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Title: An Inquiry into the Principles of Political oeconomy (Vol. 1 of 2) - Being an essay on the science of domestic policy in free - nations. In which are particularly considered population, - agriculture.
Author: Steuart, James
Language: English
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                          Transcriber’s Note:

This version of the text cannot represent certain typographical effects.
Italics are delimited with the ‘_’ character as _italic_.

Footnotes have been moved to follow the paragraphs in which they are
referenced.

The table of contents includes references in Book III to sections
printed in the text as marginal notes (sidenotes). Each has been linked
for ease of reference.

[Sidenote: Marginal Notes.]

All marginal notes will appear prior to the paragraph they annotated as,
prefixed with ‘Sidenote:’

There was an Errata included in the text. The corrections listed there
were made.

Minor errors, attributable to the printer, have been corrected. Please
see the transcriber’s note at the end of this text for details regarding
the handling of any textual issues encountered during its preparation.

                                   AN
                                INQUIRY
                                INTO THE
                   PRINCIPLES OF POLITICAL OECONOMY:
                                BEING AN
                          ESSAY ON THE SCIENCE
                                   OF
                    Domestic Policy in Free Nations.

                  IN WHICH ARE PARTICULARLY CONSIDERED

               POPULATION, AGRICULTURE, TRADE, INDUSTRY,
               MONEY, COIN, INTEREST, CIRCULATION, BANKS,
                  EXCHANGE, PUBLIC CREDIT, AND TAXES.

------------------------------------------------------------------------

                      By Sir JAMES STEUART, Bart.

------------------------------------------------------------------------

 _Ore trahit quodcumque potest atque addit acervo._ HOR. Lib. I. Sat. 1.

                            IN TWO VOLUMES.

------------------------------------------------------------------------

                                VOL. I.

                                LONDON:
          Printed for A. MILLAR, and T. CADELL, in the Strand.
                               MDCCLXVII.

------------------------------------------------------------------------



                               _PREFACE._


It is with the greatest diffidence that I present to the public this
attempt towards reducing to principles, and forming into a regular
science, the complicated interests of domestic policy. When I consider
the time and labour employed in the composition, I am apt to value it
from selfish considerations. When I compare it even with my own
abilities, I still think favourably of it, for a better reason; because
it contains a summary of the most valuable part of all my knowledge. But
when I consider the greatness of my subject, how small does the result
of my application appear!

The imperfections, therefore, discovered in this work, will, I hope, be
ascribed to the disproportion between the extent of the undertaking, and
that of my capacity. This has been exerted to the utmost: and if I have
failed, it may, at least, with justice, be said, that I have miscarried
in an attempt of the greatest importance to mankind.

I no where shew the least desire to make my court to any particular
statesman whose administration might have been hinted at. I freely
follow the thread of my reasoning without a biass, either in favour of
popular opinions, or of any of the numberless systems which have been
formed by those who have written upon particular parts of my subject.
The warmth of my temper has led me often into commendations, when I was
pleased; but when I felt the effects of ill humour on being dissatisfied
with particular circumstances, relating to countries, to men, and to
things, which I had in view at the time I was writing, I seldom thought
it proper to be particular. I have, in general, considered the danger of
error, either in blaming or commending the steps of any administration,
without being well informed of the whole combination of circumstances
which the statesman had before him at the time.

This composition being the successive labour of many years spent in
travelling, the reader will find some passages in which the unities of
time and place have not been observed. These I could have corrected with
ease, had I not been advised to leave them as characters to point out
the circumstances under which I wrote, and thereby to confirm the
authenticity of certain facts.

The modes of thinking, also, peculiar to the several countries where I
have lived, have, no doubt, had an influence on what I have writ
concerning their customs: the work, therefore, will not, in general,
correspond to the meridian of national opinions any where; and of this
it is proper the reader should be apprised, that he may not apply to the
domestic circumstances of his own country what was intended to refer to
those of other nations; nor impute what was the irresistible effect of
my experience and conviction, to wilful prejudice.

I have read many authors on the subject of political oeconomy; and I
have endeavoured to draw from them all the instruction I could. I have
travelled, for many years, through different countries, and have
examined them, constantly, with an eye to my own subject. I have
attempted to draw information from every one with whom I have been
acquainted: this, however, I found to be very difficult before I had
attained to some previous knowledge of my subject. Such difficulties
confirmed to me the justness of Lord Bacon’s remark, that he who knows
how to draw information by forming proper questions, is already
possessed of half the science[A].

Footnote A:

  _Prudens interrogatio, dimidium scientiæ._

I could form no consistent plan from the various opinions I met with:
hence I was engaged to compile the observations I had casually made, in
the course of my travels, reading, and experience. From these I formed
the following work, after expunging the numberless inconsistencies and
contradictions which I found had arisen from my separate inquiries into
every particular branch.

I had observed so many persons declining in knowledge as they advanced
in years, that I resolved early to throw upon paper whatever I had
learned; and to this I used to have recourse, as others have to their
memories. The unity of the object of all my speculations, rendred this
practice more useful to me than it would be to one whose researches are
more extended.

Whoever is much accustomed to write for his own use merely, must
contract a more careless stile than another who has made language his
study, and who writes in hopes of acquiring a literary reputation. I
never, till very lately, thought of appearing as an author; and in the
frequent perusals of what I had writ, my corrections were chiefly in
favour of perspicuity: add to this, that the language in which I now
write was, for many years, foreign to those with whom I lived and
conversed. When these circumstances are combined with the intricacy of
my subject, which constantly carried off my attention from every
ornament of language, I flatter myself that those of my readers, at
least, who enter as heartily as I have done into the spirit of this
work, will candidly overlook the want of that elegance which adorns the
stile of some celebrated authors in this Augustan age. I present this
inquiry to the public as nothing more than an essay which may serve as a
canvass for better hands than mine to work upon.

It contains such observations only as the general view of the domestic
policy of the countries I have seen, has suggested. It is a speculation,
and no more. It is a rough drawing of a mighty plan, proportioned in
correctness to my own sagacity, to my knowledge of the subject and to
the extent of my combinations.

It goes little farther than to collect and arrange some elements upon
the most interesting branches of modern policy, such as _population,
agriculture, trade, industry, money, coin, interest, circulation, banks,
exchange, public credit, and taxes_. The principles deduced from all
these topics, appear tolerably consistent; and the whole is a train of
reasoning, through which I have adhered to the connection of subjects as
faithfully as I could: but the nature of the work being a deduction of
principles, not a collection of institutions, I seized the opportunities
which my reasoning threw in my way, to connect every principle, as I
went along, with every part of the inquiry to which it could refer; and
when I found the connexion sufficiently shewn, I broke off such
disquisitions as would have led me from the object then present.

When principles thus casually applied in one part to matters intended to
be afterwards treated of in another, came to be taken up a-new, they
involved me in what may appear prolixity. This I found most unavoidable,
when I was led to thoughts which were new to myself, and consequently
such as must cost me the greatest labour to set in a clear and distinct
point of view. Had I been master of my subject on setting out, the
arrangement of the whole would have been rendered more concise: but had
this been the case, I should never have been able to go through the
painful deduction which forms the whole chain of my reasoning, and upon
which, to many readers, slow in forming combinations, the conviction it
carries along with it in a great measure depends: to the few, again, of
a more penetrating genius, to whom the slightest hint is sufficient to
lay open every consequence before it be drawn, in allusion to Horace, I
offer this apology, _Clarus esse laboro, prolixus fio_.

The path I have taken was new to me, after all I had read on the
subject. I examined what I had gathered from others by my own
principles; and according as I found it tally with collateral
circumstances, I concluded in its favour. When, on the other hand, I
found a disagreement, I was apprized immediately of some mistake: and
this I found constantly owing to the narrowness of the combinations upon
which it had been founded.

The great danger of running into error upon particular points relating
to this subject, proceeds from our viewing them in a light too confined,
and to our not attending to the influence of concomitant circumstances,
which render general rules of little use. Men of parts and knowledge
seldom fail to reason consequentially on every subject; but when their
inquiries are connected with the complicated interests of society, the
vivacity of an author’s genius is apt to prevent him from attending to
the variety of circumstances which render every consequence, almost,
which he can draw, uncertain. To this I ascribe the habit of running
into what the French call _Systemes_. These are no more than a chain of
contingent consequences, drawn from a few fundamental maxims, adopted,
perhaps, rashly. Such systems are mere conceits; they mislead the
understanding, and efface the path to truth. An induction is formed,
from whence a conclusion, called a principle, is drawn; but this is no
sooner done, than the author extends its influence far beyond the limits
of the ideas present to his understanding, when he made his deduction.

The imperfection of language engages us frequently in disputes merely
verbal; and instead of being on our guard against the many unavoidable
ambiguities attending the most careful speech, we place a great part of
our learning when at school, and of our wit when we appear on the stage
of the world, in the prostitution of language. The learned delight in
vague, and the witty in equivocal terms. In general, we familiarize
ourselves so much with words, and think so little, when we speak and
write, that the signs of our ideas take the place of the images which
they were intended to represent.

Every true proposition, when understood, must be assented to
_universally_. This is the case always, when simple ideas are affirmed
or denied of each other. No body ever doubted that sound is the object
of hearing, or colour that of sight, or that black is not white. But
whenever a dispute arises concerning a proposition, wherein complex
ideas are compared, we may often rest assured, that the parties do not
understand each other. Luxury, says one, is incompatible with the
prosperity of a state. Luxury is the fountain of a nation’s welfare and
happiness, says another. There may, in reality, be no difference in the
sentiments of these two persons. The first may consider luxury as
prejudicial to foreign trade, and as corrupting the morals of a people.
The other may consider luxury as the means of providing employment for
such as must live by their industry, and of promoting an equable
circulation of wealth and subsistence, through all the classes of
inhabitants. If each of them had attended to the combination of the
other’s complex idea of luxury, with all its consequences, they would
have rendered their propositions less general.

The difference, therefore, of opinion between men is frequently more
apparent than real. When we compare our own ideas, we constantly see
their relations with perspicuity; but when we come to communicate those
relations to other people, it is often impossible to put them into words
sufficiently expressive of the precise combination we have made in our
own minds.

This being the case, I have avoided, as much as possible, condemning
such opinions as I have taken the liberty to review; because I have
examined such only as have been advanced by men of genius and
reputation: and since all matters of controversy regard the companion of
our _ideas_, if the terms we use to express them were sufficiently
understood by both parties, most political disputes would, I am
persuaded, be soon at an end.

Here it may be objected, that we frequently adopt an opinion, without
being able to give a sufficient reason for it, and yet we cannot gain
upon ourselves to give it up, though we find it combated by the
strongest arguments.

To this I answer, that in such cases we do not adhere to our own
opinions, but to those of others, received upon trust. It is our regard
for the authority, and not for the opinion, which makes us tenacious:
for if the opinion were truly our own, we could not fail of seeing, or
at least we should not long be at a loss in recollecting the ground upon
which it is built. But when we assent implicitly to any political
doctrine, there is no room for reason: we then satisfy ourselves with
the persuasion that those whom we trust have sufficient reasons for what
they advance. While our assent therefore is implicit, we are beyond
conviction; not because we do not perceive the force of the arguments
brought against our opinion, but because we are ignorant of the force of
those which can be brought to support it: and as no body will sell what
belongs to him, without being previously informed of its value, so no
body will give up an implicit opinion, without knowing all that can be
said for it. To this class of men I do not address myself in my
inquiries.

But I insensibly run into a metaphysical speculation, to prove, that in
political questions it is better for people to judge from experience and
reason, than from authority; to explain their terms, than to dispute
about words; and to extend their combinations, than to follow conceits,
however decorated with the name of systems. How far I have avoided such
defects, the reader will determine.

Every writer values himself upon his impartiality; because he is not
sensible of his fetters. The wandering and independent life I have led
may naturally have set me free, in some measure, from strong attachments
to popular opinions. This may be called impartiality. But as no man can
be deemed impartial, who leans to any side whatever, I have been
particularly on my guard against the consequences of this sort of
negative impartiality, as I have found it sometimes carrying me too far
from that to which a national prejudice might have led me.

In discussing general points, the best method I found to maintain a just
balance in that respect, was to avert my eye from the country in which I
lived at the time; and to judge of absent things by the absent. Objects
which are present, are apt to produce perceptions too strong to be
impartially compared with those recalled only by memory.

When I have had occasion to dip into any question concerning the
preference to be given to certain forms of government above others, and
to touch upon points which have been the object of sharp disputes, I
have given my opinion with freedom, when it seemed proper: and in
stating the question, I have endeavoured to avoid all trite, and, as I
may call them, technical terms of party, which are of no other use than
to assist the disputants in their attempts to blacken each other, and to
throw dust in the eyes of their readers.

I have sometimes entred so heartily into the spirit of the statesman,
that I have been apt to forget my situation in the society in which I
live; and when the private man reads over the politician, his natural
partiality in favour of individuals, leads him to condemn, as
Machiavellian principles, every sentiment approving the sacrifice of
private concerns, in favour of a general plan.

In order, therefore, to reconcile me to myself in this particular, and
to prevent certain expressions, here and there interspersed, from making
the slightest impression upon a reader of delicate sentiments, I must
observe, that nothing would have been so easy as to soften many
passages, where the politician appears to have snatched the pen out of
the hand of the private citizen: but as I write for such only who can
follow a close reasoning, and attend to the general scope of the whole
inquiry, I have, purposely, made no correction; but continued painting
in the strongest colours, every inconvenience which must affect certain
individuals living under our free modern governments, whenever a wise
statesman sets about correcting old abuses, proceeding from idleness,
sloth or fraud in the lower classes, arbitrary jurisdictions in the
higher, and neglects in administrations, with respect to the interests
of both. The more any cure is painful and dangerous, the more ought men
to be careful in avoiding the disease. This leads me to say a word
concerning the connection between the theory of morals and that of
politics.

I lay it down as a general maxim, that the characteristic of a good
action consists in the conformity between the motive, and the duty of
the agent. If there were but one man upon earth, his duty would contain
no other precepts than those dictated by self-love. If he comes to be a
father, a husband, a friend, his self-love falls immediately under
limitations: he must withhold from himself, and give to his children; he
must know how to sacrifice some of his fancies, in order to gratify, now
and then, those of his wife, or of his friend. If he comes to be a
judge, a magistrate, he must frequently forget that he is a friend, or a
father: and if he rises to be a statesman, he must disregard many other
attachments more comprehensive, such as family, place of birth, and
even, in certain cases, his native country. His duty here becomes
relative to the general good of that society of which he is the head:
and as the death of a criminal cannot be imputed to the judge who
condemns him, neither can a particular inconvenience resulting to an
individual, in consequence of a step taken for a general reformation, be
imputed to him who sits at the helm of government.

If it should be asked, of what utility a speculation such as this can be
to a statesman, to whom it is in a manner addressed from the beginning
to the end: I answer, that although it seems addressed to a statesman,
the real object of the inquiry is to influence the spirit of those whom
he governs; and the variety of matter contained in it, may even suggest
useful hints to himself. But his own genius and experience will enable
him to carry such notions far beyond the reach of my combinations.

I have already said that I considered my work as no more than a canvass
prepared for more able hands than mine to work upon. Now although the
sketch it contains be not sufficiently correct, I have still made some
progress, I think, in preparing the way for others to improve upon my
plan, by contriving proper questions to be resolved by men of experience
in the practical part of government.

I leave it therefore to masters in the science to correct and extend my
ideas: and those who have not made the principles of policy their
particular study, may have an opportunity of comparing the exposition I
have given of them with the commonly received opinions concerning many
questions of great importance to society. They will, for instance, be
able to judge how far population can be increased usefully, by
multiplying marriages, and by dividing lands: how far the swelling of
capitals, cities and towns, tends to depopulate a country: how far the
progress of luxury brings distress upon the poor industrious man: how
far restrictions laid upon the corn trade, tend to promote an ample
supply of subsistence in all our markets: how far the increase of public
debts tends to involve us in a general bankruptcy: how far the abolition
of paper currency would have the effect of reducing the price of all
commodities: how far a tax tends to enhance their value: and how far the
diminution of duties is an essential requisite for securing the liberty,
and promoting the prosperity and happiness of a people.

Is it not of the greatest importance to examine, with candour, the
operations by which all Europe has been engaged in a system of policy so
generally declaimed against, and so contrary to that which we hear daily
recommended as the best? And to shew, from the plain principles of
common sense, that our present situation is the unavoidable consequence
of the spirit and manners of the present times, and that it is quite
compatible with all the liberty, affluence, and prosperity, which any
human society ever enjoyed in any age, or under any form of government?
A people taught to expect from a statesman the execution of plans, big
with impossibility and contradiction, will remain discontented under the
government of the best of Kings.

The reader is desired to correct the following errors, especially such
as are distinguished by an asterisk *, which pervert the sense entirely.



                                ERRATA.

 Page.    Line.
    3.      32.   * advantages, r. disadvantages
   73.      27.   were, r. from
   85.      28.   * This is the, r. This is not the
   89.      12.   * supposed to come, r. subsisted
  116.      12.   productions, r. spontaneous productions
  145.       9.   * trial, r. Tirol
  147.      30.   its, r. their
  172.       1.   * earth, r. cart
  208.      29.   third, r. fourth
  210.       6.   lands, r. hands
  214.       4.   moving, r. removing.
  217.       2.   turns, r. terms
  229.       8.   * usefulness, r. uselesness
  236.      19.   * management, r. mismanagement
  266.  21, 22.   they correspond, r. it corresponds
  290.       2.   easily bred, r. bred early
  339.      21.   * preventing, r. promoting
  382.      10.   * work, r. worth
  391.       8.   * next, r. net
  425.      27.   discovering, r. discoursing
  430.      29.   _eiò_, r. _ciò_
 Ditto      30.   _misuro_, r. _misura_
  501.       3.   * physical, r. political
 Ditto      27.   competition, r. composition.
  515.      17.   proportions, r. propositions
  552.      12.   * bringing, r. coining
  601.       9.   * diminution, r. denomination
  626.      31.   * revolution, r. institution
  637.     ult. }
  638.    prim. } formally, r. formerly



------------------------------------------------------------------------

                                CONTENTS
                                 OF THE
                             FIRST VOLUME.

------------------------------------------------------------------------

                                BOOK  I.

                     Of Population and Agriculture.

 INTRODUCTION,                                                    Page 1

 CHAP. I. Of the government of mankind,                                6

 CHAP. II. Of the spirit of a people,                                  8

 CHAP. III. Upon what principles, and from what _natural              17
   causes_, do mankind multiply; and what are the effects of
   procreation in countries where numbers are not found to
   increase?

 CHAP. IV. Continuation of the same subject, with regard to           21
   the natural and immediate effects of agriculture, as to
   population,

 CHAP. V. In what manner, and according to what principles            26
   and _political causes_ does agriculture augment
   population?

 CHAP. VI. How the wants of mankind promote their                     31
   multiplication,

 CHAP. VII. The effects of slavery upon the multiplication            36
   and employment of mankind,

 CHAP. VIII. What proportion of inhabitants is necessary for          41
   agriculture, and what proportion may be usefully employed
   in every other occupation?

 CHAP. IX. What are the principles which regulate the                 46
   distribution of inhabitants into farms, hamlets, villages,
   towns, and cities?

 CHAP. X. Of the consequences which result from the                   50
   reparation of the two principal classes of a people, the
   farmers and the free hands, with regard to their dwelling,

 CHAP. XI. Of the distribution of inhabitants into classes;           59
   of the employments, and multiplication of them,

 CHAP. XII. Of the great advantage of combining a well                67
   digested theory, and a perfect knowledge of facts, with
   the practical part of government, in order to make a
   people multiply,

 CHAP. XIII. Continuation of the same subject, with regard to         75
   the necessity of having exact lists of births, deaths, and
   marriages, for every class of inhabitants in a modern
   society,

 CHAP. XIV. Of the abuse of agriculture and population,               82

 CHAP. XV. Application of the above principles to the state           95
   of population in _Great Britain_,

 CHAP. XVI. Why are some countries found very populous, in           101
   respect of others, equally well calculated for
   improvement?

 CHAP. XVII. In what manner, and according to what                   109
   proportion, do plenty and scarcity affect a people?

 CHAP. XVIII. Of the causes and consequences of a country            114
   being fully peopled,

 CHAP. XIX. Is the introduction of machines into manufactures        119
   prejudicial to the interest of a state, or hurtful to
   population?

 CHAP. XX. Miscellaneous observations upon agriculture and           124
   population,

 CHAP. XXI. Recapitulation of the first book,                        149

------------------------------------------------------------------------

                                BOOK II.

                         Of Trade and Industry.

 INTRODUCTION,                                                       161

 CHAP. I. Of the reciprocal connections between trade and            166
 industry,

 CHAP. II. Of Demand,                                                172

 CHAP. III. Of the first principles of bartering, and how            175
 this grows into trade,

 CHAP. IV. How the prices of goods come to be determined by          181
 trade,

 CHAP. V. How foreign trade opens to an industrious people,          184
 and the consequences of it to _the merchants_ who set it on
 foot,

 CHAP. VI. Consequences of the introduction of a passive             190
 foreign trade among a people who live in simplicity and
 idleness,

 CHAP. VII. Of double competition,                                   196

 CHAP. VIII. Of what is called expence, profit, and loss,            205

 CHAP. IX. The general consequences resulting to a trading           206
 nation, upon the opening of an active foreign commerce,

 CHAP. X. Of the balance of work and demand,                         216

 CHAP. XI. Why in time this balance is destroyed,                    225

 CHAP. XII. Of the competition between nations,                      232

 CHAP. XIII. How far the form of government of a particular          237
 country may be favourable or unfavourable to a competition
 with other nations, in matters of commerce,

 CHAP. XIV. Security, ease, and happiness, no inseparable            250
 concomitants of trade and industry,

 CHAP. XV. A general view of the principles to be attended to        261
 by a statesman, who resolves to establish trade and industry
 upon a lasting footing,

 CHAP. XVI. Illustration of some principles laid down in the         272
 former chapter, relative to the advancement and support of
 foreign trade,

 CHAP. XVII. Symptoms of decay in foreign trade,                     278

 CHAP. XVIII. Methods of lowering the price of manufactures,         283
 in order to make them vendible in foreign markets,

 CHAP. XIX. Of infant, foreign and domestic trade, with              301
 respect to the several principles which influence them,

 CHAP. XX. Of luxury,                                                306

 CHAP. XXI. Of physical and political necessaries,                   311

 CHAP. XXII. Preliminary reflections upon inland commerce,           319

 CHAP. XXIII. When a nation, which has enriched herself by a         328
 reciprocal commerce in manufactures with other nations,
 finds the balance of trade turn against her, it is her
 interest to put a stop to it altogether,

 CHAP. XXIV. What is the proper method to put a stop to a            336
 foreign trade in manufactures, when the balance of it turns
 against a nation?

 CHAP. XXV. When a rich nation finds her foreign trade               343
 reduced to the articles of natural produce, what is the best
 plan to be followed? And what are the consequences of such a
 change of circumstances?

 CHAP. XXVI. Of the vibration of the balance of wealth               359
 between the subjects of a modern state,

 CHAP. XXVII. Circulation, and the balance of wealth, objects        374
 worthy of the attention of a modern statesman,

 CHAP. XXVIII. Circulation considered with regard to the rise        394
 and fall of the price of subsistence and manufactures,

 CHAP. XXIX. Circulation with foreign nations, the same thing        414
 as the balance of trade,

 CHAP. XXX. Miscellaneous questions and observations relative        426
 to trade and industry,

 CHAP. XXXI. Recapitulation of the second book,                      482

------------------------------------------------------------------------

                                BOOK III.
                            OF MONEY AND COIN.

                                 PART I.

    The principles of money deduced, and applied to the coin of Great
                                 Britain.

 INTRODUCTION,                                                        523

 CHAP. I. Of money of accompt,                                        526
       What money is                                                   ——
       Definitions                                                     ——
       Money a scale for measuring value,                              ——
       Principles which determine the value of things                 527
       Prices not regulated by the quantity of money,                  ——
       But by the relative proportion between commodities and         528
         the wants of mankind,
       Necessity of distinguishing between money and price,           529
       Money of accompt what, and how contrived,                       ——
       Examples of it,                                                531
       Bank money,                                                     ——
       Angola money,                                                   ——

 CHAP. II.  Of artificial or material money,                           ——
       Usefulness of the precious metals for the making money,        532
       Adjusting a standard, what?                                    533
       Debasing and raising a standard, what?                         534
       The alteration of a standard, how to be discovered?             ——
       Of alloy,                                                       ——

 CHAP. III. Incapacities of the metals to perform the office          535
   of an invariable measure of value,

       1. They vary in their relative value to one another,            ——
       All measures ought to be invariable,                            ——
       Consequences when they vary,                                   536
       Defects of a silver standard,                                  537
       Arguments in favour of it,                                      ——
       Answers to these arguments,                                    538
       Usefulness of an universal measure,                            539
       They have two values, one as coin, and one as metals,          540
       Smaller inconveniences attending material money,                ——
       It wears in circulation,                                        ——
       It is inaccurately coined,                                     541
       The coinage adds to its value, without adding to its            ——
         weight,
       The value of it may be arbitrarily changed,                     ——
       Trade profits of the smallest defects in the coin,              ——

 CHAP. IV. Methods which may be proposed for lessening the            542
   several inconveniences to which material money is liable,
       Use of theory in political matters,                             ——
       Five remedies against the effects of the variation              ——
         between the value of the metals,
       Remedies against the other inconveniences,                     544
       Against the wearing of the coin,                                ——
       Against inaccuracy of coinage,                                  ——
       Against the expence of coinage,                                 ——
       Against arbitrary changes in the value of coin,                545

 CHAP. V. Variations to which the value of the money-unit is           ——
   exposed from every disorder in the coin,
       How the market price of the metals is made to vary,             ——
       The variation ought to be referred to the _rising_             546
         metal, and never to the _sinking_,
       How the money-unit of accompt is made to vary in its           547
         value from the variation of the metals,
       Consequences of this,                                           ——
       The true unit is the mean proportional between the              ——
         value of the metals,
       The unit to be attached to the mean proportion upon a          548
         new coinage, not after the metals have varied,
       It is better to affix the unit to one, than to both            549
         metals,
       Variation to which the money-unit is exposed from the           ——
         wearing of the coin,
       Variations to which the money-unit is exposed, from the        550
         inaccuracy in the fabrication of the money,
       Variation to which the money-unit is exposed from the          551
         imposition of coinage,
       When coinage is imposed, bullion must be cheaper than           ——
         coin,
       Exception from this rule,                                      552
       Variation to which the money-unit is exposed by the             ——
         arbitrary operations of Princes in raising and
         debasing the coin,

 CHAP. VI. How the variations in the intrinsic value of the           553
   unit of money must affect all the domestic interests of a
   nation,
       How this variation affects the interests of debtors and         ——
         creditors,
       A mistake of Mr. Locke,                                        555
       When the value of the unit is diminished, creditors            556
         lose; when it is augmented, debtors lose,

 CHAP. VII. Of the disorder in the British coin, so far as it         558
   occasions the melting down or the exporting of the specie,
       Defects in the British coin,                                    ——
       Of the standard of the English coin and money-unit,             ——
       A pound sterling by statute contains 1718.7 grains troy        559
         fine silver,
       The guinea 118.644 grains fine gold,                            ——
       Coinage in England free,                                        ——
       The standard not attached to the gold coin till the            560
         year 1728,
       Consequences of this regulation to debase the standard,         ——
       That debtors will not pay in silver but in gold,                ——
       That some people consider coin as money of accompt,            561
       Others consider it as a metal,                                  ——
       Operations of money-jobbers, when the coin deviates            562
         from the market proportion of the metals, or from the
         legal weight,
       They melt down when the metals in it are wrong                  ——
         proportioned,
       And when the coin is of unequal weight,                         ——
       Why silver bullion is dearer than coin,                         ——
       Because that species has risen in the market price as          563
         bullion, and not as coin,
       What regulates the price of bullion?                           564
       1. The intrinsic value of the currency,                         ——
       2. A demand for exporting bullion,                             565
       3. Or for making of plate,                                      ——
       Exchange _raises_, and the mint price _brings down_             ——
         bullion,
       Continuation of the operations of money-jobbers: their         566
         rule for melting the coin,
       The price in guineas equal to the price of shillings of         ——
         65 in the pound troy,
       When guineas may be melted down with profit,                    ——
       Silver is exported preferably to gold,                         567
       This hurtful, when done by foreigners,                          ——

 CHAP. VIII. Of the disorder in the British coin, so far as it        568
   affects the value of the pound sterling currency,
       Two legal pounds sterling in England,                           ——
       And several others, in consequence of the wearing of           569
         the coin,
       Why any silver coin remains in England,                         ——
       Value of a pound sterling current determined by the             ——
         operations of trade,
       To the mean value of all the currencies,                       570
       Exchange a good measure for the value of a pound                ——
         sterling,
       The use of paper money not hurtful in debasing the             571
         standard,
       The pound sterling not regulated by statute, but by the         ——
         mean value of the current money,
       Why exchange appears so commonly against England,               ——
       How the market price of bullion shews the value of the          ——
         pound sterling,
       Shillings at present weigh no more than 1⁄65 of a pound        572
         troy,
       And are worn 4.29 troy grains lighter than their                ——
         standard weight,
       A pound sterling worth, at present, no more than 1638          573
         grains troy fine silver, according to the price of
         bullion,
       And according to the course of exchange,                        ——
       Shillings coined at 65 in the pound troy, would be in          574
         proportion with the gold,
       Which shews that the standard has been debased,                 ——
       And that the preserving it where it is, is no new               ——
         debasement,
       Proof that the standard has been debased by law,               575
       And is at present reduced to the value of the gold,             ——

 CHAP. IX. Historical account of the variations of the British        576
   coin,
       Purport of this treatise not to dictate, but to                 ——
         inquire,
       How the disorder in the coin may be remedied without            ——
         inconveniences,
       By making the nation itself choose the remedy,                 577
       If the present standard is departed from, every other           ——
         that might be pitched on is arbitrary,
       People imagine the present standard is the same with           578
         that of Queen Elizabeth,
       Debasements of the standard during the reformation,             ——
       Raised by Edward VI.                                            ——
       Debased by Elizabeth,                                           ——
       Supported by her successors,                                    ——
       Until it was debased by the clipping, after the                579
         revolution,
       Lowndes’s scheme refuted by Locke: the standard raised         580
         to that of Elizabeth, and the consequences of that
         measure,
       Silver has been rising from the beginning of this               ——
         century,
       The English standard has been debased by law, since             ——
         1726,
       The trading interest chiefly to be blamed for this             581
         neglect,
       Debasing the standard chiefly affects permanent                 ——
         contracts,
       And prevents prices from rising as they should do,              ——

 CHAP. X. Of the disorder of the British coin, so far as it           582
   affects the circulation of gold and silver coin, and of the
   consequences of reducing guineas to twenty shillings,
       Why silver coin is so scarce,                                  583
       Consequences of fixing the guineas at 20 shillings,             ——
         with regard to circulation,
       Will make coin disappear altogether,                           584
       How light shillings are bought by weight,                       ——
       Consequences as to the circulation with merchants and          585
         bankers,
       That guineas would still pass current for 21 shillings,         ——
       That the standard would be affixed to the light silver,         ——
         as it was in the year 1695,
       That merchants would gain by it,                               586
       Debtors would be ruined,                                        ——
       Consequences as to the bank,                                    ——
       Reducing guineas to 20 shillings is the same as making         587
         them a commodity,

 CHAP. XI. Method of restoring the money-unit to the standard          ——
   of Elizabeth, and the consequences of that revolution,
       How to fix the pound sterling at the standard of Queen          ——
         Elizabeth,
       The consequences of this reformation will be to raise          588
         the standard _5 per cent._
       Every interest in a nation equally intitled to                 589
         protection,
       Those who suffer by the debasement of the standard,             ——
       Ought only to benefit by the restitution,                      590
       And not the whole class of creditors,                           ——
       Whose claim ought to be liable to a conversion,                591
       According to justice and impartiality,                          ——

 CHAP. XII. _Objections_ stated against the principles laid           592
   down in this inquiry, and answers to _them_,
       That a pound will always be considered as a pound,             593
       That the standard is not debased at present, being              ——
         fixed to the statute, not to the coin,
       That the pound sterling is virtually worth 1718.7               ——
         grains fine silver,
       That these principles imply a progressive debasement of        594
         the standard every new coinage,
       That the same argument holds for debasing the standard          ——
         measures of weights, capacity, &c.
       That the wearing of the coin falls on them who possess          ——
         it at the crying down, but does not debase the
         standard,
       That inland dealings, not the price of bullion, or              ——
         course of exchange, regulate the standard,
       That public currency supports the value of the coin,            ——
       That this scheme is the same with that of Lowndes,              ——
       Answers to these objections,                                   595
       That a pound will be considered at its worth by all             ——
         debtors, and by those who buy,
       If the standard was affixed to the statute, people              ——
         would be obliged to pay by weight,
       No body can be obliged to pay 1718.7 grains fine silver        596
         for a pound sterling,
       That it is not the regulation of the mint, but the              ——
         disorder of the coin which must debase the standard,
       That people are obliged to measure by the standard             597
         weight, but are not obliged to pay by the standard
         pound,
       That the loss upon light money when called in, does not         ——
         fall upon the possessors,
       That inland dealings cannot support the standard where         599
         there are money-jobbers or foreign commerce,
       That public currency supports the authority of the             601
         coin, not the value of the pound sterling,
       That the scheme is similar, though not the same with           602
         that of Lowndes,
       Lowndes reasoned upon wrong principles,                         ——
       Locke attended to supporting the standard, without              ——
         attending to the consequences,
       Political circumstances are greatly changed,                   604
       Reconciliation of the two opinions,                            606
       The question in dispute is not understood,                     607
       The true characteristic of a change upon the standard           ——
         is not attended to,
       Principles will not operate their effects without the          608
         assistance of the state,
       When people understand one another, they soon agree,            ——
       Permanent contracts are confounded with sale in the            609
         dispute,
       The interest of creditors is always the predominant,           611
         and determines the opinion of a nation,
       Application of principles to the operation the Dutch           612
         have lately made upon their coin,
       All decisions in political questions depend upon               613
         circumstances,

 CHAP. XIII. In what sense the standard may be said to have           614
   been debased by law; and in what sense it may be said to
   have suffered a gradual debasement by the operation of
   political causes,
       These proportions appear contradictory,                         ——
       Debased by law, when affixed to the gold,                      615
       Effects which the changing the proportion of the metals         ——
         has upon melting the coin, and regulating payments,
       Payments made by bankers regulate all others,                   ——
       The standard gradually debased by the rising of the            616
         silver,
       The proportion of the metals in 1728, supposed to have          ——
         been as 15.21 is to 1.,
       By what progression the silver standard has been                ——
         debased,
       The standard of Elizabeth, for the pound sterling, was         617
         1718.7 grains silver, and 157.6 ditto gold, both
         fine,
       The gold standard of her pound worth, at present,               ——
         2285.5 grains fine silver,
       The variation of the metals has produced three                  ——
         different standards of Elizabeth,
       One worth £ 1 0 11⅜ present currency,                          618
       Another worth £ 1 7 10⅞ ditto,                                  ——
       And a third worth £ 1 4 5⅛ ditto,                               ——
       The last is the true standard of Elizabeth for the              ——
         pound sterling, and worth at present 2002 grains fine
         silver, and 138 ditto gold,
       But may vary at every moment,                                  619
       Gold rose during the whole 17th century,                        ——
       And silver has risen since the beginning of this                ——
         century,
       Some positions recapitulated,                                  620

 CHAP. XIV. Circumstances to be attended to in a new                  621
   regulation of the British coin,
       The adopting of the standard of Elizabeth, has an air           ——
         of justice,
       Advantages of that of Mary I.,                                  ——
       Conversions necessary in every case,                           622
       Every interest within the state to be examined,                 ——
       Landed interest examined,                                       ——
       Interest of the public creditors examined,                     625
       Interest of trade examined,                                    628
       Interest of buyers and sellers examined,                        ——
       Interest of the bank examined,                                 629
       Inconveniences attending all innovations,                      632
       Argument for preserving the standard at the present             ——
         value,
       That every change must either hurt the bank, or the             ——
         public creditors,
       A more easy method of making a change upon the                 633
         standard,

 CHAP. XV. Regulations which the principles of this inquiry           634
   point out as expedient to be made, by a new statute for
   regulating the British coin,
       1. Regulation as to the standard,                               ——
       2. As to the weight,                                            ——
       3. Mint price,                                                  ——
       4. Denominations,                                              635
       5. Marking the weight on the coins,                             ——
       6. Liberty to stipulate payment in gold or silver,              ——
       7. Creditors may demand payment, half in gold, and half         ——
         in silver,
       8. Regulations as to sale,                                      ——
       9. Ditto as to payments to and from banks, &c.,                 ——
       10. All coin to be of full weight, when paid away,              ——
       11. Liberty to melt or export coin, but death to clip           ——
         or wash,
       12. Rule for changing the mint price of the metals,            636
       13. When to change the mint price,                              ——
       14. Rule for changing the denomination of the coins,            ——
       15. How contracts are to be acquitted, after a change           ——
         of the denomination has taken place,
       16. The weight of the several coins never to be                638
         changed, except upon a general recoinage of one
         denomination at least,
       How these regulations will preserve the same value to           ——
         the pound sterling at all times, and how fractions in
         the denomination of coin may be avoided,
       17. Small coins to be current only for 20 years, and           639
         large coins for 40 years, or more,
       18. All foreign coins to pass for bullion only,                 ——
       Consequences of these regulations,                              ——

------------------------------------------------------------------------



                                   AN
                                INQUIRY
                                INTO THE
                   PRINCIPLES OF POLITICAL OECONOMY.

------------------------------------------------------------------------


                                BOOK I.
                     OF POPULATION AND AGRICULTURE.

------------------------------------------------------------------------



                             INTRODUCTION.


Oeconomy in general is the art of providing for all the wants of a
family, with prudence and frugality.

If any thing necessary or useful is found wanting, if any thing provided
is lost or misapplied, if any servant, any animal, is supernumerary or
useless, if any one sick or infirm is neglected, we immediately perceive
a want of oeconomy. The object of it, in a private family, is therefore
to provide for the nourishment, the other wants, and the employment of
every individual. In the first place, for the master, who is the head,
and who directs the whole; next for the children, who interest him above
all other things; and last for the servants, who being useful to the
head, and essential to the well-being of the family, have therefore a
title to become an object of the master’s care and concern.

The whole oeconomy must be directed by the head, who is both lord and
steward of the family. It is however necessary, that these two offices
be not confounded with one another. As lord, he establishes the laws of
his oeconomy; as steward, he puts them in execution. As lord, he may
restrain and give his commands to all within the house as he thinks
proper; as steward, he must conduct with gentleness and address, and is
bound by his own regulations. The better the oeconomist, the more
uniformity is perceived in all his actions, and the less liberties are
taken to depart from stated rules. He is no ways master to break through
the laws of his oeconomy, although in every respect he may keep each
individual within the house, in the most exact subordination to his
commands. Oeconomy and government, even in a private family, present
therefore two different ideas, and have also two different objects.

What oeconomy is in a family, political oeconomy is in a state: with
these essential differences however, that in a state there are no
servants, all are children: that a family may be formed when and how a
man pleases, and he may establish what plan of oeconomy he thinks fit;
but states are found formed, and the oeconomy of these depends upon a
thousand circumstances. The statesman (this is a general term to signify
the head, according to the form of government) is neither master to
establish what oeconomy he pleases, or in the exercise of his sublime
authority to overturn at will the established laws of it, let him be the
most despotic monarch upon earth.

The great art therefore of political oeconomy is, first to adapt the
different operations of it to the spirit, manners, habits, and customs
of the people, and afterwards to model these circumstances so, as to be
able to introduce a set of new and more useful institutions.

The principal object of this science is to secure a certain fund of
subsistence for all the inhabitants, to obviate every circumstance which
may render it precarious; to provide every thing necessary for supplying
the wants of the society, and to employ the inhabitants (supposing them
to be freemen) in such a manner as naturally to create reciprocal
relations and dependencies between them, so as to make their several
interests lead them to supply one another with their reciprocal wants.

If one considers the variety which is found in different countries, in
the distribution of property, subordination of classes, genius of
people, proceeding from the variety of forms of government, laws, and
manners, one may conclude, that the political oeconomy in each must
necessarily be different, and that principles, however universally true,
may become quite ineffectual in practice, without a sufficient
preparation of the spirit of a people.

It is the business of a statesman to judge of the expediency of
different schemes of oeconomy, and by degrees to model the minds of his
subjects so as to induce them, from the allurement of private interest,
to concur in the execution of his plan.

The speculative person, who removed from the practice, extracts the
principles of this science from _observation_ and _reflection_, should
divest himself, as far as possible, of every prejudice, in favour of
established opinions, however reasonable, when examined relatively to
particular nations: he must do his utmost to become a citizen of the
world, comparing customs, examining minutely institutions which appear
alike, when in different countries they are found to produce different
effects: he should examine the cause of such differences with the utmost
diligence and attention. It is from such inquiries that the true
principles are discovered.

He who takes up the pen upon this subject, keeping in his eye the
customs of his own or any other country, will fall more naturally into a
description of one particular system of it, than into an examination of
the principles of the science in general: he will applaud such
institutions as he finds rightly administred at home; he will condemn
those which are administred with abuse; but, without comparing different
methods of executing the same plan in different countries, he will not
easily distinguish the disadvantages which are essential to the
institution, from those which proceed from the abuse. For this reason a
land tax excites the indignation of a Frenchman, an excise that of an
Englishman. One who looks into the execution of both, in each country,
and in every branch of management, will discover the real effects of
these impositions, and be able to distinguish what proceeds from abuse,
from what is essential to the burden.

Nothing is more effectual towards preparing the spirit of a people to
receive a good plan of oeconomy, than a proper representation of it. On
the other hand, nothing is better calculated to keep the statesman, who
is at the head of affairs, in awe.

When principles are well understood, the real consequences of burdensome
institutions are clearly seen: when the purposes they are intended for,
are not obtained, the abuse of the statesman’s administration appears
palpable. People then will not so much cry out against the imposition,
as against the misapplication. It will not be a land tax of four
shillings in the pound, nor an excise upon wines and tobacco, which will
excite the murmurs of a nation; it will be the prodigal dissipation and
misapplication of the amount of these taxes after they are laid on. But
when principles are not known, all inquiry is at an end, the moment a
nation can be engaged to submit to the burden. It is the same with
regard to every other part of this science.

Having pointed out the object of my pursuit, I shall only add, that my
intention is to attach myself principally to a clear deduction of
principles, and a short application of them to familiar examples, in
order to avoid abstraction as much as possible. I farther intend to
confine myself to such parts of this extensive subject, as shall appear
the most interesting in the general system of modern politics, of which
I shall treat with that spirit of liberty, which reigns more and more
every day, throughout all the polite and flourishing nations of Europe.

When I compare the elegant performances which have appeared in Great
Britain and in France with my dry and abstracted manner of treating the
same subject, in a plain language void of ornament, I own I am
discouraged on many accounts. If I am obliged to set out by laying down
as fundamental principles the most obvious truths, I dread the
imputation of pedantry, and of pretending to turn common sense into
science. If I follow these principles through a minute detail, I may
appear trifling. I therefore hope the reader will believe me, when I
tell him, that these defects have not escaped my discernment, but that
my genius, the nature of the work, and the connection of the subject,
have obliged me to write in an order and in a stile where every thing
has been sacrificed to perspicuity.

My principal aim shall be to discover truth, and to enable my reader to
touch the very link of the chain where I may at any time go astray.

My business shall not be to seek for new thoughts, but to reason
consequentially; and if any thing new be found, it will be in the
conclusions.

Long steps in political reasoning lead to error; close reasoning is
tedious, and to many appears trivial: this however must be my plan, and
my consolation is, that the further I advance, I shall become the more
interesting.

Every supposition must be considered as strictly relative to the
circumstances presupposed; and though, in order to prevent
misapplication, and to avoid abstraction as much as possible, I
frequently make use of examples for illustrating every principle; yet
these, which are taken from matters of fact, must be supposed divested
of every foreign circumstance inconsistent with the supposition.

I shall combat no particular opinion in such intricate matters; though
sometimes I may pass them in review, in order to point out how I am led
to differ from them.

I pretend to form no system, but by following out a succession of
principles, consistent with the nature of man and with one another, I
shall endeavour to furnish some materials towards the forming of a good
one.



                                CHAP. I.
                    _Of the Government of Mankind._


Man we find acting uniformly in all ages, in all countries, and in all
climates, from the principles of self-interest, expediency, duty, or
passion. In this he is alike, in nothing else.

These motives of human actions produce such a variety of combinations,
that if we consider the several species of animals in the creation, we
shall find the individuals in no class so unlike to one another, as man
to man. No wonder then if people differ in opinion with regard to every
thing which relates to man.

As this noble animal is a sociable creature, both from necessity and
inclination, we also find, in all ages, climates and countries, a
certain modification of government and subordination established among
them. Here again we are presented with as great variety as there are
different societies; all however agreeing in this, that the end of a
_voluntary_ subordination to authority is with a view to promote the
general good.

Constant and uninterrupted experience has proved to man, that virtue and
justice in those who govern, are sufficient to render the society happy,
under any form of government. Virtue and justice when applied to
government mean no more than a tender affection for the whole society,
and an exact and impartial regard for the interest of every class.

All actions, and indeed all things, are good or bad only by relation.
Nothing is so complex as relations when considered with regard to a
society, and nothing is so difficult as to discover truth when involved
and blended with these relations.

We must not conclude from this, that every operation of government
becomes problematical and uncertain as to its consequences: some are
evidently good; others are notoriously bad: the middle terms are always
the least essential, and the more complex they appear to a discerning
eye, the more trivial they are found to be in their immediate
consequences.

A government must be continually in action, and one principal object of
its attention must be, the consequences and effects of new institutions.

Experience alone will shew, what human prudence could not foresee; and
mistakes must be corrected as often as expediency requires.

All governments have what they call their fundamental laws; but
fundamental, that is, invariable laws, can never subsist among men, the
most variable thing we know: the only fundamental law, _salus populi_,
must ever be relative, like every other thing. But this is rather a
maxim than a law.

It is however expedient, nay absolutely necessary, that in every state,
certain laws be supposed fundamental and invariable: both to serve as a
curb to the ambition of individuals, and to point out to the statesman
the out-lines, or sketch of that plan of government, which experience
has proved to be the best adapted to the spirit of his people.

Such laws may even be considered as actually invariable, while a state
subsists without convulsions or revolutions: because then the
alterations are so gradual, that they become imperceptible to all, but
the most discerning, who compare the customs and manners of the same
people in different periods of time and under different combinations of
circumstances.

As we have taken for granted the fundamental maxim, that every operation
of government should be calculated for the good of the people, so we may
with equal certainty decide, that in order to make a people happy, they
must be governed according to the spirit which prevails among them.

I am next to explain what I mean by the spirit of a people, and to shew
how far this spirit must be made to influence the government of every
society.

------------------------------------------------------------------------



                               CHAP. II.
                      _Of the Spirit of a People._


The spirit of a people is formed upon a set of received opinions
relative to three objects; morals, government, and manners: these once
generally adopted by any society, confirmed by long and constant habit,
and never called in question, form the basis of all laws, regulate the
form of every government, and determine what is commonly called the
customs of a country.

To know a people we must examine them under those general heads. We
acquire the knowledge of their morals with ease, by consulting the
tenets of their religion, and from what is taught among them by
authority and under direction.

The second, or government, is more disguised, as it is constantly
changing from circumstances, partly resulting from domestic and partly
from foreign considerations. A thorough knowledge of their history, and
conversation with their statesmen, may give one, who has access to these
helps, a very competent knowledge of this branch.

The last, or the knowledge of the manners of a people, is by far the
most difficult to acquire, and yet is the most open to every person’s
observation. Certain circumstances with regard to manners are supposed
by every one in the country to be so well known, so generally followed
and observed, that it seldom occurs to any body to inform a stranger
concerning them. In one country nothing is so injurious as a stroke with
a stick, or even a gesture which implies a design or a desire to
strike[B]: in another a stroke is nothing, but an opprobrious expression
is not to be borne[C]. An innocent liberty with the fair sex, which in
one country passes without censure, is looked upon in another as the
highest indignity[D].

Footnote B:

  France.

Footnote C:

  Germany.

Footnote D:

  Spain.

In general, the opinion of a people with regard to injuries is
established by custom only, and nothing is more necessary in government,
than an exact attention to every circumstance peculiar to the people to
be governed.

The kingdom of Spain was lost for a violence committed upon chastity[E];
the city of Genoa for a blow[F]; the kingdoms of Naples and Sicily have
ever been ready to revolt; because having been for many ages under the
dominion of strangers, the people have never been governed according to
the true spirit of their manners. Let us consult the revolutions of all
countries, and we shall find, that the most trivial circumstances have
had a greater influence on the event, than the more weighty reasons,
which are always set forth as the real motives. I need not enlarge upon
this subject, my intention is only to suggest an idea which any one may
pursue, and which will be applied upon many occasions as we go along;
for there is no treating any point which regards the political oeconomy
of a nation, without accompanying the example with some supposition
relative to the spirit of the people. I return.

Footnote E:

  By Roderigo, the last king of the Gothic line.

Footnote F:

  Given by an Austrian officer to a Genoese, which occasioned the revolt
  in 1747, by which the Germans were expelled the city.

I have said, that the most difficult thing to learn concerning a people,
is the spirit of their manners. Consequently, the most difficult thing
for a stranger to adopt, is their manner. Men acquire the language, nay
even lose the foreign accent, before they lose the oddity of their
manner. The reason is plain. The inclinations must be changed, the taste
of amusement must be new modelled; established maxims upon government,
manners, nay even upon some moral actions, must undergo certain new
modifications, before the stranger’s conversation and behaviour becomes
consistent with the spirit of the people with whom he lives.

From these considerations, we may find the reason, why nothing is more
heavy to bear than the government of conquerors, in spite of all their
endeavours to render themselves agreeable to the conquered. Of this
experience has ever proved the truth, and princes are so much persuaded
of it, that when a country is subdued in our days, or when it otherwise
changes masters, there is seldom any question of altering, but by very
slow degrees and length of time, the established laws and customs of the
inhabitants. I might safely say, there is no form of government upon
earth so excellent in itself, as, necessarily, to make the people happy
under it. Freedom itself, _imposed_ upon a people groaning under the
greatest slavery, will not make them happy, unless it is made to undergo
certain modifications, relative to their established habits.

Having explained what I mean by the spirit of a people, I come next to
consider, how far this spirit must influence government.

If governments be taken in general, we shall find them analogous to the
spirit of the people. But the point under consideration is, how a
statesman is to proceed, when expediency and refinement require a change
of administration, or when it becomes necessary from a change of
circumstances.

The great alteration in the affairs of Europe within these three
centuries, by the discovery of America and the Indies, the springing up
of industry and learning, the introduction of trade and the luxurious
arts, the establishment of public credit, and a general system of
taxation, have entirely altered the plan of government every where.

From feudal and military, it is become free and commercial. I oppose
freedom in government to the feudal system, only to mark that there is
not found now, that chain of subordination among the subjects, which
made the essential part of the feudal form. The head there had little
power, and the lower classes of the people little liberty. Now every
industrious man, who lives with oeconomy, is free and independent, under
most forms of government. Formerly, the power of the barons swallowed up
the independency of all inferior classes. I oppose commercial to
military, only because the military governments now are made to subsist
from the consequences and effects of commerce: that is, from the revenue
of the state, proceeding from taxes. Formerly, every thing was brought
about by numbers; now, numbers of men cannot be kept together without
money.

This is sufficient to point out the nature of the revolution in the
political state, and of consequence in the manners of Europe.

The spirit of a people changes no doubt of itself, but by slow degrees.
The same generation commonly adheres to the same principles, and retains
the same spirit. In every country we find two generations upon the stage
at a time; that is to say, we may distribute into two classes the spirit
which prevails; the one amongst men between twenty and thirty, when
opinions are forming; the other of those who are past fifty, when
opinions and habits are formed and confirmed. A person of judgment and
observation may foresee many things relative to government, from an
exact application to the rise and progress of new customs and opinions,
provided he preserve his mind free from all attachments and prejudices,
in favour of those which he himself has adopted, and in that delicacy of
sensation necessary to perceive the influence of a change of
circumstances. This is the genius proper to form a great statesman.

In every new step the spirit of the people should be first examined, and
if that be not found ripe for the execution of the plan, it ought to be
put off, kept entirely secret, and every method used to prepare the
people to relish the innovation.

The project of introducing popery into England was blown before it was
put in practice, and so misgave. Queen Elizabeth kept her own secret,
and succeeded in a similar attempt. The scheme of a general excise was
pushed with too much vivacity, was made a matter of party, ill-timed,
and the people nowise prepared for it; hence it will be the more
difficult to bring about at another time, without the greatest
precautions.

In turning and working upon the spirit of a people, nothing is
impossible to an able statesman. When a people can be engaged to murder
their wives and children, and to burn themselves, rather than submit to
a foreign enemy, when they can be brought to give their most precious
effects, their ornaments of gold and silver, for the support of a common
cause; when women are brought to give their hair to make ropes, and the
most decrepit old men to mount the walls of a town for its defence; I
think I may say, that by properly conducting and managing the spirit of
a people, nothing is impossible to be accomplished. But when I say,
nothing is impossible, I must be understood to mean, that nothing
essentially necessary for the good of the people is impossible; and this
is all that is required in government.

That it requires a particular talent in a statesman to dispose the minds
of a people to approve even of the scheme which is the most conducive to
their interest and prosperity, appears from this; that we see examples
of wise, rich and powerful nations languishing in inactivity, at a time
when every individual is animated with a quite contrary spirit; becoming
a prey to their enemies, like the city of Jerusalem, while they are
taken up with their domestic animosities, only because the remedies
proposed against these evils contradict the spirit of the times[G].

Footnote G:

  This was writ in the year 1756, about the time the island of Minorca
  was taken by the French.

The great art of governing is to divest one’s self of prejudices and
attachments to particular opinions, particular classes, and above all to
particular persons; to consult the spirit of the people, to give way to
it in appearance, and in so doing to give it a turn capable of inspiring
those sentiments which may induce them to relish the change, which an
alteration of circumstances has rendered necessary.

