical-necessary.
The moment he begins to add to this, he may be considered
as moving upwards into another category, to wit, the class of the
312luxurious, or consumers of superfluity; of which there are to be
found, in most countries, as many stages upward, as there are stages
downwards, from where he stood before. This is one general
idea of the question. Let me now look for another.
If we examine the state of many animals which have no appetites
leading them to excess, we may form a very just idea of a
physical-necessary for man. When they are free from labour, and
have food at will, they enjoy their full physical-necessary. They
are then in the height of beauty, and enjoy the greatest degree of
happiness they are capable of. Animals which are forced to labour,
prove to us very plainly, that this physical-necessary is not fixed
to a point, but that it may vary like most other things: every one
perceives the difference between labouring cattle which are well
fed, and those which are middling, or ill fed; all however, I suppose
to live in health, and to work according to their strength. This
represents the nature of a physical-necessary for man.
In many of the inferior classes in every nation, we find various
degrees of ease among the individuals; and yet upon the whole, it
would be hard to determine, which are those who enjoy superfluity;
which are those who possess the pure physical-necessary; and
which are those who fall below it. The cause of this ambiguity
must here be explained.
The nature of man furnishes him with some desires relative to
his wants, which do not proceed from his animal oeconomy, but
which are entirely similar to them in their effects. These proceed
from the affections of his mind, are formed by habit and education,
and when once regularly established, create another kind of necessary,
which, for the sake of distinction, I shall call political. The
similitude between these two species of necessary, is therefore the
cause of ambiguity.
This political-necessary has for its object, certain articles of physical
superfluity, which distinguishes what we call rank in society.
313Rank is determined by birth, education, or habit. A man with
difficulty submits to descend from a higher way of living to a
lower; and when an accidental circumstance has raised him for a
while, above the level of that rank where his birth or education had
placed him, his ambition prompts him to support himself in his
elevation. If his attempt be a rational scheme, he is generally approved
of; the common consent of his fellow-citizens prescribes a
certain political-necessary for him, proportioned to his ambition; and
when at any time this comes to fail, he is considered to be in want.
If on the other hand, a person either from vanity, or from no
rational prospect of success, forms a scheme of rising above the
rank where birth or education had placed him, his fellow-citizens do
not consent to prescribe for him a political-necessary suitable to his
ambition; and when this fails him, he is only considered to fall
back into the class he properly belonged to. But if the political-necessary
suitable to this rank should come to fail, then he is supposed
to be deprived of his political-necessary.
The measure of this last species of necessary, is determined only by
general opinion, and therefore can never be ascertained justly; and
as this opinion may have for its object even those who are below
the level of the physical-necessary; it often happens, that we find
great difficulties in determining its exact limits.
It may appear absurd, to suppose that any one can enjoy superfluity
(which we have called the characteristic of political-necessary) to whom
any part of the physical-necessary is found wanting. However absurd
this may appear, nothing, however, is more common among men,
and the reason arises from what has been observed above. The
desires which proceed from the affections of his mind, are often so
strong, as to make him comply with them at the expence of becoming
incapable of satisfying that which his animal oeconomy
necessarily demands.
From this it happens, that however easy it may be to conceive an
accurate idea of a physical-necessary for animals, nothing is more difficult,
314than to prescribe the proper limits for it with regard to
man.
This being the case, let us suppose the condition of those who
enjoy but little superfluity, and who fill the lower classes of the
people, to be distinguished into three denominations; to wit, the
highest, middle, and lowest degree of physical-necessary; and then
let us ask, how we may come to form an estimation as to the respective
value of the consumption implied in each, in order to determine
the minimum as to the profits upon industry. This question
is of great importance; because we have shewn that the prosperity
of foreign trade depends on the cheapness of manufacturing; and
this again depends on the price of living, that is of the physical-necessary
for manufacturers.
One very good method of estimating the value of the total consumption
implied by this necessary quantity, is to compute the expence
of those who live in communities, such as in hospitals,
workhouses, armies, convents, according to the different degrees of
ease, severally enjoyed by those who compose them. In running
over the few articles of expence in such establishments, it will be
easy to discern between those, which relate to the supply of the
physical, and those which relate to the supply of the political-necessary:
ammunition bread is an example of the first; a Monk’s
hood and long sleeves, are a species of the latter.
When once the real value of a man’s subsistence is found, the
statesman may the better judge of the degree of ease, necessary or
expedient for him to allow to the several classes of the laborious and
ingenious inhabitants.
As we have divided this physical-necessary into three degrees; the
highest, middle, and lowest; the next question is, which of the three
degrees is the most expedient to be established, as the standard
value of the industry of the very lowest class of a people.
I answer, that in a society, it is requisite that the individual of
the most puny constitution for labour and industry, and of the
315most slender genius for works of ingenuity, having no natural defect,
and enjoying health, should be able by a labour proportioned
to his force, to gain the lowest degree of the physical-necessary; for
in this case, by far the greatest part of the industrious will be found
in the second class, and the strong and healthy all in the first.
The difference between the highest class and the lowest, I do not
apprehend to be very great. A small quantity added to what is
barely sufficient, makes enough: but this small quantity is the most
difficult to acquire, and this is the most powerful spur to industry.
The moment a person begins to live by his industry, let his livelihood
be ever so poor, he immediately forms little objects of ambition;
compares his situation with that of his fellows who are a
degree above him, and considers a shade more of ease, as I may
call it, as an advancement, not only of his happiness, but of his
rank.
There are still more varieties to be met with among those who
are confined to the sphere of the physical-necessary. The labour of
a strong man ought to be otherwise recompensed than that of a puny
creature. But in every state there is found labour of different kinds,
some require more, and some less strength, and all must be paid
for; but as a weakly person does not commonly require so much
nourishment as the strong and robust, the difference of his gains
may be compensated by the smalness of his consumption.
What we mean by the first class of the physical-necessary, is when
a person gains wherewithal to be well fed, well clothed, and well
defended against the injuries of heat and cold, without any superfluity.
This I say, a strong healthy person should be able to gain
by the exercise of the lowest denominations of industrious labour,
and that without a possibility of being deprived of it, by the competition
of others of the same profession.
Could a method be fallen upon to prevent competition among industrious
people of the same profession, the moment they come to
be reduced within the limits of the physical-necessary, it would prove
316the best security against decline, and the most solid basis of a lasting
prosperity.
But as we have observed in the first book, the thing is impossible,
while marriage subsists on the present footing. From this one circumstance,
the condition of the industrious of the same profession,
is rendred totally different. Some are loaded with a family, others
are not. The only expedient, therefore, for a statesman, is to keep
the general principles constantly in his eye, to destroy this competition
as much as he can, at least in branches of exportation; to
avoid, in his administration, every measure which may tend to
promote it, by constituting a particular advantage in favour of some
individuals of the same class; and if the management of public
affairs, necessarily implies such inconveniencies, he must find out a
way of indemnifying those who suffer by the competition.
We may therefore, in this place, lay down two principles: First,
that no competition should be encouraged among those who labour
for a physical-necessary; secondly, that in a state which flourishes by
her foreign trade, competition is to be encouraged in every branch
of exportation, until the competitors have reduced one another
within the limits of that necessary.
Farther, I must observe, that this physical-necessary ought to be the
highest degree of ease, which any one should be able to acquire
with labour and industry, where no peculiar ingenuity is required.
This also is a point deserving the attention of a statesman. How
frequently do we find, in great cities, different employments, such
as carrying of water, and other burthens, sawing of wood, &c.
erected into confraternities, which prevent competition, and raise
profits beyond the standard of the physical-necessary. This, I apprehend,
is a discouragement to ingenuity, and has the bad effect of
rendring living dear, without answering any one of the intentions
of establishing corporations, as shall be shewn in another place.
The physical-necessary, therefore, ought to be the reward of labour and
317industry; whatever any workman gains above this standard, ought
to be in consequence of his superior ingenuity.
It is not at all necessary to prescribe the limits between these two
classes; they will sufficiently distinguish themselves by the simple
operation of competition. Let a particular person fall upon an ingenious
invention, he will profit by it, and rise above the lower
classes which are confined to the physical-necessary; but if the invention
be such as may be easily copied, he will quickly be rivalled
to such a degree as to reduce his profits within the bounds of that
physical-necessary; so soon as this comes to be the case, his ingenuity
disappears, because it ceases to be peculiar to him.
Here arises a question: whence does it happen that certain workmen
avoid this competition, and make considerable gains by their
employment, while others are rivalled in their endeavours to retain
a bare physical-necessary?
There is a combination of several causes to operate these effects,
which we shall examine separately; leaving to the reader to judge,
how far the combination of them may extend profits beyond the
physical-necessary.
I. We have said (chap. 9.) that the value of a workman’s labour
is determined from the quantity performed, in general, by those
of his profession, neither supposing them the best nor the worst,
nor as having any advantage or disadvantage, from the place of
their abode. A workman therefore, who, to an extraordinary dexterity,
joins the advantages of place, must gain more than another.
II. We have often remarked, that competition between workmen
of the same profession, diminishes the profits upon labour.
From this it follows, that in such arts where the least competition
is found, there must be the largest profits. Now several circumstances
prevent competition. First. An extraordinary dexterity
in any art, and especially in those where the whole excellency depends
upon great exactness, such as watch-making, painting of all
kinds, making mathematical instruments, and the like; all which
318set a celebrated artist in a manner above a possibility of rivalship,
and make him the master of his price, as experience shews. 2d.
The difficulty of acquiring the dexterity requisite, resulting both
from the time and money necessary to be spent in apprenticeship,
proves a plain obstacle to a numerous competition. Few there are,
who having the stock sufficient to defray the loss of several years
fruitless application, have also the turn necessary to lead them to
that particular branch of ingenuity. 3d. Many there are, who have
skill and capacity sufficient to enter into competition, but are obliged
to work for others, because of the expensive apparatus of instruments,
machines, lodging, and many other things necessary
for setting out as a master in the art. These, and similar causes,
prevent competition, and support large profits. 4th. Masters increase
their profits greatly by sharing that of their journeymen:
this share, the first have a just title to from the constant employment
they procure for the latter; and the certainty these have of
gaining their physical-necessary, together with a profit proportional to
their dexterity, makes them willing to share with their master. The
5th cause of considerable gains, and the last I shall mention, is the
most effectual of all, viz. great oeconomy, and parsimonious living.
In proportion to the concurrence and combination of these
circumstances, the fortune of the artist will increase, which is the
answer to the first part of the question proposed.
We are next to enquire how it happens that many industrious
people are rivalled in an industry which brings no more than a bare
physical-necessary. This proceeds from some disadvantage either
in their personal or political situation. In their personal situation,
when they are loaded with a numerous family, interrupted by
sickness, or other accidental avocations. In their political situation,
when they happen to be under a particular subordination from
which others are free, or loaded with taxes which others do not
pay.
319I shall only add, that in computing the value of the physical-necessary
of the lowest denomination, a just allowance must be made for
all interruptions of labour: no person can be supposed to work
every free day; and the labour of the year must defray the expence
of the year. This is evident. Farther, neither humanity, or policy,
that is the interest of a state, can suggest a rigorous oeconomy upon
this essential quantity. If the great abuses upon the price of labour
are corrected, those which remain imperceptible to the public eye,
will prove no disadvantage to exportation; and as long as this goes
on with success, the state is in health and vigour. Exportation of
work is another pulse of the political body.
I resume the subject, which, as a rest to the mind, I dropt
at the end of the 19th chapter.
I am to treat directly of inland commerce, which has been
sufficiently distinguished from infant, and foreign trade.
We are to consider ourselves now as transported into a new country.
Here foreign trade has been carried to the greatest height possible;
but the luxury of the inhabitants, the carelessness, perhaps,
of the statesman, and the natural advantages of other nations,
added to the progress of their industry and refinement, have concurred
to cut this branch off, and thereby to dry up the source
which had constantly been augmenting national opulence.
We must examine the natural effects of this revolution; we must
point out how every inconvenience may be avoided, and how a
statesman may regulate his conduct, so as to prevent the exportation
320of any part of that wealth which the nation may have heaped up
within herself, during the prosperity of her foreign trade. How he
may keep the whole of his people constantly employed, and by
what means he may promote an equable circulation of domestic
wealth, as an adequate equivalent given by the rich, for services
rendred them by the industrious poor. How, by a judicious imposition
of taxes, he may draw together an equitable proportion of
every man’s annual income, without reducing any one below the
standard of a full physical-necessary. How he may, with this public
fund, preserve in vigour every branch of industry, and be enabled
also, by the means of it, to profit of the smallest revolution
in the situation of other nations, so as to re-establish the foreign
trade of his own people. And lastly, how the society may be thereby
sufficiently defended against foreign enemies, by a body of men
regularly supported and maintained at the public charge, without
occasioning any sudden revolution hurtful to industry, either when
it becomes necessary to increase their numbers, in order to carry on
an unavoidable war, or to diminish them, upon the return of peace
and tranquility. This is, in few words, the object of a statesman’s
attention when he is at the head of a people living upon their own
wealth, without any mercantile connections with strangers.
However hurtful the natural and immediate effects of political
causes may have been formerly, when the mechanism of government
was less compounded than at present, they are now brought
under such restrictions, by the complicated system of modern oeconomy,
that the evil which might otherwise result, is guarded
against with ease.
As often, therefore, as we find a notable prejudice resulting to a
state, from a change of their circumstances, gradually taking place, we
may safely conclude, that negligence, or want of abilities, in those
who have the direction of public affairs, has more than any other
cause been the occasion of it.
321It was observed, in the third chapter of the first book, that before
the introduction of modern oeconomy, which is made to subsist by
the means of taxes, a state was seldom found to be interested in
watching over the actions of the people. They bought and sold,
transferred, transported, modified, and compounded productions
and manufactures, for public use, and private consumption, just
as they thought fit. Now it is precisely in these operations that a
modern state is chiefly interested; because proportional taxes are
made to affect a people on every such occasion.
The interest the state has in levying these impositions, gives a
statesman an opportunity of laying such operations under certain
restrictions; by the means of which, upon every change of circumstances,
he can produce the effect he thinks fit. Do the people
buy from foreigners what they can find at home, he imposes a
duty upon importation. Do they sell what they ought to manufacture,
he shuts the gates of the country. Do they transfer or transport
at home, he accelerates or retards the operation, as best suits
the common interest. Do they modify or compound what the public
good requires to be consumed in its simple state, he can either
prevent it by a positive prohibition, or he may permit such consumption
to the more wealthy only, by subjecting it to a duty.
So powerful an influence over the operations of a whole people,
vests an authority in a modern statesman, which was unknown in
former ages, under the most absolute governments. We may discover
the effects of this, by reflecting on the force of some states,
at present, in Europe, where the sovereign power is extremely
limited, as to every arbitrary exercise of it, and where, at the same
time, that very power is found to operate over the wealth of the
inhabitants, in a manner far more efficacious than the most despotic
and arbitrary authority can possibly do.
It is the order and regularity in the administration of the complicated
modern oeconomy, which alone can put a statesman in a
capacity to exert the whole force of his people. The more he has
322their actions under his direction, the easier it is for him to make
them concur in advancing the general good.
Here it is objected, that any free people who invest a statesman
with a power to control their most trivial actions, must be out of
their wits, and considered as submitting to a voluntary slavery of
the worst nature, as it must be the most difficult to be shaken off.
This I agree to; supposing the power vested to be of an arbitrary
nature, such as we have described in the thirteenth chapter of this
book. But while the legislative power is only exerted in acquiring
an influence over the actions of individuals, in order to promote a
scheme of political oeconomy, uniform and consistent in all its
parts, the consequence will be so far from introducing slavery
among the people, that the execution of the plan will prove absolutely
inconsistent with every arbitrary or irregular measure.
The power of a modern Prince, let him be, by the constitution
of his kingdom, ever so absolute, becomes immediately limited so
soon as he establishes the plan of oeconomy which we are endeavouring
to explain. If his authority formerly resembled the solidity
and force of the wedge, which may indifferently be made use of,
for splitting of timber, stones, and other hard bodies, and which
may be thrown aside and taken up again at pleasure; it will, at
length come to resemble the watch, which is good for no other purpose
than to mark the progression of time, and which is immediately
destroyed, if put to any other use, or touched by any but
the gentlest hand.
As modern oeconomy, therefore, is the most effectual bridle ever
invented against the folly of despotism; so the wisdom of so great a
power shines no where with greater lustre, than when we see it exerted
in planning and establishing this oeconomy, as a bridle against
the wanton exercise of power in succeeding generations. I leave it to
my reader to seek for examples in the conduct of our modern
Princes, which may confirm what, I think, reason seems to point
out: were they less striking, I might be tempted to mention them.
323The part of our subject we are now to treat of, will present us
with a system of political oeconomy, still more complicated than
any thing we have hitherto met with.
While foreign trade flourishes and is extended, the wealth of a
nation increases daily; but her force is not so easily exerted, as
after this wealth begins to circulate more at home, as we shall easily
shew. But, on the other hand, the force she exerts is much more
easily recruited. In the first case, her frugality enables her to draw
new supplies out of the coffers of her neighbours; in the last, her
luxury affords a resource from the wealth of her own citizens.
In opening my chapter, I have introduced my reader into a new
country; or indeed I may say, that I have brought him back into
the same which we had under our consideration in the first book.
Here luxury and superfluous consumption will strike his view
almost at every step. He will naturally compare the system of frugality,
which we have dismissed, with that of dissipation, which we
are now to take up; and we may very naturally conclude, that the
introduction of the latter, must prove a certain forerunner of destruction.
The examples found in history of the greatest monarchies
being broken to pieces, so soon as the taste of simplicity was
lost, seem to justify this conjecture. It is, therefore, necessary to examine
circumstances a little, that we may compare, in this particular
also, the oeconomy of the antients with our own; in order to discover
whether the introduction of luxury be as hurtful at present,
as it formerly proved to those states which made so great a figure
in the world; and which now are only known from history, and
judged of, from the few scattered ruins which remain to bear testimony
of their former greatness.
Luxury is the child of wealth; and wealth is acquired by states,
as by private people, either by a lucrative, or by an onerous title,
as the civilians speak. The lucrative title, by which a state acquires,
is either by rapine, or from her mines; the onerous title,
or that for a valuable consideration, is by industry.
324The wealth of the ancient monarchs of Babylon, Persia, Greece,
and Rome, was the effect of rapine; whereas industry enriched the
cities of Sydon, Tyre, Carthage, Athens, and Alexandria. The
luxury of the first, proved the ruin of the luxurious; the luxury of
the last, advanced their grandeur: because they had no rivals to
take advantage of the natural effects of this luxury, in cutting off
the profits of foreign trade. Peace was as hurtful to the plunderers,
as war was destructive to the industrious.
When an empire was at war, its wealth was thereby made to
circulate for an equivalent in services performed. So soon as
peace was restored, every one returned, as it were, to a state of
slavery. The monarch then possessed himself of all the wealth, and
distributed it by caprice. Fortunes were made in an instant, and
no body knew how: they were lost again by transitions equally
violent and sudden. The luxury of those days was attended with
the most excessive oppression. Extraordinary consumption was no
proof of the circulation of any adequate equivalent in favour of
the industrious: it had not the effect of giving bread to the poor,
nor of proportionally diminishing the wealth of the rich. The
great constantly remained great; and the more they were prodigal,
the more the small were brought into distress. In one word,
luxury had nothing to recommend it, but that quality which solely
constitutes the abuse of it in modern times; to wit, the excessive
gratification of the passions of the great, which frequently brought
on the corruption of their manners.
When such a state became luxurious, public affairs were neglected;
because it was not from a right administration that wealth
was to be procured. War, under such circumstances, worked
effects almost similar to the springing up of industry in modern
times; it procured employment, and this produced a more regular
circulation, as has been said.
On the other hand, the wealth and luxury of the trading cities
abovementioned, which was of the same species with that of modern
325times, proceeded from the alienation of their work; that is,
from their industry. Nothing was gained for nothing, and when
they were forced to go to war, they found themselves obliged
either to dissipate their wealth, by hiring troops, or to abandon the
resources of it, the labour of their industrious citizens. Thus the
punic wars exalted the grandeur of plundering Rome, and blotted
out the existence of industrious Carthage. I do not here pretend to
vindicate the justness of these reflections in every circumstance,
and it is foreign to my present purpose to be more particular; all
I seek for, is to point out the different effects of luxury in antient
and modern times.
Antient luxury was quite arbitrary; consequently could be laid
under no limitations, but produced the worst effects, which naturally
and mechanically could proceed from it.
Modern luxury is systematical; it cannot make one step, but at the
expence of an adequate equivalent, acquired by those who stand
the most in need of the protection and assistance of their fellow
citizens; and without producing a vibration in the balance of their
wealth. This balance is in the hands of the statesman, who may
receive a contribution upon every such vibration. He has the
reins in his hand, and may turn, restrain, and direct the luxury of
his people, towards whatever object he thinks fit.
Luxury here is so far from drawing on a neglect of public affairs,
that it requires the closest application to the administration of them,
in order to support it. When these are neglected, the industrious
will be brought to starve, consumption will diminish; that is,
luxury will insensibly disappear, and hoarding will succeed it.
These and similar consequences will undoubtedly take place, and
mechanically follow one another, when a skilful hand is not applied;
to prevent them.
It is impossible not to perceive the advantages of supporting a
flourishing inland trade, after the extinction of foreign commerce.
By such means elegance of taste, and the polite arts, may be carried
326to the highest pitch. The whole of the inhabitants may be
employed in working and consuming; all may be made to live in
plenty and in ease, by the means of a swift circulation, which will
produce a reasonable equality of wealth among all the inhabitants.
Luxury can never be the cause of inequality. Hoarding and parcimony
form great fortunes, luxury dissipates them and restores
equality.
Such a situation would surely be of all others the most agreeable,
and the most advantageous, were all mankind collected into one
society, or were the country where it is established cut off from
every communication with other nations.
The balance between work and demand would then only influence
the balance of wealth among individuals. If hands became scarce, the
balance would turn the quicker in favour of the laborious, and the
idle would grow poor. If hands became too plentiful (which indeed
is hardly to be expected) every thing would be bought the
cheaper; but the same quantity of wealth would still remain without
any diminution.
Where is, therefore, the great advantage of foreign trade?
I answer by putting another question. Where is the great advantage
of a person’s making a large fortune in his own country? A
man of a small estate may, no doubt, be as happy as another with
a great one; and the same thing would be true of nations, were
all equally inspired with a spirit of peace and justice; or were they
subordinate to a higher temporal power, which could protect the
weak against the violence and injustice of the strong.
It is, therefore, the separate interests of nations who incline to
communicate together, and consume of one another’s commodities,
which renders the consideration of the principles of trade, a matter
of great importance.
While nations contented themselves with their own productions,
while the difference of their customs, and contrast of their prejudices
327were great, the connections between them were not very
intimate.
From this proceeds the great diversity of languages and dialects.
When a traveller finds a sudden transition from one language to
another, or from one dialect to another, it is a proof that the manners
of such people have been long different, and that they have
had little communication with one another. On the contrary,
when dialects change by degrees, as in the provinces of the same
country, it is a proof that there has been no great repugnancy in
their customs. In like manner, when we find several languages,
at present different, but plainly deriving from the same source, we
may conclude, that there was a time when such nations were connected
by correspondence, or that the language has been transplanted
from one to the other, by the migration of colonies. But I
insensibly wander from my subject.
I have said, that when nations contented themselves with their
own productions, connections between them were not very intimate.
While trade was carried on by the exchange of consumable
commodities, this operation also little interested the state: consumption
then was equal on both sides; and no balance was found
upon either. But so soon as the precious metals became an object
of commerce, and when, by being rendred an universal equivalent
for every thing, it became also the measure of power between nations,
then the acquisition, or at least the preservation of a proportional
quantity of it, became, to the more prudent, an object of the
last importance.
We have seen how a foreign trade, well conducted, has the necessary
effect of drawing wealth from all other nations. We have
seen in what manner the benefit resulting from this trade may come
to a stop, and how the balance of it may come round to the other
side. We are now to examine how the same prudence which set
foreign trade on foot, and supported it as long as possible, may
guard against a sudden revolution, and at the same time put an
328effectual stop to it; to the end that a nation enriched by commerce
may not, by blindly or mechanically carrying it on, when the
balance is against her, fall into those inconveniencies which other
nations must have experienced during her prosperity.
When a Nation, which has enriched herself by a reciprocal Commerce
in Manufactures with other Nations, finds the Balance
of Trade turn against her, it is her Interest to put a Stop to it
altogether.
Trade having subsisted long in the nation we are now to keep
in our eye, I shall suppose that, through length of time, her
neighbours have learned to supply one article of their own and
other peoples wants cheaper than she can do. What is to be done?
No body will buy from her, when they can be supplied from another
quarter at a less price. I say, what is to be done? For if there be
no check put upon trade, and if the statesman do not interpose with
the greatest care, it is certain, that merchants will import the produce,
and even the manufactures of rival nations; the inhabitants
will buy them preferably to their own; the wealth of the nation
will be exported; and her industrious manufacturers will be brought
to starve. We may therefore look upon this, as a problem in trade,
to be resolved by the principles already established.
First, then, it must be inquired, if, in the branch in which she is
undersold, her rivals enjoy a natural advantage above her, which
no superior industry, frugality, or address on her side, can counterbalance?
If this be the case, there are three different courses to be
pursued, according to circumstances.
3291mo. To renounce that branch of commerce entirely, and to take
the commodities wanted from foreigners, as they can furnish them
cheaper.
2do. To prohibit the importation of such commodities altogether.
3tio. To impose a duty upon importation, in order to raise the
price of them so high as to make them dearer than the same kind
of commodity produced at home.
The first course may be taken, if, upon examining how the hands
employed in a manufacture may be disposed of, it be found, that
they may easily be thrown into another branch of industry, in which
the nation’s natural advantages are as superior to her rivals, as
their’s are superior to her’s in the branch she intends to abandon;
and providing her neighbours will agree to open their ports to the
free importation of the commodities in question. For though there
may be little profit in a trade by exchange, I still think it adviseable
to continue correspondence, and to avoid every occasion of cutting off
commerce with other nations. A laborious, oeconomical, and sagacious
nation, such as I suppose our traders to be, will be able to
profit of many circumstances, which would infallibly turn to the
disadvantage of others less expert in commerce, with whom she
trades; and in expectation of favourable revolutions, she ought not
rashly, nor because of small inconveniencies, to renounce trading
with them; especially if luxury should appear there to be on the
growing hand.
But suppose the rival nation will not consent to receive the manufactures
which the traders may produce with great natural advantages,
what course then is the best to be taken?
I think she ought to encourage the branch in which she is rivalled,
for her own consumption, though she must give over exporting
it; and, in this case, it must be examined, whether that trade
with foreigners should be prohibited altogether, (which is the second
course mentioned above) or whether it be more adviseable to
prefer the last scheme, viz. to allow the commodities to be imported,
330with a duty which may raise their price to so just a height as neither
to suffer them to be sold so cheap as to discourage the domestic
fabrication, nor dear enough to raise the profits of manufactures
above a reasonable standard, in case of an augmentation of demand.
The second course must be taken, when the natural advantages of
the foreign nations are so great, as to oblige the statesman to raise
duties to such a height as to give encouragement to smuggling.
The third course seems the best, when the advantages of the rivals
are more inconsiderable; in which case, the traders, may, in time,
and by the progress of luxury among their neighbours, or from
other revolutions, which happen frequently in trading nations,
regain their former advantages.
This may be a decision, in case a nation be rivalled in a branch
where she has not equal advantages with her neighbours; and
when she cannot compensate this inconvenience, either by her frugality
or industry, or by the means of a proper application of her
national wealth. These operations have been already fully explained,
and are now considered as laid aside; not that we suppose
they can ever cease to operate their effects in all nations, but in order
to simplify our ideas, and to point out the principles which ought
to direct a statesman upon occasions where he finds better expedients
impracticable, from different combinations of circumstances.
Let me next suppose a nation to be rivalled, in her staple manufactures;
that is, in those where she has the greatest natural advantages
in her favour.
Whenever such a case happens, it must proceed from some vice
within the state. Either from the progress of luxury in the workmen,
which must proceed from consolidated profits, or from accidental
disadvantage; such as dearness of subsistence, or from taxes injudiciously
imposed. These (I mean all, except the taxes, of which
afterwards) must be removed upon the principles above laid down:
and if this cannot be compassed, no matter why; then comes the
fatal period, when all foreign reciprocal commerce in manufactures
331must be given up. For if no profit can be made upon branches
where a nation has the greatest natural advantages, it is more
than probable, that every other branch will prove at least equally
disadvantageous. If upon this revolution the ports of the nation
be not shut against the importation of foreign manufactures, merchants
will introduce them, and this will drain off the nation’snation’s
wealth, and bring the industrious to starve.
It is upon this principle that incorporations are established. Of
these we shall say a word, and conclude our chapter.
Cities and corporations, may be considered as nations, where
luxury and taxes have rendred living so expensive, that work cannot
be furnished but at a high rate. If labour, therefore, of all
kinds, were permitted to be brought from the provinces, or from
the country, to supply the demand of the capital and smaller corporations,
what would become of tradesmen and manufactures
who have their residence there? If these, on the other hand, were
to remove beyond the liberties of such corporations, what would
become of the public revenue, collected in these little states, as I
may call them?
By the establishment of corporations, a statesman is enabled to
raise high impositions upon all sorts of consumption; and notwithstanding
that these have the necessary consequence of increasing the
price of labour, yet by other regulations, of which afterwards, the
bad consequences thereby resulting to foreign trade may be avoided,
and every article of exportation be prevented from rising above the
proper standard for making it vendible, in spite of all foreign competition.
The plan of modern taxation seems first to have been introduced
into cities, while the country was subject to the barons, and remained
in a manner quite free from them. Cities having obtained
the privilege of incorporation, began, in consequence of the power
vested in their magistrates, to levy taxes: and finding the inconveniences
resulting from external competition (foreign trade) they
332erected the different classes of their industrious into confraternities,
or corporations of a lower denomination, with power to prevent
the importation of work from their fellow tradesmen not of the
society.
Here arises a question.
Why are corporations complained of in many countries, as being
a check upon industry; if the establishment of them proceeds from
so plain a principle as that here laid down?
Let me draw my answer from another question. Why are they
not complained of in all countries?
The difference between the situation of one country and another,
will plainly point out the principle which ought to regulate the
establishment and government of corporations. When this is well
understood, all disputes concerning the general utility, or harm
arising from them will be at an end: and the question will be
brought to the proper issue; to wit, their relative utility considered
with respect to the actual situation of the country where they are
established. In one province a corporation will be found useful, in
another just the contrary.
First then it must be agreed, on all hands, that the principle laid
down is just. No body ever advanced, that the industry carried on
in towns, where living is dear, ought to suffer a competition with
that of the country, where living is cheap; I mean for the direct
consumption of the citizens. But it may be advanced, that no subaltern
corporation should enjoy an exclusive privilege against those
who share of every burthen imposed by the great corporation from
which they draw their existence. That they have no right of exclusion
against citizens; but only against strangers who are not
under the same jurisdiction, nor liable to the same burthens. Here
the dispute lies between the members of the great corporation and
those of the smaller. Now, I say, while no other interest is concerned,
the decision of this question ought to be left to the corporation
itself. But the moment the public good comes to be
333affected by certain privileges enjoyed by individuals, such privileges
should either be abolished, or put under limitations.
In countries where industry stands at a determined height, while
the consumption of cities neither augments nor diminishes; when
those who live upon an income acquired, live uniformly in the
same way; when this regular consumption is regularly supplied,
by a certain number of citizens sufficient to supply it; when the
hands employed for this purpose are in a perfect proportion to the
demand made upon them; in such countries, I say, any diminution
of the privileges of corporations would be a means of overturning
the equal balance between work and demand.
We have said above, that when hands become too many for the
work, profits fall below the necessary standard of subsistence; that
the industrious enter into competition for the physical-necessary,
and hurt one another. Here then is the principle which the corporation
ought to keep in their eye: the profits upon every trade
ought to be in proportion to work.
In order to come the better at the knowledge of this proportion,
many corporations in Germany have the subaltern corporations of
trades restrained to certain numbers. There is a determined number
of apothecaries, joiners, smiths, &c. allowed in every town,
and no more; according as employment is found for them. This
seems a good regulation. I do not say it may not be abused. But
the power of administration must be lodged somewhere; and if in
a country where industry is making little progress, corporations
were laid open, the consequence would be, that every one would
starve another, and the consumers would be ill served.
On the other hand, when industry springs up, when the manners
of a people change all of a sudden, or by quick degrees, as has
been the case in many countries in Europe within these threescore
years: it is a mark of a narrow capacity not to perceive that a change
of administration becomes necessary; and if on such revolutions
those who are at the head of corporations should profit of the increase
334of demand, and occasion prices to rise in favour of the incorporated
workmen, the infallible consequence will be, to make
the city become deserted, and deprived of a trade, which otherwise
would necessarily fall to her share, in consequence of the advantage
she must draw from establishments already made for supplying every
branch of consumption[K]. But let the principle above mentioned
be constantly followed; let profits be kept at a right standard; let
hands be increased according to demand; let the city workmen
gain no advantage over those of the country which may not be
compensated by the difference of the price of subsistence; let the
disadvantages again on the side of the town affect only their own
consumption, not the surplus of their industry; let every convenience
for carrying on foreign trade (every thing here is understood
to be foreign, which does not enter into the consumption of
the town) be provided for in the suburbs, or, if you please, in a
place out of the town walled in for that purpose; let markets there
be held for every kind of work coming from the country; and then
the true intent of a corporation will be answered. If it be found
that the prosperity of trade demands still more liberty, then the
corporation may be thrown open; but on the other hand, every
burthen must be taken off, and every incorporated member must
be indemnified by the state, for the loss he is thereby made to suffer.
335The great change daily operating on the spirit of European nations,
where corporations have been long established, without any
great inconvenience having been found to arise from them, suggests
these reflections, which seem to flow naturally, from the principles
we have deduced. I shall only add, that from the practice
of imposing taxes within these little republics (as I have called
them) Princes seem to have taken the hint of extending that system;
by first appropriating to the public revenue, what the cities had
established in favour of themselves, and then by enlarging the plan
as circumstances favoured their design. That this is the true origin
of the modern plan of taxation (I mean that upon consumption)
may be gathered from hence; that the right of imposing taxes appears
no where, almost, to have been essentially attached to royalty,
even in those kingdoms, where Princes have long enjoyed an unlimited
constitutional authority over the persons of their subjects.
This right I take to be the least equivocal characteristic of an absolute
and unlimited power. I know of no christian monarchy (except,
perhaps, Russia) where either the consent of states, or the approbation
or concurrence of some political body within the state, has
not been requisite to make the imposition of taxes constitutional;
and if more exceptions are found, I believe it will not be difficult
to trace the origin of such an exertion of sovereign authority, without
ascending to a very high antiquity. The prerogative of Princes
in former times, was measured by the power they could constitutionally
exercise over the persons of their subjects; that of modern
princes, by the power they have over their purse.
Having, therefore, shewn the necessity of putting a stop to foreign
reciprocal commerce in manufactures, so soon as in every branch
this trade becomes disadvantageous to a nation; the next question
comes to be, how to proceed in the execution, so as to avoid a sudden
and violent revolution in the oeconomy of the state, which is
of all things the most dangerous: the hurt, therefore, ought to be
foreseen at a great distance, in order to be methodically prevented.
336
It must not be understood, from what was said in the last chapter,
that so soon as the balance of foreign trade, either on the whole,
or on any branch of manufacture, is to be found against a nation,
that a statesman should then at once put a total stop to it. This is
too violent a remedy ever to be applied with success.
It is hardly possible, that a considerable revolution in the trade of
a nation should happen suddenly, either to its advantage, or disadvantage,
unless in times of civil discord, or foreign wars, which
at present do not enter into the question.
A sagacious statesman will, at all times, keep a watchful eye
upon every branch of foreign commerce, especially upon importations.
These consist either in the natural produce of other countries,
or in such produce increased in its value by manufacture.
In all trade two things are to be considered in the commodity
sold. The first is the matter; the second is the labour employed to
render this matter useful.
The matter exported from a country, is what the country loses;
the price of the labour exported, is what it gains.
If the value of the matter imported, be greater than the value
of what is exported, the country gains. If a greater value of labour
be imported, than exported, the country loses. Why? Because in
the first case, strangers must have paid, in matter, the surplus of labour
exported; and in the second case, because the country must have
paid to strangers, in matter, the surplus of labour imported.
It is therefore a general maxim, to discourage the importation of
work, and to encourage the exportation of it.
337When any manufacture begins to be imported, which was usually
made at home, it is a mark that either the price of it begins to rise
within the country, or that strangers are making a new progress in
it. On the other hand, when the importation of manufactures
consumed within a country comes to diminish, and when merchants
begin to lose upon such branches of trade, it is a proof that
industry at home is gaining ground in those articles. The statesman
then must take the hint, and set out by clogging gently the
importation of those commodities, not so as to put a stop to it all at
once; because this might have the effect of carrying profits too
high upon the home fabrication of them.
All sudden revolutions are to be avoided. A sudden stop upon a
large importation, raises the prices of domestic industry by jerks, as
it were; they do not rise gradually; and these sudden profits engage
too many people to endeavour to share in them. This occasions
a desertion from other branches of industry equally profitable
to the state. Such revolutions do great harm; because it is a long
time before people come to be informed of their true cause, and
during the uncertainty, they are, as it were, in a wilderness, surprized
and delighted with the consequences, according as their
several interests are affected by them. Every one accounts for the
phenomena in a different way. Some are for applying remedies
against the inconveniencies; while others are totally taken up in
profiting to the utmost of every momentary advantage. In a word,
nothing is more hurtful than a sudden revolution, in so complicated
a body as that of the whole class of the industrious, in a modern
society. When therefore such changes happen, in spite of all
a statesman can do, the best way to prevent the inconveniencies
which they draw along with them, is to inform the public of the
true causes of every change, favourable or hurtful to the several
classes of inhabitants. This also seems to be the best method to
engage every one to concur in promoting the proper remedies,
when the inconveniencies themselves cannot be prevented. So
338much for a scheme of encouraging growing manufactures, or of
supporting them in their decline. I proceed next to consider the
methods of preventing the loss of others already established.
We have said, that the importation of any article of consumption
usually provided at home, was a proof by no means equivocal of a
foreign rivalship. I shall say nothing, at present, of the methods
to be used as a remedy for this inconvenience: these have been
already discussed. We must now suppose, every one that might
be contrived for this purpose, to become ineffectual; and that foreign
industry is so far gaining ground, as daily, more and more,
to supply the several branches of domestic consumption.
Upon this, the statesman will begin by laying the importation of
such commodities under certain restrictions. If these do not prove
sufficient, they must be increased; and if the augmentation produces
frauds, difficult to be prevented, the articles must be prohibited
altogether. By this method of proceeding, it will be found,
that without any violent or sudden prohibition laid upon foreign
trade, by little and little, every pernicious branch of it will be cut
off, till at last it will cease altogether, as in the case mentioned
above; to wit, when the most advantageous branches cannot be
carried on without loss.
