5

限制的不合理性

第一节

即使根据商业体系的原则,这种限制也不合理

商业体系所提倡的增加金银储量的第二个方法,是对通常认为其贸易差额不利于我国的那些国家的近乎所有商品的进口施加额外限制。正因为如此,西里西亚的上等细布只需缴纳一定的关税即可输入英国,供英国本土消费;但法国的细麻布和上等细布却禁止进口,只能被运往伦敦港,在那里的仓库中等待转运输出。相对于葡萄牙或任何其他国家生产的葡萄酒,我国对法国葡萄酒进口征收的关税也格外苛重。依照所谓的“1692年关税”的相关规定,一切法国商品都必须缴纳相当于其价格或价值的25%的关税;但来自其他各国的大部分货物所缴纳的关税却要轻得多,很少超过5%。诚然,法国的葡萄酒、白兰地、食盐和醋均不在此限,但这些商品却必须依照其他法律或同一法律的其他条款缴纳其他繁重的税务负担。1696年,有关方面认为25%的税负尚不足以阻止法国商品进口,于是又对白兰地以外的法国货物再课以25%的税,同时对法国葡萄酒每吨课以25英镑的新税,对法国醋每吨课以15英镑的新税。我国税则上所列举的各种商品或大多数商品所必须缴纳的那些一般补助税或“百分之五税”,法国商品无一能够省免。如果把1/3补助税和2/3补助税也计算在内的话,单一般补助税就多达五种;因此,在这次战争开始之前,法国大部分农副产品或制造品至少需要负担75%的进口税。而大部分商品根本负担不起这样重的税负,因此那些税负无异于一纸禁令。我相信,法国一定也针锋相对地对英国的商品和制造品征收同样苛重的税负,不过我并不清楚那些税负具体苛重到什么地步。这种相互施加的限制几乎断绝了两国间一切公平的贸易往来,如此一来,如今无论是法国商品运至英国,还是英国商品运至法国,主要都靠走私。我在前一章所考察的所有原则均起源于私人利害关系和垄断精神;而本章所要考察的各项原则就要归咎于民族偏见与敌意了。于是我们不难推断,这里提到的这些原则更加缺乏合理性,即使根据商业体系的诸项原则,也是极不合理的。

首先,即使英法之间自由通商,使得贸易差额确实对法国有利,我们也不能因此而断言该贸易就对英国不利;也不能因此而断言,英国全部贸易的总差额会因此而对英国更加不利。如果法国产的葡萄酒比葡萄牙产的葡萄酒价廉物美,法国产的麻布比德国产的麻布价廉物美,那么英国需要的葡萄酒与外国麻布,当然是从法国购买更加有利,而从葡萄牙和德国购买更为不利。尽管这样一来,每年从法国进口的商品价值将大大增加,但因同品质的法国商品价格要比葡萄牙和德国的商品更为低廉,全部进口商品的总价值应该有所减少,而减少的数量恰与其低廉程度相称。即便从法国进口的商品将完全用于在英国本国消费,情况也是如此。

其次,我们进口的法国商品中大部分可能会转而出口到其他国家去赚取利润,这种转出口带来的回报也许会等同于我们从法国进口的全部商品的原始费用。人们经常挂在嘴边关于东印度贸易的种种理论,或许对法国贸易也同样适用,那就是,尽管东印度的商品中大部分都是用金银购买的,但将其中一部分商品再出口之后所能够带回到本国来的金银,就比所有货物的初始费用还要多。现在,荷兰最重要的贸易部门之一,就是负责将法国商品运到欧洲其他各国。英国人饮用的法国葡萄酒,也有一部分是秘密经由荷兰及西兰岛 【1】 输入的。如果英法之间实施自由贸易,或者法国商品在进口时缴纳的税负水平与欧洲其他各国相同,并在出口时退回,那么在如今对荷兰如此有利的对法贸易中,英国就有机会分得一杯羹了。

最后,第三点,我们没有一个明确的标准,可以判定任何两国之间的贸易差额究竟对哪国有利,即哪一个国家输出的价值最大。关于这一类问题,我们判断的依据往往是为个别贸易者的私利所左右的国民偏见与敌意。然而在这种情况下,人们往往会使用两种标准,即关税簿册和汇兑情况。在我看来,这也是如今大多数人所认可的,关税簿册这种标准是非常靠不住的,因为根据该标准对大多数商品的估值都极不准确。至于汇兑的情况,恐怕也是同样不可靠。

据说,如果两地,如伦敦和巴黎,以等值票面进行汇兑,那表明伦敦欠巴黎的债务,恰被巴黎欠伦敦的债务抵消了。反之,如果在巴黎购买汇票时需要在伦敦给付贴水,据说那就表明伦敦欠巴黎的债务尚未与巴黎欠伦敦的债务完全抵消,还需从伦敦汇出一定的差额;鉴于此输出有风险、麻烦,要产生费用,代汇者要求给付贴水,汇兑人也必须给付贴水。然而据说,两个城市之间债务与债权的一般状况必然会受到彼此间通常的商务往来的支配。如果两个城市之间,甲从乙那里进口的数额不大于它向乙出口的数额,乙从甲那里进口的数额也不大于它向甲出口的数额,则两个城市的债务和债权可以相互抵消。但如果有任何一方从另一方进口的数额大于其向另一方出口的数额,则前者所承担的债务必然大于其对后者拥有的债权,那么二者间的债务和债权就无法互相抵消,前者必须向后者汇出一部分货币,其金额即相当于债务和债权之间的差额。因此,既然两地间商业往来的通常情况可以表明其债务和债权的一般状况,它也就必然能够表明两地间进出口的一般状况,因为这些都是债务和债权状况的支配因素。

不过尽管通过两地之间商业往来的通常情况就足以看出二者债务和债权的一般状况,但我们不能就此推断出,债务和债权情况有利于哪一方,贸易差额也就一定对其有利。任何两地之间债务和债权的一般状况并不一定完全取决于彼此通常的商务往来,通常它还会受到任何一方与其他许多地方进行交易情况的影响。例如,英国商人通常会用荷兰汇票从汉堡、丹泽和里加等地购买货物,这样一来,英国和荷兰之间债务和债权的一般状况就不完全取决于两国彼此交易的通常情况,还将受到英国和那些地方进行交易情况的影响。在这种情形下,即使英国对荷兰的出口可能大大超出它从荷兰进口的价值,即使所谓的贸易差额可能大大有利于英国,它仍然必须每年向荷兰汇出一笔货币。

此外,按照一向计算汇兑平价的方法,同样不能充分表明,如果汇兑的一般情况被认为有利于一个国家,那么债务与债权的一般情况也必然对它有利。换言之,真实的汇兑情况,与计算所得的汇兑情况,可能极不相同,而且事实上往往极不相同,所以,在许多情况下,关于债务和债权的一般情况,我们决不能根据汇兑的一般情况得到确实的结论。

当我们为了在英国支付一笔货币,收到一张可以在法国兑现的一笔货币的汇票时,如果前一笔货币根据英国铸币的标准所含的纯银,与后一笔货币根据法国铸币标准所含的纯银的盎司数目相同,我们就说,英国和法国之间以平价汇兑。如果你所支付的多于兑付所得,人们就认为你支付了贴水,并说汇兑对英国不利,对法国有利。如果你支付的少于兑付所得,人们就认为你得到了贴水,并说汇兑对法国不利,对英国有利。

但是,第一,我们不能总是按照各国造币厂的标准来判断各国通货的价值。各国通货的磨损程度,或者因为其他原因而低于其所制定标准的程度,有多有少。一国通用铸币与他国通用铸币的相对价值,并不取决于各自应该包含的纯银量,而是取决于各自实际所含的纯银量。在威廉王时代的银币改革之前,根据通常的算法,英国和荷兰之间的货币兑换按照其各自铸币的一般标准计算,需要英国支付25%的贴水。然而朗兹先生的调查研究表明,当时英国现行货币的价值比其标准价值不止低25%。因此,尽管按照通常算法当时的汇兑不利于英国,真正的汇兑却有利于英国;事实上,在英国支付较少量纯银所购得的汇票可以在荷兰兑换较大量的纯银,原本被认为在英国支付贴水的人最终却得到了贴水。在上一次英国金币改革之前,法国铸币的磨损程度要远远小于英国,法国铸币接近其标准的程度要比英国铸币高出两到三个百分点。因此,如果按照通常算法,英国与法国铸币之间的兑换对英国不利的程度不超过2%到3%的话,实际兑换就很可能对英国有利。自金币改革以来,兑换一直都对英国有利,对法国不利。

第二,在某些国家,铸币的费用是由政府支付的;而在另一些国家,它是由个人支付的,此时个人不但要持银块前往制币厂,政府甚至还有可能从铸币过程中获得一些税收。在英国,铸币的费用是由政府支出的,如果你持有1磅重的标准纯银前往铸币厂,可以得到62先令,其所含的同类标准纯银的重量正好是1磅。在法国,政府对铸币收取8%的税,不但支付了铸币的费用,还能够为政府带来少量收入。由于英国的铸币不收费,现行银币的价值绝不可能大大超过其实际包含的银块的价值。而在法国,由于铸币是收费的,劳动增加了铸币的价值,正如劳动使得精致的金银器皿的价值提高一样。如此说来,包含一定重量纯银的一笔法国货币要比包含同样重量纯银的英国货币的价值更高,购买时也必然需要花费更多的银块或其他商品。因此,虽说两国当前的铸币与各自标准的贴近程度没有什么差别,然而一笔英国货币无法买到含有同样重量纯银的一笔法国货币,因而也就无法买到价值相当于这笔货币的法国汇票。如果说我们为这样一笔货币支付的款项足以补偿法国铸币的费用,那么两国间的实际兑换为汇兑平价,其债务和债权或许事实上能够相互抵消,而根据计算所得的汇兑则对法国大大有利。如果所支付的款项低于这一数目,则两国间的汇兑事实上可能有利于英国,而根据算法则是有利于法国的。

第三点,也是最后一点,在某些地方,如阿姆斯特丹、汉堡、威尼斯等,外国汇票是以其所谓银行货币兑换的;而在另外一些地方,如伦敦、里斯本、安特卫普、莱戈恩等,外国汇票则是以本国的普通货币支付的。所谓银行货币的价值始终大于同等面值的普通货币。举例来说,阿姆斯特丹银行的1000荷兰盾的价值大于阿姆斯特丹通行的1000荷兰盾的价值。二者间的差额被称为银行的扣头,在阿姆斯特丹,银行的扣头一般为5%。假设两国当前使用的货币接近其各自铸币标准的程度一样,且其中一国使用普通货币来支付外国汇票,而另一国使用银行货币来支付外国汇票,那么显然,根据通行算法所得的汇兑有利于用银行货币支付的一国,而实际汇兑应该有利于以通行货币支付的一国;其道理和根据算法所得汇兑有利于用磨损较小的货币,或更接近于其各自标准的货币支付汇票的一方,而实际汇兑则有利于用磨损程度较大的货币支付的一方的道理是一样的。在上一次金币改革之前,在与阿姆斯特丹、汉堡和威尼斯等地交易时,计算所得的汇兑不利于伦敦,并且我认为,在与所有其他用所谓银行货币支付汇票的地方交易时的情况也都是如此。不过那并不表明实际汇兑也同样不利于伦敦。自从金币改革以来,即使在与那些地方交易时,实际汇兑也一直是有利于伦敦的。在伦敦与里斯本、安特卫普、莱戈恩等地交易时,或者,我认为在伦敦与除法国外的大多数其他欧洲地方交易时,根据计算所得的汇兑一般都是有利于伦敦的,且实际汇兑很可能也是有利于伦敦的。

[……]

第二节

根据其他原则,那些额外的限制也不合理

在上一节中我试图论证了即使根据商业体系的诸项原则,对于从那些贸易差额被认为不利于我国进口的商品进行额外限制也是完全不必要的。

然而,事实上整个贸易差额原则根本经不起推敲,但是另一方面,不仅这些限制,而且几乎所有其他商业监管规则全都是建立在这一原则之上。当两个地方彼此进行贸易时,贸易差额原则认为,如果差额平衡,则双方均没有损失或利润产生;但是如果贸易差额在任何程度上倾向于其中一方,则必有一方遭受损失,另一方获益,其损失和获益的程度与平衡倾斜程度一致。但是这些推想本身就是错误的。通过补贴或垄断等方式强迫进行的贸易,可能并且通常都不利于原本旨在获益的那一方,在接下来的文字中我会竭力证明这一点。而在没有外力强迫或限制的情况下自然、经常地在任何两地之间进行的贸易总是对双方都有利,不过对双方有利的程度不尽相同。

这里所谓的有利或获益并不是指金银数量的增加,而是指该国土地或劳动年产量的可交换价值的增加,或者其居民年收入的增加。

如果贸易差额平衡,且两地间的贸易完全是用各自本国生产的产品进行交换的话,则在大多数情况下,两地不但都会获益,且获益的程度也完全相同或基本相同;在这种情况下,两国各自会为对方的一部分剩余产品开辟出一块市场;甲方为生产和制造这一部分剩余产品而投入的资本,即在一定数目居民之间分配并为他们提供收入和生计的资本,会由乙方偿还;乙方投入的这部分资本则由甲方偿还。如此说来,两地各有一部分居民的收入或生计是间接从另一方获得的。同样,由于互相交换的商品被认为是同等价值的,在贸易中所使用的两种资本在大多数情况下也就一样多,或几乎一样多;在两国用于生产本国商品的资本,两国居民由此种分配而得的收入与生计,也必然相等或几乎相等。彼此互相提供的收入和生计,根据商务往来的程度,有多有少。举例来说,如果按一年计,两方面居民各自所获得的收入或生计高达10万英镑,或者100万英镑,那么两方面各自就需要为另一方的居民提供10万英镑或100万英镑的年收入。

如果两边的贸易是这样一种情况,即甲方向乙方出口的全部都是本国生产的商品,而乙方输入甲方的回程货物全都是外国商品,那么贸易差额被认为是平衡的,即双方都在用商品交换商品。在这种情况下,双方同样都会获益,但获益的程度不尽相同;纯粹出口本国商品的那个国家的居民,显然从该贸易中获得的收入最多。例如,如果英国从法国进口的商品只包括法国本国生产的商品,而英国本国的商品并不为法国人所需,因而每年向法国输入大量外国商品,例如烟草,或其他东印度商品作为补偿的话,这样的贸易尽管同样能为两国居民带来一定的收入,但为法国居民带来的收入显然要高于英国居民所得的收入。法国每年用于该贸易的全部资本都将在法国民众之间进行分配。而就英国资本而言,只有一部分,即用于生产英国商品(英国用来购买外国商品)的那部分资本,每年是在英国民众之间分配的,大部分英国资本都被用于补偿在弗吉尼亚、印度和中国使用的资本了,并将为那些遥远国度的居民提供收入和生计。在资本数目相同或几乎相同的情况下,法国用于该贸易的资本为法国民众所增加的收入就要大大高于英国用贸易资本为英国民众增加的收入。在这种情况下,法国与英国进行的是直接的消费品对外贸易,而英国与法国进行的是一种迂回的消费品对外贸易。在直接消费品对外贸易和迂回消费品对外贸易中所使用的资本的不同效果,我在前文中已经详细论述过了。

事实上,任何两个国家之间的贸易既不可能是双方都用本国生产的商品进行交换,也不大可能是一方完全用本国商品,而另一方完全用外国商品进行交换。几乎所有的国家都是用一部分本国商品和一部分外国商品进行交换的。然而,在贸易货物中包含最大比例的本国商品和最小比例的外国商品的国家,必然是主要的获益者。

如果英国不是用烟草和东印度商品,而是用金银来支付每年从法国进口的商品的话,则通常认为在这种情况下贸易差额是不平衡的,因为一国的商品不是用商品,而是用金银支付的。然而在这种情况下,正如前一种情况一样,贸易仍然会带给两国居民一些收入,只不过带给法国居民的收入稍高于英国;英国居民还是会从中获得一些收入。用于生产为购买金银所需的英国商品而投入的资本,即在一定数目居民之间分配并为其产生收入的资本,也因此而被收回,从而继续用于生产英国商品。输出这部分金银并不会减少英国的资本总量,正如输入同等价值的其他商品不会减少其资本总量一样。相反,在大多数情况下,英国的资本总量还会有所增加。商品之所以出口,就是因为国外对该商品的需求要大于国内,因此一般认为,出口所换回的商品在国内的价值要大于所出口商品的价值。如果在英国价值仅10万英镑的烟草被出口到法国之后,购回的葡萄酒的价值可以在英国达到11万英镑,那么这次交易就使得英国的资本总量增加了1万英镑。同理,如果用价值10万英镑的英国金子所购回的法国葡萄酒在英国的价值高达11万英镑,那么这次交易也同样使得英国的资本总量增加了1万英镑。如果说酒窖中存有价值11万英镑葡萄酒的商人要比仓库中存有价值10万英镑烟草的人富裕的话,那么葡萄酒商人也一定比保险箱里藏有价值10万英镑金子的商人更加富裕。葡萄酒商人所能够启动的产业数目,并因此而能够为其提供收入、生计和就业者的数目,显然要大于其他二人中的任何一个。然而国家的资本总量等同于其各行各业居民的资本总量,国家一年中所能够维持的产业数目也等同于各行各业的资本所能维持的产业数目。因此一般而言,国家的资本和国家在一年内所能维持的产业数目,将通过这次交换而增加。诚然,如果英国能够用自己生产的五金制品和绒面呢,而不是用弗吉尼亚烟草或巴西和秘鲁的金银来购买法国葡萄酒的话,这次贸易对英国将更加有利;直接的消费品对外贸易永远比迂回贸易更为有利。然而用金银进行交换的迂回的消费品对外贸易,却似乎并不会比其他同类迂回贸易更为不利。一个没有金银矿藏的国家不会因为每年出口这两种金属而造成金银严重短缺,正如一个不生产烟草的国家也不会因为烟草出口而造成烟草资源枯竭。一个有办法购买烟草的国家不会长期短缺烟草;同样,只要有办法购买到金银,任何一个国家也不会长期缺乏金银。