Can any change be greater among free men, than from a state of absolute
liberty and independency to become subject to constraint in the most
trivial actions? This change has however taken place over all Europe
within these three hundred years, and yet we think ourselves more free
than ever our fathers were. Formerly a gentleman who enjoyed a bit of
land knew not what it was to have any demand made upon him, but in
virtue of obligations by himself contracted. He disposed of the fruits
of the earth, and of the labour of his servants or vassals, as he
thought fit. Every thing was bought, sold, transferred, transported,
modified, and composed, for private consumption, or for public use,
without ever the state’s being once found interested in what was doing.
This, I say, was formerly the general situation of Europe, among free
nations under a regular administration; and the only impositions
commonly known to affect landed men were made in consequence of a
contract of subordination, feudal or other, which had certain
limitations; and the impositions were appropriated for certain purposes.

Daily experience shews, that nothing is more against the inclinations of
a people, than the imposition of taxes; and the less they are accustomed
to them, the more difficult it is to get them established.

The great abuse of governors in the application of taxes contributes not
a little to augment and entertain this repugnancy in the governed: but
besides abuse, there is often too little management used to prepare the
spirits of the people for such innovations: for we see them upon many
occasions submitting with chearfulness to very heavy impositions,
provided they be well-timed, and consistent with their manners and
disposition. A French gentleman, who cannot bear the thought of being
put upon a level with a peasant in paying a land tax, pays contentedly,
in time of war, a general tax upon all his effects, under a different
name. To pay for your head is terrible in one country; to pay for light
appears as terrible in another.

It often happens, that statesmen take the hint of new impositions from
the example of other nations, and not from a nice examination of their
own domestic circumstances. But when these are rightly attended to, it
becomes easy to discover the means of executing the same plan, in a way
quite adapted to the spirit, temper, and circumstances of the people.
When strangers are employed as statesmen, the disorder is still greater,
unless in cases of most extraordinary penetration, temper, and above all
flexibility and discretion.

Statesmen have sometimes recourse to artifice instead of reason, because
their intentions often are not upright. This destroys all confidence
between them and the people; and confidence is necessary when you are in
a manner obliged to ask a favor, or when at least what you demand is not
indisputably your right. A people thus tricked into an imposition,
though expedient for their prosperity, will oppose violently, at another
time, a like measure, even when essential to their preservation.

At other times, we see statesmen presenting the allurement of present
ease, precisely at the time when people’s minds are best disposed to
receive a burden. I mean when war threatens, and when the mind is heated
with a resentment of injuries. Is it not wonderful, at such a time as
this, to increase taxes only in proportion to the interest of money
wanted; does not this imply a shortsightedness, or at least an
indifference as to what is to come? Is it not more natural, that a
people should consent to come under burdens to gratify revenge, than
submit to repay a large debt when their minds are in a state of
tranquillity.

From the examples I have given, I hope what I mean by the spirit of a
people is sufficiently understood, and I think I have abundantly shewn
the necessity of its being properly disposed, in order to establish a
right plan of oeconomy. This is so true, that many examples may be
found, of a people’s rejecting the most beneficial institutions, and
even the greatest favors, only because some circumstance had shocked
their established customs. No wonder then, if we see them refuse to come
under limitations, restraints and burdens, when the utmost they can be
flattered with from them, is a distant prospect of national good.

I have found it necessary to premise these general reflections, in order
to obviate many objections which might naturally enough occur in the
perusal of this inquiry. I shall have occasion to make a number of
suppositions, and to draw consequences from them, which are abundantly
natural, if a proper spirit in the people be presupposed, but which
would be far from being natural without this supposition. I suppose, for
example, that a poor man, loaded with many children, would be glad to
have the state maintain them; that another, who has wasted lands, would
be obliged to one who would gratuitously build him a farm-house upon it.
Yet in both suppositions I may prove mistaken; for fathers there are,
who would rather see their children dead than out of their hands; and
proprietors are to be found, who, for the sake of hunting, would lay the
finest country in Europe into a waste.

In order to communicate an adequate idea of what I understand by
political oeconomy, I have explained the term, by pointing out the
object of the art; which is, to provide food, other necessaries, and
employment to every one of the society.

This is a very simple and a very general method of defining a most
complicated operation.

To provide a proper employment for all the members of a society, is the
same as to model and conduct every branch of their concerns.

Upon this idea, I think, may be formed the most extensive basis for an
inquiry into the principles of political oeconomy.

The next thing to be done, is to fall upon a distinct method of
analysing so extensive a subject, by contriving a train of ideas, which
may be directed towards every part of the plan, and which, at the same
time, may be made to arise methodically from one another.

For this purpose I have taken a hint from what the late revolutions in
the politics of Europe have pointed out to be the regular progress of
mankind, from great simplicity to complicated refinement.

This first book shall then set out by taking up society in the cradle,
as I may say. I shall then examine the principles which influence their
multiplication, the method of providing for their subsistence, the
origin of their labour, the effects of their liberty and slavery, the
distribution of them into classes, with some other topics which relate
to mankind in general.

Here we shall find the principles of industry influencing the
multiplication of mankind, and the cultivation of the soil. This I have
thrown in on purpose to prepare my reader for the subject of the second
book; where he will find the same principle (under the wings of liberty)
providing an easy subsistence for a numerous populace, by the means of
trade, which sends the labour of an industrious people over the whole
world.

From the experience of what has happened these last two hundred years,
we find to what a pitch the trade and industry of Europe has increased
alienations, and the circulation of money. I shall, therefore, closely
adhere to these, as the most immediate consequences of the preceding
improvement; and, by analysing them, I shall form my third book, in
which I intend to treat of credit.

We see also how credit has engaged nations to avail themselves of it in
their wars, and how, by the use of it, they have been led to contract
debts; which they never can satisfy and pay, without imposing taxes. The
doctrine then of debts and taxes will very naturally follow that of
credit in this great chain of political consequences.

By this kind of historical clue, I shall conduct myself through the
great avenues of this extensive labyrinth; and in my review of every
particular district, I shall step from consequence to consequence, until
I have penetrated into the utmost recesses of my own understanding.

When a subject is broken off, I shall render my transitions as gradual
as I can, by still preserving some chain of connexion; and although I
cannot flatter myself (in such infinite variety of choice, as to order
and distribution) to hit off, at all times, that method, which may
appear to every reader the most natural and the most correct, yet I
shall spare no pains in casting the materials into different forms, so
as to make the best distribution of them in my power.

------------------------------------------------------------------------



                               CHAP. III.
    _Upon what Principles, and from what_ natural Causes _do Mankind
  multiply? And what are the effects of Procreation in Countries where
                  Numbers are not found to increase?_


The multiplication of mankind has been treated of in different ways;
some have made out tables to shew the progression of multiplications,
others have treated the question historically. The state of numbers in
different ages of the world, or in different countries at different
times, has been made the object of inquiry; and the most exact scrutiny
into antient authors, the means of investigating the truth of this
matter. All passages relative to the subject have been laid together,
and accompanied with glosses and interpretations the most plausible, in
order to determine the main question. The elaborate performances of Mr.
Hume, and Mr. Wallace, who have adopted opposite opinions in regard to
the populousness of the antient world, have left nothing new to be said
upon this subject; at least the application they appear to have given in
examining the antients, is a great discouragement to any one who might
otherwise still flatter himself, there, to find out circumstances proper
to cast a new light upon the question.

My intention in this chapter is not to decide, nor even to give my
opinion upon that matter, far less to combat the arguments advanced on
either side. I am to consider the question under a different point of
view; not to enquire what numbers of people were found upon the earth at
a certain time, but to examine the natural and rational causes of
multiplication. If we can discover these, we may perhaps be led to judge
how far they might have operated in different ages and in different
countries.

The fundamental principle of the multiplication of all animals, and
consequently of man, is generation; the next is food: generation gives
existence, food preserves it. Did the earth produce of itself the proper
nourishment for man, with unlimited abundance, we should find no
occasion to labour in order to procure it. Now in all countries found
inhabited, as in those which have been found desolate, if the state of
animals be inquired into, the number of them will be found in proportion
to the quantity of food produced by the earth, _regularly throughout the
year_, for their subsistence. I say, regularly throughout the year,
because we perceive in those animals which produce in great abundance,
such as all the feathered genus, that vast multitudes are destroyed in
winter; they are brought forth with the fruits of the earth, and fall in
proportion. This principle is so natural, that I think it can hardly be
controverted.

As to man, the earth does not spontaneously produce nourishment for him
in any considerable degree. I allow that as some species of animals
support life by devouring others, so may man; but it must be observed,
that the species feeding must always be much inferior in number to the
species fed upon. This is evident in reason and in fact.

Were the earth therefore uncultivated, the numbers of mankind would not
exceed the proportion of the spontaneous fruits which she offers for
their immediate use, or for that of the animals which might be the
proper nourishment of man.

There is therefore a certain number of mankind which the earth would be
able to maintain without any labour: allow me to call this quantity (A).
Does it not, from this exposition of the matter, appear plain, that
without labour (A) never can increase any more than animals, which do
not work for themselves, can increase beyond the proportion of food
provided for them by nature? Let it be however observed, that I do not
pretend to limit (A) to a determined number. The seasons will no doubt
influence the numbers of mankind, as we see they influence the plenty of
other animals; but I say (A) will never increase beyond the fixed
proportion above-mentioned.

Having resolved one question with regard to multiplication, and shewn
that numbers must become greater or smaller according to the productions
of nature, I come to the second thing proposed to be treated of in the
chapter: to wit, what will become of the generative faculty after it has
produced the full proportion of (A), and what effects will afterwards
follow.

We see how beneficent, I might have said prodigal, nature is, in
bestowing life by generation. Several kinds of animals, especially
insects, multiply by thousands, and yet the species does not appear
annually to increase. No body can pretend that particular individuals of
any species have a privilege to live, and that others die from a
difference in their nature. It is therefore reasonable to conclude, that
what destroys such vast quantities of those produced, must be, among
other causes, the want of food. Let us apply this to man.

Those who are supposed to be fed with the spontaneous fruits of the
earth, cannot, from what has been said, multiply beyond that proportion;
at the same time the generative faculty will work its natural effects in
augmenting numbers. The consequence will be, that certain individuals
must become worse fed, consequently weaker; consequently, if in that
weakly state, nature should withold a part of her usual plenty, the
whole multitude will be affected by it; a disease may take place, and
sweep off a far greater number than that proportioned to the deficiency
of the season. What results from this? That those who have escaped,
finding food more plentiful, become vigorous and strong; generation
gives life to additional numbers, food preserves it, until they rise up
to the former standard.

Thus the generative faculty resembles a spring loaded with a weight,
which always exerts itself in proportion to the diminution of
resistance: when food has remained some time without augmentation or
diminution, generation will carry numbers as high as possible; if then
food come to be diminished, the spring is overpowered; the force of it
becomes less than nothing. Inhabitants will diminish, at least, in
proportion to the overcharge. If upon the other hand, food be increased,
the spring which stood at 0, will begin to exert itself in proportion as
the resistance diminishes; people will begin to be better fed; they will
multiply, and in proportion as they increase in numbers, the food will
become scarce again.

I must here subjoin a remark very analogous to this subject. That the
generative faculty in man (which we have compared to a spring) and the
care and love we have for our children, first prompt us to multiply, and
then engage us to divide what we have with our little ones. Thus from
dividing and subdividing it happens, that in every country where food is
limited to a certain quantity, the inhabitants must be subsisted in a
regular progression, descending down from plenty and ample subsistence,
to the last periods of want, and even sometimes starving for hunger.

Although the examples of this last extremity are not common in some
countries, yet I believe they are more so than is generally imagined;
and the other stages of want are productive of many diseases, and of a
decay which extinguishes the faculty of generation, or which weakens it,
so as to produce children less vigorous and less healthy. I appeal to
experience, if this reasoning be not just.

Put two or three pairs of rabbits into a field proper for them, the
multiplication will be rapid; and in a few years the warren will be
stocked: you may take yearly from it a hundred pairs, I shall suppose,
and keep your warren in good order: give over taking any for some years,
you will perhaps find your original stock rather diminished than
increased, for the reasons above mentioned. Africa yearly furnishes many
thousands for the cultivation of America; in this she resembles the
warren. I have little doubt but that if all her sons were returned to
her, by far the greater part would die of hunger.

------------------------------------------------------------------------



                               CHAP. IV.
   _Continuation of the same Subject, with regard to the natural and
          immediate effects of Agriculture, as to Population._


I proceed in my examination. I now suppose man to add his labour and
industry to the natural activity of the soil: in so far, as by this he
produces an additional quantity of food, in so far he lays a foundation
for the maintenance of an additional number. This number I shall call
(B). From this I conclude, that as (A) is in a constant proportion to
the spontaneous fruits, so (B) must be in proportion to agriculture (by
this term I understand at present every method of augmenting food by
labour) consequently the number maintained by the labour of mankind must
be to the whole number of mankind as (B) is to (A + B), or as (B) is to
(A) and (B) jointly.

By this operation we find mankind immediately divided into two classes;
those who, without working, live upon the spontaneous fruits of the
earth; that is, upon milk, cattle, hunting, &c. The other part, those
who are obliged to labour the soil. It is proper next to inquire what
should naturally oblige a man to labour; and what are the natural
consequences of it as to multiplication.

We have already said, that the principle of generation is inherent in
man, and prompts him to multiply. Another principle, as naturally
inherent in the mind, as the first is in the body, is self-love, or a
desire of ease and happiness, which prompts those who find in themselves
any superiority; whether personal, or political, to make use of every
natural advantage. Consequently, such will multiply proportionably:
because by appropriating to themselves the fruits of the earth, they
have the means of subsisting their offspring. The others, I think, will
very naturally become their servants; as this method is of all others
the most easy to procure subsistence. This is so analogous to the nature
of man, that we see every where, even among children, that the smallest
superiority in any one over the rest, constantly draws along with it a
tribute of service in one way or other. Those who become servants for
the sake of food, will soon become slaves: for slavery is but the abuse
of service, established by a civil institution; and men who find no
possibility of subsisting otherwise, will be obliged to serve upon the
conditions prescribed to them.

This seems a consequence not unnatural in the infancy of the world: yet
I do not pretend to affirm that this was the origin of slavery.
Servants, however, there have always been; and the abuse of service is
what we understand by slavery. The subordination of children to their
parents, and of servants to their masters, seems to be the most rational
origin of society and government. The first of these is natural, and
follows as the unavoidable consequence of an entire dependence: the
second is political, and may very naturally take place as to those who
cannot otherwise procure subsistence. This last species of subordination
may, I think, have taken place, the moment man became obliged to labour
for subsistence, but no sooner.

The wants of man are not confined to food, merely. When food is to be
produced from the rude surface of the earth, a great part of his time
must be taken up with this object, even supposing him to be provided
with every utensil proper for the exercise of his industry: he must
therefore be in a worse condition to provide for his other wants:
consequently, he may be willing to serve any one who will do it for him.
Whereas on the other hand, if we suppose all mankind idle and fed,
living upon the spontaneous fruits of the earth, the plan of universal
liberty becomes quite natural: because under such circumstances they
find no inducement to come under a voluntary subordination.

Let us now borrow the idea of a primitive society, of a government, of a
king, from the most antient history we have, the better to point out the
effects of agriculture and multiplication. The society is the whole
taken together; it is Jacob, his sons, their wives, their children, and
all the servants. The government regards the institutions prescribed by
Jacob, to every one of the family, concerning their respective
subordination and duty. Multiplication will here go forward, not in
proportion to the generative faculty, but according to the employment of
the persons already generated. If Jacob continue pasturing his herds, he
must extend the limits of his right of pasture; he must multiply his
stock of cattle, in proportion as the mouths of his family augment. He
is charged with all this detail: for he is master, and director, and
statesman, and general provider. His servants will work as they are
ordered; but if he has not had the proper foresight, to break up lands
so soon as his family comes nearly up to that proportion which his
flocks can easily feed; if in this case, a dry season should burn up the
grass in Palestine, he will be obliged to send some of his stock of
cattle, with some of his family, to market, there to be sold; and with
the price he must buy corn. For in this early age, there was money,
there were manufacturers of sackcloth, of common rayment, and of
party-coloured garments; there was a trade in corn, in spicery, balm,
and myrrh. Jacob and his family were shepherds, but they lived not
entirely on flesh; they eat bread: consequently there was tillage in
those days, though they exercised none. The famine however was ready to
destroy them, and probably would have done it, but for the providential
circumstance of Joseph’s being governor of Egypt. He relieved their
distress, he gave to his family the best country in the whole kingdom
for pasture; and they had a gratuitous supply of bread.

No doubt, so long as these favourable circumstances subsisted,
multiplication would go on apace. What supernatural assistance God was
pleased to grant for the increase of his chosen people, does not concern
my inquiry.

I have mentioned transiently this example of the patriarch, only to
point out how antient the use of money, the invention of trade and
manufactures appear to have been. Without such previous establishments,
I consider mankind as savages, living on the spontaneous fruits of the
earth, as in the first supposition; and confined, as to numbers, to the
actual extent of these productions.

From what has been said, we may conclude, that the numbers of mankind
must depend upon the quantity of food produced by the earth for their
nourishment; from which, as a corollary, may be drawn,

That mankind have been, as to numbers, and must ever be, in proportion
to the food produced; and that the food produced will be in the compound
proportion of the fertility of the climate, and the industry of the
inhabitants.

From this last proposition it appears plain, that there can be no
general rule for determining the number of inhabitants necessary for
agriculture, not even in the same country. The fertility of the soil
when laboured; the ease of labouring it; the quantity of good
spontaneous fruits; the plenty of fish in the rivers and sea; the
abundance of wild birds and beasts; have in all ages, and ever must
influence greatly the nourishment, and, consequently, regulate the
multiplication of man, and determine his employment.

To make an establishment in a country not before inhabited, to root out
woods, destroy wild and venomous animals, drain marshy grounds, give a
free course to water, and to lay down the surface into corn fields, must
surely require more hands than to cultivate the same after it is
improved. For the truth of this, I appeal to our American brethren.

We may therefore conclude, that the most essential requisite for
population, is that of agriculture, or the providing of subsistence.
Upon this all the rest depends: while subsistence is upon a precarious
footing, no statesman can turn his attention to any thing else.

The great importance of this object has engaged some to imagine, that
the luxurious arts, in our days, are prejudicial both to agriculture and
multiplication. It is sometimes a loss to fix one’s attention too much
upon any one object, however important. No body can dispute that
agriculture is the foundation of multiplication, and the most essential
requisite for the prosperity of a state. But it does not follow from
this, that almost every body in the state should be employed in it; that
would be inverting the order of things, and turning the servant into the
master. The duty and business of man is not to feed; he is fed, in order
to do his duty, and to become useful.

It is not sufficient for my purpose to know, that the introduction of
agriculture, by multiplying the quantity of the earth’s productions,
does evidently tend to increase the numbers of mankind. I must examine
the _political causes_ which must concur, in order to operate this
effect.

For this purpose, my next inquiry shall be directed towards discovering
the true principles which influence the employment of man, with respect
to agriculture. I shall spare no pains in examining this point to the
bottom, even though it should lead me to anticipate some branches of my
subject.

I shall endeavour to lay down principles consistent with the nature of
man, with agriculture, and with multiplication, in order, by their
means, to discover both the use and abuse of the two last. When these
parts are well understood, the rest will go on more smoothly, and I
shall find the less occasion to interrupt my subject, in order to
explain the topics upon which the whole depends.

------------------------------------------------------------------------



                                CHAP. V.
   _In what Manner, and according to what Principles, and_ political
             Causes, _does Agriculture augment Population_?


I have already shewn, how the spontaneous fruits of the earth provide a
fund of nourishment for a determined number of men, and I have slightly
touched upon the consequences of adding labour to the natural activity
of the soil.

Let me now carry this inquiry a little farther. Let me suppose a country
fertile in spontaneous productions, capable of improvements of every
kind, inhabited by a people living under a free government, and in the
most refined simplicity, without trade, without the luxurious arts, and
without ambition. Let me here suppose a statesman, who shall inspire a
taste for agriculture and for labour into those who formerly consumed
the spontaneous fruits of the earth in ease and idleness. What will
become of this augmentation of food produced by this additional labour?

The sudden increase of food, such as that here supposed, will
immediately diffuse vigour into all; and if the additional quantity be
not very great, no superfluity will be found. No sooner will the
inhabitants be fully nourished, but they will begin to multiply a-new;
then they will come to divide with their children, and food will become
scarce again.

Thus much is necessary for the illustration of one principle; but the
effects, which we have been pointing out, will not be produced barely by
engaging those who lived by hunting (I suppose) to quit that trade, and
turn farmers. The statesman must also find out a method to make the
produce of this new branch of industry circulate downwards, so as to
relieve the wants of the most necessitous. Otherwise, the plenty
produced, remaining in the hands of those who produced it, will become
to them an absolute superfluity; which, had they any trade with a
neighbouring state, they would sell, or exchange, and leave their fellow
citizens to starve. And as we suppose no trade at all, this superfluity
will perish like their cherries, in a year of plenty; and consequently
the farmers will immediately give over working.

If, to prevent this inconveniency, the statesman forces certain classes
to labour the soil, and, with discretion, distributes the produce of it
to all that have occasion for subsistence, taking in return their
services for the public benefit; this will prove an infallible way of
multiplying inhabitants, of making them laborious, and of preserving a
simplicity of manners; but it is also the picture of antient slavery,
and is therefore excluded from the supposition.

If he acts consistently with that spirit of liberty, which we have
supposed to animate his subjects, he has no method left, but to contrive
different employments for the hands of the necessitous, that, by their
labour, they may produce an equivalent which may be acceptable to the
farmers, in lieu of this superfluity; for these last will certainly not
raise it, if they cannot dispose of it; nor will they dispose of it, but
for a proper equivalent. This is the only method (in a free state) of
procuring additional food, and of distributing it through the society,
as the price of those hours which before were spent in idleness: and, as
this will prove a more certain and more extensive fund of subsistence,
than the precarious productions of spontaneous fruits, which cannot be
increased at discretion, and in proportion to demand, it will greatly
increase numbers; but, on the other hand, it must evidently destroy that
simplicity of manners which naturally reigns among nations who do not
labour.

A people, therefore, who have an industrious turn, will multiply in
proportion to the superfluity of their farmers; because the labour of
the necessitous will prove an equivalent for it.

Now this additional number of inhabitants being raised and fed with the
superfluity _actually_ produced by the farmers, can never be supposed
necessary for providing that quantity, which (though relatively to the
farmers it be called a superfluity) is only a sufficiency relatively to
the whole society; and, therefore, if it be found necessary to employ
the new inhabitants also in farming, it must only be with a view to a
still greater multiplication.

Farther, we may lay it down as a principle, that a farmer will not
labour to produce a superfluity of grain relatively to his own
consumption, unless he finds some want which may be supplied by means of
that superfluity; neither will other industrious persons work to supply
the wants of the farmer for any other reason than to procure
subsistence, which they cannot otherwise so easily obtain. These are the
reciprocal wants which the statesman must create, in order to bind the
society together. Here then is one principle: _Agriculture among a free
people will augment population, only in proportion as the necessitous
are put in a situation to purchase subsistence with their labour_. I
proceed.

If in any country which actually produces nourishment for its
inhabitants, according to the progression above-mentioned, (p. 27.) a
plan is set on foot for the extension of agriculture; the augmentation
must be made to bear a due proportion to the progress of industry and
wants of the people, or else an outlet must be provided for disposing of
the superfluity. And if, at setting out, a foreign consumption cannot be
procured for the produce of husbandry, the greatest caution must be had
to keep the improvement of the soil within proper bounds: for, without
this, the plan intended for an improvement will, by over-doing, turn out
to the detriment of agriculture. This will be the case, if the fruits of
the earth be made to increase faster than the numbers and the industry
of those who are to consume them. For if the whole be not consumed, the
regorging plenty will discourage the industry of the farmer.

But if, together with an encouragement to agriculture, a proper outlet
be found for the superfluity, until the numbers and industry of the
people, by increasing, shall augment the home-consumption, which again
by degrees will diminish the quantity of exportation, then the spring
will easily overcome the resistance; it will dilate; that is, numbers
will continue to increase.

From this may be derived another principle: _That agriculture, when
encouraged for the sake of multiplying inhabitants, must keep pace with
the progress of industry; or an out-let must be provided for all
superfluity_.

In the foregoing example, I have supposed no exportation, the more to
simplify the supposition: I was, therefore, obliged to throw in a
circumstance, in order to supply the want of it; to wit, an augmentation
of inland demand from the suspension of hunting; and I have supposed
those who formerly supported themselves by this, to consume the
superfluous food of the farmers for the price of their labour. This may
do well enough as a supposition, and has been made use of only to
explain principles; but the manners of a people are not so easily
changed; and therefore I have anticipated a little the supposition of
trade, only to shew how it must concur with industry, in the advancement
of agriculture and multiplication.

Let me next consider the consequences of an augmentation of agriculture
in a country where the inhabitants are lazy; or where they live in such
simplicity of manners, as to have few wants which labour and industry
can supply. In this case, I say, the scheme of agriculture will not
succeed; and, if set on foot, part of the grounds will soon become
uncultivated again.

The laziest part of the farmers, disgusted with a labour which produces
a plenty superfluous to themselves, which they cannot dispose of for any
equivalent, will give over working, and return to their antient
simplicity. The more laborious will not furnish food to the necessitous
for nothing: such therefore who cannot otherwise subsist, will naturally
serve the industrious, and thereby sell their service for food. Thus by
the diminution of labour, a part of the country, proportional to the
quantity of food which the farmers formerly found superfluous, will
again become uncultivated.

Here then will be found a country, the population of which must stop for
want of food; and which, by the supposition, is abundantly able to
produce more. Experience every where shews the possible existence of
such a case, since no country in Europe is cultivated to the utmost; and
that there are many still, where cultivation, and consequently
multiplication, is at a stop. These nations I consider as in a _moral
incapacity_ of multiplying: the incapacity would be _physical_, if there
was an actual impossibility of their procuring an augmentation of food
by any means whatsoever.

These principles seem to be confirmed by experience, whether we compare
them with the manner of living among the free American savages, or among
the free, industrious, and laborious Europeans. We find the productions
of all countries, generally speaking, in proportion to the number of
their inhabitants; and, on the other hand, the inhabitants are most
commonly in proportion to the food.

I beg that this may not be looked upon as a quibble, or what is called a
vicious circle. I have qualified the general proposition by subjoining
that it is found true most commonly; and from what is to follow, we
shall better discover both the truth and meaning of what is here
advanced. While certain causes operate, food will augment, and mankind
will increase in proportion; when these causes cease, _procreation_ will
not augment numbers; then the general proposition will take place;
numbers and food will remain the same, and balance one another. This I
imagine to be so in fact; and I hope to shew that it is rational also.
Let me now put an end to this chapter, by drawing some conclusions from
what has been laid down, in order to enlarge our ideas, and to enable us
to extend our plan.

I. One consequence of a fruitful soil, possessed by a free people, given
to agriculture, and inclined to industry, will be the production of a
superfluous quantity of food, over and above what is necessary to feed
the farmers. Inhabitants will multiply; and according to their increase,
a certain number of the whole, proportional to such superfluity of
nourishment produced, will apply themselves to industry and to the
supplying of other wants.

II. From this operation produced by industry, we find the people
distributed into two classes. The first is that of the farmers who
produce the subsistence, and who are necessarily employed in this branch
of business; the other I shall call _free hands_; because their
occupation being to procure themselves subsistence out of the
superfluity of the farmers, and by a labour adapted to the wants of the
society, may vary according to these wants, and these again according to
the spirit of the times.

III. If in the country we are treating of, both money and the luxurious
arts are supposed unknown, then the superfluity of the farmers will be
in proportion to the number of those whose labour will be found
sufficient to provide for all the other necessities of the inhabitants;
and so soon as this is accomplished, the consumption and produce
becoming equally balanced, the inhabitants will increase no more, or at
least very precariously, unless their wants be multiplied.

------------------------------------------------------------------------



                               CHAP. VI.
        _How the Wants of Mankind promote their Multiplication._


If the country we were treating of in the former chapter be supposed of
a considerable extent and fruitfulness, and if the inhabitants have a
turn for industry; in a short time, _luxury_ and the use of _money_ (or
of something participating of the nature of money) will infallibly be
introduced.

By LUXURY, I understand _the consumption of any thing produced by the
labour or ingenuity of man, which flatters our senses or taste of
living, and which is neither necessary for our being well fed, well
clothed, well defended against the injuries of the weather, nor for
securing us against every thing which can hurt us_[H].

Footnote H:

  As my subject is different from that of morals, I have no occasion to
  consider the term luxury in any other than a political sense, to wit,
  as a principle which produces employment, and gives bread to those who
  supply the demands of the rich. For this reason I have chosen the
  above definition of it, which conveys no idea, either of abuse,
  sensuality, or excess; nor do I, at present, even consider the hurtful
  consequences of it as to foreign trade. Principles here are treated of
  with regard to mankind in general, and the effects of luxury are only
  considered relatively to multiplication and agriculture. Our reasoning
  will take a different turn, when we come to examine the separate
  interest of nations, and the principles of trade.

  I beg therefore, that at present my reasoning be carried no further
  (from inductions and suppositions) than my intention is that it should
  be. I am no patron, either of vice, profusion, or the dissipation of
  private fortunes; although _I may now and then reason very cooly upon
  the political consequences of such diseases in a state, when I only
  consider the influence they have as to feeding and multiplying a
  people_. My subject is too extensive of itself to admit of being
  confounded with the doctrine either of morals, or of government,
  however closely these may appear connected with it; and did I not
  begin by simplifying ideas as much as possible, and by banishing
  combinations, I should quickly lose my way, and involve myself in
  perplexities inextricable.

By MONEY, I understand _any commodity, which purely in itself is of no
material use to man for the purposes above-mentioned, but which acquires
such an estimation from his opinion of it, as to become the universal
measure of what is called value, and an adequate equivalent for any
thing alienable_.

Here a new scene opens. This money must be found in the hands of some of
the inhabitants; naturally, of such as have had the wit to invent it,
and the address to make their countrymen fond of it, by representing it
as an equivalent value for food and necessaries; that is to say, the
means of procuring, without work or toil, not only the labour of others,
but food itself.

Here then is produced a new object of want. Every person becomes fond of
having money; but how to get it is the question. The proprietors will
not give it for nothing, and by our former supposition every one within
the society was understood to be abundantly supplied with food and
necessaries; the farmers, from their labouring the ground; the free
hands, by the return of their own ingenuity, in furnishing necessaries.
The proprietors therefore of this money have all their wants supplied,
and still are possessors of this new kind of riches, which we now
suppose to be coveted by all.

The natural consequence here will be, that those who have the money will
cease to labour, and yet will consume; and they will not consume for
nothing, for they will pay with money.

Here then is a number of inhabitants, who live and consume the produce
of the earth without labouring: food will soon become scarce; demand for
it will rise, and that will be paid with money; this is the best
equivalent of all; many will run to the plough; the superfluity of the
farmers will augment; the rich will call for superfluities; the free
hands will supply them, and demand food in their turn. These will not be
found a burden on the husbandmen, as formerly; the rich, who hired of
them their labour or service, must pay them with money, and this money
in their hands will serve as an equivalent for the superfluity of
nourishment produced by additional agriculture.

When once this imaginary wealth, money, becomes well introduced into a
country, luxury will very naturally follow; and when money becomes the
object of our wants, mankind become industrious, in turning their labour
towards every object which may engage the rich to part with it; and thus
the inhabitants of any country may increase in numbers, until the ground
refuses farther nourishment. The consequences of this will make the
subject of another chapter.

Before we proceed, something must be said, in order to restrain these
general assertions a little.

We have supposed a very rapid progress of industry, and a very sudden
augmentation of inhabitants, from the introduction of money. But it must
be observed, that many circumstances have concurred with the money, to
produce this effect.

We have supposed a country capable of improvement, a laborious people, a
taste of refinement and luxury in the rich, an ambition to become so,
and an application to labour and ingenuity in the lower classes of men.
According to the greater or less degree of force, or concurrence of
these and like circumstances, will the country in question become more
or less cultivated, and consequently peopled.

If the soil be vastly rich, situated in a warm climate, and naturally
watered, the productions of the earth will be almost spontaneous: this
will make the inhabitants lazy. Laziness is the greatest of all
obstacles to labour and industry. Manufactures will never flourish here.
The rich, with all their money, will not become luxurious with delicacy
and refinement; for I do not mean by luxury the gratification of the
animal appetites, nor the abuse of riches, but _an elegance of taste and
in living, which has for its object the labour and ingenuity of man_;
and as the ingenuity of workmen begets a taste in the rich, so the
allurement of riches kindles an ambition, and encourages an application
to works of ingenuity in the poor.

Riches therefore will here be adored as a god, but not made subservient
to the uses of man; and it is only by the means of swift circulation
from hand to hand, (as shall be observed in its proper place) that they
become productive of the effects mentioned above[I].

Footnote I:

  Every transition of money from hand to hand, for a valuable
  consideration, implies some service done, something wrought by man, or
  performed by his ingenuity, or some consumption of something produced
  by his labour. The quicker therefore the circulation of money is in
  any country, the more strongly it may be inferred, that the
  inhabitants are laborious; and _vice versa_: but of this more
  hereafter.

When money does not circulate, it is the same thing as if it did not
exist; and as the treasures found in countries where the inhabitants are
lazy do not circulate, they are rather ornamental than useful.

It is not therefore in the most fruitful countries of the world, nor in
those which are the best calculated for nourishing great multitudes,
that we find the most inhabitants. It is in climates less favoured by
nature, and where the soil only produces to those who labour, and in
proportion to the industry of every one, where we may expect to find
great multitudes; and even these will be found greater or less, in
proportion as the turn of the inhabitants is directed to ingenuity and
industry.

In such countries where these are made to flourish, the free hands (of
whom we have spoken above) will be employed in useful manufactures,
which, being refined upon by the ingenious, will determine what is
called the standard of taste; this taste will increase consumption,
which again will multiply workmen, and these will encourage the
production of food for their nourishment.

Let it therefore never be said, that there are too many manufacturers
employed in a country; it is the same as if it were said, there are too
few idle persons, too few beggars, and too many husbandmen.

We have more than once endeavoured to shew, that these manufacturers
never can be fed but out of the superfluity of nourishment produced by
the farmers. It is a contradiction, I think, to say, that those who are
fed upon the surplus of those who cultivate the soil are necessary for
producing a sufficiency to themselves. For if even this surplus were to
diminish, the manufactures, not the labourers, would be the first to be
extinguished for want of nourishment.

The importance of the distributive proportion of mankind into labourers
and free hands appears so great, and has so intimate a connection with
this subject, that it engages me to seek for an illustration of the
principles I have been laying down, in an example drawn from facts, as
it is found to stand in one of the greatest and most flourishing nations
in Europe. But before I proceed farther in this part of my subject, I
must examine the consequences of slavery with regard to the subject we
are now upon. Relations here are so many and so various, that it is
necessary to have sometimes recourse to transitions, of which I give
notice to my reader, that he may not lose the connection.

------------------------------------------------------------------------



                               CHAP. VII.
   _The Effects of Slavery upon the Multiplication and Employment of
                               Mankind._


Before I go on to follow the consequences of the above reasoning, I must
stop, to consider a difference, of no small importance, between antient
and modern times, which will serve to illustrate the nature of slavery,
with regard to population and the employment of mankind.

We have endeavoured to lay down the principles which seem to influence
these two objects, supposing all to be free. In that case I imagine the
human species will multiply pretty much in proportion to their industry;
their industry will increase according to their wants, and these again
will be diversified according to the spirit of the times.

From this I conclude, that the more free and simple the manners of a
country are, _cæteris paribus_, the fewer inhabitants will be found in
it. This is proved by experience every where. The Tartars, who freely
wander up and down a country of vast extent, multiply but little; the
savages in America, who live upon hunting, in a state of great
independence; the inhabitants of several mountainous countries in
Europe, where there are few manufactures, and where the inhabitants do
not leave the country; in all such places mankind do not multiply. What
is the reason of this? One would imagine, where there is a great extent
of ground capable of producing food, that mankind should multiply until
the soil refused to give more. I imagine the answer may be easily
discovered from the principles above laid down.

Where mankind have few wants, the number of free hands necessary to
supply them is very small, consequently very little surplus from the
farmers is sufficient to maintain them. When therefore it happens, that
any poor family in the class of free hands is very numerous, division
there comes to be carried to its utmost extent, and the greatest part
become quite idle, because there is no demand for their work. As long as
they can be fed by the division of the emoluments arising from the
labour of their parents, or by the charity of others, they live; when
these resources fail, they become miserable. In so wretched a situation
it is not easy to find bread. The farmers will not double their
diligence from a charitable disposition. Those who have land will not
allow those indigent people a liberty to raise grain in it for nothing;
and although they should, the poor are not in a capacity to provide what
is necessary for doing it. All other work is fully stocked, the wretched
die, or extinguish without multiplying.

To make this more evident, let us suppose the wants of mankind, in any
polite nation of Europe, which lives and flourishes in our days upon the
produce of its own soil, reduced all at once to the simplicity of the
antient patriarchs, or even to that of the old Romans. Suppose all the
hands now employed in the luxurious arts, and in every branch of modern
manufactures, to become quite idle, how could they be subsisted? What
oeconomy could be set on foot able to preserve so many lives useful to
the state? Yet it is plain by the supposition, that the farmers of the
country are capable of maintaining them, since they do so actually. It
would be absurd to propose to employ them in agriculture, seeing there
are enough employed in this, to provide food for the whole.

If it be certain, that such people would die for want without any
resource, must it not follow, that unless their parents had found the
means of maintaining them when children, and they themselves the means
of subsisting by their industry in supplying wants, they could not have
existed beyond their first infancy.

This seems to strike deep against the populousness of the old world,
where we know that the wants of mankind, with regard to trades and
manufactures, were so few.

But in those days the wants of mankind were of a different nature. At
present there is a demand for the ingenuity of man; then there was a
demand for his person and service. Now provided there be a demand for
man, whatever use he be put to, the species will multiply; for those who
stand in need of them will always feed them, and as long as food is to
be found, numbers will increase.

In the present times food cannot, in general, be found, but by labour,
and that cannot be found but to supply wants. Nobody will feed a free
man, more than he will feed the wild birds or beasts of the field,
unless he has occasion for the labour of the one or the flesh of the
other.

In the old world the principles were the same, but the spirit of nations
was different. Princes wanted to have numerous armies. Free states
sought for power in the number of their citizens. The wants of mankind
being few, and a simplicity of manners established, to have encouraged
industry, excepting in agriculture, which in all ages has been the
foundation of population, would have been an inconsistency. To make
mankind labour beyond their wants, to make one part of a state work to
maintain the other gratuitously, could only be brought about by slavery,
and slavery was therefore introduced universally. Slavery was then as
necessary towards multiplication, as it would now be destructive of it.
The reason is plain. If mankind be not forced to labour, they will only
labour for themselves; and if they have few wants, there will be little
labour. But when states come to be formed, and have occasion for idle
hands to defend them against the violence of their enemies, food at any
rate must be procured for those who do not labour; and as, by the
supposition, the wants of the labourers are small, a method must be
found to increase their labour above the proportion of their wants.

For this purpose slavery was calculated: it had two excellent effects
with respect to population. The first, that, in unpolished nations,
living upon the spontaneous fruits of the earth, and almost continually
in war, lives were preserved for the sake of making slaves of the
captives. These sold to private people, or different states, were sure
of being fed; whereas remaining in their own country, they only occupied
a place, which, by the force of the generative faculty, as has been
observed, was soon to be filled up by propagation: for it must not be
forgot, that when numbers are swept off, by any sudden calamity, which
does not proportionally diminish subsistence, a new multiplication
immediately takes place. Thus we perceive the hurt done by plagues, by
war, and by other devastations, either among men, or cattle, repaired in
a few years, even in those countries where the standard number of both
is seldom found to increase. What immense quantities of cattle are
yearly slaughtered! Does any body imagine that if all were allowed to
live, numbers would increase in proportion? The same is true of men.

The second advantage of slavery was, that in countries where a good
police prevailed, and where the people had fewer wants by far than are
felt in modern times, the slaves were forced to labour the soil which
fed both them and the idle freemen, as was the case in Sparta; or they
filled all the servile places which freemen fill now, and they were
likewise employed, as in Greece and in Rome, in supplying with
manufactures those whose service was necessary for the state.

Here then was a violent method of making mankind laborious in raising
food; and providing this be accomplished, (by any means whatever)
numbers will increase.

Trade, industry, and manufactures, only tend to multiply the numbers of
men, by encouraging agriculture. If it be therefore supposed, that two
states are equally extended, equally fruitful, and equally cultivated,
and the produce consumed at home, I believe they will be found equally
peopled. But suppose the one laboured by free men, the other by slaves,
what difference will be found in making war? In the first, the free
hands must, by their industry and labour, purchase their food, and a day
lost in labour is in a manner a day of fasting: in the last, the slaves
produce the food, they are first fed, and the rest costs nothing to the
body of free men, who may be all employed in war, without the smallest
prejudice to industry.

From these principles it appears, that slavery in former times had the
same effect in peopling the world that trade and industry have now. Men
were then forced to labour because they were slaves to others; men are
now forced to labour because they are slaves to their own wants.

I only add, that I do not pretend that in fact slavery in antient times
did every where contribute to population, any more than I can affirm
that the spirit of industry in the Dutch is common to all free nations
in our days. All that is necessary for my purpose is, to set forth the
two principles, and to shew the natural effects of the one and the
other, with respect to the multiplication of mankind and advancement of
agriculture, the principal objects of our attention throughout this
book.

I shall at present enlarge no farther upon this matter, but return to
where I left off in the preceeding chapter, and take up the farther
examination of the fundamental distribution of inhabitants into
labourers and free hands.

------------------------------------------------------------------------



                              CHAP. VIII.
 _What Proportion of Inhabitants is necessary for Agriculture, and what
    Proportion may be usefully employed in every other Occupation?_


I have proposed this question, not with an intention to answer it fully,
but to point out how, with the proper lights given, it may be answered.

As I write under circumstances not the most favourable for having
recourse to books, I must employ those I have. The article _Political
Arithmetic_, of Mr. Chambers’s Cyclopedia, furnishes me with some
extracts from Sir William Petty, and Dr. Davenant, which I here intend
to employ, towards pointing out a solution of the question proposed.
These authors consider the state of England as it appeared to them, and
what they say is conclusive only with respect to that state.

Sir William Petty supposes the inhabitants of England to be six
millions, the value of grain yearly consumed by them ten millions
sterling, the bushel of wheat reckoned at 5_s._ and that of barley at
2_s._ 6_d._ If we cast the two together, and reckon upon an average,
this will make the quarter, or eight bushels of grain, worth 1_l._
10_s._ but in regard, the barley cannot amount to one half of all the
grain consumed, especially as there is a good quantity of rye made use
of, which is worth more than the barley, though less than the wheat; let
us suppose the grain worth 32_s._ _per_ quarter, at a medium; then ten
millions sterling will purchase six millions of quarters of grain, or
thereabouts: which used for nourishment, in bread and beer, gives the
mean quantity of one quarter, or 512 pounds of grain for every
inhabitant, including the nourishment of his proportional part of
animals; supposing that Sir William attended to this circumstance, for
it is not mentioned by Chambers. And I must observe, by the by, that
this computation may hold good as to England, where people eat so little
bread; but would not answer in France, nor in almost any other country I
have seen.

Dr. Davenant, correcting Sir William’s calculation, makes the
inhabitants 5,545,000. These, according to Sir William’s prices and
proportions, would consume to the amount of 8,872,000_l._ sterling; but
the Dr. carries it, with reason, a little higher, and states it at
9,075,000_l._ sterling; the difference, however, is inconsiderable. From
this he concludes, the gross produce of the corn fields to be about
9,075,000_l._ sterling. I make no criticism upon this computation.

Next, as to the value of other lands; I find Sir William reckons the
gross produce of them in butter, cheese, milk, wool, horses yearly bred,
flesh for food, tallow, hides, hay, and timber, to amount to
12,000,000_l._ sterling: The amount therefore of the gross produce of
all the lands in England must be equal to these two sums added together,
that is to 21,075,000_l._ sterling.

From these data, the Dr. values the yearly rent of corn lands at two
millions sterling, and those of pasture, &c. at seven millions, in all
nine millions.

From this it appears, that the land rents of England are to the gross
produce, as nine is to twenty one, or thereabouts.

Let me now examine some other proportions.

The rents of the corn lands are to the gross produce of them, as two is
to nine; those of pasture, as seven to twelve.

Now it is very certain, that all rents are in a pretty just proportion
to the gross produce, after deducting three principal articles.

1. The nourishment of the farmer, his family and servants.

2. The necessary expences of his family, for manufactures, and
instruments for cultivating the ground.

3. His reasonable profits, according to the custom of every country.

Of these three articles, let us distinguish what part implies the direct
consumption of the pure produce, from what does not.

Of the first sort are the nourishment of men and cattle, wool and flax
for cloathing, firing, and other smaller articles.

Of the second are all manufactures bought, servants wages, the hire of
labourers occasionally, and profits, either spent in luxury, (that is
superfluity) lent, or laid up.

The three articles above mentioned (which we have distributed under two
heads) being deduced from the gross produce, the remaining value shews
the land rent.

This being the case, I am next to examine the cause of the great
disproportion between the rents of corn lands, and those of pasture,
when compared with the gross produce, in order to draw some conclusion,
which may lead to the solution of the question here proposed.

This difference must proceed from the greater proportion of labouring
and other inhabitants employed in consequence of tillage; which makes
the expence of it far greater than that of pasture. And since, in the
one and the other, every article of necessary expence or consumption,
appears to be proportionally equal among those concerned in both, that
is, proportional to the number of labouring inhabitants; it follows,
that the proportion of people employed in agriculture, and upon the
account of it, in different countries, is nearly in the ratio of the
gross produce to the land-rent; or in other words, in the proportion of
the consumption made by the farmers, and by those employed necessarily
by them, to the net produce; which is the same thing.

Now as the consumption upon corn farms is 7⁄9, and that upon pasture
5⁄12, the proportion of these two fractions must mark the ratio between
the populousness of pasture lands, and those in tillage; that is to say,
tillage lands in England were, at that time, peopled in proportion to
pasture lands, as 84 is to 45, or as 28 to 15.

This point being settled, I proceed to another; to wit, the application
of this net produce or surplus of the quantity of food and necessaries
remaining over and above the nourishment, consumption and expence, of
the inhabitants employed in agriculture; and which we have observed
above, to be equal to the land-rents of England, that is to say, to nine
millions yearly.

Must not this of necessity be employed in the nourishment, and for the
use of those whom we have called the _free hands_; who may be employed
in manufactures, trades, or in any way the state pleases.

Now the number of people, I take to be very nearly in the proportion of
the quantity of food they consume; especially when a society is taken
thus, in such accumulative proportion, and when all are found under the
same circumstances as to the plenty of the year.

The whole gross produce of England we have said to be 21,000,000_l._
sterling, of which 9 millions have remained for those not employed in
agriculture; the farmers, therefore, and their attendants, must annually
consume 12 millions; consequently the last class is to the first as 12
is to 9. If therefore, according to Dr. Davenant, there be 5,545,000
people in that kingdom, there must be about 3,168,571 employed or
dependent upon agriculture, and 2,376,429 free hands for every other
occupation. But this proportion of farmers will be found far less, if we
reflect, that we have reckoned for them the total amount of the three
articles above mentioned, that is to say, the total consumption they
make, as well in manufactures, profits upon their labour, &c. as for
food and necessaries; whereas there has been nothing reckoned for the
free hands, but the land-rent: consequently there should be added to the
number of the latter as many as are employed in supplying with all sorts
of manufactures the whole of the farmers of England, and all those who
depend upon them; and this number must be taken from one and added to
the other class.

If this number be supposed to amount to four hundred thousand, it will
do more than cast the balance upon the opposite side.

From these matters of fact (in so far as they are so) we may conclude:

I. That the raising of the rents of lands shews the increase of
industry, as it swells the fund of subsistence consumed by the
industrious; that is, by those who buy it.

II. That it may denote either an increase of inhabitants, or the
depopulation of the land, in order to assemble the superfluous mouths in
villages, towns, &c. where they may exercise their industry with greater
conveniency.

While the land-rents of Europe were very low, numbers of the inhabitants
appeared to be employed in agriculture; but were really no more than
idle consumers of the produce of it. This shall be farther illustrated
in the subsequent chapters.

III. The more a country is in tillage, the _more_ it is inhabited, and
the smaller is the proportion of _free hands_ for all the services of
the state. The more a country is in pasture, the _less_ it is inhabited,
but the greater is the proportion of _free hands_.

I do not pretend, as I have said above, that there is any calculation to
be depended on in this chapter; I have only endeavoured to point out how
a calculation might be made, when the true state of England comes to be
known.

This question not being of a nature to enter into the chain of our
reasoning, may be considered rather as incidental than essential; I have
therefore treated it superficially, and chiefly for the sake of the
conclusions.

Our next inquiry will naturally be into the principles which determine
the residence of inhabitants, in order to discover why, in all
flourishing states, cities are now found to be every where increasing.

------------------------------------------------------------------------



                               CHAP. IX.
_What are the Principles which regulate the Distribution of Inhabitants
           into Farms, Villages, Hamlets, Towns, and Cities?_


Having pointed out the natural distribution of inhabitants into the two
capital classes of which we have been treating, I am now going to
examine how far their employment must decide as to their place of
residence.

I. When mankind is fed upon the spontaneous fruits of the earth, the
distribution of their residence depends upon the division of the lands.
If these are in common to all, then the inhabitants will be scattered
abroad, or gathered together, according as the productions of the earth
are equally distributed over the face of the country, or confined to
some fruitful spots.

Hence the Tartars wander with their flocks and feed upon them: hence the
hunting Indians are scattered in small societies, through the woods, and
live upon game: hence others, who feed upon the fruits of the earth, are
collected in greater numbers upon the sides of rivers, and in watered
vallies.

Where therefore the surface of the earth is not appropriated, _there_
the place producing food determines the place of residence of every one
of the society, and _there_ mankind may live in idleness, and remain
free from every constraint.

II. When the earth is not in common to those who live upon her
spontaneous fruits, but appropriated by a few, _there_ either slavery or
industry must be introduced among those who consume the surplus of the
proprietors; because they will expect either service or work in return
for their superfluity. In that case, the residence of the inhabitants
will depend upon the circumstances we are going to consider; and the
object of agriculture (in countries where the surface of the earth is
not broken up, being solely directed towards the gathering in of fruits)
will only determine the residence of these who are necessary for that
purpose: consequently it will follow, that in climates where the earth
produces spontaneously, and in vast abundance, there _may_ be found
large cities; because the number of those who are necessary for
gathering in the fruits, is small in proportion to their quantity;
whereas in other countries, where the earth’s productions are scanty,
and where the climate refuses those of the copious and luxuriant kind,
there will hardly be found any considerable town, as the number of those
who are necessary for collecting the subsistence, bear a great
proportion to the fruits themselves. I do not say, that in the first
case there _must_ be large towns, or that in the other there _can_ be
none; but I say, that in the first case, those who _may_ be gathered
into towns, bear a great proportion to the whole society; and that in
the second, they bear a small one.

I think I have found this principle confirmed by experience. When I
compare the bulk and populousness of the cities of Lombardy, and still
more, those of the watered provinces of Spain, with the inhabitants of
the territory which maintains them, I find the proportion of the first
vastly greater than in those of France and England; and still more again
in these two last mentioned kingdoms, than in the more northern
countries and provinces, where the earth’s productions bear a less
proportion to the labour bestowed in producing them. Now, although I
allow that neither the one or the other to be fed by spontaneous
productions, yet still it may be inferred, that the more the climate
contributes to favour the labour of man, the more the productions
participate of the spontaneous nature[J].

Footnote J:

  Hence we may conclude, that in those countries where the people live
  upon the spontaneous fruits, the whole society (considered in a
  political light) is found composed of free hands. Nature there
  supplies the place of the whole class of farmers.

  We have said that industry and manufactures are the occupation of the
  free hands of a state; consequently, where the proportion of them is
  the largest, industry should flourish to the greatest advantage; that
  is to say, in countries where the inhabitants live upon the
  spontaneous fruits: but that is not the case. Why? Because there is
  another circumstance of equal weight which prevents it. These people
  are unacquainted with want, and want is the spur to industry. Let this
  suffice, in general, as to the distribution of inhabitants in
  countries unacquainted with labour.

Again, in countries where labour is required for feeding a society, the
smaller the proportion of labourers, the greater will be that of the
free hands. Fruits which are produced by annual labour, and still more,
such as are the consequence of a thorough cultivation, (such as
luxuriant pasture) give returns far superior to the nourishment of those
employed in the cultivation; consequently, all the surplus is consumed
by people not employed in agriculture; consequently, by those who are
not bound to reside upon the spot which feeds them, and who may choose
the habitation best adapted for the exercise of that industry which is
most proper to produce an equivalent to the farmers for their
superfluities.

From this it is plain that the residence of the farmers only, is
essentially attached to the place of cultivation. Hence, farms in some
provinces, villages in others.

I now proceed to the other class of inhabitants; the free hands who live
upon the surplus of the farmers.

These I must subdivide into two conditions. The first, those to whom
this surplus directly belongs, or who, with a revenue in money already
acquired, can purchase it. The second, those who purchase it with their
daily labour or personal service.

Those of the first condition may live where they please; those of the
second, must live where they can. The residence of the consumers, in
many cases, determines that of the suppliers. In proportion, therefore,
as those who live where they please choose to live together, in that
proportion the others must follow them. And in proportion as the state
thinks fit to place the administration of government in one place, in
that proportion must the administrators, and every one depending upon
them, be gathered together. These I take to be principles which
influence the swelling of the bulk of capitals, and smaller cities.

When the residence of the consumer does not determine that of him who
supplies it, other considerations are allowed to operate. This is the
case in what may properly be called manufactures, distinguished from
trades, whether they be for home consumption, or foreign exportation.
These considerations are,

I. Relative to the place and situation of the establishment, which gives
a preference to the sides of rivers and rivulets, when machines wrought
by water are necessary; to the proximity of forests when fire is
employed; to the place which produces the substance of the manufacture;
as in mines, collieries, brick-works, &c.