Something, however, must here be added, in order to restrain so
general a plan of administration. Nothing is more complex than
the interests of trade, considered with respect to a whole nation. It
is hardly possible for a people to have every branch of trade favourable
for the increase of her wealth: consequently, a statesman who,
upon the single inspection of one branch, would lay the importation
of it under limitations, in proportion as he found the balance
upon it unfavourable to the nation, might very possibly undo a
flourishing commerce.
He must first examine minutely every use to which the merchandize
imported is put: if a part is re-exported with profit, this profit
must be deduced from the balance of loss incurred by the consumption
339of the remainder. If it be consumed upon the account of
other branches of industry, which are thereby advanced, the balance
of loss may still be more than compensated. If it be a means
of supporting a correspondence with a neighbouring nation, otherwise
advantageous, the loss resulting from it may be submitted to,
in a certain degree. But if upon examining the whole chain of
consequences, he finds the nation’s wealth not at all increased, nor
her trade encouraged, in proportion to the damage at first incurred
by the importation, I believe he may decide, that such a branch of
trade is hurtful; and therefore that it ought to be cut off, in the
most prudent manner, according to the general rule.
The first object of the care of a statesman, who conducts a nation,
which is upon the point of losing her foreign trade, without any
prospect or probability of recovering it, is to preserve her wealth
already acquired. No motive ought to engage him to sacrifice this
wealth, the safety alone of the whole society excepted, when suddenly
threatned by foreign enemies. The gratification of particular
people’s habitual desires, although the wealth they possess
may enable them, without the smallest hurt to their private fortunes,
to consume the productions of other nations; the motive of
preventing hoards; that of promotingpromoting a brisk circulation within
the country; the advantages to be made by merchants, who may
enrich themselves by carrying on a trade disadvantageous to the
nation; even, to say all in one word, the supporting of the same
number of inhabitants, ought not to engage his consent to the
diminution of national wealth.
Here follow my reasons for carrying this proposition so very far,
even to the length of sacrificing a part of the inhabitants of a country
to the preservation of its wealth; and I flatter myself, that when
duly examined, I may avoid the smallest imputation of Machiavellian
principles, in consequence of so bold an assertion.
While a people are fed with the produce of their own lands, the
preservation of their numbers is quite consistent with the preservation
340of their wealth. If, therefore, in such a case, their numbers
should be diminished upon a decay of foreign trade, either by their
food’s being exported, or by their lands becoming uncultivated, I
should never hesitate to lay the blame upon the statesman’s administration.
But an industrious people may (as has been said) carry their
numbers far beyond the proportion of their own subsistence. The
deficiency must be supplied from abroad, and must be paid with the
balance of the trade in their favour. Now when this balance comes
to turn against them, and when, consequently, a stop is put to the
disadvantageous foreign trade, upon the principles we have been
laying down, the statesman is reduced to this alternative; either
annually to allow a part of the wealth already got, to be exported,
in order to buy subsistence for the surplus of his people, as I may
call them, or to reduce their numbers by degrees, either by encouragements
given to their leaving the country, or by establishing colonies,
&c. until they are brought down to the just proportion of
national subsistence. If he prefers the first, supposing the execution
of such a plan to be possible, the consequence will be, that so soon
as all the wealth is spent, the whole society, except the proprietors
of the lands, and these who cultivate them, must go to destruction.
If he prefers the second, he remains independent of all the world
with respect to the inhabitants he preserves. They remain in a capacity
of maintaining themselves, and he may alter the plan of his
political oeconomy as best suits his circumstances, relatively to other
nations. While all his subjects are employed and provided for, he
will remain at the head of a flourishing and happy people.
It may be here objected, that the first alternative is an impossible
supposition. I allow it to be so, if you suppose it to be carried the
length to which I have traced it; because no power whatsoever in a
statesman, can go so far as to preserve numbers at the expence of
the whole riches of his people. But I can very easily suppose a
case, where numbers may be supported at an eminent loss to a state
341which finds itself in the situation in which we have represented it
in our supposition.
Suppose a prince, upon the failure of his foreign trade, to increase
his army, in proportion as he finds his industrious hands laid idle by
a deficiency of demand for their labour; and let him fill his magazines
for their subsistence by foreign importation, leaving the produce
of his country to feed the rest of his subjects. By such a plan,
every body will remain employed, and also provided for, and such
a prince may be looked upon as a most humane governor. This I
willingly agree to. I should love such a prince; but the more I
loved him, the more I should regret that his project must fail, from
a physical impossibility of its being long supported; and when it
comes to fail by the exhausting of his wealth, it will not be his
regrets which will give bread to his soldiers, nor employment to
his industrious subjects, who will no longer find an equivalent for
their labour.
Let this suffice at present, upon the general principles which influence
the stop necessary to be put to the importation of foreign
commodities, and to the diminution of national wealth, in the case
we have had before us.
Next as to the articles of exportation. The most profitable branches
of exportation are those of work, the less profitable those of
pure natural produce. When work cannot be exported in all its
perfection, because of its high price, it is better to export it
with a moderate degree of perfection, than not at all; and if even
this cannot be done to advantage, then will a people be obliged
to renounce working except for themselves: and then, if domestic
consumption does not increase in proportion to the deficiency
of foreign demand, a certain number of hands will be idle, and
a certain quantity of natural produce will remain upon hand. The
first must disappear in a short time; they will starve or desert; the
last will become an article of exportation. Here then is a new species
of trade which takes place upon the extinction of the other.
342When a nation has been forced to reduce her exportations to articles
of pure natural produce, in conformity to the principles we have
been laying down, then the plan proposed in the title of this chapter
is executed. She is then brought as low in point of trade as she
can be, but at the same time, she may enjoy her natural advantages
in spite of fortune; and in proportion to them, she may, with
a good government and frugality, retain a balance of trade in her
favour, which will constantly go on in augmenting her national
wealth.
There is, therefore, a period at which foreign trade may stop in
every article, but in natural produce. I do not know whether this
period be at a great distance, when the state of trade is considered
relatively to certain nations of Europe.
Were industry and frugality found to prevail equally in every
part of the great political bodies, or were luxury and superfluous
consumption, every where carried to the same height, trade might,
without any hurt, be thrown entirely open. It would then cease
to be an object of a statesman’s care and concern. On the other
hand, were all nations equally careful to check every branch of
unprofitable commerce, a general stagnation of trade would soon
be brought about. Manufactures would no more be the object of
traffic; every nation would supply itself, and nothing would be
either exported or imported but natural productions.
But as industry and idleness, luxury and frugality, are constantly
changing their balance throughout the nations of Europe, able
merchants make it their business to inform themselves of these
fluctuations, and able statesmen profit of the discovery for the re-establishment
of their own commerce; and when they find that this
can no more be carried on with the manufactures or produce of
their own country, they engage their merchants to become carriers
for their neighbours, and by these means, form as it were a third
and last entrenchment, which, while they can defend it, will not
suffer their foreign trade to be quite extinguished; because, by this
343last expedient, it may continue for some time to increase their national
stock. It is in order to cut off even this resource, that some
nations lay not only importations under restraint, but also the importers[L].
Let such precautions be carried to a certain length on all
hands, and we shall see an end to the whole system of foreign
trade, so much alamode, that it appears to become more and more
the object of the attention as well as of the imitation of all modern
statesmen.
There is now no more question of a trading nation; this
character is lost, the moment there is a stop put to the export
of the labour and ingenuity of her people.
The first objects of her care should be to increase, by every possible
means, the quantity of her natural produce; to be as frugal as
possible in the consumption of it, and to export the surplus to the best
advantage.
If she finds her exportation of subsistence going forward, while
some of her people remain in want, she may rest assured that industry
is made to suffer by some internal vice; and the most probable
cause of such an effect will be found to be an unequal competition
between those of the lower classes, who work for a physical-necessary.
344This must be removed, and the statesman should
never rest, until he has set the balance of work and demand so far
right, as to prevent at least the scale of work from preponderating;
for this is the door by which misery gets in among the people.
The scale of demand preponderating, will not now be so hurtful, as
this alteration of the balance will only raise prices, and accelerate
circulation, and keep the other balance, to wit, that of wealth (of
which we shall treat in the following chapter) in a constant vibration,
without diminution of the public stock.
Another object of a statesman’s care in these supposed circumstances,
is to suffer no work whatever, nor the natural produce of any
other country conducive to luxury, to be imported; for although I
have said, that superfluous consumption can do little harm when
the interests of foreign trade do not enter into the question so as to
prevent exportation, by raising prices at home; and though the
importation of foreign produce, in exchange for like commodities
of national growth, does no hurt to a state with respect to her
wealth, yet if such importation be an article of mere superfluity, I
think a statesman should prudently discourage it; because the search
of superfluities is of itself a proof of a luxurious turn, and I should
wish to see this turn improved so as to promote national purposes
only, that is, to the augmentation and subsistence of useful inhabitants.
Let me illustrate this by an example. Foreign wines, I shall suppose,
become alamode, as a part of the luxury of an elegant table.
A statesman, by his example, may discourage this, and introduce
many other articles of expence in entertainments sufficient to compensate
it. The furniture of apartments may be rendred more
magnificent, ornaments of the side board, decoration of deserts,
new amusements immediately after dinner might be introduced,
which would have an air of refinement and delicacy.
By such examples he might easily substitute one expence, which
might become a national improvement, in the place of another,
345where the luxury produces no such effect. And when prodigality
and expence have neither the good effect of giving bread to the
poor, nor of accelerating circulation at home in favour of the public,
I can see no reason why a statesman should interest himself for
their support; and much less, why a speculative person, who examines
only the methods of making mankind happy by their mutual services
to each other, should strain a subject, in order to find
arguments proper to make either the apology or panegyric of the
various schemes of dissipation.
I need not add, as a restriction of this principle of discouraging
the importation of foreign commodities (which become articles
of a greater superfluous home-consumption) that when such
a branch of trade becomes necessary to be carried on, in order to
engage a neighbouring nation to consume of home-superfluities;
in this case, the luxury of the consumers of the foreign produce, has
an evident tendency to national improvement. If delicate wines,
and raw silk, are imported as a return for salt herrings and raw
hides, the support of such a trade is only the means of making the
rich consume these articles of home-production, by converting them
into burgundy and velvet.
These considerations regard the augmentation, or at least the
preservation of national wealth. If they are attended to, it is hardly
possible that any part of what is already acquired, can go abroad;
and in this case the whole balance of the exportation of natural
produce becomes clear gain.
There are still several things to be observed with regard to the
exportation of natural produce. Such articles as are in great abundance,
and are not produced in other countries, as wines in the
southern countries of Europe, ought always to be exported by
the inhabitants, because considerable profits must be made upon a
trade where there is no rivalship; and on such occasions, a people
ought to be wise enough to keep such profits for themselves.
346But if other nations will not receive them, unless they be imported
by their own subjects, then the statesman may impose a duty
upon exportation, which is one way of sharing the profits with the
carriers. All the precaution necessary, in imposing this duty, is not
to raise it so high as to diminish the demand; nor to give an encouragement
to a neighbouring nation, to enter into competition for
such a branch of trade.
Neighbouring states which furnish the same articles of natural
produce, regulate, commonly, the duties upon exportation, in such a
manner as nearly to compensate all differences which strangers
may find, between trading with the one or with the other. Or
they grant particular privileges in point of trade, to the nations
with whom they find it most for their advantage to trade.
If the natural advantages upon such articles are less considerable,
no duty can be imposed. Exportation may then be encouraged by
granting still greater privileges to strangers or others, who may
promote the exportation at little cost to the state.
If in the last place, the natural produce of a country be common
to others, where it is perhaps equally plentiful; it will be difficult
to procure the exportation of it; and yet it may happen, that too
great an abundance of it at home, may occasion inconveniencies.
In this case, the statesman must give a premium or bounty upon exportation,
as the only method of getting rid of a superfluity, which
may influence so much the whole mass of the commodity produced,
as to sink the price of the industry of those employed in it, below
the standard of their physical-necessary. By giving, therefore, this
premium, he supports industry in that branch; he takes nothing
from the national wealth; and the exportation, which takes place
in consequence of the bounty, is all clear gain. This is an uncommon
operation in trade, but it has so intimate a connection with the
doctrine of taxes, and the proper application of public money, that
I will postpone the farther consideration of it until I come to that
347branch of my subject; and the rather, that this book is swelling
beyond its due proportion.
I have little occasion to speak of importations, into a country
which exports no manufactures. The ruling principle in such
cases, is to suffer no importation but what tends to encourage the
exportation of the surplus of natural produce, and which, at the
same time, has no tendency to rival any branch of domestic industry.
Thus it is much better for a northern country to pamper
the taste of her rich inhabitants with wines and spices, than to discourage
agriculture by the importation of rice and foreign grain;
supposing the alternative quite optional, and the one as well as the
other to be the returns of her own superfluity.
I come next to the consideration of her inland trade, and consumption
of her own manufactures. Here there is no question of
either an increase or diminution of her wealth, but only of making
it circulate in the best manner to keep every body employed.
Several considerations must here influence our statesman’s conduct,
and a due regard must be had to every one of them. I shall reduce
them to three different heads, and pass them in review very cursorily,
as we have already explained sufficiently the principles upon
which they depend.
1mo. To regulate consumption and the progress of luxury, in
proportion to the hands which are found to supply them.
2do. To regulate the multiplication of inhabitants according to
the extent of the fertility of the soil. These two considerations must
constantly go hand in hand.
In so far therefore, as the statesman finds his country still capable
of improvement, in so far he may encourage a demand for work,
and even countenance new branches of superfluous consumption;
since the equivalent to be given for them must of necessity prove an
encouragement to agriculture. But whenever the country becomes
thoroughly cultivated and peopled to the full proportion of
its own produce, a check must be put to multiplication, that is, to
348luxury, or misery and depopulation will follow; unless indeed, we
suppose that numbers are to be supported at the expence of national
wealth, the fatal consequences of which we have already pointed
out.
3tio. He should regulate the distribution of the classes of his
people, according to the political situation of the country.
This is the most complicated case of all. It would be imprudent,
for example, in a very small state situated on the continent, to
distribute all its inhabitants into producers and consumers, as we
have called them on several occasions; that is, into those who live
upon a revenue already acquired, and those who are constantly employed
in acquiring one by supplying the wants of the other. There
must be a third class; to wit, those who are maintained and taken
care of at the expence of the whole community, to serve as a defence.
This set of men give no real equivalent for what they receive;
that is to say, none which can circulate or pass from hand to
hand; but still they are usefully employed as members of a society
mutually tied together by the band of reciprocal dependence. Here
is no vice implied; but at the same time, the statesman must attend
to the consequences of such a distribution of classes.
The richer any state is, the more it has to fear from its neighbours:
consequently, the greater proportion of the inhabitants
must be maintained for its defence, at the expence of the industry
of the other inhabitants. This must diminish the number of free
hands employed in manufactures, and in supplying articles of consumption:
consequently, it would be imprudent to encourage the
progress of luxury, while public safety calls for a diminution of
the hands which must supply it. If in such circumstances luxury
do not suffer a check, demand will rise above the proper standard;
living will become dearer daily, prices will rise, and they will prove
an obstacle to the recovery of foreign trade; an object of which a
prudent statesman will never lose sight for a moment.
349It is for these and other such considerations, that many small
states are found to fortify their capital; to keep a body of soldiers
in constant pay, bearing a great proportion to the number of the
inhabitants; to form arsenals well stored with artillery, and to institute
sumptuary laws and other regulations proper to check luxury.
Nothing so wise in every respect! Their territory cannot be
extended nor improved, nor can their inhabitants be augmented,
but at the expence of their wealth; for such as gained their livelihood
at the expence of strangers, are at present out of the question.
Were their own citizens therefore permitted, out of the abundance
of their wealth, to give bread to as many as their extravagance
could maintain, the public stock would be constantly diminishing,
in proportion to the foreign subsistence imported for these supernumeraries,
fed at the expence of the luxurious; which would be
just so much lost.
In other states which are extended, powerful by means of wealth,
and strong by nature and situation, whose safety is connected with
the general system of European politicks, which secures them
against conquest; such as Spain, France, Great Britain, &c. the
progress of luxury does little harm (as these territories are still capable
of infinite improvements) provided it does not descend to the
lower classes of the people.
It ought to be the particular care of a statesman to check its progress
there, otherwise there will be small hopes of ever recovering
foreign trade. Whereas, if the lower classes of a people continue
frugal and industrious, from these very circumstances trade may
open anew, and be recovered by degrees, in proportion as luxury
comes to get footing in other nations, where the common people
are less laborious and frugal.
Luxury, among those who live upon a revenue already got, and
who, by their rank in the state, are not calculated for industry, has
the good effect of affording bread to those who supply them; but
there never can be any advantage in having luxury introduced
350among the lower classes, because it is then only a means of rendring
their subsistence more chargeable, and consequently more
precarious.
Having thus briefly laid together the principal objects of a statesman’s
care, upon the cessation of the foreign trade of his people, I
shall finish my chapter, by pointing out some general consequences
which reason and experience shew to be naturally connected with
such a revolution; not with regard to industry and inland trade,
but as they influence the spirit, government, and manners of a
people.
Nothing is more certain than that the spirit of a nation changes
according to circumstances. While foreign trade flourishes, the
minds of the monied people are turned to gain. Money, in such
hands, is generally employed to procure more, not to purchase
instruments of luxury; except for the consumption of those prodigal
strangers who are thereby becoming daily poorer. It is this
desire of becoming rich, which produces frugality. A man is always
frugal while he is making a fortune; another very commonly becomes
extravagant in the enjoyment of it; just so would it be with
nations, were a wise statesman never to interpose.
When, by the cessation of foreign trade, the mercantile part of a
nation find themselves cut off from the profits they used to draw
from strangers; and on the other hand, perceive the barriers of the
nation gradually shutting against every article of unprofitable correspondence,
they begin to withdraw their stocks from trade, and
seek to place them within the country. This money is often lent to
landed men, hitherto living within bounds, for two most substantial
reasons. First, because there was little money to be borrowed,
from the high rate of interest, owing to the great profits on foreign
trade; and because the national stock was then only forming. The
second, because the taste of the times was frugality. But when
once the money which was formerly employed in buying up loads
of work for the foreign markets, falls into the hands of landed
351men, they begin to acquire a taste for luxury. This taste is improved
and extended by an infinity of arts, which employ the hands
formerly taken up in furnishing branches of exportation. Thus
by degrees we see a rich, industrious, frugal, trading nation, transformed
into a rich, ingenious, luxurious, and polite nation.
As the statesman formerly kept his attention fixed on the preservation
of an equal balance between work and demand, and on every
branch of commerce, in order to prevent the carrying off any part
of the wealth already acquired; he must now direct his attention
towards the effects of the domestic operations of that wealth. He
was formerly interested in its accumulation; he must now guard
against the consequences of this.
While the bulk of a nation’s riches is in foreign trade, they do
not circulate within the country; they circulate with strangers,
against whom the balance is constantly found. In this case, the
richest man in a state may appear among the poorest at home. In
foreign countries you may hear of the wealth of a merchant, who
is your next door neighbour at home, and who, from his way of
living, you never knew to be worth a shilling. The circulation of
money for home-consumption will then be very small; consequently,
taxes must be very low; consequently, government will
be poor.
So soon as all this load of money which formerly was continually
going backwards and forwards, without almost penetrating, as one
may say, into the country, is taken out of foreign trade, and thrown
into domestic circulation, a new scene opens.
Every one now begins to appear rich. That wealth which formerly
made the admiration of foreigners, now astonishes the proprietors
themselves. The use of money, formerly, was to make
more of it: the use of money now, is to give it in exchange for
those or such like commodities, which were then consumed by
strangers only.
It is this revolution in the spirit of a people, which renders the
consideration of the balance of their wealth an object of the greatest
352political concern; because the constant fluctuation of it, among the
several classes of inhabitants, is what lays the foundation of public
opulence.
A government must always be respected, feared, and obeyed by
the people governed; consequently, it must be powerful, and its
power must be of a nature analogous to that of the subjects. If
you suppose a great authority vested in the grandees of a kingdom,
in consequence of the number and dependence of their vassals, the
crown must have still a more powerful vassalage at its command:
if they are powerful by riches, the crown must be rich. Without
preserving this just balance, no government can subsist. All power
consists in men, or in money.
If therefore we suppose a vast quantity of wealth thrown into domestic
circulation, the statesman must follow new maxims. He
must promote the circulation of it so as to fill up the blank of foreign
consumption, and preserve all the industrious who have enriched
him. The quicker the circulation is found to be, the better
opportunity will the industrious have of becoming rich speedily;
and the idle and extravagant will become the more quickly poor.
Another consequence equally certain, is, that the quicker the circulation,
the sooner will wealth become equally divided; and the
more equality there is found in wealth, the more equality will
be found in power. From these principles it will follow, that upon
such a revolution of national circumstances, a popular government
may very probably take place, if the statesman do not take proper
care to prevent it.
This is done by the imposition of taxes, and these are differently
laid on, according to the spirit of the government.
By taxes a statesman is enriched, and by means of his wealth, he
is enabled to keep his subjects in awe, and to preserve his dignity
and consideration.
By the distribution of taxes, and manner of levying them, the
power is thrown into such hands as the spirit of the constitution requires
353it should be found in. Are they imposed in a monarchy
where every man is taught to tremble at the King’s name, the great
men will be made rich by his bounty, and the lower classes will be
loaded and kept poor; that they may, on easier terms, be engaged
to fill those armies which the Prince entertains to support his authority
at home, and his influence abroad.
Here independent people will always be looked upon with an
evil eye, and considered as rivals to the Prince, who ought to be the
only independent person in the state.
In limited governments, where the sovereign has not the sole
power of taxation, they will be laid on more equally, and less arbitrarily;
providing the theory of them in general be well understood.
Here every man must know what he is to pay, and when;
and the amount of the tax must bear a proportion, on one hand, to
the exigencies of the state; and on the other, to the quantity of circulation
which takes place upon the payment of it: that is, a man
must not be made to pay all the state can demand of him for a year,
upon his making a trifling, though most essential acquisition of a
necessary article of subsistence.
I think I have observed one remarkable difference in the point
of view in levying taxes in countries where these two forms of government
are established.
Under the pure monarchy, the Prince seems jealous, as it were,
of growing wealth, and therefore imposes taxes upon people, who
are growing richer. Under the limited government they are calculated
chiefly to affect those who are growing poorer.
Thus the monarch imposes a tax upon industry; where every one
is rated in proportion to the gain he is supposed to make by his profession.
The poll-tax and taille, are likewise proportioned to the
supposed opulence of every one liable to them. These, with others
of the same nature, are calculated (as it is alledged) to establish an
equality in the load supported by the subjects; by making the industrious,
and money gatherers, contribute in proportion to their
354gains, although the capital stock from which these profits arise be
concealed from the eyes of the public.
In limited governments, impositions are more generally laid upon
consumption. They encourage industry, and leave the full profits
of it to make up a stock for the industrious person. When the stock
is made, that is, when it ceases to grow, it commonly begins to
decrease: the number of prudent people, who live precisely upon
their income, is very small. It is therefore upon the dissipation of
wealth, in the hands of private people, that the state is enriched.
Thus the career towards poverty is only a little abridged: he who
is in the way of spending his estate will get at the end of it, if his
life be spared; and therefore there is no harm done to him, and
much good done to the state, in making a part of his wealth circulate
through the public coffers.
The only precaution necessary to be taken in taxing consumption,
is, to render the impositions equal, and to prevent their affecting
what is purely necessary; or operating an unequal competition between
people of the same denomination. Such impositions have
still a worse effect, than those which fall upon growing wealth:
they prevent the poor from being able to subsist themselves. A fellow
feeling excites compassion among those of the lower classes;
they endeavour to assist each other, and by this operation, like a
pack of cards, set up by children upon a table, the first that is
thrown down tumbles down another, until all are laid flat; that
is, misery invades the lower classes: more than one half of a people.
From these principles (which I have been obliged to anticipate)
we may gather the necessity of taxes, in states where foreign trade
begins to decay. Without them, there is no security for a government
against the power of domestic wealth. Formerly, Princes
lived upon their domain, or patrimonial estate. What domain would
be sufficient, at present, to support the expence of government?
And if a government is not able to hold the reins of every principle
of action within the state, it is no government, but an idol, that is,
355an object of a voluntary respect. The statesman, therefore, must
hold the reins; and not commit the management of the horses to
the discretion of those whom he is employed to conduct.
Another consequence of taxes, is, that the more luxury prevails,
the more the state becomes rich: if luxury, therefore, breeds licentiousness,
it at the same time provides a curb against its bad effects.
This augmentation of wealth produces a double advantage to
the statesman: for besides the increase of the public revenue, the
progress of luxury changing the balance of wealth constantly, by
removing it from the rich and extravagant, to the poor and laborious,
renders those who were formerly rich, and consequently
powerful, dependent upon him for their support. By the acquisition
of such persons, he gains additional credit, and supports his
authority. Thus wealth and power circulate, and go hand in hand.
It may be asked, how these principles can be reconciled with the
vigour and strength commonly found in the government of flourishing
trading nations; for in such we must suppose few taxes?
consequently, a poor and therefore a weak government; and a rich,
consequently, a powerful people?
I answer, that under such circumstances, a people are commonly
taken up with their trade, and are therefore peaceable; and as their
wealth does not appear, being constantly in circulation with strangers,
the influence of it is not felt at home. While wealth is employed
in pursuit of farther gains, it cannot give power; consequently,
as to all political effects at home, it is as if it did not exist;
and therefore there is no occasion for the state to be possessed of a
wealth they have no occasion to employ. If such a nation be attacked
by her enemies, she becomes wealthy in an instant, every
one contributes to ward off the common danger: but if, on the
contrary, her tranquillity is disturbed at home, the rebellion generally
proves successful; which is a confirmation of the principles
laid down. I might illustrate this by many historical remarks. I
shall only suggest to my reader, to examine the nature of the Dutch
356revolutions, and to compare the success of rebellions in France and
England, during the last century, with others of a fresher date. Here
the reader may consult the learned Mr. Hume’s observation upon
the commencement of the civil war. History of Great Britain, Vol. I.
p. 325.
When, therefore, foreign trade has ceased for some time, and
luxury has filled up the void, a considerable part of national wealth
begins to circulate through the public treasury. It is natural then
for great men to resort to court, in order to partake of the profits of
government; and for the statesman to be fond of attaching such
people to his interest, in order to be a constant check upon the turbulent
spirit, which new gotten wealth may excite in the minds of
one set of people, and desperate fortunes in those of others.
While there was little circulation of money in Europe, and few
taxes, there was small profit to be made in following of Kings.
These were more formidable to their enemies, than profitable to
their friends. The great men of the state lived upon their lands,
and their grandeur resembled that of the Prince; it consisted in the
number and dependence of their vassals; who got as little by their
Lord, as he did by the King. The poor in those days were plundered
of the little money they had, by the great; now the great
are stripped of the largest sums, by the numbers of poor, who demand
from them on all hands, the just equivalent of their industry.
When Princes find their great men all about them, all asking,
and all depending for different marks of their favour, they may
perceive the great change of their situation, produced by luxury,
and a swift circulation. This revolution has not been sudden, it
has been the work of several centuries; and I think we may distinguish
three different stages during this period.
The first during the grandeur of the feudal government: then the
great Barons were to be consulted, and engaged to concur in the
King’s wars, because it was they who paid the expence, and suffered
the greatest loss. These are called by some the days of liberty;
357because the states of every country in Europe, almost, were then in
all their glory: they are called so with great reason, when we consider
the condition of the great only.
In those days there were seldom any troubles or disturbances in
the state, seldom any civil wars levied against the King, but such as
were supported by the grandees; who, either jealous of their own
just rights, or ambitious of acquiring others at the expence of the
crown, used to compel their vassals, or engage them by the constitutional
influence they had over them, to disturb the public tranquillity.
The second stage, I think, may be said to have begun with the
times of industry, and the springing up of trade. Such Princes,
whose subjects began to enrich themselves at the expence of other
nations, found, on one side, the means of limiting the power of
the great lords, in favour of the extension of public liberty. The
lords, on the other side, when they wanted to disturb the public
tranquillity, did not, as formerly, vindicate their own privileges,
so much as they combined with the people, and moved them to
revolt, on popular considerations.
This may be called the period of confusion, out of which has
arisen certain determined forms of government; some drawing
nearer to the monarchical, others nearer to the popular form, according
as the power of Princes has been more or less able to support
itself, during the shock of the revolution, and the overturn of
the balance between public and private opulence.
The third and last stage, of which I shall speak at present, may
be fixed at that period when the proportion of the public revenue
became adequate to the mass of national wealth; when general
laws were made to govern, and not the arbitrary power of the
great. The grandees now, from being a bridle on royal authority,
are often found dependent upon it for their support. The extraordinary
flux of money into the treasury, enables Princes to keep
splendid courts, where every kind of pleasure and amusement is to
358be had. This draws together the rich men of the state. The
example of the sovereign prompts these to an imitation of his expence,
this imitation increases consumption, which in its turn
augments the King’s income, as it diminishes that of every other
person.
When the great men of a kingdom have exhausted their estates,
in paying a regular court to the Prince, they employ the credit they
have acquired with him during the time of their dissipation, to obtain
marks of his favour, in order to support them in their decline.
By these they are enabled to live in as much state as before. They
find no difference in their situation; unless perhaps they should accidentally
reflect, that the fund which produced their former opulence,
was in their own possession; whereas that of their present
wealth is in the hands of their master.
To compensate this difference, they are made to acquire, by the
favour of the court, advantages which they never could have enjoyed
from the largest independent fortune.
The luxurious system of living, every where introduced, draws the
wealthy together, either in the capital or in other great cities of the
kingdom; where every one compares the expence and figure he
makes, with that of others who are about him. A person honoured
with the King’s favour, of the same quality with another, acquires,
by this circumstance, a great superiority. He commands, I shall
suppose, in a place; he is the person to whom people must apply, in
order to obtain favours, perhaps justice; he is adorned with a title,
or outward mark of distinction, which procure him respect and
consideration; and, which is still more, he is on the road to a farther
elevation. It requires a great stock both of philosophy and
good sense, not to be dazzled with these advantages. Independency,
compared with them, is but a negative happiness. To be truly
happy, we must have power, and have other people to depend on
us.
359
We have frequently mentioned this balance, as an object of
great importance to a statesman who is at the head of a
luxurious nation; which having lost its foreign trade, has substituted,
in the place of it, an extensive inland commerce. This will
supply the loss of the former, so far, as equally to provide employment,
and, consequently, subsistence, to every one inclined to be industrious;
although it must prove quite ineffectual for augmenting
the national wealth already acquired.
I shall first explain what I mean by the balance of wealth vibrating
between the members of a society, and from that will be seen
why I rank this also among the political balances of a modern state.
It has been observed in the beginning of the nineteenth chapter,
that the great characteristic of what we call liberty, is the circulation
of an adequate equivalent for every service.
By wealth, I understand this circulating adequate equivalent.
The desires of the rich, and the means of gratifying them, make
them call for the services of the poor: the necessities of the poor,
and their desire of becoming rich, make them chearfully answer
the summons; they submit to the hardest labour, and comply with
the inclinations of the wealthy, for the sake of an equivalent in
money.
This permutation between the two classes, is what we call circulation;
and the effects produced by it, upon the political situation
of the parties at the precise time of the circulation, and the consequences
after it is compleatly effected, explains what is called the
balance of wealth.
360To render our ideas more correct, let us consider the money on
one side, and the prestations, as the civilians call them, or performances
of any kind, on the other, as reciprocal equivalents for one
another; and then let us examine the nature of those prestations
which tend to put these equivalents into circulation; that is to say,
what are the things which money can purchase.
These we may divide, with the lawyers, into corporeal and incorporeal.
The corporeal may again be divided into consumable and
inconsumable; and the incorporeal into personal service, and what
the lawyers call jura, rights in or to any thing whatever. I cannot
fully explain myself without the help of this distribution.
Let us next consider the effects of the circulation of money, as it
has for its object, the acquisition of the four several species here
laid down.
1. Of inconsumable things. 2. Of things consumable. 3. Of
personal service. 4. Of rights acquired in or to any thing whatever.
I. The only thing inconsumable is the surface of the earth. This
must not be taken in a philosophical, and far less in a chemical
sense. A thing is consumed, so far as it concerns our inquiry, the
moment it becomes useless, or even when it is lost.
The surface of the earth, therefore, is the only thing inconsumable;
because, generally speaking, it never can cease to be useful,
and never can be lost; it may be changed, but the earth must
always have a surface. What is said of the surface, may be understood
likewise of that small part of its body accessible to man, for
supplying him with what he finds useful there, as the produce of
mines.
Next to the earth itself, nothing is less consumable than her
metals, consequently coin may very properly be classed under the
head of things inconsumable; although it may be lost, and even
worn out in circulation.
Let us now consider the effects of circulation in the purchase of
land. (A), I shall suppose, has a piece of land, and (B) has one
361thousand pounds weight of gold coin, which the laws of society
have constituted to be an adequate circulating equivalent for every
thing vendible. They agree to make an exchange. Before the exchange
the balance of their wealth is equal; the coin is worth the
land, the land is worth the coin; the exchange makes no alteration,
nor has it the effect of making any afterwards; the new landlord
may apply himself to the improvement of the soil, the monied
man to the turning of his thousand weight of gold coin to the best
advantage; consequently, by this transaction, no vibration of the
balance seems to be affected.
If coin itself be the object of sale, the consequences are much the
same. (A) has a guinea, (B) has twenty one shillings, the exchange
they make produces no alteration in their circumstances. The
same holds good in other species of circulation, such as the transmission
of money by inheritance. (A) dies and leaves his money
to (B); here the possessor of the money only changes his name,
perhaps his inclinations, and that is all. In like manner a person
pays his debts, and withdraws his bond, or other security; no balance
is affected by this circulation, matters stand between the parties
just as before.
The nature, therefore, of circulation, when one inconsumable
commodity is given for another, is, that it operates no vibration in
the balance of wealth between the parties; because, in order to
produce this, one must remain richer than he was before, and the
other proportionally poorer.
II. Under the second head of alienation, to wit, that of consumable
commodities, is comprehended every thing corporeal, except
money, and land, which money may purchase. In these, two
things deserve attention. First, the simple substance, or the production
of nature; the other, the modification, or the work of
man. The first I shall call the intrinsic worth, the other, the useful
value. The value of the first, must always be estimated according
to its usefulness after the modification it has received is entirely
362destroyed, and when by the nature of the thing both must be consumed
together, then the total value is the sum of both. The value
of the second must be estimated according to the labour it has
cost to produce it. An example will make this plain.
The intrinsic worth of any silk, woollen, or linnen manufacture,
is less than the primitive value employed, because it is rendred almost
unserviceable for any other use but that for which the manufacture
is intended. But the intrinsic substance of a loaf of bread
loses nothing by the modification, because the last cannot be consumed
without the first. In a piece of silver plate curiously
wrought, the intrinsic worth subsists entire, and independent of the
useful value, because it loses nothing by the modification. The intrinsic
value, therefore, is constantly something real in itself: the
labour employed in the modification represents a portion of a man’s
time, which having been usefully employed, has given a form to
some substance which has rendred it useful, ornamental, or in
short, fit for man, mediately or immediately.
Let us now apply these distinctions to the different circumstances
which attend consumption, in order to perceive their effects.
The consumption of the intrinsic value of any commodity, takes
place the moment the matter employed begins to diminish, and is
compleated so soon as it is consumed totally. The consumption
of the useful value proceeds in like manner, in proportion as the
use it is put to makes the value of it diminish, or disappear altogether.
Let us next take an example, and examine the effects of circulation
in the purchase of things consumable, as to the vibration of
the balance of wealth. (A) has a piece of coin, (B) has something
which his labour has produced; they make an exchange. (A) hitherto
has neither gained or lost, neither has (B); but (A) begins to
make use of what he had purchased with his coin, and in using
it a part disappears; that moment the balance begins to turn
363against him. (B) on the other hand, exchanges his piece of coin
with another, whom we shall call (C), and gets in return a piece of
wood; if (B) puts this piece of wood into the fire, in proportion as
the wood consumes, the balance is returning to its level between (A)
and (B), and is changing in favour of (C). If (B), instead of burning
his wood, makes a beam of it for supporting his house, the balance
will turn more slowly, because the wood is then longer in
consuming: but if he makes some useful piece of furniture of one
part of his wood, he may warm himself with the remaining part of
it, and with the coin he gets for his work, may buy a beam for his
house, and even food to eat. If (B) stops at this period, and works
no more, he will find himself just upon a level with (A); so soon as
his fire is burnt out, his beam rotten, and his food consumed, and
the whole balance will be found in favour of (C), providing that by
his industry he has been able to procure for himself all necessaries,
and preserve the piece of coin entire. Here then is the spur
to industry; to wit, the acquisition of this balance, which gives a
relative superiority even among those of the lowest classes, and determines
their rank as well as their political-necessary, according
to the principles laid down in the twenty-first chapter.
The essential characteristic of this vibration of the balance of
wealth, is the change in the relative proportion of riches between
individuals. But it must be observed, that under this second species
we are to consider the change of proportion no farther than as it is
produced by the circulation of a free adequate equivalent, of such
a nature as to be transferable to another hand without any diminution.
The consumption, therefore, is the only thing which makes
the balance turn. While the consumable commodity remains
entire in the hands of the purchaser, he still remains possessor of the
value, and may, by inverting the operation, return to the possession
of the same species of wealth he had before.
Here it may he asked, if money be absolutely necessary for producing
a vibration of this balance by the means of consumption.
364We may easily conceive the greatest inequality between the numbers
of a state, without supposing the existence of money. We may
suppose the property of lands unequally divided, and a great surplus
of subsistence found in the hands of one individual, which
may by him be given in exchange for the produce of industry.
Under such circumstances then it may be asked, if without money
there can be no such thing as a vibration in the balance of wealth;
supposing in this case, the term wealth to imply, in general, the
means of purchasing whatever man can perform or produce.
I answer, that no doubt the balance may be susceptible of small
vibrations, because even in the exchange of consumable commodities,
the consumption may go on faster on one side than on the
other; but I think, unless the inconsumable fund of wealth (which
is what gives the superiority, and which in the example alledged,
we supposed to be coin) can be made to change hands according to
the adequate proportion of the consumption made, we cannot say
properly, that a vibration can be operated in any considerable degree.
Let us suppose (A) to be a proprietor of a bit of land, and (B) an industrious
workman; in order that (B) may purchase the land of (A,)
it must be supposed that (A) is very extravagant, and that he inclines
to consume a much greater proportion of work than what is equivalent
to all the surplus-produce of his land. Now in order to supply
(A) to the value of the land itself, (B) must distribute his work
to many different persons, and take in exchange, not such things as
he has use for himself, but such as may be found useful to (A). But
so soon as (A) has paid to (B) the whole surplus of his land, what
fund of credit will he find in order to engage (B) to furnish more?
He cannot pay him in land, because this fund is not susceptible of
circulation; and every expedient that could be fallen upon to keep
accounts clear between them, is neither more or less than the introduction
of money, either real or symbolical. These terms must be
explained.