据说,工匠若与麦酒馆进行交易,必对工匠不利;自然,一个制造业国家与生产葡萄酒的国家进行的贸易也同属亏本贸易。我的答案是,与麦酒馆进行的交易不一定是亏本交易。从其本质上来看,它和任何其他交易的获利程度是一样的,只不过这种交易比较容易被滥用。一个酿酒师的职业,或者即使是小酒贩的职业,都必然与其他职业一样,同属必要的劳动分工。一个工匠在需要时从酿酒师那里购买,通常要比他自己酿造同样数量的麦酒更为划算,如果他是一个穷工匠,则对他来说,从小酒贩那里一点一点买,要比从酿酒师那里大量购买更加划算。如果此人贪吃好饮,则无疑会从酿酒师和酒贩那里购买大量麦酒,也会从附近其他的商人那里购买其他商品,比如会从屠夫那里购买更多的畜肉,如果此人贪慕时尚,则必然会从附近的布匹商人那里购买大量呢绒布匹。贸易自由有时的确会被滥用,且就某些贸易来说尤其如此,但无论如何,就工匠这一整体而言,这些贸易能够自由进行,显然是利大于弊。此外,个人有时会因为过量饮酒而倾家荡产,但对于一个国家而言,似乎没有这等风险。虽说每个国家都有很多人因为饮酒而入不敷出,为此量入而出或根本分文不花的人总是占更大多数。此外还应该指出,根据经验,葡萄酒如此便宜,并没有导致满街酒鬼烂醉如泥,倒反而使人们更有节制。大致说来,生产葡萄酒国家的居民是全欧洲最有节制的人,例如西班牙人、意大利人以及法国南部各省的居民。人们很少会不加节制地饮食,像温和的啤酒那样廉价的饮料,就算再怎么大肆挥霍,也无法表现出一个人出手阔绰、慷慨好客。相反,在那些因为气候过热或过冷而不生产葡萄,因而葡萄酒变得物以稀为贵的国家,酗酒倒成了一种普遍的恶行,诸如北方诸国,以及所有居住在热带附近的国家,像几内亚海岸的黑人,就是如此。当来自法国北部各省的兵团驻扎在南部某省,即从葡萄酒比较昂贵的省份来到葡萄酒非常便宜的省份时,我经常听人说,那些士兵起初会因为稀罕优质葡萄酒如此便宜而纵欲,但几个月之后,大多数人就会像当地居民一样节制了。如果我们立刻废除对外国葡萄酒征收的关税,并取消对麦芽、啤酒和淡啤酒加收的税负,英国的中下阶层民众或许也会出现普遍而短暂的酗酒现象,但很可能过不了多久,几乎所有人都会节制起来,且这种节制将一直延续下去。如今,在上流社会,即有能力消费最昂贵的酒精饮料的人士中,酗酒已经不再是普遍的恶行,因为饮用麦芽酒而烂醉如泥的绅士,实不多见。此外,在英国对葡萄酒贸易所进行的限制与其说阻止了人们前往酒馆,不如说阻止了人们令他们无法买到最物美价廉的酒精饮料。此种限制对葡萄牙的葡萄酒贸易更有利,而对法国的葡萄酒贸易不利。据说与法国人相比,葡萄牙人是英国制造业商品更好的顾客,因而与他们进行的贸易应该得到鼓励。政客们说,既然葡萄牙人照顾了我们,我们理应照顾他们。小商人的卑鄙策略,居然就这样成为一个大帝国的政治原则:的确如此,只有小商人,才会把这种策略看作是对待顾客的金科玉律。大商人不会过问这些小节,他们只关心能否在最物美价廉的地方购买到自己需要的商品。

然而,实施通过这类原则,各国最终得出的结论是,他们的利益统统在于让周围所有的邻国都变成穷国。每个国家最终都以嫉妒和毁谤之心看待所有与之进行贸易的国家的繁荣,并认为那些国家一旦得利,就必然意味着自己遭受了损失。各国之间的商业,如同个人之间的商业交易一样,原本应该是团结和友爱的纽带,最终却变成了滋生冲突和仇恨的沃土。在本世纪和上一个世纪,因为王公大臣们的任性和野心而对欧洲和平造成的伤害,远没有商人和制造业者那种无端的嫉妒之心来得更为严重。人类统治者施行的暴力和不公,自古以来就是祸害,在我看来,根据人类行事的规律法则,这种祸害是无法根除的。商人和制造业者既不是也不应该是人类的统治者,他们的贪婪和独占欲也许不能彻底改正,但要其不妨碍其他人的安宁,还是能够轻易做到的。

毫无疑问,最初发明并宣传这种原则的,正是商人们独占和垄断的精神;而最先倡导这种原则的人,却并不像后来笃信这种原则的人那般愚蠢。在任何国家,能够从卖得最便宜的人那里购买到自己需要的商品都是也必然是符合最大多数人利益的。这个道理不言自明,所以花费精力论证会显得有些滑稽;商人和制造业者出于自私、精明而故意混淆了这一基本常识,如果不因为此,我们甚至根本无须提及这一道理。在这方面,他们的利益与大多数民众的利益截然相反。就像同业组合内自由人的利益在于阻止国内居民雇用其他人而只雇用他们自己一样,这些商人和制造业者的利益,也在于自己保有国内市场的垄断。因此,英国和几乎所有的其他欧洲国家,均对所有由外国商人输入的商品课以额外的税负。于是就有了我们如今看到的,对所有可能与我们的制造品进行竞争的外国制造品征收高关税或干脆明令禁止的现象。因此也正如我们所看到的,对于贸易差额被认为不利于我国的国家,也就是那些与我国的民族仇恨最为强烈的国家,几乎所有商品的进口都施加了额外限制。

然而,尽管在战争或政治中邻国的富裕意味着我国的危险,在贸易中却显然是对我们有利的。在敌对状态下,富裕有可能使得敌人能够保有比我们更为精良的船舰和军队;而在和平的商业状态下,它必然会使得邻国与我们进行价值更大的交易,为我们提供更好的市场,使我们得以出售那些自己生产的产品或用那些产品购买的任何商品。对于勤劳生产的人来说,有富裕的邻人作为顾客自然要比贫穷的邻人更好,有一个富裕的邻国也是同样的道理。的确,如果富人本身又是一个制造业者,或许对所有同业的邻人来说不啻为一种威胁。不过其他邻人,从目前看来也是最大多数邻人却能够从中得益,因为富人的花费为大多数邻人提供了很好的市场。甚至他的产品的售价比那些贫穷的工匠更加低廉也能使大多数邻人受益。同样,一个富国的制造业者对邻国制造业者而言无疑是非常危险的竞争对手,然而竞争本身对大多数民众是有利的,此外,这样一个富裕的国家在其他方面的巨额花费,也必然为人们提供良好的市场,使之从中得益。希望发财的人绝不会退居穷乡僻壤,而必然居住在首都或者大的商业城镇附近。他们很清楚,如果财富的流通量很小,他们便很难从中受益,而如果财富的流通量极大,他们或许能够从中分得一杯羹。这种原则能够引导一两个,乃至一二十个普通人的常识,也应该能够影响一二百,乃至一二千万人的判断,应该能够使整个国家认识到,邻国的富裕可以看作是其本身获得财富的可能来源和潜在机遇。一个国家要想通过对外贸易富强起来,那么如果邻国都是富裕而勤勉的商业国家,它自然最容易达到目的。如果一个大国四周都是些游牧的未开化之人或贫穷的野蛮人,那么它无疑只能通过开垦本国的土地或发展国内商业来获取财富,想靠对外贸易则基本无望。古代埃及人和现代中国人似乎正是通过这种方式获得财富的。据说,古埃及人极不重视对外贸易;众所周知,现代中国人极其轻视对外贸易,根本不给对外贸易以正当的法律保护。由于对外商业贸易的现代原则旨在使所有的邻国陷入贫困,就算能够达到目的,产生其所企望的效果,也必然使得对外商业沦为极其微不足道、受人鄙视的地位。

正是这些原则,导致法国和英国之间的商业往来在两国都受到了很多阻碍和限制。然而,如果两个国家考虑一下自己真正的利益,而不要顾及商业上的妒忌或民族仇恨,法国商业为英国带来的利益可能远非任何其他国家可比;出于同样的原因,英国之于法国也是如此。法国是距离英国最近的邻国。英国南部沿海各地与法国北部及西北部沿海各地间的贸易,好像国内贸易一样,可以每年往返4次、5次乃至6次。两国投在这种贸易中的资本,比起投在对外贸易的大部分其他分支中的等量资本而言,可以启动4倍、5倍乃至6倍的产业活动,为4倍、5倍乃至6倍的人口提供就业和生计。就算英国和法国距离最远的那些地区之间,其贸易往来至少也能达到每年1次,即使这种少量的贸易,迄今为止英国从中所获得的利益也至少和与大部分其他欧洲国家进行对外贸易的获利一样多。如果与被我们鼓吹夸大的英国和北美殖民地之间的贸易相比——那种贸易往往每3年,甚至常常是每4—5年才能往返一次——则对法贸易的获利至少要高出3倍。此外,据估计法国居民多达2400万,而我们的北美殖民地人口绝不会超过300万;法国要比北美富饶得多;尽管由于财富不平等分配的现象更为严重,法国的穷人和乞丐人数也要比北美多得多。因此,法国所能提供的市场至少要比北美市场大8倍,且由于贸易往来的频率极高,英国从对法贸易中所得的利益要比对北美殖民地贸易所能提供的获利高出24倍之多。与英国的贸易对法国也同样有利,且根据两个国家的财富、人口、邻近程度,法国与英国的贸易也同样比法国与其殖民地之间的贸易优越得多。以上就是两种贸易之间的巨大差别:一种是两国的所谓“智者”认为应该阻止的贸易,而另一种是最受他们偏爱的贸易。

然而本该促进两国之间的开放自由贸易,使双方都从中收获甚丰的现实环境,却最终变成了对这种商业贸易的主要阻碍力量。由于彼此相邻,两国必然成为竞争对手,因此,一方的富强必然会使另一方感到恐惧;本来可以增进民族友谊的有利因素,最终却助长了激烈的民族仇恨。两国都是富饶而勤勉的国家;两国的商人和制造业者都害怕由于另一方的高超技能和勤勉劳动所带来的激烈竞争。商业上的嫉妒由强烈的民族仇恨所激起,而强烈的民族仇恨又助长了商业上的嫉妒,两者相互助长;两国的贸易者,都无比笃信其自私自利的谬说,宣称不受限制的国外贸易,必然会生出不利的贸易差额,而不利的贸易差额,又一定会导致国家的毁灭。

在欧洲各商业国家内,秉持这种学说自命不凡的学者常常预言说:贸易差额的不利必将导致国家濒于灭亡。但在这一切令他们激奋不已的焦虑论调背后,几乎所有贸易国家都试图改变贸易差额,使其有利于本国而不利于邻国,不过,这些努力似乎都是徒劳,无论从哪个方面来说,似乎没有一个欧洲国家曾因上述原因而陷入贫困。相反,每一个城镇和国家都因为对所有国家开放港口而致富,并没有像商业体系原则所预期的那样,因为自由贸易而走向毁灭。今日的欧洲,从某些方面来说,虽有几个城镇能够配得上自由贸易港口之称,而真正开放自由贸易的国家却没有一个。荷兰或许要算是最接近这一特征的国家了,却仍然离此目标甚远;众所周知,不仅荷兰的国家财富全部得自对外贸易,其国民必要生计的大部分也来自于对外贸易。

我在上文中已经解释过,还有一种差额全然不同于贸易差额,而这种差额的有利或不利,将必然决定一个国家的兴衰,这就是年产量和年消费量的差额。前文已经指出,如果年产量的可交换价值超过年消费量的可交换价值,则社会在这一年内的资本必然增加,增加的部分正好是前者超出后者的部分。在这种情况下,整个社会就其收入来说是量入而出的局面,整个一年中节省下来的收入自然增加了其资本总量,社会可继而使用这些盈余资本进一步增加年产量。相反,如果年产量的可交换价值低于年消费量的可交换价值,则整个社会的资本必然减少,减少的部分也正好是前者低于后者的部分。在这种情况下,整个社会就其收入来说,陷入了入不敷出的局面,消费必然会侵蚀资本。因而,社会的资本总量必然减少,随之而减少的,还有工业年产量的可交换价值。

产量和消费量的差额与所谓的贸易差额截然不同。即使是完全没有对外贸易、与世隔绝的国家,也可能存在这种差额。无论整个地球上的财富、人口和土地改良情况如何逐渐增加或逐渐减退,这种差额始终存在。

即使在所谓的贸易差额从整体而言不利于某一个国家时,产量和消费量之间的差额仍然可能始终有利于该国。也许半个世纪以来,一个国家的进口价值始终超出其出口价值;即使整个这段时期流入的金银可能立即流出;即使其流通的铸币逐渐磨损,只能用各种纸币替代铸币;甚至即使该国对与之交易的主要国家的债务逐渐增加,在同一时期内,这个国家真正的财富,它的土地和劳动年产量的可交换价值仍然可能以大大超过这些负面因素的比例与日俱增。

[……]

注释

【1】  位于丹麦东部,是丹麦境内最大的岛屿。——译者注

6

农业体系

我认为有必要对于政治经济学的贸易或商业体系作出详尽的解释,而对农业体系就不必长篇大论了。

据我所知,没有任何一个国家的农业体系将土地农产品作为该国政府收入和社会财富的唯一来源,这种观点目前仅仅是几个学识渊博且独辟蹊径的法国人的构想。显然,如果一种学说根本没有,甚至可能永远不会对世界上的任何国家造成任何危害,实在没有必要费心去详尽罗列该学说有何弊端。不过在此,我还是要尽可能地解释清楚这个天才学说的大致轮廓。

法王路易十四当政期间,鼎鼎有名的财政大臣科尔贝尔先生为人正直、工作勤勉、所学甚详,对审查政府账目有着丰富的经验和敏锐的洞察,简言之,他具备足够的能力,完全可以用新方案来管理政府税收的收支,并处理得井井有条。遗憾的是,这位杰出的财政大臣已经习惯了管理诸多政府部门的方法,习惯了建立必要的核查和监督机制,使这些部门各归其所。商业体系本质上的诸多束缚和严格管制,恰恰迎合了这位对工作兢兢业业的财政大臣的口味,他的头脑中充斥着商业体系带来的所有偏见。他试图将政府部门的管理模式运用到法国的工商业,不但不允许个体商人在平等、自由、公正的开明原则下以其各自的方式追求利益,还赋予某些工商业部门额外的特权,对另一些部门又特别限制。在城镇工商业和农业两者之间,他不仅和欧洲其他各国的财政大臣一样倾向于鼓励前者的发展,甚至不惜以抑制和阻止后者的发展为代价来辅助前者。为了给城镇居民提供价格低廉的生活必需品,以此来鼓励法国制造业和对外贸易,科尔贝尔先生全线禁止玉米出口,致使该国迄今最重要的工业原料无法进入国外市场。法国有着肥沃的农田和宜人的气候,自然条件十分优厚,但上述禁令连同各省自古就有的禁止玉米省际运输法案,再加上各省土地耕种者担负的名目繁多的苛捐杂税,导致法国的农业发展严重滞后。政府抑制农业发展在法国各地多少都有所体现,对其原因也展开过各种调查,原因之一似乎是科尔贝尔政府在城镇的工商业和农业之间选择优先发展前者。

常言道,矫枉往往过正。曾提出将农业作为每一个国家政府税收和社会财富的唯一来源的法国思想家们,似乎恰恰就是以此为座右铭的。如果说在科尔贝尔的方案中,城镇工商业发展被给予过高重视,那么这些哲学家设想的体系无疑又对它太不重视了。

一般认为,在任何方面可能有助于增加一国土地和劳动年产值的各阶层人民主要分为三类。第一类是土地所有者。第二类是土地耕种者、农场主和农村劳动者,这类人被尊称为生产阶级。第三类是饱受歧视,并被冠以“非生产阶级或纯消费阶级”这一侮辱性的称号的工匠、制造业者和商人。

土地所有者阶层对土地年产值的贡献在于,他们定期投入资本改良土地,修葺农舍,疏通排水设施,修补篱笆并改善其他设施。有了这些,耕种者就能够在同等资本投入的基础上获得更好的收成,从而缴付更高的地租。增加的这部分地租可以看作土地所有者支出费用或投入资本改良土地所应得的利息或利润。在农业学说中,这种费用被称为土地费用。

土地耕种者或农场主对土地年产值的贡献在于,他们支出费用耕种土地,在农业学说中,这部分费用被称为原始费用和年度费用。原始费用包括购买农具、牲畜、种子,以及农场主在第一年租种土地期间至少大半年时间或在土地有若干收成之前,维持其家人、雇工和牲畜的费用。年度费用包括购买种子、农具磨损和修葺的费用,以及农场主在一年内维持其雇工和牲畜而支出的费用,如果农场主的家人也参与劳动,被视为耕种的雇工,则也包括这部分家人的基本生活费用。对于农场主而言,土地的收成除去上缴的地租应充足有余。首先要在合理的时间内,至少在他租种期间,能够收回他所有的原始费用和产生资本的一般利润;其次要能够每年补偿他的所有年度费用和产生资本的一般利润。这两种费用是农场主在耕种期间投入的资本,如果资本不能定期收回并带来一定的利润,农场主付出的劳动和其他职业就不在同一水平上,那么从自身利益出发,他就必须尽快放弃这种劳动,寻求其他能够带来利润的工作。土地产值中用于使农场主再生产的部分应该留给耕种者专用。如果土地所有者将其挪作他用,其土地的产量必然下降,几年之后农场主将不但难以缴付上调的地租,甚至连原来的合理地租也难以承受。应该归属土地所有者的地租,不过是把先前用于提高土地总产值而支付的所有必要费用完全扣除之后所剩余的部分。正是由于土地耕种者的劳动,在扣除了所有的必要费用之后还能产生这样一部分净产值,他们在农业学说里才被冠以“生产阶级”的美称,也正是因此,其原始费用和年度费用才在该学说中被称为“生产性费用”,因为除了能够收回其本身的价值,这些费用每年还能产生一部分净产值。

所谓的土地费用,即土地所有者为改良其土地所花费的成本,在农业学说中也被冠以“生产性费用”的美称。直到上调的那部分地租偿还了所支出的所有费用,以及所投入资本的一般利润之前,这部分上调地租应该是神圣而不可侵犯的,教会和国王都不得觊觎:教会不能对其征收什一税,国王不能对其征税。否则,这笔资金的缺失将不利于土地所有者改良土地,从而降低日后教会征缴什一税和国王征税的金额。因此在一个井然有序的社会里,那些土地费用除了完全再生其本身的价值外,也会在一段时间之后产生净产值,所以在该学说中也被称为“生产性费用”。

不过,土地所有者的土地费用,以及农场主的原始费用和年度费用,是农业学说中仅有的三种生产性费用。其他任何形式的费用和其他任何阶层的人们,即使在常人看来是最具有生产能力的,根据这样的标准,也都被视为完全不生产。