II. Relative to the conveniency of transportation, as upon navigable
rivers, or by great roads.

III. Relative to the cheapness of living, consequently not (frequently)
in great cities, except for their own consumption. But it must be
observed, that this last consideration can hardly ever be permanent: for
the very establishment being the means of raising prices, the advantage
must diminish in proportion as the undertaking comes to succeed. The
best rule therefore is, to set down such manufactures upon the banks of
navigable rivers, where all necessary provisions may be brought from a
distance at a small cost. This advantage is permanent, the others are
not; and may prove in time hurtful, by a change in these very
circumstances which decided as to the choice of the situation. From the
establishment of manufactures we see hamlets swell into villages, and
villages into towns.

Sea-ports owe their establishment to foreign trade. From one or other of
these and similar principles, are mankind gathered into hamlets,
villages, towns, and cities.

------------------------------------------------------------------------



                                CHAP. X.
    _Of the Consequences which result from the Separation of the two
  principal Classes of a People, the Farmers and the Free Hands, with
                       regard to their Dwelling._


I am next going to examine the consequences resulting to the state, to
the citizens, and to the landed interest, from this kind of separation,
as I may call it, between the parent earth and her laborious children,
which I suppose to take place every where in proportion to the progress
of industry, luxury, and the swift circulation of money.

As to the state, it is, I think, very plain, that, without such a
distribution of inhabitants, it would be impossible to levy taxes. For
as long as the earth nourishes directly those who are upon her surface,
as long as she delivers her fruits into the very hand of him who
consumes them, there is no alienation, no occasion for money,
consequently no possibility of establishing an extensive taxation, as
shall in its place be fully explained, and from this principle is, I
imagine, to be deduced the reason, why we find taxation so little known
under the feudal form of government.

The personal service of the vassals, with their cattle and servants,
upon all occasions made the power and wealth of the lords, and their
rents were mostly paid in kind. They lived upon their lands, were
commonly jealous of one another, and had constant disputes. This was a
very good reason to keep them from coming together. Towns were situated
round their habitations. These were mostly composed of the few tradesmen
and manufacturers that were in the country. The lord’s judge, his
fiscal, and his court of record, added to these numbers; law-suits, and
the lord’s attendance, brought the vassals frequently together; this
gave encouragement to houses of entertainment; and this I take to be the
picture of the greatest part of small towns, if we ascend three or four
hundred years from the present time.

Cities were the residence of bishops. These lords were very independent
of the civil government, and had at the same time the principal
direction in it. They procured privileges to their cities, and these
communities formed themselves by degrees into small republics: taxes
here have ever been familiar. The feudal lords seldom appeared there,
and the inferior classes of the people enjoyed liberty and ease in these
cities only.

In some countries of Europe, as in Germany, the principal citizens, in
time, became patricians. In France certain offices of public trust
sometimes procured nobility to those who bore them, and always
consideration. The representatives of the citizens were even admitted
into the states, and formed the _tiers êtat_. Elsewhere they received
casual marks of distinction from the sovereign, as the Lord Mayor of
London does to this day usually receive knighthood. In short, the only
dawning of public liberty to be met with during the feudal government,
was in the cities; no wonder then if they increased.

Upon the discovery of America and the East-Indies, industry, trade, and
luxury, were soon introduced in the kingdoms of Spain, France, and
England: the grandeur and power of the Hans towns had already pointed
out to sovereigns the importance of those objects.

The courts of princes then became magnificent; the feudal lords
insensibly began to frequent them with more assiduity than formerly. The
splendor of the prince soon eclipsed those rays which shone around them
upon their own lands. They now no more appeared to one another as
objects of jealousy, but of emulation. They became acquainted, began to
relish a court life, and every one proposed to have a house in the
capital. A change of habitation made a change of circumstances, both as
to city and country. As to the city; in so far as inhabitants were
increased, by the addition of the great lords, and of those who followed
their example, demand increased for every sort of provision and labour;
and this quickly drew more inhabitants together. Every one vied with
another in magnificence of palaces, clothes, equipages. Modes changed,
and by turns enlivened the different branches of ingenuity. Whence came
so great a number of inhabitants all of a sudden? He who would have cast
his eyes on the deserted residences of the nobility, would have seen the
old people weeping and wailing, and nothing heard among them but
complaints of desolation: the youth were retired to the city; there was
no change as to them.

This is no doubt a plain consequence of a sudden revolution, which never
can happen without being attended with great inconveniencies. Many of
the numerous attendants of the nobility who uselesly filled every house
and habitation belonging to the great man, were starving for want. He
was at court, and calling aloud for money, a thing he was seldom
accustomed to have occasion for, except to lock up in his chest. In
order to procure this money, he found it expedient to convert a portion
of the personal services of his vassals into cash: by this he lost his
authority. He then looked out for a farmer (not a husbandman) for an
estate which he formerly consumed in its fruits. This undertaker, as I
may call him, began by dismissing idle mouths. Still greater complaints
ensued. At last, the money spent in the city began to flow into the
hands of the industrious: this raised an emulation, and the children of
the miserable, who had felt the sad effects of the revolution, but who
could not foresee the consequences, began to profit by it. They became
easy and independent in the great city, by furnishing to the
extravagance of those under whose dominion they were born.

This progression is perhaps too minutely traced to be exact; I therefore
stop, to consider the situation of affairs at that period, when all the
inconveniences of the sudden revolution had ceased, and when things were
come to the state in which we now find them. Capitals swelled to a great
extent. Paris and London appear monstrous to some, and are said to be a
load upon the rest of the country. This must be examined.

We agree, I suppose, that the inhabitants of cities are not employed in
agriculture, and we may agree that they are fed by it: we have examined
into the causes of the increase of cities, and we have seen the fund
provided for their subsistence, to wit, the surplus of fruits produced
by husbandmen.

What are then the advantages resulting to the citizens from this great
increase of their city? I cannot find any great benefit resulting to
individuals from that circumstance; but I conclude, that the same
advantages which many find in particular, must be common to great
numbers, consequently great numbers are gathered together.

The principal objections against great cities are, that health there is
not so good, that marriages are not so frequent as in the country, that
debauchery prevails, and that abuses are multiplied.

To this I answer, that these objections lie equally against all cities,
and are not peculiar to those complained of for their bulk; and that the
evils proceed more from the spirit of the inhabitants, than from the
size of the capital. As for the prolongation of life, it is more a
private than a public concern.

It is farther urged, that the number of deaths exceeds the number of
births in great cities; consequently smaller towns, and even the
country, is stripped of its inhabitants, in order to recruit these
capitals.

Here I deny, first, that in all capitals the number of deaths exceeds
the number of births; for in Paris it is otherwise. But supposing the
assertion to be true, what conclusion can be drawn from it, except that
many people who are born in the country die in town. That the country
should furnish cities with inhabitants is no evil. What occasion has the
country for supernumerary hands? If it has enough for the supply of its
own wants, and of the demands of cities, has it not enough? Had it more,
the supernumeraries would either consume without working, or, if added
to the class of labourers, instead of being added to the number of free
hands, would overturn the balance between the two classes; grain would
become too plentiful, and that would cast a general discouragement upon
agriculture: whereas, by going to cities, they acquire money, and
therewith purchase the grain they would have consumed, had they remained
in the country; and this money, which their additional labour in cities
will force into circulation, would otherwise have remained locked up, or
at least would never have gone into the country, but in consequence of
the desertion of the supernumeraries. The proper and only right
encouragement for agriculture, is a moderate and gradual increase of
demand for the productions of the earth: this works a natural and
beneficial increase of inhabitants; and this demand must come from
cities, for the husbandmen never have occasion to demand; it is they who
offer to sale.

The high prices of most things in large cities is surely a benefit, not
a loss to the country. But I must observe, that the great expence of
living in capitals does not affect the lower classes, nor the moderate
and frugal, in any proportion to what it does the rich. If you live on
beef, mutton, bread, and beer, you may live as cheap in London and in
Paris as in most cities I know. These articles abound, and though the
demand be great, the provision made for supplying it is in proportion.
But when you come to fish, fowl, and game; delicacies of every kind
brought from far, by the post, by ships, and messengers; when you have
fine equipages, large houses, expensive servants, and abundance of waste
in every article, without one grain of oeconomy in any, it is no wonder
that money should run away so fast.

I do not, from what has been said, conclude, that there is any evident
advantage in having so overgrown a capital as London in such a kingdom
as England; but only that I do not find great force in the objections I
have met with against it. That there may be others which I do not know,
I will not deny, because I am not sufficiently acquainted with that
kingdom to be a competent judge of the matter.

Let me now conclude this chapter, by mentioning in what respects I think
cities an advantage, in general, to a country; and, as I go along, I
shall point out wherein they prove a disadvantage, in particular, to
some parts of it.

The general advantages of them are;

I. To remove the unnecessary load upon the land; those idle people, who
eat up a part of the produce of labour without contributing to it.

II. The opportunity of levying taxes, and of making these affect the
rich, in proportion to the consumption they make, without hurting
industry or exportation.

III. The advantages resulting to the landed interest are no less
considerable. This is proved by universal experience: for we see every
where, that the moment any city, town, or village, begins to increase,
by the establishment of trade or manufactures, the lands round about
immediately rise in their value. The reason of this seems easily deduced
from the above principles.

When a farmer has got his oeconomy under right regulations, not one
supernumerary, nor useless mouth, but abundance of hands for every kind
of labour, which is generally the case near towns and cities, the
proximity of them discharges him of every superfluity. His cattle
consume the exact quantity of grain and of forage necessary; what
remains is money; a superfluous egg is money; a superfluous day of a
cart, of a horse, a superfluous hour of a servant, is all money to the
farmer. There is a constant demand for every thing he can do or furnish.
To make this the more sensibly perceived, remove into a province, far
from a town, and compare situations. There you find abundance of things
superfluous, which cannot be turned into money, which therefore are
consumed without much necessity, and with no profit. It is good to have
an estate there, when you want to live upon it; it is better to have one
near the great town, when you do not.

It may be alledged, that the disadvantages felt by the distant farmer
and proprietor, when they compare situations with those situated near
the town, proceed from the town: this must be examined.

If the town consume the produce of this distant farm, it must consume it
in competition with every place at a smaller distance; consequently this
competition must do more good than harm to the distant farm. If the city
consumes none of the produce, wherein does it affect it? It may be
answered, that, by entering into competition with the distant farmer for
the labouring inhabitants, these desert agriculture, in favour of a more
lucrative occupation, to be found in the city. Scarcity of hands in the
country raises the price of labour on one hand, while it diminishes the
demand on the other; consequently the farmer suffers a double
disadvantage. Of this there can be no doubt; but as these revolutions
cannot by their nature be sudden, it becomes the duty of the statesman,
whom I suppose constantly awake, to set on foot directly some branch of
industry in every such distant part of the country; and as prices will
diminish for a while, for the reasons above-mentioned, this will prove
an encouragement to the establishment; this again will accelerate
propagation, as it will prove an outlet for children, and, in a short
time, the farmer will find himself in a better situation than ever. But
even without this assistance from the state, a few years will set all to
rights, providing the spirit of industry is kept up: for cities, by
swelling, extend their demand to the most distant corners of a country;
the inhabitants who desert do not cease to consume, and thereby they
repair the hurt they did by their desertion. I appeal to experience for
the truth of this. Do we not perceive demand extending every year
farther and farther from great capitals? I know places in France which,
twenty years ago, never knew what it was to send even a delicacy to
Paris, but by the post, and which now send thither every week loaded
waggons, with many thousand weight of provisions; in so much that I may
almost say, that a fatted chicken in the most distant province of that
country can be sold with great profit in the Paris market during all the
winter season; and cattle carry thither their own flesh cheaper than any
waggon can. What distant farm then can complain of the greatness of that
noble city? There is however a case, where a distant part of a country
may suffer in every respect, to wit, when the revolution is sudden; as
when a rich man, used to spend his income in his province, for the
encouragement of industry, goes to Paris or London, and stays away for a
year or two, without minding the interest of the estate he abandons. No
doubt that must affect his province in proportion; but in every
revolution which comes on gradually by the desertion of such as only
lived by their industry, new mouths are born and supply the old. The
only question is about employing them well: while you have superfluous
food and good oeconomy, a country will always reap the same benefit from
her natural advantages.

IV. Another advantage of cities is, the necessity arising from thence of
having great roads, and these again prove a considerable encouragement
to agriculture.

The miserable condition of roads over all Europe almost, till within
these hundred years, is a plain proof of the scanty condition of the
cities, and of the small encouragement formerly given towards extending
the improvement of the soil.

Let any one examine the situation of the landed interest before the
making of great roads in several provinces in France, and compare it
with what it is at present. If this be found a difficult inquiry, let
him compare the appearance of young gentlemen of middling fortune, as he
finds them at Paris, or in their regiment, with that of their fathers,
who live in their province in the old way, and he will have a very good
opportunity of perceiving the progress of ease and refinement in that
class, which has proceeded from no other cause than the improvement of
the soil. People complain that prices are risen; of this there is no
doubt with regard to many articles. Is it not quite consistent with our
principles? It is not because there is now a larger mass of money in the
kingdom, though I allow this to be true, and also that this circumstance
may have contributed to raise prices; but the direct principle which has
influenced them, and which will always regulate their rise and fall, is
the increase of demand. Now the great roads in a manner carry the goods
to market; they seem to shorten distances, they augment the number of
carriages of all sorts, they remove the inconveniencies above-mentioned
resulting from the distance of the city. The more distant parts of the
country come to market, in competition with the farmers in the
neighbourhood of the cities. This competition might make the rents of
lands lying round such as were the first to encourage industry, sink in
their value. But the hurt in this respect done to the proprietors of
these lands would soon be repaired. The cities would increase in bulk,
demand would increase also, and prices would rise a-new. Every thing
which employs inhabitants usefully promotes consumption; and this again
is an advantage to the state, as it draws money from the treasures of
the rich into the hands of the industrious. The easy transportation of
fruits produces this effect: the distant farmer can employ his idle
hours in providing, and the idle days of his servants and cattle in
sending things to market, from farms which formerly never knew what it
was to sell such productions.

I shall carry these speculations no farther, but conclude by observing,
that the making of roads must advance population, as they contribute to
the advancement of agriculture.

------------------------------------------------------------------------



                               CHAP. XI.
_Of the Distribution of Inhabitants into Classes; of the Employment and
                        Multiplication of them._


Having deduced the effects of modern policy, in assembling so large a
proportion of inhabitants into cities, it is proper to point out the
principles which should direct the statesman to the proper means of
providing, supporting, and employing them. Without this they neither can
live nor multiply. Their parent, Earth, has in a manner banished them
from her bosom; they have her no more to suckle them in idleness;
industry has gathered them together, labour must support them, and that
must produce a surplus for bringing up children. If this resource should
fail, misery will ensue: the depopulation of the cities will be followed
by the ruin of the lands, and all will go to wreck together.

We have already laid down the principles which appear the most natural
to engage mankind to labour, supposing all to be free; and we have
observed how slavery, in former times, might work the same effect, as to
peopling the world, that trade and industry do now; men were then forced
to labour because they were slaves to others, men are forced to labour
now because they are slaves to their own wants: provided man be made to
labour, and make the earth produce abundantly, and providing that either
authority, industry or charity, can make the produce circulate for the
nourishment of the free hands, the principle of a great population is
brought to a full activity.

I shall now suppose these principles to be well understood. Wants
promote industry, industry gives food, food increases numbers: the next
question is, how numbers are to be well employed?

It is a general maxim in the mouth of every body; increase the
inhabitants of the state: the strength and power of a state is in
proportion to the number of its inhabitants.

I am not fond of condemning opinions; but I am very much for limiting
general propositions. I have hardly ever escaped being led into error by
every one I have laid down. Nothing is so systematical, nothing so
pretty in a treatise as general maxims; they facilitate the distribution
of our ideas, and I have never been able to dash them out but with a
certain regret.

As I often recur to private oeconomics for clearing up my ideas
concerning the political, I have asked myself, if it be a general rule,
that the master of a family should increase the mouths of it, to the
full proportion of all he can feed? Now it is my opinion, that in a
small family well composed, and where every one is properly employed,
both master and servants are much happier than in others vastly more
numerous, where the same order and regularity is not kept up; and that a
small number of well disciplined soldiers is more formidable, and really
stronger, than the numerous populace of a large city.

The use of inhabitants is to be mutually serviceable one to another in
particular, and to the society in general. Consequently, every state
should, in good policy, first apply itself to make the inhabitants they
have answer that purpose, before they carry their views towards
augmenting their numbers. I think it is absurd to wish for new
inhabitants, without first knowing how to employ the old; and it is
ignorance of the real effects of population, to imagine that an increase
of numbers will infallibly remove inconveniencies which proceed from the
abuses of those already existing.

I shall then begin by supposing that inhabitants require rather to be
well employed than increased in numbers.

If I know the number of inhabitants, I may know the proportion which die
every year: consequently, I know how many pairs of breeders are
necessary to keep up the stock. If I want to raise twenty bushels of
grain only, I do not sow my lands with twenty bushels. If I have as many
children born as there are people who die, I have enough by the
supposition. But these children must be raised proportionally, from the
different classes of inhabitants, which I here consider as distributed
into two conditions; those who do not labour, and those who do. May I
not venture to say, that there is no absolute necessity that those of
the first class should multiply in order to recruit the second. If then
the second class is kept up to its proper standard by its own
multiplication, and if their work be all consumed, will it not be found
that the diminution of those mouths who do not work, and which appear
only useful in consideration of the consumption they make, is no real
loss to the nation? But to this it is objected, that if the number of
the first class be diminished, the work of the second will lie upon
hand.

Here I look for my answer from what daily experience points out. Two
persons (A) and (B) have each 1000_l._ a year; (A) has many children,
(B) has none: they both spend their income; (A) upon the necessaries of
life for his family, and for the education of his children; for the
supplying of which, those of the working class are only employed, for
who ever does or gives any thing for money, I consider as a worker: (B)
spends his income as a fashionable young gentleman; he has a fine
chariot, abundance of footmen in laced liveries; in short, without
examining into the particulars of his expence, I find the whole 1000_l._
spent at the end of the year. Neither (A) nor (B) do any work; nor are
any of (A’s) children necessary as a supply to the working hands, by the
supposition. Is it not true then, that (B) has consumed as much work or
service, for these I consider as the same thing, as (A) with his family?
Nay, I may still go farther, and affirm, that (B) has contributed as
much, if not more, to population than (A). For if it be true, that he
who gives food gives numbers, I say, that the expence of (B) has given
food to the children of the industrious employed by him: consequently,
in place of having directly contributed to the increase of the idle of
the state, which is the case with (A), he has indirectly contributed to
the multiplication of the industrious. What good then does the state
reap from (A’s) children, from his marriage, from his multiplication?
Indeed, I see no harm although he had remained a batchelor: for those
who produce only idle consumers, certainly add neither riches, strength,
or ease to a state. And it is of such people alone that there is any
question here.

From this I conclude, that there can be no determined number of rich
idle consumers necessary to employ a determined number of industrious
people, no more than of masters to employ a fixt number of menial
servants. Do we not see a single man frequently attended by more
servants than are necessary when he gets a wife and family: nay, it many
times happens, that a young man, upon his marriage, diminishes the
number of his domestics, in order to give bread to his children.

If riches are calculated, as I hope to be able to shew, for the
encouragement of industry; if circulation is to be accelerated by every
method, in order to give bread to those who are disposed to work, or, in
other words, who are disposed to become vigorous members of the
commonwealth, by contributing with their strength, their ingenuity, or
their talents, to supply her wants, to augment their riches, to promote
and administer a good government at home, or to serve it abroad: then, I
say, the too great multiplication of those, who come under none of these
classes, the idle consumers as I have called them, contribute directly
to make the other part languish.

There is no governing a state in perfection, and consequently no
executing the plan of a right distribution of the inhabitants, without
exactly knowing their situation as to numbers, their employment, the
gains upon every species of industry, the numbers produced from each
class. These are the means of judging how far those of a particular
trade or occupation are in a situation to bring up a family. To examine,
on the other hand, the state of the higher classes who do not labour,
the ease of their circumstances, and the use the state has for their
service, may appear superfluous. Since those who do not work, must be
supposed to have wherewithal to live; and consequently, not to stand in
need of assistance. But this is not every where, nor always the case:
many excellent subjects are lost to a state, for want of a proper
attention in the statesman to this object.

I have observed how necessary a thing it was to govern a people
according to their spirit: now by governing I understand, protecting,
cherishing, and supporting, as well as punishing, restraining, and
exacting. If, therefore, there be found in any country, a very numerous
nobility, who look upon trade and the inferior arts, as unbecoming their
birth; a good statesman must reflect upon the spirit of former times,
and compare it with that of the present. He will then perceive, that
these sentiments have been transmitted from father to son, and that six
generations are not elapsed since, over all Europe, they were
universally adopted: that although the revolution we talked of in the
10th chap. has in effect rendered them less adapted to the spirit of the
present times, they are however productive of excellent consequences;
they serve as a bulwark to virtue, against the allurements of riches;
and it is dangerous to force a set of men who form a considerable body
in a state, from necessity, to trample under foot, what they have been
persuaded from their infancy to be the test of a noble and generous
mind.

About 200 years ago, the nobility of several nations, I mean, by this
term, all people well born, whether adorned with particular marks of
royal favour or not, used to live upon the produce of their lands. In
those days there was little luxury, little circulation; the lands fed
numbers of useless mouths, in the modern acceptation of useless,
consequently produced a very moderate income in money to the
proprietors, who were, notwithstanding, the most considerable persons in
the state. This class of inhabitants remaining inactive in the country,
during the revolution above mentioned, have, in consequence of the
introduction of industry, trade and luxury, insensibly had the balance
of wealth, and consequently of consideration turned against them. Of
this there is no doubt. This class however has retained the military
spirit, the lofty sentiments; and notwithstanding of their depression in
point of fortune, are found calculated to shine the brightest, when set
in a proper elevation. In times of peace, when trade flourishes, the
lustre of those who wallow in public money, the weight and consideration
of the wealthy merchant, and even the ease and affluence of the
industrious tradesman, eclipse the poor nobility: they become an object
of contempt to bad citizens, an object of compassion to the good; and
political writers imagine they render them an important service, when
they propose to receive them into the lower classes of the people. But
when danger threatens from abroad, and when armies are brought into the
field, compare the behaviour of those conducted by a warlike nobility,
with those conducted by the sons of labour and industry; those who have
glory, with those who have gain for their point of view. Let the state
only suffer this nobility to languish without a proper encouragement,
there is no fear but they will soon disappear; their lands will become
possessed by people of a way of thinking more a la mode, and the army
will quickly adopt new sentiments, more analogous to the spirit of a
moneyed interest.

I find nothing more affecting to a good mind, than to see the distress
of a poor nobility in both sexes. Some have proposed trade for this
class. Why do you not trade? I answer, for the nobility; Because, in
order to trade, I must have money. This objection is unanswerable. Why
then do you not apply to other branches of industry? If it is the state
who is supposed to ask the question, I ask, in my turn, What advantage
she can reap from their industry? What profit from their becoming
shop-keepers, weavers, or taylors? Are not, or ought not all these
classes to be provided with hands from their own multiplication? What
advantage can she reap by the children of one class taking the bread out
of the mouths of another?

If the sentiments in which the nobility have been educated, prove
detrimental to the state, throw a discouragement upon them. If birth is
to be no mark of distinction, let it not be distinguished by any
particular privilege, which in appearance sets that class above the
level of those with whom the state intends they should be incorporated.
You do not make your valet de chambre get behind your coach, though upon
an occasion it might be convenient, and though perhaps he had been your
footman the day before; you would even turn him out of doors, did he not
change his company with his rank.

If you cannot afford to have a nobility, let it die away: grant, as in
England, the title of noble to one of a family, and let all the rest be
commoners; that is to say, distinguished by no personal privilege
whatsoever from the lowest classes of the people. But if you want them
to serve you as soldiers, and that they should preserve those sentiments
you approve of in a soldier, take care at least of their children. If
these appear to you poor and ragged, while they are wandering up and
down their fathers lands, chasing a wretched hare or a partridge,
compare them, when in the troops, with those of your wealthy neighbours,
if any such you have.

The establishment of an _hôtel militaire_ shews at least that there are
people who lend an ear to such representations. I do not propose that a
prince should divert into that channel those streams of wealth which
flow from every part of the state, though nothing is more reasonable
than for men to pay in order to protect their gains, but let a tax be
imposed upon noble property, and let that be applied for the education
of the generous youth from their earliest years. There the state will
have all under her eye, they are her children, her subjects, and they
ask no more than to be taken from the obscurity of their habitations,
and rendered capable of being employed while young and vigorous. When
they have done their task, the country which produced them will receive
them back into her warm bosom; there they will produce others like
themselves, and support the spirit and propagation of their own class,
without becoming any charge upon others.

A statesman should make it his endeavour to employ as many of every
class as possible, and when employment fails in the common run of
affairs, to contrive new outlets for young people of every denomination.
The old and idle are lost beyond recovery in many particulars.

The mutual relations likewise, through industry, between class and class
should be multiplied and encouraged to the utmost. Relations by
marriage, I am apt to believe, prove here more hurtful than beneficial.
That is to say, I would rather discourage the intermarriage of the
persons of different classes; but I would encourage, as much as
possible, all sorts of mutual dependencies between them, in the way of
their trades. The last tends to keep every one employed, according to
the wants and spirit of his class; the first is productive in general of
no good effect that I can perceive; which is reason sufficient for a
state to give at least no encouragement to such marriages, and this is
all the restraint proper to be imposed.

Such members of the society as remain unemployed, either from natural
infirmities or misfortunes, and who thereby become a load upon others,
are really a load upon the state. This is a disease which must be
endured. There is no body, no thing, without diseases. A state should
provide retreats of all sorts, for the different conditions of her
decayed inhabitants: humanity, good policy, and christianity, require
it. Thus much may be said in general upon the principles which direct
the employment and distribution of inhabitants, which in every state
must be different, according to circumstances relating to the extension,
situation and soil of the country, and above all, to the spirit of the
people. I am next to offer some considerations with regard to the proper
methods of augmenting numbers.

------------------------------------------------------------------------



                               CHAP. XII.
   _Of the great Advantage of combining a well digested Theory and a
  perfect Knowledge of Facts with the practical Part of Government, in
                   order to make a People multiply._


We have the happiness to live in an age where daily opportunities offer,
of perceiving the difference between exercising an art according to the
mechanical received practice, and according to the principles which
study and refinement have introduced for bringing it to perfection. This
will appear in the strongest light to one who compares the operation of
building an ordinary house, with that of executing a great public work,
where the most able architects are employed; the making a common parish
road, with that of a military way, through mountains, forests, and
marshes. In the first, every difficulty appears unsurmountable: in the
second, the greatest obstacles are made to vanish. By comparing these
things, we distinguish between the artist, who proceeds by the rules of
the science, and the ordinary tradesman, who has no other resource than
common practice, aided by his own ingenuity.

Every branch of science must be carried to perfection by a master in it,
formed by the hand of nature, and improved by application and
experience. The great genius of Mr. de Colbert saw through the confusion
and perplexity of the administration of the French finances; he invented
resources for swelling the public treasure, which never would have been
liable to so many inconveniencies as are complained of, had the
administration been conducted with as much disinterestedness, as it was
set on foot with ability. The genius of Mr. Law was original as to
figures and paper credit. Sir Robert Walpole discovered new principles
of taxation, he extended the plan of public credit, and reduced the
application of it to a science. These were born statesmen, they were
creators of new ideas, they found out new principles for the government
of men, and led them by their interest to concur in the execution of
their plans. Men of a speculative disposition may broach hints, although
the force of theory, destitute of practice, and unassisted by
experiment, be not sufficient to carry them the length of forming a
plan. A great genius, with power and authority, has occasion for no more
than a hint to strike out the system, and to carry it, with success,
into execution.

No problems of political oeconomy seem more obscure than those which
influence the multiplication of the human species, and which determine
the distribution and employment of them, so as best to advance the
prosperity of each particular society.

I have no where found these matters treated to my wish, nor have I ever
been able to satisfy myself concerning them. There are many clouds which
still cover the fruitful fields of this science; and until these be
dissipated, the political eye cannot take in the whole landscape, nor
judge of the deformities which appear in the many representations which
our modern painters are daily giving of it.

I may here, without an imputation of vanity, put myself so far upon a
level with the great Montesquieu, as to adopt the saying of Correggio,
_Io anche son pittore_; I am also a dawber; for I frankly acknowledge my
own insufficiency to treat this subject with perspicuity: my frequent
repetitions, and my often returning to it at different times, in order
to clear up my ideas and those of my readers, shews plainly, that I am
sensible of my own insufficiency. By setting it in different lights, and
viewing it as it were from different stations, perhaps both my reader
and I may come at last to see a little clearer.

In a former chapter, I have endeavoured to lay down the principles which
influence multiplication; but alas! they are all so general, that they
can be considered only as the most remote. They may satisfy a slight
speculation, but can be of little use in practice. I have principally
insisted upon those which are found to operate at all times among
societies where primitive simplicity prevails. Now this matter comes to
be examined in a more complex light, as relative to the modern manners
of mankind, which no statesman, however able, can change, where trade,
industry, luxury, credit, taxes, and debts, are introduced. In these the
most polite nations of Europe are involved. This is a chain of adamant,
it hangs together by a cohesion, which the successive revolutions of
three centuries have so cemented with the spirit of nations, that it
appears to be indissoluble. It is not my business to examine how far the
modern system is to be preferred to the antient; my point of view is, to
investigate how a statesman may turn the circumstances which have
produced this new plan of oeconomy to the best advantage for mankind,
leaving the reformation of such plan to time and events, of which I am
not the master. Schemes of recalling antient simplicity, and of making
mankind honest and virtuous, are beautiful speculations: I admire them
as much as any body, but not enough to believe them practicable in our
degenerate age.

If therefore the principles I here lay down appear contradictory to so
amiable a system of policy, let no man thence conclude any thing to my
disadvantage upon the account of my particular opinion of it, which is a
matter of no importance whatsoever. My object is to examine the
consequences of what we feel and see daily passing, and to point out how
far the bad may be avoided, and the good turned to the best advantage.

The loss of antient simplicity, and the introduction of this complicated
scheme of living, has rendered the mechanism of government infinitely
more difficult, and almost every disorder in the political body affects
multiplication. Depopulation is as certain a mark of political diseases,
as wasting is of those in the human body. The increase of numbers in a
state shews youth and vigour; when numbers do not diminish, we have an
idea of manhood, and of age when they decline.

The importance of the subject therefore requires me to bring it once
more upon the carpet, in order to inquire into the proper methods of
restoring and preferring youth, and of diffusing vigour into every
articulation, into every vein, into every nerve, as I may say, of a
modern society.

In the republic of Lycurgus an unmarried man met with no respect;
because no reason but debauchery could prevent his marrying. Marriage
was no load in a state where all were fed and taken care of at the
public charge. A Spartan who did not marry, was considered as one who
refused to contribute towards recruiting of the army, only to gratify a
vicious habit.

The _jus trium liberorum_, and the other encouragements given by
Augustus Cæsar to engage the Romans to marry, were calculated chiefly
for the nobility, and only for the citizens, but not at all for the
inferior class (the slaves) bound to labour. The vice to be corrected,
and that which the emperor had in his eye in those institutions, was the
prodigal and dissolute life of rich men who lived in celibacy. This
affected the Roman state, and deprived it of its principal force, the
military power, the equites. Judge of the force of this class by the
numbers of them destroyed at Cannæ. In those days, the chief
encouragement to multiplication was to be directed towards the higher
classes; the lower classes of the people (by far the most numerous in
all countries and in all ages) were easily recruited, by the importation
of slaves, as they are now in the West-Indies, where, consequently, the
same principle must naturally operate, which fixed the attention of the
wise emperor. The state of affairs in Europe, and in England
particularly, is changed entirely, by the establishment of universal
liberty. Our lowest classes are absolutely free; they belong to
themselves, and must bring up their own children, else the state becomes
depopulated. There is no resource to us from importation, whether by
ships, or acts of parliament for naturalization. We shall always have a
numerous and free common people, and shall constantly have the same
inconveniencies to struggle with, as long as the lowest classes remain
in such depression as not to be able to support their own numbers. Here
then lies the difficulty. In order to have a flourishing state, which
Sir William Temple beautifully compared to a pyramid, we must form a
large and solid basis of the lowest classes of mankind. As the classes
mount in wealth, the pyramid draws narrower until it terminate in a
point, (as in monarchy) or in a small square, as in the aristocratical
and mixed governments. This lowest class therefore must be kept up, and,
as we have said, by its own multiplication. But where every one lives by
his own industry, a competition comes in, and he who works cheapest
gains the preference. How can a married man, who has children to
maintain, dispute this preference with one that is single? The unmarried
therefore force the others to starve; and the basis of the pyramid is
contracted. Let this short sketch of a most important part of our
subject suffice at present; it shall be taken up and examined at more
length, in the chapter of physical necessaries, or natural wants.

From this results the principal cause of decay in modern states: it
results from liberty, and is inseparably connected with it.

Several modern writers upon this subject, recommend marriage, in the
strongest manner, to all classes of inhabitants; yet a parish priest
might, properly enough, not be warranted to join a couple unless they
could make it appear that their children were not likely to become a
burden to the parish. Could any fault be found, reasonably, with such a
regulation? Those who are gratuitously fed by others are a load upon the
state, and no acquisition, certainly, so long as they continue so.
Nothing is so easy as to marry; nothing so natural, especially among the
lower sort. But as in order to reap, it is not sufficient to plow and to
sow, so in order to bring up children, it is not sufficient to marry. A
nest is necessary for every animal which produces a helpless brood: a
house is the nest for children; but every man who can beget a child
cannot build or rent a house.

These reflections lead me to make a distinction which I apprehend may be
of use in clearing up our ideas concerning population. Let me therefore
consider the generation of man in a political light, and it will present
itself under two forms. The one as a real multiplication; the other only
as procreation.

Children produced from parents who are able to maintain them, and bring
them up to a way of getting bread for themselves, do really multiply and
serve the state. Those born of parents whose subsistence is precarious,
or which is proportioned only to their own physical necessary, have a
precarious existence, and will undoubtedly begin their life by being
beggars. Many such will perish for want of food, but many more for want
of ease; their mendicity will be accompanied with that of their parents,
and the whole will go to ruin; according to the admirable expression of
the Marechal de Vauban, in his Dixme Royale. _La mendicité_, says he,
_est un mal qui tue bientot son homme_. He had many examples of the
truth of it before his eyes; whoever has not, must have seen little of
the world.

When marriage is contracted without the requisites for multiplication,
it produces a procreation, attended with the above mentioned
inconveniencies; and as by far the greater part of inhabitants are in
the lower classes, it becomes the duty of a statesman to provide against
such evils, if he intends, usefully, to increase the number of his
people.

Every plan proposed for this purpose, which does not proceed upon an
exact recapitulation of the inhabitants of a country, parish by parish,
will prove nothing more than an expedient for walking in the dark. Among
such recapitulations or lists I would recommend, as an improvement upon
those I have seen in the Marechal de Vauban’s excellent performance
above cited, and in the states of his Prussian Majesty, or elsewhere, to
have one made out, classing all the inhabitants, not only by the trades
they exercise, but by those of their fathers, with a view to distinguish
those classes which multiply, from those which only procreate. I should
be glad also to see bills of mortality made out for every class,
principally to compare the births and deaths of the children in them.

Let me take an example. Suppose then, that I have before me a general
recapitulation of all the inhabitants of a country, parish by parish,
where they may appear distributed under the respective denominations of
their fathers’ employment. I shall immediately find a considerable
number produced from the higher classes, from those who live upon an
income already provided, and upon branches of industry which produce an
easy and ample subsistence. These have no occasion for the assistance of
the state in bringing up their children, and you may encourage marriage,
or permit celibacy in such classes, in proportion to the use you find
for their offspring when they are brought up. When I come to the lower
classes, I examine, for example, that of shoemakers, where I find a
certain number produced. This number I first compare with the number of
shoemakers actually existing, and then with the number of marriages
subsisting among them, (for I suppose recapitulations of every kind)
from which I discover the fertility of marriage, and the success of
multiplication in that part. When the state of the question is examined,
class by class, I can decide where marriage succeeds, and where it does
not. I have said, that I imagine it an advantage that every class should
support at least its own numbers; and when it does more, I should wish
(were it possible) that the higher classes might be recruited from the
lower, rather than the lower from the higher; the one seems a mark of
prosperity, the other of decay: but I must confess that the first is by
far the most difficult to be obtained.

According therefore to circumstances, and in consistence with these
principles, I would encourage marriage by taking the children off the
hands of their parents. Where marriage succeeds the worst, if it happens
to be in a very low class, great encouragement should be given to it:
perhaps the whole should be taken care of. Certain trades may be loaded
with one child, others with two, and so progressively. But of this, more
in another place. I beg it may not here be imagined that I propose, that
the whole of the lower classes of people are to marry and propagate, and
that the state is to feed all their offspring. My view extends no
farther, than to be assured of having such a number of children yearly
taken care of as shall answer the multiplication proposed, and that
these be proportionally raised from each class, and from each part of
the country, and produced from marriages protected by the state,
distinguished from the others, which under a free government must always
be found exposed to the inconveniencies of want and misery. To guard
against such evils ought to be another object of public care. Hospitals
for foundlings are an admirable institution; and colonies are an outlet
for superfluous inhabitants. But I insensibly enter into a detail which
exceeds my plan. To lay down a scheme, you must suppose a particular
state perfectly known. This lies beyond my reach, and therefore I shall
go no farther, but illustrate what I have said, by some observations and
reflections which seem analogous to the subject.

I have not here proposed plans of multiplication inconsistent with the
spirit of the nations with which I am a little acquainted; nor with the
religion professed in Europe, for many reasons, obvious to any rational
man. But principally, because, I believe, it will be found, that a
sufficient abundance of children are born already; and that we have
neither occasion for concubinage, nor polygamy, to increase their
numbers. But we want a right method of taking care of those we have, in
order to produce a multiplication proportioned to the possibility of our
providing nourishment and employment. I have therefore proposed, that a
statesman, well informed of the situation of his people, the state of
every class, the number of marriages found in each, should say, let
there be so many marriages authorised in every class, distributed in a
certain proportion for every parish, city, burrow, &c. in the country;
let rules be laid down to direct a preference, in case of a competition,
between different couples; and let the consequence of this approbation
be, to relieve the parents of all children above a certain number, as
has been said. I propose no new limitations upon marriage, because I am
a friend to liberty, and because such limitations would shock the spirit
of the times. I therefore would strongly recommend hospitals for
foundlings over all the country; and still more strongly the frugal
maintenance of children in such hospitals, and their being bred up early
to fill and recruit the lowest classes of the people.

------------------------------------------------------------------------



                              CHAP. XIII.
   _Continuation of the same Subject, with regard to the Necessity of
having exact Lists of Births, Deaths, and Marriages, for every Class of
                   Inhabitants in a modern Society._


Mr. Derham has furnished some tables which shew the proportion between
marriages and births in England, to be as 1 to 4; that of births to
burials as 1 12⁄100to 1: from which it appears that multiplication there
goes on, though slowly: a mark of youth and vigour. Dr. Davenant values
the augmentation at 9000 a year. Could matters be kept at that standard,
I should prefer it by far to a more rapid multiplication: it amounts to
about a million in a century (without entering into accumulations or
exact calculations) and the longer youth is preserved so much the
better. A rapid multiplication will stop at some period, and that stop,
which marks distress, must produce great inconveniencies.

These calculations extracted from very lame vouchers, shew how necessary
it is to have authentic recapitulations: since, lame as they are, it is
from these and the like, that Dr. Halley, and others, have calculated
the value of annuities, which (at a time when all the states of Europe
are borrowing money at the expence of every man’s private industry or
property) ought to be valued at their real worth. Now, in all these
calculations of mortality, it appears that what we have called the abuse
of marriage or procreation is included.

If it be true, as I think it is, from what I have seen and observed,
that numbers, especially of children, among the lower classes, perish
from the effects of indigence; either directly by want of food, or by
diseases contracted gradually from the want of convenient ease; and that
others perish for want of care, when the slightest assistance of a
surgeon to let them blood, would be sufficient to preserve them against
the inflammatory distempers to which they are chiefly exposed.

If these things are so, must we not infer, that calculations formed upon
a conclusion drawn from the births and deaths of mankind in general,
cannot possibly be so exact as if the like were drawn from those of
every class of inhabitants taken separately.

It may here be answered, that among the rich and easy, there are found
diseases which sweep off numbers, in as great a proportion as other
distempers do of the poor: that we see very large families brought up
among the lowest classes, while a great man has all the pains in the
world to preserve a young boy from the wreck of a number of children.

All this I agree may be true; but I should be glad to see in what
proportion it _is_ so, and to be certain of the fact. I want to know the
diseases of the rich and of the poor; I want to have as particular
details of the births and deaths of every class, as I can have of those
of the cities of Paris, London, or Breslaw. I want to know from what
parents those multitudes of poor which I find every where are sprung;
and most of all to have such accounts from different countries, where
different manners prevail. For no just conclusion can be drawn from the
comparison of facts, without examining circumstances. The most barren
class in one country, may be the most fruitful in another. As an example
of this, let any one compare the state of marriage among the footmen of
London and of Paris.

I find error concealed every where under general propositions. The
children of the poor, says one, thrive better than those of the rich. If
it be so, it ought not to be so in common reason. But the same person
will tell you, I have made my son a merchant; he will be a rich man.
Why? Because (A B) was a merchant, who, from nothing, died worth a
hundred thousand pounds. But if you go through all the letters of the
alphabet following (A B), among those who set out as he did, you will
find, that perhaps every one of them died a bankrupt. Those who prove
successful are remarkable: those who miscarry are never heard of. It is
just so with respect to the question before us. But to return to our
tables, and what are called calculations.

One marriage produces four children at a medium in England. If you
reckon 6,000,000 of people in that country, and that 1⁄30 part dies
annually, then to keep up the stock it is sufficient that 200,000 be
annually born; add to this the yearly increase of 9000, the total of
births will then be 209,000: for if 200,000 die this year, and if
209,000 be born, this must certainly imply an increase of 9000,
providing we suppose the acquisition of foreigners to be equal to the
exportation of the natives. As this is only meant as an illustration, I
need not examine the matter of fact. The next question is, how many
marriages, properly contracted or encouraged as above, will give this
increase? For we may know that these subsisting in that kingdom, joined
with the effects of extramatrimonial conjunctions, is just sufficient to
produce it. I imagine that nothing but experiment can give the solution
of this question. Mr. King supposes every 104th person in England to
marry yearly, that is 57,682 persons, or 28,841 couples. If this number
of marriages be supposed to subsist with fertility for seven years,
producing a child every year, the number of 200,000 births would be
procured; but I apprehend that marriages, rightly contracted, subsist
much longer in general than seven years, even with fertility, though not
in proportion to a child every year: consequently, the number of
marriages constantly subsisting with fertility in England, where it is
supposed that 28,841 are yearly contracted, must be much greater than
seven times that number, or than 201,887. If we suppose the whole of the
209,000 births to be produced by marriages, at three marriages to every
child annually produced, then the number of marriages subsisting will be
627,000. From these speculations (for I do not pretend to call them
calculations) I conclude, that the more fruitful marriages are rendered
(not with regard to procreation, merely, but multiplication, which I
have above distinguished) the fewer become necessary; and the fewer
unnecessary marriages are contracted, the better for the state, and the
less misery for those who contract them. I shall here stop, and leave to
the reader to draw his conclusions, putting him in mind of the wide
difference that is always found between theory and practice.

From this reasoning I infer, that no exact judgment can be formed, as to
the numbers in any society, from the single datum of the annual number
of deaths among them; and although the just proportion between numbers
and deaths may exactly be determined in one particular place, yet that
proportion will not serve as a general standard, and being taken for
granted may lead to error.

Here are the reasons for my opinion.

Were no body to marry but such as could maintain their children, the
bills of births and burials would, I apprehend, diminish, and yet
numbers might remain as before; and were every body to marry who could
procreate, they certainly would increase, but still numbers would never
exceed the proportion of subsistence. Could we but see bills of births
and deaths for the city of Rome, while in all its glory; or indeed for
the sugar colonies in America, where slaves are imported, adding the
number of those imported to that of births, and supposing the colony
neither upon the growing nor the declining hand, then the deaths and
births would be equal; but the proportion of them to all in the colony,
I apprehend, would be far less than in any state in Europe, where
slavery does not prevail.

It may be alledged, that were all to marry, the consequence would be a
great multiplication. I say not; or if it were, what sort of
multiplication would it be? A multitude of children who never could come
to manhood; or who would starve their parents, and increase misery
beyond expression. All therefore that can be learned from bills of
mortality, &c. is, that if the births exceed the deaths, and that all
remain in the country, numbers will increase; that if the deaths exceed
the births, numbers will diminish; but while they stand at par, no
conclusion can be drawn as to numbers in general: these will be in a
less proportion as abusive procreation goes forward; and, _vice versa_,
they will be in a greater. There still hangs a cloud upon this subject:
let me therefore reason upon an example. Suppose the inhabitants of a
country to stand at 6,000,000, one thirtieth to die every year, and as
many to be born, that is, the births and burials to stand at 200,000;
that every three marriages subsisting produce a child every year, that
is 600,000 marriages; let the quantity of food be supposed the same,
without a possibility of being augmented. Would not the consequence be,
that numbers could not increase? Now let me suppose marriages carried to
1,000,000, I say the effect would be, either that they would become in
general less fruitful, or if they suffered no diminution in this
particular, that the bills of births and deaths would rise to 333,333;
that is to say, they would be to the number of inhabitants as 1 to 18,
instead of being as 1 to 30. Now this increase of mortality proceeding
from want of food, either the old would starve the young, or the young
would starve the old; or a third case, more probable than either, would
happen, the rich would starve the poor. What would be the consequences
in all these three suppositions? In the first, the number of 6,000,000
would be found to diminish; because the proportion of large consumers
would rise, and mortality would increase among the children. In the
second, the standard number would augment, because the proportion of
small consumers would rise, and mortality would increase among the
parents. In the third, numbers would remain pretty much the same, but
misery and distress would lay all the lower classes waste. It is
computed that one half of mankind die before the age of puberty in
countries where numbers do not augment; from this I conclude, that too
many are born. If methods therefore are fallen upon to render certain
diseases less mortal to children, all the good that will be got by it,
in general, will be to render old people of the lower classes more
wretched; for if the first are brought to live, the last must die.

From these speculations I cannot help wishing to see bills of mortality
made out for different classes, as well as for different ages. Were this
executed it would be an easy matter to perceive, whether the mortality
among children proceeds from diseases to which infancy is necessarily
exposed, or from abusive procreation. I am pretty much convinced before
I see the experiment, that it proceeds from the latter; but should
experience prove it, the principles I have laid down would acquire an
additional force. In the mean time, I must conclude, that it is not for
want of marrying that a people does not increase, but from the want of
subsistence; and it is miserable and abusive procreation which starves
one half of the whole, and is the fountain of so much wretchedness.

Upon the whole, I may say, that were it possible to get a view of the
general state of births and burials in every class of the inhabitants of
a country, marriage might surely be put upon a better footing than ever
it has been, for providing a determined number of good and wholesome
recruits every year towards national multiplication. This is walking in
the light, and is a means of procuring whatever augmentation of hands
you wish for. What difficulties may be found in the execution, nothing
but experience can shew; and this, to a judicious eye, will point out
the remedy. In my opinion, this will be far better than a general
naturalization, which I take to be a leap in the dark. For however easy
it may be to naturalize men, I believe nothing is so difficult as to
naturalize customs and foreign habits; and the greatest blessing any
nation can enjoy, is an uniformity of opinion upon every point which
concerns public affairs and the administration of them. When God blesses
a people, he makes them unanimous, and bestows upon them a governor who
loves them, and who is beloved, honoured and respected by them; this,
and this only, can create unanimity.

Let this suffice at present, as to the distribution, employment, and
increase of a people. Upon the proper employment of the free hands, the
prosperity of every state must depend: consequently the principal care
of a statesman should be, to keep all employed, and for this purpose he
must acquire an exact knowledge of the state of every denomination, in
order to prevent any one from rising above, or sinking below that
standard which is best proportioned to the demand made for their
particular industry. As the bad consequences resulting from the loss of
this exact balance are not immediate, a moderate attention, with the
help of the proper recapitulations, will be sufficient to direct him.

This and the two preceding chapters have in a manner wholly treated of
the employment of the free hands: I must now consider the effects of an
overcharge of those employed in agriculture. Here we shall still
discover inconveniencies, resulting from the want of that just
proportion in the distribution of classes, which gives health and vigour
to a state; and we shall see how it may happen, that even an overcharge
of inhabitants in general may become a political disease; as an
abundance of blood, however rich and good, may affect the health of the
human body.

------------------------------------------------------------------------



                               CHAP. XIV.
             _Of the Abuse of Agriculture and Population._


I have taken notice above of two performances, wherein the authors, with
equal ability, have treated of the numbers of mankind; a subject which
has a very close connection with political oeconomy.

Although (as I have said) I do not pretend to decide between them as to
the point in dispute, I find that in this chapter I shall be naturally
led into a chain of reasoning very contrary to that of Mr. Wallace,
which is a thing I should have dispensed with, did not the merit of his
performance in the eyes of the learned world appear sufficient to draw
my attention.

Agriculture is without all doubt the foundation of multiplication, which
must ever be in proportion to it; that is, to the earth’s productions,
as has been said. But it does not follow, that in proportion to
multiplication those produced must of course become useful to one
another, and useful to the society in general. Now I consider
multiplication as no otherwise useful to a state, than in so far as the
additional number becomes so, to those who are already existing, whom I
consider as the body-politic of the society. If it therefore happens,
that an additional number produced do no more than feed themselves, then
I perceive no advantage gained to the society by their production. If,
without rendering any equivalent service, they are fed by others, there
is a loss.

Agriculture may be said to be carried to its utmost extent, when the
earth is so laboured as to produce the greatest quantity of fruits
possible for the use of man; and in judging of the improvement of two
spots of ground of the same extent, that may be said to be most improved
which produces the greatest quantity of food: but as to population, the
question does not stop there; for let the quantity be equal on both, yet
if the inhabitants of the one be more frugal livers than those of the
other, this circumstance alone will make an inequality. If agriculture
therefore be considered only with respect to population, we must
consider that country as the best peopled, where productions are the
most abundant, and where the inhabitants are the most sober. Thus much
with regard to the extent of agriculture and population: we come now to
consider the inconveniencies which may result to a society from an
over-stretch, or from what I call an abuse of either the one or the
other.

I call every thing an abuse in society which implies a contradiction to
the spirit of it, or which draws along with it an inconveniency to
certain classes, which is not compensated by the general welfare.

The political oeconomy of government is brought to perfection, when
every class in general, and every individual in particular, is made to
be aiding and assisting to the community, in proportion to the
assistance he receives from it. This conveys my idea of a free and
perfect society, which is, _a general tacit contract, from which
reciprocal and proportional services result universally between all
those who compose it_.

Whenever therefore any one is found, upon whom nobody depends, and who
depends upon every one, as is the case with him who is willing to work
for his bread, but who can find no employment, there is a breach of the
contract, and an abuse. For the same reason, if we can suppose any
person entirely taken up in feeding himself, depending upon no one, and
having nobody depending on him, we lose the idea of society, because
there are no reciprocal obligations between such a person and the other
members of the society.

Those who are for employing the whole of a people in agriculture may
answer, that all their time cannot be employed in this occupation, and
that in the intervals they may apply themselves to supply reciprocal
wants.

I very readily agree, that any person, who would calculate his labour in
agriculture, purely for his own subsistence, would find abundance of
idle hours. But the question is, whether in good oeconomy such a person
would not be better employed in providing _nourishment_ for others, than
in providing for any other want. When he provides food, he surely
provides for a want; and experience shews, that it is better for a man
to apply close to one trade, than to turn himself to several.

Hence I conclude, that the best way of binding a free society together,
is by multiplying reciprocal obligations, and creating a general
dependence between all its members. This cannot be better effected, than
by appropriating a certain number of inhabitants, for the production of
the quantity of food required for all, and by distributing the remainder
into proper classes for supplying every other want. I say farther, that
this distribution is not only the most rational, but that mankind fall
naturally into it; and misery attends and has ever attended those who
have been found without a particular employment.

It must not be concluded from this reasoning, that abuse is always
implied when we find any of the classes of the free hands of a state
casually employed in agriculture.

There is such a variety of circumstances in every country, that without
a peculiar talent of laying principles together, so as to answer every
combination, the most perfect theory which can be proposed must appear
defective.

In countries ill-improved, where industry begins to take root, we are
not to conclude, that good policy requires a sudden and immediate
separation between the dwellings of the husbandmen and free hands.
Sudden revolutions are constantly hurtful, and a good statesman ought to
lay down his plan of arriving at perfection by gradual steps.

If he finds, as is the case of rude and uncivilized societies, that many
are occupied, partly, in providing subsistence for their own family,
partly, in other useful pursuits, he may by degrees detach as many as he
can from every other branch of industry, except that of agriculture. The
most wealthy are the most proper to carry this branch to any degree of
perfection. The landed men ought to be encouraged by every means to
apply to the study of farming. This employment has been considered as
honourable in all ages of the world, and very well suits the rank, the
interest, and the amusement of gentlemen.

The next step is to introduce manufactures into the country, and to
provide a ready market abroad for every superfluous part of them. The
allurement of gain will soon engage every one to pursue that branch of
industry which succeeds best in his hands. By these means many will
follow manufactures and abandon agriculture; others will prosecute their
manufactures in the country, and avail themselves at the same time, of
small portions of land, proper for gardens, grass for cows, and even for
producing certain kinds of fruit necessary for their own maintenance.