365By real money, is meant what we call coin, or a modification of
the precious metals, which by general agreement among men,
and under the authority of a state, carries along with it its own intrinsic
value.
By symbolical money, I understand what is commonly called
credit, or an expedient for keeping accounts of debt and credit between
parties, expressed in those denominations of money which
are realized in the coin. Bank notes, credit in bank, bills, bonds,
and merchants books (where credit is given and taken) are some of
the many species of credit included under the term symbolical money.
In the example before us, we may suppose that (A) having no more
circulating equivalent to give (B) for his work, and being desirous
to consume of it to the value of his land, shall agree to issue notes of
hand, every one of which shall carry in it a right to an acre of
land, to a fruit tree, to ten yards of the course of a river, &c. and
that every such parcel of property, shall be esteemed at a certain
proportion of work. This agreement made, he goes on with his
consumption, and pays regularly, and adequately, the value of
what he receives; and in proportion as consumption proceeds on
the side of (A), the balance of wealth must turn in favour of (B);
whereas while (A) kept his bit of land, and (B) his faculty of working
up an equivalent for the surplus of it, the balance stood even;
because the land on one hand, and the industry on the other, produced
adequate equivalents for each other. The produce of both was
consumable, and supposed to be consumed; which operation being
over, the land and the industry remained as before, ready to produce
anew. Here then is the effect of credit or symbolical money;
and here I ask, whether or not the notes of hand given by (A) to (B),
do not contain as real a value, as if he had given gold or silver? and
farther, whether or not it appears, that the country where they live
becomes any richer by this invention? does this note any more than
declare who is the proprietor of the value contained?
366Nothing is so easy as to invent a money which may make land
circulate as well as houses, and every other thing which is of a nature
to preserve the same value during the time of circulation.
Whatever has a value, may change hands for an equivalent, and
whenever this value is determined, and cannot vary, it may be
made to circulate; and in the circulation to produce a vibration in
the balance of wealth, as well as a pound of gold or silver made
into coin.
Those nations, therefore, who only circulate their metals, confine
industry to the proportion of the mass of them. Those who
would circulate their lands, their houses, their manufactures, nay
their personal service, even their hours, might produce an encouragement
for industry far beyond what could be done by metals
only. And this may be done, when the progress of industry demands
a circulation beyond their power.
This anticipation of the subject of the following book, is here
thrown in, only to enable my reader to form to himself an idea of the
extent of the subject we are at present upon, and to help him to judge
to what length luxury, that is consumption, maybe carried. Since,
by what we have said, it appears that there is no impossibility for a
people to throw the whole intrinsic value of their country into circulation.
All may be cut into paper, as it were, or stamped upon copper,
tin, or iron, and made to pass current as an adequate equivalent for
the produce of industry; and as there is no bounds to be set to consumption
and prodigality, it might he possible, by such an invention,
in the compass of a year, to circulate an equivalent in consumable
commodities produced by industry, for the whole property
of the most extended and most wealthy kingdom. That this is no
chimerical supposition, appears plain by the activity of many
modern geniuses, who, in an inconsiderable space of time, find
means to get through the greatest fortunes; that is to say, in our
language, they throw them into circulation by the means of the
symbolical money of bonds, mortgages, and accounts. But does
367this species of circulation increase the riches of a state? surely no
more than it would increase the riches of France or England, to
carry all the plate in the two kingdoms to be coined at the mint.
The use of symbolical money is no more than to enable those who
have effects, which by their nature cannot circulate (and which,
by the bye, are the principal cause of inequality) to give an adequate
circulating equivalent for the services they demand, to the
full extent of all their worth. In other words, it is a method of
melting down, as it were, the very causes of inequality, and of
rendring fortunes equal.
The patrons therefore of Agrarian laws and of universal equality,
instead of crying down luxury and superfluous consumption, ought
rather to be contriving methods for rendring them more universal.
If they blame what is called perpetual substitutions of property or
entails (made by parents in favour of their posterity as yet unborn)
because they are in some respects prejudicial to industry; they
should not, I think, find fault with that charming leveler dissipation,
that nurse of industry, and the only thing intended to be prevented
by such dispositions.
Some have persuaded themselves, that an equality of fortune
would banish luxury and superfluous consumption. Among the
rest, is M. de Montesquieu, an author for whom I have the highest
esteem, and who has, in this respect, been copied by many others.
But I never found his idea set in a clear light. Equality of fortune
would certainly change the nature of luxury, it would diminish
the consumption of some, and would augment the consumption of
others; but without making people idle, it could never destroy industry
itself, and while this subsists in an equal degree, there must
be the same quantity of what it produces regularly consumed.
Farther, this proposition never can be advanced, but on the supposition
that the luxurious person, that is the consumer, must be
richer than he who supplies him. This I cannot by any means admit
to be true. Must the carter who drinks a pot of beer be richer
368than the alehouseman? Must a country girl who buys a bit of ribband,
be richer than the haberdasher who sells it? Must the beau
be richer than his taylor? the traveller than the banker who gives
him his money? the client than the lawyer? the sick than the physician?
How then does it appear that equality must prevent luxury, unless
we suppose every one confined to an absolute physical-necessary,
and either deprived of the faculty of contriving, or of the power of
acquiring any thing beyond it. This principle Lycurgus alone laid
down for the basis of his republic; and yet riches were known in
Sparta as well as poverty.
Absolute equality, de facto, is an absurd supposition, if applied to
human society. Must not frugality amass, and prodigality dissipate?
These opposite dispositions, are of themselves sufficient to destroy
at once, the best regulations for supporting equality, and,
when carried to a certain length, must substitute in its place as great
an inequality as the quantity of circulation is capable to produce.
Whatever circulates, may stagnate. Why was there so great equality
at Sparta? because there was little circulation. Why are the
Capucins in a state of perfect equality? because among them there
is no circulation at all.
If therefore such variations in the balance of wealth depend on
the difference of genius among men, what scheme can be laid down
for preserving equality, better than that of an unlimited industry
equivalent to an universal circulation of all property, whereby dissipation
may correct the effects of hoarding, and hoarding again
those of dissipation? This is the most effectual remedy both against
poverty and overgrown riches; because the rich and the poor are
thereby perpetually made to change conditions. In these alterations
in their respective situations, the parties who are changing by
degrees, must surely in their progress towards a total alteration, become,
at one time or other, upon a level, that is, to an equality; as
the buckets in a well meet, before they can pass one another.
3693tio. The first species of things incorporeal, which may be purchased
with money, is personal service; such as the attendance of a
menial servant, the advice of a physician, of a lawyer, the assistance
of skilful people in order to acquire knowledge, the service of
those employed in the administration of public affairs at home and
abroad, or for the defence of a kingdom by sea, or land; the residence
of great men at court, who do honour to princes, and make
their authority respected; and even when money is given to procure
amusement, pleasure, or dissipation, when no durable and transferable
value is given in return.
There is a kind of resemblance between the species here enumerated,
and what we called the useful value in consumable commodities.
In the one and the other, there is an equivalent given for a
man’s time usefully employed; but the difference between them
lies in this: that the useful value being supported, or having for a
substratum, as the schoolmen call it, the intrinsic substance, is thereby
rendred permanent and vendible; whereas here, for want of a
permanent and transferable substance, the personal services though
producing advantages which are sufficiently felt, cannot however
be transferred for the adequate price they cost.
The circulation produced by this third species of acquisition,
operates an instantaneous vibration of the balance. The moment
the personal service is performed, it may be said to be consumed;
and although the purchaser has received a just equivalent for the
money given, and in some cases may even be thereby put in a situation
to indemnify himself of all his expence, by performing the
like services to others, yet every body must perceive that such services
cannot properly be considered as a circulation of the former.
4to. The acquisition of the other species of things incorporeal, that
is, rights, produces little more balance, when an adequate circulating
equivalent is given for them, than the sale of land; because
a right implies no more than a power to use, that is, to consume;
370and by the use, the right is not diminished: it is balanced by the
use of the money; the money therefore and the right being both
permanent, there is no vibration in the scales. Of this species are
all servitudes; the purchasing of privileges or immunities, even the
lending of money at interest, may here not improperly be classed.
Here it will, perhaps, be alledged, that an example be given, where
the creation of such a right, though purchased with an adequate circulating
equivalent, produces the greatest vibration in the balance
of wealth possible. It is when a state contracts debts, and when
the public creditors acquire a right to general impositions on the
people for the payment of their interest.
This objection requires a little explanation, and I have proposed
it chiefly for the sake of introducing an illustration of my subject.
If it be said, that in this example a vibration in the balance of
wealth within the state is implied, then I say that it must take place
either 1st. between the creditors and the state, or 2d. between the
state and the people, or 3d. between the creditors and the people.
But,
1mo. The creditors acquire no balance against the state, because
they have given one inconsumable commodity for another; to wit,
money for an annual income. The money is worth the income, the
income is worth the money. If therefore any change in the balance
comes afterwards to take place, it must be in consequence of
other operations quite independent of this transaction. But let us
suppose, which is but too frequently the case, that here money
must be considered as a consumable commodity, because it is only
borrowed to be spent. In this light does not the creditor seem to
acquire a balance in his favour against the state, so soon as the money
is actually spent. I answer in the negative: because a state by
expending the money borrowed, remains with respect to the creditors
just as wealthy as before. It is the people who pay the interest,
for which the state gives them in return no adequate transferable
equivalent.
3712do. Here it is urged, that this being the case, the state has acquired
a balance against the people according to the principles above
laid down, where it was said, that upon occasions, where money
is given for personal service, and where nothing transferable is
given in return, the balance turns instantaneously in favour of
him who received the money.
To this I answer, that as to the interest paid by the people, the
state does not receive it for herself, but for the creditors. The personal
services are then supposed to be already paid for, and the vibration
has taken place before the interest becomes due. Therefore
the balance does not turn between the state and the people.
In levying of taxes which are destined to pay the interest of money
already spent, the public gives no adequate equivalent on one
hand; and on the other, it is not enriched with respect to the people,
any more than it was impoverished with respect to the creditors,
by spending the money borrowed; and since there is no reciprocal
change in the situation of the two parties, I do not see how we can
infer any vibration in the balance of wealth between them. We
shall presently see between whom the balance is made to vibrate.
3tio. The balance between the creditors and the people is what
at first sight appears to be principally affected; because the first receive
a constant retribution from the latter, in consequence of the
loan. But neither is any true vibration found here, either adequate
to the loan, or to the money spent. 1mo. Because the creditors
themselves are part of the people who contribute towards all impositions
on consumptions, which are commonly the most regular,
the most permanent, and the most familiarly appropriated for the
payment of the interest. 2do. Because the money spent by the
state, if spent at home, returns to other hands indeed, but still returns
to the people, of whom we are here speaking. And 3tio. because
there is no transaction at all between the creditors and the
people.
372Objection. By this way of reasoning it would appear, that the exhausting
a people by taxes, makes no vibration in the balance of
their wealth.
Answer. If the people be exhausted, it must be by enriching
strangers. This case should at present be excluded, as we have
laid aside the consideration of foreign relations. But allowing this
circumstance also to be implied in the objections made, I agree that
every penny of money sent out of a country, for no real and permanent
equivalent received in return, operates a vibration in the
wealth between nation and nation; but none between subject and
subject. To this it is answered, that when taxes are high, many
people are ruined while others are enriched. This operates a
vibration. I allow it; but then I reply, that by the very supposition
in every such case, the money must remain at home; whereas in
the former, it was supposed to be expended abroad. Now we are
not at present examining the effects of debts and taxes, in changing
the balance between man and man, but only between the three
cumulative interests above specified, the state, the people, and the
creditors.
Let me now ask, what is the effect of taxes on the vibration of
the balance of wealth between individuals?
I answer, that whoever pays a tax, appears to pay for a personal
service. He receives no corporeal equivalent which can be alienated
by him for the same value; and he who is employed by the
state, and is paid with the produce of taxes, acquires a balance in
his favour against those who pay them. When the amount of
taxes goes abroad for foreign services, there can be no alteration
upon the balance at home, as has been said; neither is there any
when it remains at home: the people and the creditors are as rich
as before. Let this suffice at present, as to the effects of debts and
taxes upon the balance of national wealth.
Industry is the only method of making wealth circulate, so as to
change its balance between the parties; all kinds of circulation
373which operate no such change, are foreign to the present purpose.
A man dies and leaves his wealth to another, no body loses by
this, but he who is no more; a second pays his debts, neither
debtor, or creditor can be said to change circumstances by the
operation. A merchant buys a quantity of merchandize for ready
money, he thereby loses no balance of his wealth; it is true he has
given money for consumable effects; but the balance does not operate
until the consumption takes place, and as he is not supposed
to buy in order to consume, I rank this branch of circulation among
those which do not influence the balance.
Thus we find two different kinds of circulation in a state; one
which makes the balance turn, and one which does not. These
objects are of no small consequence to be attended to in the right
imposition of taxes, as shall, in its proper place, be more fully explained.
At present it is sufficient to observe, that the proper time
of laying on taxes is at the time of circulation: because the imposition
may then be always exactly proportioned to the sum circulating;
consequently, to the faculties of the persons severally interested.
In all excises, or taxes upon consumption, it is the money of the
consumer which is taxed, in the instant of the payment; so that he
against whom the balance is to turn, has the additional load to pay.
This species of tax, imposed at the time of circulation, is what produces
the largest sums to a state. I never heard of a proper expedient
for taxing the person in whose favour the balance is to turn,
though from the principles which are afterwards to be laid down,
we may perhaps discover one.
As for the other species of circulation, where the balance does
not turn, it is not so much the custom to impose very considerable
taxes upon it: there are however several examples to be met with
which point out how they may be imposed. The casualties paid
upon the change of vassals, or upon the fall of lives, in leases upon upon
374lands in England; the confirmation of testaments in Scotland; investitures
in Germany; the centiéme denier, the lods et ventes, and
the control upon the acts of notaries in France; the emoluments of
the Rota in Spain, and in many Roman Catholic countries, are of
this species. Upon the same principle, taxes more or less considerable
might be laid upon every branch of this kind of circulation;
for which purpose, it would be highly necessary to find out all the
ramifications of it, by analysing it to the bottom, as we have hitherto
run through it very superficially.
Having explained the nature of circulation, and of this
balance, we are next to point out the objects of a statesman’s
attention concerning them.
I. He ought to form to himself a clear and distinct idea of the nature, properties,
and effects of circulation; a word frequently made use of without
much meaning, and in a vague and undetermined sense.
The term circulation is, perhaps, one of the most expressive in any
language, and is therefore easily understood. It represents the successive
transition of money, or transferable commodities, from hand
to hand, and their return, as it were in a circle, to the point from
which they set out. This is the rough idea which every one, who
understands the word at all, must form of its meaning. But a statesman’s
perceptions must be more accurate as well as more complex.
He must combine the consequences which result from this successive
transition, and attend to the effects produced by it. He must
375not only consider the money, which is a permanent value, passing
from hand to hand, but weigh the consequences of the variety of
consumption which it draws along with it, in its progress.
Before a guinea can travel from London to York, it may be the
means of consuming a thousand times its value, and as much more,
before it can return to London again. Every stop the guinea makes
in its course, marks a want of desire to consume, in him who possesses
it. If, therefore, in any country, there were but one guinea
in circulation, all consumption would stop (or barter would take
place) the moment it fell into the hands of a miser. This leads us
to the second object of a statesman’s attention.
II. He ought at all times to maintain a just proportion between the produce
of industry, and the quantity of circulating equivalent, in the hands of his
subjects, for the purchase of it; that, by a steady and judicious administration,
he may have it in his power at all times, either to check prodigality and hurtful
luxury, or to extend industry and domestic consumption, according as the
circumstances of his people shall require the one or the other corrective, to be
applied to the natural bent and spirit of the times.
For this purpose, he must examine the situation of his country,
relatively to three objects, viz. the propensity of the rich to consume;
the disposition of the poor to be industrious; and the proportion
of circulating money, with respect to the one and the
other.
If the quantity of money in circulation is below the proportion
of the two first, industry will never be able to exert itself; because
the equivalent in the hands of the consumers, is then below the
proportion of their desires to consume, and of those of the industrious
to produce. Let me illustrate this by a familiar example
taken from a party at quadrille.
When, on dealing the cards, every one puts in a fish into the
stake, according to the old English fashion, a very few are sufficient
for the circulation of the game: but when you play the aces, the
consolation and the multiplication of beasts according to the French
376custom, you must have a box with contracts, fishes, and counters;
so reducing all to the lowest denomination, every player has occasion
for above five hundred marks. It is therefore plain, that the
number of marks must be in proportion to the circulation of the
game. But at play, as in a state, circumstances render this circulation
very irregular. Fortune may run so equally among the
players, during a considerable time, that none of them may have
occasion to pay away above the value of a hundred counters, and
while this equality continues, there is not found the smallest interruption
in the circulation. But let one of the players have a run
of luck, you will soon see three of the boxes empty, and all the
circulating marks heaped up before the winner. Fortune at quadrille,
forms stagnations of the circulating equivalent, as industry
and frugality form them in a state. At this period of the game,
must not the players stop, or must they not fall upon a way of
drawing back their marks into circulation? If they borrow back
from the winner, this represents loan. If they buy back their
marks with money from their purses, it represents what I call
throwing solid property into circulation.
From this familiar example, we may judge how necessary it is
that the circulating fund be constantly kept up to the proportion
of the occasions for it. It is impossible to determine the proportion
of coin necessary for carrying on the circulation of a country, especially
of one where neither loan, or paper credit, that is the melting
down of solid property, are familiarly known. Here is the
reason: the solution of the question does not depend upon the quantity
of coin alone, but also upon the disposition of those who are
the possessors of it; and as these are constantly changing, the question
thereby becomes insoluble.
It is, therefore, the business of a statesman, who intends to promote
circulation, to be upon his guard against every cause of stagnation;
and when he has it not in his power to remove these political
obstructions, as I may call them, by drawing the coin of the
377country out of its repositories; he ought (in proportion as the
other political interests of his people are found to require it) to
facilitate the introduction of symbolical money to supply its place.
A great political genius is better discovered by the extent of his
perceptions, than by the minute exactness of them in every part of
the detail. It is far better for a statesman to be able to discern
(though superficially) every object of government under all its relations,
than to be able to trace any one with the greatest accuracy.
This is apt to occupy him too much, and no one relation should
ever engross his whole attention.
I cannot omit in this place taking notice of a very judicious remark
of M. de Melon, an eminent political French writer, who was
employed by the Duke of Orleans in state affairs, during his regency
of the kingdom.
“It belongs only (says he) to one who has had the direction of
every branch of government to lay down a general plan of administration,
and even then, one must not expert from such a person,
very particular details with respect to many objects, of which
he himself is entirely ignorant, and which he has been obliged
to confide to the care of others subordinate to him. A person
who can stoop to a minute exactness in small affairs, proves commonly
very unequal to the administration of great ones. It is
enough for such a person to know principles by experience and
reflection, and to apply fundamental maxims as occasion requires.”
I apply this observation to the point in hand. A statesman who
allows himself to be entirely taken up in promoting circulation,
and the advancement of every species of luxurious consumption,
may carry matters too far, and destroy the industry he wishes to
promote. This is the case, when the consequences of domestic
consumption raises prices, and thereby hurts exportation.
A principal object of his attention must therefore be, to judge
when it is proper to encourage consumption, in favour of industry;
378and when to discourage it, in favour of a reformation upon the
growth of luxury.
If the country he governs be in a state of simplicity, and that he
wishes to awaken a taste for industry and refinement, he must, as
has been said, encourage domestic consumption, for the sake of
multiplying, and giving bread to the industrious; he must facilitate
circulation, by drawing into the hands of the public what coin
there is in the country, in case he finds any part of it locked up;
and he must supply the actual deficiency of the metals, by such a
proportion of paper credit, as may abundantly supply the deficiency.
In every country where simplicity prevails, and where there is
any considerable quantity of coin, a great proportion of it must be
locked up: because the consumption there must be small; consequently,
little circulation; consequently, either little coin, or many
treasures. In such cases, therefore, a statesman must engage the
possessors of these riches to part with them, at the desire of those
who can give security for their worth: and he must establish the
standard of an annual retribution for the loan. If this be difficult
to be brought about, from the want of confidence in the monied
men, he may, in their favour, contrive expedients to become the
borrower himself, at the expence of the alienation of certain rights,
or the creation of new privileges, in lieu of interest; and when he
has engaged them to part with their coin, he may lend it out to
such as have both solid property and a desire to consume; but who,
for want of a circulating fund to purchase superfluities, have hitherto
lived in simplicity.
The introduction, therefore, of loans upon interest, is a very
good expedient to accelerate circulation, and give birth to industry.
Obj. But here it is objected, that such a plan is looked upon by
some nations to be contrary to the precepts of the christian religion,
and therefore a statesman cannot permit it.
379To this I can make no answer, because I am no casuist; but I can
propose an expedient which will supply the defect of borrowing at
interest; and as it may serve to illustrate the principles I am now
upon, I shall here introduce it.
The intention of permitting loans upon interest, is not to provide
a revenue to those who have ready money locked up, but to obtain
the use of a circulating equivalent to those who have a sufficient
security to pledge for it. If the statesman, therefore, shall find
himself withheld by the canons of his church, from drawing the
coin of his subjects into circulation, by permitting the loan of it
upon interest, nothing is more easy than to invent another species
of circulation, where no interest at all is necessary.
Let him open an office, where every proprietor of lands may receive,
by virtue of a mortgage thereon, a certain proportional value
of circulating paper of different denominations, the most proper
for circulation. He may therein specify a term of payment in favour
of the debtor, to give him an opportunity to call in his obligation,
and relieve the engagement of his property. But that term
being elapsed, the land is to belong to the creditor, or the paper to
become payable by the state, if required, which may in consequence
become authorised either to sell the land engaged, or to retain a
proportional value of the income, or of the property of the land
itself, as shall be judged most expedient.
Farther, let him constitute a real security for all debts upon every
species of solid property, with the greatest facility in the liquidation
of them, in favour of those who shall have given credit to the proprietors
for merchandise of any kind. To compass this, let all
entails, substitutions, and fidei commissa, or trusts, restraining the
alienation of land-property, be dissolved; and let such property be
rendred as saleable as housholdhoushold furniture. Let such principles influence
the spirit of the government; let this sort of paper credit
be modified and extended according to circumstances, and a taste
for consumption will soon take place.
380The greatest of all obstacles to industry in its infancy, is the general
want of credit on both sides. The consumers having no circulating
value, the difficulty of liquidating what they owe by the
alienation of their lands, prevents their getting credit; and the
many examples of industrious people giving way, on account of
bad payments, discourages others from assisting them in the beginning
of their undertaking.
From these principles we may gather, that a statesman who intends
to increase industry and domestic consumption, should set out
by providing a circulating fund of one kind or other, which ought
always to be ready, and constantly at the command of those who
have any sort of real equivalent to give for the consumption they
incline to make: for as specie may often times be wanting, a contrivance
must be fallen upon immediately to supply that want.
The utility of this kind of credit, or paper money, is principally
at the instant of its entring into circulation, because it is then only
that it supplies the want of real specie; and by this invention, the
desire to consume creates, as it were, the circulating equivalent,
without which the alienation of the produce of industry would not
have taken place; consequently, the industry itself would have suffered
a check.
But in the after circulation of this paper money from hand to
hand, this utility comes to cease; because the subsequent consumer,
who has another man’s paper to give in exchange, is already provided
with a circulating equivalent, and therefore were it not for
the wearing of the specie, or difficulty of procuring it, it is quite
indifferent both to the state, as well as to circulation, whether this
paper continues to pass current, or whether it be taken up, and
realized by the debtor, and gold and silver be made to circulate in
its place.
Let me now endeavour, to make this whole doctrine still more
plain, by an example.
381Suppose a country where there is a million of pieces of gold employed
necessarily in carrying on the ordinary circulation, a million
of pieces of the same value locked up, because the proprietors have
no desire to spend them. Suppose the revenue of the solid property
of the country to be worth also a million a year; and that if the
fund itself could be sold, it might be worth twenty millions of the
same specie. Suppose no such thing as credit or paper money to be
known, and that every man who inclines to make any consumption,
must be provided previously with a part of the circulating million,
before he can satisfy his inclination.
Under these circumstances, the statesman resolves to establish industry,
and finding that by his people’s taking a taste for a greater
consumption, the million which was formerly sufficient for carrying
on circulation, is no longer so; he proposes to those who have
the other million locked up, to borrow it from them at 5 per cent.
and the better to engage them to comply with his proposal, he offers
to impose duties upon the whole of the inhabitants to the annual
amount of fifty thousand pieces of gold, to be paid annually to the
creditors, in return for their treasure. If this scheme be adopted,
he may lend out his million in small sums, to every one who inclines
to borrow, upon good security; or by premiums and other
encouragements given to his infant manufactures, he may throw
it into the hands of the public, that is, into circulation. Here is
one method of increasing the quantity of a circulating fund, when
an augmentation upon the consumption of the produce of industry
comes to demand it.
But let us now suppose this regular plan of borrowing to be contrary
to what is called the constitution of the state, to religion, or
to the spirit of the people, what must be done to supply the place
of such a scheme?
The statesman must then fall upon another contrivance, by extending
the use of pledges, and instead of moveables, accept of
lands, houses, &c. The Monte pieta at Rome issues paper money
382upon moveable security deposited in their hands. Let the statesman,
without exacting interest, do the same upon the lands of his subjects,
the best of all securities. While the lands subsist, this paper
money must retain its value; because I suppose the regulations to
be such as to make it convey an indisputable right to the lands engaged.
The advantage of such an establishment will be, that as
formerly no man could purchase the smallest produce of industry,
without having a part of the circulating million of pieces of gold;
every body now who has an inclination to consume, may immediately
procure paper money in proportion to his worthworth, and receive
in return whatever he desires to possess.
Now let me suppose that this paper money shall in time, and
from the growing taste for superfluities, amount to the value of
five millions of pieces of gold. I ask, whether the real value of
this paper is any way diminished, because it exceeds, by far, all the
gold and silver in the country, and consequently cannot all at once
be liquidated by the means of the coin? Certainly not: because it
does not draw its value from any representation of these metals,
but from the lands to which it conveys a right. Next, I ask, if the
country is thereby become any richer? I answer, also, in the negative:
because the property of the lands, if sold, being supposed
worth twenty millions, the proprietors of the paper are here supposed
to have acquired, by their industry, five millions of the
twenty; and no more than the remaining fifteen millions belong to
the landlords.
Let us now suppose a million of this paper money to fall into the
hands of those who have no inclination to spend it. This is the case
of the frugal, or money hoarding persons, and they will naturally
chuse to realize their paper, by taking possession of the lands represented
by it. The moment this operation takes place, the million
of paper money is annihilated, and the circulating capital is reduced
to four millions of paper, and one million of specie. Suppose, on
the other hand, that those who have treasures which they cannot
383lend at interest, seeing a paper money in circulation, which conveys
a right to solid property, shall purchase it with their million
of pieces of gold, and then lay hold of a proportional part of the
land: what effect will this double operation produce upon the circulating
fund? I answer, that instead of being composed as formerly,
of one million of coin and five millions of paper, it will, at
first, on the buying up of the paper, consist of two millions of coin
and five millions of paper; and so soon as the million of paper
bought up comes to be realized upon the land, and thereby extinguished,
the circulating coin will be two millions, and the paper
will be reduced to four. Here then is a very rational method of
drawing all the coin of the country from the treasures of the frugal,
without the help of interest. Let me take one step farther,
and then I will stop, that I may not too far anticipate the subject of
the following book.
I suppose, that the statesman perceiving that the constant circulation
of the coin insensibly wears it away, and reflecting that
the value of it is entirely in proportion to its weight, and that the
diminution of the mass must be an effectual diminution of the real
riches of his country, shall call in the metals and deposit them in a
treasure, and shall deliver, in their place, a paper money having a
security upon the coin locked up. Is it not plain, that while the
treasure remains, the paper circulated will carry along with it as
real (though not so intrinsic) a value as the coin itself could have
done? But if this treasure comes to be spent, what will the case be
then? It is evident, that the paper conveying a right to the coin,
will then as effectually lose its value, as the other species of paper
conveying a right to the lands, and issued, as we have supposed, by
the proprietors of them, would have done, had an earthquake
swallowed up, or a foreign conqueror seized the solid property engaged
as a security for this paper.
The expedient, therefore, of symbolical money, which is no more
than a species of what is called credit, is principally useful to encourage
384consumption, and to increase the demand for the produce of
industry. And the bringing the largest quantity of coin possible
into a country, cannot supply the want of it in this respect; because
the credit is constantly at hand to every one who has property, and
the other may fail them on a thousand occasions. A man who has
credit may always purchase, though he may be many times without
a shilling in his pocket.
Whenever, therefore, the interest of a state requires that the rich
inhabitants should increase their consumption, in favour of the industrious
poor; then the statesman should fall upon every method
to maintain a proportion between the progress of industry, and the
gradual augmentation of the circulating fund, by enabling the inhabitants
to throw with ease their solid property into circulation
whenever coin is found wanting. Here entails are pernicious.
On the other hand, when luxury begins to make too great a progress,
and when it threatens to be prejudicial to foreign trade, then
might solid property be rendred more unwieldy; and entails might
then become useful: all moveable debts, except bills of exchange
in foreign circulation, might be stripped of their privileges, and
particularly, as in France, of the right of arresting the person of
the debtor. Usury ought then to be punished severely; even something
like the Senatus Consultum Macedonianum, which made the contract
of loan void on the side of the borrowers, while they remained under
the power of their fathers, might be introduced. Merchants
accounts should no more be allowed to enjoy a preference to other
debts; but on the contrary, be made liable to a short prescription.
In a word, domestic circulation should be clogged, and foreign circulation
accelerated. When foreign trade again comes to a stop,
then the former plan may be taken up a-new, and domestic circulation
accelerated and facilitated, in proportion as the produce of
industry and taste of superfluity require it.
III. A statesman ought carefully to distinguish between those branches of
circulation which operate a vibration in the balance of wealth, and those
385which do not, in order to regulate the taxes which he may think proper to lay
upon his people.
In treating of this third object of a statesman’s attention, I shall
confine myself to the application of those principles which point
out the necessity of taxation among a luxurious people, become
wealthy by the means of trade, where the industrious can no longer
be made to subsist but by means of a great domestic circulation,
which is the object of our present inquiry.
In every case where the balance of wealth is made to vibrate by
circulation, there is an opportunity of imposing a tax upon consumptions,
perfectly proportioned to the quantity of the circulation.
Now by the imposition of taxes, and the right employment
of the amount of them, a statesman has it in his power to retard
or to promote the consumption of any branch of industry. By the
imposition of duties he may either check luxury when he finds it
calling off too many hands from other more necessary occupations;
or by granting premiums, he may promote consumption or exportation
upon branches where it is expedient to increase the hands
employed, which last is the reverse of taxation; or in the third place,
when foreign trade begins to bear a small proportion to domestic
consumption, he may profit of luxury, and draw a part of the
wealth of the luxurious into the public treasure, by gently augmenting
the impositions upon it; for when taxes are gently increased,
consumption is not checked; consequently, this is the proper
method to be followed, when luxury does no harm. But when it
proves hurtful, the rise in the impositions should be sudden, that
they may operate the effects of violent revolutions which are always
accompanied with inconveniencies, and on such occasions
every inconvenience will mark the success of the operation. An
example will make this plain.
If you want to check the drinking of spirituous liquors, let every
alteration of your oeconomy concerning them, either as to the impositions
upon the consumption, or regulations in the retailing
386them, proceed by jerks as it were; if you want to increase the revenue,
from the propensity people have to poison themselves with
spirits, your augmentations and alterations may be gentle and
progressive.
Here let me observe by the way, that the best method for a
statesman to curb any sort of vice among his people, is to set out
by facilitating the gratification of it, in order to bring it once upon
a regular and systematical footing, and then by sudden and violent
revolutions in the administration of the oeconomy of it, to destroy
it and root it out.
Were all the strumpets in London received into a large and convenient
building, whither the dissolute might repair for a while
with secrecy and security, in a short time, no loose women would
be found in the streets. And it cannot be doubted, but that by
having them all together under certain regulations, which might
render their lives more easy than they are at present, the progress
of debauchery, and its hurtful consequences, might in a great measure
be prevented. At Paris, they are to be found in their houses,
because the police never troubles them there while they commit no
riot or disturbance. But when they are persecuted in their habitations,
they break forth into the streets, and by the open exercise of
their profession, the delicacy of modesty is universally hurt and
but too frequently blunted, and the example that those prostitutes
openly set to their own sex, debauches more women than all the
rakes in town do.
I hope this digression will not be misconstructed into an apology for
public stews, where, in place of following good regulations for suppressing
the vices with which they are filled, the principal object is
frequently to encourage the abuses for the sake of making them turn
to account as a branch of revenue. Such a plan of administration represents
a statesman who turns against his people, those arms which
he had provided for their defence. My intention is very different, it is
to curb vice as much as possible, and to shut up what cannot be rooted
387out within the bounds of order, and to remove it as a nusance
from the eyes of the public, and from the contagious imitation of
the innocent. I now come to the object of a statesman’s attention,
relative to that branch of circulation which implies no vibration of
the balance of wealth between the parties concerned.
The more perfect and the more extended any statesman’s knowledge
is of the circumstances and situation of every individual in
the state which he governs, the more he has it in his power to do
them good or harm. I always suppose his inclinations to be virtuous
and benevolent.
The circulation of large sums of money brings riches to light
for a moment, which before and after are commonly hid from the
eyes of the public. Those branches of property therefore, which
have once made their appearance in this species of circulation,
should not be lost sight of until they come naturally to melt away,
by returning into the other branch of which we have been speaking;
that is, until they are fairly spent, and the balance be made
to turn against the former proprietors of them. After this revolution,
they will circulate for a while in small sums, and remain imperceptible,
but in time they will come to form new stagnations;
then they will be lent out again, or employed in the purchase of
lands; and falling once more under the eyes of the state, they will
again become an object of the same attention as formerly.
Nothing is more reasonable, than that all property which produces
an annual determined income, should be made to contribute
to the common burthens of a state. But those taxes which are intended
to operate upon so moveable a property as ready money,
ought to be imposed with a most gentle hand, and even so as not
to appear directly to affect it. The statesman here must load his
wealthy citizens with duties, as Horace loads his sovereign with
adulation, never addressing his compliments directly to the emperor,
but conveying them to him in the most elegant manner,
through the channel of an interposed person. Thus people possessing
388large capitals of ready money, which in a moment they can
transport beyond the reach of the most extended jurisdiction, may
have certain privileges granted them which may attach them to the
country (in England, for example, a vote in a county or burrow)
and then in consequence of their rank, not because of their money,
be made to come under a sort of capitation, or other similar
imposition bearing another name. Might not the creditors of that
nation be represented in parliament, and in consequence of so great
a privilege, and the additional security thereby granted to the
funds, be made afterwards to come under taxations as well as other
proprietors of a determined revenue. An admirable hint for the
imposition of such taxes, is to be met with in a certain great European
monarchy, where the highest order of knighthood is distinguished
with a ribband, a star, and a pension of about an hundred
and thirty pounds sterling a year. But so soon as any one is raised
to that dignity, he pays exactly that very sum in lieu of capitation.
The pension was given by the prince who instituted the order; the
capitation followed in a subsequent reign, and now appears rather
a mark of distinction than a burthen.
IV. The next object of a statesman’s attention proper to be taken notice of,
is the different political considerations which must occur to him when he compares
the turning of the balance of wealth against the industrious members of
a state, with those vibrations which take place against the not working part of
the inhabitants. In other words, the different effect of taxes, as they severally
affect those who consume in order to reproduce, and those who consume in
order to gratify their desires.
The one and the other consumption implies a vibration in the balance
of wealth, and whenever there is a vibration, there we have
said that a proportional tax may be imposed.
But as the intention of taxes, as I understand them, is only to
advance the public good (by throwing a part of the wealth of the
rich into the hands of the industrious poor, and not to exhaust one
part of a nation to enrich another, no necessary article of consumption
389should be taxed to an industrious person, but in such a way as
to enable him to draw back the full amount of it, from those who
consume his work. By this means, the whole load of taxes must
fall upon the other category of inhabitants, to wit, those who live
upon the produce of a fund already acquired.
Let me here observe, by the way, that if taxes are rightly laid on,
no industrious person, any more than another who lives upon his
income, will ever be able to draw back one farthing of such impositions
as he has paid upon his consumption of superfluity. This shall in
its proper place be made sufficiently plain; at present it would be a
superfluous anticipation of the doctrine of taxation, to point out the
methods of compassing this end. My intention at present is only
to recapitulate the objects of a statesman’s attention, with regard to
the consequences of circulation, and the vibrations of the balance
of wealth; and having shewn how nearly those principles are connected
with those of taxation, this alone is sufficient to shew their
importance.
V. A statesman ought to attend to the difference between the foreign and
domestic circulation of the national wealth.
This object, though in part relative to foreign commerce, must
not be passed over without observation. In fact, there is no nation
entirely deprived of foreign communications; therefore, although
a statesman, who is at the head of a luxurious people, may act in
general as if there were none at all, yet still he must be attentive to
the consequences of circulation with his neighbours, in so far as it
takes place.
Every commercial correspondence with foreign nations, not carried
on by the exchange of consumable commodities, must produce
a vibration of the balance of wealth, either in favour or prejudice
of the interest we have in our eye. But it does not follow, because
there is a vibration, that therefore a statesman has the same liberty
of imposing taxes upon every article of consumption, as if the two
390scales were vibrating within the country subject to his administration.
When the consumers are his subjects, he may safely impose the
tax, and if he raises it by degrees, so high as to diminish the consumption,
and reduce the amount of the imposition, he will probably
gain on the other hand, by discouraging the foreign importation,
and by keeping the nation’s wealth at home, more than he
possibly could have got by the amount of his tax, in consequence of
the dissipation of it.
When the foreigners are the consumers, the case is very different:
for you cannot oblige a man who is not your subject, to
pay beyond the advantage he gains by your correspondence. It is
therefore, as has been said, only upon the exportation of goods,
where the nation has great natural advantages over her neighbours,
that any duty can be raised.
VI. The last object I shall mention as worthy of a statesman’s
attention, is, the rules of conduct he should prescribe to himself, as to the
extending or contracting taxation, according as he finds a variation in the
proportion between the FOREIGN and DOMESTIC circulation of his country.
For this purpose he must know exactly the proportions of the one
and the other; he must compare the quantity of domestic consumption,
with the produce of industry and quantity of importations.
If domestic consumption be equal to the sum of both, the country
must annually lose the value imported. In this case, taxes are to
be raised by sudden jerks, especially upon importations; not to increase
the produce of them, but to prevent the increase of luxury,
and dissipation of national wealth.
If domestic consumption do not exceed the produce of industry,
this will prove that exportation is at least equal to importation. In
this case the exportation must be supported; and when that can no
otherwise be done, a part of the taxes levied upon home consumption
must be distributed in premiums upon the articles of exportation;
and when this also becomes ineffectual, then all importations
391for consumption must be cut off, according to the principles
above laid down.