工匠和制造业者尤为典型。根据常人的理解,他们的劳动大大增加了土地原产物的价值,可是在农业学说中,他们被认为是完全不生产的阶层。这种学说一般认为,他们的劳动不过是收回了雇用他们的资本,且为这部分资本创造了一般性利润。雇用资本包括由雇主事先垫付的原材料、工具和工资,是专门用于支付其劳动和维持其生活的资金,其所产生的利润则是专门用于维持雇主生活的资金。雇主既垫付了工匠和制造业者劳动所必须的原材料、工具和工资,也垫付了维持他自身生活所必需的那部分资金,一般来说,他垫付的这部分资金和他所希冀的劳动价格带来的利润呈正比。如果劳动价格还不能够偿还他维持自身生活的全部费用和投入到雇工劳动中的原材料、工具和工资费用,那么显然,它未能偿还雇主所投资的全部费用。因此,制造业资本的利润不同于地租的利润,也不是在偿还了雇主为获得利润所投下的全部费用之后所剩余的净利润。和大制造业者一样,农场主投入的资本也能够创造利润,但它还为他人创造了地租,这是大制造业者的投资所无法做到的。因此——这么说吧——用于雇用和维持工匠和制造业者生活的那部分资本不过只是让它本身的价值继续存在,而没有创造任何新价值。这就是为什么农业学说称之为完全不生产的费用。相反,用于雇用农场主或农村劳动力的费用则不仅能够继续维系其自身的价值,还能够产生新价值,即土地所有者的地租,因此它是生产性费用。

商业资本同制造业资本一样,都是不能生产的,都只能维持自身的价值。商业利润仅仅偿还了其雇主在投资期间、收回资本回报之前垫付给自身维持生活的费用,充其量只补偿了投资所必须支付的一部分费用。

工匠和制造业者的劳动的确从未增加过土地原产品年产量价值的一分一毫,可又的确大大增加了某些特定原产品的价值。不过其所消费的其他部分的价值及其所增加的那部分价值正好相等,因此在整个过程中,农产品年产总量的价值并未有丝毫增加。举例来讲,一个将褶边加工成蕾丝的手艺人,有时会将价值仅为几便士的亚麻原料的价值增加到30英镑。乍看之下,他似乎把原材料价值增加了7200多倍,事实上他一丁点儿都没有增加土地原产品年产总量的价值。加工蕾丝或许要耗去他两年的劳动。完工后所得到的30英磅不过只是偿还了他在这两年劳动期间的生活花费而已。他日复一日的劳动为那对褶边所增加的价值不过只是补偿了他那日复一日的劳动过程中的生活花费。因此在整个过程中,他丝毫没有增加土地原产品年产总量的价值:他在此期间所持续消费的农产品部分,总是能够抵消掉他所持续创造的价值。在这个费用高却又不重要的制造业中,受雇的大多数人都很贫穷,这一点恰恰证明,他们的劳动价格一般不超过他们所消耗的生活必需品的价值。而农场主和农村劳动力的情况则不同,一般来说,土地所有者的地租就是其不断产生的价值,而地租又是在扣除了完全补偿劳动者及其雇主的雇用和维持生活所需的全部费用之后剩余的部分。

工匠,制造业者和商人若要增加国家税收和社会财富,唯一的途径就是节俭,或者按照农业学说中的说法,只能靠克己,即自行剥夺原本用于维持自身生活所用的那部分资金。年复一年,他们再生产的只是那部分资金。因此,如果他们每年不节省下一部分资金或限制自己使用一部分资金,他们的劳动就根本不能增加整个社会的税收和财富。农场主和农村劳动力则相反,他们可以充分享有维持自身生活的那部分资金,同时还能增加政府的税收和社会财富。除去维持他们自身生活的花费之外,他们年复一年的劳动还创造了净产值,产值的增加必然将增加税收和社会财富。因而诸如法国和英国这样在很大程度上由土地所有者和耕种者组成的国家,劳动之余还能享乐,国家也因此而走向富裕。与之相反,荷兰和汉堡这类主要由商人、工匠和制造业者组成的国家,就只能通过节俭和克己来累积财富。由于各国所处的境况截然不同,国家的利害关系也大不相同,国民的性格也各有特点:前一类国家的国民自然而然地形成了善良慷慨,诚实直率,热情友爱的性格;后一类国民则难免狭隘卑鄙、自私自利,拒绝任何俗世的享乐。

非生产阶层,即商人、工匠和制造业者完全要靠其他两个阶层,即土地所有者和耕种者阶层来维持和雇用。后两个阶层既为前一个阶层提供了生产原料和维持其生活所必需的费用,又提供了他们在从事该劳动期间所消费的粮食和牲畜。土地所有者和耕种者最终不但要支付非生产阶层所有劳动者的工资,还要支付其雇主的所有利润。那些劳动者及其雇主在某种程度上都受制于生产阶层,只不过他们是在外做工的奴仆,而不是在主人家中做事,不过无论哪一种奴仆,都要靠同一类主人养活。因而两者的劳动都是非生产的,对于土地原产品总价值的增加没有什么影响——不仅没有增加,反倒还需从总价值中抽出一部分来支付自身费用。

尽管如此,非生产阶层不仅不能算作无用,而且对其他两个阶层颇有助益。通过商人、工匠和制造业者的辛勤劳动,土地所有者和耕种者就可以用其自身一小部分劳动的产品,来购买他们所需的他国产品及本国加工的产品;否则,无论输入别国商品还是自行加工为己所用,以其操作的笨拙和不熟练,为此付出的劳动要远远高于他们购买成品所需的费用。因为有了商人、工匠和制造业者的辛勤劳动,土地耕种者才得以心无旁骛地致力于土地的耕种,也正由于这种全力以赴的劳动,他们才能够收获足量的农产品,来支付土地所有者和他们自身为了维持和雇用非生产阶层所支付的全部费用。因此,尽管商人、工匠和制造业者本质上是不生产的,但他们的劳动以这种方式间接增加了土地产量。通过给予生产阶层充分的时间和自由来专注于自己的劳动,即土地耕种,非生产阶层的劳动提高了生产性劳动的生产力;可以这样说,往往由于与耕种毫不相干的人的劳动,耕种的效率得到大大的提高。

对土地所有者和耕种者而言,以任何方式抑制商人、工匠和制造业者的发展,向来都不符合他们的利益。非生产阶层享受的自由度越大,诸多行业间的竞争就越激烈,他们提供给土地所有者和耕种者的商品——无论是别国商品还是本国制造品——的价格就越低廉。

对非生产阶层而言,抑制另外两个阶层的发展也不符合其自身利益。用于维持其生活和雇用其劳动的,正是扣除了土地耕种者和土地所有者维持生活所必须的投资之后剩余的那部分土地农产品。同理,这部分盈余越多,维持和雇用该阶层的费用就会越高。完全公正、完全自由和完全平等地建立,是这三个阶层最大限度地同臻繁荣的最简单、最有效的秘诀。

在荷兰和汉堡等以商业为主的国家,非生产阶层主要由商人、工匠和制造业者构成,维持和雇用他们的资本也同样要由土地所有者和耕种者承担。唯一的区别是,为这些非生产阶层提供生产和生活资料的大多是其他国家的土地所有者和耕种者,是别国臣民,与荷兰等国的工商业阶级相隔千里,极不便利。

然而这些商业国对于其他国家的居民,不仅有用,而且用处颇大。其他国家居民本应拥有其各自的工商业阶层,但因各国政策的某些缺陷,工商业阶层未能形成。这些以非生产阶层为主的国家在某种程度上填补了这个极其重要的空缺,代替了这些国家的商人、工匠和制造业者。

那些农业国家——我姑且这样称呼它们——也决不会对荷兰等国的贸易或输出的商品课以高额关税,来束缚和限制这些商业国家的发展,这不符合它们自身的利益。高额关税会提高这些商品的价格,由于这些商品是用输入国的土地原产物的盈余,或换而言之,是用这些剩余产物的价格购买的,如此只会导致其本国土地原产物实际价值的贬抑。高额关税只会打击生产阶层的积极性,使之不再乐于增加土地产物的盈余,并进而导致本国土地的改良与耕种受到影响。与之相反,如若想提高剩余部分产物的价值、扩大生产、激励改良和耕种土地,最为有效的策略莫过于允许所有商业国家进行绝对的自由贸易。

这种绝对的自由贸易,从以下这一点来说也是最有效的方案:它能够及时提供那些农业国所需要的工匠、制造业者和商人,以最恰当、最便利的方式填补这个使他们深感不便的空缺。

土地剩余产物持续增加,在适当的时候,会创造出多于用于耕种和改良土地的利润值的资金,而这部分利润中剩余的部分自然又被投资,用于雇用国内的工匠和制造业者。然而一旦那些工匠和制造业者发现本国既提供生产原料又提供维持其生活的费用,那么即便他们缺乏精湛的技艺,也极有可能立即生产出与商业国的工匠和制造业者同等低廉的产品,毕竟后者的生产和生活资料要从遥远的地方运来。由于技艺不精,在一段时间内,这些手工业者的制作成本不能和他国技艺娴熟的同行一样低廉;可一旦放眼国内市场,他们的产品和那些千里迢迢来自异国他乡的产品相比,由于减免运费,价格相差无几,并且随着他们技艺的改善精进,他们产品的价格很快就会更大幅度降低。这样,那些商业国的工匠和制造业者在这些农业国的市场上就会立刻面临来自对手的竞争,继之而来的是销量大减,最终被完全挤出该国市场。由于不断改进技艺,农业国的制造业产品价格低廉,假以时日便会走出国门、进军他国市场,且最终会以同样的方式,逐渐将那些商业国家的制造业者挤出市场。

农业国土地原产物和加工产品均保持持续增长,到一定时候会生成一笔资本,其金额会高于用于农业或制造业的费用所产生的一般利润率。这部分盈余自然会转向对外贸易,用于将本国土地原产物和制造业产品超出本国消费需求的那一部分输出到其他国家。在向他国输出本国农产品时,和那些商业国家的商人相比,农业国的商人也具有一定的优势,道理和农业国的工匠和制造业者所具有的优势一样,即农业国的商人可在国内得到货物、原料及供给,而商业国家的商人若要得到这些,就得不远万里地去寻找。因此,如果农业国的商人缺乏先进的航海技术,他们和商业国商人输入到外国市场的货物价格基本持平;一旦农业国商人的航海技术发展成熟,他们的产品价格将更加低廉。如此说来,不久他们就可以在这一块对外贸易中与商业国家平起平坐,并最终将后者完全挤出市场。

因此,按照这个自由宽宏的制度,一个农业国若要促进本国的工匠、制造业者和商人的发展,最有利的办法就是给予其他国家的工匠、制造业者和商人以最大限度的贸易自由。这样可以提高本国土地剩余产物的价值,从而生成一笔资金,经一段时间的积累,这笔资金必然能够培养起本国所需的工匠、制造业者和商人。

相反,如果农业国对外贸课以高额关税或设置重重障碍,必然会从两方面危害到自身利益。其一,抬高所有外国商品和其他制造品的价格,必然会降低本国土地剩余产物的实际价值,因为该国是用这些盈余,或换言之,是用这些剩余产物的价格购买那些外国商品和制造品的;其二,通过给予本国商人、工匠和制造业者在国内市场上的某种垄断,提高商业和制造业相对于农业的利润,就会使先前应用于农业的一部分资本流入商业和制造业,或者阻碍了本应用于农业的资本流入农业。因此我们说,这项政策从两个方面挫伤了农业的发展。首先,它降低了农产品的实际价值,因而降低了农业的利润;其次,它提高了所有其他行业的利润。由此,农业相对处于劣势,贸易和制造业则拥有了原本不该有的优势。受到一己私利的驱使,每个人都会尽可能地将自己的资本和劳动从前者转投到后者。

农业国通过实施这项抑制性政策,可藉相对自由贸易以较快的速度培养出自己的工匠、制造业者和商人——不过这一点非常可疑——然而我们可以说,这是在其还未发展成熟之前,过早地将他们培养起来。过速地培育起某一个行业,就必然会抑制另一个更有价值的行业。被过速培育的这个行业只能回收起初投入的资本并产生一般利润,而被抑制的那个行业在回收该资本并产生一般利润之后还能够产生净值,即支付给地主的地租。这必然会压制生产性劳动,而过早地鼓励了完全不生产的劳动。

[……]

前面已经谈到,任何国家的规模最大和最重要的商业活动是在城乡居民之间展开的。一方面通过交换,城镇居民获得了土地原产物,从而获得了生产材料和维持生活所需的花费;另一方面,他们在交换中支付加工过的能够立即付诸使用的那部分原产物。在截然不同的两类人之间开展交易,其实最终是一定数量的原产物与一定数量的加工品之间的交换,因此后者越贵,前者就会越便宜;任何国家无论以任何方式提高加工品价格,都会导致土地原产物价格下跌,从而不利于该国农业的发展。用一定数量的土地原产物,或用一定数量的土地原产物的价格所能购买的加工品的数量越少,这部分土地原产物的可交换价值就越低,就越会打击土地所有者改良土地或农场主耕种土地的积极性。此外,任何国家无论以何种方式减少工匠和制造业者的从业人数,都会导致国内市场萎缩。而国内市场是土地原产物的诸多市场中最为重要的市场,因而该国的农业发展就会进一步受到抑制。

由此,那些认为农业胜过任何其他行业的学说,为促进农业的发展,总是对制造业和对外贸易设置障碍,最终却事与愿违,原本旨在促进农业发展,却间接地起到了抑制的作用。就这一点来说,其自相矛盾的程度或许要比商业体系的原则更为严重。商业体系对制造业和对外贸易的重视超过对农业的重视,因而从社会资本中抽取部分资本,使社会资本不再用于较有优势的行业,转而用于支持不大具备优势的行业。但事实上它最终却能够实现初衷,鼓励其意欲支持的行业发展。与之相反,重农学说最终只会抑制其所要保护的行业发展。

由此看来,无论是额外鼓励某个行业的发展,增加投入,使之远远超过本应投入的社会资本,还是限制某个行业的发展,减少投入,使之远远低于本应投入的社会资本的制度,事实上都会和原来的目标背道而驰。不仅没有加速富国强民的进程,还降低了土地年产物和劳动力的实际价值。

所有学说,无论是优先发展还是抑制发展的学说,一旦完全废除,最明白、最简单的自由制度就会自然而然地建立起来。只要不违背公正原则,任何人都可以完全自由地按照自己的方式谋求私利,并用他自己的劳动和资本与任何其他个人或阶层展开竞争。

Adam Smith

The Invisible Hand











PENGUIN BOOKS — GREAT IDEAS

1

The Division of Labour

The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgement with which it is anywhere directed, or applied, seem to have been the effects of the division of labour.

The effects of the division of labour, in the general business of society, will be more easily understood by considering in what manner it operates in some particular manufactures. It is commonly supposed to be carried furthest in some very trifling ones; not perhaps that it really is carried further in them than in others of more importance: but in those trifling manufactures which are destined to supply the small wants of but a small number of people, the whole number of workmen must necessarily be small; and those employed in every different branch of the work can often be collected into the same workhouse, and placed at once under the view of the spectator. In those great manufactures, on the contrary, which are destined to supply the great wants of the great body of the people, every different branch of the work employs so great a number of workmen that it is impossible to collect them all into the same workhouse. We can seldom see more, at one time, than those employed in one single branch. Though in such manufactures, therefore, the work may really be divided into a much greater number of parts than in those of a more trifling nature, the division is not near so obvious, and has accordingly been much less observed.

To take an example, therefore, from a very trifling manufacture; but one in which the division of labour has been very often taken notice of, the trade of the pin-maker; a workman not educated to this business (which the division of labour has rendered a distinct trade), nor acquainted with the use of the machinery employed in it (to the invention of which the same division of labour has probably given occasion), could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty. But in the way in which this business is now carried on, not only the whole work is a peculiar trade, but it is divided into a number of branches, of which the greater part are likewise peculiar trades. One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; to make the head requires three distinct operations; to put it on is a peculiar business, to whiten the pins is another; it is even a trade by itself to put them into the paper; and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands, though in others the same man will sometimes perform two or three of them. I have seen a small manufactory of this kind where ten men only were employed, and where some of them consequently performed two or three distinct operations. But though they were very poor, and therefore but indifferently accommodated with the necessary machinery, they could, when they exerted themselves, make among them about twelve pounds of pins in a day. There are in a pound upwards of four thousand pins of a middling size. Those ten persons, therefore, could make among them upwards of forty-eight thousand pins in a day. Each person, therefore, making a tenth part of forty-eight thousand pins, might be considered as making four thousand eight hundred pins in a day. But if they had all wrought separately and independently, and without any of them having been educated to this peculiar business, they could certainly not each of them have made twenty, perhaps not one pin in a day; that is, certainly, not the two hundred and fortieth, perhaps not the four thousand eight hundredth part of what they are at present capable of performing, in consequence of a proper division and combination of their different operations.

In every other art and manufacture, the effects of the division of labour are similar to what they are in this very trifling one; though, in many of them, the labour can neither be so much subdivided, nor reduced to so great a simplicity of operation. The division of labour, however, so far as it can be introduced, occasions, in every art, a proportionable increase of the productive powers of labour. The separation of different trades and employments from one another seems to have taken place in consequence of this advantage. This separation, too, is generally carried furthest in those countries which enjoy the highest degree of industry and improvement; what is the work of one man in a rude state of society being generally that of several in an improved one. In every improved society, the farmer is generally nothing but a farmer; the manufacturer, nothing but a manufacturer. The labour, too, which is necessary to produce any one complete manufacture is almost always divided among a great number of hands. How many different trades are employed in each branch of the linen and woollen manufactures, from the growers of the flax and the wool, to the bleachers and smoothers of the linen, or to the dyers and dressers of the cloth! The nature of agriculture, indeed, does not admit of so many subdivisions of labour, nor of so complete a separation of one business from another, as manufactures. It is impossible to separate so entirely the business of the grazier from that of the corn-farmer as the trade of the carpenter is commonly separated from that of the smith. The spinner is almost always a distinct person from the weaver; but the ploughman, the harrower, the sower of the seed, and the reaper of the corn, are often the same. The occasions for those different sorts of labour returning with the different seasons of the year, it is impossible that one man should be constantly employed in any one of them. This impossibility of making so complete and entire a separation of all the different branches of labour employed in agriculture is perhaps the reason why the improvement of the productive powers of labour in this art does not always keep pace with their improvement in manufactures. The most opulent nations, indeed, generally excel all their neighbours in agriculture as well as in manufactures; but they are commonly more distinguished by their superiority in the latter than in the former. Their lands are in general better cultivated, and having more labour and expense bestowed upon them, produce more in proportion to the extent and natural fertility of the ground. But this superiority of produce is seldom much more than in proportion to the superiority of labour and expense. In agriculture, the labour of the rich country is not always much more productive than that of the poor; or, at least, it is never so much more productive as it commonly is in manufactures. The corn of the rich country, therefore, will not always, in the same degree of goodness, come cheaper to market than that of the poor. The corn of Poland, in the same degree of goodness, is as cheap as that of France, notwithstanding the superior opulence and improvement of the latter country. The corn of France is, in the corn provinces, fully as good, and in most years nearly about the same price with the corn of England, though, in opulence and improvement, France is perhaps inferior to England. The corn-lands of England, however, are better cultivated than those of France, and the corn-lands of France are said to be much better cultivated than those of Poland. But though the poor country, notwithstanding the inferiority of its cultivation, can, in some measure, rival the rich in the cheapness and goodness of its corn, it can pretend to no such competition in its manufactures; at least if those manufactures suit the soil, climate, and situation of the rich country. The silks of France are better and cheaper than those of England, because the silk manufacture, at least under the present high duties upon the importation of raw silk, does not so well suit the climate of England as that of France. But the hardware and the coarse woollens of England are beyond all comparison superior to those of France, and much cheaper too in the same degree of goodness. In Poland there are said to be scarce any manufactures of any kind, a few of those coarser household manufactures excepted, without which no country can well subsist.