This I do not consider as a species of farming. It is more properly, in
a political light, a sort of village life, only the village here appears
dispersed over a large extent; and I call it a village life, because
here the occupation of the inhabitants is principally directed towards
the prosecution of their trades: agriculture is but a subaltern
consideration, and will be carried on so far only, as it occasions no
great avocation from the main object. It will however have the effect to
parcel out the lands into small possessions: a system admirably
calculated for the improvement of the soil, and advantageous to
population, when the spirit of industry is not thereby checked. This is
not the case when such possessors apply totally to agriculture, and
content themselves with a bare subsistence from it, without prosecuting
any other branch of industry, or forming any plan of ambition for
themselves, or for their children’s emerging from so circumscribed a
sphere of life: from this alone proceeds, in most countries, the
inconveniency of a minute subdivision of land property.

We shall presently see, by various examples, the truth of this
proposition; and from what observations I have been able to make, it
appears, that a great inconvenience flows from it; the _property_ of the
lands, and not the _bare possession_ of them, is vested in the lower
classes. While they only remain as tenants, the interest of the
proprietor, on one hand, will lead him to incorporate these small
possessions into larger farms, the moment the possessors, by relaxing
from their principal occupation, (industry) are no longer able to pay a
rent above the value of the grounds when let in farms; and the interest
of these tenants, on the other hand, will frequently lead them to
abandon such small possessions, when the prosecution of their industry
demands a change of habitation. Thus the interest of agriculture will go
hand in hand with that of industry, and classes will separate their
habitations, according as their respective interests require.

It is certainly the interest of every landlord, whose land is ill
improved, to multiply habitations upon it, providing he makes choice of
such people as can live by some other branch of industry than bare
agriculture: and, in many cases, it may be his advantage to incorporate
his lands into farms as soon as they are fully cultivated. By this plan
he will advance the improvement of his land; he will multiply the useful
inhabitants; and he will at the same time share the profits of their
industry beyond the value of the land rent.

By these means has the woollen manufacture in England, and the linen in
Ireland and Scotland been greatly augmented. But as the improvement of
land goes on, this oeconomy will decline: towns will swell in
consequence of the principles we are now going to deduce; the lands will
become more thinly inhabited; and farms will by degrees grow more
extensive. I appeal to experience for the justness of this opinion.

Hence it plainly appears, that, in every light this matter can be
represented, we still find it impossible to employ usefully above a
certain part of a people in agriculture. The next question is, how to
determine the just proportion. For this purpose we must have recourse to
facts, not to theory. We have, in a former chapter, examined the state
of this question with regard to one country. I shall here only add,
that, in proportion to the culture of the soil, and to the number of
crops it is made to produce, a greater or less number will be required;
and in proportion to the surplus of food above what is necessary to
maintain the labourers, will a number of free hands be provided for. If
therefore a species of agriculture can be found established, which
produces little or no surplus, _there_ little or no industry can be
exercised; few wants can be supplied: this will produce a wonderful
simplicity of manners, will ruin the system of modern policy, and
produce what I must call an abuse. Let me look for some examples, in
order to set this question in a clearer light.

In the wine-provinces of France, we find the lands which lie round the
villages divided into very small lots, and there cultivation is carried
to a very extraordinary height. These belong _in property_ to the
peasants, who cultivate the vines. No frugality can be greater than in
the consumption of this produce, and the smallest weed which comes up
among the grain, is turned to account, for the food of animals. The
produce of such lands, I may say, is intirely consumed by the proprietor
and his family, who are all employed in the cultivation, and there is no
superfluous quantity here produced for the maintenance of others. Does
not this resemble the distribution of lands made by the Romans in favour
of 5000 Sabine families, where each received two _plethra_ of ground.
[See Numbers of Mankind, p. 117.] Now let me examine the political state
of agriculture, and of other labour performed by my French vine-dresser.

By the supposition we imply, that the bit of land is sufficient for
maintaining the man and his family, and nothing more; he has no grain to
sell, no food can by him be supplied to any other person whatever; but
the state of other lands capable of yielding a surplus, such as the
vineyard, produces a demand for his labour. This labour, considered with
respect to the vine-dresser, is a fund for providing all his wants in
manufactures, salt, &c. and what is over must be considered as his
profits, out of which he pays the royal impositions. The same labour,
considered with regard to the proprietor of the vineyard, enters into
that necessary deduction out of the fruits, which, when deducted, leaves
the remainder, which we call surplus, or what answers to the land rent.
This belongs to the proprietor, and becomes a fund for supplying all his
wants.

Here we have an idea of society. The vine-dresser depends upon the
proprietor for the price of his labour; the proprietor upon the
vine-dresser for his surplus. But did we suppose all the kingdom
parcelled out, and laboured, as the spot which lies round the village,
what would become of the vine-dresser with regard to all his other
wants; there would be no vines to dress, no surplus nourishment any
where found, consequently no employment, not even life, for those who
had no land. From this example we discover the difference between
agriculture exercised _as a trade_ and _as a direct means of
subsisting_, a distinction to be attended to, as it will very frequently
occur in the prosecution of our subject. We have the two species in the
vine-dresser: he labours the vineyard as a trade, and his spot of ground
for subsistence. We may farther conclude, that, as to the last part, he
is only useful to himself; but, as to the first, he is useful to the
society, and becomes a member of it; consequently, were it not for his
trade, the state would lose nothing, though the vine-dresser and his
land were both swallowed up by an earthquake. The food and the consumers
would both disappear together, without the least political harm to any
body: consequently, such a species of agriculture is no benefit to a
state; and consequently, neither is that species of multiplication,
implied by such a distribution of property, any benefit. Thus an
over-extension of agriculture and division of lands becomes an abuse,
and so, consequently, does an over-multiplication.

Here I am obliged to conclude, that those passages of Roman authors
which mention the frugality of that people, and the small extent of
their possessions cannot be rightly understood, without the knowledge of
many circumstances relative to the manners of those times. For if you
understand such a distribution of lands to have extended over all the
Roman territory, the number of the citizens would have far exceeded what
they appear to have been by the Census, and even surpass all belief. But
farther, I may be allowed to ask, whether or no it be supposed that
these frugal Romans laboured this small portion of lands with their own
hands and consumed the produce of it? If I am answered in the
affirmative, (which is necessary to prove the advantages of
agriculture’s being exercised by all the classes of a people) then I
ask, from whence were the inhabitants of Rome, and other cities,
subsisted; who fed the armies when in the field? If these were fed by
foreign grain imported, or plundered from their neighbours, where was
the advantage of this subdivision of lands, and of this extensive
agriculture, which could not feed the inhabitants of the state? If it be
said, that notwithstanding this frugal distribution of property among
the citizens, there was still found surplus enough to supply both Rome
and the armies, will it not then follow, that there was no necessity for
employing all the people in agriculture, since the labour of a part
might have sufficed.

_That number of husbandmen_, therefore, _is the best, which can provide
food for all the state; and that number of inhabitants is the best,
which is compatible with the full employment of every one of them_.

Idle mouths are only useful to themselves, not to the state;
consequently, are not an object of the care of the state, any farther
than to provide employment for them; and their welfare (while they
remain useless to others) is, in a free country, purely a matter of
private concern. Let me take another example for the farther
illustration of this matter.

Those who travel into the southern provinces of Spain, find large tracts
of land quite uncultivated, producing only a scanty pasture for herds of
the lesser cattle. Here and there are found interspersed some spots of
watered lands, which, from the profusion of every gift which nature can
bestow, strike a northern traveller with an idea of paradise. In such
places villages are found, and numbers of inhabitants. It must be
allowed that industry and labour do not here go forward as in other
countries; but to supply this want charity steps in. Charity in Spain
(in proportion to its extent) is as powerful a principle towards
multiplication as industry and labour. _Whatever gives food gives
numbers_: but charity cannot extend beyond superfluity, and this must
ever be in proportion to industry. These watered lands are well laboured
and improved. The value of them in one sense, is in proportion to their
fertility, and the surplus of the labourers should naturally be given
for an equivalent in money or work: but this equivalent cannot be found,
because the consumers have neither the one nor the other. If the
Spaniards, therefore, were not the most charitable people upon earth, it
is very plain that the labouring of these watered lands would diminish,
until it came upon a level with the wealth and industry of the
consumers. But here it is otherwise: labour goes on mechanically, and
without combination of circumstances, and the poor live in ease, in
proportion to the plenty of the year.

Here then is a third principle of multiplication. The first is slavery,
or a violent method of making mankind labour; the second is industry,
which is a rational excitement to it; the third is charity, which
resembles the manna in the desert, the gift of God upon a very
extraordinary occasion, and when nothing else could have preserved the
lives of his people. Whether, in all cases, this principle of
christianity advances the prosperity of a modern society (when complied
with from obedience to precept, without consulting reason as to the
circumstances of times and situations) is a question which lies out of
my road to examine. The action, considered in the intention of the
agent, must in every case appear highly beautiful, and we plainly see
how far it contributes to multiplication, though we do not so plainly
perceive how this again is advantageous to society.

Now if we examine the state of agriculture in the territory of this
Spanish village, we find, upon the whole, no more surplus of fruits than
upon the French vine dresser’s portion of land; consequently, if all
Spain was laboured and inhabited like this village and its small garden,
as it is called, it would be the most populous country in the world, the
most simple in the manner of living; but it never could communicate the
idea of a vigorous or a flourishing state. It is the employment alone of
the inhabitants which can impress that character.

Now in this last example, what a number of free hands do we find! are
not all the poor of this class? Would it not be better if all these by
their labour could purchase their subsistence, than be obliged to
receive it in the precarious manner they do? Can one suppose all these
people industrious, without implying what I call superfluity of labour?
Is not this luxury, according to my definition of it? Where would be the
harm if the Spanish farmer, who gives a third of his crop in charity,
should in return receive some changes of raiment, some convenient
furniture for his house, some embellishment to his habitation; these
things would cost him nothing; he would receive them in exchange for
what he now gives from a principle of charity, and those who have a
precarious, would have a certain livelihood. Let us travel a little
farther in search of the abuse of population.

In Germany, we find many small towns, formed into corporations, which
enjoy certain privileges. The freedom of such towns is not easily
purchased; and one, upon considering outward circumstances, must be not
a little surprized to hear of the sums refused, when offered, to obtain
it. Round these towns there is a small territory divided into very small
portions, and not able to maintain the inhabitants: these lands
therefore are infinitely overstocked with husbandmen; for every
proprietor, less or more, concerns himself with the cultivation. Here,
one who would aspire to extend his possession would, according to the
sentiment of Manius Curius Dentatus, certainly be considered as a
dangerous citizen, and a hurtful member of the society. Those lots are
divided among the children of the proprietors, who are free of the town,
by which means they are constantly splitting by multiplication, and
consolidating by death, and by marriage: these nearly balance one
another, and property remains divided as before. A stranger is at a loss
to find out the reason why the liberty of so poor a little town should
be so valuable. Here it is; first there are certain advantages enjoyed
in common, such as the privilege of pasture on the town lands, and
others of a like nature; but I find the charges which the burgesses are
obliged to pay, may more than compensate them. The principal reason
appears to be, that no one who has not the liberty of the town, can
settle in a way of industry so as to marry and have a family: because
without this his labour can only be directed towards furnishing the
wants of peasants who live in villages; these are few, and little
ingenuity is required for it. In towns there is found a greater
diversity of wants, and the people there have found out mechanically,
that if strangers were allowed to step in and supply them, their own
children would starve; therefore the heads of the corporation, who have
an interest to keep up the price of work, have also an interest to hold
the liberty of their town at a high value. This appears to me a pretty
just representation of the present state of some towns I have seen,
relative to the present object of inquiry.

But as industry becomes extended, and trade and manufactures are
established, this political oeconomy must disappear.

Such a change, however, will not probably happen without the
interposition of the sovereign, and a new plan of administration; what
else can give a turn to this spirit of idleness, or rather, as I may
call it, of this trifling industry? Agriculture can never be a proper
occupation for those who live in towns: this therefore is an abuse of
it, or rather indeed an abuse of employment.

Ease and plenty can never enter a little town, but by the means of
wealth; wealth can never come in but by the produce of labour going out;
and when people labour purely for their own subsistence, they only make
the little money they have circulate, but can acquire nothing new; and
those who with difficulty can maintain themselves, can never hope to
increase their numbers.

If in spite of the little industry set on foot in such towns, the
generative faculty shall work its effect and increase numbers, this will
make the poor parents still divide, and misery will ensue; this again
may excite compassion, and that will open the chests of those who have a
charitable disposition: hospitals are founded for the relief of the
poor, they are quickly filled, and as many necessitous remain as ever.
The reason is plain; the hospital applies a palliative for the abuse,
but offers no cure. A tree is no sooner discharged of its branches than
it pushes new ones. It has been said, that numbers are in proportion to
food; consequently, poor are in proportion to charity. Let the King give
his revenue in charity, he will soon find poor enough to consume it. Let
a rich man spend 100,000_l._ a year upon a table, he will find guests
(the best in the kingdom) for every cover. These things, in my way of
considering them, are all analogous, and flow from the same principle.
And the misery found in these little German towns, is another
modification of the abuse of population. These examples shew the
inconveniencies and abuses which result from a misapplication of
inhabitants to agriculture, which produces a population more burthensome
than beneficial to a modern state.

If the simplicity of the antients is worthy of imitation, or if it
appears preferable to the present system, which it is not my business to
decide, then either slavery must be introduced to make those subsist who
do not labour, or they must be fed upon charity. Labour and industry can
never, I think, be recommended on one hand, and the effects of them
proscribed on the other. If a great body of warlike men (as was the case
in Sparta) be considered as essential to the well being of the state; if
all trade and all superfluity be forbid amongst them, and no employment
but military exercises allowed; if all these warriors be fed at public
tables, must you not either have a set of helotes to plow the ground for
them, or a parcel of charitable Spanish farmers to feed them gratis.

Thus much I have thought might be of use to say to illustrate the
principles I have laid down. I find these very contrary to the reasoning
which runs through the whole of the performance which I mentioned above,
and which I have had in my eye. A more particular examination of it
might be useful, and even amusing; but it would engage me in too long a
disquisition for the nature of this work. I cannot however help, in this
place, adding one observation more, in consequence of our principles,
which _seems_ contrary to the strain of our ingenious author’s
reasoning. I say _seems_, because almost all difference of opinion upon
such subjects proceeds from the defect of language in transmitting our
ideas when complex or abstract.

The effect of diseases which sweep off numbers of people does not
essentially diminish population, except when they come suddenly or
irregularly, any more than it would necessarily dispeople the world if
all mankind were to be swept off the stage at the age of forty six
years. I apprehend that in man, as in every other animal, the generative
faculty is more than able to repair all losses occasioned by regular
diseases; and I have shewn, I think, more than once, that multiplication
never can stop but for want of food. As long then as the labour of man
can continue annually to produce the same quantity of food as at
present, and that motives are found to make him labour, the same numbers
may be fed, and the generative faculty, which from one pair has produced
so many millions, would certainly do more than keep up the stock,
although no person were to pass the age above mentioned. Here is the
proof: was the life of man confined to forty six years, the state of
mortality would be increased in the proportion which those who die above
forty six bear to those who die under this age. This proportion is, I
believe, as 1 to 10, consequently, mortality would increase 1⁄10,
consequently, numbers would be kept up by 1⁄10 increase upon births; and
surely the generative faculty of man far exceeds this proportion, when
the other requisites for propagation, to wit, food, &c. are to be found,
as by the supposition.

------------------------------------------------------------------------



                               CHAP. XV.
  _Application of the above Principles to the State of Population in_
                             Great-Britain.


A letter from Dr. Brakenridge, F. R. S. addressed to George Lewis Scott,
Esq; which I found in the Danish Mercury for March 1758, furnishes me
with a very good opportunity of applying the principles we have been
laying down to the state of population in Great-Britain. I shall
therefore, according to my plan, pass in review that gentleman’s
opinion, without entring upon any refutation of it. I shall extract the
propositions he lays down, examine the conclusions he draws from them,
and then shew wherein they differ from those which result from the
theory established in this inquiry.

The author’s calculations and suppositions as to matters of fact shall
be taken for granted, as I believe the first are as good as any that can
be made, upon a subject where all the data required for solving the
problem are quite a piece of guess-work.

I must follow the Mercury, not having the original.

PROP. I. After a very close examination, says our author, I find, that
our islands gain, as to population, absolutely no more than what is
requisite for repairing their losses, and that, in England itself,
numbers would diminish, were they not recruited from Ireland and
Scotland.

PROP. II. Men, able to carry arms, that is from 18 to 56 years, make,
according to Dr. Halley, the fourth part of a people; and when a people
increase in numbers, every denomination, as to age, increases in that
proportion: consequently in England, where the number of inhabitants
does not exceed six millions, if the annual augmentation upon the whole
do not exceed 18,000, as I am pretty sure it does not, the yearly
augmentation of those fit to carry arms will be only 4,500.

PROP. III. In England, burials are to births, as 100 is to 113. I
suppose that, in Scotland and Ireland, they may be as 100 is to 124. And
as there may be, in these two last kingdoms, about two millions and a
half of inhabitants, the whole augmentation may be stated at 15,000; and
consequently that, of such as are fit to carry arms, at 3,750. Add this
number to those annually produced in England, and the sum total of the
whole augmentation in the British isles will be about 8,250.

PROP. IV. The strangers, who arrive in England, in order to settle, are
supposed to compensate those who leave the country with the same intent.

PROP. V. It is out of this number of 8,250, that all our losses are to
be deduced. If the colonies, wars, and navigation, carry off from us
annually 8,000 men, the British isles cannot augment in people: if we
lose more, numbers must diminish.

PROP. VI. By calculations, such as they are, our author finds, that,
upon an average of 66 years, from 1690 to 1756, this number of 8000 have
been annually lost, that is, have died abroad in the colonies, in war,
or on the account of navigation.

PROP. VII. That, since the inhabitants of Britain and Ireland are about
8,000,000, and that the augmentation is annually about 8000, we may
conclude in general for all Europe, that, for every million of
inhabitants, there is an annual augmentation of 1000; consequently,
every thousand men slain in war must destroy all the augmentation of a
million of inhabitants during a year. Consequently France, which
contains 14 millions, according to Sir William Petty, having lost above
14,000 men a-year, during the same 66 years, cannot have augmented in
population.

PROP. VIII. That the progress of trade and navigation augmenting the
loss of people by sea, must consequently have diminished population over
all Europe.

PROP. IX. The exportation of our corn proves what the above propositions
have demonstrated. For supposing the progress of agriculture to
compensate the additional quantity distilled of late years, there is
still 1⁄6 of the crop exported, which proves that our numbers are small,
and that they do not augment.

From these propositions our author concludes, that what stops
multiplication in the British isles is, 1st, That living in celibacy is
become a-la-mode: 2dly, That wars have been carried on beyond the
nation’s force: 3dly, That the use of spirituous liquors destroys great
numbers of inhabitants.

I shall now shortly apply the principles I have been laying down, in
order to resolve every phenomenon here described, as to the population
of Great Britain. These I shall willingly take for granted, as it is of
no consequence to my reasoning, whether they be exact or not: it is
enough that they may be so; and the question here is only to account for
them.

England, says he, would diminish in numbers, were it not recruited from
Scotland and Ireland. This, I say, is a contingent, not a certain
consequence: for did those grown-up adventurers cease to come in, the
inhabitants of England themselves would undoubtedly multiply, provided
an additional number of breeders could be found, able to bring up their
children. Now the importation of grown men into a country in so far
resembles the importation of slaves into our colonies, that the one and
the other diminishes the price of labour, and thereby prevents marriage
among certain classes of the natives, whose profits are not sufficient
for bringing up a family: and when any such do marry notwithstanding,
they do not multiply, as has been said. Now were the Scots and Irish to
come no more into England, the price of labour would rise; those who now
cannot bring up children, might then be enabled to do it, and this would
make the English multiply themselves; that is, it would augment the
number of their own breeders. On the other hand, did the price of labour
continue too low to prove a sufficient encouragement for an additional
number of English breeders, the contingent consequence would take place;
that is, numbers would diminish, according to our author’s supposition,
and the exportation of grain would increase, in proportion to that
diminution; and did foreign demand for grain also diminish, then
agriculture would suffer, and every thing would decline: but of this
more as we go along.

The representation he gives of the state of population in these
countries, is one modification of what I have called a moral incapacity
of a people’s increasing in numbers. It is just so in Africa, where the
inhabitants are sold; just so in Switzerland, and in many mountainous
countries, where inhabitants desert, in order to seek their fortunes
elsewhere. The national stock remains at an equal standard, and the
augmentation upon births above burials is constantly in proportion to
the exportation of inhabitants. Let this proportion rise ever so high,
an increase of national population is noways essentially to be implied
from this phenomenon alone, but must proceed from other causes.

I can find nothing advanced by our author to prove, or even to induce
one to believe, that had the lives of those eight thousands been yearly
preserved from extraordinary dangers, numbers would have augmented.
England enjoyed in a manner 26 years peace after the treaty of Utrecht.
For many years before, a very destructive war had been carried on. Had
the bills of births been produced from 1701 to 1713, had they been
compared with those from this last period to 1739, when the Spanish war
began, had we seen a gradual augmentation from year to year during those
last 26 years, such as might be expected from the preservation of a
considerable number at least of the 8,250 able healthy men, just in the
period of life fit for propagation, one might be tempted to conclude,
that the preceding war had done hurt to population, by interrupting the
propagation of the species. But if, by comparing the bills of births for
a considerable number of years, in war and in peace, one can discover no
sensible difference, it is very natural to conclude, either that those
wars did not destroy many breeders, or that others must have slipt in
directly, and bred in the place of those who had been killed. What
otherwise can be the reason why the number which our author supposes to
have been destroyed abroad, should so exactly compensate the annual
augmentation, but only that those nations are stocked to the full
proportion of their subsistence: and what is the reason why, after a
destructive war, which, by the suddenness of the revolution, sweeps off
numbers of the grown men, and diminishes the original stock, numbers
should in a few years get up to the former standard, and then stop
a-new.

From our author’s representation of the bills of births and deaths, I
should be apt to suspect, in consequence of my principles, that upon a
proper examination it would be found, that, in those years of war, the
proportion of births to deaths had been higher than in years of peace,
because more had died abroad. And, had the slaughter of the inhabitants
gone gradually on, increasing every year beyond the 8,250, I am of
opinion, that the proportion of births might very possibly have kept
pace with it. On the contrary, during the years of peace, the proportion
should have diminished, and had nobody died out of the country at all,
the births and deaths would have become exactly equal.

From what I have here said, the reader may perceive, that it is not
without reason that I have treated the principles relating to my subject
in general, and that I avoid as much as possible to reason from facts
alledged as to the state of particular countries. Those our author
builds upon may be true, and may be false: the proportion of births and
deaths in one place is no rule for another; we know nothing exactly
about the state of this question in the British isles; and it may even
daily vary, from a thousand circumstances. War _may_ destroy population
as well as agriculture, and it _may not_, according to circumstances.
When the calamity falls upon the breeders, and when these are supposed
the only people in the country in a capacity of bringing up their
children, births will soon diminish. When it destroys the indigent, who
cannot bring up their children, or who do not marry, births will remain
the same. The killing the wethers of a flock of sheep does not diminish
the brood of lambs next year; the killing of old pigeons makes a
pigeon-house thrive. When the calamity falls upon the farmers, who make
our lands produce, agriculture is hurt, no doubt: does it fall upon the
superfluities of cities, and other classes of the free hands, it may
diminish manufacturers, but agriculture will go on, while there is a
demand for its produce; and if a diminution of consumption at home be a
consequence of the war, the augmentation upon exportation will more than
compensate it. I do not find that war _diminishes_ the demand for
subsistence.

The long wars in Flanders in the beginning of this century interrupted
agriculture now and then, but did not destroy it. That in the Palatinate
in the end of the last ruined the country so, that it has hardly as yet
recovered it. War has different effects, according to circumstances.

OBJ. The population of the British isles is not stopt for want of food,
because one-sixth part of the crop is annually exported. I answer, That
it is still stopt for want of food, for the exportation only marks that
the home demand is satisfied; but this does not prove that the
inhabitants are full fed, although they can buy no more at the
exportation-price. Those who cannot buy, are exactly those who I say die
for want of subsistence: could they buy, they would live and multiply,
and no grain perhaps would be exported. This is a plain consequence of
my reasoning; and my principal point in view throughout this whole book,
is to find out a method for enabling those to buy who at present cannot,
and who therefore do not multiply; because they can give no equivalent
to the farmers for their superfluity, which consequently they export. By
this application of our principles, I have no occasion to call in
question our author’s facts. It is no matter what be the state of the
case: if the principles I lay down be just, they must resolve every
phenomenon.

------------------------------------------------------------------------



                               CHAP. XVI.
   _Why are some Countries found very populous in respect of others,
               equally well calculated for Improvement?_


This question comes immediately under the influence of the principles
already laid down, and must be resolved in consequence of them. It is
with a view to make the application of these, that I have proposed it;
and, in the examination, we shall prove their justness, or discover
their defects.

It may be answered in general, that every such difference must proceed
from what I call the spirit of the government and of the people, which
will not only decide as to numbers, but as to many other things. I must
however observe, that the question in itself is of little importance, if
nothing but numbers be considered; for of what consequence is it to know
how many people are in a country, when the employment of them does not
enter into the inquiry? Besides, it is only by examining the employment
of a people, that I can form any judgment as to this particular. But as
the numbers of mankind have been thought a point worthy of examination,
I have chosen this title for a chapter, which might perhaps have more
properly stood under another.

While slavery prevailed, I see no reason to conclude against the numbers
of mankind, as I have said already: when slavery was abolished, and
before industry took place, if my principles be true that period I think
should mark the time of the thinnest population in Europe; for I believe
it will be found, that there never was an example of a country, however
fertile by nature, where every one was absolutely free; where there was
little or no industry, nor labour, but in agriculture; and where, at the
same time, there were many inhabitants, not beggars, nor living upon
charity. I have mentioned this so often, that I am afraid of tiring my
reader with useless repetitions. I have brought it in here, only to give
him an opportunity of applying this principle to the solution of the
question before us.

I shall begin my inquiry by asking what is understood by a country’s
being populous; for that term presents different ideas, if circumstances
are not attended to. I have heard it said, that France was a desert, and
that there was nobody found in it but in towns; while in England one
cannot travel half a mile without finding a farm, perhaps two together;
and in looking round, one sees the whole country divided into small
possessions. The difference here found, I apprehend, decides nothing in
favour of, or against the real populousness of the one or the other, but
proceeds entirely from circumstances relative to agriculture, and to the
distribution of free hands. These circumstances will be better
understood from the examination of facts, than from the best theory in
the world. Let one consider the state of agriculture in Picardy and in
Beauce, and then compare it with the practice in many provinces in
England, and the contrast will appear striking. Were there more forest
in England, to supply the inhabitants with fuel, I imagine many
inclosures, useful at first for improving the grounds, would be taken
away, and the country laid more open; were wolves less common in France,
there would be found more scattered farms. Cattle there must be shut up
in the night, and cannot be left in the fields; this is a great
discouragement to inclosing. Where there are no inclosures, there are
few advantages to be found from establishing the farm-house exactly upon
the spot of ground to be laboured; and then the advantages which result
to certain classes of inhabitants, from being gathered together, the
farmers with the tradesmen, are found to preponderate. Thus the French
farmers are gathered into villages, and the English remain upon their
fields. But farther, in Picardy and Beauce agriculture has been long
established, and, I imagine, that, at the time when lands were first
broken up, or rather improved, their habitations must have been closer
together.

This drawing together of inhabitants must leave many ruinous
possessions, and this, by the by, is one reason why people cry out upon
the desolation of France, because ruinous houses (which may often times
be a mark of improvement, not of desertion) are found in different
places in the country. Paris has grown considerably in bulk, and from
this it naturally happens, that the country round is purged of idle
mouths. If this makes labour dear in the country, it is the city alone
which suffers by it, the country must certainly be the gainers. So much
for two species of population in two of the best inhabited countries of
Europe. I now come to another in one of the worst.

In some countries you find every farm-house surrounded with small huts,
possessed by numbers of people, supposed to be useful to the farmer.
These in Scotland are called cottars, (cottagers) because they live in
cottages. If you consider them in a political light, they will appear to
be inhabitants appropriated for agriculture. In one sense they are so,
if by that you understand the gathering in of the fruits; in another
they are not, if by agriculture you understand the turning up the
surface. I bring in this example, and shall enlarge a little upon it,
because I imagine it to be, less or more, the picture of Europe 400
years ago.

The Scotch farmer must have hands to gather in a scanty produce, spread
over a large extent of ground. He has six cottars, I shall suppose; but
these cottars must have wives, and these wives will have children, and
all must be fed before the master’s rent can be paid. It never comes
into the cottar’s head to suppose that his children can gain money by
their labour; the farmer never supposes that it is possible for him to
pay his rent without the assistance of his cottars to tend his cattle,
and gather in his crop; and the master cannot go against the custom of
the country, without laying his land waste. All these children are ready
at the farmer’s disposal; he can, without any expence, send what parcels
of sheep he pleases, to different distances of half a mile or more, to
feed upon spots of ground which, without the conveniency of these
children, would be entirely lost. By this plan of farming, landlords who
have a great extent of country which they are not able to improve, can
let the whole in a very few farms, and at the same time all the
spontaneous produce of the earth is gathered in and consumed. If you
compare the rent of these lands with the extent, it appears very small;
if you compare it with the numbers fed upon the farm, you will find that
an estate in the highlands maintains, perhaps, ten times as many people
as another of the same value in a good and fertile province. Thus it is
in some estates as in some convents of the begging order, the more
mouths the better cheer.

I shall now suppose our modern policy to inspire an ingenious or public
spirited lady to set up a weaver or two at a farm-house. The cottars
begin to spin; they will be a long time in attaining to a dexterity
sufficient to appear at the weaver’s house, in competition with others
who are accustomed to the trade; consequently this manufacture will be
long in a languishing condition; but if the undertaking is supported
with patience, these obstacles will be got the better of. Those who
tended herds of cattle for a poor maintenance, will turn themselves to a
more profitable occupation; the farmer will find more difficulty in
getting hands, he will complain, perhaps give way; the master will lose
a year’s rent, and no body will take so extensive a farm; it must be
divided, then it must be improved, and then it produces more grain upon
one tenth, than perhaps formerly was produced upon the whole. This grain
is bought with the price of spinning; the parents divide with the
children, who are fed, and spin in their turn. When this is
accomplished, what is the revolution? Why, formerly the earth fed all
the inhabitants with her spontaneous productions, as I may call them;
now more labour is exercised upon turning up her surface, this she pays
in grain, which belongs to the strong man for his labour and toil; women
and children have no direct share, because they have not contributed
thereto, as they did in feeding cattle. But they spin, and have money to
buy what they have not force to produce; consequently they live; but as
they become useless as cottars, they remove from their mother earth, and
gather into villages. When this change is effected the lands appear less
inhabited; ruinous huts (nay, villages I may call them) are found
frequently, and many would be apt to conclude, that the country is
depopulated; but this is by no means found to be the case, when the
whole is taken together.

The spirit therefore of the principal people of a country determines the
employment of the lower classes; the employment of these determines
their usefulness to the state, and their usefulness, their
multiplication. The more they are useful, the more they gain, according
to the definition of the contract of society; the more they gain, the
more they can feed; and consequently the more they will marry and divide
with their children. This increases useful population, and encourages
agriculture. Compare the former with the present situation, as to
numbers, as to ease, as to happiness!

Is it not plain, that when the earth is not improved it cannot produce
so much nourishment for man as when it is? On the other hand, if
industry does not draw into the hands of the indigent, wherewith to
purchase this additional nourishment, no body will be at a considerable
first expence to break up grounds in order to produce it. The
withdrawing therefore a number of hands from a trifling agriculture
forces, in a manner, the husbandman to work the harder; and by hard
labour upon a small spot, the same effect is produced as with slight
labour upon a great extent.

I have said, that I imagined the state of agriculture in the Scotch
farm, was a pretty just representation of the general state of Europe
about 400 years ago: if not in every province of every country, at least
in every country for the most part. Several reasons induce me to think
so: first, where there is no industry, nothing but the earth directly
can feed her children, little alienation of her fruits can take place.
Next, because I find a wonderful analogy between the way of living in
some provinces of different countries with what I have been describing.
Pipers, blue bonnets, and oat meal, are known in Swabia, Auvergne,
Limousin, and Catalonia, as well as in Lochaber: numbers of idle, poor,
useless hands, multitudes of children, whom I have found to be fed, no
body knows how, doing nothing at the age of fourteen, keeping of cattle
and going to school, the only occupations supposed possible for them. If
you ask why they are not employed, they tell you because commerce is not
in the country: they talk of commerce as if it was a man, who comes to
reside in some countries in order to feed the inhabitants. The truth is,
it is not the fault of these poor people, but of those whose business it
is to find out employment for them.

Another reason I derive from the nature of the old tenures, where we
find lands which now produce large quantities of grain, granted for a
mere trifle, when at the same time others in the neighbourhood of cities
and abbies are found charged with considerable prestations. This I
attribute to the bad cultivation of lands at that time, From which I
infer, a small population. In those days of trouble and confusion,
confiscations were very frequent, large tracts of lands were granted to
the great lords upon different revolutions, and these finding them often
deserted, as is mentioned in history, (the vassals of the former, being
either destroyed or driven out to make place for the new comers) used to
parcel them out for small returns in every thing but personal service.
Such sudden and violent revolutions must dispeople a country; and
nothing but tranquillity, security, order and industry, for ages
together, can render it populous.

Besides these natural causes of population and depopulation (which
proceed, as we have observed, from a certain turn given to the spirit of
a people) there are others which operate with irresistible force, by
sudden and violent revolutions. The King of Prussia, for example,
attempted to people a country all at once, by profiting of the desertion
of the Saltzburgers. America is become very poorly peopled in some spots
upon the coast, and in some islands, at the expence of the exportation
of millions from Europe and from Africa; such methods never can succeed
in proportion to the attempt. Spain, on the other hand, was depopulated
by the expulsion of its anti-christian inhabitants. These causes work
evident effects, which there is little occasion to explain, although the
more remote consequences of them may deserve observation. I shall, in
another place, have occasion to examine the manner of our peopling
America. In this place, I shall make a few observations upon the
depopulation of Spain, and finish my chapter.

That country is said to have been antiently very populous under the
government of the Moors. I am not sufficiently versed in the politics,
oeconomy and manners of that people, to judge how far these might be
favourable to population: what seems, however, to confirm what we are
told, is, the large repositories they used for preserving grain, which
still remain entire, though never once made use of. They watered the
kingdoms of Valencia, Murcia and Granada. They gathered themselves into
cities of which we still can discover the extent. The country which they
now possess (though drier than Spain) furnishes Europe with considerable
quantities of grain. The palace of the Moorish King at Granada, shews a
taste for luxury. The mosque of Cordoua speaks a larger capital. All
these are symptoms of population, but they only help one to guess. The
numbers which history mentions to have been driven out, is a better way
still of judging, if the fidelity of historians could be depended upon,
when there is any question about numbers.

Here was an example of a country depopulated in a very extraordinary
manner: yet I am of opinion, that the scarcity of inhabitants complained
of in that country, for a long time after the expulsion, did not so much
proceed from the effects of the loss sustained, as from the contract
between the spirit of those christians who remained after the expulsion,
and their catholic deliverers. The christians who lived among the Moors,
were really Moors as to manners, though not as to religion. Had they
adopted the spirit of the subjects of Castile, or had they been governed
according to their own, numbers would soon have risen to the former
standard. But as the christian lord governed his Murcian, Andalousian,
and Granada subjects, according to the principles of christian policy,
was it any wonder that in such an age of ignorance, prejudice, and
superstition, the country (one of the finest in the world) should be
long in recovering? Recover, however, it did; and sooner perhaps than is
commonly believed: for I say it was recovered so soon as all the flat
and watered lands were brought into cultivation; because I have reason
to believe that the Moors never carried their agriculture farther in
these southern provinces.

From this I still conclude, that no destruction of inhabitants by
expulsion, captivity, war, pestilence or famine, is so permanently
hurtful to population, as a revolution in that spirit which is necessary
for the increase and support of numbers. Let that spirit be kept up, and
let mankind be well governed, numbers will quickly increase to their
former standard, after the greatest reduction possible: and while they
are upon the augmenting hand, the state will be found in more heart and
more vigour, than when arrived even at the former height; for so soon as
a state ceases to grow in prosperity, I apprehend it begins to decay
both in health and vigour.

------------------------------------------------------------------------



                              CHAP. XVII.
_In what Manner and according to what Proportion do Plenty and Scarcity
                           affect a People?_


In a former chapter I have examined this question, relatively to mankind
fed by the hand of nature: I now come nearer home, and shall keep close
to modern times, considering circumstances and effects which by daily
experience we see and feel.

I have often said, that numbers are in proportion to the produce of the
earth. I now say, that in most countries of Europe, the food produced in
the country is _nearly_ consumed by the inhabitants: and by _nearly_ I
understand, that the part exported bears a small proportion to the
home-consumption. I do by no means establish this as an universal
proposition; but I say it is true _for the most part_: and the intention
of this chapter is to enable us to judge how far these limitations
should extend. I allow, for example, that Holland, not producing food
for its inhabitants, must draw it from some country which produces a
superfluity, regularly: but let it be observed that Poland, Germany,
Flanders, and England, with many other countries, contribute their
contingents to supply the demand of the Dutch; and of several large
trading towns which have small territories. This being the case, the
quota furnished by each country, must be in a small proportion to the
respective quantity growing in it. But these are general conclusions
upon vague suppositions, which throw no light on the question. I shall
therefore endeavour to apply our reasoning to facts, and then examine
consequences.

There are few countries, I believe, in Europe more abounding in grain
than England: I shall therefore keep that kingdom in my eye while I
examine this matter. Nothing is more common than to hear that an
abundant crop furnishes more than three years subsistence: nay, I have
found it advanced by an author of consideration, (Advantages and
disadvantages of France and Great Britain, &c. article Grain) that a
plentiful year produces five years nourishment for the inhabitants. If
this be a mistake, it may prove a very hurtful one in many respects. I
am, on the contrary, apt to believe, that no annual produce of grain
ever was so great in England as to supply its inhabitants fifteen
months, _in that abundance with which they feed themselves in a year of
plenty_. If this be the case, at what may we compute the surplus in
ordinary good years? I believe it will be thought a very good year which
produces _full_ subsistence for fifteen months; and crops which much
exceed this are, I believe, very rare. Here follow my reasons for
differing so widely from the gentleman whom I have cited. If I am in the
wrong, I shall have the most sensible pleasure in being set right; and
nothing will be so easy to any one who has access to be better informed
as to facts than I can pretend to be.

I consider all the yearly crop of grain in England as consumed at home,
except what is exported; for I cannot admit that any considerable
quantity is lost: that it may be abused, misapplied, drank when it
should be eat, I do not deny. These are questions which do not regard
the present inquiry. Whether therefore it be consumed in bread, beer,
spirits, or by animals, I reckon it consumed; and in a year when the
greatest consumption is made at home, this I call _the abundance with
which the inhabitants feed themselves in years of plenty_. Now I find in
the performance above cited, a state of exportations for five years,
from 1746 to 1750 inclusive, where the quantity exported amounts in all
to 5,289,847 quarters of all sorts of grain. This is not one year’s
provision, according to Sir William Petty’s calculation, of which we
have made mention above. The bounties upon corn (continues the author
abovementioned) have amounted in one year to 500,000_l._ sterling. He
does not mention the year, and I am little able to dispute that matter
with him. I suppose it to be true; and still farther, let it be
understood that the whole exportation was made out of the produce of one
crop. I do not find that this sum answers to the bounty upon 3,000,000
of quarters, which, according to Sir William Petty, make six months
provision. I calculate thus. The bounty upon wheat is 5_s._ a quarter,
that upon rye 3_s._ 6_d._ that upon barley 2_s._ 6_d._ these are the
species of grain commonly exported: cast the three premiums together,
and divide by three, the bounty will come to 3_s._ 8_d._ at a medium; at
which rate 500,000_l._ sterling will pay the bounty of 2,727,272
quarters of grain. An immense quantity to be exported! but a very
inconsiderable part of a crop supposed capable to maintain England for
five years. It may be answered, that the great abundance of a plentiful
year is considerably diminished when a scanty crop happens to preceed
it, or to follow upon it. In the first case, it is sooner begun upon; in
the last, it supplies the consumption in the year of scarcity,
considerably. This I allow to be just; but as it is not uncommon to see
a course of good years follow one another, the state of exportation at
such times must certainly be the best, nay, the only method of judging
of the real extent of superfluity.

On the other hand, I am apt to believe, that there never was a year of
such scarcity as that the lands of England did not produce greatly above
six months subsistence, _such as the people are used to take in years of
scarcity_. Were six months of the most slender subsistence to fail, I
imagine all Europe together might perhaps be at a loss to supply a
quantity sufficient to prevent the greatest desolation by famine.

As I have no access to look into records, I content myself with less
authentic documents. I find then by the London news-papers, that, from
the 9th of April to the 13th of August 1757, while great scarcity was
felt in England, there were declared in the port of London no more than
71,728 quarters of wheat, of which 15,529 were not then arrived. So that
the whole quantity there imported to relieve the scarcity, was 56,199
quarters. Not one month’s provision for the inhabitants of that city,
reckoning them at 800,000 souls! One who has access to look into the
registers of the trade in grain, might in a moment determine this
question.

Another reason which induces me to believe what the above arguments seem
to prove, I draw from what I see at present passing in Germany; I mean
the universal complaints of scarcity in those armies which are now
assembled, [1757] When we compare the numbers of an army, let it be of a
hundred thousand men, suppose the suite of it to be as many more, and
forty thousand horses, all strangers, (for the others I reckon nothing
extraordinary) what an inconsiderable number does this appear, in
proportion to the inhabitants of this vast country of Germany! Yet let
us observe the quantity of provisions of all sorts constantly coming
down the Rhine, the Moselle, and many other rivers, collected from
foreign provinces on all hands; the numbers of cattle coming from
Hungary; the loads of corn from Poland; and all this in a year which has
produced what at any other time would have been called an excellent
crop. After these foreign supplies, must not one be astonished to find
scarcity complained of in the provinces where the war is carried on, and
high prices every where else. From such circumstances I must conclude,
that people are generally very much deceived in their estimation of
plenty and scarcity, when they talk of two or three years subsistence
for a country being found upon their lands at once. I may indeed be
mistaken in my conclusions; but the more I have reflected upon this
subject, the more I find myself confirmed in them, even from the
familiar examples of the sudden rise of markets from very inconsiderable
monopolies, and of their sudden fall by inconsiderable quantities
imported. I could cite many examples of these vicissitudes, were it
necessary, to prove what every one must observe.

I come now to resolve a difficulty which naturally results from this
doctrine, and with which I shall close the chapter.

If it be true, that a crop in the most plentiful year is nearly consumed
by the inhabitants, what becomes of them in years of scarcity; for
nobody can deny, that there is a great difference between one crop and
another. To this I answer, first, That I believe there is also a very
great deceit, or common mistake, as to the difference between crops: a
good year for one soil, is a bad one for another. But I shall not
enlarge on this; because I have no sufficient proof of my opinion. The
principal reason upon which I found it, is, that it is far from being
true, that the same number of people consume always the same quantity of
food. In years of plenty every one is well fed; the price of the lowest
industry can procure subsistence sufficient to bear a division; food is
not so frugally managed; a quantity of animals are fatted for use; all
sorts of cattle are kept in good heart; and people drink more largely,
because all is cheap. A year of scarcity comes, the people are ill fed,
and when the lower classes come to divide with their children, the
portions are brought to be very small; there is great oeconomy upon
consumption, few animals are fatted for use, cattle look miserably, and
a poor man cannot indulge himself with a cup of generous ale. Add to all
these circumstances, that in England the produce of pasture is very
considerable, and it commonly happens, that a bad year for grain, which
proceeds from rains, is for the same reason a good year for pasture; and
in the estimation of a crop, every circumstance must be allowed to
enter.

From what has been said I must conclude in general, that the best corn
country in the world, provided slavery be not established, does not
produce wherewithal fully to maintain, as in years of plenty, one third
more than its own inhabitants; for if this should be the case, all the
policy of man would not be able to prevent the multiplication of them,
until they arose nearly up to the mean proportion of the produce in
ordinary years, and it is only what exceeds this standard, and proceeds
from unusual plenty, which can be exported. Were plentiful years more
common, mankind would be more numerous; were scarcity more frequent,
numbers would be less. Numbers therefore must ever be, in my humble
opinion, in the ratio of food, and multiplication will never stop until
the balance comes to be nearly even.

------------------------------------------------------------------------



                              CHAP. XVIII.
  _Of the Causes and Consequences of a Country’s being fully peopled._


In the titles of my chapters, I rather seek to communicate a rough idea
of the subject than a correct one. In truth and in reason, there is no
such thing as a country actually peopled to the full, if by this term
numbers only are meant, without considering the proportion they bear to
the consumption they make of the productions of their country. I have in
a former chapter established a distinction between the physical and
moral impossibility of increasing numbers. As to the physical
impossibility, the case can hardly exist, because means of procuring
subsistence from other countries, when the soil refuses to give more,
seem, if not inexhaustible, at least very extensive. A country therefore
fully peopled, that is, in a physical impossibility of increasing their
numbers, is a chimerical and useless supposition. The subject here under
consideration is, the situation of a people, who find it their interest
to seek for subsistence from abroad. This may happen, and commonly does,
long before the country itself is fully improved: it decides nothing as
to the intrinsic fertility of the soil, and proves no more, than that
the industry of the free hands has made a quicker progress in
multiplying mouths, than that of the farmers in providing subsistence.
To illustrate this idea, let me propose the following question.

Is multiplication the efficient cause of agriculture, or is agriculture
that of multiplication?

I answer, that multiplication is the efficient cause of agriculture,
though I allow, that, in the infancy of society, the spontaneous fruits
of the earth, which are free to all, are the efficient cause of a
multiplication, which may rise to the exact proportion of them; as has
been said above. This must be explained.

I have already distinguished the fruits of agriculture from the earth’s
spontaneous production: I must farther take notice, that when I employ
the term agriculture in treating of modern policy, I always consider it
to be exercised as a trade, and producing a surplus, and not as the
direct means of subsisting, where all is consumed by the husbandman, as
has been fully explained above. We have said, that it is the surplus
produced from it, which proves a fund for multiplying inhabitants. Now
there must be a demand for this surplus. Every person who is hungry will
make a demand, but every such demand will not be answered, and will
consequently have no effect. The demander must have an equivalent to
give: it is this equivalent which is the spring of the whole machine;
for without _that_ the farmer will not produce any surplus, and
consequently he will dwindle down to the class of those who labour for
actual subsistence. The poor, who produce children, make an ineffectual
demand, and when they cannot increase the equivalent, they divide the
food they have with the new comers, and prove no encouragement to
agriculture. By dividing, the whole become ill fed, miserable, and thus
extinguish. Now because it is the _effectual_ demand, as I may call it,
which makes the husbandman labour for the sake of the equivalent, and
because this demand increases, by the multiplication of those who have
an equivalent to give, therefore I say that multiplication is the cause,
and agriculture the effect. On the other hand, I think the spontaneous
fruits of the earth, as in the supposition, may be considered as the
cause of a certain limited multiplication; because in that case there is
no equivalent demanded. The earth produces, whether her fruits be
consumed or not: mankind are fed upon these gratuitously, and without
labour, and the existence of the fruits is anterior to the production of
those who are to consume them. Those who are first fed, draw their
vigour from their food, and their multiplication from their vigour.
Those who are produced, live freely upon their parent earth, and
multiply until all the produce be consumed: then multiplication stops,
as we have said; _but establish agriculture_, and multiplication will go
on a-new. Consequently, my reader will say, agriculture is as much the
cause of this new multiplication, as the spontaneous fruits were of the
first. Here is a very natural conclusion, which seems directly to
contradict what we have been endeavouring to prove; but the knot is
easily untied. We have seen how the existence of agriculture must depend
upon the industry of man; that is, on the only means _of establishing
agriculture_: now, as this industry is chiefly promoted by the motive of
providing for our children, the procreation of them must be considered
as the first, or at least the most palpable political cause of setting
mankind to work, and therefore may be considered as anterior to
agriculture; whereas, on the other hand, the earth’s spontaneous
productions being in small quantity, and quite independent of man,
appear, as it were, to be furnished by nature, in the same way as a
small sum is given to a young man, in order to put him in a way of
industry, and of making his fortune. The small sum sets him a-going, but
it is his industry which makes the fortune. From this illustration it
appears, that if the demand for food can be more readily supplied from
abroad than from home, it will be the foreign subsistence, which will
preserve numbers, produced from _industry_, not from _domestic
agriculture_; and these numbers will, in their turn, produce an
advancement of it at home, by inspiring a desire in the husbandman to
acquire the equivalent which their countrymen give to strangers.

Such nations, whose statesmen have not the talent to engage the
husbandmen to wish for the equivalent, which the labour of their
fellow-citizens can produce; or, in other words, who cannot create
reciprocal wants and dependencies among their subjects, must stand in a
moral incapacity of augmenting in numbers. Of such states we have no
occasion to treat in this chapter, any more than of those who are
supposed to be in the physical incapacity of multiplying: our point of
view is, to examine the natural consequences resulting from a demand for
subsistence extending itself to foreign countries. This I take to be the
mother of industry at home, as well as of trade abroad; two objects
which come to be treated of in the second book.

A country may be fully peopled (in the sense we understand this term) in
several different ways. It may be fully stocked at one time with six
millions, and at another may maintain perhaps eight or even nine
millions with ease, without the soil’s being better cultivated or
improved. On the other hand, a country may maintain twenty millions with
ease, and by being improved as to the soil, become overstocked with
fifteen millions. These two assertions must be explained.

The more frugal a people are, and the more they feed upon the plentiful
productions of the earth, the more they may increase in numbers.

Were the people of England to come more into the use of living upon
bread, and give over consuming so much animal food, inhabitants would
certainly increase, and many rich grass fields would be thrown into
tillage. Were the French to give over eating so much bread, the Dutch so
much fish, the Flemish so much garden stuff, and the Germans so much
sourkraut, and all take to the English diet of pork, beef, and mutton,
their respective numbers would soon decay, let them improve their
grounds to the utmost. These are but reflections, by the by, which the
reader may enlarge upon at pleasure. The point in hand is, to know what
are the consequences of a country’s being so peopled, no matter from
what cause, that the soil, in its actual state of fertility, refuses to
supply a sufficient quantity of such food as the inhabitants incline to
live upon. These are different according to the diversity of spirit in
the people.

If they be of an indolent disposition, directed in their political
oeconomy by established habits and old prejudices, which prevent
innovations, although a change of circumstances may demand them, the
effect will be to put a stop to population; which cannot augment without
an increase of food on one hand, and of industry on the other, to make
the first circulate. These must go hand in hand: the precedence between
them is a matter of mere curiosity and speculation.

If, on the contrary, a spirit of industry has brought the country to a
certain degree of population, this spirit will not be stopt by the want
of food; it will be brought from foreign countries, and this new demand,
by diminishing among them the quantity usually produced for their own
subsistence, will prompt the industrious to improve their lands, in
order to supply the new demand without any hurt to themselves. Thus
trade has an evident tendency towards the improvement of the world in
general, by rendering the inhabitants of one country industrious, in
order to supply the wants of another, without any prejudice to
themselves. Let us make a step further.

The country fully stocked can offer in exchange for this food, nothing
but the superfluity of the industry of the free hands, for that of the
farmers is supposed to be consumed by the society; except indeed some
species of nourishment or productions, which, being esteemed at a higher
value in other countries than in those which produce them, bring a more
considerable return than the value of what is exported, as when raw silk
and delicate wines, &c. are given in exchange for grain and other
provisions.

The superfluity of industry must, therefore, form the principal part of
exportation, and if the nation fully stocked be surrounded by others
which abound in grain and articles of subsistence, where the inhabitants
have a taste for elegance, and are eager of acquiring the manufactures
and improvements of their industrious neighbours; it is certain, that a
trade with such nations will very considerably increase the inhabitants
of the other, though fully stocked, relatively to the production of
their own soil; and the additional numbers will only increase that of
manufacturers, not of husbandmen. This is the case with Holland, and
with many large trading cities which are free and have but a small
territory.

If, on the contrary, the nation fully stocked be in the neighbourhood of
others who take the same spirit as itself, this supply of food will
become in time more difficult to be had, in proportion as their
neighbours come to supply their own wants. They must therefore seek for
it at a greater distance, and as soon as the expence of procuring it
comes to exceed the value of the labour of the free hands employed in
producing the equivalent, their work will cease to be exported, and the
number of inhabitants will be diminished to the proportion of the
remaining food.

I do not say that trade will cease on this account; by no means. Trade
may still go on, and even be more considerable than before; but it will
be a trade which never can increase inhabitants, because for this
purpose there must be subsistence. It may have however numberless and
great advantages: it may greatly advance the wealth of the state, and
this will purchase even power and strength. A trading nation may live in
profound peace at home, and send war and confusion among her enemies,
without even employing her own subjects. Thus trade without increasing
the inhabitants of a country can greatly add to its force, by arming
those hands which she has not fed, and employing them for her service.

------------------------------------------------------------------------



                               CHAP. XIX.
 _Is the Introduction of Machines into Manufactures prejudicial to the
            Interest of a State, or hurtful to Population?_


This I find has been made a question in modern times. The antients held
in great veneration the inventors of the saw, of the lathe, of the
wimble, of the potters wheel; but some moderns find an abuse in bringing
mechanism to perfection: (see _Les Interets de la France mal entendus_,
p. 272. 313.) the great Montesquieu finds fault with water mills, though
I do not find that he has made any objection against the use of the
plow.

Did people understand one another, it would be impossible that such
points could suffer a dispute among men of sense; but the circumstances
referred to, or presupposed, which authors almost always keep in their
eye, though they seldom express them, render the most evident truths
susceptible of opposition.

It is hardly possible suddenly to introduce the smallest innovation into
the political oeconomy of a state, let it be ever so reasonable, nay
ever so profitable, without incurring some inconveniencies. A room
cannot be swept without raising dust, one cannot walk abroad without
dirtying one’s shoes; neither can a machine, which abridges the labour
of men, be introduced _all at once_ into an extensive manufacture,
without throwing many people into idleness.