If the domestic consumption should really fall short of the produce
of industry, it marks a flourishing foreign trade. Prices then
must be kept low, as has been abundantly explained; consequently,
there will be less profit from taxes; because every penny imposed,
which affects the price of exportable goods, must be refunded out
of the netnet produce of them, and all the expence of collecting that
part is entirely lost to the public: the remainder, therefore, will be
greater or less, according as foreign trade is great or small.
In proportion, therefore, as domestic circulation gains ground
upon the foreign, taxes become necessary; in order, with the
amount of them, to correct the bad effects of luxury, in raising
prices, by giving larger premiums to support exportation. And in
proportion as a statesman’s endeavours to support the trade of his
country becomes ineffectual, from the growing taste of dissipation
in his subjects, the utility of an opulent exchequer will be more
and more discovered; as he will be thereby enabled to support his
authority against the influence of the great load of riches thrown
into domestic circulation, and to defend his luxurious and wealthy
subjects from the effects of the jealousy of those nations which enriched
them.
To conclude, the exportation of work, and the supporting a superiority
in the competition of foreign markets (as has been said,
and as shall be farther explained) seem to be the most rational inducements
to engage a statesman to begin a scheme of imposing
considerable taxes upon his people, while they enjoy any share of
foreign commerce. If such taxes continue to subsist after the extinction
of it, and are then found necessary; this necessity is itself a
consequence of the change made on the spirit and manners of a
people become rich and luxurious.
The charge of government, under such circumstances, must
greatly increase, as well as the price of every thing. Is it not very
392natural, that he who is employed by the state should receive an equivalent
proportioned to the value of his services? Is it to be supposed,
that a person born in a high rank, who, from this circumstance
alone, acquires an advantage, in most nations, hardly to be made up
by any acquired abilities, will dedicate his time and his attendance
for the remuneration which might satisfy his inferiors? The talents
of great men deserve reward as much as those of the lowest among
the industrious; and the state is with reason made to pay for every
service she receives. This circulation of an adequate equivalent,
we have said to be the palladium of liberty, the band of gentle dependence
among freemen; and the same spirit ought to animate
every part of the political body. That nothing is to be done for nothing,
is a fundamental political maxim in every free government, and
obligations, not liquidated by a just equivalent, form pretensions
beyond their worth; and are constantly accompanied with discontent
at one time or other.
Another use of taxes, after the extinction of foreign trade, is to
assist circulation, by performing, as it were, the function of the heart
of a child, when at its birth that of the mother can be of no farther
life to it. The public treasure, by receiving from the amount of
taxes, a continual flux of money, may throw it out into the most
proper channels, and thereby keep that industry alive, which formerly
flourished, and alone depended upon the prosperity of foreign
commerce.
In proportion, therefore, as a statesman perceives the rivers of
wealth, (as we have called them above) which were in brisk circulation
with all the world, begin to flow abroad more slowly, and
to form stagnations, which break out into domestic circulation, he
ought to set a plan of taxation on foot, as a fund for premiums to
indemnify exportation for the loss it must sustain from the rise of
prices, occasioned by luxury; and also for securing the state itself,
against the influence of domestic riches, as well as for recompensing
those who are employed in its service.
393This system ought to be carried on and extended, in proportion
to the decay of foreign trade; and when this comes in a manner to
cease, then the increase of taxes, and the judicious application of
them, going hand in hand, the state itself will support circulation,
by receiving with one hand, and giving out with the other; until by
a prudent management under the care and direction of an able
statesman, through time and perseverance, every internal vice be
corrected, and foreign commerce be made to flourish once more,
from the principles we have been laying down, and from what
may be farther said to illustrate them in the subsequent books of
this inquiry.
While industry is kept alive there is still ground for hope. Manners
change, and the same luxury which extinguished foreign
trade, by calling home the wealth employed in that species of circulation,
may afterwards, by keeping industry alive at home, and
by throwing a sufficient power of wealth into the hands of a good
statesman, render the recovery of that trade no difficult project, to
one who has an instrument in his possession, so irresistible in removing
every obstacle in the way of his undertaking.
This represents a new circulation; to wit, that of the spirit and
manners of a people, who, under the government of able statesmen,
may prosper in every situation; and since, from the nature of
man, no prosperity can be permanent, the next best thing to be
done, is, to yield to the force which cannot be resisted; and, by address
and management, reconduct a people to the height of their
former prosperity, after having made them travel (as I may say) with
as little inconvenience as possible, through all the stages of decline.
394
The intention of this chapter is to apply the principles we
have been in search of, to the solution of some questions,
which have been treated by those great masters of political reasoning,
Messrs. de Montesquieu and Hume. The ideas they have
broached are so pretty, and the theory they have laid down for determining
the rise and fall of prices so simple, and so extensive,
that it is no wonder to see it adopted by almost every one who has
writ after them.
I have not forgot how much I was pleased when first I perused
these authors, from the easy distribution which a general theory
enabled me to make of certain classes of my ideas then lying without
order, in that great repository of human crudities, the memory;
which frequently retains more materials, than people, commonly,
have either time, or perhaps capacity rightly to digest.
I am very far from pretending to any superiority of understanding
over those gentlemen whose opinions I intend to review: accident
alone has led me to a more minute examination of the particular
circumstances, upon which they have founded their general
combinations; and in consequence of my inquiries, I think I have
discovered, that in this, as in every other part of the science of political
oeconomy, there is hardly such a thing as a general rule to be
laid down.
There is no real or adequate proportion between the value of
money and of goods; and yet in every country we find one established.
How is this to be accounted for?
395We have, in the fourth chapter of this book, already inquired
into the principles which point out the influence of trade upon the
variation of the price of goods; but the question now comes to be,
how to fix and determine the fundamental price, which is the object
of variation. It has been said, that the price of a manufacture
is to be known by the expence of living of the workman, the
sum it costs him to bring his work to perfection, and his reasonable
profit. We are now to examine what it is, which in all countries
must determine the standard prices of these articles of the first necessity;
since the value of them does necessarily influence that of
all others.
The best way to come at truth, in all questions of this nature, is,
to simplify them as much as possible, that they may be first clearly
understood.
Whenever a question arises about price, an alienation is necessarily
implied; and when we suppose a common standard in the
price of any thing, we must suppose the alienation of it to be frequent
and familiar. Now I must here observe, that in countries
where simplicity reigns (which are those where the decision of this
question ought regularly to be sought for, since it is there only
where a complication of circumstances do not concur to raise the
prices of subsistence) it is hardly possible to determine any standard
for the price of articles of the first necessity.
Let us examine the state of those hunting Indians who live by
their bow, and of other nations where the inhabitants exercise, I
may say universally, that species of agriculture which I have called
a direct method of subsistence, and we shall find, that the articles
of food and necessaries are hardly found in commerce: no person
purchases them; because the principal occupation of every body
is to procure them for himself. What answer would a Scotch highlander
have given any one, fifty years ago, who would have asked
him, for how much he sold a quart of his milk, a dozen of his
eggs, or a load of his turf? In many provinces, unacquainted with
396trade and industry, there are many things which bear no determined
price; because they are seldom or never sold.
Sale alone can determine prices, and frequent sale can only fix a
standard. Now the frequent sale of articles of the first necessity
marks a distribution of inhabitants into labourers, and what we have
called free hands. The first are those who produce the necessaries of
life; the last are those who must buy them: and as the fund with
which they purchase is produced from their industry, it follows,
that without industry there can be no sale of articles of subsistence;
consequently, no standard price determined.
Another consequence of this reasoning, is, that the sale of subsistence
implies a superfluity of it in the hands of the seller, and a
proper equivalent for it in the hands of the buyer; and when the
equivalent is not money, it also implies a superfluity of the produce
of some sort of industry; consequently, by the exchange of superfluities
upon certain articles, a man procures to himself a sufficiency
upon every one. This represents that gentle dependence which
unites the members of a free society.
Does it not follow from this analysis of the question, that the
prices of articles of the first necessity, depend rather upon the occupation
and distribution of the classes of inhabitants, than either
upon the abundance of those necessaries, or of the money to purchase
them; since many examples may be found, where these articles
have borne little or no price, even in countries where money
was not wanting. The reason therefore of low prices, is not the
vast abundance of the things to be sold, but the little occasion any
body has to buy them; every one being provided for them in one
way or other, without being obliged to go to market.
How many familiar examples occur every where of this oeconomy!
do we not find in every country, even when the numbers
of the industrious free are multiplied exceedingly, more than one
half of the inhabitants fed directly from the earth? The whole
class of farmers does not go to market for subsistence. Ask a country
397gentleman the expence of his living, he will tell you the sum of
money he yearly spends, perhaps the quantity of his rents in kind,
which he consumes in his house, and the rent of the lands he holds
himself in farm; but it will never come into his head to reckon
the value of every chicken, sheep, or bullock, with which his farm
provides him, which he consumes without estimation, and which
in many countries he could not dispose of for any determined
value.
From this I still conclude, that it is only in countries of industry
where the standard prices of articles of the first necessity can be
determined; and since in these, many circumstances concur to
render them either higher or lower than in other countries, it follows,
that in themselves they bear no determined proportion whatsoever,
to the quantity of gold and silver in the country, as I hope
presently to make still more evident.
What is it then which determines the standard value of these articles,
in countries of industry? Here follows, in my humble opinion,
the best answer to this question.
The standard price of subsistence is determined from two considerations.
The first from the number of those who are obliged
to buy, that is to say, of those who have them not of their own,
and who are not provided with them, in lieu of service, by those
who have. The second is, from the degree of employment found
for those who are obliged to purchase them.
The number of the buyers of subsistence, nearly determines the
quantity sold; because it is a necessary article, and must be provided
in a determined proportion for every one: and the more the sale is
frequent, the more the price is determined. Next as to the standard:
this, I apprehend, must depend upon the faculties of the
buyers; and these again must be determined by the extent of those
of the greatest numbers of them; that is to say, by the extent of the
faculties of the lower classes of the people. This is the reason why
bread, in the greatest famine, never can rise above a certain price;
398for did it exceed the faculties of the great classes of a people, their
demand must be withdrawn, which would leave the market overstocked
for the consumption of the rich; consequently, such persons,
who in times of scarcity are forced to starve, can only be such
whose faculties fall, unfortunately, below the standard of those of
the great class: consequently, in countries of industry, the price
of subsistence never can rise beyond the powers to purchase of
that numerous class who enjoy physical-necessaries; consequently,
never to such an immoderate height as to starve considerable numbers
of the people; a thing which very commonly happens in countries
where industry is little known, where multitudes depend
merely upon the charity of others, and who have no resource left,
so soon as this comes to fail them.
The faculties, therefore, of those who labour for a physical-necessary,
must, in industrious nations, determine the standard value
of subsistence, and the value in money which they receive for
their work, will determine the standard of their faculties, which
must rise or fall according to the proportion of the demand for
their labour.
By this exposition of the matter, I do not pretend to have dissipated
every obscurity. The question still remains complex, as the
nature of it requires it should do; and the solution of it depends
upon farther considerations, which now lead me to the examination
of the doctrine of Messrs. de Montesquieu and Hume, concerning
the influence of riches upon the increase of prices. I shall begin
by shortly laying this doctrine before my readers, in three propositions.
1mo. The prices (say they) of commodities, are always proportioned
to the plenty of money in the country. So that the augmentation of
wealth, even fictitious, such as paper, affects the state
of prices, in proportion to its quantity.
3992do. The coin and current money in a country, is the representation
of all the labour and commodities of it. So that in proportion
as there is more or less of this representation, (money) there goes
a greater of less quantity of the thing represented (commodities,
&c.) to the same quantity of it. From this it follows, that
3tio. Increase commodities, they become cheaper; increase money,
they rise in their value.
Nothing can be more beautiful than these ideas. They appear
at first sight, sufficiently extensive to comprehend every variation of
circumstances which can happen. Who was the first author of
this doctrine, I cannot say. I find it in Mr. Locke, and in the Spectator
for the 19th of October, 1711; but they have been beautifully
illustrated by Monsr. de Montesquieu; and Mr. Hume has extended
the theory, and diversified it prettily in his political discourse;
which have done much honour to that gentleman, and drawn the
approbation of the learned world so much, that there is hardly a
nation in Europe which has not the pleasure of reading them in
their own language.
Upon examining this theory, when I came to treat of the matters
it is calculated to influence, I found I could not make answer
to the principles I had pursued, in the most natural order in which
I had been able to deduce them: and this consideration obliged me,
with regret, to lay it aside, and to follow another, much more
complex. I have already expressed the mortification I have always
had upon finding myself forced to strike out a general rule, and
this, of all others, had at first hit my fancy the most; but I am
obliged to confess, that upon a close examination of the three propositions,
I am obliged to range this ingenious exposition of a most
interesting subject, among those general and superficial maxims
which never fail to lead to error.
In order to set the matter in as clear a light as possible, I shall
make a short application of my own principles, relating to the decision
of the main question, the causes of the rise and fall of prices,
400and conclude my chapter with some remarks upon the three propositions
above laid down, submitting the whole to the better judgment
of my reader.
I have laid it down as a principle, that it is the complicated operations
of demand and competition, which determines the standard
price of every thing. If there be many labourers, and little demand,
work will be cheap. If the increase of riches, therefore,
have the effect of raising demand, work will increase in its value,
because there competition is implied; but if it has only the effect of
augmenting demand, prices will stand as formerly. What then will
become of the additional quantity of coin, or paper money? I answer,
that in both cases it will enter into circulation, in proportion
to the rise or augmentation of demand; with this difference, that in
the first case, it will have the effect of raising prices; because the
supply is not supposed to augment in proportion: in the second,
prices will stand as they were; because the supply is supposed to augment
in proportion. These are the consequences of the augmentation
of wealth, when it has the effect of either raising or augmenting
demand. But if upon this revolution it be found that the state
of demand remains without any variation, then the additional coin will
probably be locked up, or converted into plate; because they who
have it, not being inspired with a desire of increasing their consumption,
and far less with the generous sentiment of giving their
money away, their riches will remain without producing more
effect than if they had remained in the mine. As for the paper
money, so soon as it has served the first purpose of supplying the
demand of him who borrowed it, (because he had at that time no
coin) it will return upon the debtor in it, and become realized;
because of the little use found for it in carrying on circulation.
Let the specie of a country, therefore, be augmented or diminished,
in ever so great a proportion, commodities will still rise and
fall according to the principles of demand and competition, and
these will constantly depend upon the inclinations of those who have
401property or any kind of equivalent whatsoever to give; but never upon
the quantity of coin they are possessed of.
Let the quantity of the coin be ever so much increased, it is the desire
of spending it alone, which will raise prices. Let it be diminished
ever so low, while there is real property of any denomination in
the country, and a competition to consume in those who possess it,
prices will be high, by the means of barter, symbolical money,
mutual prestations, and a thousand other inventions. Let me give
an example.
Suppose a country where prices are determined, and where the
specie is sufficient for the circulation: is it not plain, that if this
country has a communication with other nations, there must be a
proportion between the prices of many kinds of merchandize, there
and elsewhere, and that the sudden augmentation or diminution of
the specie, supposing it could of itself operate the effects of raising or
sinking prices, would be restrained in its operation by foreign competition?
But let us suppose it cut off from every communication
whatsoever, which seems the only case, where this theory can operate
with any appearance of justness, will any body pretend, that the
frugal or extravagant turn of the inhabitants, will have no influence
upon prices, and will it be asserted, that no variation in the spirit
of a people, as to frugality and dissipation, can take place, except
upon a variation in the quantity of their gold and silver?
It may be answered, that as to articles of superfluity, no doubt
the genius of a people may influence prices, in combination with
the quantity of the specie; but that in articles of indispensible necessity,
they must constantly remain in proportion to the mass of
riches. This I cannot by any means admit to be just. Let me take
the example of grain, which is the most familiar. Is it not plain,
from what we have said above, that the proportion of wealth, found
in the hands of the lowest class of the people, constantly regulates
the price of it; consequently, let the rich be ever so wealthy, the
price of subsistence can never rise above the faculties of the poor.
402And is it not also plain, that those of the lowest class of the people,
who purchase subsistence, must buy it with the returns they receive
from the rich for their industry? Now if the quantity of the wealth
of the latter, does not regulate their demand for the service of the
former, must it not follow, that the price of grain, as well as of
every other thing offered to sale, must depend upon the degree of
competition among the rich for the labour of the poor, that is, upon
the demand for industry, and not on the quantity of wealth in
the country?
No body ever denied, that the extraordinary demand for a commodity
had the effect of raising the price of it: and certainly no
body will deny, that the demand for a particular commodity may
be greater at one time than at another, though the same quantity
of that commodity be found at both times in the country; and the
same quantity of specie likewise not only in the country, but also
in circulation.
I acknowledge that in a country where there is much coin, and
where credit is little known, a high and extraordinary demand for
an article of superfluity, may raise the price more than in another
where the coin is more scarce; because on certain occasions, the price
of a thing has no other bounds than the extent of the faculties of
the buyer. In like manner, in other countries where there is almost
no coin, nor credit, it may be impossible for the highest demand to
raise the price of such things even to the common standard established
in those where there is great wealth. But these instances
appear to be too particular to serve for the foundation of a general
rule, with respect to the state of prices in the present situation of the
nations of Europe, which, less or more, are all in communication
with one another.
I cannot here omit taking notice of two very remarkable circumstances
which we learn from undoubted historical authority, which
seem to contradict one another, and to throw a great obscurity upon
the principles I have been endeavouring to explain. I shall therefore
403introduce them by way of illustration, and when they are examined,
I hope they will confirm my doctrine.
The first is, that in Scotland, formerly, when coin and credit
were certainly very rare, the price of eight pounds weight of oat
meal, which is now commonly sold at eight pence sterling, was
then valued at no more than two thirds of one penny: and that a
labouring man used to receive one penny and one third of a penny
sterling for his week’s subsistence; that is to say, the value of sixteen
pounds of oatmeal, which to this day is the regulated quantity given
for that purpose.
There is a very curious confirmation of the authenticity of this
computation, in an hospital at old Aberdeen; where in former
times, some proprietors of lands had settled a certain quantity of
oat meal in favours of the poor of the hospital, with a liberty to
the hospital to accept the meal in kind, or the conversion at two
thirds of a penny for every eight pounds weight. They imprudently
chose the last, and to this very day they are paid according to this
standard. Now it is certainly impossible that any degree of plenty
whatsoever, or any failing of demand, could at present reduce the
price of that commodity so very low; consequently, it may be said
that it is the augmentation of wealth, not that of demand which
raises prices.
The second fact we learn from antiquity, that at the time when
Greece and Rome abounded in wealth, when every rarity, and the
work of the choicest artists was carried to an excessive price, an ox
was bought for a mere trifle, and grain was cheaper perhaps than
ever it was in Scotland.
If the application of our principles to the circumstances of those
times, produce a solution of these apparent inconsistencies; and if we
thereby can discover that the low prices of grain, both in Scotland,
where there was little money, and at Rome where there was a
great deal, was entirely owing to the little demand for articles of
subsistence; will it not follow, that our principle is just, and that
404the other, notwithstanding of the ingenuity of the thought, must
fail in exactness; since it will appear, that low prices may be
equally compatible with wealth, and with poverty.
Now as to Scotland in former times, as in all countries where
there is little industry; where the inhabitants are mostly fed
directly from the earth, without any alienation of her fruits taking
place; where agriculture is exercised purely as a method of subsisting;
where rents are low, and where, consequently, the free hands,
who live upon them for the price of their industry, must be few;
the demand for grain in the public markets must be very small;
consequently, prices will be very low, whether there be little, or
whether there be much money in the country. The reason is plain.
The demand is proportioned here, not to the number of those who
consume, but of those who buy: now those who consume, are all
the inhabitants, but those who buy, are only the few industrious
who are free, and who gain an independent livelihood by their own
labour and ingenuity: now the price of their week’s subsistence was
one penny one third, consequently the subsistence they bought
could not rise above this standard.
Next as to the state of Greece and Rome, where slavery was established.
Those who were fed by the labour of their own slaves, by
those of the state, or by the grain gratuitously distributed to the
people, had no occasion to go to market; consequently, they did
not enter into competition with the buyers. Farther, the simplicity
of manners, and the few manufactures then known, made
wants in general less extensive; consequently, the number of the
industrious free was small, and they were the only persons who
could have occasion to purchase food and necessaries; consequently,
the competition of the buyers must have been small in proportion,
and prices low.
Add to this, the reflections which naturally present themselves
upon examining the nature of providing the markets. These were
supplied partly from the surplus produced upon the lands of the
405great men, laboured by slaves; who being fed from the lands, the
surplus cost in a manner nothing to the proprietors; and as the
number of those who had occasion to buy, were very few, this surplus
was sold cheap. Besides, the grain distributed to the people
gratis, must necessarily have kept down the market, as a part of it
would naturally, sometimes, be found superfluous to those who
received it; and consequently, come to be sold in competition with
that raised at private expence.
But when a fine mullet was brought to market, or when an artist
appeared with a curious piece of work, the case was very different.
There was plenty of money in the country, in the hands of the
rich, who all appeared in competition for the preference; consequently,
prices rose to an extravagant height. The luxury of those
times, though excessive, was confined to a few, and as money, in
general, circulated but slowly through the hands of the multitude,
it was constantly stagnating in those of the rich, who found no
measure, but their own caprice, in regulating the prices of what
they wished to possess, and had money to purchase.
From what has been said, it appears, that the riches of a country
has no determined influence upon prices; although, I allow, they
may accidentally affect them: and if we depart from the principles
above laid down, to wit, that prices are regulated by the complicated
operation of demand and competition, in order, to follow the other,
we must add a restriction (which I observe Mr. Hume has attended to
on one occasion, although he has lost sight of it on several others) to
wit, that the price of every commodity is in proportion to the sum of money circulating
in the market for that commodity; which is almost my proposition
in other words: for the money to be employed in the purchase of any
commodity, is just the measure of the demand. But even here, the
money in the market destined only for the purchase of a particular
commodity, does not regulate the price of it. Nothing but the
finishing of the transaction, that is, the convention between the
buyer and seller, can determine the price, and this must depend
406upon inclination, not weight of money, as an example will make
plain.
I shall suppose grain to have been at forty shillings per quarter,
in a country market, for several months together, where the ordinary
demand for the current consumption is twenty quarters every
market day. If at any time an extraordinary demand should happen,
which may exceed all that is to be found in the market, there will
be a competition among the buyers, which will have the effect of
raising the market. Now, according to the doctrine of our learned
authors, it may be said, that the corn rises in proportion to the
quantity of the specie which is in the market, and that it is because
of this increase of specie, that the grain rises in its price. I answer,
first, allowing this to be true, can it be said, that a particular temporary,
or perhaps accidental demand for a few quarters of corn,
more than usual, implies any augmentation of the quantity of money
in the country, or indeed the smallest variation either upon the
total consumption, or quantity of grain contained in it? For if the
demand has risen in one market, it must probably have diminished
in another, as the same inhabitants cannot consume in two places.
This I think every person must be convinced of, without farther
illustration. But I say farther, that prices will not rise in proportion
to the money in the market; but in proportion to the desire of
acquiring grain in those who have that money.
Suppose the whole quantity of grain in the market to be thirty
quarters; if there be no demand for more, these will be sold at
forty shillings, as the twenty quarters would have been. But suppose
the demand to be for sixty quarters, and that there is a hundred
and twenty pounds sterling ready to be employed for corn,
does it follow, that grain will rise to four pounds a quarter, because
the money in the market bears this proportion to the quantity of
grain? Certainly not.
We must therefore, I think, adopt the other principle, and follow
the proportions of demand and competition; and then we shall
407find, that if the sellers want to raise their price up to the proportion
of the specie, all demand will cease, as effectually as if it had never
been made; and the sellers will afterwards be obliged to accept of
such a moderate augmentation as shall be in proportion to the urgency
of the demand, but never in proportion to the money ready to be
employed.
The circulation of every country, as we have shewn above, must
ever be in proportion to the industry of the inhabitants, producing the commodities
which come to market: whatever part of these commodities is
consumed by the very people who produce them, enters not into
circulation, nor does it in anywise affect prices. If the coin of a
country, therefore, falls below the proportion[M] of the produce of
industry offered to sale, industry itself will come to a stop; or inventions,
such as symbolical money, will be fallen upon to provide an
equivalent for it. But if the specie be found above the proportion of
the industry, it will have no effect in raising prices, nor will it enter
into circulation: it will be hoarded up in treasures, where it must
wait not only the call of a desire in the proprietors to consume, but
of the industrious to satisfy this call.
We may therefore conclude, in consequence of the principles we
have laid down, that whatever be the quantity of money in any
nation, in correspondence with the rest of the world, there never
can remain, in circulation, but a quantity nearly proportional to the
consumption of the rich, and to the labour and industry of the poor
inhabitants. The value of each particular species of which consumption
is determined by a complication of circumstances at home
and abroad; consequently, the proportion is not determined by the
quantity of money actually in the country.
If the contrary is maintained, and if it be affirmed that the proportion
between specie and manufactures is reciprocal and determined,
then I am authorised to draw this conclusion, to wit: That
if the greatest produce of industry must be sold for what specie is
408found in the country, let the sum be ever so small, so in like manner,
the smallest produce of industry must be sold for all the specie found in
the country, let the sum be ever so great. Consequently, in the first
case, we must suppose, that the industrious will never seek for a
better price from abroad; and in the second, that the monied
people must spend all they have in supplying their most moderate
wants, and never seek for cheaper merchandize than what they
can find at home. Consequently, there can be no foreign trade,
nor can there ever be any hoarding.
I shall now conclude my chapter, with a few observations upon
the three propositions as they stand in their order.
Prop. 1. Prices are in proportion to the plenty of money. And
thus the augmenting even of fictitious wealth, such as paper, affects
the state of prices, according to its quantity.
From this Mr. Hume disapproves of the introduction of paper
money, when specie is wanting, and says, that if nothing were
allowed to circulate but gold and silver, the quantity being less,
prices would be lower.
This is neither more or less, in my humble opinion, than a project
to destroy credit, with a view to support trade and industry.
Because it would effectually prevent any person from making a
consumption, except at the time he happened to be provided with
ready money. Does the paper money in England, keep up the
prices of grain at present, January 1759? And will not every article
of necessaries fall, in a short time, as low in that country as in
any other in Europe, if the same measures continue to be followed?
Were all paper money in that kingdom proscribed at once, no
doubt the prices of many things would fall very considerably; but
such a fall would neither be universal or equable. The reason of
this fall would not be, because the specie would become proportionally
divided among all the inhabitants, according to the value
of their property; nor because of the small quantity of it, since
409prices abroad would still regulate many at home: but because of
the sudden revolution, and the violent overturn thereby produced
on the balance of work and demand. The scale of the first
would preponderate to such a degree, that those classes of the industrious,
who work for daily subsistence in furnishing superfluities,
would enter into so strong a competition with one another, that
their work would fall to nothing, while subsistence would remain
at the price of exportation. If it be asked what could occasion this
difference. I answer, because the workmen who supply superfluities,
adapted to the state of their nation, would find no more
demand for them, from the want of credit, or of a circulating fund
to buy with, and strangers would not profit of the fall in the price
of a superfluity not adapted to their own taste; but they would
very willingly become purchasers of every bushel of grain become
superfluous, by starving so many of the inhabitants; and this
would keep the price of subsistence upon a pretty even level with
that of other countries.
But if we suppose all communication cut off with strangers,
would this proportion between money and prices then hold true?
By no means. Here is the reason: there are many ways of alienating
goods or natural produce, without the assistance of specie. Immense
quantities of both may be consumed by barter, or in lieu of
service, where money is never heard of: now all this portion
alienated, enters into the mass of what is called produce and manufactures
which come to market; but can have no influence upon
the specie, nor can specie have any upon it, since the money remains
inactive during those operations.
Another reason is, that there is no such thing as preserving specie
in an equal repartition, so as to serve the occasions of every
body in proportion to their worth. The reason is manifest: money,
like every other thing, will come into the hands of those who give
the greatest value for it, and when the quantity of it is small in
any country, where nothing can be procured without it, such proprietors
410of lands as have the greatest desire to consume, will purchase
the specie at a higher interest, or with more of their lands
than others.
This alone is sufficient to prove that the repartition of specie can
never be in proportion to property; and this also destroys the supposition
of prices rising and falling, according to the proportion of
it, even in a country cut off from every foreign communication.
Here is the proof: any individual who has, by mortgaging his
lands, got together a large proportion of the specie of his country,
will raise prices in his neighbourhood, by making an extraordinary
demand for work; and the rest of the same country, drained of
their circulating value, must diminish their demand; consequently,
prices will fall elsewhere. I now come to the second proposition.
The coin and current money of a country, is the representation of
all its labour and commodities; so that in proportion as there is
more or less of this representation, a greater or less quantity of it will
go for the same quantity of the thing represented.
To this representation I cannot agree, and I apprehend it to be the
source of error. A proper equivalent for labour and manufactures,
may, in one sense, be called a representation; but there is no necessity
for this equivalent to consist in coin. Are not meat and clothes an
equivalent for personal service? Is not a free house and a bit of
land, a very good equivalent for all the manufactures a country
weaver can work up for me who am his landlord? If there were not
one penny of coin in a country, would it follow, that there could
be no alienation, or that every thing might there be got for nothing?
Coin has an intrinsic value; and when it comes into a country,
it adds to the value of the country, as if a portion of territory were
added to it: but it has no title to represent any thing vendible, by
preference, or to be considered as the only equivalent for all things
alienable. It is made a common price, on no other account than
because of its rarity, its solidity, its being of a nature to circulate,
411and to suffer a correct division without end, and to carry its
value along with it, which is a proper equivalent for every thing;
and at the same time it is by its nature little liable to vary.
Were, indeed, a statesman to perform the operation of circulation
and commerce, by calling in, from time to time, all the proprietors
of specie in one body, and all those of alienable commodities, workmen,
&c. in another; and were he, after informing himself of the
respective quantities of each, to establish a general tariff of prices,
according to our author’s rule; this idea of representation might easily
be admitted; because the parcels of manufactures would then seem
to be adapted to the pieces of the specie, as the rations of forage
for the horses of an army are made larger or smaller, according as
the magazines are well or ill provided at the time: but has this
any resemblance to the operations of commerce?
The idea of coin being the representation of all the industry and manufactures
of a country, is pretty; and has been invented for the
sake of making a general rule for operating an easy distribution of
things extremely complex in their nature. From this comes error.
We substitute a complex term, sometimes in one sense, and sometimes
in another, and we draw conclusions as if it expressed a fixed
and determined idea.
If in algebra, x, y, z, &c. ever stood for more than a single
idea, the science would become useless; but as they never represent
but the very same notion, they never change their nature through
all manner of transpositions.
It is not the same of terms in any other science, as abundantly
appears from the question now before us: coin is called a representation,
because it is an equivalent; and because it is a representation,
it must bear an exact proportion to the thing represented. And since
in some particular examples, this representation appears to hold;
therefore the rule is made general, although circumstances may be
different. If, for example, a merchant, or a private person, has
upon hand a thousand pounds worth of grain, no doubt that the
412thousandth part of the merchandize is worth the thousandth part
of the sum; because both are determined in their quantity and
quality: but the parcels of this corn, though exactly proportioned
to the price of the whole, do not draw their value from this proportion,
but from the total value of the whole mass; which is determined
from the complicated operations of demand and competition,
as has been said, and not from the specie of the country,
which can bear no proportion either to the quantity or quality of
the grain.
There may be vast quantities of coin in a country of little industry;
and, vice versa, coin is constantly an equivalent, but never a
representation, more than any other equivalent which may be contrived.
Were the doctrine of this second proposition true, every
commodity in a country should be sold like a parcel of the grain
in the foregoing example, by the rule of three; as the property
of all the labour and manufactures of the country is to the part I
intend to alienate, so is all the gold and silver in the country to the
part I am entitled to receive. This way of regulating prices may
be very ingenious, but it is not very common. I now proceed to
the third and last proposition.
Increase the commodities, they become cheaper: increase the
money, they rise in their value.
This proposition is much too general: the first part of it is commonly
true, the last part is more commonly false.
What can increase commodities, but a demand for them? If the
demand be equal to the augmentation, there will be no alteration
in the price.
Let extraordinary plenty increase subsistence, it will naturally fall
in the price; but it may be hoarded up, and made to rise in spite
of the plenty; it may be demanded from abroad; this also will
make it rise.
Let the production of superfluities, not exportable, be produced by
workmen whose branch is overstocked, prices will undoubtedly fall.
413The same observations are true of a diminution in the quantity of
commodities. If this diminishes by degrees, from a diminution of
demand, the price of them will not rise.
If the quantity of subsistence falls below the necessary consumption
of the inhabitants, prices will undoubtedly rise.
If the articles of superfluity are diminished, prices will only rise
in proportion to the eagerness to buy, that is, to the competition,
not to the deficiency. On the other hand, as to coin or money,
Increase the money, nothing can be concluded as to prices, because
it is not certain, that people will increase their expences in
proportion to their wealth; and although they should, the moment
their additional demand has the effect of producing a sufficient supply,
prices will return to the old standard.
But diminish the quantity of specie employed in circulation, you both
retard this, and hurt the industrious; because we suppose the former
quantity exactly sufficient to preserve both in the just proportion
to the desires and wants of the inhabitants.
These are but a few of the numberless modifications necessary to
be applied to this general rule; and I hope what I have said, will
justify the observation I have made on the whole doctrine; to wit,
that it is much more specious than solid, in every one of its three
branches.
Let me just propose one question more upon this subject, and then
I shall conclude.
Suppose the specie of Europe to continue increasing in quantity
every year, until it amounts to ten times the present quantity,
would prices rise in proportion?
I answer, that such an augmentation might happen, without the
smallest alteration upon prices, or that it might occasion a very
great one, according to circumstances. If industry increases to ten
times what it is at present, that is to say, were the produce of it
increased to ten times its present value, according to the actual
standard of prices, the value of every manufacture and produce
414might remain without alteration. This supposition is possible; because
no man can tell to what extent demand may carry industry.
If, on the other hand, the scale of demand could be supposed to
preponderate, so as to draw all the wealth into circulation, without
having the effect of augmenting the supply (which I take to be impossible)
then prices would rise to ten times the present standard,
at least in many articles.
This solution is entirely consistent both with Mr. Hume’s principle
and mine; because nothing is so easy in an hypothesis, as to
establish proportions between things, which in themselves are beyond
all the powers of computation.
We have endeavoured to shew in a former chapter, how the
circulation of money, given in exchange for consumable
commodities, produces a vibration in the balance of domestic
wealth: we are now to apply the same principles to the circulation
of foreign trade; in order to find out, if there can really be such a
thing as a balance upon it, which may enrich one country, and
impoverish another.
It has been said, that when money is given for a consumable
commodity, the person who gets it acquires a balance in his favour,
so soon as he with whom he has exchanged, has begun to
consume.
That if two consumable commodities are exchanged, the balance
comes to a level, when both are consumed. That it is only the
415wealth which is found in circulation, which can change its balance,
and the remainder must be found locked up, made into plate, or
employed in foreign trade. And it has been observed, that the
quantity of money found in circulation, is ever in proportion to
the sale of the produce of industry and manufactures; and that
when the quantity of metals is not sufficient to carry on a circulation,
proportioned to the demands of those who have any real
equivalent to give, that symbolical money may be made to fill up
the void, when the interest of the state comes to require it.
We have also laid it down as a kind of general rule, that while
luxury only tends to keep up demand to the reasonable proportion
of power and inclination in the industrious part of a people to supply
it, that then it is advantageous to a nation; and that so soon as
it begins to make the scale of home-demand preponderate, by
forming a competition among the natives, to consume what strangers
seek for, that then it is hurtful, and has an evident tendency
to root out foreign trade. These principles are all analogous to
one another, and should be retained while we examine the question
before us.
I must still add, that the fluctuation of the balance of wealth is
constantly inclining in favour of the industrious, and against the
idle consumer. This however admits of a restriction, viz. The industrious
must be supposed to be frugal; and the idle, extravagant.
For if the industrious man consumes the produce of his industry,
he will only have laboured to increase his consumption, not his
wealth: and if the idle person, by his frugality, keeps within the
bounds of his yearly income, he will thereby repair every disadvantage
incurred by his sloth, the balance then will stand even between
them; the industry in one scale, and the fund already provided
in the other, will keep both parties on a level as before.
In order, therefore, to make the balance of domestic wealth turn
in favour of a poor man, he must be both industrious and frugal.
416Now let us apply these principles to a whole nation, considered
as an individual in the great society of mankind. A private person
who conducts his affairs with prudence, must either be in a way
of growing richer by his industry, or of spending his income with
oeconomy and discretion: so I must suppose a nation which is well
governed, either to be growing rich by foreign trade, or at least in
a state of not becoming poorer by it.
It is the duty of every statesman to watch over the conduct of
those who hold the foreign correspondence, as it is the duty of the
master of a family to watch over those he sends to market.
I find it is the opinion of the learned Mr. Hume, that there is no
such thing as a balance of trade, that money over all the world is
like a fluid, which must ever be upon a level, and that so soon as
in any nation that level is destroyed by any accident, while the
nation preserves the number of its inhabitants, and its industry,
the wealth must return to a level as before.
To prove this, he supposes four fifths of all the money in Great
Britain annihilated in one night, the consequence of which he
imagines would be, that all labour and commodities would sink in
their price, and that foreign markets would be thereby entirely
supplied by that industrious people, who would immediately begin
to draw back such a proportion of wealth, as would put them again
upon a level with their neighbours.
This reasoning is consistent with the principles we have examined,
and humbly rejected in the preceding chapter; both stand
upon the same foundation, and lead to a chain of consequences
totally different from the whole plan of this inquiry.
My intention is not so much to refute the opinions of others, as
briefly to pass them in review. General propositions, such as those
we have been treating of, are only true or false, according as they
are understood to be accompanied with certain restrictions, applications,
and limitations: I shall therefore say nothing as to the
proposition itself, but only examine how far the example he has
417taken of the sudden annihilation of a great proportion of a nation’s
wealth, can naturally be followed by the consequences he supposes.
For this purpose, let me suggest another consequence (different
from that of the author, and flowing from the doctrine we have
established) which possibly might happen, upon the annihilation
of four fifths of all the money in Great Britain. I shall take no
notice of the effects which so sudden a revolution might occasion;
these have not been attended to by the author, and therefore I shall
consider them as out of the question. I suppose the event to have
happened, prices to have been reduced, and every immediate inconvenience
to have been prevented. My only inquiry shall be
directed towards the unavoidable consequences of such a revolution,
as to foreign trade, as to drawing back the money annihilated, and
as to the preserving the same number of inhabitants, and the same
degree of industry as before. If I can shew, that the event alone of
annihilating the specie, and reducing prices in proportion, (which
I shall allow to be the consequence of it) will have the effect of
annihilating both industry and the industrious, it cannot afterwards
be insisted on, that the revolution can have the effect of
drawing back a proportional part of the general wealth of Europe:
because the preservation of the industrious is considered as the requisite
for this purpose.