This great increase of the quantity of work which, in consequence of the division of labour, the same number of people are capable of performing, is owing to three different circumstances; first, to the increase of dexterity in every particular workman; secondly, to the saving of the time which is commonly lost in passing from one species of work to another; and lastly, to the invention of a great number of machines which facilitate and abridge labour, and enable one man to do the work of many.

First, the improvement of the dexterity of the workman necessarily increases the quantity of the work he can perform; and the division of labour, by reducing every man's business to some one simple operation, and by making this operation the sole employment of his life, necessarily increases very much the dexterity of the workman. A common smith, who, though accustomed to handle the hammer, has never been used to make nails, if upon some particular occasion he is obliged to attempt it, will scarce, I am assured, be able to make above two or three hundred nails in a day, and those too very bad ones. A smith who has been accustomed to make nails, but whose sole or principal business has not been that of a nailer, can seldom with his utmost diligence make more than eight hundred or a thousand nails in a day. I have seen several boys under twenty years of age who had never exercised any other trade but that of making nails, and who, when they exerted themselves, could make, each of them, upwards of two thousand three hundred nails in a day. The making of a nail, however, is by no means one of the simplest operations. The same person blows the bellows, stirs or mends the fire as there is occasion, heats the iron, and forges every part of the nail: in forging the head too he is obliged to change his tools. The different operations into which the making of a pin, or of a metal button, is subdivided, are all of them much more simple, and the dexterity of the person, of whose life it has been the sole business to perform them, is usually much greater. The rapidity with which some of the operations of those manufactures are performed, exceeds what the human hand could, by those who had never seen them, be supposed capable of acquiring.

Secondly, the advantage which is gained by saving the time commonly lost in passing from one sort of work to another is much greater than we should at first view be apt to imagine it. It is impossible to pass very quickly from one kind of work to another that is carried on in a different place and with quite different tools. A country weaver, who cultivates a small farm, must lose a good deal of time in passing from his loom to the field, and from the field to his loom. When the two trades can be carried on in the same workhouse, the loss of time is no doubt much less. It is even in this case, however, very considerable. A man commonly saunters a little in turning his hand from one sort of employment to another. When he first begins the new work he is seldom very keen and hearty; his mind, as they say, does not go to it, and for some time he rather trifles than applies to good purpose. The habit of sauntering and of indolent careless application, which is naturally, or rather necessarily acquired by every country workman who is obliged to change his work and his tools every half hour, and to apply his hand in twenty different ways almost every day of his life, renders him almost always slothful and lazy, and incapable of any vigorous application even on the most pressing occasions. Independent, therefore, of his deficiency in point of dexterity, this cause alone must always reduce considerably the quantity of work which he is capable of performing.

Thirdly, and lastly, everybody must be sensible how much labour is facilitated and abridged by the application of proper machinery. It is unnecessary to give any example. I shall only observe, therefore, that the invention of all those machines by which labour is so much facilitated and abridged seems to have been originally owing to the division of labour. Men are much more likely to discover easier and readier methods of attaining any object when the whole attention of their minds is directed towards that single object than when it is dissipated among a great variety of things. But in consequence of the division of labour, the whole of every man's attention comes naturally to be directed towards some one very simple object. It is naturally to be expected, therefore, that some one or other of those who are employed in each particular branch of labour should soon find out easier and readier methods of performing their own particular work, wherever the nature of it admits of such improvement. A great part of the machines made use of in those manufactures in which labour is most subdivided, were originally the inventions of common workmen, who, being each of them employed in some very simple operation, naturally turned their thoughts towards finding out easier and readier methods of performing it. Whoever has been much accustomed to visit such manufactures must frequently have been shown very pretty machines, which were the inventions of such workmen in order to facilitate and quicken their own particular part of the work. In the first fire-engines, a boy was constantly employed to open and shut alternately the communication between the boiler and the cylinder, according as the piston either ascended or descended. One of those boys, who loved to play with his companions, observed that, by tying a string from the handle of the valve which opened this communication to another part of the machine, the valve would open and shut without his assistance, and leave him at liberty to divert himself with his play-fellows. One of the greatest improvements that has been made upon this machine, since it was first invented, was in this manner the discovery of a boy who wanted to save his own labour.

All the improvements in machinery, however, have by no means been the inventions of those who had occasion to use the machines. Many improvements have been made by the ingenuity of the makers of the machines, when to make them became the business of a peculiar trade; and some by that of those who are called philosophers or men of speculation, whose trade it is not to do anything, but to observe everything; and who, upon that account, are often capable of combining together the powers of the most distant and dissimilar objects. In the progress of society, philosophy or speculation becomes, like every other employment, the principal or sole trade and occupation of a particular class of citizens. Like every other employment too, it is subdivided into a great number of different branches, each of which affords occupation to a peculiar tribe or class of philosophers; and this subdivision of employment in philosophy, as well as in every other business, improves dexterity, and saves time. Each individual becomes more expert in his own peculiar branch, more work is done upon the whole, and the quantity of science is considerably increased by it.

It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people. Every workman has a great quantity of his own work to dispose of beyond what he himself has occasion for; and every other workman being exactly in the same situation, he is enabled to exchange a great quantity of his own goods for a great quantity, or, what comes to the same thing, for the price of a great quantity of theirs. He supplies them abundantly with what they have occasion for, and they accommodate him as amply with what he has occasion for, and a general plenty diffuses itself through all the different ranks of the society.

Observe the accommodation of the most common artificer or day-labourer in a civilized and thriving country, and you will perceive that the number of people of whose industry a part, though but a small part, has been employed in procuring him this accommodation, exceeds all computation. The woollen coat, for example, which covers the day-labourer, as coarse and rough as it may appear, is the produce of the joint labour of a great multitude of workmen. The shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser, with many others, must all join their different arts in order to complete even this homely production. How many merchants and carriers, besides, must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country! How many merchants and carriers, besides, must how many ship-builders, sailors, sail-makers, rope-makers, must have been employed in order to bring together the different drugs made use of by the dyer, which often come from the remotest corners of the world! What a variety of labour, too, is necessary in order to produce the tools of the meanest of those workmen! To say nothing of such complicated machines as the ship of the sailor, the mill of the fuller, or even the loom of the weaver, let us consider only what a variety of labour is requisite in order to form that very simple machine, the shears with which the shepherd clips the wool. The miner, the builder of the furnace for smelting the ore, the seller of the timber, the burner of the charcoal to be made use of in the smelting-house, the brick-maker, the brick-layer, the workmen who attend the furnace, the mill-wright, the forger, the smith, must all of them join their different arts in order to produce them. Were we to examine, in the same manner, all the different parts of his dress and household furniture, the coarse linen shirt which he wears next his skin, the shoes which cover his feet, the bed which he lies on, and all the different parts which compose it, the kitchen-grate at which he prepares his victuals, the coals which he makes use of for that purpose, dug from the bowels of the earth, and brought to him perhaps by a long sea and a long land carriage, all the other utensils of his kitchen, all the furniture of his table, the knives and forks, the earthen or pewter plates upon which he serves up and divides his victuals, the different hands employed in preparing his bread and his beer, the glass window which lets in the heat and the light, and keeps out the wind and the rain, with all the knowledge and art requisite for preparing that beautiful and happy invention, without which these northern parts of the world could scarce have afforded a very comfortable habitation, together with the tools of all the different workmen employed in producing those different conveniences; if we examine, I say, all these things, and consider what a variety of labour is employed about each of them, we shall be sensible that, without the assistance and cooperation of many thousands, the very meanest person in a civilized country could not be provided, even according to what we very falsely imagine the easy and simple manner in which he is commonly accommodated. Compared, indeed, with the more extravagant luxury of the great, his accommodation must no doubt appear extremely simple and easy; and yet it may be true, perhaps, that the accommodation of a European prince does not always so much exceed that of an industrious and frugal peasant as the accommodation of the latter exceeds that of many an African king, the absolute master of the lives and liberties of ten thousand naked savages.

2

The Principle of the Division of Labour

This division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another.

Whether this propensity be one of those original principles in human nature of which no further account can be given; or whether, as seems more probable, it be the necessary consequences of the faculties of reason and speech, it belongs not to our present subject to inquire. It is common to all men, and to be found in no other race of animals, which seem to know neither this nor any other species of contracts. Two greyhounds, in running down the same hare, have sometimes the appearance of acting in some sort of concert. Each turns her towards his companion, or endeavours to intercept her when his companion turns her towards himself. This, however, is not the effect of any contract, but of the accidental concurrence of their passions in the same object at that particular time. Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that. When an animal wants to obtain something either of a man or of another animal, it has no other means of persuasion but to gain the favour of those whose service it requires. A puppy fawns upon its dam, and a spaniel endeavours by a thousand attractions to engage the attention of its master who is at dinner, when it wants to be fed by him. Man sometimes uses the same arts with his brethren, and when he has no other means of engaging them to act according to his inclinations, endeavours by every servile and fawning attention to obtain their good will. He has not time, however, to do this upon every occasion. In civilized society he stands at all times in need of the co-operation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons. In almost every other race of animals each individual, when it is grown up to maturity, is entirely independent, and in its natural state has occasion for the assistance of no other living creature. But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens. Even a beggar does not depend upon it entirely. The charity of well-disposed people, indeed, supplies him with the whole fund of his subsistence. But though this principle ultimately provides him with all the necessaries of life which he has occasion for, it neither does nor can provide him with them as he has occasion for them. The greater part of his occasional wants are supplied in the same manner as those of other people, by treaty, by barter, and by purchase. With the money which one man gives him he purchases food. The old clothes which another bestows upon him he exchanges for other old clothes which suit him better, or for lodging, or for food, or for money, with which he can buy either food, clothes, or lodging, as he has occasion.

As it is by treaty, by barter, and by purchase that we obtain from one another the greater part of those mutual good offices which we stand in need of, so it is this same trucking disposition which originally gives occasion to the division of labour. In a tribe of hunters or shepherds a particular person makes bows and arrows, for example, with more readiness and dexterity than any other. He frequently exchanges them for cattle or for venison with his companions; and he finds at last that he can in this manner get more cattle and venison than if he himself went to the field to catch them. From a regard to his own interest, therefore, the making of bows and arrows grows to be his chief business, and he becomes a sort of armourer. Another excels in making the frames and covers of their little huts or movable houses. He is accustomed to be of use in this way to his neighbours, who reward him in the same manner with cattle and with venison, till at last he finds it his interest to dedicate himself entirely to this employment, and to become a sort of house-carpenter. In the same manner a third becomes a smith or a brazier, a fourth a tanner or dresser of hides or skins, the principal part of the clothing of savages. And thus the certainty of being able to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men's labour as he may have occasion for, encourages every man to apply himself to a particular occupation, and to cultivate and bring to perfection whatever talent or genius he may possess for that particular species of business.

The difference of natural talents in different men is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause as the effect of the division of labour. The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature as from habit, custom, and education. When they came into the world, and for the first six or eight years of their existence, they were perhaps very much alike, and neither their parents nor play-fellows could perceive any remarkable difference. About that age, or soon after, they come to be employed in very different occupations. The difference of talents comes then to be taken notice of, and widens by degrees, till at last the vanity of the philosopher is willing to acknowledge scarce any resemblance. But without the disposition to truck, barter, and exchange, every man must have procured to himself every necessary and conveniency of life which he wanted. All must have had the same duties to perform, and the same work to do, and there could have been no such difference of employment as could alone give occasion to any great difference of talents.

As it is this disposition which forms that difference of talents, so remarkable among men of different professions, so it is this same disposition which renders that difference useful. Many tribes of animals acknowledged to be all of the same species derive from nature a much more remarkable distinction of genius, than what, antecedent to custom and education, appears to take place among men. By nature a philosopher is not in genius and disposition half so different from a street porter, as a mastiff is from a greyhound, or a greyhound from a spaniel, or this last from a shepherd's dog. Those different tribes of animals, however, though all of the same species, are of scarce any use to one another. The strength of the mastiff is not in the least supported either by the swiftness of the greyhound, or by the sagacity of the spaniel, or by the docility of the shepherd's dog. The effects of those different geniuses and talents, for want of the power or disposition to barter and exchange, cannot be brought into a common stock, and do not in the least contribute to the better accommodation and conveniency of the species. Each animal is still obliged to support and defend itself, separately and independently, and derives no sort of advantage from that variety of talents with which nature has distinguished its fellows. Among men, on the contrary, the most dissimilar geniuses are of use to one another; the different produces of their respective talents, by the general disposition to truck, barter, and exchange, being brought, as it were, into a common stock, where every man may purchase whatever part of the produce of the other men's talents he has occasion for.

3

The Principle of the Commercial System

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

The different progress of opulence in different ages and nations has given occasion to two different systems of political economy with regard to enriching the people. The one may be called the system of commerce, the other that of agriculture.



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Consumable commodities, it is said, are soon destroyed; whereas gold and silver are of a more durable nature, and, were it not for this continual exportation, might be accumulated for ages together, to the incredible augmentation of the real wealth of the country. Nothing, therefore, it is pretended, can be more disadvantageous to any country than the trade which consists in the exchange of such lasting for such perishable commodities. We do not, however, reckon that trade disadvantageous which consists in the exchange of the hardware of England for the wines of France; and yet hardware is a very durable commodity, and were it not for this continual exportation might, too, be accumulated for ages together, to the incredible augmentation of the pots and pans of the country. But it readily occurs that the number of such utensils is in every country necessarily limited by the use which there is for them; that it would be absurd to have more pots and pans than were necessary for cooking the victuals usually consumed there; and that if the quantity of victuals were to increase, the number of pots and pans would readily increase along with it, a part of the increased quantity of victuals being employed in purchasing them, or in maintaining an additional number of workmen whose business it was to make them. It should as readily occur that the quantity of gold and silver is in every country limited by the use which there is for those metals; that their use consists in circulating commodities as coin, and in affording a species of household furniture as plate; that the quantity of coin in every country is regulated by the value of the commodities which are to be circulated by it: increase that value, and immediately a part of it will be sent abroad to purchase, wherever it is to be had, the additional quantity of coin requisite for circulating them: that the quantity of plate is regulated by the number and wealth of those private families who choose to indulge themselves in that sort of magnificence: increase the number and wealth of such families, and a part of this increased wealth will most probably be employed in purchasing, wherever it is to be found, an additional quantity of plate: that to attempt to increase the wealth of any country, either by introducing or by detaining in it an unnecessary quantity of gold and silver, is as absurd as it would be to attempt to increase the good cheer of private families by obliging them to keep an unnecessary number of kitchen utensils. As the expense of purchasing those unnecessary utensils would diminish instead of increasing either the quantity or goodness of the family provisions, so the expense of purchasing an unnecessary quantity of gold and silver must, in every country, as necessarily diminish the wealth which feeds, clothes, and lodges, which maintains and employs the people. Gold and silver, whether in the shape of coin or of plate, are utensils, it must be remembered, as much as the furniture of the kitchen. Increase the use for them, increase the consumable commodities which are to be circulated, managed, and prepared by means of them, and you will infallibly increase the quantity; but if you attempt, by extraordinary means, to increase the quantity, you will as infallibly diminish the use and even the quantity too, which in those metals can never be greater than what the use requires. Were they ever to be accumulated beyond this quantity, their transportation is so easy, and the loss which attends their lying idle and unemployed so great, that no law could prevent their being immediately sent out of the country.

It is not always necessary to accumulate gold and silver in order to enable a country to carry on foreign wars, and to maintain fleets and armies in distant countries. Fleets and armies are maintained, not with gold and silver, but with consumable goods. The nation which, from the annual produce of its domestic industry, from the annual revenue arising out of its lands, labour, and consumable stock, has wherewithal to purchase those consumable goods in distant countries, can maintain foreign wars there.

A nation may purchase the pay and provisions of an army in a distant country three different ways: by sending abroad either, first, some part of its accumulated gold and silver; or, secondly, some part of the annual produce of its manufactures; or, last of all, some part of its annual rude produce.

The gold and silver which can properly be considered as accumulated or stored up in any country may be distinguished into three parts: first, the circulating money; secondly, the plate of private families; and, last of all, the money which may have been collected by many years parsimony, and laid up in the treasury of the prince.

It can seldom happen that much can be spared from the circulating money of the country; because in that there can seldom be much redundancy. The value of goods annually bought and sold in any country requires a certain quantity of money to circulate and distribute them to their proper consumers, and can give employment to no more. The channel of circulation necessarily draws to itself a sum sufficient to fill it, and never admits any more. Something, however, is generally withdrawn from this channel in the case of foreign war. By the great number of people who are maintained abroad, fewer are maintained at home. Fewer goods are circulated there, and less money becomes necessary to circulate them. An extraordinary quantity of paper money, of some sort or other, such as exchequer notes, navy bills, and bank bills in England, is generally issued upon such occasions, and by supplying the place of circulating gold and silver, gives an opportunity of sending a greater quantity of it abroad. All this, however, could afford but a poor resource for maintaining a foreign war of great expense and several years duration.

The melting down of the plate of private families has upon every occasion been found a still more insignificant one. The French, in the beginning of the last war, did not derive so much advantage from this expedient as to compensate the loss of the fashion.

The accumulated treasures of the prince have, in former times, afforded a much greater and more lasting resource. In the present times, if you except the King of Prussia, to accumulate treasure seems to be no part of the policy of European princes.

The funds which maintained the foreign wars of the present century, the most expensive perhaps which history records, seem to have had little dependency upon the exportation either of the circulating money, or of the plate of private families, or of the treasure of the prince. The last French war cost Great Britain upwards of ninety millions, including not only the seventy-five millions of new debt that was contracted, but the additional two shillings in the pound land-tax, and what was annually borrowed of the sinking fund. More than two-thirds of this expense were laid out in distant countries; in Germany, Portugal, America, in the ports of the Mediterranean, in the East and West Indies. The kings of England had no accumulated treasure. We never heard of any extraordinary quantity of plate being melted down. The circulating gold and silver of the country had not been supposed to exceed eighteen millions. Since the late recoinage of the gold, however, it is believed to have been a good deal under-rated. Let us suppose, therefore, according to the most exaggerated computation which I remember to have either seen or heard of, that, gold and silver together, it amounted to thirty millions. Had the war been carried on by means of our money, the whole of it must, even according to this computation, have been sent out and returned again at least twice in a period of between six and seven years. Should this be supposed, it would afford the most decisive argument to demonstrate how unnecessary it is for government to watch over the preservation of money, since upon this supposition the whole money of the country must have gone from it and returned to it again, two different times in so short a period, without anybody's knowing anything of the matter. The channel of circulation, however, never appeared more empty than usual during any part of this period. Few people wanted money who had wherewithal to pay for it. The profits of foreign trade, indeed, were greater than usual during the whole war; but especially towards the end of it. This occasioned, what it always occasions, a general over-trading in all the parts of Great Britain; and this again occasioned the usual complaint of the scarcity of money, which always follows over-trading. Many people wanted it, who had neither wherewithal to buy it, nor credit to borrow it; and because the debtors found it difficult to borrow, the creditors found it difficult to get payment. Gold and silver, however, were generally to be had for their value, by those who had that value to give for them.