In treating every question of political oeconomy, I constantly suppose a
statesman at the head of government, systematically conducting every
part of it, so as to prevent the vicissitudes of manners, and
innovations, from hurting any interest within the commonwealth, by their
natural and immediate effects or consequences. When a house within a
city becomes crazy, it is taken down; this I call systematical ruin:
were it allowed to fall, the consequences might be fatal in many
respects. In like manner, if a number of machines are all at once
introduced into the manufactures of an industrious nation, (in
consequence of that freedom which must necessarily be indulged to all
sorts of improvement, and without which a state cannot thrive) it
becomes the business of the statesman to interest himself so far in the
consequences, as to provide a remedy for the inconveniencies resulting
from the sudden alteration. It is farther his duty to make every
exercise even of liberty and refinement an object of government and
administration; not so as to discourage or to check them, but to prevent
the revolution from affecting the interests of the different classes of
the people, whose welfare he is particularly bound to take care of.

The introduction of machines can, I think, in no other way prove hurtful
by making people idle, than by the suddenness of it: and I have
frequently observed, that all sudden revolutions, let them be ever so
advantageous, must be accompanied with inconveniencies. A safe,
honourable, and lasting peace, after a long, dangerous, and expensive
war, forces a number of hands to be idle, and deprives them of bread.
Peace then may be considered as a machine for defending a nation, at the
political loss of making an army idle; yet no body, I believe, will
alledge that in order to give bread to soldiers, sutlers, and
undertakers, the war should be continued. But here I must observe, that
it seems to be a palpable defect in policy, if a statesman shall neglect
to find out a proper expedient (at whatever first expence it may be
procured) for giving bread to those who, at the risk of their lives,
have gone through so many fatigues for the service of their country.
This expence should be charged to the account of the war, and a state
ought to consider, that as their safety required that numbers should be
taken out of the way of securing to themselves a lasting fund of
subsistence, which would have rendered them independent of every body,
(supposing that to have been the case) she becomes bound by the contract
of society, which ties all together, to find them employment. Let me
seek for another illustration concerning this matter.

I want to make a rampart cross a river, in order to establish a bridge,
a mill, a sluice, &c. For this purpose, I must turn off the water, that
is, stop the river; would it be a good objection against my improvement
to say, that the water would overflow the neighbouring lands, as if I
could be supposed so improvident as not to have prepared a new channel
for it? Machines stop the river; it is the business of the state to make
the new channel, as it is the public which is to reap the benefit of the
sluice: I imagine what I have said will naturally suggest an answer to
all possible objections against the introduction of machines; as for the
advantages of them, they are so palpable that I need not insist upon
them. There is however one case in which I think they may be disapproved
of; but it seems a chimerical supposition, and is brought in here for no
other purpose than to point out and illustrate the principle which,
influences this branch of our subject.

If you can imagine a country peopled to the utmost extent of the
fertility of the soil, and absolutely cut off from any communication
with other nations; all the inhabitants fully employed in supplying the
wants of one another, the circulation of money going forward regularly,
proportionally, and uniformly through every vein, as I may call it, of
the political body; no hidden or extraordinary demand at any time for
any branch of industry; no redundancy of any employment; no possibility
of increasing either circulation, industry, or consumption. In such a
situation as that I should disapprove of the introduction of machines,
as I disapprove of taking physic in an established state of perfect
health. I disapprove of a machine only because it is an innovation in a
state absolutely perfect in these branches of its political oeconomy;
and where there is perfection there can be no improvement. I farther
disapprove of it because it might force a man to be idle, who would be
found thereby in a physical impossibility of getting his bread, in any
other way than that in which he is supposed to be actually employed.

The present situation of every country in Europe, is so infinitely
distant from this degree of perfection, that I must consider the
introduction of machines, and of every method of augmenting the produce
or facilitating the labour and ingenuity of man, as of the greatest
utility. Why do people wish to augment population, but in order to
compass these ends? Wherein does the effect of a machine differ from
that of new inhabitants?

As agriculture, exercised as a trade, purges the land of idle mouths,
and pushes them to a new industry which the state may turn to her own
advantage; so does a machine introduced into a manufacture, purge off
hands which then become superfluous _in that branch_, and which may
quickly be employed in another.

If therefore the machine proves hurtful, it can only be because it
presents the state with an additional number of hands bred to labour;
consequently, if these are afterwards found without bread, it must
proceed from a want of attention in the statesman: for an industrious
man made idle, may constantly be employed to advantage, and with profit
to him who employs him. What could an act of naturalization do more,
than furnish industrious hands forced to be idle, and demanding
employment? Machines therefore I consider as a method of augmenting
(virtually) the number of the industrious, without the expence of
feeding an additional number: this by no means obstructs natural and
useful population, for the most obvious reasons.

We have shewn how population must go on, in proportion to subsistence,
and in proportion to industry: now the machine eats nothing, so does not
diminish subsistence, and industry (in our age at least) is in no danger
of being overstocked in any well governed state; for let all the world
copy your improvements, they still will be the scholars. And if, on the
contrary, in the introduction of machines you are found to be the
scholars of other nations, in that case you are brought to the dilemma
of accepting the invention with all its inconveniencies, or of
renouncing every foreign communication.

In speculations of this kind, one ought not, I think, to conclude, that
experience _must_ of necessity prove what we imagine our reasoning has
pointed out.

The consequences of innovations in political oeconomy, admit of an
infinite variety, because of the infinite variety of circumstances which
attend them: no reasoning, therefore, however refined, can point out a
priori, what upon such occasions must indispensably follow. The
experiment must be made, circumstances must be allowed to operate;
inconveniencies must be prevented or rectified as far as possible; and
when these prove too many, or too great to be removed, the most
rational, the best concerted scheme in theory must be laid aside, until
preparatory steps be taken for rendring it practicable.

Upon the whole, daily experience shews the advantage and improvement
acquired by the introduction of machines. Let the inconveniencies
complained of be ever so sensibly felt, let a statesman be ever so
careless in relieving those who are forced to be idle, all these
inconveniencies are only temporary; the advantage is permanent, and the
necessity of introducing every method of abridging labour and expence,
in order to supply the wants of luxurious mankind, is absolutely
indispensable, according to modern policy, according to experience, and
according to reason.

------------------------------------------------------------------------



                               CHAP. XX.
     _Miscellaneous Observations upon Agriculture and Population._


I have hitherto considered the object of agriculture, as no more than
the raising of grain; the food of mankind has been estimated by the
quantity they consume of that production; and husbandmen have been
supposed to have their residence in the country. As my subject has but
an indirect connection with the science of agriculture, I have
simplified many things complex in themselves, the better to adapt them
to the principal object of my inquiry, and the better to keep my
attention fixed upon one idea at a time. I am now going to return to
some parts of my subject, which I think I have treated too
superficially; and to examine, as I go along, some miscellaneous
questions which will naturally arise from what is to be said.

[Sidenote: QUEST. I.]

Almost every one who has writ upon population, and upon agriculture,
considered as an essential concomitant of it, has recommended the equal
distribution of the property of lands as useful to both: a few
reflections upon this question, after what has been thrown out in the
course of the foregoing chapters, may not be improper; more in order to
examine and apply the principles laid down, than with a view to combat
the opinion of others.

I have already, upon several occasions, taken notice of the great
difference between the political oeconomy of the antients, and that of
modern times; for this reason, among others, that I perceive the
sentiments of the antients, which were founded upon reason and common
sense, relative to their situation, have been adopted by some moderns,
who have not perhaps sufficiently attended to the change of our manners,
and to the effects which this change must operate upon every thing
relative to our oeconomy. The antients recommended strongly an equal
distribution of lands as the best security for liberty, and the best
method, not only to preserve an equality among the citizens, but also to
increase their number.

In those days, the citizens did not compose one half of the state
relatively to numbers; and there was almost no such thing as an
established monied interest, which can no where be founded but upon
trade, and an extensive industry. In those days there was no solid
income but in land: and that being equally divided among the citizens,
was favourable to their multiplication and produced equality. But in our
days, riches do not consist in lands only; nay we sometimes find the
most considerable proprietor of these in very indifferent circumstances;
loaded with debts, and depending upon the indulgence of men who have not
an acre, and who are their creditors. Let us therefore divide our lands
as we please, we shall never produce equality by it. This is an
essential difference between us and the antients, with respect to one
point. Now as to the other, population.

The equal division of lands, no doubt, greatly tends to increase the
numbers of one class of inhabitants, to wit, the landlords. In antient
times, as has been observed, the chief attention was to increase the
citizens, that is the higher classes of the state; and the equal
division of property so effectually produced this effect, that the Greek
states were obliged to allow the exposition of children; and Aristotle
looked upon it as a thing indispensably necessary, as M. de Montesquieu
has very judiciously observed. The multiplication of the lowest classes,
that is of the slaves, never entered into the consideration of the
public, but remained purely a matter of private concern; and we find it
was a question with some, whether or not it was worth while to breed
from them at all. But in our days the principal object is to support the
lower classes from their own multiplication, and for this purpose, an
unequal division of property seems to me the more favourable scheme;
because the wealth of the rich falls naturally into the pockets of the
industrious poor; whereas the produce of a very middling fortune, does
no more than feed the children of the proprietor, who in course become
very commonly and very naturally an useless burthen upon the land. Let
me apply this to an example. Do we not familiarly observe, that the
consolidation of small estates, and the diminution of gentlemens
families of middling fortunes, do little harm to a modern state. There
are always abundance of this class of inhabitants to be found whenever
there is occasion for them. When a great man buys up the lands of the
neighbouring gentry, or small proprietors, all the complaints which are
heard, turn upon the distress which thence result to the lower classes,
from the loss of their masters and protectors; but never one word is
heard of that made by the state, from the extinction of the former
proprietor’s family. This abundantly shews that the object of modern
attention is the multiplication of the lower classes, consequently it
must be an inconsistency to adopt the practice of the antients, when our
oeconomy is entirely opposite to theirs.

[Sidenote: QUEST. II.]

Let this suffice to point out how far the difference of our manners
should influence the division of our lands. I shall now examine a
question relative to the science of agriculture, not considered as a
method of improving the soil, (this will come in more naturally
afterwards) but of making it produce to the best advantage, supposing it
to be already improved.

In treating of the productions of the earth, in consequence of
agriculture, I have all along distinguished them from those which
spontaneously proceed from the force of nature: these are the immediate
gift of God, those are the return of the labour of his creatures. Every
one knows that the labour of mankind is not in proportion to their
numbers, but to their industry. The produce therefore of agriculture
must be estimated, not according to the quantity of fruits only, but
also according to the labour employed to produce them. These things
premised, the question here proposed to be examined arises, viz. Which
species of agriculture is the most advantageous to a modern society,
that which produces the greatest quantity of fruits _absolutely_ taken,
or that which produces the greatest quantity _relatively_ taken, I mean
to the labour employed?

This question might easily be resolved, in general, by the application
of principles already deduced; although it cannot admit of a direct
answer, in the manner I have put it. One, therefore, may say
indeterminately, that species is the best which produces a surplus the
best proportioned to the industry, and to the demands of all the free
hands of the state. But as this solution would not lead me to the object
I have in view, I have thrown in an alternative in order to gain
attention to the principles which I am going to examine, and which
influence and determine the establishment of the one or the other
species of agriculture.

The principal difficulty I find in the examination of this question, is
to distinguish the effects of agriculture from those of the spontaneous
production of the earth. The returns from pasture, for example,
relatively taken, are, as we have observed, both from reason and from
experience, far greater than those of corn fields, (vid. supra, chap.
8.) though I little doubt but that, absolutely taken, the case is quite
otherwise; that is to say, that an acre of the finest corn land will
produce more nourishment for man, than an equal portion of the finest
pasture: but here we are following the proportion of space and produce,
not of labour; for if the produce of both acres be considered relatively
to the _labour_ necessary for the cultivation, as well as to the extent;
the produce of pasture will be found far greater: this however I ascribe
to the spontaneous operation of nature, and not to the superior utility
of this kind of agriculture.

Since therefore it is impossible, rightly to separate the effects of
nature from those of art and industry, in this species of improvement,
let us confine our speculations to those only which have for their
object the turning up the surface, and the sowing or cultivating annual
vegetables. For the better conveying our ideas, let us take an example,
and reason from a supposition.

Let me suppose an island of a small extent and fruitful soil,
sufficiently improved, and cultivated after the manner of the best lands
of England, in the ordinary method of farming.

In that case we may infer, from what was laid down in the 8th chapter,
that the number of people employed about farming may be nearly about one
half of the whole society. Let the whole inhabitants of the island be
called 1000, that is 500 farmers, and as many free hands. The 500
farmers must then feed 1000; the 500 free hands must provide for all the
other wants of 1000. By this supposition, and allowing that there is an
equal degree of industry in these two classes, the providing of food
will appear to be an occupation just equal to that of providing for all
other wants. From this let me draw a few consequences, by the by, before
I proceed.

Experience shews that in all countries there are found many who are here
understood to be included in the class of free hands, who consumed
infinitely more of other things than of food; consequently we must
conclude, that as the wants of some do far exceed the proportion of
their food, so in order to bring the balance even, the wants of others
must fall far below it. That this is the case, I believe, will be found
by experience. Let me follow this thought a little farther.

In proportion as a greater number than one half of the people becomes
employed in agriculture, must it not follow, that all other work must
come to bear a smaller proportion than formerly to the food consumed;
consequently the manner of living must become more simple. Now we have
shewn that what we call wants, in contradistinction to food, can only be
supplied by the free hands, and that these again can only be fed from
the surplus of the farmers; consequently the fewer wants, and the fewer
free hands, the less surplus, which of course infers an agriculture less
productive, relatively to the number of farmers. Were, therefore, a
whole society employed in agriculture, carried on as a direct method of
subsisting, there would be no surplus, consequently no free hands;
consequently no work for supplying any want but food. This may be
thought an impossible supposition. If you suppose agriculture exercised
as a trade, I allow it to be so, but not if it be carried on as a method
of subsisting only; and if you throw away the idea of labour altogether,
and suppose mankind in its infancy, that is in paradise, living upon the
spontaneous fruits of the earth, and quite naked, you will find the case
not only supposable, but exactly so. It is exactly so among the cattle:
every one of them may be considered in a parallel situation with a
husbandman who works for his own nourishment. They feed upon the
spontaneous fruits of the earth, and have no surplus; and having no
other want, they are freed from every other care. Let me return now to
the island.

The 500 farmers feed 1000; and we suppose the lands laboured as in a
good English farm. One of the society proposes to augment the number of
inhabitants by introducing a more operose species of agriculture, the
produce of which may be _absolutely_ greater, though relatively less.

The first question the statesman would naturally put to this reformer
would be, What is your view in increasing the number of our inhabitants,
is it to defend us against our enemies, is it to supply the wants of
strangers, and thereby to enrich ourselves, is it to supply our own
_wants_ with more abundance, or is it to provide us more abundantly with
_food_? I can hardly find out any other rational view in wishing for an
additional number of people in any country whatsoever. Let it be
answered, that all these ends may be thereby obtained: and now let us
examine how far this reformation upon agriculture will have the effect
of increasing inhabitants, how far such increase will procure the ends
proposed, and how far the execution of such a plan is a practicable
scheme to an industrious people.

If the inhabitants be not sufficiently fed, which is the only thing that
can prevent their multiplication, it must proceed from one of two
causes. Either _first_, that those do procreate who cannot produce an
equivalent for the food of their children; or _secondly_, that industry
making a quicker progress than agriculture, the industrious come too
strongly in competition with one another, for the surplus of food to be
found; which has the effect of raising the prices of it, and reducing
the portions too low to suffer a division; and thereby of preventing
marriage and multiplication in the lower classes of the free hands.

In the first case, it is to no purpose to increase the produce of
agriculture, by rendering it more expensive; for those who have no
equivalent to give when food is cheap, will still be in greater
necessity when it rises in the price. In the second case, it is to no
purpose to diminish the surplus of the farmers, because the supposition
proves that the balance is already too heavy upon the side of the free
hands, that is, that the surplus of the farmers is already become
insufficient fully to feed them.

Two remedies may be proposed for this inconveniency, the one tending to
population, the other to depopulation; and as the end to be compassed is
to set the balance even between husbandmen and free hands, I shall
explain both, and point out _how far_ from principles it appears, that
in either way the end may be attained.

That tending to increase population is the remedy proposed, and, no
doubt, was it possible to introduce a new system of agriculture of a
larger absolute production, although the relative production should be
less, the inhabitants of the state becoming thereby better fed, though
at a greater cost, would infallibly multiply. Let me therefore examine
this first part before I say any thing of the other; and for the greater
distinctness I shall return to my example, and examine both the
consequences and the possibility of putting such a plan in execution.

Let me suppose, that by using the spade and rake, instead of the plow
and harrow, the lands of our island might be brought to produce with
more abundance; this is a method of increasing the expence of
agriculture, which would require an additional number of husbandmen.

Now, by the supposition, 500 farmers fed, though scantily, the whole of
the inhabitants, that is 1000 persons. If therefore 100 of the free
hands can be engaged to become farmers, the end may be attained: more
nourishment will be produced; the people will be better fed; they will
multiply; that is, their number will rise above 1000. Let us next
endeavour to form a judgment of this increase, and of the consequence of
the revolution.

The society will now be composed of 600 farmers and 400 free hands. The
600 will certainly produce more fruits than formerly; but as their
labour is relatively less productive by the supposition, it will be
impossible for them to furnish surplus equal to their own consumption;
consequently, the free hands never will be able to rise to a number
equal to theirs; that is, the society will never get up to 1200. But we
supposed, that the other wants of the society required the industry of
one half of the inhabitants to supply them; that is, of all the 500 free
hands; and, as the number of these has been already reduced, and can
never more rise to that proportion, as has been said, must not either
the people voluntarily adopt a more simple way of living; or must not
the demand for work rise very considerably? Let me consider the
consequences in both cases. In the first, you perceive, that if the
inhabitants themselves are obliged to simplify their way of living, for
want of hands to supply what they formerly consumed, three of the four
objects proposed by the reformation become impossible to be attained; to
wit, the defending themselves against their enemies, the supplying the
wants of strangers, and the supplying their own with more abundance. And
with regard to the fourth, the being better fed, that must cease to be
the case, the moment the end is obtained; that is, the moment the
inhabitants are multiplied up to the proportion of additional food.
Consequently, by simplifying their way of life, and allowing farming to
stand upon the new footing, they compass not any one of the ends they
proposed.

Next, if we suppose, that the inhabitants do not incline to simplify
their way of life, but that the wealthy among them insist upon
purchasing all the instruments of luxury which they formerly were used
to enjoy, must not demand for work greatly rise, and must not, of
consequence, an additional encouragement be given to that species of
labour which had been diminished, in taking 100 persons from industry,
to throw them into the class of farmers? Will not this make them quickly
desert their spade, and the rather, as they have taken to an employment
less lucrative than that of farming, according to the former systems?

So much for the consequences which would follow, in case the plan
proposed was found practicable; that is, supposing it to be a thing
possible to transport into agriculture a part of an industrious society,
already otherwise employed, and to change _all at once_ the relative
proportion between those who supply food, and those who purchase it with
their industry. We have begun, by taking that first step for granted;
and now I am to shew what obstacles will be found in the execution.

We have said, that it is the multiplicity and complexity of wants which
give an encouragement to agriculture, and not agriculture, or an
abundance of food, which inspires mankind with a disposition to labour.
Now, if this principle be true, the supposition we have proceeded upon
is absurd. I am afraid, both reason and experience will abundantly prove
that it is so.

The natural and necessary effect of industry, in trades and
manufactures, is to promote the increase of relative husbandry; which,
by augmenting the surplus, tends of course to increase the proportion of
the free hands relatively to the farmers. A river may as easily ascend
to its source, as a people voluntarily adopt a more operose agriculture
than that already established, supposing the lands to be fully improved,
the spirit of industry to prevail on one hand, and the farmers to have
profit only in view on the other.

What farmer could sell the surplus of an expensive agriculture in
competition with another who exercised a species relatively more
productive?

When lands are improved, the simplification of agriculture is a
necessary concomitant of industry, because diminishing expence is the
only method of gaining a preference at market.

[Sidenote: QUEST. III.]

Whether industry has done hurt to population, by augmenting the
relative, and diminishing the absolute produce of agriculture; or
whether it has done good to it, by encouraging the science in general,
and extending the exercise of it over the face of the earth, is a matter
of fact which I shall leave to others, better informed than I am, to
determine. For my own part, I believe that thousands of examples may be
found of the one and the other. I know corn fields, where villages
formerly stood, the inhabitants of which fed themselves with the pure
produce of absolute agriculture; that is, with a bit of garden ground,
and the milk of a cow: there surely is depopulation: but, at a small
distance from the place where those villages stood, I see corn fields,
where nothing but heath was to be met with; this marks population. I
seek no more than to explain from facts the principles I am endeavouring
to discover, and shall leave general conclusions to others, as I have
already said.

There is a maxim in law, which may be extended almost to every thing in
this world, _unum quodque eodem modo solvitur quo colligatum est_.
Industry forms this species of absolute agriculture; industry destroys
it. A military force raised the Roman greatness; a military force
destroyed it. A spirit of liberty may form a noble constitution, and a
spirit of liberty may break the same to pieces. The States of Denmark
restrained the royal power and established a free government; the same
States rendered that very power unlimited, and established there the
purest monarchy in Christendom. But these reflections are foreign to our
subject: _Ne sutor ultra crepidam_. I return.

When industry is set on foot, it gives encouragement to agriculture
exercised as a trade: and by the allurements of ease, which a large
surplus procures to the farmers, it does hurt to that species which is
exercised as a method of subsistence. Lands become more generally and
less thoroughly laboured. In some countries tillage is set on foot and
encouraged; this is an operose agriculture. While industry goes forward,
and while a people can remain satisfied with a nourishment consisting
chiefly of bread, this system of agriculture will subsist, and will
carry numbers very high. If wealth increases, and if those who have it
begin to demand a much greater proportion of work than formerly, while
they consume no more food, then I believe numbers may diminish from the
principles I am now going in quest of.

I return to the council of the island where the proposition laid down
upon the carpet is, _The scanty subsistence of the inhabitants requires
redress_.

A Machiavelian stands up (of such there are some in every country) and
proposes, in place of multiplying the inhabitants, by rendering
agriculture more operose, to diminish their number, by throwing a
quantity of corn fields into grass. What is the intention of
agriculture, says he, but to nourish a state? By our operose method of
plowing and sowing, one half of the whole produce is consumed by those
who raise it; whereas by having a great part of our island in pasture,
one half of the husbandmen may be saved. Pray what do you propose to do
with those whom you intend to make idle? replies a citizen. Let them
betake themselves to industry. But industry is sufficiently, nay more
than sufficiently stocked already. If, says Machiavel, the supernumerary
husbandmen be thrown out of a way of living, they may go where they
please; we have no occasion for them, nor for any one who lives only to
feed himself. But you diminish the number of your people, replies the
citizen, and consequently your strength; and if afterwards you come to
be attacked by your enemies, you will wish to have those back again for
your defence, whom in your security you despised. To this the other
makes answer: there you trust to the Egyptian reed. If they be necessary
for feeding us at present, how shall we be able to live while we employ
them as soldiers? We may live without many things, but not without the
labour of our husbandmen. Whether we have our grounds in tillage or in
pasture, if that class be rightly proportioned to the labour required,
we never can take any from it. In those countries where we see princes
have recourse to the land to recruit their armies, we may safely
conclude, that there the land is overstocked; and that industry has not
as yet been able to purge off all the superfluous mouths: but with us
the case is different, where agriculture is justly proportioned to the
number of husbandmen. If I propose a reform, it is only to augment the
surplus, upon which all the state, except the husbandmen, are fed; if
the surplus after the reform is greater than at present, the plan is
good, although 250 of our farmers should thereby be forced to starve for
hunger.

Though no man is, I believe, capable to reason in so inhuman a style,
and though the revolution here proposed be an impossible supposition, if
meant to be executed all at once, the same effects however must be
produced, in every country where we see corn fields by degrees turned
into pasture; only the change is gradual, industry is not overstocked
any where, and subsistence may be drawn from other countries, where the
operose species of agriculture can be carried on with profit.

Familiar experience proves the truth of this. I have a corn farm, where
I maintain ten horses and four servants for the cultivation alone: at
the end of the year I find my surplus equal to 40_l._ sterling. If, by
throwing my grounds into grass, I can dismiss three servants and eight
horses, and at the end of the year raise my surplus to 50_l._ sterling,
who doubts of my doing it? Is not this following the doctrine above laid
down? But there is nothing odious in this; because I do not see these
three servants die for hunger, nor is it a consequence they should, as
states are formed. They turn themselves to industry, and food comes from
abroad, in proportion as the country itself produces a less quantity.
Fact and experience prove this assertion, and I cite Holland as an
example, where every branch of operose agriculture is exploded, except
for such productions as cannot be brought from other countries. I
introduced the rough Machiavelian only to set principles in a strong
light, and particularly that concerning the recruiting of armies from
the land, which I take to be both a true one, and one necessary to be
attended to, to wit, that those who must labour for the subsistence of
the society, can be of little use for the defence of a state, in case of
any emergency. Princes have found out the truth of this, and in
proportion as industry has extended itself, regular armies have been
found necessary to be kept up in times of peace, in order to be had in
times of war. A militia composed of people truly industrious, I take to
be far better in speculation than in practice. How would a militia do in
Holland? how admirable was it not formerly in Scotland, Poland, and
Catalonia? And how admirably does it still succeed in the armies of the
house of Austria? I may however be mistaken; for a military and an
industrious spirit may be found compatible with one another in some
particular nations: time perhaps will clear up this matter. Thus much
with regard to a militia. Now as to recruiting a regular army.

The more they are recruited from the land, the less they desert. The
army of the Russians, for example, now assembled (1758) hardly knows
desertion, those of the house of Austria, taken from certain provinces
where there is almost no industry, are in the same case, also the
militia of France which I consider as regular troops. On the other hand,
those armies which are raised in the countries where industry has taken
root are chiefly composed of loose fellows, the excrements of populous
cities, the sons of vice and idleness, who have neither domicil nor
attachment. These are soldiers truly by trade, and make a trade of it;
how many thousands of such are now to be found? they come to market
every season, and the best bidder has them while he can hold them. Some
princes make a point not to receive their own deserters back, but accept
of those who have committed the same infidelity to others; while others
content themselves with punishing those who fail in their attempt to
desert, but receive them back when they return of their own accord,
after having accomplished their desertion. All is now become commerce,
and seems to be regulated by the principles of it. I return to our
agriculture.

Does not the exposition we have now given of these principles tend to
cast a light upon the first question dismissed in this chapter, to wit,
the effects of an equal and an unequal distribution of the property of
lands?

When these are once well cultivated and improved, it is of no
consequence to whom the property belongs; for by the property of such
lands I only can mean the surplus, as we have abundantly explained
elsewhere. Let therefore the property of all the lands of a kingdom,
fully improved, belong to the state, or to any number of individuals,
however few, there is no question of improvement; no difference as to
agriculture, no difference as to population, according to modern policy.
So long as the whole is well cultivated and made to produce, by a set of
men I call farmers, the end is fully obtained; and according to the
nature of the agriculture, which many different circumstances of taste
and manner of living has introduced, larger or smaller portions of land
must be allotted to each of them.

If you suppose a country not as yet improved, as many are, then, the
case becomes quite different, and small possessions are necessary, both
for multiplying the inhabitants and for improving the soil. In this
supposition the most operose agriculture may be carried on in
competition with the most lucrative; because when there is a question of
improvement, there is frequently a considerable outgoing instead of any
surplus after paying the labour.

Agriculture for improvement can be carried on by none but those who have
wealth and superfluity, and is prosecuted with a view to future, not to
present advantage: of this we shall treat in another place. For I
consider it as a quite different operation, influenced by different
principles, and no ways to be confounded with the present subject of
inquiry. But I have insensibly been wandering through an extensive
subject, and it is now time to return.

I have said above that a river might as easily ascend to its source, as
an industrious people voluntarily adopt a more operose system of
agriculture than that already established, while the spirit of industry
prevails on one hand, and while farmers have profit only in view on the
other. In consequence of this position, I have treated the plan proposed
for augmenting the inhabitants of the island, by the introduction of a
more operose agriculture as absurd, and so it certainly is: but let me
throw in a circumstance which affects the spirit of that people, and the
plan becomes plausible and easy.

Let a part of the wealthy proprietors of the lands take a taste for
agriculture. Let a Tull, a Du Hamel turn agriculture into an object of
luxury, of amusement. Let this science be turned into a Missisippi, or
South Sea scheme. Let the rich be made to believe that treasures are to
be found at a small expence, laid at first out upon farming, and you
will soon see the most operose species of the science go forward, and
the produce of it come to market and be sold, in spite of all
competition. My Lady Duchess’s knotting may be sold at so much a pound,
as well as that performed by a girl who does not spend six pence a day;
but if the one and the other be considered relatively to the expence of
the manufacturer, every knot of my Lady’s will be found to have cost as
much as a pound of the other. The Duchess’s pound, however, increases
the quantity of knots; and so does my Lord’s farm the mass of
subsistence for the whole society. The nation also gains by his
extravagance having taken a turn, which may produce the permanent good
effect of improving a part of the country, though at an expence
infinitely beyond the value of it. I must now again touch upon another
part of my subject, which I think has been treated too superficially.

In a former chapter I have shewn how industry has the natural effect of
collecting into towns and cities the free hands of a state, leaving the
farmers in their farms and villages. This distribution served the
purpose of explaining certain principles; but when examined relatively
to other circumstances which at that time I had not in my eye, it will
be found by far too general. Let me therefore add some farther
observations upon that matter.

The extensive agriculture of plowing and sowing, is the proper
employment of the country, and is the foundation of population in every
nation fed upon its own produce. Cities are commonly surrounded by
kitchen gardens, and rich grass fields; these are the proper objects of
agriculture for those who live in suburbs, or who are shut up within the
walls of small towns. The gardens produce various kinds of nourishment,
which cannot easily be brought from a distance, in that fresh and
luxuriant state which pleases the eye, and conduces to health. They
offer a continual occupation to man, and very little for cattle,
therefore are properly situated in the proximity of towns and cities.
The grass fields again are commonly either grazed by cows, for the
production of milk, butter, cream, &c. which suffer by long carriage; or
kept in pasture for preserving fatted animals in good order until the
markets demand them; or they are cut in grass for the cattle of the
city. They may also be turned into hay with profit; because the carriage
of a bulky commodity from a great distance is sometimes too expensive.
Thus we commonly find agriculture disposed in the following manner. In
the center stands the city surrounded by kitchen gardens; beyond these
lies a belt of fine luxuriant pasture or hay fields; stretch beyond this
and you find the beginning of what I call operose farming, plowing and
sowing; beyond this lie grazing farms for the fattening of cattle; and
last of all come the mountainous and large extents of unimproved or ill
improved grounds, where animals are bred. This seems the natural
distribution, and such I have found it almost every where established,
when particular circumstances do not invert the order.

The poorness of the soil near Paris, for example, presents you with
fields of rye corn at the very gates, and with the most extensive
kitchen gardens and orchards, even for cherries and peaches, at a
considerable distance from town. Other cities I have found, and I can
cite the example of that which I at present inhabit, Padoua, where no
kitchen garden is to be found near it, but every spot is covered with
the richest grain; two thirds with wheat, and the remaining third with
Indian corn. The reason of this is palpable. The town is of a vast
extent, in proportion to the inhabitants; the gardens are all within the
walls, and the dung of the city enables the soil to produce constantly.
Hay is brought from a greater distance, because the expence of
distributing the dung over a distant field, would be greater than that
of transporting the hay by water-carriage. The farm houses here appear
no larger than huts, as they really are, built by the farmers, because
the space to be laboured is very small, in proportion to the produce;
hence it is, that a farmer here pays the value of the full half of the
crop to the landlord, and out of the remaining half, not only sows the
ground and buys the dung, but furnishes the cattle and labouring
instruments, nay even rebuilds his house, when occasion requires.

When first I examined these fertile plains, I began to lament the
prodigal consumption of such valuable lands, in a multitude of very
broad high-ways, issuing to all quarters; many of which I thought might
be saved, in consideration of the vast advantage accruing upon such
oeconomy: but upon farther reflection I perceived, that the loss was
inconsiderable; for the fertility of the soil proceeding chiefly from
the manure laid upon it, the loss sustained from the roads ought to be
computed at no more than the value of the land when uncultivated. The
case would be very different, were roads now to be changed, or new ones
carried through the corn fields; the loss then would be considerable,
though even that would be temporary, and only affect particular persons:
for the same dung, which now supports these lands in their fertility,
would quickly fertilize others in their places and in a few years
matters would stand as at present.

These last reflections lead me naturally to examine a question which has
been treated by a very polite French writer, the author of _l’Ami de
l’homme_, and which comes in here naturally enough, before I put an end
to this first book. Here it is.

[Sidenote: QUEST. IV.]

Does an unnecessary consumption of the earth’s productions, either in
food, cloathing, or other wants; and a prodigal employment of fine rich
fields, in gardens, avenues, great roads, and other uses which give
small returns, _hurt population_, by rendering food and necessaries less
abundant, in a kingdom such as France, in its present situation?

My answer is, That if France were fully cultivated and peopled, the
introduction of superfluous consumption would be an abuse, and would
diminish the number of inhabitants; as the contrary is the case, it
proves an advantage. I shall now give my reasons for differing in
opinion from the gentleman whose performance I have cited.

As the question is put, you perceive the end to be compassed is, to
render food and necessaries abundant; because the abuse is considered in
no other light, than relatively to the particular effect of diminishing
the proper quantity of subsistence, which the king would incline to
preserve, for the nourishment and uses of his people. I shall therefore
confine myself chiefly to this object, and if I shew, that these
superfluous employments of the surface of the earth, and prodigal
consumptions of her fruits, are really no harm, but an encouragement to
the improvement of the lands of France _in her present state_, I shall
consider the question as sufficiently resolved: because if the abuse, as
it is called, proves favourable to agriculture, it can never prove
hurtful to population. However, from the inattention of the government,
it may affect foreign trade, but this is an object entirely foreign to
the question. But before I enter upon the subject, it is proper to
observe, that I am of opinion, that any system of oeconomy which
necessarily tends to corrupt the manners of a people, ought by every
possible means to be discouraged, although no particular prejudice
should result from it, either to population, or to plentiful
subsistence.

Now, in the question before us, the only abuse I can find in these
habits of extraordinary consumption, appears relative to the character
of the consumers, and seems in no way to proceed from the effects of the
consumption. The vices of men may no doubt prove the cause of their
making a superfluous consumption, but the consumption they make can
hardly ever be the cause of this vice. The most virtuous man in France
may have the most splendid table, the richest clothes, the most
magnificent equipages, the greatest number of useless horses, the most
pompous palace, and most extensive gardens. The most enormous luxury to
be conceived, in our acceptation of the term, so long as it is directed
to no other object than the consumption of the labour and ingenuity of
man, is compatible with virtue as well as with vice. This being
premised, I come to the point in hand.

France, at present, is in her infancy as to improvement, although the
advances she has made within a century excite the admiration of the
world. I shall not go far in search of the proof of this assertion.
Great tracts of her lands are still uncultivated, millions of her
inhabitants are idle. When all comes to be cultivated, and all are
employed, then she will be in a state of perfection, relatively to the
moral possibility of being improved. The people are free, slavery is
unknown, and every man is charged with feeding himself, and bringing up
his children. The ports of the country are open to receive subsistence,
and that nation, as much as any other, may be considered as an
individual in the great society of the world; that is, may increase in
power, wealth, and ease, relatively to others, in proportion to the
industry of her inhabitants. This being the case, all the principles of
political oeconomy, which we have been inquiring after, may freely
operate in this kingdom.

France has arrived at her present pitch of luxury, relatively to
consumption, by slow degrees. As she has grown in wealth, her desire of
employing it has grown also. In proportion as her demands have
increased, more hands have been employed to supply them; for no article
of expence can be increased, without increasing the work of those who
supply it. If the same number of inhabitants in the city of Paris
consume four times as much of any necessary article as formerly, I hope
it will be allowed, that the production of such necessaries must be four
times as abundant, and consequently, that many more people must be
employed in providing them.

What is it that encourages agriculture, but a great demand for its
productions? What encourages multiplication, but a great demand for
people; that is, for their work? Would any one complain of the
extravagant people in Paris, if, instead of consuming those vast
superfluities, they were to send them over to Dover, for a return in
English gold? What is the difference between the prodigal consumption,
and the sale? The one brings in money, the other brings in none: but as
to food and necessaries, for providing the poor and frugal, their
contingent, in either case, stands exactly the same.

But, says one, were it not for this extraordinary consumption, every
thing would be cheaper. This I readily allow; but will any body say,
that reducing the price of the earth’s productions is a method to
encourage agriculture, especially in a country where grounds are not
improved, and where they cannot be improved; chiefly, because the
expence surpasses all the profits which possibly can be drawn from the
returns? High prices therefore, the effect of great consumption, are
certainly advantageous to the extension of agriculture. If I throw my
rich corn fields into gravel-walks and gardens, I suppose they will no
more come into competition with those of my neighbour, the laborious
husbandman. Who will then lose by my extravagance? Not the husbandman.
It will perhaps be said, the nation in general will lose; because you
deprive them of their food. This might be true, were the laying waste
the corn fields a sudden revolution, and extensive enough to affect the
whole society; and were the sea-ports and barriers of the kingdom shut:
but that not being the case, the nation, upon the smallest deficiency,
goes to market with her money, and loses none of her inhabitants.

OBJ. But if living is made dear, manufacturers must starve, for want of
employment.

ANSW. Not those who supply home consumption, but only those who supply
foreigners living more cheaply; and of such I know but few. The interest
of this class shall be fully examined in another place. At present I
shall only observe, that the laying waste corn fields in an industrious
country, where refinement has set on foot a plan of useful husbandry,
will have no other effect, than that of rendring grain for a while
proportionally dearer: consequently, agriculture will be thereby
encouraged; and in a few years the loss will be repaired, by a farther
extension of improvement. This will make food plentiful and cheap: then
numbers will increase, until it become scarce again. It is by such
alternate vicissitudes, that improvement and population are carried to
their height. While the improvement of lands goes forward, I must
conclude, that demand for subsistence is increasing; and if this be not
a proof of population, I am much mistaken.

I can very easily suppose, that a demand for _work_ may increase
considerably, in consequence of an augmentation of riches only; because
there is no bounds to the consumption of _work_; but as for articles of
nourishment the case is quite different. The most delicate liver in
Paris will not put more of the earth’s productions into his belly, than
another: he may pick and choose, but he will always find, that what he
leaves will go to feed another: victuals are not thrown away in any
country I have ever been in. It is not in the most expensive kitchens
where there is found the most prodigal dissipation of the abundant
fruits of the earth; and it is with such that a people is fed, not with
ortolans, truffles, and oysters, sent from Marenne.

OBJ. Roads of a superfluous breadth are carried many times through the
finest fields, belonging to the poor and industrious, without a proper
indemnity being given.

ANSW. The with-holding the indemnity is an abuse; the loss of the fields
is none _to the state_, except in such countries where the quantity of
arable lands is small, as in mountainous provinces; there a proper
consideration should be had to the breadth, because the loss cannot be
made up. In such countries as I here describe, and I cite the Tirol for
an example, I have found all the inhabitants in a manner employed in
that species of agriculture, which is exercised as a method of
subsisting. The little ground that is arable, is divided into very small
lots; the people multiply very much, and leave the country. Those who
remain are usually employed in cutting wood, for building and burning,
which they send down the rivers, and in return buy corn, which comes
from the south and from the north. This is the best plan of industry
they can follow, without the assistance of their sovereign. Roads here
are executed to great perfection, with abundance of solidity, and with a
tender regard for the little ground there is. I return to France.

OBJ. A multitude of superfluous horses are kept in Paris, which consume
what would feed many more inhabitants.

ANSW. True: but he who feeds the horses, because _he thinks_ he has use
for them, would not feed those inhabitants, because _he is sure_ he has
no use for them: and did he, in complaisance for the public, dismiss his
cattle, the farmer, who furnishes the hay and oats, would lose a
customer, and nobody would gain. These articles are produced, because
they are demanded: when additional inhabitants are produced, who will
demand and can pay, their demand will be answered also, as long as there
is an unemployed acre in France.

OBJ. The increase of the consumption of wood for firing is hurtful to
population, because it marks the extension of forests.

ANSW. This consequence I deny; both from fact and reason. From fact,
because forests are not extended, and that nothing but the hand of
nature, in an ill-inhabited country, seems capable of forming them. In
France, forests are diminishing daily; and were it not for the
jurisdiction of the _Table de marbre_, they would have been more
diminished than they are. I agree, that the consumption of wood is at
present infinitely greater than formerly, and likewise, that the price
of it is greatly risen every where. These two circumstances rather seem
to mark the contraction, than the extension of forests. But the increase
of consumption and price proceed from other causes, as I shall shew, in
order to point out some new principles relative to this extensive
subject. 1. The increase of consumption proceeds from the increase of
wealth. 2. The increase of price proceeds from the increase upon the
value of labour, and not from the scarcity of forest, nor the height of
the demand for firing. As to the first, I believe the fact will not be
called in question, as it is one of the superfluities of consumption
complained of, and put down to the account of luxury and extravagance.
As to the second, the true cause of the rise of the price of that
commodity demands a little more attention, and in order to point it out
with some distinctness, I must first shew the political impossibility of
forests becoming extended over the _arable_ lands of France in her
present situation.

The best proof I can offer to support my opinion is, to compare the
inconsiderable value of an acre of standing forest in the king’s
adjudications, where thousands are sold at a time, with the value of an
acre of tolerable corn lands, and then ask, if the present value of
forests is so considerable, as to engage any proprietor to sow such a
field for raising wood, when he must wait, perhaps 40 years, before it
be fit for cutting? Add to this, that whoever plants a tree in France,
comes under the jurisdiction above-mentioned, and is not at liberty to
cut it down, and dispose of it, without their permission. It is in a
great measure for this reason, that so few trees are seen about French
villages; and I never heard of one example, of corn lands being sown
with the seeds of forest-trees, with a view to improvement. That
forests, which are well kept, may extend themselves over grounds not
worth the cultivation, I do not deny; but this surely can do no harm to
agriculture; and it is only in that respect, I pretend that forests in
France are not at present in a way of gaining ground.

Now as to the rise in the price of wood for burning, I say, it proceeds
not from the rise of the price of timber growing in forests, so much as
from the increase of the price of labour, and principally of the price
of transportation. This is not peculiar to France alone, but is common
to all Europe almost, for the reasons I shall presently give. But in the
first place, as to the matter of fact, that the rise in the price
proceeds from the cause assigned, may be seen, by comparing the low
price of an acre of standing forest, with the great value of the timber
when brought to market: the first is the neat value of the wood; the
last includes that of the labour.

Next as to the price of labour; the rise here is universal in all
industrious nations, from a very plain reason, easily deducible from the
principles above laid down.

While the land remained loaded with a number of superfluous mouths,
while numbers were found in every province employed in agriculture, for
the sake of subsistence, merely, such people were always ready to employ
their idle hours and days, for a very small consideration from those who
employed them. They did not then depend upon this employment for their
subsistence; and a penny in their pocket purchased some superfluity for
them. But when modern policy has by degrees drawn numbers from the
country, the few that remain for the service of the public must now
labour for their subsistence; and he who employs them, must feed them,
clothe them, and provide for all their other wants. No wonder then, if
labour be dearer: there is a palpable reason for the augmentation.

The price of all necessaries has risen, no doubt, partly for the same
reason, and this circumstance certainly enters into the combination: but
work, in the country especially, has risen far beyond the proportion of
the price of necessaries, and will rise still more as the lands become
better purged of superfluous mouths.

Notwithstanding what I have said, I readily allow, that the great
consumption of wood for burning, but more particularly for forges, has
considerably raised the intrinsic value of forest lands; but the
consequence has not been, to extend the forests, as we have shewn, but
to produce a general revenue from them all over the kingdom; whereas
formerly, in many provinces, they produced almost nothing. When they
were cut, cattle were turned in, and by eating up the tender shoots from
year to year, the forest ran into a wild, neither producing timber, nor
pasture. This practice was established upon the ruling principle of
private interest. The land was not worth the expence of grubbing up the
timber; the timber when grown, did not compensate the loss of a few
years pasture. No jurisdiction, however well administred, can check the
operation of that principle; and a statesman who would attempt it, would
be called a tyrant: he would distress the husbandman, and do no service
to the state.

From what has been said, I must conclude, that while the consumption of
the earth’s produce, and of the work of man tend to excite industry, in
providing for extraordinary demands; when the interest of foreign trade
does not enter into the question; and while there are lands enough
remaining unimproved, to furnish _the first matter_; there can be no
political abuse from the misapplication or unnecessary destruction of
either fruits or labour. The misapplier, or dissipator, is punished by
the loss of his money; the industrious man is rewarded by the
acquisition of it. We have said, that vice is not more essentially
connected with superfluity, than virtue with industry and frugality. But
such questions are foreign to my subject. I would however recommend it
to moralists, to study circumstances well, before they carry reformation
so far, as to interrupt an established system in the political oeconomy
of their country.

------------------------------------------------------------------------



                               CHAP. XXI.
                  _Recapitulation of the First Book._


[Sidenote: INTROD.]

I set out by distinguishing government from political oeconomy; calling,
the first the power to command, the second the talent to execute. Thus
the governor may restrain, but the steward must lead, and, by direct
motives of self-interest, gently conduct free and independent men to
concur in certain schemes ultimately calculated for their own proper
benefit.

The object is, to provide food, other necessaries and employment, not
only for those who actually exist, but also for those who are to be
brought into existence. This is accomplished, by engaging every one of
the society to contribute to the service of others, in proportion only
as he is to reap a benefit from reciprocal services. To render this
practicable, the spirit of the people must be studied, the different
occupations prescribed to each must first be adapted to their
inclinations, and when once they have taken a taste for labour, these
inclinations must be worked upon by degrees, so as to be bent towards
such pursuits as are most proper for attaining the end desired.

[Sidenote: CHAP. I.]

He who sits at the head of this operation, is called the statesman. I
suppose him to be constantly awake, attentive to his employment, able
and uncorrupted, tender in his love for the society he governs,
impartially just in his indulgence for every class of inhabitants, and
disregardful of the interest of individuals, when that regard is
inconsistent with the general welfare.

Did I propose a plan of execution, I confess this supposition would be
absurd; but as I mean nothing farther than the investigation of
principles, it is no more so, than to suppose a point, a straight line,
a circle, or an infinite, in treating of geometry.

[Sidenote: CHAP. II.]

To prepare the way for treating this subject, in that order which the
revolutions of the last centuries have pointed out as the most natural,
I have made the distribution of my plan in the following order.
Population and agriculture are the foundations of the whole. Civil and
domestic liberty, introduced into Europe by the dissolution of the
feudal form of government, set trade and industry on foot; these
produced wealth and credit; these again debts and taxes; and all
together established a perfectly new system of political oeconomy, the
principles of which it is my intention to deduce and examine.

Population and agriculture, as I have said, must be the basis of the
whole, in all ages of the world; and as they are so blended together in
their connections and relations, as to make the separation of them quite
incompatible with perspicuity and order, they have naturally been made
the subject of the first book.

[Sidenote: CHAP. III.]

I have shewn, that the first principle of multiplication is generation;
the second is food: the one gives existence and life; the other
preserves them.

The earth’s spontaneous fruits being of a determined quantity, never can
feed above a determined number. Labour is a method of augmenting the
productions of nature, and in proportion to the augmentation, numbers
may increase. From these positions, I conclude,

[Sidenote: CHAP. IV.]

That the numbers of mankind must ever have been in proportion to the
produce of the earth; and this produce must constantly be in the
compound ratio of the fertility of the soil, and labour of the
inhabitants. Consequently, there can be no determined universal
proportion over the world, between the number of those necessary for
labouring the soil, and of those who may be maintained by its produce.
Here I am led to examine the motives which may induce one part of a free
people to labour, in order to feed the other.

This I shew to proceed from the different wants to which mankind are
liable.

[Sidenote: CHAP. V.]

Here I introduce a statesman, as being necessary to model the spirit of
a society. He contrives and encourages reciprocal objects of want, which
have each their allurement. This engages every one in a different
occupation, and must hurt the former simplicity of manners. I shew how
essential it is, to keep a just balance throughout every part of
industry, that no discouragement may be cast upon any branch of it,
either from superfluity, or want; and I have pointed out, how the
dividing of food between parents and children, is the means of bringing
on scarcity, which inconveniency can only be removed by an augmentation
of labour.

If a society does not concur in this plan of reciprocal industry, their
numbers will cease to increase; because the industrious will not feed
the idle. This I call a state of a moral impossibility of increase in
numbers, and I distinguish it from the physical impossibility, which can
take place only when nature itself, not man, refuses to produce
subsistence. From this I apply to each particular society what I had
before found applicable to mankind in general; to wit,

That the inhabitants of every country must be in the compound proportion
of the quantity of food produced in it, and of the industry of the lower
classes. If the food produced surpass the proportion of industry, the
balance of food will be exported; if the industry surpasses the
proportion of food, its deficiency must be supplied by imports.

Reciprocal wants excite to labour; consequently, those whose labour is
not directed towards the cultivation of the soil, must live upon a
surplus produced by those who do. This divides the society into two
classes. The one I call farmers, the other free hands.

As the creating these reciprocal wants was what set the society to work,
and distributed them naturally into the two classes we have mentioned;
so the augmentation of wants will require an augmentation of free hands,
and their demand for food will increase agriculture.

[Sidenote: CHAP. VI.]

Here I define luxury to mean no more than the consumption of
superfluity, or the supplying of wants not essentially necessary to
life; and, I say, that a taste for superfluity will introduce the use of
money, which I represent as the general object of want, that is of
desire, among mankind; and I shew how an eagerness to acquire it becomes
an universal passion, a means of increasing industry among the free
hands; consequently, of augmenting their numbers; consequently, of
promoting agriculture for their subsistence.

The whole operation I have been describing proceeds upon one
supposition, to wit, that the people have a taste for labour, and the
rich for superfluity. If these be covetous and admirers of simplicity;
or those be lazy and void of ambition, the principles laid down will
have no effect: and so in fact we find, that it is not in the finest
countries in the world where most inhabitants are found, but in the most
industrious.

Let it therefore never be said, there are too many manufacturers in a
free country. It is the same thing as if it was said, there are too few
idle persons, too few beggars, and too many husbandmen.

[Sidenote: CHAP. VII.]

Here I break off my subject, to answer an objection arising from these
principles.

OBJ. How could the simplicity of the antients be compatible with a great
multiplication?

ANSW. In antient times men were forced to labour the ground because they
were slaves to others. In modern times the operation is more complex,
and as a statesman cannot make slaves of his subjects, he must engage
them to become slaves to their own passions and desires; this is the
only method to make them labour the ground, and provided this be
accomplished, by whatever means it is brought about, mankind will
increase.

[Sidenote: CHAP. VIII.]

This question being dismissed, I point out a method of estimating the
proportion of numbers between the farmers and free hands of a country,
only as an illustration of the principle already laid down, to wit, that
it is the surplus of the farmers which goes for the subsistence of the
others.

This surplus I shew to be the same thing as the value of the land rents;
and hence I conclude,

1st, That the rising of the rents of lands proves the augmentation of
industry, and the multiplication of free hands; but as rents may rise,
and yet the number of inhabitants continue the same as before, I infer,

2dly, That the revolution must then mark the purging of the lands of
superfluous mouths, and forcing these to quit their mother earth, in
order to retire to towns and villages, where they may usefully swell the
number of the free hands and apply to industry.

3dly, That the more a country is in tillage, the more it is inhabited,
and the fewer free hands are to be found: that the more it is laid into
pasture, the less it is inhabited, and the greater is the proportion of
free hands.

[Sidenote: CHAP. IX.]

Next I consider the principles which determine the place of residence.

The farmers must live upon, or near the spot they labour; that is,
either upon their farms or in their villages.

The free hands I divide into two conditions. The first composed of the
proprietors of the surplus of food, that is the landlords; together with
those who can purchase it with a revenue already acquired, that is, the
monied interest. The second condition is composed of those who must
purchase some of this surplus with their daily labour.

Those of the first condition may live where they please; those of the
second must live where they can.

When those of the first choose to live together, a considerable number
of those of the second must follow them, in order to supply their
consumption. This forms towns and cities.

When a statesman places the whole administration of public affairs in
the same city, this swells a capital.

When manufacturers get together in bodies, they depend not directly upon
consumers, but upon merchants. The situation of their residence depends
upon circumstances relative to their occupation, provision and
transportation of their work. From this hamlets swell into villages, and
villages into towns. Sea ports owe their establishment to the increase
of foreign trade.

[Sidenote: CHAP. X.]

As the collecting such numbers of inhabitants together is a late
revolution in the political oeconomy of Europe, I endeavour to give a
short historical representation of it, and examine the consequences
which result from it, both to the state from the growth of cities, and
to the land proprietors from the desertion, as I may call it, of so many
vassals and dependents. One principal effect I observe to be, the
additional occupation it has given to statesmen; that is to say,
political oeconomy is thereby become more complex.

[Sidenote: CHAP. XI.]

Formerly the inhabitants were dispersed, and by sucking, as it were,
their mother earth, were more easily subsisted: now industry has
gathered them together, and industry must support them. The failing of
industry, is like the cutting off the subsistence of an army. This is
the care of a general to prevent, that the care of a statesman.

The supporting industry means no more than employing those who must live
by it; and keeping their numbers in proportion to their work. The first
point, therefore, is to find work for the present inhabitants; the
second is, to make them multiply, if the demand for their labour
increases.

Increasing numbers will never remove, but rather augment such
inconveniencies, as proceed from the abuses of those already existing.

In order to employ a people rightly, it is proper to know the exact
state of numbers necessary for supplying the demand for every
occupation; to distribute those who must live by their industry into
proper classes; and to make every class (as far as possible) at least,
support their own numbers by propagation.

[Sidenote: CHAP. XII.]

Where the value of any species of industry is not sufficient for that
purpose, a proper remedy must be applied. When any are found incapable,
from age or infirmities, to gain their livelihood, they must be
maintained. Infants exposed by their parents must be taken care of, and
thrown back into the lowest classes of the people; the most numerous
always, and the most difficult to be supported by their own propagation.
Marriage, without assistance, will not succeed in a class who gain no
more by their industry than a personal physical necessary. Here our
oeconomy differs widely from that of the antients. Among them marriage
was encouraged in many ways; but it was only for the free. These did not
amount to one half of the people. The slaves who represented our lower
classes were recruited from other countries, as they are at present in
America.