Here then is the consequence, which, in my humble opinion,
would very probably happen upon so extraordinary an emergency;
and I flatter myself that my reader has already anticipated my decision.
The inhabitants of Great Britain, who, upon such an occasion,
would be found in possession of all the exportable necessaries of life,
and of many other kinds of goods demanded in foreign markets,
instead of selling them to their poor countrymen, for a price proportioned
to our author’s tariff, and to the diminution of the specie,
which he takes to be the representation of them, would export
418them to France, to Holland, or to any other country where they
could get the best price, and the inhabitants of Britain would
starve.
If it be replied, that the exportation would not be allowed. I answer,
that such a prohibition would be highly seasonable; but
quite contrary to the principle of laying trade open, and impossible
to be effectual, as that author justly observes, when he says, “Can
one imagine, that all commodities could be sold in France, for a
tenth of the price they would yield on the other side of the
Pyrenees, without finding their way thither, and drawing from
that immense treasure?” Suppose this phrase to run thus. Can any
one imagine, that provisions could be sold in Britain, for a fourth
part of the price they would yield on the other side of the water,
without finding their way thither, and drawing from that immense
treasure? This is entirely consistent with our principles, and ruins
the whole of Mr. Hume’s former supposition: because the exportation
of them would annihilate the inhabitants.
From this I conclude, that a nation, though industrious and populous,
may reduce itself to poverty in the midst of wealthy neighbours,
as a private person, though rich, may reduce himself to
want, in the midst of the amusements and luxury of London or
of Paris. And that both the one and the other, by following a different
conduct, may amass great sums of wealth, far above the
proportion of it among their neighbours.
This is not a matter of long discussion. It is not by the importation
of foreign commodities, and by the exportation of gold and
silver, that a nation becomes poor; it is by consuming those commodities
when imported. The moment the consumption begins,
the balance turns; consequently, it is evidently against the principles
which we now examine, either to sell at home, or destroy
confiscated goods. The only way of repairing the damage done by
such frauds, is to export the merchandize, and by selling them
cheap in other countries, to hurt the trade of the country which
419first had furnished them. From this also we may conclude, that
those nations which trade to India, by sending out gold and silver,
for a return in superfluities of the most consumable nature, the
consumption of which they prohibit at home, do not in effect spend
their own specie, but that of their neighbours who purchase the
returns of it for their own consumption. Consequently, a nation
may become immensely rich by the constant exportation of her
specie, and importation of all sorts of consumable commodities.
But she would do well to beware of this trade, when her inhabitants
have taken a luxurious turn, lest she should come to resemble
the drunkard who commenced wine merchant, in order to make
excellent chear in wine with all his friends who came to see him;
or the millener, who took it into her head to wear the fine laces
she used to make up for her customers.
If a rich nation, where luxury is carried to the highest pitch,
where a desire of gain serves as a spur to industry, where all the
poor are at work, in order to turn the balance of domestic wealth
in their favour, if such a nation, I say, is found to consume not
only the whole work of the inhabitants, but even that of other
countries, it must have a balance of trade against it, equivalent to
the foreign consumption; and this must be paid for in specie, or
in an annual interest, to the diminution of the former capital. Let
this trade continue long, they will not only come at the end of
their metals, but they may even succeed in exporting their lands.
This last appears a paradox, and yet it is no uncommon thing.
The Corsicans have exported, that is sold, the best part of their
island to Genoa; and now, after having spent the price in wearing
damask and velvet, they want to bring it back, by confiscating the
property of the Genoese, who have both paid for the island, and
drawn back the price of it by the balance of their trade against these
islanders. It were to be wished that Corsica alone afforded an
example of this kind.
420Is it not, therefore, the duty of a statesman to prevent the consumption
of foreign produce? If tapestry or other elegant furniture,
such as is seen in a certain great capital in Europe, were
allowed to be imported into a neighbouring nation, who doubts
but this article would carry money out of that nation?
It may be answered, that as much elegance of another kind
may be sent in return. True; and it would be very lucky if this
could be the case; but then you must suppose an equality of elegance
in both countries, and farther, you must suppose a reciprocal
taste for the respective species of elegance. Now the taste of one
country may, indeed, be common to both; but it may happen that
the taste of the one may not be that of the other, though nothing
inferior, perhaps, in the opinion of a third party. And the difference
may proceed from this; that the young people of one
country travel into the other, where the inhabitants stay at home:
a circumstance which would prove very prejudicial to the country
of the travellers, if a wise statesman did not, by seasonable prohibitions
upon certain articles of foreign consumption, prevent the
bad consequences of adopting a taste for what his subjects cannot
produce.
This furnishes a hint, that it might not be a bad maxim in a
great monarchy, to have houses built in the capital for every foreign
minister, where the general distribution of the apartments of each
might be, as much as possible, analogous to the taste of the country
for whose minister it is calculated: but as to the furniture, to have
it made of the most elegant domestic manufactures easily exportable,
nicely adapted also to the uses and fashions of every foreign
country. Such a regulation could never fail of being highly acceptable,
as it would prove a great saving to foreign ministers, and
would insensibly give them a taste for the manufactures and luxury
of the country they reside in. On the other hand, I would be so
far from expecting a return of this civility, that I would recommend
a set of furniture, as a gratification, to every minister sent
421abroad, who should regularly sell it off upon the expiration of his
commission. Such an expence would not cost one penny to the nation,
and would be a means of captivating unwary strangers, who
might be thereby made to pay dearly for such marks of politeness
and civility. I return.
Without being expert in the computation of exports and imports,
or very accurate in combining the different courses of exchange
between the different cities of Europe, a statesman may lay it down
as a maxim, that whatever foreign commodity, of whatsoever kind
it be, is found to be consumed within the nation he governs, so far
the balance of trade is against her; and that so far as any commodity
produced either by the soil, or labour of the inhabitants, is
consumed by foreigners, so far the balance is for her.
A nation may in some measure be compared to a country gentleman,
who lives upon his land. This I suppose to be his all. From
it he draws directly his nourishment, perhaps his clothes are
worked up in his family. If he be so very frugal as never to go to
market for any thing, any spare produce which he can sell, is clear
money in his purse. If he indulges now and then in a bottle of
wine, which his farm does not produce, he must go to market with
his purse in his hand; and so soon as his bottle is out, I think he is
effectually so much poorer than he was before. If he goes on, and
increases his consumption of such things as he is obliged to buy,
he will run out the money he had in his purse, and be reduced
to the simple production of his farm. If then this country gentleman
be poorer, certainly some body is richer; and as it is no body
in his family, it must be some of his neighbours.
Just so a nation which has no occasion to have recourse to foreign
markets, in order to supply her own consumption, must certainly
grow rich in proportion to her exportation.
These riches again will not circulate at home, in proportion to
the domestic consumption of natural produce and manufactures,
but in proportion to the alienation of them for money: the surpluswealth
422will stagnate in one way or other, in the hands of the money
gatherers, who are the small consumers.
While there is found a sufficient quantity of money for carrying
on reciprocal alienations; those money gatherers will not be able
to employ their stagnated wealth within the nation; but so soon as
this gathering has the effect of diminishing the specie, below the
proportion found necessary to carry on the circulation, it will begin
to be lent out, and so return to circulate for a time, until by the
operation of the same causes it will fall back into its former repositories.
Should it be here objected, that upon the augmentation of a nation’s
riches, no money can stagnate; because prices rising in proportion
to the augmentation of them, all the additional wealth must be
thrown into circulation: surely both reason and experience must
point out the weakness of such an objection.
While a favourable balance, therefore, is preserved upon foreign
trade, a nation grows richer daily; and still prices remain regulated
as before, by the complicated operations of demand and competition;
and when one nation is grown richer, others must be growing
poorer: this is an example of a favourable balance of trade.
When this superfluity of riches is only profited of by the luxurious
individuals, instead of being turned to profit by the state itself,
with a view to secure the advantages thereby acquired, then the
balance takes a contrary turn: this is the case whenever foreign
importations for consumption, are either permitted as a gratification
to the luxurious desires of the wealthy, or because of the rise in the
price of goods at home, in consequence of domestic competition.
If it be permitted purely in favour of the first, it marks a levity and
want of attention unworthy of a statesman: if on account of the
second, it shews either an ignorance of the real consequences of so
temporary an expedient, or a disregard for the welfare of the
lower classes of the people.
423Every augmentation of prices at home, must be a necessary consequence
of many domestic circumstances, and must be removed by
correcting them, as has been, I think, made clear. But let it be
supposed, that from the augmentation of wealth alone, manufactures
can no more produce work so cheap as other nations; I think that
both in humanity and prudence, a people should submit to the inconvenience
of paying dearer. In humanity, because by the introduction
of foreign manufactures, you starve those very people,
who by their labour have enriched you: in prudence, because by
opening your ports to such importation you deliberately throw
away that superiority of riches you have been at so much pains to
acquire.
I freely grant, that particular people do not regulate either their
expence or their schemes of getting money, with a view to promote
the public good. One who has a coat to buy, will be very glad to
find a piece of foreign manufacture at a cheap rate; another will
wish to smuggle a piece of goods on which there is a high duty.
But the question is, whether a statesman is to allow this foreign
consumption? I think it is much the same question, as if it were
asked, whether the master of a family should, in good oeconomy,
allow his servants to invite their friends to drink in his cellar, instead
of carrying them to a public house.
But suppose it said, that “by laying trade open, you are sure
that wealth will naturally come to a balance, in all countries,
and that all fears of a wrong balance of trade are only the effect
of a gloomy imagination.” See Mr. Hume’s Political Discourses,
Sect. v.
Several answers may be made to this objection. The first, that it
is in order to prevent this kind of balance, that every nation gives
themselves disquiet: for by balance here, is understood an equality
of wealth; and it is rich nations only who are anxious, lest they
should be brought to such an equality. In the question here before
us, it is the loss of the superiority which is understood by a balance
424turning against a nation. If, therefore, it be the interest of a nation,
poor in respect of its neighbours, to have trade laid open,
that wealth may, like a fluid, come to an equilibrium; I am sure
it is the interest of a rich nation, to cut off the communication of
hurtful trade, by such impediments as restrictions, duties, and prohibitions,
upon importation; that thereby, as by dykes, its wealth
may be kept above the level of the surrounding element.
Another answer is, that laying trade open would not have the
effect proposed; because it would destroy industry in some countries,
at least, if not every where. A manufacture must be very
solidly established indeed, not to suffer any prejudice by a permission
to import the like commodities from other countries. The
very nature of luxury is such, that it prompts people often to consume,
from caprice and novelty, what is really inferior to home-production.
It may be answered, that this argument cuts two
ways: for if a nation from caprice consumes foreign commodities,
why may not other nations from caprice likewise, take off those
which are left on hand? This reasoning may appear good, in a
theory which does not take in every political consideration. But a
poor manufacturer who cannot find work, because the branch he
works in is supplied from abroad, cannot live till the caprice of
foreigners makes them demand his labour. If a certain number
of inhabitants be employed in a necessary branch of consumption,
there must be a certain demand preserved for it; and whatever can
render this precarious, will ruin the undertaking, and those employed
in it.
A third answer is, that any nation who would open its ports to
all manner of foreign importation, without being assured of a reciprocal
permission from all its neighbours, would, I think, very
soon be ruined; and if this be true, it is a proof that a balance of
trade is a possible supposition, and that proper restrictions upon importation
may turn to the advantage of a state.
425In order to promote industry, a statesman must act, as well as
permit and protect. Could ever the woollen manufacture have
been introduced into France, from the consideration of the great
advantage England had drawn from it, if the King had not undertaken
the support of it, by granting many privileges to the undertakers,
and by laying strict prohibitions on all foreign cloths? Is
there any other way of establishing a new manufacture any where?
Laying, therefore, trade quite open would have this effect, it
would destroy at first, at least, all the luxurious arts; consequently,
it would diminish consumption; consequently, diminish the quantity
of circulating cash; consequently, it would promote hoarding;
and consequently, would bring on poverty in all the states of Europe.
Nothing, I imagine, but an universal monarchy, governed
by the same laws, and administred according to one plan well concerted,
can be compatible with an universally open trade. While
there are different states, there must be different interests; and
when no one statesman is found at the head of these interests, there
can be no such thing as a common good; and when there is no
common good, every interest must be considered separately. But
as this scheme of laying trade quite open, is not a thing likely to
happen, we may save ourselves the trouble of inquiring more particularly
into what might be its consequences; it is enough to observe,
that they must, in their nature, be exceedingly complex, and
if we have mentioned some of them, it has only been to apply
principles, and shew how consequences may follow one another:
to foretel what must follow is exceedingly difficult, if not impossible.
In discoursingdiscoursing of the balance of trade, I have hitherto considered
it only so far as the specie of a country is augmented by it. In the
subsequent book, when we shall have occasion to bring this subject
once more upon the carpet, I shall shew how a balance may be extremely
favourable without augmenting the mass of the precious
metals; to wit, by providing subsistence for an additional number
of inhabitants; by increasing the quantity of shipping, which is an
426article of wealth; by constituting all other nations debtors to it; by
the importation of many durable commodities, which may be considered
also as articles of wealth; as a well furnished house, a well
stored cellar, an ample wardrobe, and a fine stable of horses, are
articles which enhance the value of the inheritance of a landed
man.
Then we shall have occasion to shew how industry heightens the
permanent value of a nation, as agriculture increases its annual
produce.
It is now time to draw to a conclusion of this book. The subject
of trade and industry is inexhaustible, if considered in all its
branches, and traced through every consequence. My intention
has been to inquire into the original principles which influence
general operations, and which, less or more, enter into every combination.
I have represented trade in its infancy, manhood, and
old age; and have endeavoured to prescribe a general regimen of
health for every period. It is sufficient to be thoroughly master of
the principles, to be able to apply them to particular cases, providing
every circumstance be exactly known.
The intention of this chapter, is, to review some parts of our subject,
which I think have not received all the light necessary to be
thrown upon them, to suggest some remarkable differences between
antient and modern oeconomy, with regard to circulation
427and industry; and, in general, to lay certain circumstances together,
which may point out the spirit of modern times, from which
we are endeavouring to extract a set of consistent principles. Every
thing which points out relations is useful; because we know nothing,
but through this channel. Now certain relations are too
frequently taken for granted, and nothing is more essential in political
reasonings, than to point them out clearly, to proceed by the
shortest steps, and still to keep experience and matter of fact before
our eyes, when we draw a conclusion from a general proposition.
Let the conclusion appear ever so just, if, when compared with experience,
a disagreement appears, it is ten to one we have overlooked
some circumstance, which ought to have entred into the
combination.
To illustrate this, let me cite a mistake of my own, which I purposely
left uncorrected, in the second chapter of the first book,
where I very confidently declare, that a statesman, who, upon certain
occasions, which seem favourable for raising great sums upon
a people, increases taxes only in proportion to the interest of the
money borrowed, must be shortsighted and regardless of futurity.
This, I remember, appeared to me at the time I wrote, so clear and
evident, that I thought I ran no risk in making it enter into a preliminary
chapter. But when I came to look a little more particularly
into the matter, I found I had been grosly mistaken; as I hope
to shew evidently in its proper place. Had every such mistake
been treated with the same indulgence, I should have been more
employed in the correction of my own blunders, than in the prosecution
of my subject. People who reason with tolerable exactness
on such subjects, generally fall into mistakes, from the generality
of their propositions. These may commonly be true enough,
within the compass of the author’s combinations at the time, and
yet may not be true in every other case. From which I infer, that
every one of my readers, who can form combinations more extensive
than mine, will find sufficient matter for criticism in every page
428of this inquiry. So much the better: it is by such criticisms and
discussions, that particular branches of knowledge are brought to
the certainty of science.
The more simple any plan of political oeconomy is, the more it
is easy to govern by general rules; the more complex it becomes,
the more it is necessary for a statesman to enter into combinations.
But when general rules have been long established, they gain such
an authority over the minds of a people, that any deviation from
them appears like heresy in religion: and how seldom does it happen,
that a people is blessed with a governor, who has both penetration
to discover, art to persuade, and power to execute a plan
adapted to every combination of circumstances.
No change can happen in a state, but what is advantageous to
some class or other, and when the public good requires that a stop
should be put to such advantages, numbers of discontented people
will always be found. Circumstances, therefore, ought to be well
weighed before new plans of administration are entred upon; and
when once adopted, those who pretend to criticise, must suppose
themselves provided with superior talents and better informations
as to every circumstance, than the author of the innovation. For
this reason, there is little danger in censuring a statesman’s opinion,
when he delivers it; but a great deal in finding fault with his conduct,
when his motives are not known.
In the former chapters, we have been treating of the nature and
consequences of circulation, the effects of augmentations and diminutions
of specie, and the doctrine of Mr. Hume concerning the
balance of trade. The perspicuity with which this author writes,
renders his ideas easy to conceive; and when people understand
one another, most disputes are soon at an end.
In order, therefore, to throw a little more light upon the nature
of the balance of trade between nations, let me examine the following
questions while we have the subject of the last chapter fresh
in our memory.
429Quest. 1. Can any judgment be formed concerning the state of
the balance of trade of a nation, barely from the quantity of specie
that is found in it?
I answer in the negative. A great proportion of all the specie of
Europe, may be found in a country against which the balance of
trade has stood regularly for many years. An inconsiderable proportion
of it may be found in another, which has had it as regularly
in its favour for the same time.
The balance upon every article of trade, may be favourable to a
nation which squanders away more than the returns of it, upon
foreign wars.
The balance of every article of trade, may be against a country
which receives more than all the loss incurred, either from her
mines, from countries tributary to her, or who willingly furnish
subsidies upon many political considerations.
Besides these varieties, there are still other combinations, relative
to the specie itself. The money found in a country, may either be
said to belong absolutely to the country, when neither the state itself,
or the particular people of it, are in debt to foreigners; or only so
by virtue of a loan. Now, whether it is borrowed or not, the property
of it belongs to the country; but the difference consists in
this, that when it is borrowed, the acquisition of the metals adds
nothing to the national patrimony, that is to say, there is no acquisition
of wealth thereby made; but when it is gained by industry,
the money adds to the real value of the country, in consequence of
the principles laid down in the 26th chapter.
May not a nation then, having very little gold and silver, open a
subscription for millions, at so much per cent? Will not strangers
lend to her; when her own subjects cannot? May she not yearly,
by paying away the interest of the money borrowed, and by a heavy
balance of trade against her, be constantly diminishing her specie,
and yet by new contracts, keep up, and even increase the mass of
the circulating value, to such a degree, as to be possessed of a
430greater proportion of specie than any of her neighbours? Farther,
Is it not certain, that all nations will endeavour to throw their
ready money, not necessary for their own circulation, into that
country where the interest of money is high with respect to their
own, and where consequently the value of property in land is low;
since they may either draw a high interest from it, or make the acquisition
of solid property? Forbidding therefore the acquisition of
solid property to strangers, is, in effect, a prohibition upon the
gratuitous importation of specie. I allow there may be examples
of people who make such purchases, with a view to draw the rents
of the lands bought, out of the country; but whatever be the intention
at the time of purchase, such however is the effect of an
established fortune in a country, that, sooner or later, it draws the
proprietor to it; and when this does not happen, a subsequent
alienation commonly takes place.
Were the purchase, therefore, of lands permitted universally,
and were it established, that property in land, to a certain value,
should give a right to naturalization, no doubt large sums would
be brought into those countries, where lands are found cheapest;
and as no exportable commodity is given in return, the specie of
such countries might mark the quantity of lands sold, as well as
that of merchandize exported. For want of a sufficient extension of
these and many other combinations, which it would be easy to contrive,
Mr. Belloni, in his Dissertation upon Commerce, Chap. I. Sect. 5.
falls into several mistakes, when he judges of the exportation of
commodities of a particular country, by the quantities of money
found in it.
Essendo adunque da ciòciò venuto (says he) che l’abondanza del danaro, ovunque
si ritrovi, significa l’abodanza stessa delle cose, delle quali egli é misuramisura:
perciò diviziosi meritamente sono stati detti quegli uomini, e ricco altersi quel
regno, dove si ritrova gran copia di danaro. Dal altro canto poi, se si considera
lo stato di un regno, ed il danaro, che è dentro di esso, tenendo sempre
431salda l’essenza della moneta (che altro non sia, che misura di cose, e prezzo,
che viene in compenso di mercanzie) ovunque di essa vedrasi affluenza, ognuno
ben vede, doversi subito necessariamente arguire, un gran traffico di quel dominio,
con esito di merci, in uso degli esteri, e all’incontro ovunque questa
venga a mancare, doversene dedurre grande introito di merci, che sieno subentrate
nel luogo della moneta, e che l’abbiano fatta uscire.
These consequences are only just so far as money comes into, or
goes out of a country, as the price of merchandize exported or imported.
But how much money has not this author himself drawn
into Rome from England, for the exportation of nothing but the
bills of travellers?
On the other hand, may not a country, which is actually in possession
of great quantities of gold and silver, call in these metals,
and circulate, in their place, a symbolical money? May not a nation
then, as well as a private person, employ this specie in a profitable
foreign trade, and gain daily by it? May she not, after some
time, withdraw her stock, by calling in her debts? And may she
not also call in her paper, and remain with an additional acquisition
of specie in her pocket? Consequently, during the circulation
of the paper, no judgment can be formed as to the balance of her
trade, by examining the state of her specie; because I can suppose
that at this time every shilling of it may be in the hands of strangers.
Consequently, the richest nation in Europe may be the
poorest in circulating specie.
“The writings of Mr. Gee (says Mr. Hume, in his Political Discourse
upon the Balance of Trade) struck all the nation with a pannic
fear, by shewing from a long enumeration of particulars, that
the balance inclined so much against us, and for so considerable
sums, that in the space of five or six years, there would not remain
one shilling in England. But happily twenty years are
elapsed since, we have supported a long and expensive foreign
war, and nevertheless, it is commonly believed, that money is
432at present as plentiful in the kingdom as ever.” I quote from the
French translation.
Mr. Gee was in the wrong to conclude, that the balance of trade
would have the effect of carrying off the coin: and Mr. Hume has
been misled by this mistake, to conclude, that Mr. Gee’s calculations
were false. I know nothing as to the matter of fact; nor whether
Mr. Gee was a good or a bad judge of the question he treated; but
from what has been said, I hope it appears, that the state of the
coin in England, at the time Mr. Hume wrote, was no proof on
either side.
To judge of the balance of trade is one thing; to judge of the
wealth of a nation as to specie is another. England may greatly
increase her specie by her trade, and greatly diminish it by her
wars: perhaps this may be the fact. She may also, at certain times,
have a balance of trade against her; and great sums laid out in
foreign wars, may be the means of making it return in her favour.
Should that nation begin to pay off her debts to strangers, in ready
coin, might she not soon diminish, perhaps exhaust, the specie she
is now possessed of; yet surely none ever became poorer by paying
off their debts. Nothing is so easy as to have specie, when one has
solid property to pledge for it; and nothing can be worse judged,
than to purchase specie from strangers, at the expence of paying an
interest for it, when they can contrive a circulating value in paper
money, representing the solid value which must have been pledged
to strangers for the loan of their metals.
But still it may be asked, how it happens, that notwithstanding
of the most unfavourable balance of trade, no nation is ever found
to be entirely drained of her specie; and since we have proved, that
the specie of a country may be diminished by a disadvantageous
trade, what are the principles which prevent the total dissipation
of it?
This is a very curious question, and opens a door to a multitude
of new ideas, which will furnish abundant matter of speculation,
433when we come to treat more directly of credit. I shall here
examine it in general, only for the sake of applying the principles
we have laid down.
I. It may be said, that as common prudence prevents a private
person from spending to his last shilling; so the like prudence commonly
engages a people to put a stop to trade, before it has had
time totally to drain them. Although most people drink wine,
there is no reason why every body should be drunk.
II. Nothing is so complicated as the balance of trade, considered
among many nations. The general wealth circulates from one to
another, as the money which the farmer gives the landlord circulates
back to the farmer. In the number of hands through which
the money passes, some are of the class of the luxurious, some of
the frugal; the first represents those nations who lose by the balance,
the latter those who gain. But the most industrious nations
of all, and those who, considered abstractedly from extraordinary
accidents, appear in the way to swallow up the wealth of the rest,
are, by the means of such accidents, made liable to terrible restitutions.
How many millions, for example, has England restored
to the continent, in consequence of her wars and subsidies? She
then lays a foundation for many more years of favourable balance,
and accordingly we see it return to her, as the money which the
state spends within the nation, returns into the exchequer at the
end of the year.
III. It may be asked, how it happens that no nation has ever
spent to its last farthing, as many an individual has done? I answer,
that I am far from believing that this has never happened; nay, I
believe there is nothing more frequent or familiar than this very
case, providing the riches of a country be here supposed to mean
no more than the specie absolutely belonging to herself, not borrowed
from other nations.
I have said above, that the acquisition of money by industry, increased
the real value of a country, as much as the addition of a
434portion of territory: now what should hinder a people from spending
their ready money, and, at the same time, preserving their
land? Because a young gentleman, whose father has left him a fine
estate in land, and ten thousand pounds in ready money, has spent
the ten thousand pounds, does it follow, that he is without a shilling?
Upon this view of the question, it will, I believe, be granted,
that Dr. Swift’s idea that all the specie of Ireland would in a short
time be exported, in consequence of an unfavourable balance of trade,
is very far from being chimerical, and might be exactly true; although
at this time there be six times more in circulation than
ever; just as a person who is running through his fortune, has commonly
more money in his hands than his father used to have,
when he was acquiring it. Let Ireland pay her debts to England,
and then count her specie. Let England pay her’s to all the world,
and then weigh her gold and silver. Suppose that on summing up
the accounts, there is not found one shilling in either country, is
this any proof of their being undone? By no means: coin is one
article of our wealth, but never can be the measure of it.
I know little of the state of Ireland; but if it be true, that paper
money is increasing daily in that country, it is, I suppose, because
the specie is daily exported to England, as the returns of estates
belonging to people who reside there, and that the Irish, instead
of buying it back again for their own use in circulation, augment
their paper, in proportion to the progress of their industry; and
only buy such quantities of specie as are necessary for paying the
balance of their trade. Now by buying specie, I do not suppose,
that they bring any over to Ireland, in order to send it back to
England; but that they send over goods to the value, which the
English merchants pay in specie, or in English paper, to those who
are creditors upon Ireland, for the value of their rents, &c.
Suppose then, for a farther illustration of some principles, that all
the lands of Ireland belonged to Englishmen residing in their own
country, and annually drawing from Ireland the income belonging
435to them, what would the consequence be? As long as this portion of
the produce of lands, which goes for rent, (and which, as we have
said, is the fund provided for the subsistence of the free hands who
purchase their own necessaries) could be bought and consumed by
the Irish themselves, that is, in other words, while in Ireland there
was a demand for this portion of the fruits, it would be paid for,
either in coin, to the diminution of their specie, or in something
which might be converted into money; that is, by the produce of
their industry, and thus, by the means of trade, would come into
the hands of the English proprietors, either in specie, or in any
other form they judged proper.
That so soon as the demand for this portion of fruits came to fail,
for want of money, or industry, in Ireland to purchase it, what remained
on hand would be sent over to England in kind; or by the
way of trade, be made to circulate with other nations (in beef,
butter, tallow, &c.) who would give silver and gold for it, to the
proprietors of the Irish lands. By such a diminution of demand
in the country, for the fruits of the earth, the depopulation of Ireland
would be implied; because they who consumed them formerly,
consume them no more; that is to say, they either died, or
left the country.
To conclude, a great part of the value of a country is its produce
and manufactures; but it does not follow, as Mr. Belloni asserts,
that these should as necessarily draw a proportional sum of the gold
and silver of Europe into that country, as a shoal of small fishes
draws water fowl, or as charity draws the poor, or as beauty draws
admiration.
Quest. 2. Can no rule be found to judge of the balance of trade
from the state of specie, or at least to perceive the effects of that
balance in augmenting or diminishing the mass of riches?
Could it be supposed that specie never circulated between nations,
but in the way of trade, and in exchange for exportable commodities,
this would be a rule.
436In nations where the earth produces neither gold or silver, and
where these metals are imported as the returns of industry only,
the balance in their favour, from the introduction of specie, to this
day, would be measured by the quantity of it which they possess.
Here Mr. Belloni’s opinion is just.
Farther, the consumption made by any nation for the same term
of years, is equal to the whole natural produce and labour of the
inhabitants for that time, minus the quantity of such produce and
labour, as is, or has been equal in value to the actual national
specie.
On the other hand, in nations where gold and silver are produced
by the earth, the balance of trade against them, from the time
these metals became the object of trade, to this day, may be estimated
by the quantity of them which has been exported.
And farther, the consumption made by such nations, for the
same term of years, is equal to the whole natural produce and labour
of the inhabitants for that time, plus the quantity of such produce
and labour, as is, or has been equal to the quantity of these
metals exported.
These positions are by much too general to be laid down as principles,
because trade is not concerned in every acquisition or alienation
of specie; but they may serve, in the mean time, to illustrate
the doctrine we have been considering, and even in many
cases may be found pretty exact. For example,
If it be true, that in any nation of Europe, there be now just as
much silver and gold as there was ten years ago, and if that nation
during this period, has supported, without borrowing from strangers,
an expensive war which may have cost it, I suppose, five millions,
it is certain, that during this period, the home consumption
must have been the value of five millions less than the natural produce,
labour, and industry of the inhabitants; which sum of five
millions must have come from abroad, in return for a like value
437of the production, labour, &c. remaining over and above their own
consumption.
In this supposition, the national wealth (the metals) remains as
before, the balance of it only is changed. How this change is performed,
and what are its consequences, may be discovered by an
application of the principles already laid down.
Quest. 3. What were the effects of riches before the introduction
of trade and industry?
I never can sufficiently recommend to my readers to compare
circumstances, in the oeconomy of the antients, with that of modern
times; because I see a multitude of new doctrines laid down,
which, I think, never would have been broached, had such circumstances
been properly attended to. I have endeavoured to
shew, that the price of goods, but especially of articles of the first
necessity, have little or no connection with the quantities of specie
in a country. The slightest inspection into the state of circulation,
in different ages, will fortify our reasoning: but the general taste
of dissipation which is daily gaining ground, makes people now
begin to imagine, that wealth and circulation are synonimous
terms; whereas nothing is more contrary both to reason and matter
of fact. A slight review of this matter, in different ages, will
set it in a clearer light than a more abstract reasoning can.
It is a question with me, whether the mines of Potosi and Brasil,
have produced more riches to Spain and Portugal, within these two
hundred years, than the treasures heaped up in Asia, Greece, and
Egypt, after the death of Alexander, furnished to the Romans,
during the two hundred years which followed the defeat of Perseus,
and the conquest of Macedonia.
From the treasures mentioned by all the historians who have
writ of the conquest of those kingdoms by the Romans, I do not
think I am far from truth, when I compare the treasures of the
frugal Greeks to the mines of the new world.
438What effect, as to circulation, had the accumulation of these vast
treasures? Not any to accelerate it, surely: and no person, the least
conversant in antiquity, will pretend that the circulating specie in
those times, bore as great a proportion to their treasures, as what
is at present circulating among us, bears to the wealth of the most
oeconomising Prince in Europe. If any one doubt of this particular,
let him listen to Appian, who says, that the successors of Alexander,
the possessors of those immense riches, lived with the greatest frugality.
Those treasures were then, as I have said, a real addition
to the value of their kingdoms; but had not the smallest influence
upon prices. In those days of small circulation, the prices of every
thing must have been vastly low, not from the great abundance of
them, but because of the little demand; and as a proof of this, I
cite the example of a country, which, within the space of fifty
years, possessed in specie at one time, considerably beyond the worth
of the land, houses, slaves, merchandize, natural produce, moveables,
and ready money, at another. The example is mentioned
by Mr. Hume, and I am surprized the consequence of it did not
strike him. For if the money they possessed was greatly above the
worth of all their property, moveable and immoveable, surely it
never could be considered as a representation of their industry,
which made so small a part of the whole. Athens possessed, before
the Peloponesian war, a treasure of ten thousand talents; and fifty
years afterwards, all Athens, in the several articles above specified,
did not amount to the value of six thousand. Hume’s Political Discourses
upon the Balance of Trade.
These treasures were spent in the war, and they had been laid up
for no other purpose. Therefore I was in the right, when I observed
above, Chap. 22. that war in antient times, had the effect
that industry has now: it was the only means of making wealth
circulate. But peace producing a general stagnation of circulation,
people returned to the antient simplicity of their manners, and the
prices of subsistence remained on the former footing; because there
439was no increase of appetite, or rising of demand upon any necessary
article. So much for the state of wealth during the days of frugality.
The Romans subdued all those kingdoms of the Greeks, and
drew their treasures to Rome. The republic went to destruction,
and a succession of the most prodigal Princes ever known in history
succeeded one another for about two hundred years. Those monstrous
treasures were then thrown into circulation, and I must now
give an idea of the effects produced by such a revolution.
I have already observed (Chap. 28.) that in consequence of the
great prodigality of those times, the prices of superfluities rose to a
monstrous height; while those of necessaries kept excessively low.
The fact is indisputable, and any one who inclines to satisfy himself
farther, may look into that valuable collection of examples of
antient luxury, wealth, and at the same time of simplicity, found in
Mr. Wallace’s Dissertation upon the Numbers of Mankind in antient and
modern Times, p. 132. et seq.
But how is it to be accounted for, that the prices of superfluities
should stand so high, while necessaries were so low? The reason is
plain, from the principles we have laid down. The circulation of
money had no resemblance to that of modern times: fortunes
were made by corruption, fraud, concussion, rapine, and penury;
not by trade and industry. Seneca amassed in four years 2,400,000
pounds sterling. An augur was worth 3 millions sterling. M. Antony
owed on the Ides of March, 322,916 pounds sterling, and paid
it before the calends of April. We know of no such circulation.
Every revolution was violent: the powerful were rapacious and
prodigal, the weak were poor and lived in the greatest simplicity:
consequently, the objects of the desires of the rich were immensely
dear; and the necessaries for the poor were excessively cheap. This
is a confirmation of the principles we have laid down in Chap. 28.
that the price of subsistence must ever be in proportion to the faculties
of the numerous classes of those who buy: that the price of
440every thing must be in proportion to the demand made for it; and
that in every case, where the supply can naturally increase in proportion
to the demand, there must be a determined proportion between
the price of such articles and that of subsistence. Now in the
examples given by Mr. Wallace, of such articles as were found at
monstrous prices, we only find such as could not be increased according
to demand: here is the enumeration of them. Large asses
brought from Spain, peacocks, fine doves, mullets, lampreys,
peaches, large asparagus, purple, wool, jewels, carpets, vestes
Byssinæ, slaves skilled in the finer arts, pictures, statues, books, and
rewards to those who taught the sciences. By casting a glance upon
the catalogue, we may easily perceive that the extraordinary price
must have proceeded from the impossibility of augmenting the
supply in proportion to the demand; not from the abundance of
the money, which had no effect in raising the price of necessaries.
The cheapness again of these, did not proceed from vast
plenty; but because the price must have remained in proportion
to the faculties of the numerous poor; and because the augmentation
of the wealth of the rich never could increase their consumption
of any necessary article. Had the Roman empire been governed
with order and tranquility, this taste of luxury, by precipitating
money into the hands of the numerous classes, would, in time,
have wrought the effects of multiplying the number of the industrious,
by purging the lands; consequently, of increasing the demand
for vendible subsistence; consequently, of raising the price of
it. And on the other hand, the adequate proportion between services
and rewards given by the public, would have checked the
other branch of circulation which produced those monstrous fortunes,
to wit, rapine and corruption: and industry receiving a regular
encouragement, every article of extraordinary demand for
delicate aliments, birds, fishes, fruits, &c. would have been supplied
with sufficient abundance; and consequently, would have
fallen in its price. But when either despotism or slavery were the
441patrimonial inheritance of every one on coming into the world,
we are not to expect to see the same principles operate, as in ages
where the monarch and the peasant are born equally free to enjoy
the provision made for them by their forefathers.
I shall now come nearer home, and examine a very remarkable
difference between the oeconomy in practice some hundred years
ago, and that of the present time, with regard to the method of
levying men and money.
This change is a consequence of trade and industry, and as I have
been preparing the way for the introduction of other matters which
equally owe their existence to them, it may not be improper, in
this last chapter, to point out the natural causes of this change in
modern politics. When people consider effects only, without examining
the causes which produce them, they commonly blame
rashly, or fall into an idle admiration of fortune. It is only by
tracing natural causes, that we come at the means of forming a
solid judgment of the nature of every abuse, and of every advantage.
The general taste for the extension of industry, is what has brought
such loads of money into circulation; not the discovery of America.
We read of treasures in antient times which appear to rival the
wealth of modern Europe. Appian, as cited by Mr. Hume, mentions
a treasure of the Kings of Egypt, of near two hundred millions
sterling; and says, that all the successors of Alexander were
nearly as rich, and fully as frugal. Frugality then is compatible
with the greatest wealth. Therefore the wealth of America, has
not been the cause of European refinement; but the extension of
civil liberty has obliged the possessors of treasures, which in all
ages have been coveted by man, to open their repositories, in order
to procure the service of those who formerly made a branch of
the property of the most wealthy. This is the foundation of trade
and industry.
442Why, therefore, has trade and industry laid the foundation of
taxes and standing armies, which appear so contrary to the one and
the other?
I answer shortly, that very little change has been made as to
things themselves by that revolution; but with respect to the order
of things, the difference is great. Trade and industry cannot flourish
without method and regularity; taxes and standing armies are
only a systematical execution of the old plan, for preserving the
power, safety, and independence of the nations of Europe.
Taxes are no more than the liquidation of those services which
formerly were performed in kind. Standing armies are become
necessary, that the call of the rich luxurious, who are insatiable
in their demand for the service of the poor, may not be able
to engross also the hands necessary for the defence of the state.
Personal services were the taxes of former times. Let no man
imagine, that ever any state could subsist without the contribution
of its subjects. But a more authentic proof of this opinion
is, that in the year 1443, while Charles the VIIth was engaged in
the long war with the Kings of England, who disputed with him
the monarchy of France, the services of the vassals of that kingdom
(by the edict of Saumur of the 14th of September) were formally
converted into the perpetual Taille; and this may be considered, as
the foundation of the regular military force of the French nation.
No body, in those days, imagined such an imposition to be oppressive
or unjust: and if those who remain subject to it, appear under
oppression at present, it is only because they continue in their antient
situation. Personal services are the heaviest of all impositions.
Quest. 4. Why, therefore, are taxes so generally cried out
against, why do they appear so new an invention, and why do people
flatter themselves, that there is a possibility of putting an end to
so general an oppression? I answer, because people commonly attend
to words, and not to things. In former times, the great bulk
of the inhabitants lived upon the lands, and were bound to personal
443service. This kind of imposition was familiar, general, and
equal; every class of the people was bound to services analogous to
their rank in the state. The industrious who lived without any dependence
upon the lands, and who did not enjoy the privileges of cities
and corporations, were so few, that they were not an object of public
attention. Farther, most privileges then known, were in consequence
of land-property; consequently, those independent people
were in a manner without protection, they were vassals to no body;
consequently, had no body to interest themselves for them; consequently,
were a prey to every one who had power, and no body
was sorry to see a rich fellow, who had got plenty of ready money,
and who seemed to do nothing for it, plundered by a lord who appeared
in the service of his country. We see in the time of the
croisades how odious all those money gatherers were; these were
what we now call traders, it was principally in hatred to them,
that the borrowing of money at interest was declared antichristian;
because the Jews were principally in those days the merchants or
the money lenders.