The enormous expense of the late war, therefore, must have been chiefly defrayed, not by the exportation of gold and silver, but by that of British commodities of some kind or other. When the government, or those who acted under them, contracted with a merchant for a remittance to some foreign country, he would naturally endeavour to pay his foreign correspondent, upon whom he had granted a bill, by sending abroad rather commodities than gold and silver. If the commodities of Great Britain were not in demand in that country, he would endeavour to send them to some other country, in which he could purchase a bill upon that country. The transportation of commodities, when properly suited to the market, is always attended with a considerable profit; whereas that of gold and silver is scarce ever attended with any. When those metals are sent abroad in order to purchase foreign commodities, the merchant's profit arises, not from the purchase, but from the sale of the returns. But when they are sent abroad merely to pay a debt, he gets no returns, and consequently no profit. He naturally, therefore, exerts his invention to find out a way of paying his foreign debts rather by the exportation of commodities than by that of gold and silver. The great quantity of British goods exported during the course of the late war, without bringing back any returns, is accordingly remarked by the author of The Present State of the Nation.

Besides the three sorts of gold and silver above mentioned, there is in all great commercial countries a good deal of bullion alternately imported and exported for the purposes of foreign trade. This bullion, as it circulates among different commercial countries in the same manner as the national coin circulates in every particular country, may be considered as the money of the great mercantile republic. The national coin receives its movement and direction from the commodities circulated within the precincts of each particular country: the money of the mercantile republic, from those circulated between different countries. Both are employed in facilitating exchanges, the one between different individuals of the same, the other between those of different nations. Part of this money of the great mercantile republic may have been, and probably was, employed in carrying on the late war. In time of a general war, it is natural to suppose that a movement and direction should be impressed upon it, different from what it usually follows in profound peace; that it should circulate more about the seat of the war, and be more employed in purchasing there, and in the neighbouring countries, the pay and provisions of the different armies. But whatever part of this money of the mercantile republic Great Britain may have annually employed in this manner, it must have been annually purchased, either with British commodities, or with something else that had been purchased with them; which still brings us back to commodities, to the annual produce of the land and labour of the country, as the ultimate resources which enabled us to carry on the war. It is natural indeed to suppose that so great an annual expense must have been defrayed from a great annual produce. The expense of 1761, for example, amounted to more than nineteen millions. No accumulation could have supported so great an annual profusion. There is no annual produce even of gold and silver which could have supported it. The whole gold and silver annually imported into both Spain and Portugal, according to the best accounts, does not commonly much exceed six millions sterling, which, in some years, would scarce have paid four months' expense of the late war.

The commodities most proper for being transported to distant countries, in order to purchase there either the pay and provisions of an army, or some part of the money of the mercantile republic to be employed in purchasing them, seem to be the finer and more improved manufactures; such as contain a great value in a small bulk, and can, therefore, be exported to a great distance at little expense. A country whose industry produces a great annual surplus of such manufactures, which are usually exported to foreign countries, may carry on for many years a very expensive foreign war without either exporting any considerable quantity of gold and silver, or even having any such quantity to export. A considerable part of the annual surplus of its manufactures must, indeed, in this case be exported without bringing back any returns to the country, though it does to the merchant; the government purchasing of the merchant his bills upon foreign countries, in order to purchase there the pay and provisions of an army. Some part of this surplus, however, may still continue to bring back a return. The manufacturers, during the war, will have a double demand upon them, and be called upon, first, to work up goods to be sent abroad, for paying the bills drawn upon foreign countries for the pay and provisions of the army; and, secondly, to work up such as are necessary for purchasing the common returns that had usually been consumed in the country. In the midst of the most destructive foreign war, therefore, the greater part of manufactures may frequently flourish greatly; and, on the contrary, they may decline on the return of the peace. They may flourish amidst the ruin of their country, and begin to decay upon the return of its prosperity. The different state of many different branches of the British manufactures during the late war, and for some time after the peace, may serve as an illustration of what has been just now said.

No foreign war of great expense or duration could conveniently be carried on by the exportation of the rude produce of the soil. The expense of sending such a quantity of it to a foreign country as might purchase the pay and provisions of an army would be too great. Few countries produce much more rude produce than what is sufficient for the subsistence of their own inhabitants. To send abroad any great quantity of it, therefore, would be to send abroad a part of the necessary subsistence of the people. It is otherwise with the exportation of manufactures. The maintenance of the people employed in them is kept at home, and only the surplus part of their work is exported. Mr Hume frequently takes notice of the inability of the ancient kings of England to carry on, without interruption, any foreign war of long duration. The English, in those days, had nothing wherewithal to purchase the pay and provisions of their armies in foreign countries, but either the rude produce of the soil, of which no considerable part could be spared from the home consumption, or a few manufactures of the coarsest kind, of which, as well as of the rude produce, the transportation was too expensive. This inability did not arise from the want of money, but of the finer and more improved manufactures. Buying and selling was transacted by means of money in England then as well as now. The quantity of circulating money must have borne the same proportion to the number and value of purchases and sales usually transacted at that time, which it does to those transacted at present; or rather it must have borne a greater proportion, because there was then no paper, which now occupies a great part of the employment of gold and silver. Among nations to whom commerce and manufactures are little known, the sovereign, upon extraordinary occasions, can seldom draw any considerable aid from his subjects, for reasons which shall be explained hereafter. It is in such countries, therefore, that he generally endeavours to accumulate a treasure, as the only resource against such emergencies. Independent of this necessity, he is in such a situation naturally disposed to the parsimony requisite for accumulation. In that simple state, the expense even of a sovereign is not directed by the vanity which delights in the gaudy finery of a court, but is employed in bounty to his tenants, and hospitality to his retainers. But bounty and hospitality very seldom lead to extravagance; though vanity almost always does. Every Tartar chief, accordingly, has a treasure. The treasures of Mazepa, chief of the Cossacks in the Ukraine, the famous ally of Charles the th, are said to have been very great. The French kings of the Merovingian race had all treasures. When they divided their kingdom among their different children, they divided their treasure too. The Saxon princes, and the first kings after the conquest, seem likewise to have accumulated treasures. The first exploit of every new reign was commonly to seize the treasure of the preceding king, as the most essential measure for securing the succession. The sovereigns of improved and commercial countries are not under the same necessity of accumulating treasures, because they can generally draw from their subjects extraordinary aids upon extraordinary occasions. They are likewise less disposed to do so. They naturally, perhaps necessarily, follow the mode of the times, and their expense comes to be regulated by the same extravagant vanity which directs that of all the other great proprietors in their dominions. The insignificant pageantry of their court becomes every day more brilliant, and the expense of it not only prevents accumulation, but frequently encroaches upon the funds destined for more necessary expenses. What Dercyllidas said of the court of Persia may be applied to that of several European princes, that he saw there much splendour but little strength, and many servants but few soldiers.

The importation of gold and silver is not the principal, much less the sole benefit which a nation derives from its foreign trade. Between whatever places foreign trade is carried on, they all of them derive two distinct benefits from it. It carries out that surplus part of the produce of their land and labour for which there is no demand among them, and brings back in return for it something else for which there is a demand. It gives a value to their superfluities, by exchanging them for something else, which may satisfy a part of their wants, and increase their enjoyments. By means of it the narrowness of the home market does not hinder the division of labour in any particular branch of art or manufacture from being carried to the highest perfection. By opening a more extensive market for whatever part of the produce of their labour may exceed the home consumption, it encourages them to improve its productive powers, and to augment its annual produce to the utmost, and thereby to increase the real revenue and wealth of the society. These great and important services foreign trade is continually occupied in performing to all the different countries between which it is carried on. They all derive great benefit from it, though that in which the merchant resides generally derives the greatest, as he is generally more employed in supplying the wants, and carrying out the superfluities of his own, than of any other particular country. To import the gold and silver which may be wanted into the countries which have no mines is, no doubt, a part of the business of foreign commerce. It is, however, a most insignificant part of it. A country which carried on foreign trade merely upon this account could scarce have occasion to freight a ship in a century.

It is not by the importation of gold and silver that the discovery of America has enriched Europe. By the abundance of the American mines, those metals have become cheaper. A service of plate can now be purchased for about a third part of the corn, or a third part of the labour, which it would have cost in the fifteenth century. With the same annual expense of labour and commodities, Europe can annually purchase about three times the quantity of plate which it could have purchased at that time. But when a commodity comes to be sold for a third part of what had been its usual price, not only those who purchased it before can purchase three times their former quantity, but it is brought down to the level of a much greater number of purchasers, perhaps to more than ten, perhaps to more than twenty times the former number. So that there may be in Europe at present not only more than three times, but more than twenty or thirty times the quantity of plate which would have been in it, even in its present state of improvement, had the discovery of the American mines never been made. So far Europe has, no doubt, gained a real conveniency, though surely a very trifling one. The cheapness of gold and silver renders those metals rather less fit for the purposes of money than they were before. In order to make the same purchases, we must load ourselves with a greater quantity of them, and carry about a shilling in our pocket where a groat would have done before. It is difficult to say which is most trifling, this inconveniency or the opposite conveniency. Neither the one nor the other could have made any very essential change in the state of Europe. The discovery of America, however, certainly made a most essential one. By opening a new and inexhaustible market to all the commodities of Europe, it gave occasion to new divisions of labour and improvements of art, which, in the narrow circle of the ancient commerce, could never have taken place for want of a market to take off the greater part of their produce. The productive powers of labour were improved, and its produce increased in all the different countries of Europe, and together with it the real revenue and wealth of the inhabitants. The commodities of Europe were almost all new to America, and many of those of America were new to Europe. A new set of exchanges, therefore, began to take place which had never been thought of before, and which should naturally have proved as advantageous to the new, as it certainly did to the old continent. The savage injustice of the Europeans rendered an event, which ought to have been beneficial to all, ruinous and destructive to several of those unfortunate countries.

The discovery of a passage to the East Indies by the Cape of Good Hope, which happened much about the same time, opened perhaps a still more extensive range to foreign commerce than even that of America, notwithstanding the greater distance. There were but two nations in America in any respect superior to savages, and these were destroyed almost as soon as discovered. The rest were mere savages. But the empires of China, Indostan, Japan, as well as several others in the East Indies, without having richer mines of gold or silver, were in every other respect much richer, better cultivated, and more advanced in all arts and manufactures than either Mexico or Peru, even though we should credit, what plainly deserves no credit, the exaggerated accounts of the Spanish writers concerning the ancient state of those empires. But rich and civilised nations can always exchange to a much greater value with one another than with savages and barbarians. Europe, however, has hitherto derived much less advantage from its commerce with the East Indies than from that with America. The Portuguese monopolised the East India trade to themselves for about a century, and it was only indirectly and through them that the other nations of Europe could either send out or receive any goods from that country. When the Dutch, in the beginning of the last century, began to encroach upon them, they vested their whole East India commerce in an exclusive company. The English, French, Swedes, and Danes have all followed their example, so that no great nation in Europe has ever yet had the benefit of a free commerce to the East Indies. No other reason need be assigned why it has never been so advantageous as the trade to America, which, between almost every nation of Europe and its own colonies, is free to all its subjects. The exclusive privileges of those East India companies, their great riches, the great favour and protection which these have procured them from their respective governments, have excited much envy against them. This envy has frequently represented their trade as altogether pernicious, on account of the great quantities of silver which it every year exports from the countries from which it is carried on. The parties concerned have replied that their trade, by this continual exportation of silver, might indeed tend to impoverish Europe in general, but not the particular country from which it was carried on; because, by the exportation of a part of the returns to other European countries, it annually brought home a much greater quantity of that metal than it carried out. Both the objection and the reply are founded in the popular notion which I have been just now examining. It is therefore unnecessary to say anything further about either. By the annual exportation of silver to the East Indies, plate is probably somewhat dearer in Europe than it otherwise might have been; and coined silver probably purchases a larger quantity both of labour and commodities. The former of these two effects is a very small loss, the latter a very small advantage; both too insignificant to deserve any part of the public attention. The trade to the East Indies, by opening a market to the commodities of Europe, or, what comes nearly to the same thing, to the gold and silver which is purchased with those commodities, must necessarily tend to increase the annual production of European commodities, and consequently the real wealth and revenue of Europe. That it has hitherto increased them so little is probably owing to the restraints which it everywhere labours under.

I thought it necessary, though at the hazard of being tedious, to examine at full length this popular notion that wealth consists in money, or in gold and silver. Money in common language, as I have already observed, frequently signifies wealth, and this ambiguity of expression has rendered this popular notion so familiar to us that even they who are convinced of its absurdity are very apt to forget their own principles, and in the course of their reasonings to take it for granted as a certain and undeniable truth. Some of the best English writers upon commerce set out with observing that the wealth of a country consists, not in its gold and silver only, but in its lands, houses, and consumable goods of all different kinds. In the course of their reasonings, however, the lands, houses, and consumable goods seem to slip out of their memory, and the strain of their argument frequently supposes that all wealth consists in gold and silver, and that to multiply those metals is the great object of national industry and commerce.

The two principles being established, however, that wealth consisted in gold and silver, and that those metals could be brought into a country which had no mines only by the balance of trade, or by exporting to a greater value than it imported, it necessarily became the great object of political economy to diminish as much as possible the importation of foreign goods for home consumption, and to increase as much as possible the exportation of the produce of domestic industry. Its two great engines for enriching the country, therefore, were restraints upon importation, and encouragements to exportation.

The restraints upon importation were of two kinds.

First, restraints upon the importation of such foreign goods for home consumption as could be produced at home, from whatever country they were imported.

Secondly, restraints upon the importation of goods of almost all kinds from those particular countries with which the balance of trade was supposed to be disadvantageous.

Those different restraints consisted sometimes in high duties, and sometimes in absolute prohibitions.

Exportation was encouraged sometimes by drawbacks, sometimes by bounties, sometimes by advantageous treaties of commerce with foreign states, and sometimes by the establishment of colonies in distant countries.

Drawbacks were given upon two different occasions. When the home manufactures were subject to any duty or excise, either the whole or a part of it was frequently drawn back upon their exportation; and when foreign goods liable to a duty were imported in order to be exported again, either the whole or a part of this duty was sometimes given back upon such exportation.

Bounties were given for the encouragement either of some beginning manufactures, or of such sorts of industry of other kinds as were supposed to deserve particular favour.

By advantageous treaties of commerce, particular privileges were procured in some foreign state for the goods and merchants of the country, beyond what were granted to those of other countries.

By the establishment of colonies in distant countries, not only particular privileges, but a monopoly was frequently procured for the goods and merchants of the country which established them.

The two sorts of restraints upon importation abovementioned, together with these four encouragements to exportation, constitute the six principal means by which the commercial system proposes to increase the quantity of gold and silver in any country by turning the balance of trade in its favour. I shall consider each of them in a particular chapter, and without taking much further notice of their supposed tendency to bring money into the country, I shall examine chiefly what are likely to be the effects of each of them upon the annual produce of its industry. According as they tend either to increase or diminish the value of this annual produce, they must evidently tend either to increase or diminish the real wealth and revenue of the country.

4

Restraints on the Importation of Goods

By restraining, either by high duties or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home market is more or less secured to the domestic industry employed in producing them. Thus the prohibition of importing either live cattle or salt provisions from foreign countries secures to the graziers of Great Britain the monopoly of the home market for butcher's meat. The high duties upon the importation of corn, which in times of moderate plenty amount to a prohibition, give a like advantage to the growers of that commodity. The prohibition of the importation of foreign woollens is equally favourable to the woollen manufacturers. The silk manufacture, though altogether employed upon foreign materials, has lately obtained the same advantage. The linen manufacture has not yet obtained it, but is making great strides towards it. Many other sorts of manufacturers have, in the same manner, obtained in Great Britain, either altogether or very nearly, a monopoly against their countrymen. The variety of goods of which the importation into Great Britain is prohibited, either absolutely, or under certain circumstances, greatly exceeds what can easily be suspected by those who are not well acquainted with the laws of the customs.

That this monopoly of the home market frequently gives great encouragement to that particular species of industry which enjoys it, and frequently turns towards that employment a greater share of both the labour and stock of the society than would otherwise have gone to it, cannot be doubted. But whether it tends either to increase the general industry of the society, or to give it the most advantageous direction, is not, perhaps, altogether so evident.

The general industry of the society never can exceed what the capital of the society can employ. As the number of workmen that can be kept in employment by any particular person must bear a certain proportion to his capital, so the number of those that can be continually employed by all the members of a great society must bear a certain proportion to the whole capital of that society, and never can exceed that proportion. No regulation of commerce can increase the quantity of industry in any society beyond what its capital can maintain. It can only divert a part of it into a direction into which it might not otherwise have gone; and it is by no means certain that this artificial direction is likely to be more advantageous to the society than that into which it would have gone of its own accord.

Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society.

First, every individual endeavours to employ his capital as near home as he can, and consequently as much as he can in the support of domestic industry; provided always that he can thereby obtain the ordinary, or not a great deal less than the ordinary profits of stock.

Thus, upon equal or nearly equal profits, every wholesale merchant naturally prefers the home trade to the foreign trade of consumption, and the foreign trade of consumption to the carrying trade. In the home trade his capital is never so long out of his sight as it frequently is in the foreign trade of consumption. He can know better the character and situation of the persons whom he trusts, and if he should happen to be deceived, he knows better the laws of the country from which he must seek redress. In the carrying trade, the capital of the merchant is, as it were, divided between two foreign countries, and no part of it is ever necessarily brought home, or placed under his own immediate view and command. The capital which an Amsterdam merchant employs in carrying corn from Konnigsberg to Lisbon, and fruit and wine from Lisbon to Konnigsberg, must generally be the one-half of it at Konnigsberg and the other half at Lisbon. No part of it need ever come to Amsterdam. The natural residence of such a merchant should either be at Konnigsberg or Lisbon, and it can only be some very particular circumstances which can make him prefer the residence of Amsterdam. The uneasiness, however, which he feels at being separated so far from his capital generally determines him to bring part both of the Konnigsberg goods which he destines for the market of Lisbon, and of the Lisbon goods which he destines for that of Konnigsberg, to Amsterdam: and though this necessarily subjects him to a double charge of loading and unloading, as well as to the payment of some duties and customs, yet for the sake of having some part of his capital always under his own view and command, he willingly submits to this extraordinary charge; and it is in this manner that every country which has any considerable share of the carrying trade becomes always the emporium, or general market, for the goods of all the different countries whose trade it carries on. The merchant, in order to save a second loading and unloading, endeavours always to sell in the home market as much of the goods of all those different countries as he can, and thus, so far as he can, to convert his carrying trade into a foreign trade of consumption. A merchant, in the same manner, who is engaged in the foreign trade of consumption, when he collects goods for foreign markets, will always be glad, upon equal or nearly equal profits, to sell as great a part of them at home as he can. He saves himself the risk and trouble of exportation, when, so far as he can, he thus converts his foreign trade of consumption into a home trade. Home is in this manner the centre, if I may say so, round which the capitals of the inhabitants of every country are continually circulating, and towards which they are always tending, though by particular causes they may sometimes be driven off and repelled from it towards more distant employments. But a capital employed in the home trade, it has already been shown, necessarily puts into motion a greater quantity of domestic industry, and gives revenue and employment to a greater number of the inhabitants of the country, than an equal capital employed in the foreign trade of consumption: and one employed in the foreign trade of consumption has the same advantage over an equal capital employed in the carrying trade. Upon equal, or only nearly equal profits, therefore, every individual naturally inclines to employ his capital in the manner in which it is likely to afford the greatest support to domestic industry, and to give revenue and employment to the greatest number of people of his own country.