If, therefore, according to modern oeconomy, the lowest species of
labour must be kept cheap, in order to make manufactures flourish, the
state must be at the expence of the children; for as matters stand,
either the unmarried gain as much as the married should do, and become
extravagant; or the married gain no more than the unmarried can do, and
become miserable. An unequal competition between people of the same
class, always implies one of these inconveniencies; and from these
principally proceeds the decay and misery of such numbers in all modern
states, as well as the constant complaints of the augmentation of the
price of labour.

Every individual is equally inspired with a desire to propagate. A
people can no more remain without propagating, than a tree without
growing: but no more can live than can be fed; and as all augmentations
of food must come at last to a stop, so soon as this happens, a people
increase no more; that is to say, the proportion of those who die
annually increases. This insensibly deters from propagation, because we
are rational creatures. But still there are some who, though rational,
are not provident; these marry and produce. This I call vicious
propagation. Hence I distinguish propagation into two branches, to wit,
multiplication, which goes on among these who can feed what they breed,
and mere procreation, which takes place among those who cannot maintain
their offspring.

This last produces a political disease, which mortality cures at the
expence of much misery; as forest trees which are not pruned, dress
themselves and become vigorous at the expence of numbers which die all
around. How to propose a remedy for this inconveniency, without laying
some restraint upon marriage; how to lay a restraint upon marriage
without shocking the spirit of the times, I own I cannot find out; so I
leave every one to conjecture.

[Sidenote: CHAP. XIII.]

Although a complete remedy cannot be obtained against the effects of
abusive procreation; yet with the help of accurate lists of births and
deaths for every class of people, many expedients may be fallen upon to
preserve the few who escape the dangers of their infancy, from falling
back into the unhappy class which produced them. From these lists the
degree of mortality and nature of diseases, as well as the difference
between the propagation of the easy and of the miserable, will plainly
appear; and if it be the duty of a statesman to keep all his people
busy, he certainly should acquire the most exact knowledge possible of
the numbers and propagation of those of every denomination, that he may
prevent any class from rising above or sinking below the standard, which
is best proportioned to the demand for their respective industry.

[Sidenote: CHAP. XIV.]

Population and agriculture have so close a connexion with one another,
that I find even the abuses to which they are severally liable,
perfectly similar. I have observed how naturally it must happen, that
when too many of a society propagate, a part must starve; when too many
cultivate, a part must starve also. Here is the reason:

The more of a people cultivate a country, the smaller portion of it must
fall to every man’s share; and when these portions are reduced so low as
to produce no more than what is necessary to feed the labourers, then
agriculture is stocked to the utmost.

From this I divide agriculture into two branches; the one useful, the
other abusive. The first is a trade, that is, a method of producing not
only subsistence for the labourers, but also a surplus to be provided
for the free hands of the state, for their subsistence, and for an
equivalent either in work itself, or for the produce of it. The second
is no trade, because it implies no alienation, but is purely a method of
subsisting. If, therefore, in any country where agriculture is exercised
as a trade, and where there are many free hands, the farmers should be
allowed to multiply up to the proportion of the whole produce; would not
all the free hands be forced to starve? What would be the advantage of
having so many farmers; for there is one evident loss? Every one would
be entirely taken up in feeding himself, wants would disappear; life
indeed would be simplified to the last degree, but the bond of society,
mutual dependence, would be dissolved: therefore I call this species
abusive, in proportion as these effects are produced. I cite several
examples of this abusive agriculture in different countries, where I
take occasion to observe, that the christian virtue, charity, in
proportion to its extent, is as conducive to multiplication as either
slavery, or industry: whatever gives food must give numbers. I do not
say that charity is conducive to industry.

[Sidenote: CHAP. XV.]

I next apply these general principles to a particular representation
given of the state of population in the British isles; from which I
conclude, that population there is not obstructed, either by losses
sustained from war and commerce, or from the exportation of their
subsistence, but from the political situation of that country, which
throws it at present into a moral incapacity of augmenting in numbers.

[Sidenote: CHAP. XVI.]

The establishment of trade and industry naturally rectifies this
misapplication of agriculture, by purging the land of superfluous
mouths, and thereby reduces it, as it ought to be, to a trade calculated
to furnish a surplus, which comes to be sold for the labour of all the
industrious. It is this alone which can rivet the bond of general
dependence among free men who must live by their industry; by making one
part laborious farmers, and the other ingenious tradesmen and
manufacturers. It is by the vibration of the balance between these two
classes, that multiplication and agriculture are carried to their
height. When industry goes on too fast, free hands multiply above the
standard, that is, their scale sinks; this raises the price of food, and
gives an additional encouragement to agriculture: when this again
becomes the more weighty, food becomes plentiful and cheap, then numbers
augment a-new. These reflections lead me to consider the effects of
plentiful and scarce years in modern times, when famines are almost
things unknown; and I conclude,

[Sidenote: CHAP. XVII.]

That were plentiful years more common, mankind would be more numerous;
that were scarce years more frequent, numbers would diminish. Then
applying this observation to the state of exportations of grain from
England, I am tempted to infer, that this kingdom, the most fertile
perhaps in Europe, has never been found to produce, in one year,
eighteen months full subsistence for all its inhabitants; nor ever less
than ten months scanty provision in the years of the greatest sterility.

[Sidenote: CHAP. XVIII.]

When a country is fully peopled and continues to be industrious, food
will come from abroad. When a loaf is to be had, the rich will eat it,
though at the distance of a mile; and the poor may starve, though at the
next door. It is the demand of the rich, who multiply as much as they
incline, which encourages agriculture even in foreign nations; therefore
I conclude, that this multiplication is the cause, and that the progress
of agriculture is but the effect of it.

A country once fully stocked may diminish in numbers, and still remain
stocked. This must proceed from a change in the manner of living; as
when an indolent people quit the consumption of the more abundant
productions of the earth, to seek after delicacies. On the other hand,
the industrious bring an additional supply from abroad, and by
furnishing strangers with the produce of their labour, they still go on
and increase in numbers. This is the case of Holland: and this scheme
will go on, until abuses at home raise the price of labour; and
experience abroad, that universal school mistress, teaches foreigners to
profit of their own advantages.

When food ceases to be augmented, numbers come to a stand; but trade may
still go on and increase wealth: this will hire armies of foreigners; so
the traders may read of their own battles, victories, and trophies, and
by spending their money, never smell gunpowder.

[Sidenote: CHAP. XIX.]

When they cannot augment their numbers, they will introduce machines
into many manufactures; and these will supply the want, without adding
to the consumption of their food. Foreigners, astonished at a novelty
which lowers prices, and checks their growing industry, will copy the
inventions; but being no more than scholars, who go aukwardly to work,
this improvement will throw many of their hands into idleness: the
machines will be cried down, and the traders will laugh in their
sleeves, well knowing that nothing is more easy than to put work into
the hands of an industrious man made idle. Wit and genius, in short,
will always set him who possesses them above the level of his fellows,
and when one resource fails him, he will contrive another.

[Sidenote: CHAP. XX.]

The wit I here mention is not that acquired in the closet; for there one
may learn, that an equal distribution of lands was so favourable to
multiplication in antient times, that it must be owing to a contrary
practice, that our numbers now are so much smaller. But he who walks
abroad, and sees millions who have not one moment’s time to put a spade
in the ground, so busily are they employed in that branch of industry
which is put into their hands, must readily conclude, that circumstances
are changed, and that the fewer people are necessary for feeding the
whole society, the more must remain free to be employed in providing
every other thing that can make life agreeable, both to themselves and
to strangers; who in return deliver into the hands of their industrious
servants, the ensigns of superiority and dominion, money. Who is best
employed, he who works to feed himself, or he who works to be fed,
cloathed, and supplied, disposing only of his superfluities to those
whom, consequently, he shortly must command. This is obtained by the
introduction of the useful species of agriculture, and by the explosion
of the abusive. And when strangers are so kind as to allow their
neighbours the privilege of clothing and adorning them, good nature, not
to say self-interest, demands, in return, that the first be indulged in
a permission to exercise those branches of toil and labour which are the
least profitable, though the most necessary for the subsistence of the
latter.

When the eye of humanity considers the toil of the farmer, and the
indifference of his rich countryman in squandering, the abuse appears
offensive. The rich man is advised to consider of the pain incurred by
the poor husbandman, in consequence of his dissipation. Upon this the
rich, touched with compassion, simplifies his way of life. The
husbandman in a fury falls upon the reformer, and, in his rough way,
gives him to understand, that he by no means looks upon him as his
friend: for, says he, do you take me for the rich man’s slave; or do you
imagine that I toil as I do, either by his command, or for any
consideration for him? Not in the least, it is purely for his money; and
from the time you persuaded him to become an oeconomist, here am I, and
my poor family, starving. We are not the only people in this situation;
there is my neighbour who has all his hay and oats upon hand, since, by
your instigation, likewise, he dismissed his useless horses. Do you
think he will give his oats in charity to feed the poor? He is poor
enough himself, and all those who have been working to get this
provision together are in no better humour than I am. Hold your tongue,
says the reformer, you are a parcel of extravagant fellows, you
labourers. A hundred years ago, one could have got as many of you as one
pleased, for the half of what you cost us at present. Give us back our
lands, says the other, at the rate we had them; and let us all be well
fed before we give you a farthing, and you shall have us as cheap as
ever. But do you think that after you have chased one half of us into
towns, and raised your rents with the price of their food, that we can
work twice as hard, and serve you as formerly? No, Sir! you ought to
have more sense than to expect it.

This is a sketch of the first book; I thought a short abridgment of it
might be of service for recollecting ideas, and ranging them in order
before I proceed.

                         END OF THE FIRST BOOK.

-----------------------------------------------------------------------



                                   AN
                                INQUIRY
                                INTO THE
                   PRINCIPLES OF POLITICAL OECONOMY.

------------------------------------------------------------------------



                                BOOK II.
                         OF TRADE AND INDUSTRY.



                             INTRODUCTION.


Before I enter upon this second book, I must premise a word of
connexion, in order to conduct the ideas of my reader by the same way
through which the chain of my own thoughts, and the distribution of my
plan have naturally led me.

My principal view hitherto has been to prepare the way for an
examination of the principles of modern politics, by inquiring into
those which have, less or more, operated regular effects in all the ages
of the world.

In doing this, I confess, it has been impossible for me not to
anticipate many things which, according to the plan I have laid down,
will in some measure involve me in repetitions.

I propose to investigate principles which are all relative and depending
upon one another. It is impossible to treat of these with distinctness,
without applying them to the objects on which they have an influence;
and as the same principles extend their influence to several branches of
my subject, those of my readers who keep them chiefly in their eye, will
not find great variety in the different applications of them.

In all compositions of this kind, two things are principally requisite.
The first is, to represent such ideas as are abstract, clearly, simply,
and uncompounded. This part resembles the forging out the links of a
chain. The second is, to dispose those ideas in a proper order; that is,
according to their most immediate relations. When such a composition is
laid before a good understanding, memory finishes the work, by cementing
the links together; and providing any one of them can be retained, the
whole will follow of course.

Now the relations between the different principles of which I treat, are
indeed striking to such as are accustomed to abstract reasoning, but not
near so much so, as when the application of them is made to different
examples.

The principle of self-interest will serve as a general key to this
inquiry; and it may, in one sense, be considered as the ruling principle
of my subject, and may therefore be traced throughout the whole. This is
the main spring, and only motive which a statesman should make use of,
to engage a free people to concur in the plans which he lays down for
their government.

I beg I may not here be understood to mean, that self-interest should
conduct the statesman: by no means. Self-interest, when considered with
regard to him, is public spirit; and it can only be called
self-interest, when it is applied to those who are to be governed by it.

From this principle men are engaged to act in a thousand different ways,
and every action draws after it certain necessary consequences. The
question therefore constantly under consideration comes to be, what will
mankind find it their interest to do, under such and such circumstances?

In order to exhaust the subject of political oeconomy, I have proposed
to treat the principles of it in relation to circumstances; and as these
are infinite, I have taken them by categories; that is, by the more
general combinations, which modern policy has formed. These, for the
sake of order, I have represented as all hanging in a chain of
consequences, and depending on one another. See Book I. Chap. ii.

I found this the best method for extending my plan, from which it is
natural to infer, that it will also prove the best for enabling my
readers to retain it.

I shall do what I can to diversify, by various circumstances, the
repetitions which this disposition must lead me into. There is no seeing
a whole kingdom, without passing now and then through a town which one
has seen before. I shall therefore imitate the traveller, who, upon such
occasions, makes his stay very short, unless some new curiosity should
happen to engage his attention.

I have said, that self-interest is the ruling principle of my subject,
and I have so explained myself, as to prevent any one from supposing,
that I consider it as the universal spring of human actions. Here is the
light in which I want to represent this matter.

The best way to govern a society, and to engage every one to conduct
himself according to a plan, is for the statesman to form a system of
administration, the most consistent possible with the interest of every
individual, and never to flatter himself that his people will be brought
to act in general, and in matters which purely regard the public, from
any other principle than private interest. This is the utmost length to
which I pretend to carry my position. As to what regards the merit and
demerit of actions in general, I think it fully as absurd to say, that
no action is truly virtuous, as to affirm, that none is really vitious.

It might perhaps be expected, that, in treating of politics, I should
have brought in public spirit also, as a principle of action; whereas
all I require with respect to this principle is, only a restraint from
it; and even this is, perhaps, too much to be taken for granted. Were
public spirit, instead of private utility, to become the spring of
action in the individuals of a well-governed state, I apprehend, it
would spoil all. I explain myself.

Public spirit, in my way of treating this subject, is as superfluous in
the governed, as it ought to be all-powerful in the statesman; at least,
if it is not altogether superfluous, it is fully as much so, as miracles
are in a religion once fully established. Both are admirable at setting
out, but would shake every thing loose were they to continue to be
common and familiar. Were miracles wrought every day, the laws of nature
would no longer be laws: and were every one to act for the public, and
neglect himself, the statesman would be bewildered, and the supposition
is ridiculous.

I expect, therefore, that every man is to act for his own interest in
what regards the public; and, politically speaking, every one ought to
do so. It is the combination of every private interest which forms the
public good, and of this the public, that is, the statesman, only can
judge. You must love your country. Why? Because it is yours. But you
must not prefer your own interest to that of your country. This, I
agree, is perfectly just and right: but this means no more, than that
you are to abstain from acting to its prejudice, even though your own
private interest should demand it; that is, you should abstain from
unlawful gain. Count Julian, for example, who, from private resentment,
it is said, brought the Moors into Spain, and ruined his country,
transgressed this maxim. A spy in an army, or in a cabinet, who betrays
the secrets of his country, and he who sells his trust, are in the same
case: defrauding the state is, among many others, a notorious example of
this. To suppose men, in general, honest in such matters, would be
absurd. The legislature therefore ought to make good laws, and those who
transgress them ought to be speedily, severely, and most certainly
punished. This belongs to the coercive part of government, and falling
beyond the limits of my subject, is ever taken for granted.

Were the principle of public spirit carried farther; were a people to
become quite disinterested, there would be no possibility of governing
them. Every one might consider the interest of his country in a
different light, and many might join in the ruin of it, by endeavouring
to promote its advantages. Were a rich merchant to begin and sell his
goods without profit, what would become of trade? Were another to defray
the extraordinary expence of some workmen in a hard year, in order to
enable them to carry on their industry, without raising their price,
what would become of others, who had not the like advantages? Were a man
of a large landed estate to distribute his corn rents at a low price in
a year of scarcity, what would become of the poor farmers? Were people
to feed all who would ask charity, what would become of industry? These
operations of public spirit ought to be left to the public, and all that
is required of individuals is, not to endeavour to defeat them.

This is the regular distribution of things, and it is only this which
comes under my consideration.

In ill-administred governments I admire as much as any one every act of
public spirit, every sentiment of disinterestedness, and nobody can have
a higher esteem for every person remarkable for them.

The less attentive any government is to do their duty, the more
essential it is that every individual be animated by _that_ spirit,
which then languishes in the very part where it ought to flourish with
the greatest strength and vigour; and on the other hand, the more public
spirit is shewn in the administration of public affairs, the less
occasion has the state for assistance from individuals.

Now as I suppose my statesman to do his duty in the most minute
particulars, so I allow every one of his subjects to follow the dictates
of his private interest. All I require is an exact obedience to the
laws. This also is the interest of every one; for he who transgresses
ought most undoubtedly to be punished: and this is all the public spirit
which any perfect government has occasion for.

------------------------------------------------------------------------



                                CHAP. I.
      _Of the reciprocal Connections between Trade and Industry._


I am now going to treat of trade and industry, two different subjects,
but which are as thoroughly blended together, as those we have discussed
in the first book. Similar to these in their mutual operations, they are
reciprocally aiding and assisting to each other, and it is by the
constant vibration of the balance between them, that both are carried to
their height of perfection and refinement.

_TRADE_ _is an operation, by which the wealth, or work, either of
individuals, or of societies, may be exchanged, by a set of men called
merchants, for an equivalent, proper for supplying every want, without
any interruption to industry, or any check upon consumption_.

_INDUSTRY_ _is the application to ingenious labour in a free man, in
order to procure, by the means of trade, an equivalent, fit for the
supplying every want_.

I must observe, that these definitions are only just, relatively to my
subject, and to one another: for _trade_ may exist without _industry_,
because things produced partly by nature may be exchanged between men;
_industry_ may be exercised without _trade_, because a man may be very
ingenious in working to supply his own consumption, and where there is
no exchange, there can be no _trade_. _Industry_ likewise is different
from _labour_. _Industry_, as I understand the term, must be voluntary;
_labour_ may be forced: the one and the other may produce the same
effect, but the political consequences are vastly different.

_Industry_, therefore, is only applicable to free men; _labour_ may be
performed by slaves.

Let me examine this last distinction a little more closely, the better
to try whether it be just, and to point out the consequences which
result from it.

I have said, that without the assistance of one of the three principles
of multiplication, to wit, slavery, industry, or charity, there was no
possibility of making mankind subsist, so as to be serviceable to one
another, in greater numbers than those proportioned to the spontaneous
fruits of the earth. Slavery and industry are quite compatible with the
selfish nature of man, and may therefore be generally established in any
society: charity again is a refinement upon humanity, and therefore, I
apprehend, it must ever be precarious.

Now I take slavery and industry to be equally compatible with great
multiplication, but incompatible with one another, without great
restrictions laid upon the first. It is a very hard matter to introduce
industry into a country where slavery is established; because of the
unequal competition between the work of slaves and that of free men,
supposing both equally admitted to market. Here is the reason:

The slaves have all their particular masters, who can take better care
of _them_, than any statesman can take of the industrious freemen;
because their liberty is an obstacle to his care. The slaves have all
their wants supplied by the master, who may keep them within the limits
of sobriety. He may either recruit their numbers from abroad, or take
care of the children, just as he finds it his advantage. If the latter
should prove unprofitable, either the children die for want of care, or
by promiscuous living few are born, or by keeping the sexes asunder,
they are prevented from breeding at all. A troop of manufacturing
slaves, considered in a political light, will be found all employed, all
provided for, and their work, when brought to market by the master, may
be afforded much cheaper, than the like performed by freemen, who must
every one provide for himself, and who may perhaps have a separate
house, a wife, and children, to maintain, and all this from an industry,
which produces no more, nay not so much, as that of a single slave, who
has no avocation from labour. Why do large undertakings in the
manufacturing way ruin private industry, but by coming nearer to the
simplicity of slaves. Could the sugar islands be cultivated to any
advantage by hired labour? Were not the expences of rearing children
supposed to be great, would slaves ever be imported? Certainly not: and
yet it is still a doubt with me, whether or not a proper regulation for
bringing up the children of slaves might not turn this expedient to a
better account, than the constant importation of them. But this is
foreign to the present purpose. All I intend here to observe is, the
consequences of a _competition_ between the work of slaves and of free
men; from which competition I infer, that, without judicious
regulations, it must be impossible for industry ever to get the better
of the disadvantages to which it will necessarily be exposed at first,
in a state where slavery is already introduced.

These regulations ought to prevent the competition between the
industrious freemen and the masters of slaves, by appropriating the
occupation of each to different objects: to confine slavery, for
example, to the country; that is, to set the slaves apart for
agriculture, and to exclude them from every other service of work. With
such a regulation _perhaps_ industry might succeed. This was not the
case of old; industry did not succeed as at present: and to this I
attribute the simplicity of those times.

It is not so difficult to introduce slavery into a state where liberty
is established; because such a revolution might be brought about by
force and violence, which make every thing give way; and, for the
reasons above-mentioned, I must conclude, that the consequences of such
a revolution would tend to extinguish, or at least, without the greatest
precaution, greatly check the progress of industry: but were such
precautions properly taken; were slavery reduced to a temporary and
conditional service, and put under proper regulations; it might prove,
of all others, the most excellent expedient for rendering the lower
classes of a people happy and flourishing; and for preventing that
vitious procreation, from which the great misery to which they are
exposed at present chiefly proceeds. But as every modification of
slavery is quite contrary to the spirit of modern times, I shall carry
such speculations no farther. Thus much I have thought it necessary to
observe, only by the way, for the sake of some principles which I shall
have occasion afterwards to apply to our own oeconomy; for wherever any
notable advantage is found accompanying slavery, it is the duty of a
modern statesman to fall upon a method of profiting by it, without
wounding the spirit of European liberty. And this he may accomplish in a
thousand ways, by the aid of good laws, calculated to cut off from the
lower classes of a people any interest they can have in involving
themselves in want and misery, opening to them at the same time an easy
progress towards prosperity and ease.

Here follows an exposition of the principles, from which I was led to
say, in a former chapter, that the failure of the slavish form of feudal
government, and the extension thereby given to civil and domestic
liberty, were the source from which the whole system of modern polity
has sprung.

Under the feudal form, the higher classes were perhaps more free than at
present, but the lower classes were either slaves, or under a most
servile dependence, which is entirely the same thing as to the
consequence of interrupting the progress of private industry.

I cannot pretend to advance, as a confirmation of this doctrine, that
the establishment of slavery in our colonies in America was made with a
view to promote agriculture, and to curb manufactures in the new world,
because I do not know much of the sentiments of politicians at that
time: but if it be true, that slavery has the effect of advancing
agriculture, and other laborious operations which are of a simple
nature, and at the same time of discouraging invention and ingenuity;
and if the mother-country has occasion for the produce of the first, in
order to provide or to employ those who are taken up at home in the
prosecution of the latter; then I must conclude, that slavery _has been_
very _luckily_, if not _politically_, established to compass such an
end: and therefore, if any colony, where slavery is not common, shall
ever begin to rival the industry of the mother-country, a very good way
of frustrating the attempt will be, to encourage the introduction of
slaves into such colonies without any restrictions, and allow it to work
its natural effect.

Having given the definition of trade and industry, as relative to my
inquiry, I come now to examine their immediate connections, the better
to cement the subject of this book, with the principles deduced in the
former.

In treating of the reciprocal wants of a society, and in shewing how
their being supplied by labour and ingenuity naturally tends to increase
population on one hand, and agriculture on the other, the better to
simplify our ideas, we supposed the transition to be direct from the
manufacturer to the consumer, and both to be members of the same
society. Matters now become more complex, by the introduction of trade
among different nations, which is a method of collecting and
distributing the produce of industry, by the interposition of a third
principle. Trade receives from a thousand hands, and distributes to as
many.

To ask, whether trade owes its beginning to industry, or industry to
trade, is like asking, whether the motion of the heart is owing to the
blood, or the motion of the blood to the heart. Both the one and the
other, I suppose, are formed by such insensible degrees, that it is
impossible to determine where the motion begins. But so soon as the body
comes to be perfectly formed, I have little doubt of the heart’s being
the principle of circulation. Let me apply this to the present question.

A man must first exist, before he can feel want; he must want, that is,
desire, before he will demand; and he must demand, before he can
receive. This is a natural chain, and from it we have concluded in Book
I. that population is the cause, and agriculture the effect.

By a parallel reason it may be alledged, that as wants excite to
industry, and are considered as the cause of it; and as the produce of
industry cannot be exchanged without trade; so trade must be an effect
of industry. To this I agree: but I must observe, that this exchange
does not convey my idea of trade, although I admit, that it is the root
from which the other springs; it is the seed, but not the plant; and
trade, as we have defined it, conveys another idea. The workman must not
be interrupted, in order to seek for an exchange, nor the consumer put
to the trouble of finding out the manufacturer. The object of trade
therefore is no more than a new want, which calls for a set of men to
supply it; and trade has a powerful effect in promoting industry, by
facilitating the consumption of its produce.

While wants continue simple and few, a workman finds time enough to
distribute all his work: when wants become more multiplied, men must
work harder; time becomes precious; hence trade is introduced. They who
want to consume, send the merchant, in a manner, to the workman, for his
labour, and do not go themselves; the workman sells to this interposed
person, and does not look out for a consumer. Let me now take a familiar
instance of infant trade, in order to shew how it grows and refines:
this will illustrate what I have been saying.

I walk out of the gates of a city in a morning, and meet with five
hundred persons, men and women, every one bringing to market a small
parcel of herbs, chickens, eggs, fruit, &c. It occurs to me immediately,
that these people must have little to do at home, since they come to
market for so small a value. Some years afterwards, I find nothing but
horses, carts, and waggons, carrying the same provisions. I must then
conclude, that either those I met before are no more in the country, but
purged off, as being found useless, after a method has been found of
collecting all their burdens into a few carts; or that they have found
out a more profitable employment than carrying eggs and greens to
market. Which ever happens to be the case, there will be the
introduction of what I call trade; to wit, this collecting of eggs,
fruit, fowl, &c. from twenty hands, in order to distribute it to as many
more within the walls. The consequence is, that a great deal of labour
is saved; that is to say, the cart gives time to twenty people to
labour, if they incline; and when wants increase, they will be ready to
supply them.

We cannot therefore say, that trade will force industry, or that
industry will force trade; but we may say, that trade will facilitate
industry, and that industry will support trade. Both the one and the
other however depend upon a third principle; to wit, a taste for
superfluity, in those who have an equivalent to give for it. This taste
will produce demand, and this again will become the main spring of the
whole operation.

------------------------------------------------------------------------



                               CHAP. II.
                              _Of Demand._


This is no new subject; it is only going over what has been treated of
very extensively in the first book under another name, and relatively to
other circumstances. _These_ ideas were there kept as simple as
possible; _here_ they take on a more complex form, and appear in a new
dress.

The wants of mankind were said to promote their multiplication, by
augmenting the demand for the food of the free hands, who, by supplying
those wants, are enabled to offer an equivalent for their food, to the
farmers who produced it; and as this way of bartering is a
representation of trade in its infancy, it is no wonder that trade, when
grown up, should still preserve a resemblance to it.

_Demand_, considered as a term appropriated to trade, will now be used
in place of _wants_, the term used in the first book relatively to
bartering; we must therefore expect, that the operations of the same
principle, under different appellations, will constantly appear similar,
in every application we can make of it, to different circumstances and
combinations.

Whether this term be applied to bartering or to trade, it must
constantly appear reciprocal. If I demand a pair of shoes, the shoemaker
either demands money, or something else for his own use. To prevent
therefore the ambiguity of a term, which, from the sterility of
language, is taken in different acceptations, according to the
circumstances which are supposed to accompany it, I shall endeavour
shortly to analyze it.

_1mo._ Demand is ever understood to be relative to merchandize. A demand
for money, except in bills of exchange, is never called demand. When
those who have merchandize upon hand, are desirous of converting them
into money, they are said to offer to sale; and if, in order to find a
buyer, they lower their price, then, in place of saying the demand for
money is high, we say the demand for goods is low.

_2do._ Suppose a ship to arrive at a port loaded with goods, with an
intention to purchase others in return, the operation only becomes
double. The ship offers to sale, and the demand of the port is said to
be high or low, according to the height of the price offered, not
according to the quantity demanded, or number of demanders. When all is
sold, then the ship becomes demander; and if his demand be
proportionally higher than the former, we say upon the whole, that the
demand is for the commodities of the port; that is, the port offers, and
the ship demands. This I call reciprocal demand.

_3tio._ Demand is either simple or compound. Simple, when the demander
is but _one_, compound, when _they are more_. But this is not so much
relative to persons as to interests. Twenty people demanding from the
same determined interest form but a simple demand; it becomes compound
or high, when different interests produce a competition. It may
therefore be said, that when there is no competition among buyers,
demand is simple, let the quantity demanded be great or small, let the
buyers be few or many. When therefore in the contract of barter the
demand upon one side is simple, upon the other compound, that which is
compound is constantly called the demand, the other not.

_4to._ Demand is either great or small: great, when the _quantity_
demanded is great; small, when the _quantity_ demanded is small.

_5to._ Demand is either high or low: high, when the competition among
the _buyers_ is great; low, when the competition among the _sellers_ is
great. From these definitions it follows, that the consequence of a
great demand, is a great sale; the consequence of a high demand, is a
great price. The consequence of a small demand, is a small sale; the
consequence of a low demand, is a small price.

_6to._ The nature of demand is to encourage industry; and when it is
regularly made, the effect of it is, that the supply for the most part
is found to be in proportion to it, and then the demand is commonly
simple. It becomes compound from other circumstances. As when it is
irregular, that is, unexpected, or when the usual supply fails; the
consequence of which is, that the provision made for the demand, falling
short of the just proportion, occasions a competition among the buyers,
and raises the current, that is, the ordinary prices. From this it is,
that we commonly say, demand raises prices. Prices are high or low
according to demand. These expressions are just; because the sterility
of language obliges us there to attend to circumstances which are only
implied.

Demand is understood to be _high_ or _low_, relatively to the common
rate of it, or to the competition of buyers, to obtain the provision
made for it. When demand is relative to the quantity demanded, it must
be called great or small, as has been said.

_7mo._ Demand has not always the same effect in raising prices: we must
therefore carefully attend to the difference between a demand for things
of the first necessity for life, and for things indifferent; also
between a demand made by the immediate consumers, and one made by
merchants, who buy in order to sell again. In both cases the competition
will have different effects. Things of absolute necessity must be
procured, let the price be ever so great: consumers who have no view to
profit, but to satisfy their desires, will enter into a stronger
competition than merchants, who are animated by no passion, and who are
regulated in what they offer by their prospect of gain. Hence the great
difference in the price of grain in different years; hence the uniform
standard of the price of merchandize, in fairs of distribution, such as
Frankfort, Beaucaire, &c. hence, also, the advantage which consumers
find in making their provision at the same time that merchants make
theirs; hence the sudden rise and fall in the price of labouring cattle
in country markets, where every one provides for himself.

Let what has been said suffice at setting out: this principle will be
much better explained by its application as we advance, than by all the
abstract distinctions I am capable to give of it.

------------------------------------------------------------------------



                               CHAP. III.
 _Of the first Principles of bartering, and how this grows into Trade._


I must now begin by tracing trade to its source, in order to reduce it
to its first principles.

The most simple of all trade, is that which is carried on by bartering
the necessary articles of subsistence. If we suppose the earth free to
the first possessor, this person who cultivates it will first draw from
it his food, and the surplus will be the object of barter: he will give
this in exchange to any one who will supply his other wants. This (as
has been said) naturally supposes both a surplus quantity of food
produced by labour, and also free hands; for he who makes a trade of
agriculture cannot supply himself with all other necessaries, as well as
food; and he who makes a trade of supplying the farmers with such
necessaries, in exchange for his surplus of food, cannot be employed in
producing that food. The more the necessities of man increase, _cæteris
paribus_, the more free hands are required to supply them; and the more
free hands are required, the more surplus food must be produced by
additional labour, to supply their demand.

This is the least complex kind of trade, and may be carried on to a
greater or less extent, in different countries, according to the
different degrees of the wants to be supplied. In a country where there
is no money, nor any thing equivalent to it, I imagine the wants of
mankind will be confined to few objects; to wit, the removing the
inconveniencies of hunger, thirst, cold, heat, danger, and the like. A
free man who by his industry can procure all the comforts of a simple
life, will enjoy his rest, and work no more: And, in general, all
increase of work will cease, so soon as the demand for the purposes
mentioned comes to be satisfied. There is a plain reason for this. When
the free hands have procured, by their labour, wherewithal to supply
their wants, their ambition is satisfied: so soon as the husbandmen have
produced the necessary surplus for relieving theirs, they work no more.
Here then is a natural stop put to industry, consequently to bartering.
This, in the first book, we have called _the moral impossibility of
augmenting numbers._

The next thing to be examined, is, how bartering grows into trade,
properly so called and understood, according to the definition given of
it above; how trade comes to be extended among men; how manufactures,
more ornamental than useful, come to be established; and how men come to
submit to labour, in order to acquire what is not absolutely necessary
for them.

This, in a free society, I take to be chiefly owing to the introduction
of money, and a taste for superfluities in those who possess it.

In antient times, money was not wanting; but the taste for superfluities
not being in proportion to it, the specie was locked up. This was the
case in Europe four hundred years ago. A new taste for superfluity has
drawn, perhaps, more money into circulation, from our own treasures,
than from the mines of the new world. The poor opinion we entertain of
the riches of our forefathers, is founded upon the modern way of
estimating wealth, by the quantity of coin in circulation, from which we
conclude, that the greatest part of the specie now in our hands must
have come from America.

It is more, therefore, through the taste of superfluity, than in
consequence of the quantity of coin, that trade comes to be established;
and it is only in consequence of trade that we see industry carry things
in our days to so high a pitch of refinement and delicacy. Let me
illustrate this by comparing together the different operations of
barter, sale, and commerce.

When reciprocal wants are supplied by barter, there is not the smallest
occasion for money: this is the most simple of all combinations.

When wants are multiplied, bartering becomes (for obvious reasons) more
difficult; upon this money is introduced. This is the common price of
all things: it is a proper equivalent in the hands of those who want,
perfectly calculated to supply the occasions of those who, by industry,
can relieve them. This operation of buying and selling is a little more
complex than the former; but still we have here no idea of trade,
because we have not introduced the merchant, by whose industry it is
carried on.

Let this third person be brought into play, and the whole operation
becomes clear. What before we called wants, is here represented by the
consumer; what we called industry, by the manufacturer; what we called
money, by the merchant. The merchant here represents the money, by
substituting credit in its place; and as the money was invented to
facilitate barter, so the merchant, with his credit, is a new refinement
upon the use of money. This renders it still more effectual in
performing the operations of buying and selling. This operation is
trade: it relieves both parties of the whole trouble of transportation,
and adjusting wants to wants, or wants to money; the merchant represents
by turns both the consumer, the manufacturer, and the money. To the
consumer he appears as the whole body of manufacturers; to the
manufacturers as the whole body of consumers; and to the one and the
other class his credit supplies the use of money. This is sufficient at
present for an illustration. I must now return to the simple operations
of money in the hands of the two contracting parties, the buyer and the
seller, in order to show how men come to submit to labour in order to
acquire superfluities.

So soon as money is introduced into a country it becomes, as we have
said above, an universal object of want to all the inhabitants. The
consequence is, that the free hands of the state, who before stopt
working, because all their wants were provided for, having this new
object of ambition before their eyes, endeavour, by refinements upon
their labour, to remove the smaller inconveniencies which result from a
simplicity of manners. People, I shall suppose, who formerly knew but
one sort of cloathing for all seasons, willingly part with a little
money to procure for themselves different sorts of apparel properly
adapted to summer and winter, which the ingenuity of manufacturers, and
their desire of getting money, may have suggested to their invention.

I shall not here pursue the gradual progress of industry, in bringing
manufactures to perfection; nor interrupt my subject with any further
observations upon the advantages resulting to industry, from the
establishment of civil and domestic liberty, but shall only suggest,
that these refinements seem more generally owing to the industry and
invention of the manufacturers (who by their ingenuity daily contrive
means of softening or relieving inconveniencies, which mankind seldom
perceive to be such, till the way of removing them is contrived) than to
the taste for luxury in the rich, who, to indulge their ease, engage the
poor to become industrious.

Let any man make an experiment of this nature upon himself, by entring
into the first shop. He will no where so quickly discover his wants as
there. Every thing he sees appears either necessary, or at least highly
convenient; and he begins to wonder (especially if he be rich) how he
could have been so long without that which the ingenuity of the workman
alone had invented, in order that from the novelty it might excite his
desire; for perhaps when it is bought, he will never once think of it
more, nor ever apply it to the use for which it at first appeared so
necessary.

Here then is a reason why mankind labour though not in want. They become
desirous of possessing the very instruments of luxury, which their
avarice or ambition prompted them to invent for the use of others.

What has been said represents trade in its infancy, or rather the
materials with which that great fabric is built.

We have formed an idea of the wants of mankind multiplied even to
luxury, and abundantly supplied by the employment of all the free hands
set apart for that purpose. But if we suppose the workman himself
disposing of his work, and purchasing, with it, food from the farmer,
cloaths from the clothier, and in general seeking for the supply of
every want from the hands of the person directly employed for the
purpose of relieving it; this will not convey an idea of trade,
according to our definition.

Trade and commerce are an abbreviation of this long process; a scheme
invented and set on foot by merchants, from a principle of gain,
supported and extended among men, from a principle of general utility to
every individual, rich or poor, to every society, great or small.

Instead of a pin-maker exchanging his pins with fifty different persons,
for whose labour he has occasion, he sells all to the merchant for money
or for credit; and, as occasion offers, he purchases all his wants,
either directly from those who supply them, or from other merchants who
deal with manufacturers in the same way his merchant dealt with him.

Another advantage of trade is, that industrious people in one part of
the country, may supply customers in another, though distant. They may
establish themselves in the most commodious places for their respective
business, and help one another reciprocally, without making the distant
parts of the country suffer for want of their labour. They are likewise
exposed to no avocation from their work, by seeking for customers.

Trade produces many excellent advantages; it marks out to the
manufacturers when their branch is under or overstocked with hands. If
it is understocked, they will find more demand than they can answer: if
it is overstocked, the sale will be slow.

Intelligent men, in every profession, will easily discover when these
appearances are accidental, and when they proceed from the real
principles of trade; which are here the object of our inquiry.

Posts, and correspondence by letters, are a consequence of trade, by the
means of which merchants are regularly informed of every augmentation or
diminution of industry in every branch, in every part of the country.
From this knowledge they regulate the prices they offer; and as they are
many, they serve as a check upon one another, from the principles of
competition which we shall hereafter examine.

From the current prices the manufacturers are as well informed as if
they kept the correspondence themselves: the statesman feels perfectly
where hands are wanting, and young people destined to industry, obey, in
a manner, the call of the public, and fall naturally in to supply the
demand.

Two great assistances to merchants, especially in the infancy of trade,
are public markets for collecting the work of small dealers, and large
undertakings in the manufacturing way by private hands. By these means
the merchants come at the knowledge of the quantity of work in the
market, as on the other hand the manufacturers learn, by the sale of the
goods, the extent of the demand for them. These two things being justly
known, the price of goods is easily fixt, as we shall presently see.

Public sales serve to correct the small inconveniencies which proceed
from the operations of trade. A set of manufacturers got all together
into one town, and entirely taken up with their industry, are thereby as
well informed of the rate of the market as if every one of them carried
thither his work, and upon the arrival of the merchant, who readily
takes it off their hands, he has not the least advantage over them from
his knowledge of the state of demand. This man both buys and sells in
what is called wholesale (that is by large parcels) and from him
retailers purchase, who distribute the goods to every consumer
throughout the country. These last buy from wholesale merchants in every
branch, that proportion of every kind of merchandize which is suitable
to the demand of their borough, city, or province.

Thus all inconveniencies are prevented, at some additional cost to the
consumer, who, for reasons we shall afterwards point out, must naturally
reimburse the whole expence. The distance of the manufacturer, the
obscurity of his dwelling, the caprice in selling his work, are quite
removed; the retailer has all in his shop, and the public buys at a
current price.

------------------------------------------------------------------------



                               CHAP. IV.
           _How the Prices of Goods are determined by Trade._


In the price of goods, I consider two things as really existing, and
quite different from one another; to wit, the real value of the
commodity, and the profit upon alienation. The intention of this chapter
is to establish this distinction, and to shew how the operation of trade
severally influences the standard of the one and the other; that is to
say, how trade has the effect of rendering fixt and determined, two
things which would otherwise be quite vague and uncertain.

I. The first thing to be known of any manufacture when it comes to be
sold, is, how much of it a person can perform in a day, a week, a month,
according to the nature of the work, which may require more or less time
to bring it to perfection. In making such estimates, regard is to be had
only to what, upon an average, a workman of the country in general may
perform, without supposing him the best or the worst in his profession;
or having any peculiar advantage or disadvantage as to the place where
he works.

Hence the reason why some people thrive by their industry, and others
not; why some manufactures flourish in one place and not in another.

II. The second thing to be known, is the value of the workman’s
subsistence and necessary expence, both for supplying his personal
wants, and providing the instruments belonging to his profession, which
must be taken upon an average as above; except when the nature of the
work requires the presence of the workman in the place of consumption:
for although some trades, and almost every manufacture, may be carried
on in places at a distance, and therefore may fall under one general
regulation as to prices, yet others there are which, by their nature,
require the presence of the workman in the place of consumption; and in
that case the prices must be regulated by circumstances relative to
every particular place.

III. The third and last thing to be known, is the value of the
materials, that is the first matter employed by the workman; and if the
object of his industry be the manufacture of another, the same process
of inquiry must be gone through with regard to the first, as with regard
to the second: and thus the most complex manufactures may be at last
reduced to the greatest simplicity. I have been more particular in this
analysis of manufactures than was absolutely necessary in this place,
that I might afterwards with the greater ease point out the methods of
diminishing the prices of them.

These three articles being known, the price of manufacture is
determined. It cannot be lower than the amount of all the three, that
is, than the real value; whatever it is higher, is the manufacturer’s
profit. This will ever be in proportion to demand, and therefore will
fluctuate according to circumstances.

Hence appears the necessity of a great demand, in order to promote
flourishing manufactures.

By the extensive dealings of merchants, and their constant application
to the study of the balance of work and demand, all the above
circumstances are known to them, and are made known to the industrious,
who regulate their living and expence according to their certain profit.
I call it certain, because under these circumstances they seldom
overvalue their work, and by not overvaluing it, they are sure of a
sale: a proof of this may be had from daily experience.

Employ a workman in a country where there is little trade or industry,
he proportions his price always to the urgency of your want, or your
capacity to pay; but seldom to his own labour. Employ another in a
country of trade, he will not impose upon you, unless perhaps you be a
stranger, which supposes your being ignorant of the value; but employ
the same workman in a work not usual in the country, consequently not
demanded, consequently not regulated as to the value, he will proportion
his price as in the first supposition.

We may therefore conclude from what has been said, that in a country
where trade is established, manufactures must flourish, from the ready
sale, the regulated price of work, and certain profit resulting from
industry. Let us next inquire into the consequences of such a situation.

------------------------------------------------------------------------



                                CHAP. V.
_How foreign Trade opens to an industrious People, and the consequences
             of it to_ the Merchants _who set it on foot_.


The first consequence of the situation described in the preceding
chapter, is, that wants are easily supplied, for the adequate value of
the thing wanted.

The next consequence is, the opening of foreign trade under its two
denominations of passive and active. Strangers and people of distant
countries finding the difficulty of having their wants supplied at home,
and the ease of having them supplied from this country, immediately have
recourse to it. This is passive trade. The active is when merchants, who
have executed this plan at home with success, begin to transport the
labour of their countrymen into other regions, which either produce, or
are capable of producing such articles of consumption, proper to be
manufactured, as are most demanded at home; and consequently will meet
with the readiest sale, and fetch the largest profits.

Here then is the opening of foreign trade, under its two denominations
of active and passive: but as our present point of view is the
consequences of this revolution to the merchants, we shall take no
farther notice, in this place, of that division: it will naturally come
in afterwards.

What then are the consequences of this new commerce to our merchants,
who have left their homes in quest of gain abroad?

The first is, that arriving in any new country, they find themselves in
the same situation, with regard to the inhabitants, as the workman in
the country of no trade, with regard to those who employed him; that is,
they proportion the price of their goods to the eagerness of acquiring,
or the capacity of paying, in the inhabitants, but never to their real
value.

The first profits then, upon this trade, must be very considerable; and
the demand from such a country will be _high_ or _low_, _great_ or
_small_, according to the spirit, not the real wants of the people: for
these in all countries, as has been said, must first be supplied by the
inhabitants themselves, before they cease to labour.

If the people of this not-trading country (as we shall now call it) be
abundantly furnished with commodities useful to the traders, they will
easily part with them, at first, for the instruments of luxury and ease;
but the great profit of the traders will insensibly increase the demand
for the productions of their new correspondents; this will have the
effect of producing a competition between themselves, and thereby of
throwing the demand on their side, from the principles I shall
afterwards explain. This is perpetually a disadvantage in traffic: the
most unpolished nations in the world quickly perceive the effects of it;
and are taught to profit of the discovery, in spite of the address of
those who are the most expert in commerce.

The traders will, therefore, be very fond of falling upon every method
and contrivance to inspire this people with a taste of refinement and
delicacy. Abundance of fine presents, consisting of every instrument of
luxury and superfluity, the best adapted to the genius of the people,
will be given to the prince and leading men among them. Workmen will
even be employed at home to study the taste of the strangers, and to
captivate their desires by every possible means. The more eager they are
of presents, the more lavish the traders will be in bestowing and
diversifying them. It is an animal put up to fatten, the more he eats
the sooner he is fit for slaughter. When their taste for superfluity is
fully formed, when the relish for their former simplicity is
sophisticated, poisoned, and obliterated, then they are surely in the
fetters of the traders, and the deeper they go, the less possibility
there is of their getting out. The presents then will die away, having
served their purpose; and if afterwards they are found to be continued,
it will probably be to support the competition against other nations,
who will incline to share of the profits.

If, on the contrary, this not-trading nation does not abound with
commodities useful to the traders, these will make little account of
trading with them, whatever their turn may be; but if we suppose this
country inhabited by a laborious people, who, having taken a taste for
refinement from the traders, apply themselves to agriculture, in order
to produce articles of subsistence, they will sollicit the merchants to
give them part of their manufactures in exchange for those; and this
trade will undoubtedly have the effect of multiplying numbers in the
trading nation. But if food cannot be furnished, nor any other branch of
production found out to support the correspondence, the taste for
refinement will soon die away, and trade will stop in this quarter.

Had it not been for the furs in those countries adjacent to Hudson’s
Bay, and in Canada, the Europeans never would have thought of supplying
instruments of luxury to those nations; and if the inhabitants of those
regions had not taken a taste for the instruments of luxury furnished to
them by the Europeans, they never would have become so indefatigable nor
so dexterous hunters. At the same time we are not to suppose, that ever
these Americans would have come to Europe in quest of our manufactures.
It is therefore owing to our merchants, that these nations are become in
any degree fond of refinement; and this taste, in all probability, will
not soon exceed the proportion of the productions of their country. From
these beginnings of foreign trade it is easy to trace its increase.

One step towards this, is the establishing correspondences in foreign
countries; and these are more or less necessary in proportion as the
country where they are established is more or less polished or
acquainted with trade. They supply the want of posts, and point out to
the merchants what proportion the productions of the country bear to the
demand of the inhabitants for manufactures. This communicates an idea of
commerce to the not-trading nation, and they insensibly begin to fix a
determined value upon their own productions, which perhaps bore no
determined value at all before.

Let me trace a little the progress of this refinement in the savages, in
order to shew how it has the effect of throwing the demand upon the
traders, and of creating a competition among them, for the productions
of the new country.

Experience shews, that in a new discovered country, merchants constantly
find some article or other of its productions, which turns out to a
great account in commerce; and we see that the longer such a trade
subsists, and the more the inhabitants take a taste for European
manufactures, the more their own productions rise in their value, and
the less profit is made by trading with them, even in cases where the
trade is carried on by companies; which is a very wise institution for
one reason, that it cuts off a competition between our merchants.

This we shall shew, in its proper place, to be the best means of keeping
prices low in favour of the nation; however it may work a contrary
effect with respect to individuals who must buy from these monopolies.

When companies are not established, and when trade is open, our
merchants, by their eagerness to profit of the new trade, betray the
secrets of it, they enter into competition for the purchase of the
foreign produce, and this raises prices and favours the commerce of the
most ignorant savages.

Some account for this in a different manner. They alledge that it is not
this competition which raises prices; because there is also a
competition among the savages as to which of them shall get the
merchandize; and this may be sufficient to counterbalance the other, and
in proportion as the quantity of goods demanded by the savages, as an
exchange for the produce of their country, becomes greater, a less
quantity of this produce must be given for every parcel of the goods.

To this I answer, That I cannot admit this apparent reason to be
consistent with the principles of trade, however ingenious the conceit
may be.

The merchant constantly considers his own profit in parting with his
goods, and is not influenced by the reasons of expediency which the
savages may find, to offer him less than formerly; for were this
principle of proportion admitted generally, the price of merchandize
would always be at the discretion of the buyers.

The objection here stated is abundantly plain; but it must be resolved
in a very different manner. Here are two solutions:

1. Prices, I have said, are made to rise, according as demand is _high_,
not according as it is _great_. Now, in the objection, it is said, that,
in proportion as the demand is _great_, a less proportion of the
equivalent must go to every parcel of the merchandize; which I apprehend
to be false: and this shews the necessity of making a distinction
between the _high_ and the _great_ demand, which things are different in
trade, and communicate quite different ideas.

2. In all trade there is an exchange, and in all exchange, we have said,
there is a reciprocal demand implied: it must therefore be exactly
inquired into, on which hand the competition between the demanders is
found; that is to say, on which hand it is _strongest_; according to the
distinction in the second chapter.

If the inhabitants of the country be in competition for the
manufactures, goods will rise in their price most undoubtedly, let the
quantity of the produce they have to offer be large or small; but so
soon as these prices rise above the faculties, or desire of buying, in
certain individuals, their demand will stop, and their equivalent will
be prevented from coming into commerce. This will disappoint the
traders; and therefore, as their gains are supposed to be great, either
a competition will take place among themselves, who shall carry off the
quantity remaining, supposing them to have separate interests; or, if
they are united, they may, from a view of expediency, voluntarily sink
their price, in order to bring it within the compass of the faculties,
or intention, to buy in those who are still possessed of a portion of
what they want.

It is from the effects of competition among sellers that I apprehend
prices are brought down, not from any imaginary proportion of quantity
to quantity in the market. But of this more afterwards, in its proper
place.

So soon as the price of manufactures is brought as low as possible, in
the new nation; if the surplus of their commodities does not suffice to
purchase a quantity of manufactures proportioned to their wants, this
people must begin to labour: for labour is the necessary consequence of
want, real or imaginary; and by labour it will be supplied.

When this comes to be the case, we immediately find two trading nations
in place of one; the balance of which trade will always be in favour of
the most industrious and frugal; as shall be fully explained in another
place.

Let me now direct my inquiry more particularly towards the consequences
of this new revolution produced by commerce, relative to the not-trading
nation, in order to shew the effect of a passive foreign trade. I shall
spare no pains in illustrating, upon every occasion, as I go along, the
fundamental principles of commerce, demand, and competition, even
perhaps at the expence of appearing tiresome to some of my readers.

------------------------------------------------------------------------



                               CHAP. VI.
  _Consequences of the introduction of a passive foreign Trade among a
              People who live in Simplicity and Idleness._


We now suppose the arrival of traders, all in one interest, with
instruments of luxury and refinement, at a port in a country of great
simplicity of manners, abundantly provided by nature with great
advantages for commerce, and peopled by a nation capable of adopting a
taste for superfluities.

The first thing the merchants do, is to expose their goods, and point
out the advantages of many things, either agreeable or useful to mankind
in general, such as wines, spirits, instruments of agriculture, arms,
and ammunition for hunting, nets for fishing, manufactures for clothing,
and the like. The advantages of these are presently perceived, and such
commodities are eagerly sought after.

The natives on their side produce what they most esteem, generally
something superfluous or ornamental. The traders, after examining all
circumstances, determine the object of their demand, giving the least
quantity possible in return for this superfluity, in order to impress
the inhabitants with a high notion of the value of their own
commodities; but as this parsimony may do more hurt than good to their
interest, they are very generous in making presents, from the principles
mentioned above.

When the exchange is completed, and the traders depart, regret is
commonly mutual; the one and the other are sorry that the superfluities
of the country fall short. A return is promised by the traders, and
assurances are given by the natives, of a better provision another time.

What are the first consequences of this revolution?

It is not evident, that, in order to supply an equivalent for this new
want, more hands must be set to work than formerly. And it is evident
also, that this augmentation of industry will not essentially increase
numbers, as was supposed to be the effect of it through the whole train
of our reasoning in the first book. Why? Because _there_ the produce of
the industry was supposed to be consumed at home; and _here_ it is
intended to be exported. But if we can find out any additional
consumption at home even implied by this new trade, I think it will have
the effect of augmenting numbers. An example will make this plain.

Let me suppose the superfluity of this country to be the skins of wild
beasts, not proper for food; the manufacture sought for, brandy. The
brandy is sold for furs. He who has furs, or he who can spare time to
hunt for them, will drink brandy in proportion: but I cannot find out
any reason to conclude from this simple operation, that one man more in
the country must necessarily be fed, (for I have taken care to suppose,
that the flesh of the animals is not proper for food) or that any
augmentation of agriculture must of consequence ensue from this new
traffic.

But let me throw in a circumstance which may imply an additional
consumption at home, and then examine the consequences.

A poor creature, who has no equivalent to offer for food, who is
miserable, and ready to perish for want of subsistence, goes a-hunting,
and kills a wolf; he comes to a farmer with the skin, and says; You are
well fed, but you have no brandy; if you will give me a loaf, I will
give you this skin, which the strangers are so fond of, and they will
give you brandy. But, says the farmer, I have no more bread than what is
sufficient for my own family. As for that, replies the other, I will
come and dig in your ground, and you and I will settle our account as to
the small quantity I desire of you. The bargain is made; the poor fellow
gets his loaf, and lives at least; perhaps he marries, and the farmer
gets a dram. But had it not been for this dram, (that is, this new want)
which was purchased by the industry of this poor fellow, by what
argument could he have induced the farmer, to part with a loaf.