In the beginning of the sixteenth century, when Princes began to
take a taste for magnificence, finding no body, almost, within their
own country capable to supply them, they used to send to Flanders
and Venice, the great trading states in those days, for many kinds
of manufactures. This is the fountain of foreign trade in Europe.
These two states perceiving the great benefit resulting to them from
this new taste of dissipation, gave great encouragement to the industrious.
Had they begun to impose high taxes upon them, they
would have ruined all. Industry, then, was encouraged at first,
and little loaded with any imposition. This is perfectly consistent
with our doctrine. Some Princes, perceiving the daily diminution
of their wealth, made efforts to restore this antient simplicity, by
forbidding this hurtful trade; others, such as Francis I. of France,
and Henry VIII. of England, endeavoured all they could to establish
industry in their own states. For this purpose, great privileges
444were granted to the industrious, who thereby increased daily.
But this revolution naturally purged the lands, and by that
operation diminished the number of personal service-men; or, as
in France, where personal service was at an end, the number of
those subject to the taille. I shall not trace this progress very minutely,
but come directly to the period of extensive taxation. When
industry was fairly established, and when nations began to be well
clothed with the produce of their own soil, wrought up in a thousand
different forms, by their own industrious subjects, Princes soon
perceived their treasures to melt away, and saw plainly, that without
a method of drawing back the money from this new class of
inhabitants, the whole wealth of the state would come to center in
their hands; but the means of coming at money was extremely
difficult. The proprietors of the riches had no solid property in proportion;
and their money was inaccessible. Some betook themselves
to violence, and others to fraud: the one and the other produced
the worst effects. The violence destroyed industry, and rendred
the industrious miserable: for we have observed, that when
inhabitants are once purged from off the lands, they have no resource
left them but their industry; whereas let a peasant be robbed
ever so often of his money, he still has the earth to maintain him.
The fraudulent corrupted the great; the ministers of Princes became
the terror of every man who had money; they enriched
themselves by accepting of compositions, and the state remained
constantly in want. At last, the scheme of proportional taxes took
place: but for this purpose it was necessary to obtain the consent
of the whole state; for no Prince’s power extended so far, and they
were not come to the time of being able to enlarge their prerogative.
Such impositions, therefore, were first introduced in republics,
and mixed governments. In monarchies they were established
with more difficulty; because the great were equally affected by
them with the small. But when long and expensive wars rendred
supplies of money absolutely necessary, then were taxes consented
445to; and the Prince who had not power enough to establish them,
easily found means to keep them up, when once introduced.
From this progress we may easily discover the reason why taxes
are cried out against. The system appears new, because we remember,
in a manner, the doubling of the impositions, and we see them
daily gaining ground; but we never reflect on the change of circumstances,
and seldom attend to the consequences of that new
species of circulation, which is carried on between the public and
those employed by it. The state now pays for every service, because
the people furnish it with money for this purpose.
If the blood therefore be let out, in modern times, at a thousand
orifices of the body politic, there are just as many absorbitories (if
I may be allowed such an expression) opened to receive it back.
From this last circumstance I imply the perpetuity of taxes, while
this system of political oeconomy prevails. We have not as yet
seen an example of any state abolishing them, though many indeed
have had such a scheme in view. But to resume my former comparison,
I may suggest, that if all the orifices through which the
blood issues, should be bound up, all the absorbitories which are
fed with the returning blood, must be starved. But more of this
in its proper place.
Quest. 5. Why are standing armies a consequence of trade and
industry?
In the first place, armies in all ages, past, present, and to come,
have been, are, and will be calculated for offensive and defensive
war; while therefore war subsists among men, armies in one way
or other, will be necessary.
The advantage of regular armies has been known in all ages;
and yet we find, that for many centuries they appeared in a manner
discontinued; that is to say, we read neither of legions, nor of
regiments, nor of any denomination of bodies of warlike men,
kept up and exercised in time of peace, as was the custom while
the Roman empire subsisted: and now, since trade has been established,
446we see the antient Roman military oeconomy again revived.
Let us therefore apply our principles, in order to account for this
revolution also.
During the Roman empire, there was a very great flux of money
into the coffers of the state, which proceeded more from rapine than
from taxes. Consequently, it was an easy matter to keep up large
bodies of regular forces.
With these they subdued the world, as I may call it, that is,
all the polite nations then known; the Carthaginians, Greeks, and
Asiatics. Had they remained satisfied, their empire might possibly
have subsisted; because people who are rich, luxurious, and polite,
are commonly peaceable. But nothing could satisfy their ambition:
they conquered Gaul, and stretched the boundary of their empire
from the streights of Gibraltar to the mouth of the Rhine. All
was peaceable on that side, and in two or three centuries, both Spain
and Gaul had adopted the spirit, language, and manners of the Roman
people. But when they passed the Rhine, the Danube, and
the Euphrates, they found mankind still less cultivated, and very
little known. Their enemies fled before them, and left a territory
which was not worth possessing. This of all barriers is the strongest.
By carrying on war against such people, the match was very unequal;
those nations had every thing to gain, and nothing to lose;
the Romans had all to lose, and nothing to win. Those wars continued
until the Barbarians learned the Roman discipline, and became
warriors. It was the most profitable trade for them, as well
as the only means of safety. That this was the plan of their oeconomy
appears plainly from the form of government every where
established by them. Where every free man was a soldier, there
was no occasion for a regular militia.
Men are governed by prejudice more than by reason: to this I
attribute the sudden change in the government of Europe. In place
of one man governing the world, as was the case of the Emperors,
the new spirit was, that all soldiers were equal, and a King was
447but primus inter pares. The sudden revolution had the effect of
ruining every thing: learning, industry, politics, all went to wreck.
One hundred years of barbarity must ruin the effects of a thousand centuries of
politeness. This is the date of the annihilation of standing armies.
A powerful Prince, such as Charles the Great, who acted in a high
sphere, and who made the world his own, might, during his lifetime,
establish the old oeconomy. But the general establishment of
the feudal form of government, which, no doubt, was the best for
preserving a great empire, filled with barbarity every where, joined
with the weakness of that Prince’s successors, introduced a new
form less barbarous than the former, but equally compatible with
a numerous standing militia. Every Baron became a sovereign, and
his vassals were bred to arms; but as they were forced to attend the
plough for subsistence, as well as the camp; wars were carried on
consistently with agriculture. Certain months of the year were appropriated
for war; others for peace. This was easily accomplished:
war was constantly at the door; a campaign was finished
in a week, because every man’s nearest neighbour was commonly
his worst enemy.
Europe remained in this general state of confusion for some centuries.
Princes had, during that period, a most precarious authority,
and when any nation chanced to be under the government of
one who had talents to unite his subjects, he became so formidable
that there was no possibility of resisting him. In those days, it was
a hard matter to form an idea of a balance of power; because there
was no rule to determine the force of nations. Under the Otho’s,
Germany threatned Italy with chains; under Edward and Henry,
England seemed on the road of adding all France to her monarchy;
Ferdinand the catholic, laid the foundation of the Spanish greatness,
and his successors bid fair for the universal monarchy of Europe.
In our days, the acquisition of a small province, nay of a considerable
town, is not to be made by conquest, without a general convention
between all the powers of Europe, and those who are conversant
448in foreign affairs, can estimate, in a minute, the force of
Princes, by the troops they are able to maintain; nothing is so
easy as to lay down, on a sheet of paper, a state of all the armed
men in Europe. A Prince can hardly add a soldier to a company,
but all the world is informed of it. Excepting the extent of their
credit, and the talents of their generals and counsellors, every
thing relative to power is become the object of computation.
Hence the balance of power, formerly unknown, is now become
familiar. So much is sufficient for the matter of fact; let us now
examine why trade and industry have given rise to so regular a system
of war.
The reason is, because in a state where those are introduced,
every thing must be made regular, or all will go to wreck. The
keeping up of large armies, is the remains of that turbulent spirit
which animated royalty for so many centuries. All literature is
filled with warlike sentiments, from.the books of Moses to the news
papers of this day. A young person cannot learn to read without
imbibing the fire of war. But as nothing is so evident, from the
consideration of the total revolution in the spirit of the people of
Europe, as that war is inconsistent with the prosperity of a modern
state, I sometimes allow my imagination to carry me so far as to
believe the time is at hand when war will come to cease. But
there is no such thing as predicting in political matters: general
peace is a contingent consequence which a thousand accidents may
prevent; and one among the rest is, that the whole plan of modern
policy may be broken to pieces, before Princes come to discover
that it is their interest to be quiet. The ambition of one, arms all
the rest, and when once they are at the head of their armies, want
of money only assembles a congress, not to make peace, but that
the parties may have some years to gather new force.
It is not therefore trade and industry which have given birth to
standing armies, they have only rendred war impossible without
them. It is the ambition of Princes to extend their dominion, and
449even sometimes to extend their commerce, which gives occasion to
war. And we see daily how difficult it becomes to provide troops
for this purpose, from no other reason so much as from the progress
of trade and industry. Those who have the money cannot
have the men, those who have the men cannot have the money.
Do we not see how the greatest monarchy in Europe, the Prince
who has the most millions of subjects, cannot preserve the rank of
power he has prescribed to himself (his political-necessary for war)
without a body of above thirty thousand strangers, in the time of
the most profound peace, and after the greatest reduction judged
consistent with the safety of the country? These cost vastly more
than national troops, and brave men of all countries are alike; so
that the only reason for keeping up so large a body of foreigners,
is to facilitate augmentations when occasion requires it; and not to
spare the subjects who are willing to serve, but to spare agriculture
and industry, after the superfluities of these have fallen in, to compleat
that body of troops which experience has determined to be
proportioned to such superfluities.
From this short exposition let me deduce a principle. That since
every state has occasion, according to the present system of Europe,
for a certain number of armed men for their defence, the first care
of a statesman, is, to discover to what number those of his subjects,
who willingly prefer the conditions offered for military service to
the occupations of industry, may amount. If he finds these exceed
the number wanted for recruiting the army, it is a good reason to
diminish the pay; until the encouragement comes upon a level
with the supply demanded. If on the contrary, the number of volunteers
falls below the standard required, he must examine the
state of the balance of work and demand, before he can give any
farther encouragement. If this balance stands even, he must take
care that the pay given to soldiers be not carried so high, as to engage
those of the lowest class of profitable industry to desert it.
450What measures, therefore, can be fallen upon? There are two.
Either to hire foreign troops, as many states do; and I suppose for
good reasons, only because it is done. But I should prefer another
method, which is to create a new class of inhabitants, appropriated
for supplying the army, upon the principle above laid down, that
he who feeds may have as many mouths as he pleases.
I would therefore fix the military pay at a rate below the profits
of useful industry, and accept of such as should offer. For the augmentation
of this class, I would receive all male children who
should be given or exposed by their parents. These should be bred
to every sort of labour for which the state has occasion, and their
numbers might be carried to twenty per cent. above that which
might be judged necessary in time of the hottest war. Out of this
class only, the standing forces might be recruited: those who remained
might be employed in every public service; such as working
in arsenals, docks, highways, public buildings, &c. By taking
care of the children of this whole class, their numbers would rise
to whatever height might be judged necessary. The same spirit
would be kept up; they might serve by turns, and all become disciplined.
This is a good scheme, in many cases, and is an improvement
upon the distribution of the inhabitants: the execution
is gradual; therefore no sudden revolution is implied. But it is
fit only for a state which can augment its numbers, without
seeking for subsistence from without. It would spare the land and
manufactures, and be a ready outlet for all supernumeraries in
every class.
This subject shall be resumed in the fifth book, when we come to
the application of the amount of taxes. At present it has found a
place, only because the support of a national force has been ranked
among the objects of attention of those statesmen who are at the
head of rich and luxurious nations which have lost their foreign
trade.
451Quest. 6. What are the principles upon which the relative force
of nations is to be estimated?
Without some limitations, no question can be more difficult to
resolve than this; it must therefore be examined only in so far as it
comes under the influence of certain principles. It is as impossible
to estimate the real force of a nation, as it is to estimate that of any
considerable quantity of gun-powder, and for the same reason.
The nation cannot exert all its force at once, no more than the
powder can be all inflamed at once, and the successive efforts of a
small power, are never equally effectual with the momentous shock
of a great one. In proportion, therefore, as the spirit of individuals is
moved to concur with the public measure, a people become powerful;
and as I know of no principle which can regulate such affections of
the mind, we must throw them quite out of the question, and measure
the power of nations by the quantity of men and money at a
statesman’s command, in consequence of the oeconomy he has established.
Let me then suppose two nations, where the number of
inhabitants, and weight of gold and silver are absolutely the same,
military genius and discipline quite equal. From what has been
said, we must determine that nation to be the strongest, which,
without disturbing the oeconomy of their state, can raise the greatest
proportion of men, and draw the greatest proportion of money into
the public coffers.
When the number of inhabitants is given, the first thing to be
known is the nature of the produce of the country, whether mostly
in corn, wine, or pasture: the more the ground is laboured, and
the more crops it yearly produces, the fewer free hands it will
maintain in proportion to the whole, this computation must then
proceed upon the principles laid down above, Book I. Chap. 8.
When once you come at the number of free hands, you must
examine the state of luxury. Luxury is justly said to effeminate a
nation, because the great multitude of hands taken up in supplying
the instruments of it to the rich, diminishes greatly the number
452of such as can be employed in war. If manufacturers and
folks accustomed to a sedentary life, are at a certain age taken from
trades, to compose armies, they will make bad soldiers; and the
strength of a nation lies chiefly in the valour and strength of the
soldiery. Luxury therefore effeminates a nation in general; but it
does not follow from hence, that the most luxurious are the most
effeminate, and most improper for war; on the contrary, they are
found to be the bravest and most proper. The effeminacy and baseness
of mind, in point of courage, are found in the sedentary multitude.
The truth of this might be proved from many examples
in antient history, if the present situation of Europe left the smallest
room to doubt of it.
The more therefore that luxury prevails in a country, the fewer
good troops can be raised in it, and vice versa. But it is not sufficient
to have men for war, the men must be enabled to subsist, and
in the modern way of making war, their subsistence and other expences
require large sums of money. We must then examine what
proportion of the general wealth may be applied to this purpose.
If in any country the riches be found in few hands, the state will
be poor; because the opulence of the public treasure depends greatly
upon a right and proportional distribution of wealth among the inhabitants.
Riches are only acquired three ways. First, Gratuitously,
as by succession, gift, or the like; secondly, by industry; and lastly,
by penury. Those who are poor are seldom enriched gratuitously,
never by penury, and always by industry; when a poor man grows
rich in any state, he changes in so far the balance of wealth, for
what is added to him is taken from another. When a spirit of industry
prevails, the balance is always turning in favour of the
industrious, and as it is a pretty general rule, that the rich are not the
most laborious, so the balance is generally turning against them.
This being the case, the more that industry prevails, the quicker
will this revolution be brought on. By such revolutions, wealth
becomes equably distributed; for by being equably distributed, I do not
453mean, that every individual comes to have an equal share, but an
equal chance, I may say a certainty, of becoming rich in proportion
to his industry. Riches which are acquired by succession, or
any other gratuitous means, do not in the least contribute to circulation,
the owner, as has been said, only changes his name.
Those made by penury or hoarding, instead of adding to, evidently
diminish circulation. It is, therefore, by industry alone that
wealth is made to circulate, and it is by its circulation only, that
money is useful. When large sums are locked up, they produce
nothing; they are therefore locked up not to be useful while they
remain secreted; but that they may be useful when brought out in
order to be alienated. In a state, therefore, where there are a few
very rich and many very poor, there must be much money locked
up; for without money none can be rich, and if it were not locked
up it must fall into the hands of the poor. Why? Because the rich
will not give it to the rich, gratuitously, nor will they labour to acquire
it; either then the common people must be lazy and unwilling
to work, or the rich must be so penurious and addicted to hoarding
as to keep it out of the hands of the poor. In both which cases, if
there be money in the country, it must be found in coffers.
From these positions it may be concluded, that wealth which
produces nothing to its owner, cannot be supposed to produce any
thing to the state: consequently, that state in which there is the
quickest circulation of money, is, cæteris paribus, that in which the
greatest proportion of the general wealth may be raised for the public
service. This is all that is necessary to observe at present: when
we have examined the nature of credit and taxes, and the principles
upon which they may be levied in different countries, and under
different forms of government, we shall discover more rules for
estimating the force of different states.
The principles of industry have been so interwoven with those of
trade, through all the chapters of this second book, that it is now
proper, before we dismiss the subject, to examine a little into the
454nature of the first, considered more abstractedly, and more detached
from its relation to the equivalent given for it, which is the proper
characteristic of trade, and from which proceeds the intimate connection
between them.
The object of our enquiry hitherto has been to discover the method
of engaging a free people in the advancement of the one and
the other, as a means of making their society live in ease, by reciprocally
contributing to the relief of each others wants. Let us
next examine some farther consequences. We are now to cast our
eyes upon another view of this extensive landscape, where the personal
advantages, immediately felt from this gentle band of mutual
dependence, are not to fix our attention so much as the effects produced
by industry upon the face of things, and manners of a
people.
The better to transmit this idea, which I find a little dark, let me
say, that hitherto we have treated our subject, according to the
principles which should direct a statesman, to advance trade and
industry, by engaging the rich to give bread to the poor. Now we
are to examine the consequences resulting from the execution of
this plan; and compare the difference between a country which
has been inhabited by a people abundantly provided for without
industry and labour, and one occupied by another who have subsisted
by these means: and farther, we are to examine industry as producing
effects more or less hurtful to the simplicity of manners,
and more or less permanent and beneficial, according as it has been
directed towards different objects.
I can easily suppose a nation living in the greatest simplicity,
even going naked, but abundantly fed, either with the spontaneous
fruits of the earth, or by an agriculture proportioned to the wants
of every one, and where very little alienation or exchange takes
place. From this primitive life, as I may call it, the degrees of
industry, like imperceptible shades, may be augmented; and the
augmentation, as I apprehend, is to be measured, not so much by
455the degree of occupation which the inhabitants pursue, as by the
quantity of permutation among them; because I think permutation
implies superfluity of something[N].
A people then lives in the utmost simplicity, when the earth is so
far in common, as that none can acquire the property of it, but in
virtue of his possession as the means of subsistence; and when every
one is employed in providing necessaries for himself, and for those
who belong to him. The moment any one has occasion for the
456service of another, independent of him, he must have an equivalent
to give. This equivalent must be something moveable, some
fruit of the earth, pure or modified, superfluous, not necessary, not
the earth itself, because this is the foundation of his subsistence;
and he can never alienate what is essential to his being, in order to
procure a superfluity. From this we may deduce a principle that
the alienation of consumable commodities is a consequence of superfluity
alone, as this again is the bane of simplicity. Consequently,
he who would carry simplicity to the utmost length, ought
to proscribe all alienation; consequently, all dependence among
men; consequently, all subordination: every one ought to be entirely
dependent upon his own labour, and nothing else.
Were man either restored to his primitive state of innocence, or
reduced to a state of brutality; were his pursuits either purely spiritual,
or did they extend no farther than to the gratification of his
animal desires, and acquisition of his physical-necessary; such an
oeconomy might be compatible with society. But as we stand in a
middle state between the two, and have certain desires which participate
of the one and of the other, the gratification of which constitute
what we have called our political-necessary (which we cannot
procure to ourselves, because the very nature of it implies superiority
and subordination, as well as a mutual dependence among
men) a total obstruction to alienation becomes compatible with government,
consequently with human society; and this being the
case, all simplicity of manners is only relative. Our fathers looked
upon the manners of their ancestors as simple, these again admired
the simplicity of the patriarchs; and perhaps the time may come,
when the manners of the eighteenth century may be called the
noble simplicity of the antients.
As simplicity of manners is therefore relative, let us decide, that
as long as superfluity does more good in providing for the poor,
than hurt in corrupting the rich; so far it is to be approved of and
no farther.
457Here it is urged, that since superfluity is only good, so far as it
provides subsistence for the poor, why may not the pursuits of industry
be turned towards objects which cannot corrupt the mind?
Why, in place of fine clothes, elegant entertainments, magnificent
furniture, carving, gildings, and embroidery, with all the splendor
to be seen in palaces, gardens, operas, balls, and masquerades,
processions, shews, horse-races, and diversions of every kind, why
might not, I say, the multitudes which are employed in supplying
these transitory gratifications of human weakness (not to call them
by a worse name) be employed in making highways, bridges, canals,
fountains, fortifications, harbours, public buildings, and a
thousand other works, both useful to society, and of good example
to succeeding generations? Such employments are eternal monuments
of grandeur, they are of lasting utility, and are no more to
be compared to the trifling industry of our days, than an Egyptian
pyramid is to be compared with the luxury of Cleopatra, or the
via appia with the suppers of Heliogabalus. This was the taste in
the virtuous days of antient simplicity: the greatness of a people
appeared in the magnificence of useful works, and as virtue disappeared,
a luxury resembling that of modern times took place.
The aqueducts, common sewers, temples, highways, and burying
places were the ornaments of consular Rome. The imperial grandeur
of that city shone out in amphitheatres and baths; and the
turpitude of manners (say the patrons of simplicity) which brought
on the decline, ought to terrify those who make the apology of modern
luxury and dissipation.
In order to set this question in a clear light, and to do justice both
to the antients and moderns, let us once more enter into an examination
of circumstances, and seek for effects in the causes which
produce them. These are uniform in all ages; and if manners are
different, the difference must be accounted for, without overturning
the principles of reason and common sense.
458Quest. 7. In what manner, therefore, may a statesman establish
industry, so as not to destroy simplicity, nor occasion a sudden
revolution in the manners of his people, the great classes of
which are supposed to live secure in ease and happiness; and, at
the same time, so as to provide every one with necessaries who may
be in want?
The observations we are going to make will point out the answer to
this question: they will unfold still farther the political oeconomy
of the antients, and explain how manners remained so pure
from vicious luxury, notwithstanding the great and sumptuous
works carried on, which strike us with so lofty an idea of their useful
magnificence and noble simplicity. These observations will
also confirm the justness of a distinction made, in the first chapter
of this book, between labour and industry; by shewing that labour
may ever be procured, even by force, at the expence of furnishing
man with his physical-necessary, from which no superfluity can
proceed: whereas industry cannot be established, but by an adequate
equivalent, proportioned, not to the absolutely necessary, but
to the reasonable desire of the industrious; which equivalent becomes
afterwards the means of diffusing a luxurious disposition
among all the classes of a people.
If a statesman finds certain individuals in want, he must either
feed them, in which case he may employ them as he thinks fit; or he
must give them a piece of land, as the means of feeding themselves.
If he gives the land, he can require no equivalent for it, because a
person who has nothing can give nothing but his labour; and if
he be obliged to labour for his food, he cannot purchase with labour
the earth itself, which is the object of it. If it be asked, whether a
statesman does better to give the food, or to give the land? I think
it will appear very evident, that the first is the better course, because
he can then exact an equivalent; and since in either way the person
is fed, the produce of his labour is always clear gain. But in order
to give the food, he must have it to give; in which case, it must
459either be a surplus-produce of public lands, or a contribution from
the people. In both which cases, is implied a labour carried on
beyond the personal wants of those who labour the ground. If this
fund be applied in giving bread to those whom he employs in improving
the soil of the country in general, it will have no immediate
effect of destroying the simplicity of their manners; it will only
extend the fund of their subsistence. If he employs them in making
highways, aqueducts, common sewers, bridges, and the like; it will
extend the correspondence between the different places of the
country, and render living in cities more easy and agreeable: and
these changes have an evident tendency towards destroying simplicity.
But here let it be remarked, that the simplicity of individuals
is not hurt by the industry carried on at the expence of the
public. The superfluous food at the statesman’s disposal, is given
to people in necessity, who are employed in relieving the wants of
the public, not of private persons. But if, in consequence of the roads
made, any inhabitant shall incline to remove from place to place
in a chariot, instead of riding on horseback, or walking, he must
engage some body to make the machine: this is a farther extension
to occupation, on the side of those who labour; but the consequence
of the employment is very different, when considered with regard
to the simplicity of manners. The reason is plain: the ingenuity
here must be paid for; and this superfluity in the hands of the
workman is a fund for his becoming luxurious.
Industry destroys simplicity of manners in him who gives an
equivalent for an article of superfluity; and the equivalent given
frequently gives rise to a subordinate species of luxury in the
workman. When industry therefore meets with encouragement
from individuals, who give an equivalent in order to satisfy growing
desires, it is a proof that they are quitting the simplicity of
their manners. In this case, the wants and desires of mankind
prove the mother of industry, which was the supposition in the first
460book; because, in fact, the industry of Europe is owing to this
cause alone.
But the industry of antient times was very different, where the
multitude of slaves ready to execute whatever was demanded,
either by the state or by their masters, for the equivalent of simple
maintenance only, prevented wealth from ever falling into the
hands of industrious free men; and he who has no circulating
equivalent to give for satisfying a desire of superfluity, must remain
in his former simplicity. The labour therefore of those days
producing no circulation, could not corrupt the manners of the
people; because, remaining constantly poor, they never could increase
their consumption of superfluity.
I must, in this place, insert the authority of an antient author,
in order both to illustrate and to prove the justness of this representation
of the political oeconomy of the antients.
There remains a discourse of Xenophon upon the improvement
of the revenue of the state of Athens. Concerning the authenticity
of this work, I have not the smallest doubt. It is a chef d’oeuvre
of its kind, and from it more light is to be had, in relation to the
subject we are here upon, than from any thing I have ever seen,
antient or modern.
From this antient monument we learn the sentiments of the
author with regard to the proper employment of the three principal
classes of the Athenian people, viz. the citizens, the strangers,
and the slaves. From the plan he lays down we plainly discover,
that, in the state of Athens, (more renowned than any other of
antiquity for the arts of luxury and refinement) it never entred
into the imagination of any politician to introduce industry even
among the lowest classes of the citizens; and Xenophon’s plan was
to reap all the benefits we at present enjoy from it, without producing
any change upon the spirit of the Athenian people.
The state at this time was in use to impose taxes upon their confederate
cities, in order to maintain their own common people, and
461Xenophon’s intention in this discourse was, not to lay down a plan
to make them maintain themselves by industry, but to improve the
revenue of the state in such a manner as out of it to give every
citizen a pension of three oboli a day, or three pence three farthings
of our money.
I shall not here go through every branch of his plan, nor point
out the resources he had fallen upon to form a sufficient fund for
that purpose; but he says, that in case of any deficiency in the domestic
revenue of the state, people from all quarters, Princes and
strangers of note, in all countries, would be proud of contributing
towards it, for the honour of being recorded in the public monuments
of Athens, and having their names transmitted to posterity
as benefactors to the state in the execution of so grand a design.
In our days, such an idea would appear ridiculous; in the days
of Xenophon, it was perfectly rational. At that time great quantities
of gold and silver were found locked up in the coffers of the
rich: this was in a great measure useless to them, in the common
course of life, and was the more easily parted with from a sentiment
of vanity or ostentation.
In our days, the largest income is commonly found too small for
the current expence of the proprietor. From whence it happens,
that presents, great expence at funerals and marriages, godfathers
gifts, &c. so very familiar among ourselves in former times, are
daily going out of fashion. These are extraordinary and unforeseen
expences which our ancestors were fond of, because they flattered
their vanity, without diminishing the fund of their current expence:
but as now we have no full coffers to fly to, we find them excessively
burthensome, and endeavour to retrench them as soon
as we can, not from frugality, God knows, but in consequence o£
a change in our manners.
Besides providing this daily pension of three pence three farthings
a day for every citizen of Athens, rich and poor, he proposed to
build, at the public charge, many trading vessels, a great many
462inns and houses of entertainment for all strangers in the sea ports,
to erect shops, warehouses, exchanges, &c. the rents of which
would increase the revenue, and add great beauty and magnificence
to the city. In short, Xenophon recommends to the state to perform,
by the hands of their slaves and strangers, what a free people
in our days are constantly employed in doing in every country of
industry. While the Athenian citizens continued to receive their
daily pensions, proportioned to the value of their pure physical-necessary,
their business being confined to their service in the army
in time of war, their attendance in public assemblies, and the
theatres in times of peace, clothed like a parcel of capucins, they,
as became freemen, were taught to despise industrious labour, and
to glory in the austerity and simplicity of their manners. The
pomp and magnificence of the Persian Emperors were a subject of
ridicule in Greece, and a proof of their barbarity, and of the slavery
of their subjects. From this plain representation of Xenophon’s
plan, I hope, the characteristic difference between antient and modern
oeconomy is manifest; and for such readers as take a particular
delight in comparing the systems of simplicity and luxury, I
recommend the perusal of this most valuable discourse.
Combining, therefore, all these circumstances, and comparing
them with the contrast which is found as to every particular, in our
times, I think it is but doing justice to the moderns, to allow, that
the extensive luxury which daily diffuses itself through every class
of a people, is more owing to the abolishing of slavery, the equal
distribution of riches, and the circulation of an adequate equivalent
for every service, than to any greater corruption of our manners,
than what prevailed among the antients.
In order to have industry directed towards the object of public
utility, the public, not individuals, must have the equivalent to
give. Must not the employment be adapted to the taste of him who
purchases it? Now, in antient times, most public works were performed
either by slaves, or at the price of the pure physical-necessary
463of free men. We find the price of a pyramid, recorded to us
by Herodotus, in the quantity of turnips, onions, and garlic, consumed
by the builders of it. Those who made the via appia, I apprehend,
were just as poor when it was finished as the day it was
begun; and this must always be the case, when the work requires
no peculiar dexterity in the workmen. If, on the other hand,
examples can be brought where workmen gained high wages, then
the consequences must have been the same as in our days.
So long, therefore, as industry is not directed to such objects as
require a particular address, which, by the principles laid down in
the twenty first chapter, raise profits above the physical-necessary,
the industrious never can become rich; and if they are paid in money,
this money must return into the hands of those who feed
them: and if no superfluity be found any where, but in the hands
of the state, such industry may consume a surplus of subsistence,
but never can draw one penny into circulation. This I apprehend
to be a just application of our principles, to the state of industry under
the Roman republic, and that species of industry which we call
labour. We are not therefore to ascribe the taste for employment in
those days to the virtue of the times. A man who had riches, and
who spent them, spent them no doubt then, as at present, to gratify
his desires; and if the simplicity of the times furnished no
assistance to his own invention, in diversifying them, the consequence
was, that the money was not spent, but locked up. I have
heard many a man say, had I so much money I should not know
how to spend it. The thing is certainly true; for people do not
commonly take it into their head to lay it out for the public.
No body, I believe, will deny that money is better employed in
building a house, or in producing something useful and permanent,
than in providing articles of mere transitory superfluity. But
what principle of politics can influence the taste of the proprietors
of wealth? This being the case, a statesman is brought to a
dilemma; either to allow industry to run into a channel little beneficial
464to the state, little permanent in its nature, or to deprive the
poor of the advantage resulting from it. May I not farther suggest,
that a statesman, who is at the head of a people, whose taste is
directed towards a trifling species of expence, does very well to
diminish the fund of their prodigality, by calling in, by means of
taxes, a part of the circulating equivalent which they gave for it?
When once he is enriched by these contributions, he comes to be
in the same situation with antient statesmen, with this difference,
that they had their slaves at their command, whom they fed and
provided for; and that he has the free, for the sake of an equivalent
with which they feed and provide for themselves. He then
can set public works on foot, and inspire, by his example, a taste
for industry of a more rational kind, which may advance the public
good, and procure a lasting benefit to the nation.
I have said above, that the acquisition of money, by the sale of
industry to strangers, or in return for consumable commodities,
was a way of augmenting the general worth of a nation. Now I
say, that whoever can transform the most consumable commodities
of a country into the most durable and most beneficial works,
makes a high improvement. If therefore meat and drink, which
are of all things the most consumable, can be turned into harbours,
high roads, canals, and public buildings, is not the improvement
inexpressible? This is in the power of every statesman to accomplish,
who has subsistence at his disposal; and beyond the power of
all those who have it not. There is no occasion for money to improve
a country. All the magnificent buildings which ornament
Italy, are a much more proper representation of a scanty subsistence,
than of the gold and silver found in that country at the time they
were executed. Let me now conclude with a few miscellaneous
observations on what has been said.
Obser. 1. When I admire the magnificence and grandeur of publick
works in any country, such as stupendous churches, amphitheatres,
roads, dykes, canals; in a word, when I examine Holland,
465the greatest work perhaps ever done by man, I am never struck
with the expence. I compare them with the numbers of men who
have lived to perform them. When I see another country well inhabited,
where no such works appear, the contrast suggests abundance
of reflections.
As to the first, I conclude, that while these works were carried
on, either slavery, or taxes must have been established; because it
seldom happens, that a Prince will, out of his own patrimony,
launch out into such expences, purely to serve the public. Public
works are carried on by the public; and for this purpose, either
the persons or purses of individuals, must be at its command. The
first I call slavery; that is service: the second taxes; that is public
contributions in money or in necessaries.
Obser. 2. I farther conclude, that nothing is to be gathered from
those works, which should engage us to entertain a high opinion
of the wealth, or other species of magnificence in the people who
executed them. All that can be determined positively concerning
their oeconomy as to this particular, is, that at the time they were
performed, agriculture must have been exercised as a trade, in order
to furnish a surplus sufficient to maintain the workmen; or that
subsistence must have come from abroad, either as a return for
other species of industry, or gratuitously, that is, by rapine, tribute,
&c.
Obser. 3. That the consequence of such works, is, to make meat,
drink, and necessaries circulate, from the hands of those who have
a superfluity of them, into those who are employed to labour; or
to oblige those who formerly worked for themselves only, to work
also in part for others. To execute this, there must be a subordination:
for who will increase his labour, voluntarily, in order to
feed people who do not work for him, but for the public? This
combination was neglected throughout the first book; because we
there left mankind at liberty to follow the bent of their inclinations.
This was necessary to give a right idea of the subject we then intended
466to treat, and to point out the different effects of slavery and
liberty; but now, that we have formed trading nations, and riveted
a multitude of reciprocal dependencies, which tie the members
together, there is less danger of introducing restraints; because
the advantages which people find, from a well ordered society,
make them put up the better with the inconveniencies of supporting
and improving it. It is an universal principle, that instruction
must be given with gentleness. A young horse is to be caressed
when the saddle is first put upon his back: any thing that appears
harsh, let it be ever so useful or necessary, must be suspended in
the beginning, in order to captivate the inclination of the creature
which we incline to instruct.
Obser. 4. When a statesman knows the extent and quality of the
territory of his country, so as to be able to estimate what numbers
it may feed; he may lay down his plan of political oeconomy, and
chalk out a distribution of inhabitants, as if the number were already
compleat. It will depend upon his judgment alone, and
upon the combination of circumstances, foreign and domestic, to
distribute, and to employ the classes, at every period during this
execution, in the best manner to advance agriculture, so as to bring
all the lands to a thorough cultivation. A ruling principle here,
is, to keep the husbandmen closely employed, that their surplus
may be carried as high as possible; because this surplus is the main
spring of all alienation and industry. The next thing is to make
this surplus circulate; no man must eat of it for nothing. What a
prodigious difference does a person find, when he considers two
countries, equally great, equally fertile, equally cultivated, equally
peopled, the one under the oeconomy here represented; the other,
where every one is employed in feeding and providing for himself
only.
A statesman, therefore, under such circumstances, should reason
thus: I have a country which maintains a million of inhabitants,
I suppose, and which is capable of maintaining as many more; I
467find every one employed in providing for himself, and considering
the simplicity of their manners, a far less number will be sufficient
to do all the work: the consequence is, that many are almost idle,
while others, who have many children, are starving. Let me call
my people together, and shew them the inconvenience of having
no roads. He proposes that every one who chooses to work at those
shall be fed and taken care of by the community, and his lands
distributed to those who incline to take them. The advantage is
felt, the people are engaged to work a little harder, so as to overtake
the cultivations of the portions of those who have abandoned
them. Upon this revolution, labour is increased, the soil continues
cultivated as before, and the additional labour of the farmers appears
in a fine high road. Is this any more than a method to engage
one part of a people to labour, in order to maintain another?
Obser. 5. Here I ask, whether it be not better to feed a man, in
order to make him labour and be useful, than to feed him in order
to make him live and digest his victuals? This last was the case of
multitudes during the ages of antient slavery, as well as the consequence
of ill directed modern charity. One and the other being
equally well calculated for producing a simplicity of manners: and
Horace has painted it to the life, when he says,
Nos numerus sumus, et fruges consumere nati.
This I have heard humorously translated, though nastily I confess;
We add to the number of t—d-mills. A very just representation
of many of the human species! to their shame be it spoken, as it
equally casts a reflection on religion and on government.
Consistently with these principles, we find no great or public
work carried on in countries of great liberty. Nothing of that kind
is to be seen among the Tartars, or hunting Indians. These I call
free nations, but not our European republics, where I have found
just as much subordination and constraint as any where else.
I have, on several occasions, let drop some expressions with regard
to charity, which I am sensible might be misinterpreted. It
468will therefore be proper to make some apology, which no body can
suspect of insincerity; because my reason for introducing it, is
with a view to a farther illustration of my subject.
When I see a rich and magnificent monastery of begging friars,
adorned with profusion of sculpture, a stupendous pile of building,
stately towers, incrustations of marble, beautiful pavements; when
I compare the execution and the expence of all these, with the faculties
of a person of the largest fortune, I find there is no proportion
between what the beggars have executed with the produce of
private charities, and what any Lord has done with his overgrown
estate. Nay monasteries there are which, had they been executed
by Princes, would have been cited by historians, from generation
to generation, as eternal monuments of the greatest prodigality and
dissipation. Here then is an effect of charity, which I have heard
condemned by many, and I think without much reason. What
prostitution of riches! say they: how usefully might all this money
have been employed, in establishing manufactures, building a navy,
and in many other good purposes? Whereas I am so entirely taken
up with the effects arising from the execution of the work, that I
seldom give myself time to reflect upon its intention. The building
of this monastery has fed the industrious poor, has encouraged
the liberal arts, has improved the taste of the inhabitants, has
opened the door to the curiosity of strangers: and when I examine
my purse, I find that in place of having contributed to the building
of it from a charitable disposition, my curiosity to see it has obliged
me to contribute my proportion of the expence. I spend my money
in that country, and so do other strangers, without bringing
away any thing for it. No balance of trade is clearer than this.
The miraculous tongue of St. Anthony of Padua, has brought more
clear money into that city than the industry of a thousand weavers
could have done: the charity given is not to the monks, but to the
poor whom they employ. If young wits, therefore, make a jest of
469such a devotion; I ask, who ought to be laughed at, those who give,
or those who receive money for the show?