Secondly, every individual who employs his capital in the support of domestic industry, necessarily endeavours so to direct that industry that its produce may be of the greatest possible value.

The produce of industry is what it adds to the subject or materials upon which it is employed. In proportion as the value of this produce is great or small, so will likewise be the profits of the employer. But it is only for the sake of profit that any man employs a capital in the support of industry; and he will always, therefore, endeavour to employ it in the support of that industry of which the produce is likely to be of the greatest value, or to exchange for the greatest quantity either of money or of other goods.

But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

What is the species of domestic industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can, in his local situation, judge much better than any statesman or law-giver can do for him. The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.

To give the monopoly of the home market to the produce of domestic industry, in any particular art or manufacture, is in some measure to direct private people in what manner they ought to employ their capitals, and must, in almost all cases, be either a useless or a hurtful regulation. If the produce of domestic can be brought there as cheap as that of foreign industry, the regulation is evidently useless. If it cannot, it must generally be hurtful. It is the maxim of every prudent master of a family never to attempt to make at home what it will cost him more to make than to buy. The tailor does not attempt to make his own shoes, but buys them off the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a tailor. The farmer attempts to make neither the one nor the other, but employs those different artificers. All of them find it for their interest to employ their whole industry in a way in which they have some advantage over their neighbours, and to purchase with a part of its produce, or what is the same thing, with the price of a part of it, whatever else they have occasion for.

What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it off them with some part of the produce of our own industry employed in a way in which we have some advantage. The general industry of the country, being always in proportion to the capital which employs it, will not thereby be diminished, no more than that of the above-mentioned artificers; but only left to find out the way in which it can be employed with the greatest advantage. It is certainly not employed to the greatest advantage when it is thus directed towards an object which it can buy cheaper than it can make. The value of its annual produce is certainly more or less diminished when it is thus turned away from producing commodities evidently of more value than the commodity which it is directed to produce. According to the supposition, that commodity could be purchased from foreign countries cheaper than it can be made at home. It could, therefore, have been purchased with a part only of the commodities, or, what is the same thing, with a part only of the price of the commodities, which the industry employed by an equal capital would have produced at home, had it been left to follow its natural course. The industry of the country, therefore, is thus turned away from a more to a less advantageous employment, and the exchangeable value of its annual produce, instead of being increased, according to the intention of the lawgiver, must necessarily be diminished by every such regulation.

By means of such regulations, indeed, a particular manufacture may sometimes be acquired sooner than it could have been otherwise, and after a certain time may be made at home as cheap or cheaper than in the foreign country. But though the industry of the society may be thus carried with advantage into a particular channel sooner than it could have been otherwise, it will by no means follow that the sum total, either of its industry, or of its revenue, can ever be augmented by any such regulation. The industry of the society can augment only in proportion as its capital augments, and its capital can augment only in proportion to what can be gradually saved out of its revenue. But the immediate effect of every such regulation is to diminish its revenue, and what diminishes its revenue is certainly not very likely to augment its capital faster than it would have augmented of its own accord had both capital and industry been left to find out their natural employments.

Though for want of such regulations the society should never acquire the proposed manufacture, it would not, upon that account, necessarily be the poorer in any one period of its duration. In every period of its duration its whole capital and industry might still have been employed, though upon different objects, in the manner that was most advantageous at the time. In every period its revenue might have been the greatest which its capital could afford, and both capital and revenue might have been augmented with the greatest possible rapidity.

The natural advantages which one country has over another in producing particular commodities are sometimes so great that it is acknowledged by all the world to be in vain to struggle with them. By means of glasses, hotbeds, and hot walls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines merely to encourage the making of claret and burgundy in Scotland? But if there would be a manifest absurdity in turning towards any employment thirty times more of the capital and industry of the country than would be necessary to purchase from foreign countries an equal quantity of the commodities wanted, there must be an absurdity, though not altogether so glaring, yet exactly of the same kind, in turning towards any such employment a thirtieth, or even a three-hundredth part more of either. Whether the advantages which one country has over another be natural or acquired is in this respect of no consequence. As long as the one country has those advantages, and the other wants them, it will always be more advantageous for the latter rather to buy off the former than to make. It is an acquired advantage only, which one artificer has over his neighbour, who exercises another trade; and yet they both find it more advantageous to buy off one another than to make what does not belong to their particular trades.

Merchants and manufacturers are the people who derive the greatest advantage from this monopoly of the home market. The prohibition of the importation of foreign cattle, and of salt provisions, together with the high duties upon foreign corn, which in times of moderate plenty amount to a prohibition, are not near so advantageous to the graziers and farmers of Great Britain as other regulations of the same kind are to its merchants and manufacturers. Manufactures, those of the finer kind especially, are more easily transported from one country to another than corn or cattle. It is in the fetching and carrying manufactures, accordingly, that foreign trade is chiefly employed. In manufactures, a very small advantage will enable foreigners to undersell our own workmen, even in the home market. It will require a very great one to enable them to do so in the rude produce of the soil. If the free importation of foreign manufactures were permitted, several of the home manufactures would probably suffer, and some of them, perhaps, go to ruin altogether, and a considerable part of the stock and industry at present employed in them would be forced to find out some other employment. But the freest importation of the rude produce of the soil could have no such effect upon the agriculture of the country.

If the importation of foreign cattle, for example, were made ever so free, so few could be imported that the grazing trade of Great Britain could be little affected by it. Live cattle are, perhaps, the only commodity of which the transportation is more expensive by sea than by land. By land they carry themselves to market. By sea, not only the cattle, but their food and their water too, must be carried at no small expense and inconveniency. The short sea between Ireland and Great Britain, indeed, renders the importation of Irish cattle more easy. But though the free importation of them, which was lately permitted only for a limited time, were rendered perpetual, it could have no considerable effect upon the interest of the graziers of Great Britain. Those parts of Great Britain which border upon the Irish Sea are all grazing countries. Irish cattle could never be imported for their use, but must be driven through those very extensive countries, at no small expense and inconveniency, before they could arrive at their proper market. Fat cattle could not be driven so far. Lean cattle, therefore, only could be imported, and such importation could interfere, not with the interest of the feeding or fattening countries, to which, by reducing the price of lean cattle, it would rather be advantageous, but with that of the breeding countries only. The small number of Irish cattle imported since their importation was permitted, together with the good price at which lean cattle still continue to sell, seem to demonstrate that even the breeding countries of Great Britain are never likely to be much affected by the free importation of Irish cattle. The common people of Ireland, indeed, are said to have sometimes opposed with violence the exportation of their cattle. But if the exporters had found any great advantage in continuing the trade, they could easily, when the law was on their side, have conquered this mobbish opposition.

Feeding and fattening countries, besides, must always be highly improved, whereas breeding countries are generally uncultivated. The high price of lean cattle, by augmenting the value of uncultivated land, is like a bounty against improvement. To any country which was highly improved throughout, it would be more advantageous to import its lean cattle than to breed them. The province of Holland, accordingly, is said to follow this maxim at present. The mountains of Scotland, Wales, and Northumberland, indeed, are countries not capable of much improvement, and seem destined by nature to be the breeding countries of Great Britain. The freest importation of foreign cattle could have no other effect than to hinder those breeding countries from taking advantage of the increasing population and improvement of the rest of the kingdom, from raising their price to an exorbitant height, and from laying a real tax upon all the more improved and cultivated parts of the country.

The freest importation of salt provisions, in the same manner, could have as little effect upon the interest of the graziers of Great Britain as that of live cattle. Salt provisions are not only a very bulky commodity, but when compared with fresh meat, they are a commodity both of worse quality, and as they cost more labour and expense, of higher price. They could never, therefore, come into competition with the fresh meat, though they might with the salt provisions of the country. They might be used for victualling ships for distant voyages and such like uses, but could never make any considerable part of the food of the people. The small quantity of salt provisions imported from Ireland since their importation was rendered free is an experimental proof that our graziers have nothing to apprehend from it. It does not appear that the price of butcher's meat has ever been sensibly affected by it.

Even the free importation of foreign corn could very little affect the interest of the farmers of Great Britain. Corn is a much more bulky commodity than butcher's meat. A pound of wheat at a penny is as dear as a pound of butcher's meat at fourpence. The small quantity of foreign corn imported even in times of the greatest scarcity may satisfy our farmers that they can have nothing to fear from the freest importation. The average quantity imported, one year with another, amounts only, according to the very well informed author of the tracts upon the corn trade, to twenty-three thousand seven hundred and twenty-eight quarters of all sorts of grain, and does not exceed the five hundred and seventy-first part of the annual consumption. But as the bounty upon corn occasions a greater exportation in years of plenty, so it must of consequence occasion a greater importation in years of scarcity than in the actual state of tillage would otherwise take place. By means of it the plenty of one year does not compensate the scarcity of another, and as the average quantity exported is necessarily augmented by it, so must likewise, in the actual state of tillage, the average quantity imported. If there were no bounty, as less corn would be exported, so it is probable that, one year with another, less would be imported than at present. The corn merchants, the fetchers and carriers of corn between Great Britain and foreign countries would have much less employment, and might suffer considerably; but the country gentlemen and farmers could suffer very little. It is in the corn merchants accordingly, rather than in the country gentlemen and farmers, that I have observed the greatest anxiety for the renewal and continuation of the bounty.

Country gentlemen and farmers are, to their great honour, of all people, the least subject to the wretched spirit of monopoly. The undertaker of a great manufactory is sometimes alarmed if another work of the same kind is established within twenty miles of him. The Dutch undertaker of the woollen manufacture at Abbeville stipulated that no work of the same kind should be established within thirty leagues of that city. Farmers and country gentlemen, on the contrary, are generally disposed rather to promote than to obstruct the cultivation and improvement of their neighbours' farms and estates. They have no secrets such as those of the greater part of manufacturers, but are generally rather fond of communicating to their neighbours and of extending as far as possible any new practice which they have found to be advantageous. Pius Questus, says old Cato, stabilissimusque, minimeque invidiosus; minimeque male cogitantes sunt, qui in eo studio occupati sunt. Country gentlemen and farmers, dispersed in different parts of the country, cannot so easily combine as merchants and manufacturers, who, being collected into towns, and accustomed to that exclusive corporation spirit which prevails in them, naturally endeavour to obtain against all their countrymen the same exclusive privilege which they generally possess against the inhabitants of their respective towns. They accordingly seem to have been the original inventors of those restraints upon the importation of foreign goods which secure to them the monopoly of the home market. It was probably in imitation of them, and to put themselves upon a level with those who, they found, were disposed to oppress them, that the country gentlemen and farmers of Great Britain so far forgot the generosity which is natural to their station as to demand the exclusive privilege of supplying their countrymen with corn and butcher's meat. They did not perhaps take time to consider how much less their interest could be affected by the freedom of trade than that of the people whose example they followed.

To prohibit by a perpetual law the importation of foreign corn and cattle is in reality to enact that the population and industry of the country shall at no time exceed what the rude produce of its own soil can maintain.

There seem, however, to be two cases in which it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry.

The first is, when some particular sort of industry is necessary for the defence of the country. The defence of Great Britain, for example, depends very much upon the number of its sailors and shipping. The act of navigation, therefore, very properly endeavours to give the sailors and shipping of Great Britain the monopoly of the trade of their own country, in some cases by absolute prohibitions and in others by heavy burdens upon the shipping of foreign countries. The following are the principal dispositions of this act.

First, all ships, of which the owners and three-fourths of the mariners are not British subjects, are prohibited, upon pain of forfeiting ship and cargo, from trading to the British settlements and plantations, or from being employed in the coasting trade of Great Britain.

Secondly, a great variety of the most bulky articles of importation can be brought into Great Britain only, either in such ships as are above described, or in ships of the country where those goods are purchased, and of which the owners, masters, and three-fourths of the mariners are of that particular country; and when imported even in ships of this latter kind, they are subject to double aliens' duty. If imported in ships of any other country, the penalty is forfeiture of ship and goods. When this act was made, the Dutch were, what they still are, the great carriers of Europe, and by this regulation they were entirely excluded from being the carriers to Great Britain, or from importing to us the goods of any other European country.

Thirdly, a great variety of the most bulky articles of importation are prohibited from being imported, even in British ships, from any country but that in which they are produced, under pain of forfeiting ship and cargo. This regulation, too, was probably intended against the Dutch. Holland was then, as now, the great emporium for all European goods, and by this regulation British ships were hindered from loading in Holland the goods of any other European country.

Fourthly, salt fish of all kinds, whale-fins, whale-bone, oil, and blubber, not caught by and cured on board British vessels, when imported into Great Britain, are subjected to double aliens' duty. The Dutch, as they are still the principal, were then the only fishers in Europe that attempted to supply foreign nations with fish. By this regulation, a very heavy burden was laid upon their supplying Great Britain.

When the act of navigation was made, though England and Holland were not actually at war, the most violent animosity subsisted between the two nations. It had begun during the government of the Long Parliament, which first framed this act, and it broke out soon after in the Dutch wars during that of the Protector and of Charles the Second. It is not impossible, therefore, that some of the regulations of this famous act may have proceeded from national animosity. They are as wise, however, as if they had all been dictated by the most deliberate wisdom. National animosity at that particular time aimed at the very same object which the most deliberate wisdom would have recommended, the diminution of the naval power of Holland, the only naval power which could endanger the security of England.

The act of navigation is not favourable to foreign commerce, or to the growth of that opulence which can arise from it. The interest of a nation in its commercial relations to foreign nations is, like that of a merchant with regard to the different people with whom he deals, to buy as cheap and to sell as dear as possible. But it will be most likely to buy cheap, when by the most perfect freedom of trade it encourages all nations to bring to it the goods which it has occasion to purchase; and, for the same reason, it will be most likely to sell dear, when its markets are thus filled with the greatest number of buyers. The act of navigation, it is true, lays no burden upon foreign ships that come to export the produce of British industry. Even the ancient aliens' duty, which used to be paid upon all goods exported as well as imported, has, by several subsequent acts, been taken off from the greater part of the articles of exportation. But if foreigners, either by prohibitions or high duties, are hindered from coming to sell, they cannot always afford to come to buy; because coming without a cargo, they must lose the freight from their own country to Great Britain. By diminishing the number of sellers, therefore, we necessarily diminish that of buyers, and are thus likely not only to buy foreign goods dearer, but to sell our own cheaper, than if there was a more perfect freedom of trade. As defence, however, is of much more importance than opulence, the act of navigation is, perhaps, the wisest of all the commercial regulations of England.

The second case, in which it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry is, when some tax is imposed at home upon the produce of the latter. In this case, it seems reasonable that an equal tax should be imposed upon the like produce of the former. This would not give the monopoly of the home market to domestic industry, nor turn towards a particular employment a greater share of the stock and labour of the country than what would naturally go to it. It would only hinder any part of what would naturally go to it from being turned away by the tax into a less natural direction, and would leave the competition between foreign and domestic industry, after the tax, as nearly as possible upon the same footing as before it. In Great Britain, when any such tax is laid upon the produce of domestic industry, it is usual at the same time, in order to stop the clamorous complaints of our merchants and manufacturers that they will be undersold at home, to lay a much heavier duty upon the importation of all foreign goods of the same kind.

This second limitation of the freedom of trade according to some people should, upon some occasions, be extended much farther than to the precise foreign commodities which could come into competition with those which had been taxed at home. When the necessaries of life have been taxed in any country, it becomes proper, they pretend, to tax not only the like necessaries of life imported from other countries, but all sorts of foreign goods which can come into competition with anything that is the produce of domestic industry. Subsistence, they say, becomes necessarily dearer in consequence of such taxes; and the price of labour must always rise with the price of the labourers' subsistence. Every commodity, therefore, which is the produce of domestic industry, though not immediately taxed itself, becomes dearer in consequence of such taxes, because the labour which produces it becomes so. Such taxes, therefore, are really equivalent, they say, to a tax upon every particular commodity produced at home. In order to put domestic upon the same footing with foreign industry, therefore, it becomes necessary, they think, to lay some duty upon every foreign commodity equal to this enhancement of the price of the home commodities with which it can come into competition.

Whether taxes upon the necessaries of life, such as those in Great Britain upon soap, salt, leather, candles, etc, necessarily raise the price of labour, and consequently that of all other commodities, I shall consider hereafter when I come to treat of taxes. Supposing, however, in the meantime, that they have this effect, and they have it undoubtedly, this general enhancement of the price of all commodities, in consequence of that of labour, is a case which differs in the two following respects from that of a particular commodity of which the price was enhanced by a particular tax immediately imposed upon it.

First, it might always be known with great exactness how far the price of such a commodity could be enhanced by such a tax: but how far the general enhancement of the price of labour might affect that of every different commodity about which labour was employed could never be known with any tolerable exactness. It would be impossible, therefore, to proportion with any tolerable exactness the tax upon every foreign to this enhancement of the price of every home commodity.

Secondly, taxes upon the necessaries of life have nearly the same effect upon the circumstances of the people as a poor soil and a bad climate. Provisions are thereby rendered dearer in the same manner as if it required extraordinary labour and expense to raise them. As in the natural scarcity arising from soil and climate it would be absurd to direct the people in what manner they ought to employ their capitals and industry, so is it likewise in the artificial scarcity arising from such taxes. To be left to accommodate, as well as they could, their industry to their situation, and to find out those employments in which, notwithstanding their unfavourable circumstances, they might have some advantage either in the home or in the foreign market, is what in both cases would evidently be most for their advantage. To lay a new tax upon them, because they are already overburdened with taxes, and because they already pay too dear for the necessaries of life, to make them likewise pay too dear for the greater part of other commodities, is certainly a most absurd way of making amends.