I here exclude the sentiment of charity. This alone, as I have often
observed, is a principle of multiplication, and if it was admitted here,
it would ruin all my supposition; but as true it is, on the other hand,
that could the poor fellow have got bread by begging, he would not
probably have gone a-hunting.

Here then it appears, that the very dawning of trade, in the most
unpolished countries, implies a multiplication. This is enough to point
out the first step, and to connect the subject of our present inquiries
with what has been already discussed in relation to other circumstances.
I proceed.

So soon as all the furs are disposed of, and a taste for superfluity
introduced, both the traders and the natives will be equally interested
in the advancement of industry in this country. Many new objects of
profit for the first will be discovered, which the proper employment of
the inhabitants, in reaping the natural advantages of their soil and
climate, will make effectual. The traders will therefore endeavour to
set on foot many branches of industry among the savages, and the
allurements of brandy, arms, and clothing, will animate these in the
pursuit of them. Let me here digress for a few lines.

If we suppose slavery to be established in this country, then all the
slaves will be set to work, in order to provide furs and other things
demanded by the traders, that the masters may thereby be enabled to
indulge themselves in the superfluities brought to them by the
merchants. When liberty is the system, every one, according to his
disposition, becomes industrious, in order to procure such enjoyments
for himself.

In the first supposition, it is the head of the master which conducts
the labour of the slave, and turns it towards ingenuity: in the second,
every head is at work, and every hand is improving in dexterity. Where
hands therefore are principally necessary, the slaves have the
advantage; where heads are principally necessary, the advantage lies in
favour of the free. Set a man to labour at so much a day, he will go on
at a regular rate, and never seek to improve his method: let him be
hired by the piece, he will find a thousand expedients to extend his
industry. This is exactly the difference between the slave and the free
man. From this I account for the difference between the progress of
industry in antient and modern times. Why was a _peculium_ given to
slaves, but to engage them to become dextrous? Had there been no
_peculium_ and no _libertini_, or free men, who had been trained to
labour, there would have been little more industry any where, than there
was in the republic of Lycurgus, where, I apprehend, neither the one or
the other was to be found. I return.

When once this revolution is brought about; when those who formerly
lived in simplicity become industrious; matters put on a new face. Is
not this operation quite similar to that represented in the fifth
chapter of the first book? There I found the greatest difficulty, in
shewing how the mutual operations of supplying food and other wants
could have the effect of promoting population and agriculture, among a
people who were supposed to have no idea of the system proposed to be
put in execution. Here the plan appears familiar and easy. The
difference between them seems to resemble that of a child’s learning a
language by grammar, or learning it by the ear in the country where it
is spoken. In the first case, many throw the book aside, but in the
other none ever fail of success.

I have said, that matters put on a new face; that is to say, we now find
two trading nations instead of one, with this difference, however, that
as hitherto we have supposed the merchants all in one interest, the
compound demand, that is, the competition of the buyers, has been, and
must still continue on the side of the natives. This is a great
prejudice to their interest, but as it is not supposed sufficient to
check their industry, nor to restrain their consumption of the
manufactures, let me here examine a little more particularly the
consequences of the principle of demand in such a situation; for
although I allow, that it can never change sides, yet it may admit of
different modifications, and produce different effects, as we shall
presently perceive.

The merchants we suppose all in one interest, consequently there can be
no competition among them; consequently no check can be put upon their
raising their prices, as long as the prices they demand are complied
with. So soon as they are raised to the full extent of the abilities of
the natives, or of their inclination to buy, the merchants have the
choice of three things, which are all perfectly in their option, and the
preference to be given to the one or the other depends intirely upon
themselves, and upon the circumstances I am going to point out.

First, they may support the _high_ demand; that is, not lower their
price; which will preserve a high estimation of the manufactures in the
opinion of the inhabitants, and render the profits upon their trade the
greatest possible. This part they may possibly take, if they perceive
the natives doubling their diligence, in order to become able, in time,
to purchase considerable cargoes at a high value; from which supposition
is implied a strong disposition in the people to become luxurious, since
nothing but want of ability prevents them from complying with the
highest demand: but still another circumstance must concur, to engage
the merchants not to lower their price. The great proportion of the
goods they seek for, in return, must be found in the hands of a few.
This will be the case if slavery be established; for then there must be
many poor, and few rich: and they are commonly the rich consumers who
proportion the price they offer, rather to their desires, than to the
value of the thing.

The second thing which may be done is, to open the door to a _great_
demand; that is, to lower their prices. This will sink the value of the
manufactures in the opinion of the inhabitants, and render profits less
in proportion, although indeed, upon the voyage, the profits may be
greater.

This part they will take, if they perceive the inhabitants do not
incline to consume great quantities of the merchandize at a high value,
either from want of abilities or inclination; and also, if the profits
upon the trade depend upon a large consumption, as is the case in
merchandize of a low value, and suited chiefly to the occasions of the
lower sort. Such motives of expediency will be sufficient to make them
neglect a _high_ demand, and prefer a _great_ one; and the more, when
there is a likelihood that the consumption of low-priced goods in the
beginning may beget a taste for others of a higher value, and thus
extend in general the taste of superfluity.

A third part to be taken, is the least politic, and perhaps the most
familiar. It is to profit by the competition between the buyers, and
encourage the rising of demand as long as possible; when this comes to a
stop, to make a kind of auction, by first bringing down the prices to
the level of the highest bidders, and so to descend by degrees, in
proportion as demand sinks. Thus we may say with propriety, according to
our definitions of demand, that it commonly becomes _great_, in
proportion as prices sink. By this operation, the traders will profit as
much as possible, and sell off as much of their goods as the profits
will permit.

I say, this plan, in a new discovered country, is not politic, as it
both discovers a covetousness and a want of faith in the merchants, and
also throws open the secrets of their trade to those who ought to be
kept ignorant of them.

Let me next suppose, that the large profits of our merchants shall be
discovered by others, who arrive at the same ports in a separate
interest, and who enter into no combination which might prevent the
natural effects of competition.

Let the state of demand among the natives be supposed the same as
formerly, both as to _height_ and _greatness_, in consequence of the
operation of the different principles, which might have induced our
merchants to follow one or other of the plans we have been describing;
we must however still suppose, that they have been careful to preserve
considerable profits upon every branch.

If we suppose the inhabitants to have increased in numbers, wealth, and
taste for superfluity, since the last voyage, demand will be found
rather on the rising hand. Upon the arrival of the merchants in
competition with the former, both will offer to sale; but if both stand
to the same prices, it is very natural to suppose, that the former
dealers will obtain a preference; as _cæteris paribus_, it is always an
advantage to know and to be known. The last comers, therefore, have no
other way left to counterbalance this advantage, but to lower their
prices.

This is a new phoenomenon: here the fall of prices is not voluntary as
formerly; not consented to from expediency; not owing to a failure of
demand, but to the influence of a new principle of commerce, to wit, a
double competition. This I shall now examine with all the care I am
capable of.

------------------------------------------------------------------------



                               CHAP. VII.
                        _Of double Competition._


When _competition_ is much stronger on one side of the contract than on
the other, I call it _simple_, and then it is a term synonimous with
what I have called _compound demand_. This is the species of competition
which is implied in the term _high demand_, or when it is said, that
_demand raises prices_.

_Double competition_ is, when, in a certain degree, it takes place on
both sides of the contract at once, or vibrates alternately from one to
the other. This is what restrains prices to the adequate value of the
merchandize.

I frankly confess I feel a great want of language to express my ideas,
and it is for this reason I employ so many examples, the better to
communicate certain combinations of them, which otherwise would be
inextricable.

The great difficulty is to distinguish clearly between the principles of
_demand_, and those of _competition_: here then follows the principal
differences between the two, relatively to the effects they produce
severally in the mercantile contract of buying and selling, which I here
express shortly by the word _contract_.

_Simple demand_ is what brings the quantity of a commodity to market.
Many demand, who do not buy; many offer, who do not sell. This demand is
called _great_ or _small_; it is said to _increase_, to _augment_, to
_swell_; and is expressed by these and other synonimous terms, which
mark an augmentation or diminution of quantity. In this species, two
people never demand the same thing, but a part of the same thing, or
things quite alike.

_Compound demand_ is the principle which raises prices, and never can
make them sink; because in this case more than one demands the very same
thing. It is solely applicable to the buyers, in relation to the price
they offer. This demand is called _high_ or _low_, and is said to
_rise_, to _fall_, to _mount_, to _sink_, and is expressed by these and
other synonimous terms.

_Simple competition_, when between buyers, is the same as _compound_ or
_high demand_, but differs from it in so far, as this may equally take
place among sellers, which _compound demand_ cannot, and then it works a
contrary effect: it makes prices _sink_, and is synonimous with _low
demand_: it is this competition which overturns the balance of work and
demand; of which afterwards.

_Double competition_ is what is understood to take place in almost every
operation of trade; it is this which prevents the excessive rise of
prices; it is this which prevents their excessive fall. While _double
competition_ prevails, the balance is perfect, trade and industry
flourish.

The capital distinction, therefore, between the terms _demand_ and
_competition_ is, that _demand_ is constantly relative to the buyers,
and when money is not the price, as in barter, then it is relative to
that side upon which the greatest _competition_ is found.

We therefore say, with regard to _prices_, demand is _high_ or _low_.
With regard _to the quantity of merchandize_, demand is _great_ or
_small_. With regard _to competition_, it is always called _great_ or
_small_, _strong_ or _weak_.

_Competition_, I have said, is, with equal propriety, applicable to both
parties in the contract. A _competition_ among buyers is a proper
expression; a _competition_ among sellers, who have the merchandize, is
fully as easily understood, though it be not quite so striking, for
reasons which an example will make plain.

You come to a fair, where you find a great variety of every kind of
merchandize, in the possession of different merchants. These, by
offering their goods to sale, constitute a tacit competition; every one
of them wishes to sell in preference to another, and at the same time
with the best advantage to himself.

The buyers begin, by cheapning at every shop. The first price asked
marks the covetousness of the seller; the first price offered, the
avarice of the buyer. From this operation, I say, competition begins to
work its effects on both sides, and so becomes double. The principles
which influence this operation are now to be deduced.

It is impossible to suppose the same degree of eagerness, either to buy
or to sell, among several merchants; because the degree of eagerness I
take to be exactly in proportion to their view of profit; and as these
must necessarily be influenced and regulated by different circumstances,
that buyer, who has the best prospect of selling again with profit,
obliges him, whose prospect is not so good, to content himself with
less; and that seller, who has bought to the best advantage, obliges
him, who has paid dearer for the merchandize, to moderate his desire of
gain.

It is from these principles, that competition among buyers and sellers
must take place. This is what confines the fluctuation of prices within
limits which are compatible with the reasonable profits of both buyers
and sellers; for, as has been said, in treating of trade, we must
constantly suppose the whole operation of buying and selling to be
performed by merchants; the buyer cannot be supposed to give so high a
price as that which he expects to receive, when he distributes to the
consumers, nor can the seller be supposed to accept of a lower than that
which he paid to the manufacturer. This competition is properly called
double, because of the difficulty to determine upon which side it
stands; the same merchant may have it in his favour upon certain
articles, and against him upon others; it is continually in vibration,
and the arrival of every post may less or more pull down the heavy
scale.

In every transaction between merchants, the profit resulting from the
sale must be exactly distinguished from the value of the merchandize.
The first _may_ vary, the last never _can_. It is this profit alone
which can be influenced by competition; and it is for that reason we
find such uniformity every where in the prices of goods of the same
quality.

The competition between sellers does not appear so striking, as that
between buyers; because he who offers to sale, appears only passive in
the first operation; whereas the buyers present themselves one after
another; they make a demand, and when the merchandize is refused to one
at a certain price, a second either offers more, or does not offer at
all: but so soon as another seller finds his account in accepting the
price the first had refused, then the first enters into competition,
providing his profits will admit his lowering the first price, and thus
competition takes place among the sellers, until the profits upon their
trade prevent prices from falling lower.

In all markets, I have said, this competition is varying, though
insensibly, on many occasions; but in others, the vibrations are very
perceptible. Sometimes it is found strongest on the side of the buyers,
and in proportion as this grows, the competition between the sellers
diminishes. When the competition between the former has raised prices to
a certain standard, it comes to a stop; then the competition changes
sides, and takes place among the sellers, eager to profit of the highest
price. This makes prices fall, and according as they fall, the
competition among the buyers diminishes. They still wait for the lowest
period. At last it comes; and then perhaps some new circumstance, by
giving the balance a kick, disappoints their hopes. If therefore it ever
happens, that there is but one interest upon one side of the contract,
as in the example in the former chapter, where we supposed the sellers
united, you perceive, that the rise of the price, occasioned by the
competition of the buyers, and even its coming to a stop, could not
possibly have the effect of producing any competition on the other side;
and therefore, if prices come afterwards to sink, the fall must have
proceeded from the prudential considerations of adapting the price to
the faculties of those, who, from the height of it, had withdrawn their
demand.

From these principles of competition, the forestalling of markets is
made a crime, because it diminishes the competition which ought to take
place between different people, who have the same merchandize to offer
to sale. The forestaller buys all up, with an intention to sell with
more profit, as he has by that means taken other competitors out of the
way, and appears with a single interest on one side of the contract, in
the face of many competitors on the other. This person is punished by
the state, because he has prevented the price of the merchandize from
becoming justly proportioned to the real value; he has robbed the
public, and enriched himself; and in the punishment, he makes
restitution. Here occur two questions to be resolved, for the sake of
illustration.

Can competition among buyers possibly take place, when the provision
made is more than sufficient to supply the quantity demanded? On the
other hand, can competition take place among the sellers, when the
quantity demanded exceeds the total provision made for it?

I think it may in both cases; because in the one and the other, there is
a competition implied on one side of the contract, and the very nature
of this competition implies a possibility of its coming on the other,
provided separate interests be found upon both sides. But to be more
particular.

1. Experience shews, that however justly the proportion between the
demand and the supply may be determined in fact, it is still next to
impossible to discover it exactly, and therefore buyers can only
regulate the prices they offer, by what they may reasonably expect to
sell for again. The sellers, on the other hand, can only regulate the
prices they expect, by what the merchandize has cost them when brought
to market. We have already shewn, how, under such circumstances, the
several interests of individuals affect each other, and make the balance
vibrate.

2. The proportion between the supply and the demand is seldom other than
_relative_ among merchants, who are supposed to buy and sell, not from
necessity, but from a view to profit. What I mean by _relative_ is, that
their demand is _great_ or _small_, according to prices: there may be a
great demand for grain at 35 shillings _per_ quarter, and no demand at
all for it at 40 shillings; I say, among merchants.

Here I must observe, how essential it is, to attend to the smallest
circumstance in matters of this kind. The circumstance I here have in my
eye, is the difference I find in the effect of competition, when it
takes place purely among merchants on both sides of the contract, and
when it happens, that either the consumers mingle themselves with the
merchant-buyers, or the manufacturers, that is, the furnishers, mingle
themselves with the merchant-sellers. This combination I shall
illustrate, by the solution of another question, and then conclude my
chapter with a few reflections upon the whole.

Can there be no case formed, where the competition upon one side may
subsist, without a possibility of its taking place on the other,
although there should be separate interests upon both?

I answer. The case is hardly supposable among merchants, who buy and
sell with a view to profit; but it is absolutely supposable, and that is
all, when the direct consumers are the buyers; when the circumstances of
one of the parties is perfectly known; and when the competition is so
strong upon one side, as to prevent a possibility of its becoming
double, before the whole provision is sold off, or the demand satisfied.
Let me have recourse to examples.

Grain arriving in a small quantity, at a port where the inhabitants are
starving, produces so great a competition among the consumers, who are
the buyers, that their necessity becomes evident; all the grain is
generally bought up before prices can rise so high as to come to a stop;
because nothing but want of money, that is, an impossibility of
complying with the prices demanded by the merchants, can restrain them:
but if you suppose, even here, that prices come naturally to a stop; or
that, after some time, they fall lower, from prudential considerations,
then there is a possibility of a competition taking place among the
sellers, from the principles above deduced. If, on the contrary, the
stop is not natural, but occasioned by the interposition of the
magistrate, from humanity, or the like, there will be no competition,
because then the principles of commerce are suspended; the sellers are
restrained on one side, and they restrain the buyers on the other. Or
rather, indeed, it is the magistrate, or compassion, who in a manner
fixes the price, and performs the office of both buyer and seller.

A better example still may be found, in a competition among sellers;
where it may be so strong, as to render a commodity in a manner of no
value at all, as in the case of an uncommon and unexpected draught of
fish, in a place of small consumption, when no preparations have been
made for salting them. There can be then no competition among the
buyers; because the market cannot last, and they find themselves
entirely masters, to give what price they please, being sure the sellers
must accept of it, or lose their merchandize. In the first example,
humanity commonly stops the activity of the principle of competition; in
the other it is stopt by a certain degree of fair-dealing, which forbids
the accepting of a merchandize for nothing.

In proportion therefore as the rising of prices can stop demand, or the
sinking of prices can increase it, in the same proportion will
competition prevent either the rise or the fall from being carried
beyond a certain length: and if such a case can be put, where the rising
of prices cannot stop demand, nor the lowering of prices augment it, in
such cases double competition has no effect; because these circumstances
unite the most separate interests of buyers and sellers in the
mercantile contract, and when upon one side there is no separate
interest, there can then be no competition.

From what has been said, we may form a judgment of the various degrees
of competition. A book not worth a shilling, a fish of a few pounds
weight, are often sold for considerable sums. The buyers here are not
merchants. When an ambassador leaves a court in a hurry, things are sold
for less than the half of their value: he is no merchant, and his
situation is known. When, at a public market, there are found consumers,
who make their provision; or manufacturers, who dispose of their goods
for present subsistence; the merchants, who are respectively upon the
opposite side of the contract to these, profit of their competition; and
those who are respectively upon the same side with them, stand by with
patience, until they have finished their business. Then matters come to
be carried on between merchant and merchant, and then, I allow, that
profits may rise and fall, in the proportion of quantity to demand; that
is to say, if the provision is less than the demand, the competition
among the demanders, or the rise of the price, will be in the compound
proportion of the falling short of the commodity, and of the prospect of
selling again with profit. It is this combination which regulates the
competition, and keeps it within bounds. It can affect but the profits
upon the transaction; the intrinsic value of the commodity stands
immoveable: nothing is ever sold below the real value; nothing is ever
bought for more than it may probably bring. I mean in general. Whereas
so soon as consumers and needy manufacturers mingle in the operation,
all proportion is lost. The competition between them is too strong for
the merchants; the balance vibrates by jerks. In such markets merchants
seldom appear: the principal objects there, are the fruits and
productions of the earth, and articles of the first necessity for life,
not manufactures strictly so called. A poor fellow often sells, to
purchase bread to eat; not to pay what he did eat, while he was employed
in the work he disposes of. The consumer often measures the value of
what he is about to purchase, by the weight of his purse, and his desire
to consume.

As these distinctions cannot be conveyed in the terms by which we are
obliged to express them, and as they must frequently be implied, in
treating of matters relating to trade and industry, I thought the best
way was, to clear up my own ideas concerning them, and to lay them in
order before my reader, before I entred farther into my subject.

All difference of opinion upon matters of this nature proceeds, as I
believe, from our language being inadequate to express our ideas, from
our inattention, in using terms which appear synonimous, and from our
natural propensity to include, under general rules, things which, upon
some occasions, common reason requires to be set asunder.

------------------------------------------------------------------------



                              CHAP. VIII.
             _Of what is called Expence, Profit, and Loss._


As we have been employed in explaining of terms, it will not be amiss to
say a word concerning those which stand in the title of this chapter.

The term _expence_, when simply expressed, without any particular
relation, is always understood to be relative to money. This kind I
distinguish under the three heads, of _private_, _public_, and
_national_.

1. _Private_ expence is, what a private person, or private society, lays
out, either to provide articles of consumption, or something more
permanent, which may be conducive to their ease, convenience, or
advantage. Thus we say, _a large domestic expence_, relative to one who
spends a great income. We say, a merchant has been at _great expence_
for magazines, for living, for clerks, &c. but never that he has been at
any in buying goods. In the same way a manufacturer may expend for
building, machines, horses, and carriages, but never for the matter he
manufactures. When a thing is bought, in order to be sold again, the sum
employed is called money _advanced_; when it is bought not to be sold,
it may be said to be _expended_.

2. _Public expence_ is, the employment of that money, which has been
contributed by individuals, for the current service of the state. The
contribution, or gathering it together, represents the effects of many
articles of _private expence_; the laying it out when collected, is
_public expence_.

3. _National expence_, is what is expended out of the country: this is
what diminishes national wealth. The principal distinction to be here
attended to, is between _public expence_, or the laying out of public
money, and _national expence_, which is the alienating the nation’s
wealth in favour of strangers. Thus the greatest _public expence_
imaginable, may be no national expence; because the money may remain at
home. On the other hand, the smallest _public_, or even _private
expence_, may be a national expence; because the money may go abroad.

_Profit_, and _loss_, I divide into _positive_, _relative_, and
_compound_. _Positive profit_, implies no loss to any body; it results
from an augmentation of labour, industry, or ingenuity, and has the
effect of swelling or augmenting the public good.

_Positive loss_, implies no profit to any body; it is what results from
the cessation of the former, or of the effects resulting from it, and
may be said to diminish the public good.

_Relative profit_, is what implies a loss to some body; it marks a
vibration of the balance of wealth between parties, but implies no
addition to the general stock.

_Relative loss_, is what, on the contrary, implies a profit to some
body; it also marks a vibration of the balance, but takes nothing from
the general stock.

The _compound_ is easily understood; it is that species of profit and
loss which is partly _relative_, and partly _positive_. I call it
compound, because both kinds may subsist inseparably in the same
transaction.

------------------------------------------------------------------------



                               CHAP. IX.
   _The general consequences resulting to a trading Nation, upon the
                opening of an active foreign Commerce._


Did I not intend to confine myself to very general topics in this
chapter, I might in a manner exhaust the whole subject of modern
oeconomy under this title; for I apprehend that the whole system of
modern politics is founded upon the basis of an active foreign trade.

A nation which remains passive in her commerce, is at the mercy of those
who are active, and must be greatly favoured, indeed, by natural
advantages, or by a constant flux of gold and silver from her mines, to
be able to support a correspondence, not entirely hurtful to the
augmentation of her wealth.

These things shall be more enlarged upon as we go along: the point in
hand, is, to consider the consequences of this trade, relatively to
those who are the actors in the operation.

When I look upon the wide field which here opens to my view, I am
perplexed with too great a variety of objects. In one part, I see a
decent and comely beginning of industry; wealth flowing gently in, to
recompence ingenuity; numbers both augmenting, and every one becoming
daily more useful to another; agriculture proportionally extending
itself; no violent revolutions; no exorbitant profits; no insolence
among the rich; no excessive misery among the poor; multitudes employed
in producing; great oeconomy upon consumption; and all the instruments
of luxury, daily produced by the hands of the diligent, going out of the
country for the service of strangers; not remaining at home for the
gratification of sensuality. At last the augmentations come insensibly
to a stop. Then these rivers of wealth, which were in brisk circulation
through the whole world, and which returned to this trading nation as
blood returns to the heart, only to be thrown out again by new
pulsations, begin to be obstructed in their course; and flowing abroad
more slowly than before, come to form stagnations at home. These,
impatient of restraint, soon burst out into domestic circulation. Upon
this cities swell in magnificence of buildings; the face of the country
is adorned with palaces, and becomes covered with groves; luxury shines
triumphant in every part; inequality becomes more striking to the eye;
and want and misery appear more deformed, from the contrast: even
fortune grows more whimsical in her inconstancy; the beggar of the other
day, now rides in his coach; and he who was born in a bed of state, is
seen to die in a gaol, or in an alms-house. Such are the effects of
great domestic circulation.

The statesman looks about with amazement; he, who was wont to consider
himself as the first man in the society in every respect, perceives
himself, perhaps, eclipsed by the lustre of private wealth, which avoids
his grasp when he attempts to seize it. This makes his government more
complex and more difficult to be carried on; he must now avail himself
of art and address as well as of power and force. By the help of
cajoling and intrigues, he gets a little into debt; this lays a
foundation for public credit, which, growing by degrees, and in its
progress assuming many new forms, becomes, from the most tender
beginnings, a most formidable monster, striking terror into those who
cherished it in its infancy. Upon this, as upon a triumphant war-horse,
the statesman gets a-stride, he then appears formidable a-new; his head
turns giddy; he is choaked with the dust he has raised; and at the
moment he is ready to fall, to his utter astonishment and surprize, he
finds a strong monied interest, of his own creating, which, instead of
swallowing him up as he apprehended, flies to his support. Through this
he gets the better of all opposition, he establishes taxes, multiplies
them, mortgages his fund of subsistence, either becomes a bankrupt, and
rises again from his ashes; or if he be less audacious, he stands
trembling and tottering for a while on the brink of the political
precipice. From one or the other of these perilous situations, he begins
to discover an endless path which, after a multitude of windings, still
returns into its self, and continues an equal course through this vast
labyrinth: but of this last part, more in the fourth book.

It is now full time to leave off rhapsody, and return to reasoning and
cool inquiry, concerning the more immediate and more general effects and
revolutions produced by the opening of a foreign trade in a nation of
industry.

The first and most sensible alteration will be an increase of demand for
manufacturers, because by supplying the wants of strangers, the number
of consumers will now be considerably augmented. What again will follow
upon this, must depend upon circumstances.

If this revolution in the state of demand should prove too violent, the
consequence of it will be to _raise_ demand; if it should prove gradual,
it will _increase_ it. I hope this distinction is well understood, and
that the consequence appears just: for, if the supply do not increase in
proportion to the demand, a competition will ensue among the demanders;
which is the common effect of such sudden revolutions. If, on the other
hand, a gentle increase of demand should be accompanied with a
proportional supply, the whole industrious society will grow in vigour,
and in wholsome stature, without being sensible of any great advantage
or inconveniency; the change of their circumstances will even be
imperceptible.

The immediate effects of the violent revolution will, in this example,
be flattering to some, and disagreeable to others. Wealth will be found
daily to augment, from the rising of prices, in many branches of
industry. This will encourage the industrious classes, and the idle
consumers at home will complain. I have already dwelt abundantly long
upon the effects resulting from this to the lower classes of the people,
in providing them with a certain means of subsistence. Let me now
examine in what respect even the higher classes will be made likewise to
feel the good effects of this general change, although at first they may
suffer a temporary inconveniency from it.

Farmers, as has been observed, will have a greater difficulty in finding
servants, who, instead of labouring the ground, will choose to turn
themselves to manufactures. This we have considered in the light of
purging the lands of superfluous mouths; but every consequence in this
great chain of politics draws other consequences after it, and as they
follow one another, things put on different faces, which affect classes
differently. The purging of the land is but one of the first; here
follows another.

The desertion of the hands employed in a trifling agriculture will at
first, no doubt, embarrass the farmers; but in a little time every thing
becomes balanced in a trading nation, because _here_ every _industrious_
man must advance in prosperity, in spite of all general combinations of
circumstances.

In the case before us, the relative profits upon farming must soon
become greater than formerly, because of this additional expence which
must affect the whole class of farmers; consequently, this additional
expence, instead of turning out to be a loss to either landlord or
farmer, will, after some little time, turn out to the advantage of both:
because the produce of the ground, being indispensably necessary to
every body, must in every article increase in its value. Thus in a short
time accounts will be nearly balanced on all hands; that is to say, the
same proportion of wealth will, _cæteris paribus_, continue the same
among the industrious. I say among the industrious; for those who are
either idle, or even negligent, will be great losers.

A proprietor of land, inattentive to the causes of his farmer’s
additional expence, may very imprudently suffer his rents to fall,
instead of assisting him on a proper occasion, in order to make them
afterwards rise the higher.

Those who live upon a determined income in money, and who are nowise
employed in traffic, nor in any scheme of industry, will, by the
augmentation of prices, be found in worse circumstances than before.

In a trading nation every man must turn his talents to account, or he
will undoubtedly be left behind in this universal emulation, in which
the most industrious, the most ingenious, and the most frugal will
constantly carry off the prize.

This consideration ought to be a spur to every body. The richest men in
a trading nation have no security against poverty, I mean proportional
poverty; for though they diminish nothing of their income, yet by not
increasing it in proportion to others, they lose their rank in wealth,
and from the first class in which they stood, they will slide insensibly
down to a lower.

There is one consequence of an additional beneficial trade, which raises
demand and increases wealth; but if we suppose no proportional
augmentation of supply, it will prove at best but an airy dream which
lasts for a moment, and when the gilded scene is passed away, numberless
are the inconveniencies which are seen to follow.

I shall now point out the natural consequences of this augmentation of
wealth drawn from foreign nations, when the statesman remains
inattentive to increase the supply both of food and manufactures, in
proportion to the augmentation of mouths, and of the demand for the
produce of industry.

In such a situation profits will daily swell, and every scheme for
reducing them within the bounds of moderation, will be looked upon as a
hurtful and unpopular measure: be it so; but let us examine the
consequences.

We have said, that the rise of demand for manufactures naturally
increases the value of work: now I must add, that under such
circumstances, the augmentation of riches, _in a country, either not
capable of improvement as to the soil, or where precautions have not
been taken for facilitating a multiplication of inhabitants, by the
importation of subsistence_, will be productive of the most calamitous
consequences.

On one side, this wealth will effectually diminish the mass of the food
before produced; and on the other, will increase the number of useless
consumers. The first of these circumstances will raise the demand for
food; and the second will diminish the number of useful free hands, and
consequently raise the price of manufactures: here are shortly the
outlines of this progress.

The more rich and luxurious a people are, the more delicate they become
in their manner of living; if they fed on bread formerly, they will now
feed on meat; if they fed on meat, they will now feed on fowl. The same
ground which feeds a hundred with bread, and a proportional quantity of
animal food, will not maintain an equal number of delicate livers. Food
must then become more scarce; demand for it rises; the rich are always
the strongest in the market; they consume the food, and the poor are
forced to starve. Here the wide door to modern distress opens; to wit, a
hurtful competition for subsistence. Farther, when a people become rich,
they think less of oeconomy; a number of useless servants are hired, to
become an additional dead weight on consumption; and when their starving
countrymen cannot supply the extravagance of the rich so cheaply as
other nations, they either import instruments of foreign luxury, or seek
to enjoy them out of their own country, and thereby make restitution of
their gains.

Is it not therefore evident, that if, before things come to this pass,
additional subsistence be not provided by one method or other, the
number of inhabitants must diminish; although riches may daily increase
by a balance of additional matter, supposed to be brought into the
country in consequence of the hitherto beneficial foreign trade. This is
not all. I say farther, that the beneficial trade will last for a time
only. For the infallible consequence of the rise of prices at home will
be, that those nations which at first consumed your manufactures,
perceiving the gradual increase of their price, will begin to work for
themselves; or finding out your rivals who can supply them cheaper, will
open their doors to them. These again, perceiving the great advantages
gained by your traders, will begin to supply the market; and since every
thing must be cheaper in countries where we do not suppose the
concurrence of all the circumstances mentioned above, these nations will
supplant you, and be enriched in their turn.

Here comes a new revolution. Trade is come to a stop: what then becomes
of all the hands which were formerly employed in supplying the foreign
demands?

Were revolutions so sudden as we are obliged to represent them, all
would go to wreck; in proportion as they happen by quicker or slower
degrees, the inconveniencies are greater or smaller.

Prices, we have said, are made to rise by competition. If the
competition of the strangers was what raised them, the distress upon the
manufacturers will be in proportion to the suddenness of their deserting
the market. If the competition was divided between the strangers and the
home consumers, the inconveniencies which ensue will be less; because
the desertion of the strangers will be in some measure made up by an
increase of home consumption which will follow upon the fall of prices.
And if, in the third case, the natives have been so imprudent as not
only to support a competition with the strangers, and thereby disgust
them from coming any more to market, but even to continue the
competition between themselves, the whole _loss_ sustained by the
revolution will be national. Wealth will cease to augment, but the
inconveniencies, in place of being felt by the manufacturers, will only
affect the state; those will continue in affluence, extolling the
generosity of their countrymen, and despising the poverty of the
strangers who had enriched them.

Domestic luxury will here prove an expedient for preserving from ruin
the industrious part of a people, who, in subsisting themselves, had
enriched their country. No change will follow in their condition; they
will go on with a painful assiduity to labour, and if the consequences
of it become now hurtful to one part of the state, they must, at least,
be allowed to be essentially necessary for the support of the other.

But that luxury is no necessary concomitant of foreign trade, in a
nation where the true principles of it are understood, will appear very
plain, from a contrast I am now going to point out, in the example of a
modern state, renowned for its commerce and frugality. The country I
mean, is Holland.

A set of industrious and frugal people were assembled in a country, by
nature subject to many inconveniencies, the removing of which
necessarily employed abundance of hands. Their situation upon the
continent, the power of their former masters, and the ambition of their
neighbours, obliged them to keep great bodies of troops. These two
articles added to the numbers of the community, without either enriching
the state by their labour exported, or producing food for themselves or
countrymen.

The scheme of a commonwealth was calculated to draw together the
industrious; but it has been still more useful in subsisting them: the
republican form of government, being there greatly subdivided, vests
authority sufficient in every part of it, to make suitable provision for
their own subsistence; and the tye which unites them, regards only
matters of public concern. Had the whole been governed by one sovereign,
or by one council, this important matter never could have been
effectuated.

I imagine it would be impossible for the most able minister that ever
lived, to provide nourishment for a country so extended as France, or
even as England, supposing these as fully peopled as Holland is: even
although it should be admitted that a sufficient quantity of food might
be found in other countries for their subsistence. The enterprise would
be too great, abuses would multiply; the consequence would be, that the
inhabitants would die for want. But in Holland the case is different,
every little town takes care of its own inhabitants; and this care,
being the object of application and profit to so many persons, is
accomplished with success.

When once it is laid down as a maxim in a country, that food must of
necessity be got from abroad, in order to feed the inhabitants at home,
the corn trade becomes considerable, and at the same time certain,
regular, and permanent. This was the case in Holland: as the inhabitants
were industrious, the necessary consequence has been, a very
extraordinary multiplication; and at the same time such an abundance of
grain, that instead of being in want themselves, they often supply their
neighbours. There are many examples of England’s being supplied with
grain from thence, and, which is still more extraordinary, from the
re-exportation of the very produce of its own fruitful soil.

It is therefore evident, that the only way to support industry, is to
provide a supply of subsistence, constantly proportional to the demand
that may be made for it. This is a precaution indispensably necessary
for preventing hurtful competition. This is the particular care of the
Dutch: so long as it can be effectual, their state can fear no decline;
but whenever they come to be distressed in the markets, upon which they
depend for subsistence, they will sink into ruin. It is by mere dint of
frugality, cheap and parsimonious living, that the navigation of this
industrious people is supported. Constant employment, and an
accumulation of almost imperceptible gains, fills their coffers with
wealth, in spight of the large outgoings to which their own proper
nourishment yearly forces them. The large profits upon industry in other
countries, which are no proof of generosity, but a fatal effect of a
scanty subsistence, is far from dazzling their eyes. They seldom are
found in the list of competitors at any foreign port; if they have their
cargo to dispose of, they wait with pleasure in their own vessels,
consuming their own provisions, and at last accept of what others have
left. It may be said, that many other circumstances concur in favour of
the Dutch, besides the article of subsistence. I shall not dispute this
matter; but only remind my reader of what was said in the first book; to
wit, that if a computation be made of the hands employed in providing
subsistence, and of those who are severally taken up in supplying every
other want, their numbers will be found nearly to balance one another in
the most luxurious countries. From this I conclude, that the article of
food, among the lower classes, must bear a very high proportion to all
the other articles of their consumption; and therefore a diminution upon
the price of subsistence, must be of infinite consequence to
manufacturers, who are obliged to buy it. From this consideration, let
us judge of the consequence of such augmentations upon the price of
grain, as are familiar to us; 30 or 40 _per cent._ seems nothing. Now
this augmentation operates upon two thirds, at least, of the whole
expence of a labouring man: let any one who lives in tolerable affluence
make the application of this to himself, and examine how he would manage
his affairs if, by accidents of rains or winds, his expences were to
rise 30 _per cent._ without a possibility of restraining them; for this
is unfortunately the case with all the lower classes. From whence I
conclude, that the keeping food cheap, and still more the preserving it
at all times at an equal standard, is the fountain of the wealth of
Holland; and that any hurtful competition in this article must beget a
disorder which will affect the whole of the manufacturers of a state.

------------------------------------------------------------------------



                                CHAP. X.
                  _Of the Balance of Work and Demand._


It is quite impossible to go methodically through the subject of
political oeconomy, without being led into anticipations. We have
frequently mentioned this balance of work and demand, and shewed how
important a matter it is for a statesman to attend to it. The thing,
therefore, in general is well understood; and all that remains to be
done, is to render our ideas more determined concerning it, and more
adequate, if possible, to the principles we have been laying down.

We have treated fully of demand, and likewise of competition. We have
observed how different circumstances influence these terms, so as to
make them represent ideas entirely different; and we have said that
double competition supports the balance we are now to speak of, and that
single competition overturns it.

The word demand in this chapter is taken in the most simple acceptation;
and when we say that the balance between work and demand is to be
sustained in equilibrio, as far as possible, we mean that the quantity
supplied should be in proportion to the quantity _demanded_, that is,
_wanted_. While the balance stands justly poised, prices are found in
the adequate proportion of the real expence of making the goods, with a
small addition for profit to the manufacturer and merchant.

I have, in the fourth chapter, observed how necessary a thing it is to
distinguish the two constituent parts of every price; the value, and the
profit. Let the number of persons be ever so great, who, upon the sale
of a piece of goods, share in the profits; it is still essential, in
such enquiries as these, to suppose them distinctly separate from the
real value of the commodity; and the best way possible to discover
exactly the proportion between the one and the other, is by a scrupulous
watchfulness over the balance we are now treating of, as we shall
presently see.

The value and profits, combined in the price of a manufacture produced
by one man, are easily distinguished, by means of the analysis we have
laid down in the fourth chapter. As long as any market is _fully_
supplied with this sort of work, and _no more_; those who are employed
in it live by their trade, and gain no unreasonable profit: because
there is then no violent competition upon one side only, neither between
the workmen, nor between those who buy from them, and the balance gently
vibrates under the influence of a double competition. This is the
representation of a perfect balance.

This balance is overturned in four different ways.

Either the demand diminishes, and the work remains the same:

Or the work diminishes, and the demand remains:

Or the demand increases, and the work remains:

Or the work increases, and the demand remains.

Now each of these four combinations may, or may not, produce a
competition upon one side of the contract only. This must be explained.

If demand diminishes, and work remains the same, which is the first
case, either those who furnish the work will enter into competition, in
which case they will hurt each other, and prices will fall below the
reasonable standard of the even balance; or they will not enter into
competition, and then prices continuing as formerly, the whole demand
will be supplied, and the remainder of the work will lie upon hand.

This is a symptom of decaying trade.

Let us now, on the other hand, suppose demand to increase, and work to
remain as before.

This example points out no diminution on either side, as was the case
before, but an augmentation upon one; and is either a symptom of growing
luxury at home, or of an increase in foreign trade.

Here the same alternation of circumstances occurs. The demanders will
either enter into competition and raise the price of work, or they will
enter into no competition; but being determined not to exceed the
ordinary standard of the perfect balance, will defer making their
provision till another time, or supply themselves in another market;
that is to say, the new demand will cease as soon as it is made, for
want of a supply.

Whenever, therefore, this perfect balance of work and demand is
overturned by the force of a simple competition, or by one of the scales
preponderating, one of two things must happen; either a part of the
demand is not answered, or a part of the goods is not sold.

These are the immediate effects of the overturning of the balance.

Let me next point out the object of the statesman’s care, relatively to
such effects, and shew the consequences of their being neglected.

We may now simplify our ideas, and instead of the former combinations,
make use of other expressions which may convey them.

Let us therefore say, that the _fall_ or _rise_ upon either side of the
balance, is _positive_, or _relative_. _Positive_, when the side we talk
of really augments beyond, or diminishes below the usual standard.
_Relative_, when there is no alteration upon the side we speak of, and
that the subversion of the balance is owing to an alteration on the
other side. As for example:

Instead of saying demand diminishes, and work remains the same, let us
say, demand diminishes _positively_, or work increases _relatively_;
according as the subject may lead us to speak either of the one or of
the other. This being premised,

If the scale of work shall preponderate _positively_, it should be
inquired, whether the quantity furnished has really swelled, in all
respects, beyond the proportion of the consumption, (in which case the
statesman should diminish the number of hands, by throwing a part of
them into a new channel) or whether the imprudence of the workmen has
only made them produce their work unseasonably; in which case, proper
information, and even assistance should be given them, to prevent
merchants from taking the advantage of their want of experience: but
these last precautions are necessary only in the infancy of industry.

If a statesman should be negligent on this occasion; if he should allow
natural consequences to follow upon one another; just as circumstances
shall determine; then it may happen, that workmen will keep upon hand
that part of their goods which exceeds the demand, until necessity
forces them to enter into competition with one another, and sell for
what they can get. Now this competition is hurtful, because it is all on
one side, and because we have supposed the preponderating of the scale
of work to be an overturning of a perfect balance, which can by no means
be set right, consistently with a scheme of thriving, but by the scale
of demand becoming heavier, and re-establishing a double competition.
Were this to happen before the workmen come to sell in competition, then
the balance would again be even, after what I call _a short vibration_,
which is no _subversion_; but when the scale of work remains too long in
the same position, and occasions a strong, hurtful, and lasting
competition, upon one side only, then, I say, the balance is
_overturned_; because this diminishes the reasonable profits, or
perhaps, indeed, obliges the workmen to sell below prime cost. The
effect of this is, that the workmen fall into distress, and that
industry suffers a discouragement; and this effect is certain.

But it may be asked, Whether, by this fall of prices, demand will not be
increased? That is to say, will not the whole of the goods be sold off?

I answer, That this may, or may not, be the effect of the fall,
according to circumstances: it is a contingent consequence of the
simple, but not the effect of the double competition: the distress of
the workmen is a certain and unavoidable consequence of the first.

But supposing this contingent consequence to happen, will it not set the
balance even, by increasing the demand? I answer, the balance is then
made even by a violent shock given to industry, but it is not set even
from any principle which can support it, or make it flourish. Here is
the criterion of a perfect balance: _A positive moderate profit must
balance a positive moderate profit; the balance must vibrate, and no
loss must be found on either side_. In the example before us, the
balance stands even, it is true; the work and the demand are equally
poised as to quantity; but it is a _relative profit_, which hangs in the
scale, opposite to a _relative loss_. I wish this may be well
understood; farther illustrations will make it clear.

Next, let me suppose the scale of _demand_ to preponderate positively.
In this case, the statesman should be still more upon his guard, to
provide a proportional supply; because the danger here may at first put
on a shew of profit, and deceive him.

The consequences of this subversion of the balance are either,

1st, That a competition will take place among the demanders only, which
will raise profits. Now if, after a short vibration, the supply comes to
be increased by the statesman’s care, no harm will ensue; competition
will change sides, and profits will come down again to the perfect
standard. But if the scale of demand remains preponderating, and so
keeps profits high, the consequence will be, that, in a little time, not
only the immediate seller of the goods, but also every one who has
contributed to the manufacture, will insist upon sharing these new
profits. Now the evil is not, that every one should share, or that the
profits should swell, as long as they are supported by demand, and as
long as they can truly be considered as precarious; but the mischief is,
that, in consequence of this wide repartition, and by such profits
subsisting for a long time, they insensibly become _consolidated_, or,
as it were, transformed into the intrinsic value of the goods. This, I
say, is brought about by time; because the habitual extraordinary gains
of every one employed induce the more luxurious among them to change
their way of life insensibly, and fall into the habit of making greater
consumptions, and engage the more slothful to remain idle, till they are
exhausted. When therefore it happens, that large profits have been made
for a considerable time, and that they have had the effect of forming a
taste for a more expensive way of living among the industrious, it will
not be the cessation of the demand, nor the swelling of the supply,
which will engage them to part with their gains. Nothing will operate
this effect but sharp necessity; and the bringing down of their profits,
and the throwing the workmen into distress, are then simultaneous; which
proves the truth of what I have said, that these profits become, by long
habit, virtually _consolidated_ with the real value of the merchandize.
These are the consequences of a neglected simple competition, which
raises the profits upon industry, and keeps the balance overturned for a
considerable time.

2dly, Let me examine the consequences of this overturn in the actual
preponderancy of demand, when it does not occasion a competition among
the demanders, and consequently, when it does not increase the profits
upon industry.

This case can only happen, when the commodity is not a matter of great
necessity, or even of great use; since the desire of procuring it is not
sufficient to engage the buyers to raise their price; unless, indeed,
this difference should proceed from the ease of providing the same, in
other markets, as cheap as formerly. This last is a dangerous
circumstance, and loudly calls for the attention of the statesman. He
must prevent, by all possible means, the desertion of the market, by a
speedy supply for all the demand, and must even perhaps give
encouragements to manufacturers, to enable them to diminish the prices
fixed by the regular standard. This is the situation of a nation which
is in the way of losing branches of her foreign trade; of which
afterwards.

Whatever therefore be the consequence of the actual preponderancy of the
scale of demand; that is, whether it tend to raise profits, or to
discredit the market; the statesman’s care should be directed
immediately towards making the balance come even of itself, without any
shock, and that as soon as possible, by increasing the supply. For if it
be allowed to stand long in this overturned state, natural consequences
will operate a forced restitution; that is, the rise in the price, or
the call of a foreign market, will effectually cut off a proportional
part of the demand, and leave the balance in an equilibrium,
disadvantageous to trade and industry.

In the former case, the manufacturers were forced to starve, by an
unnatural restitution, when the relative profit and loss of individuals
balanced one another. Here the manufacturers are inriched for a little
time, by a rise of profits, relative to the loss the nation sustains, by
not supplying the whole demand. This results from the competition of
their customers; but so soon as these profits become _consolidated_ with
the intrinsic value, they will cease to have the advantage of profits,
and, becoming in a manner necessary to the existence of the goods, will
cease to be considered as advantageous. These forced restitutions then,
brought about, as we have said, by selling goods below their value, by
cutting off a part of the demand, or by sending it to another market,
resembles the operation of a carrier, who sets his ass’s burden even, by
laying a stone upon the lightest end of it. He however loses none of his
merchandize; but the absurdity of the statesman is still greater, for he
appears willingly to open the heavy end of the load, and to throw part
of his merchandize into the high-way.

I hope, by this time, I have sufficiently shewn the difference in effect
between the _simple_ and the _double_ competition; between the
_vibrations_ of this balance of work and demand, and the _overturning_
of it. When it vibrates in moderation, and by short alternate risings
and sinkings, then industry and trade go on prosperously, and are in
harmony with each other; because both parties gain. The industrious man
is recompenced in proportion to his ingenuity; the intrinsic value of
goods does not vary, nor deceive the merchant; profits on both sides
fluctuate according to demand, but never get time to consolidate with,
and swell the real value, and never altogether disappear, and starve the
workman.

This happy state cannot be supported but by the care of the statesman;
and when he is found negligent in the discharge of this part of his
duty, the consequence is, that either the spirit of industry, which, it
is supposed, has cost him much pains to cultivate, is extinguished, or
the produce of it rises to so high a value, as to be out of the reach of
a multitude of purchasers.

The progress towards the one or the other of these extremes is easily
perceived, by attending to the successive overturnings of the balance.
When these are often repeated on the same side, and the balance set
right, by a succession of forced restitutions only, the same scale
preponderating a-new, then is the last period soon accomplished. When,
on the contrary, the overturnings are alternate, sometimes the scale of
demand overturning the balance, sometimes the scale of work, the last
period is more distant. Trade and industry subsist longer, but they
remain in a state of perpetual convulsion. On the other hand, when the
balance gently vibrates, then work and demand, that is, trade and
industry, like agriculture and population, prove mutually assisting to
each other, in promoting their reciprocal augmentation.

In order therefore to preserve a trading state from decline, the
greatest care must be taken, to support a perfect balance between the
hands employed in work and the demand for their labour. That is to say,
according to former definitions, to prevent demand from ever standing
long at an immoderate height, by providing at all times a supply,
sufficient to answer the greatest that ever can be made: or, in other
words, still, in order to accustom my readers to certain expressions, to
encourage the _great_, and to discourage the _high_ demand. In this
case, competition will never be found too strong on either side of the
contract, and profits will be moderate, but sure, on both.

If, on the contrary, there be found too many hands for the demand, work
will fall too low for workmen to be able to live; or, if there be too
few, work will rise, and manufactures will not be exported.

For want of this just balance, no trading state has ever been of long
duration, after arriving at a certain height of prosperity. We perceive
in history the rise, progress, grandeur, and decline of Sydon, Tyre,
Carthage, Alexandria, and Venice, not to come nearer home. While these
states were on the growing hand, they were powerful; when once they came
to their height, they immediately found themselves labouring under their
own greatness. The reason of this appears from what has been said.

While there is a demand for the trade of any country, inhabitants are
always on the increasing hand. This is evident from what has been so
often repeated in the first book, and confirmed by thousands of
examples. There never was any branch of trade established in any
kingdom, province, city, or even village; but such kingdom, province,
&c. increased in inhabitants. While this gradual increase of people is
in proportion to the growing demand for hands, the balance between work
and demand is exactly kept up: but as all augmentations must at last
come to a stop, when this happens, inconveniencies must ensue, greater
or less, according to the negligence of the statesman, and the violence
or suddenness of the revolution.

------------------------------------------------------------------------



                               CHAP. XI.
                _Why in Time this Balance is destroyed._


Now let us examine what may be the reason why, in a trading and
industrious nation, time necessarily destroys the perfect balance
between work and demand.

We have already pointed out one general cause, to wit, the natural stop
which must at last be put to augmentations of every kind.

Let us now apply this to circumstances, in order to discover in what
manner natural causes operate this stop, either by preventing the
increase of work, on one side of the balance, or the increase of demand,
on the other. When once we discover how the stop is put to
augmentations, we may safely conclude, that the continuation of the
same, or similar causes, will soon produce a diminution, and operate a
decline.

We have traced the progress of industry, and shewn how it goes hand in
hand with the augmentation of subsistence, which is the principal
allurement to labour. Now the augmentation of food is relative to the
soil, and as long as this can be brought to produce, at an expence
proportioned to the value of the returns, agriculture, without any
doubt, will go forward in every country of industry. But so soon as the
progress of agriculture demands an additional expence, which the natural
return, at the stated prices of subsistence, will not defray,
agriculture comes to a stop, and so would numbers, did not the
consequences of industry push them forward, in spite of small
difficulties. The industrious then, I say, continue to multiply, and the
consequence is, that food becomes scarce, and that the inhabitants enter
into competition for it.

This is no contingent consequence, it is an infallible one; because food
is an article of the first necessity, and here the provision is supposed
to fall short of the demand. This raises the profits of those who have
food ready to sell; and as the balance upon this article must remain
overturned for some time, without the interposition of the statesman,
these profits will be consolidated with the price, and give
encouragement to a more expensive improvement of the soil. I shall here
interrupt the examination of the consequences of this revolution as to
agriculture, until I have examined the effects which the rise of the
price of food produces on industry, and on the demand for it.

This augmentation on the value of subsistence must necessarily raise the
price of all work, because we are here speaking of an industrious people
fully employed, and because subsistence is one of the three articles
which compose the intrinsic value of their work, as has been said.

The rise therefore, upon the price of work, not being any augmentation
of that part of the price which we call profits, as happens to be the
case when a rise in demand has produced a competition among the buyers,
cannot be brought down but by increasing the supply of subsistence; and
were a statesman to mistake the real cause of the rise, and apply the
remedy of increasing the quantity of work, in order to bring down the
market, instead of augmenting the subsistence, he would occasion a great
disorder; he would introduce the hurtful simple competition between
people who labour for moderate profits, mentioned in the last chapter,
and would throw such a discouragement upon their industry, as would
quickly extinguish it altogether.

On the other hand, did he imprudently augment the subsistence, by large
importations, he would put an end to the expensive improvements of the
soil, and this whole enterprize would fall to nothing. Here then is a
dilemma, out of which he can extricate himself by a right application of
public money, only.

Such a necessary rise in the price of labour may either affect foreign
exportation, or it may not, according to circumstances. If it does, the
price of subsistence, at any rate, must be brought down at least to
those who supply the foreign demand; if it does not affect foreign
exportation, matters may be allowed to go on; but still the remedy must
be ready at hand, to be applied the moment it becomes expedient.

There is one necessary augmentation upon the prices of industry, brought
about by a very natural cause, viz. the increase of population, which
may imply a more expensive improvement of the soil; that is, an
extension of agriculture. This augmentation may very probably put a stop
to the augmentation of demand for many branches of manufactures,
consequently may stop the progress of industry; and if the same causes
continue to operate in a greater degree, it may also cut off a part of
the former demand, may discredit the market, open a door to foreign
consumption, and produce the inconveniencies of poverty and distress, in
proportion to the degree of negligence in the statesman.

I shall now give another example, of a very natural augmentation upon
the intrinsic value of work, which does not proceed from the increase of
population, but from the progress of industry itself; which implies no
internal vice in a state, but which is the necessary consequence of the
reformation of a very great one. This augmentation must be felt less or
more in every country, in proportion as industry becomes extended.

We have said, that the introduction of manufactures naturally tends to
purge the lands of superfluous mouths: now this is a very slow and
gradual operation. A consequence of it was said to be (Book I. Chap.
xx.) an augmentation of the price of labour, because those who have been
purged off, must begin to gain their whole subsistence at the expence of
those who employ them.

If therefore, in the infancy of industry, any branch of it shall find
itself assisted in a particular province, by the cheap labour of those
mouths superfluously fed by the land, examples of which are very
frequent, this advantage must diminish, in proportion as the cause of it
ceases; that is, in proportion as industry is extended, and as the
superfluous mouths are of consequence purged off.