In a country where such works are usually carried on, they cease in
a great measure to be useful, whenever they are finished; and a new
one should be set on foot directly, or what will become of those who
are without work? It must not be concluded from this, that the usefulness
of public works is not a principal consideration. The more
a work is useful after it is done, so much the better; because it
may then have the effect of giving bread to those who have not
built it. But whether useful or not afterwards, it must be useful
while it is going on; and many, who with pleasure will give a
thousand pounds to adorn a church, would not give a shilling to
build Westminster bridge, or the port of Rochefort; and the poor
live equally by the execution of either. Expensive public works,
are therefore a means of giving bread to the poor, of advancing
industry, without hurting the simplicity of manners; which is an
answer to the seventh question.
Obser. 6. Great works found in one country, and none found in
another, is no proof that the first have surpassed the second in labour
and industry: the contrast only marks the different division of
property, or taste of expence. Every undertaking marks a particular
interest. Palaces are a representation of rich individuals;
snug boxes, in the neighbourhood of cities, represent small but
easy fortunes; hutts point out poverty; aqueducts, highways, &c.
testify an opulent common good: and if these be found in a country
where no vestige of private expence appears, I then must conclude,
they have been executed by slaves, or by oppression; otherwise
somebody, at least, would have gained by the execution; and his
gains would appear in one species of expence or another.
Obser. 7. In countries where fortunes have been unequally divided,
where there have been few rich and many poor, it is common
to find lasting monuments of labour; because great fortunes
only are capable of producing them. As a proof of this let us
470compare the castles of antient times (I mean four or five hundred
years ago) with the houses built of late. At that time fortunes
were much more unequal than at present, and accordingly we find
the habitations of the great in most countries not numerous, but
of an extraordinary bulk and solidity. Now a building is never to
be judged of by the money it cost, but by the labour it required.
From the houses in a country I judge of the opulence of the
great, and of the proportion of fortunes among the inhabitants.
The taste in which these old castles are built, marks the power of
those who built them, and, as their numbers are small, we may
judge, from the nature of man, who loves imitation, that the
only reason for it was, that there were few in a condition to build
them. Why do we find in modern times a far less disproportion
between the conveniency with which every body is lodged, than
formerly; but only because riches are more equally divided, from
the operations of industry above-described.
Obser. 8. From this we may gather, that lasting monuments
are no adequate measure of the industry of a country. The expence
of a modern prince, in a splendid court, numerous armies,
frequent journeys, magnificent banquets, operas, masquerades,
tournaments, and shews, may give employment and bread to as
many hands, as the taste of him who built the pyramid; and the
smoke of the gun-powder at his reviews, of the flambeaus and
wax lights at his entertainments, may be of as great use to posterity,
as the shadow of the pyramid, which is the only visible effect
produced by it; but the one remains for ever, the other leaves no
vestige behind it. The very remaining of the work, however useless
in itself, becomes useful, in so far as it is ornamental, inspires
noble sentiments of emulation to succeeding princes, the effects of
which will still be productive of the good consequences of keeping
people employed. The expence of the other flatters the senses,
and gives delight: there is no question of choice here. All useless
471expence gratifies vanity only; accident alone makes one species
permanent, another transitory.
Those who have money may be engaged to part with it in favour
of the poor, but never forced to part with it, to the prejudice of
their posterity. Inspire, if you can, a good and useful taste of
expence; nothing so right; but never check the dissipation of
ready money, with a view to preserve private fortunes. Leave
such precautions to the prudence of every individual. Every man,
no doubt, has as good a right to perpetuate and provide for his
own posterity, as a state has to perpetuate the welfare of the whole
community; it is the combination of every private interest which
forms the common weal. From this I conclude, that, without the
strongest reasons to the contrary, perpetual substitutions of property
should be left as free to those who possess lands, as locking up in
chests should be permitted to those who have much money.
Quest. 8. What are the principles which influence the establishment
of mercantile companies; and what effects do these
produce upon the interests of trade?
There is a close connexion between the principles relating to
companies, and those we have examined in the twenty third chapter,
concerning corporations. The one and the other have excellent
consequences, and both are equally liable to abuse. A right
examination of principles is the best method to advance the first
and to prevent the latter.
The advantages of companies are chiefly two.
1. That by uniting the stocks of several merchants together, an
enterprise far beyond the force of any one, becomes practicable to
the community.
2. That by uniting the interests of several merchants, who direct
their foreign commerce towards the same object, the competition between
them abroad is taken away; and whatever is thus gained, is
so much clear profit, not only to the company, but to the society
of which they are members.
472It is in consideration of the last circumstance, that companies for
foreign commerce have a claim to extensive privileges. But no encouragement
given to such associations should be carried farther
than the public good necessarily requires it should be. The public
may reward the ingenuity, industry and inventions of particular
members, and support a private undertaking as far as is reasonable;
but every encouragement given, ought to be at the expence
of the whole community, not at that of particular denominations of
inhabitants.
The disadvantages proceeding from companies are easily to be
guessed at, from the very nature of the advantages we have been
setting forth: and the relation between the one and the other will
point out the remedies.
1. The weight of money in the hands of companies, and the
public encouragement given, them, crush the efforts of private adventurers,
while their success inspires emulation, and a desire in
every individual to carry on a trade equally profitable.
Here a statesman ought nicely to examine the advantages which
the company reaps from the incorporation of their stock, and those
which proceed from the public encouragement given to the undertaking;
that with an impartial hand, he may make an equal distribution
of public benefits. And when he finds it impossible to
contribute to the advancement of the public good, by communicating
the privileges of companies to private adventurers, he ought
to facilitate the admittance of every person properly qualified into
such associations.
2. The second disadvantage of companies, is, a concomitant of
that benefit so sensibly felt by the state, from the union of their interest,
while they purchase in foreign markets: the same union
which, at the time of buying, secures the company from all competitions,
proves equally disadvantageous to those who purchase
from them at home. They are masters of their price, and can regulate
their profits by the height of demand; whereas they ought
473to keep them constantly proportioned to the real value of the merchandize.
The advantages resulting from the union of many private stocks
is common to all companies; but those we have mentioned to proceed
from the union of their interest, is peculiar to those who carry
on an exclusive trade in certain distant parts of the world. We
have, in a former chapter, laid down the maxims which influence
the conduct of a statesman in regulating the prices of merchandize,
by watching over the balance of work and demand, and by preserving
the principles of competition in their full activity. But
here a case presents itself, where, upon one side of the contract,
competition can have no effect, and where its introduction, by
destroying the exclusive privilege of the company to trade in certain
countries, is forbid for the sake of the public good.
What method, therefore, can be fallen upon to preserve the advantage
which the nation reaps from the company’s buying in foreign
parts without being exposed to competition; and at the same
time to prevent the disadvantage to which the individuals of the
society are exposed at home, when they endeavour, in competition
with one another, to purchase from a company, who, in virtue of the
same exclusive privilege, are united in their interest, and become
masters to demand what price they think fit.
It may be answered, that it cannot be said of companies as of
private dealers, that they profit of every little circumstance of competition,
to raise their price. Those have a fixed standard, and all
the world buys from them at the same rate; so that retailers, who
supply the consumption, have in one respect this notable advantage,
that all buying at the same price, no one can undersell another;
and the competition between them secures the public from exorbitant
prices.
I agree that these advantages are felt, and that they are real; but
still they prove no more than that the establishment of companies
is not so hurtful to the interest of those who consume their goods,
474as it would be could they profit to the utmost of their exclusive privilege
in selling by retail. But it does not follow from this, that the
profits upon such a trade do not rise (in consequence of their privilege)
above the standard proper for making the whole commerce of
a nation flourish. The very jealousy and dissatisfaction, conceived
by other merchants, equally industrious and equally well deserving
of the public, because of the great advantages enjoyed by those incorporated,
under the protection of exclusive privileges, is a hurt
to trade in general, is contrary to that principle of impartiality
which should animate a good statesman, and should be prevented
if possible. Let us therefore go to the bottom of this affair; and,
by tracing the progress of such mercantile undertakings, as are
proper objects for the foundation of companies, and which entitle
them to demand and to obtain certain exclusive privileges, let us
endeavour to find out a method by which a statesman may establish
such societies, so as to have it in his power to lay their inland sales
under certain regulations, capable to supply the want of competition;
and to prevent the profits of exclusive trade from rising,
considerably, above the level of that which is carried on without
any such assistance from the public.
While the interest of companies is in few hands, the union of
the members is more intimate, and their affairs are carried on
with more secrecy. This is always the case in the infancy of such
undertakings. But the want of experience frequently occasions
considerable losses; and while this continues to be the case, no complaints
are heard against such associations. Few pretend to rival
their undertaking, and it becomes at first more commonly the object
of raillery than of jealousy. During this period, the statesman
should lay the foundation of his authority; he ought to spare no
pains nor encouragement to support the undertaking; he ought to
inquire into the capacity of those at the head of it; order their projects
to be laid before him; and when he finds them reasonable,
and well planned, he ought to take unforeseen losses upon himself:
475he is working for the public, not for the company; and the more
care and expence he is at in setting the undertaking on foot, the
more he has a right to direct the prosecution of it towards the general
good. This kind of assistance given, entitles him to the inspection
of their books; and from this, more than any thing, he
will come at an exact knowledge of every circumstance relating to
their trade. By this method of proceeding, there will be no complaints
on the side of the adventurers, they will engage with chearfulness,
being made certain of the public assistance, in every reasonable
undertaking; their stock becomes in a manner insured,
individuals are encouraged to give them credit, and from creditors
they will naturally become associates in the undertaking. So soon
as the project comes to such a bearing as to draw jealousy, the bottom
may be enlarged by opening the doors to new associates, in
place of permitting the original proprietors to augment their stock
with borrowed money; and thus the fund of the company may be
increased in proportion to the employment found for it, and every
one will be satisfied.
When things are conducted in this way, the authority of public
inspection is no curb upon trade; the individuals who serve the
company are cut off from the possibility of defrauding: no mysteries,
no secrets, from which abuses arise, will be encouraged;
trade will become honourable and secure, not fraudulent and precarious;
because it will grow under the inspection of its protector,
who only protects it for the public good.
Why do companies demand exclusive privileges, and why are
they ever granted, but as a recompense to those who have been at
great expence in acquiring a knowledge which has cost nothing to
the state? And why do they exert their utmost efforts to conceal the
secrets of their trade, and to be the only sharers in the profits of it,
but to make the public refund tenfold the expence of their undertaking.
476When companies are once firmly established, the next care of a
statesman, is, to prevent the profits of their trade from rising above
a certain standard. We speak at present of those only, who, by exclusive
privileges, are exposed to no competition at their sales. One
very good method to keep down prices, is, to lay companies under
a necessity of increasing their stock as their trade can bear it, by
the admission of new associates; for by increasing the company’s
stock, you increase, I suppose, the quantity of goods they dispose
of, and consequently diminish the competition of those who demand
of them: but as even this will not have the effect, of reducing
prices to the adequate value of the merchandize (a thing only to
be done by competition) the statesman himself may interpose an
extraordinary operation. He may support high profits to the company,
upon all articles of luxury consumed at home, in favour of
keeping down the prices of such goods as are either for exportation
or manufacture.
This can only be done when he has companies to deal with: in
every other case, the principles of competition between different
merchants, trading in the same goods, upon separate interests,
makes the thing impossible. But where the interests of the sellers,
which are the company, are united, and where there is no competition,
they are masters of their price, according to the principles
laid down in the seventh chapter. Now, provided the dividend upon
the whole stock be a sufficient recompense both for the value of
the fund, and the industry of those who are employed to turn it to
account, the end is accomplished. Extraordinary profits upon any
particular species of trade cast a discouragement upon all others.
We very frequently see that great trading companies become the
means of establishing public credit; on which occasions, it is proper
to distinguish between the trading stock of the company, which
remains in their possession, and the actions, bonds, annuities, contracts,
&c. which carry their name, and which have nothing but
the name in common. The price of the first is constantly regulated
477by the profits upon the trade; the price of the other, by the current
value of money.
Let me next observe the advantage which might result to a nation,
from a prudent interposition of the statesman, in the regulation
of a tarif of prices for such goods as are put to sale without
any competition on the side of the sellers.
The principles we have laid down, direct us to proscribe, as
much as possible, all foreign consumption, especially that of work;
and to encourage as much as possible the exportation of it. Now, if
what the India company of England, for example, sells to strangers,
and exports for a return in money, is equal to the money she herself
has formerly exported, the balance upon the India trade will
stand even. But if the competition of the French and Dutch is
found hurtful to the English company in her outward sales, may
not the government of that nation lend a hand towards raising the
profits of the company, upon tea, china, and japan wares, which
are articles of superfluity consumed by the rich, in order to enable
the company to afford her silk and cotton stuffs to strangers, at a
more reasonable rate? These operations, I say, are practicable,
where a company sells without competition, but are never to be
undertaken, but when the state of its affairs are perfectly well
known; because the prices of exportable goods might, perhaps, be
kept up by abuse and mismanagement, and not by the superior
advantages which other nations have in carrying on a like commerce.
The only remedy against abuse is reformation. But how
often do we see a people laid under contribution in order to support
that evil!
Companies, we have said, owe their beginning to the difficulties
to which an infant commerce is exposed: these difficulties once surmounted,
and the company established upon a solid foundation,
new objects of profit present themselves daily; so much, that the
original institution is frequently eclipsed, by the accessary interests
of the society. It is therefore the business of a statesman to take
478care that the exclusive privileges granted to a society, for a certain
purpose, be not extended to other interests, nowise relative to that
which set the society on foot, and gave it a name. And when exclusive
privileges are given, a statesman should never fail to stipulate
for himself, a particular privilege of inspection into all the affairs
of the company, in order to be able to take measures which effectually
prevent bad consequences to the general, interest of the nation,
or to that of particular classes.
Let this suffice at present, as to the privileges enjoyed by companies
in foreign trade. Let me now examine the nature of such
societies in general, in order to discover their influence on the mercantile
interests of a nation, and how they tend to bring every
branch of trade to perfection, when they are established and carried
on under the eye of a wise administration.
Besides the advantages and disadvantages above mentioned, there
are others found to follow the establishment of trading companies.
The first proceed from union, that is, a common interest; the last
from disunion, that is, from separate interests.
A common interest unites, and a separate interest disunites the
members of every society; and did not the first preponderate among
mankind, there would be no society at all. Those of the same nation
may have a common interest relative to foreigners, and a separate
interest relative to one another; those of the same profession
may have a common interest relative to the object of their industry,
and a separate interest relative to the carrying it on: the members
of the same mercantile company may have the same interest in the
dividend, and a separate interest in the administration of the fund
which produces it. The children of the same family; nay even a
man and his wife, though tied by the bonds of a common interest,
may be disjoined by the effects of a separate one. Mankind are
like loadstones, they draw by one pole, and repel by another. And
a statesman, in order to cement his society, should know how to
479engage every one, as far as possible, to turn his attracting pole
towards the particular center of common good.
From this emblematical representation of human society, I infer,
that it is dangerous to the common interest, to permit too close an
union between the members of any subaltern society. When the
members of these are bound together, as it were by every articulation,
they in some measure become independent of the great
body; when the union is less intimate, they admit of other connections,
which cement them to the general mass[O].
Companies ought to be permitted, consistently with these principles.
Their mercantile interests alone ought to be united, in so
far as union is required to carry on their undertaking with reasonable
profits; but beyond this, every subaltern advantage by which
the associates might profit, in consequence of their union, ought
to be cut off; and the public should take care to support the interest
of any private person against them, on all occasions, where they
take advantage of their union to hurt the right of individuals. Let
me illustrate this by an example. Several weavers, fishermen, or
those of any other class of the industrious, unite their stocks, in
order to overcome those difficulties to which single workmen are
exposed, from a multiplication of expences, which might be saved
by their association. This company makes a great demand for the
materials necessary for carrying on their business. By this demand
they attach to themselves a great many of the industrious not incorporated,
who thereby get bread and employment. So far these
find an advantage: but in proportion as the undertaking is extended,
and the society becomes able to engross the whole, or a considerable
part of such a manufacture, they destroy their competitors;
and by forming a single interest, in the purchase of the materials
requisite, and in the sale of their manufactures, they profit in the
first case, by reducing the gains of their subaltern assistants below
480the proper standard; and in the second, they raise their own profits
too far above what is necessary.
The method, therefore, to prevent such abuses, is, for a statesman
to interpose; not by restraining the operations of the company,
but by opposing the force of principles similar to those by
which they profit, in such a manner as to render their unjust dealings
ineffectual. If the weavers oppress the spinners, for instance,
methods may be fallen upon, if not by incorporating the last, at
least by uniting their interests, so as to prevent a hurtful competition
among them. He may discourage too extensive companies,
by establishing and supporting others, which may serve to preserve
competition; and he may punish, severely, every transgression of
the laws, tending to establish an arbitrary dependence on the company.
In short, while such societies are forming, he ought to be
their protector; and when they are formed, he ought to take those
whom they might be apt to oppress under his protection.
In establishing companies for manufactures, it is a good expedient
to employ, in such undertakings, none but those who have
been bred to the different branches of their business. When people
of fortune, ignorant and projecting, interest themselves in infant
manufactures, with a view to become suddenly rich, they are so
bent upon making vast profits, proportioned to their stock, that
their hopes are generally disappointed, and the undertaking fails.
Pains-taking people, bred to frugality, content themselves with
smaller gains; but under the public protection, these will swell
into a large sum, and the accumulation of small profits will form a
new class of opulent people, who adopt, or rather retain the sentiments
of frugality with which they were born.
Thus, for instance, in establishing fisheries, in place of private
subscriptions from those who put in their money from public spirit,
and partly with a view to draw an interest for it; or from those
who are allured by the hopes of being great gainers in the end,
(the last I call projectors) the public should be at the great expence
481requisite; and coopers, sail-makers, rope-makers, ship-carpenters,
net-makers; in short, every one useful to the undertaking, should
be gratuitously taken in for a small share of the profits; and by
their being lodged together in a building, or town, proper for carrying
it on, every workman becomes an undertaker to the company,
for the articles of his own work. No man concerned directly
in the enterprize, should reside elsewhere than in the place: any
one of the associates may undertake to furnish what cannot be manufactured
at home at fixed prices. Thus the whole expence of
the public in the support of the undertaking, may circulate through
the hands of those who carry it on; and every one becomes a check
upon another, for the sake of the dividend upon the general profits.
One great advantage in carrying on undertakings in this
manner, is, that although those concerned draw no profit at all
upon the undertaking itself, they find their account in it, upon the
several branches of their own industry. The herring trade was at
first set on foot in Holland by a company of merchants, who failed;
and their stock of busses, stores, &c. being sold at an under value,
were bought by private people, who had been instructed (at the
expence of the company’s miscarriage) in every part of the trade,
and who carried it on with success. Had the company been set
up at first in the manner here mentioned, their trade would never
have suffered any check.
482
Having paved the way in the first book, for a particular
inquiry into the principles of modern political oeconomy; in
the introduction to this, I shew that the ruling principle of the
science, in all ages, has been to proceed upon the supposition that
every one will act, in what regards the public, from a motive of
private interest; and that the only public spirited sentiment any
statesman has a right to exact of his subjects, is their strict obedience
to the laws. The union of every private interest makes the
common good: this it is the duty of a statesman to promote; this
consequently ought to be the motive of all his actions; because the
goodness of an action depends on the conformity between the motive
and the duty of the agent. We can, therefore, no more subject the
actions of a statesman to the laws of private morality, than we can
judge of the dispensations of providence by what we think right
and wrong[P].
483Chap. I. In treating the principles of any science, many things
must be blended together, at first, which in themselves are very different.
In the first book I considered multiplication and agriculture as
the same subject; in the second, trade and industry are represented
as mutually depending on one another. To point out this relation,
I give a definition of the one and the other, by which it appears,
that to constitute trade, there must be a consumer, a manufacturer,
and a merchant. To constitute their industry, there must be freedom
in the industrious. His motive to work must be in order to
procure for himself, by the means of trade, an equivalent, with
which he may purchase every necessary, and remain with something
over, as the reward of his diligence. Consequently, industry
differs from labour, which may be forced, and which draws no
other recompence, commonly, than bare subsistence. Here I take
occasion to shew the hurtful effects of slavery on the progress of
industry; from which I conclude, that its progress was in a great
measure prevented by the subordination of classes under the feudal
government; and that the dissolution of that system established it.
Whether trade be the cause of industry, or industry the cause of
trade, is a question of little importance, but the principle upon
which both depend is a taste for superfluity in those who have an
equivalent to give; this taste is what produces demand, and this
again is the main spring of the whole operation.
Chap. II. We have substituted throughout this book, the term
demand, to express the idea we conveyed in the last by that of wants;
and since the subject becomes more complex, and that we have
many more relations to take in, I must make a recapitulation of all
the different acceptations of this term demand.
484Demand, in the first place, is always relative to merchandize; it is
the buyer who demands; the seller offers to sale. 2. It is said to
be reciprocal, when there is a double operation, that is, when the
seller in the first, becomes the buyer in the second case; and then,
taking the two operations in one view, we call those demanders who
have paid the highest price. 3. Demand is simple, or compound; simple,
when there is no competition among the buyers; compound, when
there is. 4. It is great or small, according to the quantity demanded.
And 5. high or low, according to the price offered. The nature of a
gradual increase of demand, is to encourage industry, by augmenting
the supply; that of a sudden increase, is to make prices rise.
This principle has not every where the same efficacy in producing
these varieties: it is checked in its operations between merchants,
who seek their profit; and it is accelerated among private people,
who seek for subsistence, necessaries, or luxurious gratifications.
Chap. III. I come next to deduce the origin of trade and industry,
which I discover from the principles of the first book, where bartering
of necessaries was understood to be trade; and I find that the
progress of this is owing to the progress of multiplication and agriculture.
When a people arrive at a moral impossibility of increasing
in numbers, there is a stop put to the progress of barter. This grows
into trade, by the introduction of a new want (money) which is
the universal object of desire to all men. While the desires of man
are regulated by their physical wants, they are circumscribed within
certain limits. So soon as they form to themselves others of a political
nature, then all bounds are broken down. The difficulty of
adapting wants to wants, naturally introduces money, which is an
adequate equivalent for every thing. This constitutes sale, which
is a refinement on barter. Trade is only a step farther; it is a
double sale, the merchant buys, not for himself, but for others. A
merchant is a machine of a complex nature. Do you want, he supplies
you; have you any superfluities, he relieves you of them; do
you want some of the universal equivalent money, he gives it you,
485by creating in you a credit in proportion to your circumstances.
The introduction of so useful a machine, prompts every one to wish
for the power of using it; and this is the reason why mankind extend
their labour beyond the mere supply of their physical wants.
Trade therefore abridges the tedious operations of sale and barter,
and brings to light many things highly important for individuals,
who live by relieving the wants of others, to know. It
marks the standard of demand, which is, in a manner, the voice of
the statesman, conducting the operations of industry towards the
relief of wants; and directing the circulation of subsistence towards
the habitations of the necessitous.
Chap. IV. The consequence of this, is to determine the value
of commodities, and to mark the difference between prime cost
and selling prices. The first depends upon the time employed, the
expence of the workman, and the value of the materials. The second
is the sum of these, added to the profit upon alienation. It is
of consequence to distinguish exactly between these two constituent
parts of price, the cost and the profit: the first is invariable after
the first determination, but the second is constantly increasing,
either from delay in selling off, or by the multiplicity of alienations;
and the more exactly every circumstance with regard to the whole
analysis of manufactures is examined, the easier it is for a statesman
to correct every vice or abuse which tends to carry prices beyond
the proper standard.
Chap. V. Nothing tends to introduce an advantageous foreign
trade more than low and determined prices. In the first place, it
draws strangers to market. This we call passive commerce. Secondly,
it gives merchants an opportunity to distribute the productions of
their country with greater advantage among other nations, which
is what we call active foreign trade. In this chapter, I trace the
effects of the last species. I shew how merchants profit at first of
the ignorance of their correspondents; how they engage them to
become luxurious; how the competition between themselves, when
486profits are high, make them betray one another; and how the most
ignorant savages are taught to take advantage of the discovery;
how this intercourse tends to unite the most distant nations, as well
as to improve them; and how naturally their mutual interest leads
them to endeavour to become serviceable to one another.
Chap. VI. I next endeavour to shew the effects of trade upon
those nations who are passive in the operation. Here I take an opportunity
of bringing in a connexion between the principles of
trade, and those of agriculture, and I shew on what occasions passive
trade may tend to advance the cultivation of lands, and when
it cannot. Upon this, I build a principle, that when passive trade
implies an augmentation of the domestic consumption of subsistence,
in order to carry it on, then will agriculture be advanced by it, and
not otherwise; and as the first is commonly the case, from this I
conclude, that trade naturally has the effect of increasing the numbers
of mankind in every country where it is established. I next
trace the consequences of a growing taste for superfluity, among
nations living in simplicity; and I shew how naturally it tends to
promote industry among the lower classes, providing they be free;
or to make them more laborious, supposing them to be slaves:
from which I conclude, that where the advancement of refinement
requires the head, that is, the ingenuity and invention of man,
those who are free have the advantage; and where it requires
hands, that is to say labour, that the advantage is on the side of
the slaves: slavery, for example, might have made Holland; but
liberty alone could have made the Dutch.
Chap. VII. Having given a rough idea of trade in general, I come
to a more accurate examination of the principles which a statesman
must keep in view, in order to carry it to perfection, by rendring
it a means of promoting ease and affluence at home, as well as
power and superiority abroad. As a private person becomes easy
in his circumstances in proportion to his industry, and so rises above
the level of his fellows, in like manner, does an industrious nation
487become wealthy, and acquires a superiority over all her less industrious neighbours.
The principle which set trade on foot we have shewn to be demand,
what supports it and carries it to its perfection is competition. These
terms are often confounded, or at least so blended together as to
produce ideas incorrect, dark, and often contradictory: for this
reason I have judged an analysis of them necessary, comparing them
together, and pointing out their relations, differences, and coincidences.
Demand and competition are both relative to buying and selling; but
demand can only be applied to buying, and competition may be applied
to either.
Demand marks an inclination to have, competition an emulation to
obtain a preference.
Demand can exist without competition, but competition must constantly
imply demand.
Demand is called simple, when there appears only one interest on
the side of the buyers.
Competition is called simple, when it takes place on one side of the
contract only, or when the emulation is at least much stronger on
one side than on the other.
Demand is called compound, when more interests than one are found
among those who desire to buy.
Competition is called compound, when an emulation is found to prevail
on both sides of the contract at once.
Simple competition raises prices; double competition restrains them to
the adequate value of the merchandize.
While double competition prevails, the balance of work and demand
stands even, under a gentle vibration; simple competition destroys and
overturns it.
The objects of competition frequently determine its force. Merchants
buy in order to sell; consequently, their competition is in proportion
to their views of profit. Hungry people buy to eat, and
488their competition is in proportion to their funds. The luxurious buy
to gratify their desires, their competition is in proportion to these.
Strong competition on one side, makes it diminish on the other; and
when it becomes so strong as effectually to unite the interests on one
side of the contract, then it becomes absolutely simple; this totally
overturns the balance, and must in a short time destroy the divided
interest.
Chap. VIII. I next examine the relative terms of expence, profit and
loss. The relations they bear, are often not expressed, which involves
those who use them in ambiguities proper to be avoided. I
therefore call expence national, when the national stock is diminished
by it, in favour of other states; it is public, when the money proceeding
from a national contribution is expended by the state
within the country; and private expence is the laying out of money
belonging to private people or private interests: this has no other
effect than to promote domestic circulation. I farther distinguish
between what we call spending, and what is called advancing of money;
the first marks an intention to consume; the second marks a view
to a subsequent alienation.
Profit is either positive, relative, or compound.
Positive, when some body gains and no body loses; relative, when
some body gains exactly what is lost by another; and compound,
when the gain of one implies a loss to another, but not equal to
the full value of the gain. The same distinction may be applied
to loss.
Chap. IX. Having laid down the fundamental principles which
influence the operations of trade and industry, I take a view of their
political consequences, and of the effects resulting to a state, which
has begun to subject her political oeconomy to the interests of
commerce; and such a state I call a trading nation.
The first consequence is an augmentation of demand for the work
of the people; because they begin now to supply strangers. If
this augmentation is sudden, it will raise demand; if it be gradual,
489it will increase it. If prices rise upon one extensive branch of industry,
they must rise upon all; because a competition for hands
must take place: the farmer looks out for servants, and must dispute
them with the loom; and the first must draw back his additional
expence upon the sale of his articles of the first necessity.
Upon this revolution, wo to those who cannot increase their fund
of subsistence in proportion to the augmentation of their expence!
Nothing is so agreeable as the gradual rise of profits upon industry,
and nothing so melancholy as the stop, which is the necessary consequence
of all augmentations. When prices rise high, the market
is deserted, and other nations profit of this circumstance to obtain
a preference. From hence I conclude, that the rise of demand
is the forerunner of decay in trade; and the augmentation of it, the
true foundation of lasting opulence. But as an augmentation of
supply may imply an augmentation of inhabitants, the statesman
must constantly keep subsistence in an easy proportion to the demand
for it: on this the whole depends. Plentiful subsistence is the infallible
means of keeping prices low; and sudden and violent revolutions
in the value of it, must ruin industry, in spite of a combination
of every other favourable circumstance. The reason is
plain: that article alone, comprehends two thirds of the whole expence
of all the lower classes, and their gains must be in proportion
to their expence; but as the gains of those who work for exportation
are fixed, in a trading nation, by the effects of foreign competition,
if their subsistence is not kept at an equal standard, they
must live precariously, or in a perpetual vicissitude between plenty
and want. From this may be gathered the infinite importance of
distinguishing, in every trading nation, where the prices of subsistence
are liable to great and sudden variations, these who supply
strangers from those who supply their countrymen. As also the inconceivable
advantage which would result from such a police
upon grain, as might keep the price of it within determined
limits.
490Chap. X. This doctrine leads me naturally to consider the proportions
between demand and supply, and for the better conveying
my ideas, I have considered them as two quantities suspended in
the scales of a political balance, which I call that of work and demand;
preferring the word work to that of supply, because it is the interests
of the workmen which chiefly come under our consideration.
When the work is proportioned to the demand, the balance vibrates
under the influence of double competition; trade and industry flourish:
but as the operation of natural causes must destroy this equilibrium,
the hand of a statesman becomes constantly necessary to
preserve it.
After representing the different ways in which the balance comes
to be subverted (by the positive or relative preponderancy of either
scale) I point out the consequences of this neglect in the statesman’s
administration. If the scale of work should preponderate, that is,
if there be more work than demand, either the workmen enter into
a hurtful competition, which reduces their profit below the proper
standard and makes them starve; or a part of the goods lie upon
their hands, to the discouragement of industry. If the scale of demand
should preponderate, then either prices will rise and profits
consolidate, which prepares the way for establishing foreign rivalship,
or the demand will immediately cease, which marks a check
given to the growth of industry.
Every subversion, therefore, of this balance, implies one of four
inconveniencies, either the industrious starve one another; or a part
of their work provided lies upon hand; or their profits rise and
consolidate; or a part of the demand made, is not answered by
them. These I call the immediate effects of the subversion of this
balance. I next point out the farther consequences which they
draw along with them, when the statesman is not on his guard to
prevent them.
A statesman must be constantly attentive, and so soon as he perceives
a too frequent tendency in any one of the scales to preponderate,
491he ought gently to load the opposite scale, but never except
in cases of the greatest necessity, take any thing out of the heavy
one. Thus when the scale of demand is found to preponderate,
he ought to give encouragement to the establishment of new undertakings,
for augmenting the supply, and for preserving prices at
their former standard: when the scale of work is on the preponderating
hand, then every expedient for increasing exportation
must be employed, in order to prevent profits from falling below
the price of subsistence.
Chap. XI. I next examine how this equal balance comes at last to
be destroyed.
1mo. The constant increase of work implies an augmentation of
numbers, and consequently of food; but the quantity of food depends
on the extent and fertility of the soil: so soon therefore as
the soil refuses to give more food, it must be sought for from
abroad, and when the expence of procuring it rises above a certain
standard, subsistence becomes dear; this raises the prices, the market
is deserted, and the scale of work is made to preponderate,
until the industrious enter into a hurtful competition and starve one
another: here the application of public money becomes necessary.
2do. When an idle people, abundantly fed, betake themselves to
industry, they can afford, for a while, manufactures at the cheapest
rate; because they do not live by their industry, but amuse themselves
with it. Hence the cheapness of all sorts of country work, in former
times, and of Nuns work in those we live in. But when the
lands become purged of superfluous mouths, and when those purged
off come to be obliged to live by their industry alone, then prices
rise, and the market is deserted.
3tio. When a statesman imprudently imposes taxes, in such a way
as to oblige strangers to refund that part paid by the industrious
who supply them; this also raises prices, and the market is deserted.
Thus the operation of natural causes must bring every augmentation
to a stop, unless the hand of a statesman be employed to
492check their immediate bad effects. When subsistence becomes
scarce, and the improvement of lands too expensive, he must make
the public contribute towards the improvement of the soil: when
the price of subsistence still rises, from farther augmentations, he
must keep it down with public money: and when this operation
becomes too extensive, he must content himself with effectuating a
diminution of price upon that part of subsistence which is consumed
by those who supply foreign markets.
Chap. XII. Domestic vices alone are not sufficient to undo a
trading nation; she must have rivals who are able to profit of
them.
While her balance of work and demand is made to vibrate by alternate
augmentations, she marches on triumphant, and has nothing to
fear: when these come to a stop, she must learn how to stand still,
by the help of alternate augmentations and diminutions, until the abuses
in other nations shall enable her again to vibrate by augmentations.
But so soon as a preponderancy of the scale of work is rectified, by
retrenching the number of the industrious, and that the vibrations
of the balance are carried on by alternate diminutions, in favour of
supporting high profits upon industry, then all goes to wreck, and
foreign nations, in spite of every disadvantage attending new undertakings,
establish a successful rivalship: they take the bread out
of the mouths of those who formerly served them; and profiting
of the advantages formerly enjoyed by the traders, they make their
own balance vibrate by augmentations, which sink the trade of the
others by slow degrees, until it becomes extinct.
Chap. XIII. The rivalship between nations, leads me to inquire
how far the form of their government may be favourable or unfavourable
to the competition between them. Here I am led into
a digression concerning the origin of power and subordination
among men, so far as it is rational and consistent with natural
equity; and I conclude, that all subordination between man and man,
in whatever relation they stand to one another, ought to be in proportion
493to their mutual dependence. The degrees of which are as various
as the shades of a colour. I divide them however into four.
1. That of slaves upon their masters. 2. That of children upon
their parents. 3. That of labourers upon the proprietors of lands.
4. That of the free hands, employed in trades and manufactures,
upon their customers. And ascending a moment beyond my sphere,
I say, that the subordination of subjects to their sovereigns, in all
free governments, extends no farther than to a punctual obedience
to the laws. I then proceed to an examination of former
principles, and from a confrontation of the politics of our ancestors
with the modern system, I conclude, that the great political impediment
to the progress of trade and industry, proceeds more from
an arbitrary, irregular, and undetermined subordination between
classes, and between individuals, than from differences in the regular
and established form of their government, legislation, and
execution or administration of the supreme authority. While laws
only govern, it is of the less importance who makes them, or who
puts them in execution.
Chap. XIV. In this chapter I endeavour to amuse my reader with
an application of our principles to the political oeconomy of the
Lacedemonian commonwealth, where I shew, that trade and industry
are not essential to security and happiness. By making an
analysis of Lycurgus’s plan, I shew that its perfection was entirely
owing to the simplicity of the institution.
Chap. XV. I come next to the application of general principles
to particular modifications of trade.
The balance of work and demand promotes the foreign and domestic
interests of a nation, equally. The first, by advancing her
power and superiority abroad; the last, by keeping every one employed
and subsisted at home. These interests are influenced by
principles entirely different; and this opens a new combination
highly proper to be attended to.
494In the first book, we considered the consumers and suppliers as
members of the same society, and as having their interests blended
together; but the moment that a question about foreign trade
arises, they become entirely separated. Every country appears to
be put under the direction of a particular statesman, and these must
play against one another as if they were playing at chess. He who
governs the consumers, must use his utmost endeavours to teach
his people how to supply themselves. He who is at the head of the
suppliers, must do what he can to render the efforts of the other
ineffectual, by selling cheap, and by making it the immediate interest
of the subjects of his rival to employ the suppliers preferably
to his own countrymen. Here then are two plans, opposite and
contrary, to be executed; and we endeavour to point out the principles
which ought to influence the conduct of the respective undertakers,
in every stage of their prosperity or decline. We lay
down the methods of improving every favourable circumstance, so
as to advance the end proposed, and shew how to season every unavoidable
inconvenience with the best palliatives, when a perfect
remedy becomes impracticable.
Chap. XVI. In this chapter I continue the thread of my reasoning,
in order to draw the attention of my readers to the difference
between the principles of foreign and domestic commerce; and setting
the latter apart for a subsequent examination, I enter upon an inquiry
into the difference between those branches of foreign trade which
make nations depend on one another necessarily, and those where the
dependence is only contingent. The first may be reckoned upon, but
the last being of a precarious nature, the preservation of them
ought to be the particular care of the statesman.
The method to be followed for this purpose, is, to keep the price
of every article of exportation at a standard, proportioned to the
possibility of furnishing it; and never to allow it to rise higher, let
the foreign demand afford ever so favourable an opportunity. The
danger to be avoided, is not the high profits, but the consolidation of
495them; this consideration, therefore, must direct the statesman’s
conduct in this particular. On the other hand, he must take care
that the great classes of the industrious, who supply foreign demand,
and who, from political considerations, are reduced to the minimum
of profits, be not by an accidental diminution of that foreign demand
reduced below this necessary standard: he therefore must
supply the want of foreign demand, by procuring a sale, in one
way or other, for whatever part of this industry is found to lie upon
hand; and if loss be incurred in this operation, it is better that it
should fall on the whole community, who may be able to bear it,
than on a single class, who must be crushed under the burthen.
Chap. XVII. When manufacturers are found without employment,
the first thing to be done is to inquire minutely into the cause
of it. It may proceed from a rise in the price of subsistence, from
a diminution of demand from abroad, or from new establishments
of manufactures at home; for each of which the proper remedy
must be applied. The complaints of manufacturers are not the infallible
sign of a decaying trade; they complain most when their
exorbitant profits are cut off. The complaints of the real sufferers,
those who lose the necessary, are feeble, and seldom extend farther
than the sphere of their own misery. The true symptoms of a decaying
trade, is to be sought for in the mansions of the rich, where
foreign consumption makes its first appearance. A statesman will
judge of the decay of that trade which supports and enriches the people,
more certainly from the ease of the industrious classes, than from
their distress. Foreign nations will willingly give bread to those who
serve them, but very seldom any thing more; and from hence I conclude,
that the more manufacturers are at their ease, the more
a statesman ought to be upon his guard to prevent this temporary
advantage from bringing on both national poverty and private
distress.