Such taxes, when they have grown up to a certain height, are a curse equal to the barrenness of the earth and the inclemency of the heavens; and yet it is in the richest and most industrious countries that they have been most generally imposed. No other countries could support so great a disorder. As the strongest bodies only can live and enjoy health under an unwholesome regimen, so the nations only that in every sort of industry have the greatest natural and acquired advantages can subsist and prosper under such taxes. Holland is the country in Europe in which they abound most, and which from peculiar circumstances continues to prosper, not by means of them, as has been most absurdly supposed, but in spite of them.

As there are two cases in which it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry, so there are two others in which it may sometimes be a matter of deliberation; in the one, how far it is proper to continue the free importation of certain foreign goods; and in the other, how far, or in what manner, it may be proper to restore that free importation after it has been for some time interrupted.

The case in which it may sometimes be a matter of deliberation how far it is proper to continue the free importation of certain foreign goods is, when some foreign nation restrains by high duties or prohibitions the importation of some of our manufactures into their country. Revenge in this case naturally dictates retaliation, and that we should impose the like duties and prohibitions upon the importation of some or all of their manufactures into ours. Nations, accordingly, seldom fail to retaliate in this manner. The French have been particularly forward to favour their own manufactures by restraining the importation of such foreign goods as could come into competition with them. In this consisted a great part of the policy of Mr Colbert, who, notwithstanding his great abilities, seems in this case to have been imposed upon by the sophistry of merchants and manufacturers, who are always demanding a monopoly against their countrymen. It is at present the opinion of the most intelligent men in France that his operations of this kind have not been beneficial to his country. That minister, by the tariff of 1667, imposed very high duties upon a great number of foreign manufactures. Upon his refusing to moderate them in favour of the Dutch, they in 1671 prohibited the importation of the wines, brandies, and manufactures of France. The war of 1672 seems to have been in part occasioned by this commercial dispute. The peace of Nimeguen put an end to it in 1678 by moderating some of those duties in favour of the Dutch, who in consequence took off their prohibition. It was about the same time that the French and English began mutually to oppress each other's industry by the like duties and prohibitions, of which the French, however, seem to have set the first example. The spirit of hostility which has subsisted between the two nations ever since has hitherto hindered them from being moderated on either side. In 1697 the English prohibited the importation of bonelace, the manufacture of Flanders. The government of that country, at that time under the dominion of Spain, prohibited in return the importation of English woollens. In 1700, the prohibition of importing bonelace into England was taken off upon condition that the importation of English woollens into Flanders should be put on the same footing as before.

There may be good policy in retaliations of this kind, when there is a probability that they will procure the repeal of the high duties or prohibitions complained of. The recovery of a great foreign market will generally more than compensate the transitory inconveniency of paying dearer during a short time for some sorts of goods. To judge whether such retaliations are likely to produce such an effect does not, perhaps, belong so much to the science of a legislator, whose deliberations ought to be governed by general principles which are always the same, as to the skill of that insidious and crafty animal, vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuations of affairs. When there is no probability that any such repeal can be procured, it seems a bad method of compensating the injury done to certain classes of our people to do another injury ourselves, not only to those classes, but to almost all the other classes of them. When our neighbours prohibit some manufacture of ours, we generally prohibit, not only the same, for that alone would seldom affect them considerably, but some other manufacture of theirs. This may no doubt give encouragement to some particular class of workmen among ourselves, and by excluding some of their rivals, may enable them to raise their price in the home market. Those workmen, however, who suffered by our neighbours' prohibition will not be benefited by ours. On the contrary, they and almost all the other classes of our citizens will thereby be obliged to pay dearer than before for certain goods. Every such law, therefore, imposes a real tax upon the whole country, not in favour of that particular class of workmen who were injured by our neighbours' prohibition, but of some other class.

The case in which it may sometimes be a matter of deliberation, how far, or in what manner, it is proper to restore the free importation of foreign goods, after it has been for some time interrupted, is, when particular manufactures, by means of high duties or prohibitions upon all foreign goods which can come into competition with them, have been so far extended as to employ a great multitude of hands. Humanity may in this case require that the freedom of trade should be restored only by slow gradations, and with a good deal of reserve and circumspection. Were those high duties and prohibitions taken away all at once, cheaper foreign goods of the same kind might be poured so fast into the home market as to deprive all at once many thousands of our people of their ordinary employment and means of subsistence. The disorder which this would occasion might no doubt be very considerable. It would in all probability, however, be much less than is commonly imagined, for the two following reasons:—

First, all those manufactures, of which any part is commonly exported to other European countries without a bounty, could be very little affected by the freest importation of foreign goods. Such manufactures must be sold as cheap abroad as any other foreign goods of the same quality and kind, and consequently must be sold cheaper at home. They would still, therefore, keep possession of the home market, and though a capricious man of fashion might sometimes prefer foreign wares, merely because they were foreign, to cheaper and better goods of the same kind that were made at home, this folly could, from the nature of things, extend to so few that it could make no sensible impression upon the general employment of the people. But a great part of all the different branches of our woollen manufacture, of our tanned leather, and of our hardware, are annually exported to other European countries without any bounty, and these are the manufactures which employ the greatest number of hands. The silk, perhaps, is the manufacture which would suffer the most by this freedom of trade, and after it the linen, though the latter much less than the former.

Secondly, though a great number of people should, by thus restoring the freedom of trade, be thrown all at once out of their ordinary employment and common method of subsistence, it would by no means follow that they would thereby be deprived either of employment or subsistence. By the reduction of the army and navy at the end of the late war, more than a hundred thousand soldiers and seamen, a number equal to what is employed in the greatest manufactures, were all at once thrown out of their ordinary employment; but, though they no doubt suffered some inconveniency, they were not thereby deprived of all employment and subsistence. The greater part of the seamen, it is probable, gradually betook themselves to the merchant service as they could find occasion, and in the meantime both they and the soldiers were absorbed in the great mass of the people, and employed in a great variety of occupations. Not only no great convulsion, but no sensible disorder arose from so great a change in the situation of more than a hundred thousand men, all accustomed to the use of arms, and many of them to rapine and plunder. The number of vagrants was scarce anywhere sensibly increased by it, even the wages of labour were not reduced by it in any occupation, so far as I have been able to learn, except in that of seamen in the merchant service. But if we compare together the habits of a soldier and of any sort of manufacturer, we shall find that those of the latter do not tend so much to disqualify him from being employed in a new trade, as those of the former from being employed in any. The manufacturer has always been accustomed to look for his subsistence from his labour only: the soldier to expect it from his pay. Application and industry have been familiar to the one; idleness and dissipation to the other. But it is surely much easier to change the direction of industry from one sort of labour to another than to turn idleness and dissipation to any. To the greater part of manufactures besides, it has already been observed, there are other collateral manufactures of so similar a nature that a workman can easily transfer his industry from one of them to another. The greater part of such workmen too are occasionally employed in country labour. The stock which employed them in a particular manufacture before will still remain in the country to employ an equal number of people in some other way. The capital of the country remaining the same, the demand for labour will likewise be the same, or very nearly the same, though it may be exerted in different places and for different occupations. Soldiers and seamen, indeed, when discharged from the king's service, are at liberty to exercise any trade, within any town or place of Great Britain or Ireland. Let the same natural liberty of exercising what species of industry they please, be restored to all his Majesty's subjects, in the same manner as to soldiers and seamen; that is, break down the exclusive privileges of corporations, and repeal the statute of apprenticeship, both which are real encroachments upon natural liberty, and add to these the repeal of the law of settlements, so that a poor workman, when thrown out of employment either in one trade or in one place, may seek for it in another trade or in another place without the fear either of a prosecution or of a removal, and neither the public nor the individuals will suffer much more from the occasional disbanding some particular classes of manufacturers than from that of soldiers. Our manufacturers have no doubt great merit with their country, but they cannot have more than those who defend it with their blood, nor deserve to be treated with more delicacy.

To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain is as absurd as to expect that an Oceana or Utopia should ever be established in it. Not only the prejudices of the public, but what is much more unconquerable, the private interests of many individuals, irresistibly oppose it. Were the officers of the army to oppose with the same zeal and unanimity any reduction in the numbers of forces with which master manufacturers set themselves against every law that is likely to increase the number of their rivals in the home market; were the former to animate their soldiers in the same manner as the latter enflame their workmen to attack with violence and outrage the proposers of any such regulation, to attempt to reduce the army would be as dangerous as it has now become to attempt to diminish in any respect the monopoly which our manufacturers have obtained against us. This monopoly has so much increased the number of some particular tribes of them that, like an overgrown standing army, they have become formidable to the government, and upon many occasions intimidate the legislature. The member of parliament who supports every proposal for strengthening this monopoly is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists.

The undertaker of a great manufacture, who, by the home markets being suddenly laid open to the competition of foreigners, should be obliged to abandon his trade, would no doubt suffer very considerably. That part of his capital which had usually been employed in purchasing materials and in paying his workmen might, without much difficulty, perhaps, find another employment. But that part of it which was fixed in work-houses, and in the instruments of trade, could scarce be disposed of without considerable loss. The equitable regard, therefore, to his interest requires that changes of this kind should never be introduced suddenly, but slowly, gradually, and after a very long warning. The legislature, were it possible that its deliberations could be always directed, not by the clamorous importunity of partial interests, but by an extensive view of the general good, ought upon this very account, perhaps, to be particularly careful neither to establish any new monopolies of this kind, nor to extend further those which are already established. Every such regulation introduces some degree of real disorder into the constitution of the state, which it will be difficult afterwards to cure without occasioning another disorder.

How far it may be proper to impose taxes upon the importation of foreign goods, in order not to prevent their importation but to raise a revenue for government, I shall consider hereafter when I come to treat of taxes. Taxes imposed with a view to prevent, or even to diminish importation, are evidently as destructive of the revenue of the customs as of the freedom of trade.

5

The Unreasonableness of Restraints

Part Ⅰ

Of the Unreasonableness of those Restraints even upon the Principles of the Commercial System

To lay extraordinary restraints upon the importation of goods of almost all kinds from those particular countries with which the balance of trade is supposed to be disadvantageous, is the second expedient by which the commercial system proposes to increase the quantity of gold and silver. Thus in Great Britain, Silesia lawns may be imported for home consumption upon paying certain duties. But French cambrics and lawns are prohibited to be imported, except into the port of London, there to be warehoused for exportation. Higher duties are imposed upon the wines of France than upon those of Portugal, or indeed of any other country. By what is called the impost 1692, a duty of five-and-twenty per cent of the rate or value was laid upon all French goods; while the goods of other nations were, the greater part of them, subjected to much lighter duties, seldom exceeding five per cent. The wine, brandy, salt and vinegar of France were indeed excepted; these commodities being subjected to other heavy duties, either by other laws, or by particular clauses of the same law. In 1696, a second duty of twenty-five per cent, the first not having been thought a sufficient discouragement, was imposed upon all French goods, except brandy; together with a new duty of five-and-twenty pounds upon the ton of French wine, and another of fifteen pounds upon the ton of French vinegar. French goods have never been omitted in any of those general subsidies, or duties of five per cent, which have been imposed upon all, or the greater part of the goods enumerated in the book of rates. If we count the one-third and two-third subsidies as making a complete subsidy between them, there have been five of these general subsidies; so that before the commencement of the present war seventy-five per cent may be considered as the lowest duty to which the greater part of the goods of the growth, produce, or manufacture of France were liable. But upon the greater part of goods, those duties are equivalent to a prohibition. The French in their turn have, I believe, treated our goods and manufactures just as hardly; though I am not so well acquainted with the particular hardships which they have imposed upon them. Those mutual restraints have put an end to almost all fair commerce between the two nations, and smugglers are now the principal importers, either of British goods into France, or of French goods into Great Britain. The principles which I have been examining in the foregoing chapter took their origin from private interest and the spirit of monopoly; those which I am going to examine in this, from national prejudice and animosity. They are, accordingly, as might well be expected, still more unreasonable. They are so, even upon the principles of the commercial system.

First, though it were certain that in the case of a free trade between France and England, for example, the balance would be in favour of France, it would by no means follow that such a trade would be disadvantageous to England, or that the general balance of its whole trade would thereby be turned more against it. If the wines of France are better and cheaper than those of Portugal, or its linens than those of Germany, it would be more advantageous for Great Britain to purchase both the wine and the foreign linen which it had occasion for of France than of Portugal and Germany. Though the value of the annual importations from France would thereby be greatly augmented, the value of the whole annual importations would be diminished, in proportion as the French goods of the same quality were cheaper than those of the other two countries. This would be the case, even upon the supposition that the whole French goods imported were to be consumed in Great Britain.

But, secondly, a great part of them might be reexported to other countries, where, being sold with profit, they might bring back a return equal in value, perhaps, to the prime cost of the whole French goods imported. What has frequently been said of the East India trade might possibly be true of the French; that though the greater part of East India goods were bought with gold and silver, the re-exportation of a part of them to other countries brought back more gold and silver to that which carried on the trade than the prime cost of the whole amounted to. One of the most important branches of the Dutch trade, at present, consists in the carriage of French goods to other European countries. Some part even of the French wine drank in Great Britain is clandestinely imported from Holland and Zealand. If there was either a free trade between France and England, or if French goods could be imported upon paying only the same duties as those of other European nations, to be drawn back upon exportation, England might have some share of a trade which is found so advantageous to Holland.

Thirdly, and lastly, there is no certain criterion by which we can determine on which side what is called the balance between any two countries lies, or which of them exports to the greatest value. National prejudice and animosity, prompted always by the private interest of particular traders, are the principles which generally direct our judgment upon all questions concerning it. There are two criterions, however, which have frequently been appealed to upon such occasions, the custom-house books and the course of exchange. The custom-house books, I think, it is now generally acknowledged, are a very uncertain criterion, on account of the inaccuracy of the valuation at which the greater part of goods are rated in them. The course of exchange is, perhaps, almost equally so.

When the exchange between two places, such as London and Paris, is at par, it is said to be a sign that the debts due from London to Paris are compensated by those due from Paris to London. On the contrary, when a premium is paid at London for a bill upon Paris, it is said to be a sign that the debts due from London to Paris are not compensated by those due from Paris to London, but that a balance in money must be sent out from the latter place; for the risk, trouble, and expense of exporting which, the premium is both demanded and given. But the ordinary state of debt and credit between those two cities must necessarily be regulated, it is said, by the ordinary course of their dealings with one another. When neither of them imports from the other to a greater amount than it exports to that other, the debts and credits of each may compensate one another. But when one of them imports from the other to a greater value than it exports to that other, the former necessarily becomes indebted to the latter in a greater sum than the latter becomes indebted to it; the debts and credits of each do not compensate one another, and money must be sent out from that place of which the debts overbalance the credits. The ordinary course of exchange, therefore, being an indication of the ordinary state of debt and credit between two places, must likewise be an indication of the ordinary course of their exports and imports, as these necessarily regulate that state.

But though the ordinary course of exchange should be allowed to be a sufficient indication of the ordinary state of debt and credit between any two places, it would not from thence follow that the balance of trade was in favour of that place which had the ordinary state of debt and credit in its favour. The ordinary state of debt and credit between any two places is not always entirely regulated by the ordinary course of their dealings with one another; but is often influenced by that of the dealings of either with many other places. If it is usual, for example, for the merchants of England to pay for the goods which they buy of Hamburg, Dantzic, Riga, etc, by bills upon Holland, the ordinary state of debt and credit between England and Holland will not be regulated entirely by the ordinary course of the dealings of those two countries with one another, but will be influenced by that of the dealings of England with those other places. England may be obliged to send out every year money to Holland, though its annual exports to that country may exceed very much the annual value of its imports from thence; and though what is called the balance of trade may be very much in favour of England.

In the way, besides, in which the par of exchange has hitherto been computed, the ordinary course of exchange can afford no sufficient indication that the ordinary state of debt and credit is in favour of that country which seems to have, or which is supposed to have, the ordinary course of exchange in its favour: or, in other words, the real exchange may be, and, in fact, often is so very different from the computed one, that from the course of the latter no certain conclusion can, upon many occasions, be drawn concerning that of the former.

When for a sum of money paid in England, containing, according to the standard of the English mint, a certain number of ounces of pure silver, you receive a bill for a sum of money to be paid in France, containing, according to the standard of the French mint, an equal number of ounces of pure silver, exchange is said to be at par between England and France. When you pay more, you are supposed to give a premium, and exchange is said to be against England and in favour of France. When you pay less, you are supposed to get a premium, and exchange is said to be against France and in favour of England.

But, first, we cannot always judge of the value of the current money of different countries by the standard of their respective mints. In some it is more, in others it is less worn, clipt, and otherwise degenerated from that standard. But the value of the current coin of every country, compared with that of any other country, is in proportion not to the quantity of pure silver which it ought to contain, but to that which it actually does contain. Before the reformation of the silver coin in King William's time, exchange between England and Holland, computed in the usual manner according to the standard of their respective mints, was five-and-twenty per cent against England. But the value of the current coin of England, as we learn from Mr Lowndes, was at that time rather more than five-and-twenty per cent below its standard value. The real exchange, therefore, may even at that time have been in favour of England, notwithstanding the computed exchange was so much against it; a smaller number of ounces of pure silver actually paid in England may have purchased a bill for a greater number of ounces of pure silver to be paid in Holland, and the man who was supposed to give may in reality have got the premium. The French coin was, before the late reformation of the English gold coin, much less worn than the English, and was perhaps two or three per cent nearer its standard. If the computed exchange with France, therefore, was not more than two or three per cent against England, the real exchange might have been in its favour. Since the reformation of the gold coin, the exchange has been constantly in favour of England, and against France.

Secondly, in some countries, the expense of coinage is defrayed by the government; in others, it is defrayed by the private people who carry their bullion to the mint, and the government even derives some revenue from the coinage. In England, it is defrayed by the government, and if you carry a pound weight of standard silver to the mint, you get back sixty-two shillings, containing a pound weight of the like standard silver. In France, a duty of eight per cent is deducted for the coinage, which not only defrays the expense of it, but affords a small revenue to the government. In England, as the coinage costs nothing, the current coin can never be much more valuable than the quantity of bullion which it actually contains. In France, the workmanship, as you pay for it, adds to the value in the same manner as to that of wrought plate. A sum of French money, therefore, containing a certain weight of pure silver, is more valuable than a sum of English money containing an equal weight of pure silver, and must require more bullion, or other commodities, to purchase it. Though the current coin of the two countries, therefore, were equally near the standards of their respective mints, a sum of English money could not well purchase a sum of French money containing an equal number of ounces of pure silver, nor consequently a bill upon France for such a sum. If for such a bill no more additional money was paid than what was sufficient to compensate the expense of the French coinage, the real exchange might be at par between the two countries, their debts and credits might mutually compensate one another, while the computed exchange was considerably in favour of France. If less than this was paid, the real exchange might be in favour of England, while the computed was in favour of France.

Thirdly, and lastly, in some places, as at Amsterdam, Hamburg, Venice, etc, foreign bills of exchange are paid in what they call bank money; while in others, as at London, Lisbon, Antwerp, Leghorn, etc., they are paid in the common currency of the country. What is called bank money is always of more value than the same nominal sum of common currency. A thousand guilders in the bank of Amsterdam, for example, are of more value than a thousand guilders of Amsterdam currency. The difference between them is called the agio of the bank, which, at Amsterdam, is generally about five per cent. Supposing the current money of the two countries equally near to the standard of their respective mints, and that the one pays foreign bills in this common currency, while the other pays them in bank money, it is evident that the computed exchange may be in favour of that which pays in bank money, though the real exchange should be in favour of that which pays in current money; for the same reason that the computed exchange may be in favour of that which pays in better money, or in money nearer to its own standard, though the real exchange should be in favour of that which pays in worse. The computed exchange, before the late reformation of the gold coin, was generally against London with Amsterdam, Hamburg, Venice, and, I believe, with all other places which pay in what is called bank money. It will be no means follow, however, that the real exchange was against it. Since the reformation of the gold coin, it has been in favour of London even with those places. The computed exchange has generally been in favour of London with Lisbon, Antwerp, Leghorn, and, if you except France, I believe, with most other parts of Europe that pay in common currency; and it is not improbable that the real exchange was so too.



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Part Ⅱ

Of the Unreasonableness of those Extraordinary Restraints upon other Principles

In the foregoing Part of this Chapter I have endeavoured to show, even upon the principles of the commercial system, how unnecessary it is to lay extraordinary restraints upon the importation of goods from those countries with which the balance of trade is supposed to be disadvantageous.

Nothing, however, can be more absurd than this whole doctrine of the balance of trade, upon which, not only these restraints, but almost all the other regulations of commerce are founded. When two places trade with one another, this doctrine supposes that, if the balance be even, neither of them either loses or gains; but if it leans in any degree to one side, that one of them loses and the other gains in proportion to its declension from the exact equilibrium. Both suppositions are false. A trade which is forced by means of bounties and monopolies may be and commonly is disadvantageous to the country in whose favour it is meant to be established, as I shall endeavour to show hereafter. But that trade which, without force or constraint, is naturally and regularly carried on between any two places is always advantageous, though not always equally so, to both.

By advantage or gain, I understand not the increase of the quantity of gold and silver, but that of the exchangeable value of the annual produce of the land and labour of the country, or the increase of the annual revenue of its inhabitants.

If the balance be even, and if the trade between the two places consist altogether in the exchange of their native commodities, they will, upon most occasions, not only both gain, but they will gain equally, or very near equally; each will in this case afford a market for a part of the surplus produce of the other; each will replace a capital which had been employed in raising and preparing for the market this part of the surplus produce of the other, and which had been distributed among, and given revenue and maintenance to a certain number of its inhabitants. Some part of the inhabitants of each, therefore, will indirectly derive their revenue and maintenance from the other. As the commodities exchanged, too, are supposed to be of equal value, so the two capitals employed in the trade will, upon most occasions, be equal, or very nearly equal; and both being employed in raising the native commodities of the two countries, the revenue and maintenance which their distribution will afford to the inhabitants of each will be equal, or very nearly equal. This revenue and maintenance, thus mutually afforded, will be greater or smaller in proportion to the extent of their dealings. If these should annually amount to an hundred thousand pounds, for example, or to a million on each side, each of them would afford an annual revenue in the one case of an hundred thousand pounds, in the other of a million, to the inhabitants of the other.

If their trade should be of such a nature that one of them exported to the other nothing but native commodities, while the returns of that other consisted altogether in foreign goods; the balance, in this case, would still be supposed even, commodities being paid for with commodities. They would, in this case too, both gain, but they would not gain equally; and the inhabitants of the country which exported nothing but native commodities would derive the greatest revenue from the trade. If England, for example, should import from France nothing but the native commodities of that country, and, not having such commodities of its own as were in demand there, should annually repay them by sending thither a large quantity of foreign goods, tobacco, we shall suppose, and East India goods; this trade, though it would give some revenue to the inhabitants of both countries, would give more to those of France than to those of England. The whole French capital annually employed in it would annually be distributed among the people of France. But that part of the English capital only which was employed in producing the English commodities with which those foreign goods were purchased would be annually distributed among the people of England. The greater part of it would replace the capitals which had been employed in Virginia, Indostan, and China, and which had given revenue and maintenance to the inhabitants of those distant countries. If the capitals were equal, or nearly equal, therefore this employment of the French capital would augment much more the revenue of the people of France than that of the English capital would the revenue of the people of England. France would in this case carry on a direct foreign trade of consumption with England; whereas England would carry on a round-about trade of the same kind with France. The different effects of a capital employed in the direct and of one employed in the round-about foreign trade of consumption have already been fully explained.

There is not, probably, between any two countries a trade which consists altogether in the exchange either of native commodities on both sides, or of native commodities on one side and of foreign goods on the other. Almost all countries exchange with one another partly native and partly foreign goods. That country, however, in whose cargoes there is the greatest proportion of native, and the least of foreign goods, will always be the principal gainer.

If it was not with tobacco and East India goods, but with gold and silver, that England paid for the commodities annually imported from France, the balance, in this case, would be supposed uneven, commodities not being paid for with commodities, but with gold and silver. The trade, however, would, in this case, as in the foregoing, give some revenue to the inhabitants of both countries, but more to those of France than to those of England. It would give some revenue to those of England. The capital which had been employed in producing the English goods that purchased this gold and silver, the capital which had been distributed among, and given revenue to, certain inhabitants of England, would thereby be replaced and enabled to continue that employment. The whole capital of England would no more be diminished by this exportation of gold and silver than by the exportation of an equal value of any other goods. On the contrary, it would in most cases be augmented. No goods are sent abroad but those for which the demand is supposed to be greater abroad than at home, and of which the returns consequently, it is expected, will be of more value at home than the commodities exported. If the tobacco which, in England, is worth only a hundred thousand pounds, when sent to France will purchase wine which is, in England, worth a hundred and ten thousand, this exchange will equally augment the capital of England by ten thousand pounds. If a hundred thousand pounds of English gold, in the same manner, purchase French wine which, in England, is worth a hundred and ten thousand, this exchange will equally augment the capital of England by ten thousand pounds. As a merchant who has a hundred and ten thousand pounds worth of wine in his cellar is a richer man than he who has only a hundred thousand pounds worth of tobacco in his warehouse, so is he likewise a richer man than he who has only a hundred thousand pounds worth of gold in his coffers. He can put into motion a greater quantity of industry, and give revenue, maintenance, and employment to a greater number of people than either of the other two. But the capital of the country is equal to the capitals of all its different inhabitants, and the quantity of industry which can be annually maintained in it is equal to what all those different capitals can maintain. Both the capital of the country, therefore, and the quantity of industry which can be annually maintained in it, must generally be augmented by this exchange. It would, indeed, be more advantageous for England that it could purchase the wines of France with its own hardware and broadcloth than with either the tobacco of Virginia or the gold and silver of Brazil and Peru. A direct foreign trade of consumption is always more advantageous than a round-about one. But a round-about foreign trade of consumption, which is carried on with gold and silver, does not seem to be less advantageous than any other equally round-about one. Neither is a country which has no mines more likely to be exhausted of gold and silver by this annual exportation of those metals than one which does not grow tobacco by the like annual exportation of that plant. As a country which has wherewithal to buy tobacco will never be long in want of it, so neither will one be long in want of gold and silver which has wherewithal to purchase those metals.

It is a losing trade, it is said, which a workman carries on with the alehouse; and the trade which a manufacturing nation would naturally carry on with a wine country may be considered as a trade of the same nature. I answer, that the trade with the alehouse is not necessarily a losing trade. In its own nature it is just as advantageous as any other, though perhaps somewhat more liable to be abused. The employment of a brewer, and even that of a retailer of fermented liquors, are as necessary divisions of labour as any other. It will generally be more advantageous for a workman to buy of the brewer the quantity he has occasion for than to brew it himself, and if he is a poor workman, it will generally be more advantageous for him to buy it by little and little of the retailer than a large quantity of the brewer. He may no doubt buy too much of either, as he may of any other dealers in his neighbourhood, of the butcher, if he is a glutton, or of the draper, if he affects to be a beau among his companions. It is advantageous to the great body of workmen, notwithstanding, that all these trades should be free, though this freedom may be abused in all of them, and is more likely to be so, perhaps, in some than in others. Though individuals, besides, may sometimes ruin their fortunes by an excessive consumption of fermented liquors, there seems to be no risk that a nation should do so. Though in every country there are many people who spend upon such liquors more than they can afford, there are always many more who spend less. It deserves to be remarked too, that, if we consult experience, the cheapness of wine seems to be a cause, not of drunkenness, but of sobriety. The inhabitants of the wine countries are in general the soberest people in Europe; witness the Spaniards, the Italians, and the inhabitants of the southern provinces of France. People are seldom guilty of excess in what is their daily fare. Nobody affects the character of liberality and good fellowship by being profuse of a liquor which is as cheap as small beer. On the contrary, in the countries which, either from excessive heat or cold, produce no grapes, and where wine consequently is dear and a rarity, drunkenness is a common vice, as among the northern nations, and all those who live between the tropics, the negroes, for example, on the coast of Guinea. When a French regiment comes from some of the northern provinces of France, where wine is somewhat dear, to be quartered in the southern, where it is very cheap, the soldiers, I have frequently heard it observed, are at first debauched by the cheapness and novelty of good wine; but after a few months' residence, the greater part of them become as sober as the rest of the inhabitants. Were the duties upon foreign wines, and the excises upon malt, beer, and ale to be taken away all at once, it might, in the same manner, occasion in Great Britain a pretty general and temporary drunkenness among the middling and inferior ranks of people, which would probably be soon followed by a permanent and almost universal sobriety. At present drunkenness is by no means the vice of people of fashion, or of those who can easily afford the most expensive liquors. A gentleman drunk with ale has scarce ever been seen among us. The restraints upon the wine trade in Great Britain, besides, do not so much seem calculated to hinder the people from going, if I may say so, to the alehouse, as from going where they can buy the best and cheapest liquor. They favour the wine trade of Portugal, and discourage that of France. The Portuguese, it is said, indeed, are better customers for our manufactures than the French, and should therefore be encouraged in preference to them. As they give us their custom, it is pretended, we should give them ours. The sneaking arts of underling tradesmen are thus erected into political maxims for the conduct of a great empire: for it is the most underling tradesmen only who make it a rule to employ chiefly their own customers. A great trader purchases his goods always where they are cheapest and best, without regard to any little interest of this kind.

By such maxims as these, however, nations have been taught that their interest consisted in beggaring all their neighbours. Each nation has been made to look with an invidious eye upon the prosperity of all the nations with which it trades, and to consider their gain as its own loss. Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity. The capricious ambition of kings and ministers has not, during the present and the preceding century, been more fatal to the repose of Europe than the impertinent jealousy of merchants and manufacturers. The violence and injustice of the rulers of mankind is an ancient evil, for which, I am afraid, the nature of human affairs can scarce admit of a remedy. But the mean rapacity, the monopolising spirit of merchants and manufacturers, who neither are, nor ought to be, the rulers of mankind, though it cannot perhaps be corrected may very easily be prevented from disturbing the tranquillity of any body but themselves.

That it was the spirit of monopoly which originally both invented and propagated this doctrine cannot be doubted; and they who first taught it were by no means such fools as they who believed it. In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest. The proposition is so very manifest that it seems ridiculous to take any pains to prove it; nor could it ever have been called in question had not the interested sophistry of merchants and manufacturers confounded the common sense of mankind. Their interest is, in this respect, directly opposite to that of the great body of the people. As it is the interest of the freemen of a corporation to hinder the rest of the inhabitants from employing any workmen but themselves, so it is the interest of the merchants and manufacturers of every country to secure to themselves the monopoly of the home market. Hence in Great Britain, and in most other European countries, the extraordinary duties upon almost all goods imported by alien merchants. Hence the high duties and prohibitions upon all those foreign manufactures which can come into competition with our own. Hence, too, the extraordinary restraints upon the importation of almost all sorts of goods from those countries with which the balance of trade is supposed to be disadvantageous; that is, from those against whom national animosity happens to be most violently inflamed.

The wealth of a neighbouring nation, however, though dangerous in war and politics, is certainly advantageous in trade. In a state of hostility it may enable our enemies to maintain fleets and armies superior to our own; but in a state of peace and commerce it must likewise enable them to exchange with us to a greater value, and to afford a better market, either for the immediate produce of our own industry, or for whatever is purchased with that produce. As a rich man is likely to be a better customer to the industrious people in his neighbourhood than a poor, so is likewise a rich nation. A rich man, indeed, who is himself a manufacturer, is a very dangerous neighbour to all those who deal in the same way. All the rest of the neighbourhood, however, by far the greatest number, profit by the good market which his expense affords them. They even profit by his underselling the poorer workmen who deal in the same way with him. The manufacturers of a rich nation, in the same manner, may no doubt be very dangerous rivals to those of their neighbours. This very competition, however, is advantageous to the great body of the people, who profit greatly besides by the good market which the great expense of such a nation affords them in every other way. Private people who want to make a fortune never think of retiring to the remote and poor provinces of the country, but resort either to the capital, or to some of the great commercial towns. They know that where little wealth circulates there is little to be got, but that where a great deal is in motion, some share of it may fall to them. The same maxims which would in this manner direct the common sense of one, or ten, or twenty individuals, should regulate the judgment of one, or ten, or twenty millions, and should make a whole nation regard the riches of its neighbours as a probable cause and occasion for itself to acquire riches. A nation that would enrich itself by foreign trade is certainly most likely to do so when its neighbours are all rich, industrious, and commercial nations. A great nation surrounded on all sides by wandering savages and poor barbarians might, no doubt, acquire riches by the cultivation of its own lands, and by its own interior commerce, but not by foreign trade. It seems to have been in this manner that the ancient Egyptians and the modern Chinese acquired their great wealth. The ancient Egyptians, it is said, neglected foreign commerce, and the modern Chinese, it is known, hold it in the utmost contempt, and scarce deign to afford it the decent protection of the laws. The modern maxims of foreign commerce, by aiming at the impoverishment of all our neighbours, so far as they are capable of producing their intended effect, tend to render that very commerce insignificant and contemptible.

It is in consequence of these maxims that the commerce between France and England has in both countries been subjected to so many discouragements and restraints. If those two countries, however, were to consider their real interest, without either mercantile jealousy or national animosity, the commerce of France might be more advantageous to Great Britain than that of any other country, and for the same reason that of Great Britain to France. France is the nearest neighbour to Great Britain. In the trade between the southern coast of England and the northern and north-western coasts of France, the returns might be expected, in the same manner as in the inland trade, four, five, or six times in the year. The capital, therefore, employed in this trade could in each of the two countries keep in motion four, five, or six times the quantity of industry, and afford employment and subsistence to four, five, or six times the number of people, which an equal capital could do in the greater part of the other branches of foreign trade. Between the parts of France and Great Britain most remote from one another, the returns might be expected, at least, once in the year, and even this trade would so far be at least equally advantageous as the greater part of the other branches of our foreign European trade. It would be, at least, three times more advantageous than the boasted trade with our North American colonies, in which the returns were seldom made in less than three years, frequently not in less than four or five years. France besides, is supposed to contain twenty-four millions of inhabitants. Our North American colonies were never supposed to contain more than three millions; and France is a much richer country than North America; though, on account of the more unequal distribution of riches, there is much more poverty and beggary in the one country than in the other. France, therefore, could afford a market at least eight times more extensive, and, on account of the superior frequency of the returns, four-and-twenty times more advantageous than that which our North American colonies ever afforded. The trade of Great Britain would be just as advantageous to France, and, in proportion to the wealth, population, and proximity of the respective countries, would have the same superiority over that which France carries on with her own colonies. Such is the very great difference between that trade, which the wisdom of both nations has thought proper to discourage, and that which it has favoured the most.

But the very same circumstances which would have rendered an open and free commerce between the two countries so advantageous to both, have occasioned the principal obstructions to that commerce. Being neighbours, they are necessarily enemies, and the wealth and power of each becomes, upon that account, more formidable to the other; and what would increase the advantages of national friendship serves only to inflame the violence of national animosity. They are both rich and industrious nations; and the merchants and manufacturers of each dread the competition of the skill and activity of those of the other. Mercantile jealousy is excited, and both inflames, and is itself inflamed, by the violence of national animosity; and the traders of both countries have announced, with all the passionate confidence of interested falsehood, the certain ruin of each, in consequence of that unfavourable balance of trade, which, they pretend, would be the infallible effect of an unrestrained commerce with the other.

There is no commercial country in Europe of which the approaching ruin has not frequently been foretold by the pretended doctors of this system from an unfavourable balance of trade. After all the anxiety, however, which they have excited about this, after all the vain attempts of almost all trading nations to turn that balance in their own favour and against their neighbours, it does not appear that any one nation in Europe has been in any respect impoverished by this cause. Every town and country, on the contrary, in proportion as they have opened their ports to all nations, instead of being ruined by this free trade, as the principles of the commercial system would lead us to expect, have been enriched by it. Though there are in Europe, indeed, a few towns which in some respects deserve the name of free ports, there is no country which does so. Holland, perhaps, approaches the nearest to this character of any, though still very remote from it; and Holland, it is acknowledged, not only derives its whole wealth, but a great part of its necessary subsistence, from foreign trade.

There is another balance, indeed, which has already been explained, very different from the balance of trade, and which, according as it happens to be either favourable or unfavourable, necessarily occasions the prosperity or decay of every nation. This is the balance of the annual produce and consumption. If the exchangeable value of the annual produce, it has already been observed, exceeds that of the annual consumption, the capital of the society must annually increase in proportion to this excess. The society in this case lives within its revenue, and what is annually saved out of its revenue is naturally added to its capital, and employed so as to increase still further the annual produce. If the exchangeable value of the annual produce, on the contrary, fall short of the annual consumption, the capital of the society must annually decay in proportion to this deficiency. The expense of the society in this case exceeds its revenue, and necessarily encroaches upon its capital. Its capital, therefore, must necessarily decay, and together with it the exchangeable value of the annual produce of its industry.

This balance of produce and consumption is entirely different from what is called the balance of trade. It might take place in a nation which had no foreign trade, but which was entirely separated from all the world. It may take place in the whole globe of the earth, of which the wealth, population, and improvement may be either gradually increasing or gradually decaying.

The balance of produce and consumption may be constantly in favour of a nation, though what is called the balance of trade be generally against it. A nation may import to a greater value than it exports for half a century, perhaps, together; the gold and silver which comes into it during all this time may be all immediately sent out of it; its circulating coin may gradually decay, different sorts of paper money being substituted in its place, and even the debts, too, which it contracts in the principal nations with whom it deals, may be gradually increasing; and yet its real wealth, the exchangeable value of the annual produce of its lands and labour, may, during the same period, have been increasing in a much greater proportion.



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