When home consumption begins to be supplied from abroad, and
when foreigners desert the market, or refuse our merchandize
496when we carry it to them, then we have an infallible proof of declining
commerce; although the increase of home demand may
immediately relieve every industrious person made idle, and even
furnish them with better employment than ever, in supplying the
luxury of their countrymen.
A statesman ought to be provided with remedies against every
disease. When luxury is on the road of rooting out foreign trade,
let him lie upon the catch to pick up every workman made idle
from the caprice of fashions, in order to give him useful employment:
he may set his own example in opposition to that of the
more luxurious, and in proportion as he gains ground upon them,
he must open every channel to carry off the manufactures of those
he has set to work for the re-establishment of foreign trade. If, on
the other hand, he himself be of a luxurious disposition, and that
he inclines to encourage it, he ought to take care that the example
of dissipation he gives, may not have the effect of diminishing the
hands employed for supplying both home consumption and foreign
demand. This is accomplished by preserving a plentiful subsistence
in the country, and by keeping down the prices of every species of
manufacture, by gradually augmenting the hands employed, in
proportion to the augmentation of demand; thus his luxury will
increase his numbers, without hurting his foreign trade: the great
art, therefore, is to adapt administration to circumstances, and to
regulate it according to invariable principles.
Chap. XVIII. But as a statesman is not always the architect of
that oeconomy by which his people must be governed, he should
know how to remove inconveniencies as well as to prevent them;
because he is answerable, in a great measure, for the consequences
of the faults of those who have gone before him. Thus when his
predecessors have allowed the operation of natural causes to raise
prices, and to destroy foreign trade, he must descend into the most
minute analysis of every circumstance relating to industry, in order
to pluck up by the root the real cause of such augmentations.
497Mistaken remedies, applied in a disease not rightly understood, produce
frequently the most fatal consequences.
If a statesman, for instance, should apply the remedy against consolidated
profits, by multiplying the hands employed in a manufacture,
at a time when high prices proceed only from the dearness
of living, by this simple mistake he will ruin all: those who really
gain no more than a physical-necessary, will then enter into a hurtful
competition, and starve one another. But if instead of multiplying
hands he augments subsistence, prices will fall; and then
by keeping hands rightly proportioned to demand, they will naturally
and gradually come down to the lowest standard; and exportation
will go on prosperously.
I consider consolidated profits, and high prices of subsistence, as vices in a
state, within the compass of a statesman’s care to redress. But there
is a third cause of high prices, (that is relatively high, when compared
with those in other countries) which will equally ruin foreign
trade, in spite of all precautions.
This happens when other nations have learned to profit of their
superior natural advantages. I have shewn how vices at home
enable foreigners to become our rivals; but without this assistance,
every nation well governed, will be able to profit of its own natural
superiority, in spite of the best management on the other side.
The only remedy in such a case, is, for the nation whose trade begins
to decline, in consequence of the natural superiority of other
nations, to adhere closely to her frugality; to leave no stone unturned
to inspire a luxurious taste in her rivals; and to wait with
patience until the unwary beginners shall, from that cause, fall
into the inconveniencies of dear living, and consolidated profits.
Besides this expedient, there are others which depend on a judicious
application of public money: an irresistible engine in trade, capable
of ruining the commerce of any other nation, (not supporting it by
similar operations) and of carrying on exportation, in spite of
great natural disadvantages. But these principles are reserved
498for the fifth book, when we come to treat of the application of
taxes.
Having pointed out the methods of preserving a foreign trade
already established, I next examine how those nations which have
been contributing inadvertently to the exaltation of others more
industrious, by carrying on with them a trade hurtful to themselves,
may put a stop to the exhausting of their own treasures;
may learn to supply themselves with every thing necessary; and
may be taught to profit of their own natural advantages, so as to
become the rivals of those who have perhaps reduced them to poverty;
and even to recover, not only their former rank, but to lay
the foundation of a political oeconomy capable of raising them to
the level of the most flourishing states.
I conclude my chapter, by calling for the attention of my reader
to the wide difference there is between theory, where all the vices
to be corrected appear clear and uncompounded; and practice,
where they are often difficult to be discovered, and so complicated
with one another, that it is hardly possible to apply any remedy
which will not be productive of very great inconveniencies. Were
the remedies for abuse as easily applied as theory seems to suggest,
they would quickly be corrected every where.
Let theorists, therefore, beware of trusting to their science, when
in matters of administration, they either advise those who are disposed
blindly to follow them; or when they undertake to meddle
in it themselves. An old practitioner feels difficulties which he
cannot reduce to principles, nor render intelligible to every body;
and the theorist who boldly undertakes to remedy every evil, and
who foresees none on the opposite side, will most probably miscarry,
and then give a very rational account for his ill success. A good
theorist, therefore, may be excellent in deliberation, but without
a long and confirmed practice, he will ever make a blundering
statesman in practice.
499Chap. XIX. Having treated of the fundamental principles of
trade and industry; having explained the doctrine of demand and competition;
the theory of prices, with the causes of their rise and fall;
the difference between prime cost and profits; the consolidation of these;
and the effects of such consolidation in any branch of manufacture;
I set my subject in a new light, and present it to my readers under
a more extended view. Having, as I may say, studied the map of
every province, we are now to look at that of the whole country.
Here the principal rivers and cities are marked; but all brooks,
villages, &c. are suppressed. This is no more than a short recapitulation
of what has been gone through already. Trade, considered
in this view, divides itself into three districts, or into three
stages of life, as it were, infancy, manhood, and old age.
During the infancy of trade, the statesman should lay the foundation
of industry. He ought to multiply wants, encourage the supply
of them; in short, pursue the principles of the first book, with this
addition, that he must exclude all importation of foreign work.
While luxury tends only to banish idleness, to give bread to those
who are in want, and to advance dexterity, it is productive of the
best effects.
When a people have fairly taken a laborious turn, when sloth is
despised, and dexterity carried to perfection, then the statesman
must endeavour to remove the incumbrances which must have proceeded
from the execution of the first part of his plan. The scaffolding
must be taken away when the fabric is compleated. These
incumbrances are high prices, at which he has been obliged to
wink, while he was inspiring a taste for industry in the advancement
of agriculture and of manufactures; but now that he intends
to supply foreign markets, he must multiply hands; set them in
competition; bring down the price both of subsistence and work;
and when the luxury of his people render this difficult, he must
attack the manners of the rich, and give a check to the domestic
500consumption of superfluity, in order to have the more hands for
the supply of strangers.
The last stage of trade is by far the most brilliant; when, upon
the extinction of foreign trade, the wealth acquired comes to circulate
at home. The variety of new principles which arise upon
this revolution, makes the subject of what remains to be examined
in the succeeding chapters.
Chap. XX. Before I enter upon the principles of inland commerce,
I prepare the way, by a short dissertation upon the term
luxury. I endeavour to analyse the word to the bottom, to discover,
and to range in order, every idea which can be conveyed by it. In
this way I vindicate the definition I have given of it (which is the
consumption of superfluity) and shew that luxury, as I recommend
it, is free from the imputation either of being vicious or abusive.
I distinguish, therefore, between luxury, sensuality, and excess, three
terms often confounded, but conveying very different ideas. A person
may consume great quantities of superfluity from a principle
of ostentation, or even with a political view to encourage industry;
him I call luxurious. Sensuality may be indulged in a cottage, as well
as in a palace; and excess is purely relative to circumstances.
Luxury, therefore, as well as sensuality, or any other passion, may be
carried to excess, and so become vicious. Now excess in consumption
is vicious in proportion as it affects our moral, physical, domestic, or
political interests; that is to say, our mind, our body, our private fortune,
or the state. When the consumption we make, does no harm
in any of these respects, it may be called moderate and free from
vice.
Our moral and physical interests are hurt by excess, in eating, drinking,
love, and ease, or indolence; according as these gratifications do
respectively affect the mind, or the body, or both.
Our domestic interest frequently obliges us to call that excess, which
nature hardly finds sufficient; and, on other occasions, both mind
501and body go to destruction, by excesses which have contributed to
amass the greatest fortunes.
The most direct politicalpolitical inconvenience of excessive luxury, is, the
loss of foreign trade. The more indirect follow as consequences of
those already described; because they may render those employed
in the service of the state, negligent and unfit, rapacious and corrupt,
but these evils are more properly the direct effects of the imperfections
of the mind, than consequences resulting naturally from
excess in the consumption of superfluity. They ought, therefore,
to be considered as secondary effects, since they may proceed from
avarice as well as prodigality. The correcting of political vices resembles
the weeding a bed of tender flowers, the roots are all
blended together, and the leaves are almost alike. It is proper,
therefore, to have both the discernment and dexterity of a good
gardner for such an operation.
Chap. XXI. From luxury I pass to the physical-necessary, which I define
from the consumption implied by it: a man has his physical-necessary
when he is fed, clothed, and protected from harm. But as these
enjoyments, we find, do by no means satisfy his desires, I am led
to establish another necessary which I call political. This I measure
also by the consumption implied by it, to wit, that which is suitable
to the rank of the person.
Rank again is determined by the common opinion of men, and this opinion
is founded upon circumstances, which relate to the birth, education,
or habits of the person. When common opinion has placed
any one in a certain rank, he becomes entitled to enjoy certain articles
of physical-superfluity, which enter into the compositioncomposition of his
political-necessary: thus, such as are raised above the level of the
very lowest class of inhabitants, are entitled to have a Sunday’s
dress; the farmer has a better coat than a labouring servant; the
priest of the parish must have a gown; the magistrate of a little
town must have ruffles, perhaps silk stockings; a provost a velvet
502coat, and a lord mayor a state coach; these and such like articles
constitute what I call the political-necessary.
A man’s rank sometimes obliges him to certain articles of expence,
which may possibly affect even his physical-necessary. How
frequently do we see people cover their shoulders, at the expence
of their belly. The competition between the desires of our mind,
and those which proceed from our animal oeconomy is so strong, that
it is frequently hard to determine, whether the incapacity to supply
our physical wants, proceeds from our having too far gratified
our other desires, or from real poverty.
The lowest classes of a people, in a country of trade, must be restrained
to their physical-necessary; but this restraint must be
brought about, not by oppression, but by the effects of competition
alone. While this is supported among people of the same class, it
has the effect to reduce them all to the physical-necessary, and when
it reduces them lower it is a vice, and ought to be checked. A
peculiar ingenuity in some workmen of the same class, will raise
them above this level; and the more they can raise themselves
above competition, the greater will their gains be. By becoming
masters in any art, they share the profits of those whom they employ;
and thus rise in rank and fortune, provided their frugality
concur with every other natural or acquired advantage. It is therefore
a principle, to encourage competition universally, until it has had the
effect to reduce people of industry to the physical-necessary, and to prevent it
ever from bringing them lower: from this results the necessity of applying
every expedient for relieving certain classes of the load of
their children, if you incline they should breed; and of preventing
taxes and other burthens from affecting them unequally.
Chap. XXII. I now come to treat directly of inland commerce,
as taking place upon the extinction of foreign trade, when all
attempts to recover it are found to be vain. In such a situation, a
wealthy nation is not to consider itself as undone: an able statesman
503must know how to make his people happy in every situation.
It is an universal principle of conduct, private and political, to look
forward, and to improve the present from the experience of the
past. One great inconvenience resulting from a foreign trade already
lost, is, that there is no farther question of making any new acquisition
of wealth, or of replacing one farthing of what at any time
may be sent out of the country. But the greatest inconveniencies
are felt in the losing such a trade: these are numberless, when an
able statesman is not at hand to prevent them.
That I may point them out in order, I make a short recapitulation
of our principles: the slightest hint is sufficient to shew their
force; and when my reader is sensible of a repetition, which he
finds superfluous, let him reflect that this very circumstance is
proof of their exactness. In this science we must use our principles
as a carpenter uses his foot-rule; there is nothing new to
him in this instrument; but still he must have it in his hand, to be
able to know any thing, with accuracy, concerning his work.
In this chapter I throw in a short dissertation upon the difference
between antient and modern luxury. Their natures and effects are
briefly insisted on. I point out the resemblance between the luxury
of modern times, and that of the few great trading cities of antiquity;
such as Tyre and Carthage; and I shew in what respect it
differed from that luxury which proved the downfall of the empires
of Asia and Rome.
When empires were once formed, they were ruined by luxury,
and preserved by means of their wars: because these made their
wealth circulate.
When the trading states took a military turn, and became ambitious
of conquest, their ruin soon followed: because war destroyed
the industry which made their greatness.
The cause of difference I find to proceed from this; that in the
monarchy, the riches from which the luxury sprung was the effect
of rapine; in the other, the effect of industry. The first gave no
504equivalent for their wealth; the others did. Where no equivalent is
given in the acquisition, all proportion is lost in the dissipation.
The luxury of the robbers was monstrous and violent: that of the
merchants, systematical and proportional. The luxury of the monarchies
brought on neglect in public affairs: in the cities, it was
this neglect which destroyed their luxury. The luxury of the monarchies
had nothing to recommend it, but the gratification of the
passions: the luxury of the others produced no harm, but from
this very circumstance. From the contrast I have drawn, I establish
the difference between antient and modern luxury. The first was
violent; the last is systematical, and can be supported by industry
and liberty only. A farther consequence is, that as rapine is incompatible
with industry, so is arbitrary power: consequently,
those absolute princes who establish industry in their country, in
order to taste of the sweets of luxury and wealth, put insensibly a
bridle in the mouths of their successors, who must, from this consideration
alone, submit their government to a regular system of
laws and political œconomy.
This is a better scheme for limiting the arbitrary power of
Princes than all the rebellions that ever were contrived. Confusion
establishes arbitrary power, and order destroys it.
Chap. XXIII. When a nation, which has long dealt and enriched
herself by a reciprocal commerce in manufactures with other nations,
finds the balance of trade turn against her, it is her interest
to put a total stop to it, and to remain as she is, rather than to persist
habitually in a practice, which, by a change of circumstances,
must have effects very opposite to those advantages which it produced
formerly. Such a stop may be brought about by the means
of duties and prohibitions, which a statesman can lay on importations,
so soon as he perceives that they begin to preponderate with
respect to the exportations of his own country.
I illustrate this principle by an examination of those which influence
the establishment of incorporated cities and boroughs. I shew
505how these may be considered as so many states, which domestic
luxury, taxes, and the high price of living, have put out of a capacity
to support a competition with strangers (that is with the open
country) which here represents the rest of the world. I shew the
reasonableness of such exclusive privileges, in favour of those who
share the burthens peculiar to the community, in so far only as
regards the supply of their own consumption; and I point out, by
what methods any discouragements to industry may be prevented,
as often as that industry has for its object the supplying the wants
of those who are not included in the corporation.
From the long and constant practice of raising taxes within incorporated
cities, I conclude, that taxes are a very natural consequence
of luxury, and of the loss of foreign trade; and as Princes
have taken the hint from the cities, to extend them universally, it
is no wonder to see foreign trade put an end to, in consequence of
such injudicious extensions.
Chap. XXIV. I next proceed to the methods proper to be used,
in the delicate operation of so great a revolution as that of degrading
a people from their right of being considered as a trading
nation.
If a statesman keeps a watchful eye over every article of importation;
and examines minutely, the use every article imported
is put to; he will easily discern, when it is proper to encourage,
when to restrain, and when to prohibit.
In this examination, however, every relation must be taken in:
because the importation of a foreign commodity affects many different
interests, some within, some without the nation; some directly,
others only consequentially. Nothing is so complex as the
interests of trade. The importation of a commodity may first advance
the interest of those at home, who furnish the commodities
exported, of which the importation is the return. The importation
may be useful for the advancement of manufactures, providing
it consist in matter fit for them; yet if the whole manufacture
506produced from it be for home-consumption, the national interest
will, on the whole, be hurt by the importation. The importation of
wines and brandies is a great saving upon subsistence, in northern
countries, where liquors distilled from grain are made to supply the
place of them. These and many other relations must be examined,
before a statesman can pass sentence upon an article of importation.
The inquiry made, and accounts balancedbalanced on both sides,
every hurtful article of importation should be cut off; and when
this is done, if the consequence should prove a general stop to exportation,
then is foreign trade decently interred, without any violent
revolution; because the statesman is supposed to have proceeded
gradually, and to have been all the while labouring to increase
consumption at home, in proportion as the industrious have
been forced to lie idle by the other operations.
When foreign trade is at an end, the number of inhabitants
must be reduced to the proportion of home-subsistence, in case their
former prosperity had carried them beyond it. The nation’s
wealth must be kept entire, and made to circulate, so as to provide
subsistence and employment for every body.
Chap. XXV. Let a nation be reduced ever so low in point of foreign
commerce, she will always find a demand from abroad for
the superfluities of her natural productions; which, if rightly
conducted, will prove a means of advancing her national wealth.
If the exportation of subsistence should go forward, while many
are found in want at home, a restraint laid upon exportation will
not redress the inconvenience; because the wretched will still remain
so, unless they are assisted and put in a capacity to dispute the
subsistence of their own country with foreign nations. The principal
cause of this phenomenon is the preponderancy of the scale
of work at home. When home-demand does not fill up the void,
of which we have spoken, a vicious competition takes place among
those who work for a physical-necessary; the price of their labour
507falls below the general standard of subsistence abroad; their portion
is exported, and they are forced to starve.
A statesman, therefore, at the head of a luxurious people, must
endeavour to keep his balance even; and if a subversion is necessary,
it is far better it should happen by the preponderancy of the
scale of demand. Here is my reason for preferring this alternative.
All subversions are bad, and are attended with bad consequences.
If the scale of work preponderates, the industrious will starve,
their subsistence will be exported; the nation gains by the balance,
but appears in a manner to sell her inhabitants. If the scale of
demand preponderates, luxury must increase, but the poor are fed
at the expence of the rich, and the national stock of wealth stands
as it was. Upon the cessation, therefore, of foreign trade, you must
either lose your people, or encourage luxury.
The statesman having regulated the concerns of his outward
commerce, must apply more closely than ever to his domestic concerns.
I reduce the principal objects of his attention to three.
1. To regulate the progress of luxury according to the hands ready
to supply the demand for it. 2. To circumscribe the bounds of it,
that is, the multiplication of his people, to the proportion of the
extent and fertility of the soil. And in the last place, to distribute
his people into classes, according as circumstances (of which he is
not master) may demand.
Here I point out the reasons why the progress of luxury does less
hurt to a great kingdom than to a small state. Why sumptuary
laws are good in an imperial town of Germany, and why they
would be hurtful in London or Paris. Why the establishment of a
standing army, in a country fully peopled and rich, should be accompanied
with endeavours to diminish luxury, in order to prevent too
great a preponderancy of the scale of demand, and the rising of
prices, which would cut off the hopes of recovering a foreign
trade.
508Having briefly gone through the objects of the statesman’s concern,
I come to examine the natural consequences of this revolution
upon the spirit, government, and manners of a people,
who from industrious and frugal are become luxurious and polite.
The traders withdraw their stocks as trade decays, and lend it
out at home to landed men, who thereby are enabled to become
luxurious. This indemnifies the industrious for the loss of foreign
demand. When the money, formerly employed in order to gain
more, begins to circulate at home, for providing superfluities, and
augmenting domestic consumption, the country appears daily to
be growing more opulent; tradesmen and manufacturers, who were
formerly confined to a physical-necessary, are now easy in their circumstances;
they increase their consumption; this accelerates circulation;
an air of plenty and ease spreads over the face of the
country; and the very consequences of their decline, are construed
as invincible proofs of their growing prosperity.
Riches may be considered by a statesman in three different lights;
as a mine when they are locked up; as an object of trade when
they are employed in order to gain more; or as an object of luxury,
and fund for taxation, when they are spent in the gratification of
our political wants.
The general cast of mind and disposition of the inhabitants of
every country (in so far as regards money) may, I think, be reduced
to one or other of these three modifications. It is the business of a
statesman to work upon the spirit of his people, so as to model their
taste of expence by insensible degrees, and to bring it to be analogous
to that principle which is most conducive to national prosperity.
Hoarding in private people, can hardly ever be advantageous
to a state; when the state hoards, the case is very different,
as shall be shewn. While money is employed to gain more, it
never can procure to the proprietor, either power or authority;
but when, in the last case, it is employed for the gratification of
our desires, in the hands of the ambitious, it acquires power; consequently,
509may rival that influence which no person ought to enjoy,
but he who is at the head of the state. This is the mother of
faction, and the root from which all hurtful parties spring. It is
by such means that governments (be they good or bad) are brought
into anarchy. Private wealth corrupted, and at last destroyed the
excellence of the Roman commonwealth: and private wealth alone
established the liberty of Holland upon the ruins of Spanish tyranny.
So soon therefore as the inhabitants of a country begin to employ
their riches to gratify their inclinations, at the same time should a
statesman begin to make himself rich, in order to preserve that superiority
which is essential to him who sits at the head of every
principle of action. And whenever this lies beyond his reach, the
power he had will soon disappear; and the government will take a
new form.
A statesman acquires wealth by imposing taxes upon his people:
rapine is the tax of the despote; capitation, land tax, and others
which affect persons, are those of the monarch; excises upon consumption
are imposed by limited governments. The first lay all
flat, the second affect growing wealth, the last accelerate dissipation.
I conclude my chapter with some little historical illustrations concerning
the power and influence of great men in a state, under
different circumstances.
Chap. XXVI. I next consider the nature of what I call the balance
of wealth. The more circulation there is in a country, the more
this object becomes important. While the greatest part of a nation’s
coin was locked up; or while it circulated by rapine and extortion,
the effects discovered in modern times, where it circulates by industry,
and as an adequate equivalent for services, were hardly
perceived.
The specie, or circulating coin of a country, must be considered
as a part of the national patrimony. This is constantly changing
hands in a country of industry, and he who is proprietor of any
part of it, is in so far a proprietor of the public stock.
510With this species of property, every other may be acquired.
When it is given as the price of land, such an exchange produces
no alteration in the respective situation of the parties. An estate in
land is neither better or worse than another in coin of the same
value. If I purchase an annuity, or pay off my debts with the coin
I have in my pocket, neither I or the person with whom I transact,
make any change of situation in point of wealth.
But if I lay out my coin for consumable commodities for my
own use, then so soon as any part of what I buy is consumed, I become
poorer: for this operation annihilates, in a manner, as to me,
the coin I had. This I call a vibration in the balance of wealth; I
grow poorer, and he who produced the consumable commodity for
my use, is so far richer: the balance, therefore, is turned against
me, in his favour.
As many people, therefore, live by producing consumable commodities,
one use of coin is to render inconsumable, as it were, that part
of them which is superfluous to our own consumption. By this
operation the superfluity passes into other hands who consume it, and
the coin which the industrious receive in return purchases a supply
for all their wants, in proportion as they choose to relieve them.
The vibration of the balance of wealth, therefore, is no more
than the changes which are daily taking place, as to the relative
proportion of riches between the individuals of a state: and as this
vibration can only be produced when the coin any one possesses
comes to disappear, without his retaining the possession of any
real equivalent which he can alienate for the same value; it follows,
that the balance is constantly turning in favour of those who
either sell their effects, their service, or their work; and this balance
they retain, in proportion as their gains exceed their own
consumption. On the other hand, the balance is constantly turning
against the idle consumers; because they are supposed to produce
nothing; consequently, the whole of their consumption goes in
diminution of their wealth.
511Hitherto the question has only been about the balance of moveable
wealth, that is coin; but the introduction of this, together with
a taste for superfluity, has the effect of melting down solid property
into what I call symbolical money.
When once this refinement upon the use of money takes place,
we see houses, lands, jurisdictions, provinces, principalities, crowns,
scepters and empires, thrown into circulation by means of the
symbolical money called bank notes, transfer in bank stock, accounts,
bonds, mortgages, alienations of domain, mortgage of
taxes, and cessions made in definitive treaties.
As frugality and industry are in our days capable of amassing
the greatest fortunes in solid property, so is dissipation, by the
means of symbolical money, as certain an expedient for the annihilation
of them. From this I conclude, that dissipation implies
frugality, and frugality dissipation. In every country of great circulation,
they balance and destroy one another; and since there is
no such thing as equality of fortune to be preserved without proscribing
alienation, that is circulation, the next best expedient for
making people equal, I think, is to enrich them by turns.
I conclude my chapter by inquiring into the effects of national
debts upon the vibration of this balance; and I conclude, from the
principles laid down, that with respect to the collective interests of
the state, that is, between the state itself, the creditors, and the
people, there is no vibration of wealth produced by loans to the
public. But that according as the money borrowed is spent in the
country or abroad, in so far the balance is either made to vibrate
between individuals at home, or to turn against the state in favour
of foreign nations.
Chap. XXVII. I next endeavour to shew how necessary a thing it
is for a statesman to acquire a thorough knowledge of the nature
and effects of circulation. By this he is able to judge, when the
coin circulating in the country is sufficient for carrying on alienation;
and when it is not, he is taught how to augment the quantity
512of it, either by drawing it from the repositories as oft as he
finds the inhabitants disposed to lock it up; or by substituting symbolical
or paper money in place of it, when the metals are really
wanting.
Here I observe, that the circulating or current money of any nation
is constantly in proportion to the taste of dissipation in the rich, and
application to industry in the poor.
When the dissipation of the rich, tends to call off the industrious
from supplying the branches of exportation, then the statesman, in
place of facilitating the melting down of solid property in favour of
domestic circulation, by the easy introduction of symbolical money,
should render this operation more difficult, permitting the
lands to be loaded by entails, substitutions, trusts, settlements, and
other inventions which may hurt the credit of young people, such as
retarding the term of coming to full age, and others of a like
nature.
On the other hand, while lands remain ill cultivated; while the
numerous classes remain idle and poor; and while much money is
found locked up, the very opposite administration is expedient:
Every method then must be employed to facilitate and establish the
credit of those who have solid property; such as the introduction of
loans upon interest; the breaking entails upon estates; the facilitating
the sale of them, in favour of the liquidation of all claims
competent to the industrious, against the proprietors, even declaring
the cause of creditors the favourable side in all ambiguous law-suits;
and, last of all, allowing arrestment of the person for moveable
debts, which is supporting the interest of creditors as far, I
think, as is possible, in any free nation. Every regulation becomes,
in short, expedient, which can favour the industrious, accelerate
circulation, and establish a credit to every one in proportion to his
worth.
The more money becomes necessary for carrying on consumption,
the more it is easy to levy taxes; the use of which is to advance the
513public good, by drawing from the rich, a fund sufficient to employ
both the deserving, and the poor, in the service of the state; or to
correct the bad consequences of domestic luxury as to foreign trade,
by providing a fund for the payment of bounties upon exportation.
In imposing taxes, a statesman should attend to the nature of
those branches of circulation where the balance is made to vibrate,
in order to distinguish them from those where no vibration is implied.
When a man buys an estate, it would be absurd to make
him pay a tax of cent. per cent. though you may safely make him
pay at that rate, when he buys a pint of gin, or a pound of chocolate.
In taxes, again, upon consumption, a particular attention is to be
had, not to confound those which are paid by people who consume
to gratify their desires, with those which are paid by such as
consume in order to produce; that is to say, those which affect the
rich, with those which affect the industrious.
Farther, a statesman must see with perspicuity how far the imposition
of taxes may influence the prices of exportable goods; and in
so far as prices are influenced by them, they must be refunded with
interest, and even when that is not sufficient to support the foreign
competition, premiums or bounties are to be thrown in, at the expence
of new impositions upon domestic consumption.
As all augmentations must at last come to a stop, so must these
expedients for the support of foreign trade against the influence of
domestic abuse; but when trade comes to a stop, taxes may be increased;
because the considerations in favour of exportation are
removed. The statesman then must change his plan, and make
use of the power and influence he acquires by an opulent exchequer,
to root out the abuses which have dried up the spring
from which his country used to receive a continual augmentation
of wealth.
514I conclude my chapter with this reflection: That under a wise
administration, every vice in a state carries a proper antidote along
with it.
If luxury extinguishes foreign trade it gives birth to taxation;
and money in the hands of a good statesman is an irresistible engine
for correcting every abuse.
In treating of taxes, I frequently look no farther than my pen,
when I raise my head and look about, I find the politics of my
closet very different from those of the century in which I live. I
agree that the difference is striking; but still reason is reason, and
there is no impossibility in the supposition of its becoming practice.
Chap. XXVIII. Prices imply alienation for money, and frequent
and familiar alienations only can fix a standard.
The price of articles of the first necessity regulate, in a great
measure, the price of every thing else. Now the frequent and familiar
alienation of such articles implies industry, and a numerous
class of free hands; because these only are the buyers. No alienation
is implied in the consumption of necessaries, by those whose
occupation it is to produce them for themselves. Did every one,
therefore, supply himself with necessaries, there would be no
alienation of them; consequently, no price fixed. From hence it
follows, that the price of necessaries depends on the occupations
of a people, and not on the quantity of their specie.
The standard price of subsistence is in the compound proportion of
the number of those who are obliged to buy, and of the demand
found for their labour. Subsistence never can rise above the level of
the faculties of the numerous classes of a people; because so soon as
a price rises above the faculties of the buyer, his demand is withdrawn;
and when the demand of a numerous class is withdrawn,
subsistence is found in too great plenty for the rich, to bear a high
price.
The more equal, therefore, the faculties of the industrious populace
of any country are, the less distress will follow upon scarcity,
515and those only, whose means cannot reach that standard price,
run any risk of starving.
The faculties, therefore, of the physical-necessarians (as we have
taken the liberty to call them) will, in countries of industry, determine
the standard value of subsistence; and the value, in money,
which they receive for their work, will determine the standard of
those faculties; consequently, the price of subsistence must rise
and fall according to the number of workmen, and demand for
their work: that is to say, the price of subsistence must be in the
compound proportion above mentioned.
Here I am led into an examination of the opinion of Messrs. De
Montesquieu and Hume, who think that the price of every thing
depends upon the quantity of specie in the country, which they consider
as the representation of every thing vendible; as if these two
quantities, the commodities, and the specie, were divided into aliquot
parts, exactly proportioned to one another. I do my endeavour to
investigate the meaning of these propositionspropositions, in order to shew in
what respect they lead to error, in place of throwing light upon
an intricate question: and then I propose another doctrine, which
is, that nothing can determine the value of a vendible commodity,
any where, but the complicated operations of demand and competition,
which however frequently influenced by wealth, yet never can be
regulated by it.
Chap. XXIX. In this chapter I follow the succession of Mr.
Hume’s ideas, in his political discourses; and as he is led from
his principles to believe, that there is no such thing as a wrong
balance of trade against a nation, but on the contrary thinks that
the nature of money resembles that of a fluid, which tends every
where to a level: In pursuing the consequences of our former reasoning,
I shew, that nothing is so easy, or more common than a
right or a wrong balance of trade; and I observe, that what we
mean by a balance, is not the bringing the fluid to a level, but
either the accumulating or raising it in some countries, by the
516means of national industry and frugality, which is a right balance;
or the depressing it in others, by national luxury and dissipation,
which is a wrong one. Thus the general doctrine of the level can
only take place, on the supposition that all nations are equally frugal
and industrious; or rather, that they have an equal mixture of
these and their opposite qualities, together with a reciprocal trade
entirely laid open. When the ideas of different people are fairly
exposed, every question comes to be resolved without disputation:
vices in reasoning seldom take place but when terms are not rightly
understood.
Chap. XXX. As the intention of this inquiry is not to treat of
population, agriculture, trade, industry, &c. as particular subjects,
but as objects influencing the political œconomy of modern
states, my end is answered, so soon as I find the general principles
relating to each sufficiently deduced and ranged under general
heads. The use, therefore, of a chapter of miscellaneous questions
and observations, is to serve as an exercise on what is gone
before; to introduce, without a direct connection, questions analogous
to the subject of the book, or to give a further extension to
such as I have treated, in the course of the chapters, with too
much brevity.
In the first and second questions, I endeavour to shew, that the quantity
of coin in any country, is no sufficient rule for judging of
the state of her foreign trade; because money may be acquired
and expended by operations nowise mercantile. A nation, may
borrow from foreigners more than the amount of the balance
against her: she may pay away, in subsidies, and foreign wars,
sums greatly beyond the value of a right balance on her trade.
She may call in her specie, and trade with it abroad, while paper
is made to circulate in its place at home: or she may lock it up in
banks, where it never may appear. In short, the riches of a trading
nation may resemble those of a trading man; who may be immensely
rich, with very little specie in his possession.
517On the other hand, the riches of a prodigal nation may resemble
those of a prodigal man; who may be full of money, borrowed
from all hands, upon the credit of a large fund of solid property.
The third question concerns the effects of riches in those countries
where trade and industry are little known. Under such circumstances,
coin must be locked up, or virtue will go to wreck.
Why? Because, if coin circulate where there is no industry, it must
circulate for no adequate equivalent in work or service; that is,
for the gratification of the passions, or in monstrous prodigality.
Experience demonstrated the truth of this principle. While the
Greek Monarchs of Asia and Ægypt remained in possession of their
vast treasures, virtue and simplicity stood their ground; when those
riches were thrown into circulation, under the first Roman Emperors,
we see the horrible consequences which ensued. What
could produce such monsters, except a taste of dissipation, without
rational objects to discharge their wealth upon? All the money in
the universe, thrown into the hands of an extravagant modern
Prince, would not affect his morals; the taste of luxury would soon
discharge him of it; and the consequence would be, to enrich
those who gratified his desires, and that nearly in proportion to
their service. But in antient times, the violence of government
stopped the progress of industry: the consequence of which was,
that the few productions of it were sold for the most exorbitant
prices, and the wealth accumulated by private people commonly
occasioned their destruction; because rapine was the only expedient
Princes had fallen upon to draw back money into their coffers.
Comparing the antient with our modern œconomy, I find both are
curious and entertaining. A contrast often makes us reflect upon
circumstances which otherwise might escape our observation.
In the fourth and fifth questions, I apply the principles we have
laid down, in order to discover why the establishment of trade and
518industry has naturally given rise to an established system of taxation,
and regular standing armies.
This leads me to compare circumstances relative to the œconomy
of Europe some centuries ago, when taxes were almost unknown,
with the present times, when they are becoming daily more familiar;
and I shew that they are, in a great part, paid in lieu of the
personal service to which the subjects were formerly bound, and by
the means of which states were supported; and if they are extended
beyond this proportion, it is in consequence of a new circulation
opened between the state and those who serve it: so that
the effect of taxes, spent within a country well governed, is to
draw money gratuitously from those who have a superfluity of it,
in order to bestow it upon those who are willing and capable to advance
the service of the state; that is, in other words, to oblige
private people to lay out their money for the service of their
country.
From the same principles, and from a very succinct historical
deduction of the facts relating to the state of the militia of Europe,
from the time of the Romans, I endeavour to shew, that
standing armies in our days are become necessary, while Princes
have the rage of making war; because, without keeping up such
bodies of men in time of peace, the call of the luxurious would
provide employment for them, which they would not choose to
quit, when the will of their sovereign might command their attendance.
These questions lead me to inquireinquire into the method of estimating
the relative power of different states in making war.
Here I reduce power to the two principles of men and money;
the men at the command of a state, are those who have a poor and
precarious living, or at least a worse condition than that which
the state can offer for their military service; consequently, the
more a people are usefully employed, the less they are calculated
for filling armies. From hence it is that luxury is said to render a
519nation effeminate: a true proposition, when rightly understood, relatively
to the industrious, not to the luxurious classes of the
people.
The annual revenue of a state is in proportion to the circulation;
because it is at the time of circulation only that national contributions
can be levied with the fewest inconveniencies. Money which
does not circulate is of no use to the proprietors, and consequently
can be of no utility to the state.
Credit is in proportion to the capacity of paying the interest of
money borrowed.
Having abundantly insisted on the advantages of industry in providing
for the poor, I now come to consider its permanent effects,
after the first end has been accomplished. If a thousand pounds
are bestowed upon making a fire-work, a number of people are
thereby employed, and gain a temporary livelihood. If the same
sum is bestowed for making a canal for watering the fields of a
province, a like number of people may reap the same benefit, and
hitherto accounts stand even: but the fire-work played off, what
remains, but the smoke and stink of the powder? Whereas the
consequence of the canal is a perpetual fertility to a formerly barren
soil. Here I enter again into an examination and confrontation
of antient and modern oeconomy. I shew that the magnificence
of the antients had not the same tendency to destroy simplicity,
as the luxury of modern times has; because they owed their
magnificence to the slavery of the inferior classes of people, who
got no return for their labour farther than bare subsistence.
Whereas modern magnificence depends upon industry; which
draws after it such a retribution in money, as soon enables those
who at first contributed to the luxury of others, to call for the like
services from an inferior class, who are entering on the course
which the more wealthy abandon.
I conclude this chapter with an inquiry into the principles which
ought to regulate the establishment of trading companies. Those
520principles relate to the advantages and disadvantages which severally
attend them. The principal advantage in common to all, proceeds
from the union of private stocks; consequently, the statesman
ought to protect companies so far only as this union promotes the
end for which they were instituted: but whenever he finds that the
strength of united stocks is made use of to oppress the unincorporated
industrious, he ought to take these under his protection,
by providing an outlet for their industry, by which he will frustrate
any attempt of turning that into a monopoly, which was intended
only to extend trade and industry.
The second advantage is peculiar to such companies as trade to
foreign parts under exclusive privileges. By these a state reaps the
benefit of keeping prices low in foreign markets; because the
company is freed from the competition of their own countrymen.
But the inconvenience resulting in consequence of this, is, that as
the company buys, so they also sell without competition. The method,
therefore, of preventing the bad consequence of this, is, for
the state constantly to be at the great expence of every such settlement
in favour of foreign trade; and to grant the exclusive privilege
in favour of commerce in general, and not in the common
way, as an indemnification to particular people for the expence of
making the settlement, or from other political considerations. When
an exclusive privilege is granted upon such principles, the state
may retain a power of inspection into all their affairs, and may
open the doors of the company to new subscribers, in proportion
to the demand for the trade, in place of allowing the company to
swell their stock with borrowed money. By such means frauds are
prevented; a foundation is laid for several mercantile operations,
which advance the prosperity of the state, without hurting the
company; and jealousy is taken away, by preventing the too close
connection between the members of it, when few in number, from
degenerating into an oppressive and scandalous monopoly.
End of the Second Book.
521[Illustration]
AN
INQUIRY
INTO THE
PRINCIPLES OF POLITICAL OECONOMY.
BOOK III.
OF MONEY AND COIN.
PART I.
THE PRINCIPLES OF MONEY DEDUCED, AND
APPLIED TO THE COIN OF GREAT BRITAIN.
[Illustration]
This book, which treats of money, contains such variety of
matter, that I have found an advantage in dividing it into two
parts. In the first, the principles are deduced and applied principally
to the domestic circumstances of Great Britain in the year
1760, when this book was written. In the second, the interests of
foreign trade, and state of coin in the two great commercial nations
with whom we are in correspondence are taken in.
Instead of a chapter of recapitulation at the end of the book, I
found here that a full table of contents would give the reader a
general view of the subject, and serve the purpose of recollection
better.
523
AN
INQUIRY
INTO THE
PRINCIPLES OF POLITICAL OECONOMY.