This circumstance is of the last importance to be attended to by a
statesman. Perhaps it was entirely owing to it, that industry was
enabled to set up its head in this corner. How many examples could I
give, of this assistance given to manufactures in different provinces,
where I have found the value of a day’s work, of spinning, for example,
not equal to half the nourishment of the person. This is a great
encouragement to the making of cloths; and accordingly we see some
infant manufactures dispute the market with the produce of the greatest
dexterity; the distaff dispute prices with the wheel. But when these
provinces come to be purged of their superfluous mouths, spinning
becomes a trade, and the spinners must live by it. Must not then prices
naturally rise? And if these are not supported by the statesman, or if
assistance is not given to these poor manufacturers, to enable them to
increase their dexterity, in order to compensate what they are losing in
cheapness, will not their industry fail? Will not the poor spinners be
extinguished? For it is not to be expected, that the landlord will
receive them back again from a principle of charity, after he has
discovered their former uselesness.

A third cause of a necessary augmentation upon the intrinsic value of
goods proceeds from taxes. A statesman must be very negligent indeed, if
he does not attend to the immediate consequences of his own proper
operations. I shall not enlarge on this at present, as it would be an
unnecessary anticipation; but I shall return, to resume the part of my
reasoning which I broke off abruptly.

I have observed, how the same cause which stops the progress of
industry, gives an encouragement to agriculture: how the rise in the
price of subsistence necessarily increases the price of work to an
industrious and well-employed people: how this cuts off a part of the
demand for work, or sends it to a foreign market.

Now all these consequences are entirely just, and yet they seem
contradictory to another part of my reasoning, (Book I. Chap. xvi.)
where I set forth the advantages of a prodigal consumption of the
earth’s produce as advantageous to agriculture, by increasing the price
of subsistence, without taking notice, on the other hand, of the hurt
thereby done to industry, which supports the consumption of that
produce.

The one and the other chain of consequences is equally just, and they
appear contradictory only upon the supposition, that there is no
statesman at the helm. These contradictions represent the alternate
overturn of the balance. The duty of the statesman is, to support the
double competition every where, and to permit only the gentle alternate
vibrations of the two scales.

When the progress of industry has augmented numbers, and made
subsistence scarce, he must estimate to what height it is expedient that
the price of subsistence should rise. If he finds, that, in order to
encourage the breaking up of new lands, the price of it must rise too
high, and stand high too long, to preserve the intrinsic value of goods
at the same standard as formerly; then he must assist agriculture with
his purse, in order that exportation may not be discouraged. This will
have the effect of increasing subsistence, according to the true
proportion of the augmentation required, without raising the price of it
too high. And if that operation be the work of time, and the demand for
the augmentation be pressing, he must have subsistence imported, or
brought from abroad, during that interval. This supply he may cut off
whenever he pleases, that is, whenever it ceases to be necessary.

If the supply comes from a sister country, it must be so taken, as to
occasion no violent revolution when it comes to be interrupted a-new. As
for example: One province demands a supply of grain from another, only
for a few years, until their own soil can be improved, so as to provide
them sufficiently. The statesman should encourage agriculture, no doubt,
in the province furnishing, and let the farmers know the extent of the
demand, and the time it may probably last, as near as possible; but he
must discourage the plucking up of vineyards, and even perhaps the
breaking up of great quantities of old pasture; because, upon the
ceasing of the demand, such changes upon the agriculture of the province
furnishing, may occasion a hurtful revolution.

While this foreign supply is allowed to come in, the statesman should be
closely employed in giving such encouragement to agriculture at home,
according to the principles hereafter to be deduced, as may nearly
balance the discouragement given to it by this newly permitted
importation. If this step be neglected, the consequence may be, that the
foreign supply will go on increasing every year, and will extinguish the
agriculture already established in the country, in place of supplying a
temporary exigency, which is within the power of the country itself to
furnish. These, I suppose, were the principles attended to by the
government of England, upon opening their ports for the importation of
provisions from Ireland.

The principle, therefore, being to support a gentle increase of food,
inhabitants, work, and demand, the statesman must suffer small
vibrations in the balance, which, by alternate competition, may favour
both sides of the contract; but whenever the competition stands too long
upon either side, and threatens a subversion of the balance, then, with
an artful hand, he must endeavour to load the lighter scale, and never,
but in cases of the greatest necessity, have recourse to the expedient
of taking any thing from the heaviest.

In treating of the present state of France, we observed, in the chapter
above-cited, how the vibration of the balance of agriculture and
population may carry food and numbers to their height; but as foreign
trade was not there the direct object of inquiry, I did not care to
introduce this second balance of work and demand, for fear of perplexing
my subject. I hope I have now abundantly shewn the force of the
different principles, and it must depend upon the judgment of the
statesman to combine them together, and adapt them to his plan: a thing
impossible to be even chalked out by any person who is not immediately
at the head of the affairs of a nation. My work resembles the formation
of the pure colours for painting, it is the artist’s business to mix
them: all I can pretend to, is to reason consequentially from
suppositions. If I go at any time farther, I exceed my plan, and I
confess the fault.

I shall now conclude my chapter by introducing a new subject. I have
been at pains to shew how the continued neglect of a statesman, in
watching over the vibrations of the balance of work and demand,
naturally produces a total subversion of it; but this is not, of itself,
sufficient to undo an industrious people. Other nations must be taught
to profit of the disorder; and this is what I call the competition
between nations.

------------------------------------------------------------------------



                               CHAP. XII.
                 _Of the Competition between Nations._


Mankind daily profit by experience, and acquire knowledge at their own
cost.

We have said that what lays the foundation of foreign trade, is the ease
and conveniency which strangers find in having their wants supplied by
those who have set industry on foot. The natural consequence of this
foreign demand is to bring in wealth, and to promote augmentations of
every kind. As long as these go on, it will be impossible for other
nations to rival the traders, because their situation is every day
growing better: dexterity increasing, diminishes the price of work;
every circumstance, in short, becomes more favourable; the balance never
vibrates, but by one of the scales growing positively heavier, and it is
constantly coming even by an increase of weight on the other side. We
have seen how these revolutions never can raise the intrinsic value of
goods, and have observed that this is the road to greatness.

The slower any man travels, the longer he is in coming to his journey’s
end; and when his health requires travelling, and that he cannot go far
from home, he rides out in a morning and comes home to dinner.

This represents another kind of vibration of the balance, and when
things are come to such a height as to render a train of augmentations
impossible, the next best expedient is, to permit alternate vibrations
of diminution and augmentation.

Work augments, I shall suppose, and no more demand can be procured; it
may then be a good expedient to diminish hands, by making soldiers of
them; by employing them in public works; or by sending them out of the
country to become useful in its colonies. These operations give a
relative weight to the scale of demand, and revive a competition on that
side. Then the industrious hands must be gently increased a-new, and the
balance kept in vibration as long as possible. By these alternate
augmentations and diminutions, hurtful revolutions, and the subversion
of the balance, may be prevented. This is an expedient for standing
still without harm, when one cannot go forward to advantage.

If such a plan be followed, an industrious nation will continue in a
situation to profit of the smallest advantage from revolutions in other
countries, occasioned by the subversion of _their_ balance; which may
present an opportunity of new vibrations by alternate augmentations.

On such occasions, the abilities of a statesman are discovered, in
directing and conducting what I call the delicacy of national
competition. We shall then observe him imitating the mariners, who do
not take in their sails when the wind falls calm, but keep them trimmed
and ready to profit of the least breath of a favourable gale. Let me
follow my comparison. The trading nations of Europe represent a fleet of
ships, every one striving who shall get first to a certain port. The
statesman of each is the master. The same wind blows upon all; and this
wind is the principle of self-interest, which engages every consumer to
seek the cheapest and the best market. No trade wind can be more
general, or more constant than this; the natural advantages of each
country represent the degree of goodness of each vessel; but the master
who sails his ship with the greatest dexterity, and he who can lay his
rivals under the lee of his sails, will, _cæteris paribus_, undoubtedly
get before them, and maintain his advantage.

While a trading nation, which has got an established advantage over her
rivals, can be kept from declining, it will be very difficult, if not
impossible, for any other to enter into competition with her: but when
the balance begins to vibrate by alternate diminutions; when a decrease
of demand operates a failure of supply; when this again is kept low, in
order to raise the competition of consumers; and when, instead of
restoring the balance by a gentle augmentation, a people are engaged,
from the allurements of high profits, to discourage every attempt to
bring down the market; then the cissars of foreign rivalship will fairly
trim off the superfluity of demand; the simple competition will cease;
prices will fall, and a return of the same circumstances will prepare
the way for another vibration downwards.

Such operations as these, are just what is requisite for facilitating
the competition of rival nations; and the only means possible to engage
those who did not formerly work, to begin and supply themselves.

Did matters stand so, the evil would be supportable; strangers would
only supply the superfluities of demand, and the balance would still be
found in a kind of equilibrium at home. But, alas! even this happy state
can only be of short duration. The beginnings of trade with the
strangers will prove just as favourable to the vibration of their
balance, by augmentations, as it was formerly to the home-traders; and
now every augmentation to those, must imply a diminution to the others.
What will then become of those hands, in the trading nation, who subsist
only by supplying the foreign market? Will not this revolution work the
same effect, as to them, as if an additional number of hands had been
employed to supply the same consumption? And will not this utterly
destroy the balance among the traders, by throwing an unsurmountable
competition on the side of the supply? It will however have a different
effect from what might have happened, if the same number of hands had
been thrown into the trading nation; for, in this case, they might only
destroy the consolidated profits upon labour, and perhaps restore the
balance: the inconveniency would be equally felt by every workman, but
profit would result to the public. But in the other case, the old
traders will find no foreign sale for their work; these branches of
industry will fall below the price of subsistence, and the new beginners
will have _reasonable_ profits in supplying their own wants. I say
_reasonable_, because this transition of trade from one nation to
another, never can be sudden or easy; and can only take place in
proportion to the rise in the intrinsic value of goods in that which is
upon the decline, not in proportion to the rise in their profits upon
the sale of them: for as long as the most extravagant profits do not
become consolidated, as we have said, with the value of the work, a
diminution of competition among the consumers, which may be occasioned
by a beginning of foreign industry, will quickly make them disappear;
and this will prove a fatal blow to the first undertakings of the rival
nations. But when once they are fairly so consolidated, that prices can
no more come down of themselves, and that the statesman will not lend
his helping hand, then the new beginners pluck up courage, and set out
by making small profits: because in all new undertakings there is
mismanagement and considerable loss; and nothing discourages mankind
from new undertakings more than difficult beginnings.

As long, therefore, as a trading state is upon the rising hand, or even
not upon the decline, and while the balance is kept right without the
expedient of alternate diminutions, work will always be supplied from
that quarter, cheaper than it possibly can be furnished from any other,
where the same dexterity does not prevail. But when a nation begins to
lose ground, then the very columns which supported her grandeur, begin,
by their weight, to precipitate her decline. The wealth of her citizens
will support and augment home demand, and encourage that blind fondness
for high profits, which it is impossible to preserve. The moment these
consolidate to a certain degree, they have the effect of banishing from
the market the demand of strangers, who only can enrich her. It is in
vain to look for their return after the nation has discovered her
mistake, although she should be able to correct it; because, before this
can happen, her rivals will have profited of the golden opportunity, and
during the infatuation of the traders, will, even by their assistance,
have got fairly over the painful struggle against their superior
dexterity.

Thus it happens, that so soon as matters begin to go backward in a
trading nation, and that by the increase of their riches, luxury and
extravagance take place of oeconomy and frugality among the industrious;
when the inhabitants themselves foolishly enter into competition with
strangers for their own commodities; and when a statesman looks cooly
on, with his arms across, or takes it into his head, that it is not his
business to interpose, the prices of the dextrous workman will rise
above the amount of the mismanagement, loss, and reasonable profits, of
the new beginners; and when this comes to be the case, trade will decay
where it flourished most, and take root in a new soil. This I call a
competition between nations.

------------------------------------------------------------------------



                              CHAP. XIII.
     _How far the Form of Government of a particular Country may be
   favourable or unfavourable to a Competition with other Nations, in
                         matters of Commerce._


The question before us, though relative to another science, is not
altogether foreign to this. I introduce it in this place, not so much
for the sake of connexion, as by way of digression, which at the same
time that it has a relation to general principles, may also prove a
relaxation to the mind, after so long a chain of close reasoning.

In setting out, I informed my readers that I intended to treat of the
political oeconomy of free nations only; and upon every occasion where I
have mentioned slavery, I have pointed out how far the nature of it is
contrary to the advancement of private industry, the inseparable
concomitant of foreign and domestic trade.

No term is less understood than that of _liberty_, and it is not my
intention, at present, to enter into a particular inquiry into all the
different acceptations of it.

By a people’s being free, I understand no more than their being governed
by general laws, well known, not depending upon the ambulatory will of
any man, or any set of men, and established so as not to be changed, but
in a regular and uniform way; for reasons which regard the body of the
society, and not through favour or prejudice to particular persons, or
particular classes. In so far as a power of dispensing with, restraining
or extending general laws, is left in the hands of any governor, in so
far, I consider public liberty as precarious. I do not say it is hereby
hurt; this will depend upon the use made of such prerogatives. According
to this definition of liberty, a people may be found to enjoy freedom
under the most despotic forms of government; and perpetual service
itself, where the master’s power is limited according to natural equity,
is not altogether incompatible with liberty in the servant.

Here new ideas present themselves concerning the general principles of
_subordination_ and _dependence_ among mankind; which I shall lay before
my reader before I proceed, submitting the justness of them to his
decision.

As these terms are both relative, it is proper to observe, that by
_subordination_ is implied an authority which superiors have over
inferiors; and by _dependence_, is implied certain advantages which the
inferiors draw from their subordination: a servant is under
_subordination_ to his master, and _depends_ upon him for his
subsistence.

Dependence is the only bond of society; and I have observed, in the
fourth chapter of the first book, that the dependence of one man upon
another for food, is a very natural introduction to slavery. This was
the first contrivance mankind fell upon, in order to become useful to
one another.

Upon the abolishing of slavery, from a principle of christianity, the
next step taken, was the establishment of an extraordinary subordination
between the different classes of the people; this was the principle of
the feudal government.

The last refinement, and that which has brought liberty to be generally
extended to the lowest denominations of a people, without destroying
that dependence necessary to serve as a band of society, was the
introduction of industry: by this is implied, the circulation of an
adequate equivalent for every service, which procures to the rich, every
advantage they could expect to reap, either from the servitude or
dependence of the poor; and to these again, every comfort they could
wish to enjoy under the mildest slavery, or most gentle subordination.

From this exposition, I divide dependence into three kinds. The first
natural, between parents and children; the second political, between
masters and servants, lords and vassals, Princes and subjects; the third
commercial, between the rich and the industrious.

May I be allowed to transgress the limits of my subject for a few lines,
and to dip so far into the principles of the law of nature, as to
enquire, how far subordination among men is thereby authorized? I think
I may decide, _that in so far as the subordination is in proportion to
the dependence, in so far it is reasonable and just_. This represents an
even balance. If the scale of subordination is found too weighty,
tyranny ensues, and licentiousness is implied, in proportion as it rises
above the level. From this let me draw some conclusions.

_1mo._ He who depended upon another, for the preservation of a life
justly forfeited, and at all times in the power of him who spared it,
was, by the civil law, called a slave. This surely is the highest degree
of dependence.

_2do._ He who depends upon another for every thing necessary for his
subsistence, seems to be in the second degree; this is the dependence of
children upon their parents.

_3tio._ He who depends upon another for the means of procuring
subsistence to himself by his own labour, stands in the third degree:
this I take to have been the case between the feudal lords, and the
lowest classes of their vassals, the labourers of the ground.

_4to._ He who depends totally upon the sale of his own industry, stands
in the fourth degree: this is the case of tradesmen and manufacturers,
with respect to those who employ them.

These I take to be the different degrees of subordination between man
and man, considered as members of the same society.

In proportion, therefore, as certain classes, or certain individuals
become more dependent than formerly, in the same proportion ought their
just subordination to increase: and in proportion as they become less
dependent than formerly, in the same proportion ought this just
subordination to diminish. This seems to be a rational principle: next
for the application.

I deduce the origin of the great subordination under the feudal
government, from the necessary dependence of the lower classes for their
subsistence. They consumed the produce of the land, as the price of
their subordination, not as the reward of their industry in making it
produce.

I deduce modern liberty from the independence of the same classes, by
the introduction of industry, and circulation of an adequate equivalent
for every service.

If this doctrine be applied in order to resolve the famous question so
much debated, concerning the origin of supreme authority, in so far as
it is a question of the law of nature, I do not find the decision so
very difficult: _All authority is in proportion to dependence, and must
vary according to circumstances_.

I think it is as rational to say, that the fatherly power proceeded
originally from the act of the children, as to say, that the great body
of the people who were fed, and protected by a few great lords, was the
fountain of power, and creator of subordination. Those who have no other
equivalent to give for their food and protection, must pay in personal
service, respect, and submission; and so soon as they come to be in a
situation to pay a proper equivalent for these dependencies, in so far
they acquire a title to liberty and independence. The feudal lords,
therefore, who, with reason, had an entire authority over many of their
vassals, being subdued by their King; the usurpation was upon _their_
rights, not upon the rights of the lower classes: but when a King came
to extend the power he had over the vassals of the lords, to the
inhabitants of cities, who had been independent of that subordination,
his usurpation became evident.

The rights of Kings, therefore, are to be sought for in history; and not
founded upon the supposition of tacit contracts between them and their
people, inferred from the principles of an imaginary law of nature,
_which makes all mankind equal_: nature can never be in opposition to
common reason.

The general principle I have laid down, appears, in my humble opinion,
more rational than that imaginary contract; and as consonant to the full
with the spirit of free government. If the original tacit contract of
government between Prince and people is admitted universally, then all
governments ought to be similar; and every subordination, which appears
contrary to the entire liberty and independence of the lowest classes,
ought to be construed as tyrannical: whereas, according to my principle,
the subordination of classes may, in different countries, be vastly
different; the prerogative of one sovereign may, from different
circumstances, be far more extended than that of another.

May not one have attained the sovereignty (by the free election of the
people, I suppose) because of the great extent of his possessions,
number of his vassals and dependents, quantity of wealth, alliances and
connexions with neighbouring sovereigns? Had not, for example, such a
person as Hugh Capet, the greatest feudal Lord of his time, a right to a
much more extensive jurisdiction over his subjects, than could
reasonably be aspired to by a King of Poland, sent from France, or from
Germany, and set at the head of a republic, where he has not one person
depending upon him for any thing?

The power of Princes, as _Princes_, must then be distinguished from the
power they derive from other circumstances, which do not necessarily
follow in consequence of their elevation to the throne. It would, I
think, be the greatest absurdity to advance, that the title of King
abolishes, of itself, the subordination due to the person who exercises
the office of that high magistracy.

Matter of fact, which is stronger than all reasoning, demonstrates the
force of the principle here laid down. Do we not see how subordination
rises and falls under different reigns, under a rich Elizabeth, and a
necessitous Charles, under a powerful Austrian, and a distressed
Bavarian Emperor? I proceed no farther in the examination of this
matter: perhaps my reader has decided that I have gone too far already.

From these principles may be deduced the boundaries of subordination. A
people who depend upon nothing but their own industry for their
subsistence, ought to be under no farther subordination than what is
necessary for their protection. And as the protection of the whole body
of such a people implies the protection of every individual, so every
political subordination should there be general and equal: no person, no
class should be under a greater subordination than another. This is the
subordination of the laws; and whenever laws establish a subordination
more than what is proportionate to the dependence of those who are
subordinate, in so far such laws may be considered as contrary to
natural equity, and arbitrary.

These things premised, I come to the question proposed, namely, How far
particular forms of government are favourable or unfavourable to a
competition with other nations, in point of commerce?

If we reason from facts, and from experience, we shall find, that trade
and industry have been found mostly to flourish under the republican
form, and under those which have come the nearest to it. May I be
allowed to say, that, perhaps, one principal reason for this has been,
that under these forms the administration of the laws has been the most
uniform, and consequently, that most liberty has _actually_ been there
enjoyed: I say actually, because I have said above, that in my
acceptation of the term, liberty is equally compatible with monarchy as
with democracy; I do not say the enjoyment of it is equally secure under
both; because under the first it is much more liable to be destroyed.

The life of the democratical system is equality. Monarchy conveys the
idea of the greatest inequality possible. Now if, on one side, the
equality of the democracy secures liberty; on the other, the moderation
in expence discourages industry; and if, on one side, the inequality of
the monarchy endangers liberty, the progress of luxury encourages
industry on the other. From whence we may conclude, that the
democratical system is naturally the best for giving birth to foreign
trade; the monarchical, for the refinement of the luxurious arts, and
for promoting a rapid circulation of inland commerce.

The danger which liberty is exposed to under monarchy, and the
discouragement to industry, from the frugality of the democracy, are
only the natural and immediate effects of the two forms of government;
and these inconveniencies will only take place while statesmen neglect
the interest of commerce, so far as not to make it an object of
administration.

The disadvantage, therefore, of the monarchical form, in point of trade
and industry, does not proceed from the inequality it establishes among
the citizens, but from the consequence of this inequality, which is very
often accompanied with an arbitrary and undetermined subordination
between the individuals of the higher classes, and those of the lower;
or between those vested with the execution of the laws, and the body of
the people. The moment it is found that any subordination within the
monarchy, between subject and subject, is left without proper bounds
prescribed, liberty is so far at an end. Nay monarchy itself is thereby
hurt, as this undetermined subordination implies an arbitrary power in
the state, not vested in the monarch. _Arbitrary_ power never can be
delegated; for if it be _arbitrary_, it may be turned against the
monarch, as well as against the subject.

I might therefore say, that when such a power in individuals is
constitutional in the monarchy, such monarchy is not a government, but a
tyranny, and therefore falls without the limits of our subject; and when
such a power is anti-constitutional, and yet is exercised, that it is an
abuse, and should be overlooked. But as the plan of this inquiry engages
me to investigate the operations of general principles, and the
consequences they produce, I cannot omit, in this place, to point out
those which flow from an undetermined subordination, from whatever cause
it may proceed.

Whether this undetermined subordination between individuals, be a _vice_
in the constitution of the government, or an _abuse_, it is the same
thing as to the consequences which result from it. It is this which
checks and destroys industry, and which in a great measure prevents its
progress from being equal in all countries. This difference in the form
or administration of governments, is the only one which it is
essentially necessary to examine in this inquiry; and so essential it
is, in my opinion, that I imagine it would be less hurtful, in a plan
for the establishment of commerce, fairly, and at once, to enslave the
lower classes of the inhabitants, and to make them vendible like other
commodities, than to leave them nominally free, burthened with their own
maintenance, charged with the education of their children, and at the
same time under an irregular subordination; that is, liable at every
moment to be loaded with new prestations or impositions, either in work
or otherwise, and to be fined or imprisoned at will by their superiors.

It produces no difference, whether these irregularities be exercised by
those of the superior classes, or by the statesman and his substitutes.
It is the irregularity of the exactions more than the extent of them
which ruins industry. It renders living precarious, and the very idea of
industry should carry along with it, not only an assured livelihood, but
a certain profit over and above.

Let impositions be ever so high, provided they be proportional, general,
gradually augmented, and permanent, they may have indeed the effect of
stopping foreign trade, and of starving the idle, but they never will
ruin the industrious, as we shall have occasion to shew in treating of
taxation. Whereas, when they are arbitrary, falling unequally upon
individuals of the same condition, sudden, and frequently changing their
object, it is impossible for industry to stand its ground. Such a system
of oeconomy introduces an unequal competition among those of the same
class, it stops industrious people in the middle of their career,
discourages others from exposing to the eyes of the public _the ease of
their circumstances_, consequently encourages hoarding; this again
excites rapaciousness upon the side of the statesman, who sees himself
frustrated in his schemes of laying hold of private wealth.

From this a new set of inconveniencies follow. He turns his views upon
solid property. This inspires the landlords with _indignation_ against
_him_ who can load _them_ at will; and with _envy_ against the _monied
interest_, who can baffle his attempts. This class again is constantly
upon the catch to profit of the public distress for want of money. What
is the consequence of all this? It is, that the lowest classes of the
people, who ought by industry to enrich the state, find on one hand the
monied interest constantly amassing, in order to lend to the state,
instead of distributing among _them_, by seasonable loans, their
superfluous income, with a view to share the reasonable profits of their
ingenuity; and on the other hand, they find the emissaries of taxation
robbing them of the seed before it is sown, instead of waiting for a
share in the harvest.

Under the feudal form of government, liberty and independence were
confined to the nobility. Birth opened the door of preferment to some,
and birth as effectually shut it against others. I have often observed
how, by reason and from experience, such a form of government must be
unfavourable both to trade and industry.

From reason it is plain, that industry must give wealth, and wealth
_will_ give power, if he who possesses it be left the master to employ
it as he pleases. A government could not therefore encourage a system
which tended to throw power into the hands of those who were only made
to obey. It was consequently very natural for the nobility to be jealous
of wealthy merchants, and of every one who became easy and independent
by means of their own industry; experience proved how exactly this
principle regulated their administration.

A statesman ought, therefore, to consider attentively every circumstance
of the constitution of his country, before he sets on foot the modern
system of trade and industry. I am far from being of opinion that this
is the only road to happiness, security, and ease; though, from the
general taste of the times I live in, it be the system I am principally
employed to examine. A country may be abundantly happy, and sufficiently
formidable to those who come to attack it, without being extremely rich.
Riches indeed are forbid to all who have not mines, or foreign trade.

If a country be found labouring under many natural disadvantages from
inland situation, barren soil, distant carriage, it would be in vain to
attempt a competition with other nations in foreign markets. All that
can be then undertaken is a passive trade, and that only in so far as it
can bring in additional wealth. When little money can be acquired, the
statesman’s application must be, to make that already acquired to
circulate as much as possible, in order to give bread to every one in
the society.

In countries where the government is vested in the hands of the great
lords, as is the case in all aristocracies, as was the case under the
feudal government, and as it still is the case in many countries in
Europe, where trade, however, and industry are daily gaining ground; the
statesman who sets the new system of political oeconomy on foot, may
depend upon it, that either his attempt will fail, or the constitution
of the government will change. If he destroys all arbitrary dependence
between individuals, the wealth of the industrious will share, if not
totally root out the power of the grandees. If he allows such a
dependence to subsist, his project will fail.

While Venice and Genoa flourished, they were obliged to open the doors
of their senate to the wealthy citizens, in order to prevent their being
broken down. What is venal nobility? The child of commerce, the
indispensible consequence of industry, and a middle term, which our
Gothic ancestors found themselves obliged to adopt, in order not
entirely to lose their own rank in the state. Money, they found, must
carry off the fasces, so they chose rather to adopt the wealthy
plebeians, and to clothe ignoble shoulders with their purple mantle,
than to allow these to wrest all authority out of the hands of the
higher class. By this expedient, a sudden revolution has often been
prevented. Some kingdoms have been quit for a bloody rebellion, or a
long civil war. Other countries have likewise demonstrated the force of
the principles here laid down: a wealthy populace has broken their
chains to pieces, and overturned the very foundations of the feudal
system.

All these violent convulsions have been owing to the short-sightedness
of statesmen; who, inattentive to the consequences of growing wealth and
industry, foolishly imagined that hereditary subordination was to
subsist among classes, whose situation, with respect to each other, was
entirely changed.

The pretorian cohorts were at first subordinate to the orders of the
Emperors, and were the guards of the city of Rome. The Janissaries are
understood to be under the command of the principal officers of the
Port. So soon as the leading men of Rome and Constantinople, who
naturally were entitled to govern the state, applied to these tumultuous
bodies for their protection and assistance, they in their turn, made
sensible of their own importance, changed the constitution, and shared
in the government.

A milder revolution, entirely similar, is taking place in modern times;
and an attentive spectator may find amusement in viewing the progress of
it in many states of Europe. _Trade_ and _industry_ are in vogue; and
their establishment is occasioning a wonderful fermentation with the
remaining fierceness of the feudal constitution.

Trade and industry owed their establishment to _war_ and to _ambition_;
and perhaps mankind may hope to see the day when they will put an end to
the first, by exposing the expensive folly of the latter.

Trade and industry, I say, owed their establishment to the ambition of
princes, who supported and favoured the plan in the beginning,
principally with a view to enrich themselves, and thereby to become
formidable to their neighbours. But they did not discover, until
experience taught them, that the wealth they drew from such fountains
was but the overflowing of the spring; and that an opulent, bold, and
spirited people, having the fund of the prince’s wealth in their own
hands, have it also in their own power, when it becomes strongly their
inclination, to shake off his authority. The consequence of this change
has been the introduction of a more mild, and a more regular plan of
administration. The money gatherers are become more useful to princes,
than the great lords; and those who are fertile in expedients for
establishing public credit, and for drawing money from the coffers of
the rich, by the imposition of taxes, have been preferred to the most
wise and most learned counsellors.

As this system is new, no wonder if it has produced phenomena both new
and surprizing. Formerly, the power of Princes was employed to destroy
liberty, and to establish arbitrary subordination; but in our days, we
have seen those who have best comprehended the true principles of the
new plan of politics, arbitrarily limiting the power of the higher
classes, and thereby applying their authority towards the extension of
public liberty, by extinguishing every subordination, other than that
due to the established laws.

The fundamental maxim of some of the greatest ministers, has been to
restrain the power of the great lords. The natural inference that people
drew from such a step, was, that the minister thereby intended to make
every thing depend on the prince’s will only. This I do not deny. But
what use have we seen made of this new acquisition of power? Those who
look into events with a political eye, may perceive several acts of the
most arbitrary authority exercised by some late European sovereigns,
with no other view than to establish public liberty upon a more
extensive bottom. And although the prerogative of some princes be
increased considerably beyond the bounds of the antient constitution,
even to such a degree as perhaps justly to deserve the name of
usurpation; yet the consequences resulting from the revolution, cannot
every where be said, upon the whole, to have impaired what I call
_public liberty_. I should be at no loss to prove this assertion from
matters of fact, and by examples, did I think it proper: it seems better
to prove it from reason.

When once a state begins to subsist by the consequences of industry,
there is less danger to be apprehended from the power of the sovereign.
The mechanism of his administration becomes more complex, and, as was
observed in the introduction to the first book, he finds himself so
bound up by the laws of his political oeconomy, that every transgression
of them runs him into new difficulties.

I only speak of governments which are conducted systematically,
constitutionally, and by general laws; and when I mention princes, I
mean their councils. The principles I am enquiring into, regard the cool
administration of their government; it belongs to another branch of
politics, to contrive bulwarks against their passions, vices and
weaknesses, as men.

I say, therefore, that from the time states have begun to be supported
by the consequences of industry, the plan of administration has become
more moderate; has been changing and refining by degrees; and every
change, as has been often observed, must be accompanied with
inconveniencies.

It is of governments as of machines, the more they are simple, the more
they are solid and lasting; the more they are artfully composed, the
more they become useful; but the more apt they are to be out of order.

The Lacedemonian form may be compared to the wedge, the most solid and
compact of all the mechanical powers. Those of modern states to watches,
which are continually going wrong; sometimes the spring is found too
weak, at other times too strong for the machine: and when the wheels are
not made according to a determined proportion, by the able hands of a
Graham, or a Julien le Roy, they do not tally well with one another;
then the machine stops, and if it be forced, some part gives way; and
the workman’s hand becomes necessary to set it right.

------------------------------------------------------------------------



                               CHAP. XIV.
_Security, Ease and Happiness, no inseparable Concomitants of Trade and
                               Industry._


The republic of Lycurgus represents the most perfect plan of political
oeconomy, in my humble opinion, anywhere to be met with, either in
antient or modern times. That it existed cannot be called in question,
any more than that it proved the most durable of all those established
among the Greeks; and if at last it came to fail, it was more from the
abuses which gradually were introduced into it, than from any vice in
the form.

The simplicity of the institution made the solidity of it; and had the
Lacedemonians at all times adhered to the principles of their
government, and spirit of their constitution, they might have perhaps
subsisted to this very day.

My intention, in this chapter, is not to enter into a critical
disquisition concerning the mechanism of every part of the Spartan
republic; but to compare the general plan of Lycurgus’s political
oeconomy with the principles we have been laying down.

Of this plan we have a description in the life of that legislator
written by Plutarch, one of the most judicious authors to be met with in
any age.

This historian flourished at least 800 years after the institution of
the plan he describes. A plan never reduced into a system of written
laws, but stamped at first upon the minds of the Spartans by the
immediate authority of the gods, which made them submit to the most
violent revolution that perhaps ever took place in any nation, and which
they supported for so many ages by the force of education alone.

As the whole of Lycurgus’s laws was transmitted by tradition only, it is
not to be supposed, that the description Plutarch, or indeed any of the
antients, have given us of this republic, can be depended on with
certainty as a just representation of every part of the system laid down
by that great statesman. But on the other hand, we may be very sure,
that as to the outlines of the institution, we have them transmitted to
us in all their purity; and, in what relates to my subject, I have no
occasion to launch out into any particulars which may imply the smallest
controversy, as to the matter of fact.

Property among the Lacedemonians, at the time when Lycurgus planned his
institution, was very unequally divided: the consequence of which, says
our historian, was to draw many poor people into the city, where the
wealth was gathered into few hands; that is, according to our language,
_the luxury of the rich, who lived in the city, had purged the lands of
useless mouths, and the instability of the government had rendered
industry precarious, which must have opened the door to general distress
among all the lower classes_.

The first step our legislator took, was to prepare the spirit of the
people, so as to engage them to submit to a total reform, which could
not fail of being attended with innumerable inconveniencies.

For this purpose he went to Delphi, without having communicated his
design to any body. The Pythia declared him to be the darling of the
gods, and rather a god than a man; and publicly gave out, that Apollo
had delivered to him alone the plan of a republic which far exceeded
every other in perfection.

What a powerful engine was this in the hands of a profound politician,
who had travelled over the world with a previous intention to explore
the mysteries of the science of government! and what advantages did such
an authentic recommendation, coming directly (as was believed) from the
voice of the Divinity, give him over a superstitious people, in
establishing whatever form of government he thought most proper!

The sagacious Lacedemonian did not, however, entirely depend upon the
blind submission of his countrymen to the dictates of the oracle; but
wisely judged that some preparatory steps might still be necessary. He
communicated, therefore, his plan, first to his friends, and then by
degrees to the principal people of the state, who certainly never could
have been brought to relish an innovation so prejudicial to their
interest, had it not been from the deepest reverence and submission to
the will of the gods. Assured of their assistance, he appeared in the
market place, accompanied by his party, all in arms; and having imposed
respect, he laid the foundation of his government by the nomination of a
senate.

Whatever regards any other object than his plan of political oeconomy,
shall be here passed over in silence. It is of no consequence to my
inquiry, where the supreme power was vested: it is sufficient to know
that there was an authority in the state sufficient to support the
execution of his plan.

He destroyed all inequality at one stroke. The property of all the lands
of the state was thrown together, and became at the disposal of the
legislator. Every branch of industry was proscribed to the citizens. And
a monied interest was made to disappear, by the introduction of iron
coin. The lands he divided into equal lots, according to the number of
citizens.

Thus all were rendred entirely equal in point of fortune, as neither
wealth, industry, or lands, could give a superiority to any body. From
this part of the plan I conclude, that Lycurgus discovered the utter
insufficiency of an agrarian law for establishing equality among the
individuals of a state, without proscribing, at the same time, both
wealth and industry. A circumstance which seems to have escaped every
other statesman in antient times, as well as the modern patrons of
equality and simplicity of manners. The lands were cultivated by the
Helotes, who were nourished from them, and who were obliged to deliver
the surplus, that is, a determined quantity of fruits, to the proprietor
of the lot. Every necessary mechanic art was likewise exercised by this
body of slaves.

By this distribution, the produce of the earth (that is every article of
nourishment) came free and without cost to every individual of the
state. The Spartan landlords were rather overseers of the slaves, and
collectors of the public subsistence, than direct proprietors of the
soil which produced it. For although every man was fed from his own
lands, and provided his own portion, yet this portion was regulated, and
was to be consumed in public; and any one who pretended to eat alone, or
before he came to the public hall, was held in the utmost contempt.

Their cloathing was the most simple possible, perfectly alike, and could
be purchased for a small value. This frugality produced no bad effect;
because no man lived by his industry. Arts, as has been said, were
exercised by the Helotes, the property of private citizens; and if such
masters as entertained manufacturing slaves gained by that traffic (as
some must do) every method of profiting of their superior riches was cut
off.

The Spartans were continually together, they had nothing to do but to
divert themselves; and their amusements were mostly martial exercises.
The regulations of these numerous assemblies (which were compared, with
great elegance and justness, to swarms of bees) cut off all outward
marks of distinction. There was not a possibility for luxury to
introduce itself, either in eating, drinking, cloathing, furniture, or
any other expence.

Here then was a whole nation fed and provided for gratuitously; there
was not the least occasion for industry; the usefulness of which we have
shewn principally to consist in its proving an expedient for procuring
for the necessitous, what the Spartans found provided for them without
labour.

Under such circumstances we may conclude, from the principles we have
laid down, that a people thus abundantly nourished, must have multiplied
exceedingly. And so no doubt they did. But the regulation of the lots
permitted no more than a fixt number of citizens. Whenever, therefore,
numbers were found to exceed this standard, the supernumeraries were
dismissed, and sent to form colonies. And when the Helotes increased too
much, and thereby began to rise above the proportion of the labour
required of them, in order to prevent the consuming the food of their
masters, which they had among their hands, and thereby becoming idle,
licentious, and consequently dangerous to the state, it was permitted to
destroy them by way of a military exercise, conducted by stratagem and
address; arts which this people constantly preferred in war, to labour,
strength, and intrepidity.

This appears a very barbarous custom, and I shall not offer any thing as
an apology for it, but the ferocity of the manners of those times.
Abstracting from the cruelty, the restraining the numbers of that class
within certain limits, was absolutely necessary. The Lacedemonian slaves
were in many respects far happier than those of other nations. They were
in reality a body of farmers, which paid a certain quantity of fruits
out of every lot; to wit, 70 medimni of barley: their numbers were not
recruited from abroad, as elsewhere, but supported by their own
propagation; consequently there was an absolute necessity either to
prevent the over multiplication of them, or to diminish an income
proportioned exactly to the necessities of the state: and what expedient
could be fallen upon? They were slaves, and therefore could not be
inrolled in the number of citizens; they could not be sold to strangers,
for money which was forbid; and they were of no use to industry. No
wonder then if the fierceness of the manners of those days permitted the
inhuman treatment they received; which, however, Plutarch is far from
attributing to the primitive institution of Lycurgus. Besides, when we
see that the freemen themselves were obliged to quit the country the
moment their numbers exceeded a certain standard, it was not to be
expected, that useless slaves should be permitted to multiply at
discretion.

From this sketch of Lycurgus’s political oeconomy, we find the state
abundantly provided with every necessary article; an effectual stop put
to vicious procreation among the citizens; and a corrective for the over
multiplication of the slaves. The next care of a statesman is to
regulate the employment of a people.

Every freeman in the state was bred up from his infancy to arms. No
family care could prevent him from serving the state as a soldier; his
children were no load upon him; it was the business of the Helotes to
supply them with provisions; of the servants in town to prepare these,
and the public tables were always ready furnished. The whole youth of
Sparta was educated not as the children of their parents, but of the
state. They imbibed the same sentiments of frugality, temperance, and
love of simplicity. They exercised the same employment, and were
occupied in the same way in every respect. The simplicity of Lycurgus’s
plan, rendered this a practicable scheme. The multiplicity and variety
of employments among us, makes it absolutely necessary to trust the
parents with the education of their children; whereas in Sparta, there
were not two employments for a free man; there was neither orator,
lawyer, physician, or politician, by profession to be found. The
institutions of their lawgiver were constantly inculcated by the old
upon the minds of the young; every thing they heard or saw, was relative
to war. The very gods were represented in armour, and every precept they
were taught, tended to banish superfluity, and to establish moderation
and hard living.

The youth were continually striving together in all military exercises;
such as boxing and wrestling. To keep up, therefore, a spirit of
emulation, and to banish animosity at the same time, sharp, satirical
expressions were much encouraged; but these were always to be seasoned
with something gracious or polite. The grave demeanour likewise, and
down-cast look which they were ordered to observe in the streets, and
the injunction of keeping their hands within their robes, might very
naturally be calculated to prevent quarrels, and especially blows, at
times when the authority of a public assembly could not moderate the
vivacity of their passions. By these arts, the Spartans lived in great
harmony in the midst of a continual war.

Under such regulations a people must enjoy security from foreign
attacks; and certainly the intention of the legislator never was to
extend the limits of Laconia by conquest. What people could ever think
of attacking the Lacedemonians, where nothing but blows could be
expected?

They enjoyed ease in the most supreme degree; they were abundantly
provided with every necessary of life; although, I confess, the
enjoyment of them in so austere a manner, would not be relished by any
modern society. But habit is all in things of this kind. A course meal
to a good stomach, has more relish than all the delicacies of the most
exquisite preparation to a depraved appetite; and if sensuality be
reckoned among the pleasures of life, enough of it might have been met
with in the manners of that people. It does not belong to my subject to
enter into particular details on this head. But the most rational
pleasure among men, the delightful communication of society, was here
enjoyed to the utmost extent. The whole republic was continually
gathered together in bodies, and their studies, their occupations, and
their amusements, were the same. One taste was universal; and the young
and the old being constantly together, the first under the immediate
inspection and authority of the latter, the same sentiments were
transmitted from generation to generation. The Spartans were so pleased,
and so satisfied with their situation, that they despised the manners of
every other nation. If this does not transmit an idea of happiness, I am
at a loss to form one. Security, ease, and happiness, therefore, are not
inseparable concomitants of trade and industry.

Lycurgus had penetration enough to perceive the weak side of his
institution. He was no stranger to the seducing influence of luxury; and
plainly foresaw, that the consequences of industry, which procures to
mankind a great variety of new objects of desire, and a wonderful
facility in satisfying them, would easily root out the principles he had
endeavoured to instil into his countrymen, if the state of simplicity
should ever come to be sophisticated by foreign communications. He
affected, therefore, to introduce several customs which could not fail
of disgusting and shocking the delicacy of neighbouring states. He
permitted the dead to be buried within the walls; the handling of dead
bodies was not reckoned pollution among the Lacedemonians. He forbade
bathing, so necessary for cleanliness in a hot country: and the
coarseness and dirtiness of their cloaths, and sweat from their hard
exercises, could not fail to disgust strangers from coming among them.
On the other hand, nothing was found at Sparta which could engage a
stranger to wish to become one of their number. And to prevent the
contagion of foreign customs from getting in, by means of the citizens
themselves, he forbade the Spartans to travel; and excluded from any
employment in the state, those who had got a foreign education. Nothing
but a Spartan breeding could have fitted a person to live among them.

The theft encouraged among the Lacedemonians was calculated to make them
artful and dextrous; and contained not the smallest tincture of vice. It
was generally of something eatable, and the frugality of their table,
prompted them to it; while on the other hand, their being exposed to the
like reprisals, made them watchful and careful of what belonged to
themselves; and the pleasure of punishing an unsuccessful attempt, in
part indemnified them for the trouble of being constantly upon their
guard. A Lacedemonian had nothing of any value that could be stolen; and
it is the desire and intention of making unlawful gain, which renders
theft either criminal or scandalous.

The hidden intercourse between the Spartans and their young wives was,
no doubt, calculated to impress upon the minds of the fair sex, the wide
difference there is between an act of immodesty, and that of simply
appearing naked in the public exercises; two things which we are apt to
confound, only from the impression of our own customs. I am persuaded
that many a young person has felt her modesty as much hurt by taking off
her handkerchief, the first time she appeared at court, as any
Lacedemonian girl could have done by stripping before a thousand people;
yet both her reason and common sense, must make her sensible of the
difference between a compliance with a custom in a matter of dress, and
a palpable transgression against the laws of her honour, and the modesty
of her sex.

I have called this Lacedemonian republic a perfect plan of political
oeconomy; because it was a system, uniform and consistent in all its
parts. _There_, no superfluity was necessary, because there was no
occasion for industry, to give bread to any body. _There_, no
superfluity was permitted, because the moment the limits of the
absolutely necessary are transgressed, the degrees of excess are quite
indeterminate, and become purely relative. The same thing which appears
superfluity to a peasant, appears necessary to a citizen; and the utmost
luxury of this class, frequently does not come up to what is thought the
mere necessary for one in a higher rank. Lycurgus stopt at the only
determined frontier, the pure physical necessary. All beyond this was
considered as abusive.

The only things in commerce among the Spartans were,

_1mo._ What might remain to them of the fruits of their lot, over their
own consumption; and _2do._ The work of the slaves employed in trades.
The numbers of these could not be many, as the timber of their houses
was worked only with the saw and ax; and every utensil was made with the
greatest simplicity. A small quantity, therefore, of iron coin, as I
imagine, must have been sufficient for carrying on the circulation at
Sparta. The very nature of their wants must, as I have said, terminate
all their commerce, in the exchange of their surplus-food of their
portions of land, with the work of the manufacturing slaves, who must
have been fed from it.

As the Lacedemonians had no mercantile communication with other nations,
the iron coin was no more than a bank note of no intrinsic value, as I
suppose, but a middle term introduced for keeping accounts, and for
facilitating barter. An additional argument for this opinion of the coin
being of no intrinsic value, is, that it is said to have been rendred
unserviceable for other uses, by being slaked in vinegar. In order
consequently to destroy, as they imagined, any intrinsic value which
might therein otherwise remain. If this coin, therefore, was made of an
extraordinary weight, it must have been entirely with a political view
of discouraging commerce and circulation, an institution quite
consistent with the general plan, and nowise a consequence of the
baseness of the metal of which it was made: a small quantity of this,
with the stamp of public authority for its currency and value, would
have answered every purpose equally well.

Let me now conclude this chapter by an illustration of the subject,
which will still more clearly point out the force of the principles upon
which this Lacedemonian republic was established.

Were any Prince in Europe, whose subjects, I shall suppose, may amount
to six millions of inhabitants, one half employed in agriculture, the
other half employed in trade and industry, or living upon a revenue
already acquired; were such a Prince, I say, supposed to have authority
sufficient to engage his people to adopt a new plan of oeconomy,
calculated to secure them against the designs of a powerful neighbour,
who, I shall suppose, has formed schemes of invading and subduing them.

Let him engage the whole proprietors of land to renounce their several
possessions: or if that supposition should appear too absurd, let him
contract debts to the value of the whole property of the nation; let the
land-tax be imposed at twenty shillings in the pound, and then let him
become bankrupt to the creditors. Let the income of all the lands be
collected throughout the country for the use of the state; let all the
luxurious arts be proscribed; and let those employed in them be formed,
under the command of the former land proprietors, into a body of regular
troops, officers and soldiers, provided with every thing necessary for
their maintenance, and that of their wives and families at the public
expence. Let me carry the supposition farther. Let every superfluity be
cut off; let the peasants be enslaved, and obliged to labour the ground
with no view of profit to themselves, but for simple subsistence; let
the use of gold and silver be proscribed; and let all these metals be
shut up in a public treasure. Let no foreign trade, and very little
domestic be encouraged, but let every man, willing to serve as a
soldier, be received and taken care of; and those who either incline to
be idle, or who are found superfluous, be sent out of the country. I
ask, what combination, among the modern European Princes, would carry on
a successful war against such a people? What article would be wanting to
their ease, that is, to their ample subsistence? Their happiness would
depend upon the temper of their mind. And what country could defend
themselves against the attack of such an enemy? Such a system of
political oeconomy, I readily grant, is not likely to take place: but if
ever it did, would it not effectually dash to pieces the whole fabric of
trade and industry, which has been forming for so many years? And would
it not quickly oblige every other nation to adopt, as far as possible, a
similar conduct, from a principle of self-preservation.

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                               CHAP. XV.
_A general View of the Principles to be attended to by a Statesman, who
   resolves to establish Trade and Industry upon a lasting footing._


The two preceding chapters I have introduced purposely to serve as a
relaxation to the mind, like a farce between the acts of a serious
opera. I now return to the place where I broke off my subject, at the
end of the twelfth chapter.

It is a great assistance to memory, now and then to assemble our ideas,
after certain intervals, in going through an extensive subject. No part
of it can be treated of with distinctness, without banishing
combinations; and no part of it can be applied to practice, or adapted
to any plan, without attending to combinations almost infinite.

For this reason nothing can appear more inconsistent than the spirit
which runs through some parts of this book, if compared with that which
prevailed in the first. _There_ luxury was looked on with a favourable
eye, and every augmentation of superfluity was considered as a method of
advancing population. We were then employed in drawing mankind, as it
were, out of a state of idleness, in order to increase their numbers,
and engage them to cultivate the earth. We had no occasion to divide
them into societies having separate interests, because the principles we
treated of were common to all. We therefore considered the industrious,
who are the providers, and the luxurious, who are the consumers, as
children of the same family, and as being under the care of the same
father.

We are now engaged in a more complex operation; we represent different
societies animated with a different spirit; some given to industry and
frugality, others to dissipation and luxury. This creates separate
interests among nations, and every one must be supposed under the
government of a statesman, who is wholly taken up in advancing the good
of those he governs, though at the expence of other societies which lie
round him.

This presents a new idea, and gives birth to new principles. The general
society of mankind treated of in the first book, is here in a manner
divided into two. The industrious providers are supposed to live in one
country, the luxurious consumers in another. The principles of the first
book remain here in full vigour. Luxury still tends as much as ever to
the advancement of industry; the statesman’s business is only to remove
the seat of it from his own country. When that can be accomplished
without detriment to industry at home, he has an opportunity of joining
all the advantages of antient simplicity, to the wealth and power which
attend upon the luxury of modern states. He may preserve his people in
sobriety, and moderation as to every expence, as to every consumption,
and make them enjoy, at the same time, riches and superiority over all
their neighbours.

Such would be the state of trading nations, were they only employed in
supplying the wants or extravagant consumption of strangers; and did
they not insensibly adopt the very manners with which they strive to
inspire others.

As often, therefore, as we suppose a people applying themselves to the
advancement of foreign trade, we must simplify our ideas, by dismissing
all political combinations of other circumstances; that is to say, we
must suppose the spirit universal, and then point out the principles
which influence the success of it.

We must encourage oeconomy, frugality, and a simplicity of manners,
discourage the consumption of every thing that can be sold out of the
country, and excite a taste for superfluity in neighbouring nations.
When such a system can no more be supported to its full extent, by the
scale of foreign demand becoming positively lighter; then in order to
set the balance even again, without taking any thing out of the heavy
scale, and to preserve and give bread to those who have enriched the
state, an additional home consumption, proportioned to the deficiency of
foreign demand, must be encouraged. For were the same simplicity of
manners still kept up, the infallible consequence would be a forced
restitution of the balance, by the distress, misery, and at last
extinction of the supernumerary workmen.

I must therefore, upon such occasions, consider the introduction of
luxury, or superfluous consumption, as a rational and moral consequence
of the deficiency of foreign trade.

I am, however, far from thinking that the luxury of every modern state,
is only in proportion to such failure; and I readily admit, that many
examples may be produced where the progress of luxury, and the domestic
competitions with strangers who come to market, have been the cause both
of the decline and extinction of their foreign trade; but as my business
is chiefly to point out principles, and to shew their effects, it is
sufficient to observe, that in proportion as foreign trade declines,
either a proportional augmentation upon home consumption must take
place, or a number of the industrious, proportioned to the diminution of
former consumption, must decrease. By the first, what I call a natural
restitution of the balance is brought about, from the principles above
deduced; by the second, what I call a forced one.

Here then is an example, where the introduction of luxury may be a
rational and prudent step of administration; and as long as the progress
of it is not accelerated from any other principle, but that of
preserving the industrious, by giving them employment, the same spirit,
under the direction of an able statesman, will soon throw industry into
a new channel, better calculated for reviving foreign trade, and for
promoting the public good, by substituting the call of foreigners in
place of that of domestic luxury.

I hope, from what I have said, the political effects of luxury, or the
consumption of superfluity, are sufficiently understood. These I have
hitherto considered as advantageous only to those classes who are made
to subsist by them; I reserve for another occasion the pointing out how
they influence the imposition of taxes, and how the abuse of consumption
in the rich may affect the prosperity of a state.

So soon as all foreign trade comes to a stop, without a scheme for
recalling it, and that domestic consumption has filled up its place in
consuming the work, and giving bread to the industrious, we find
ourselves obliged to reason again upon the principles of the first book.
The statesman has once more both the producers and the consumers under
his care. The consumers can live without employment, the producers
cannot. The first seldom have occasion for the statesman’s protection;
the last constantly stand in need of it. There is a perpetual
fluctuation in the balance between these two classes, from which a
multitude of new principles arise; and these render the administration
of government infinitely more difficult, and require superior talents in
the person who is at the helm. I shall here only point out the most
striking effects of the fluctuation and overturn of this new balance,
which in the subsequent chapters shall be more fully illustrated.

_1mo._ In proportion as the consumers become extravagant, the producers
become wealthy; and when the former become bankrupts, the latter fill
their place.

_2do._ As the former become frugal and oeconomical, the latter languish;
when those begin to hoard, and to adopt a simple life, these are
extinguished: all extremes are vicious.

_3tio._ If the produce of industry consumed in a country, surpass the
income of those who do not work, the balance due by the consumers must
be paid to the suppliers by a proportional alienation of their funds.
This vibration of the balance, gives a very correct idea of what is
meant by _relative profit and loss_. The nation here loses nothing by
the change produced.

_4to._ When, on the other hand, the annual produce of industry consumed
in a country, does not amount to the value of the income of those who do
not work, the balance of income saved, must either be locked up in
chests, made into plate, lent to foreigners, or fairly exported as the
price of foreign consumption.

_5to._ The scales stand even when there is no balance on either side;
that is, when the domestic consumption is just equivalent to the annual
income of the funds. I do not pretend to decide at present whether this
exact equilibrium marks the state of perfection in a country where there
is no foreign trade, (of which we are now treating) or whether it be
better to have small vibrations between the two scales; but I think I
may say, that all subversions of the balance on either side cannot fail
to be hurtful, and therefore should be prevented.

Let this suffice at present, upon a subject which shall be more fully
treated of afterwards. Let us now fix our attention upon the interests
of a people entirely taken up in the prosecution of foreign trade. So
long as this spirit prevails, I say, it is the duty of a statesman to
encourage frugality, sobriety, and an application to labour in his own
people, and to excite in foreign nations a taste for superfluities as
much as possible.

While a people are occupied in the prosecution of foreign trade, the
mutual relations between the individuals of the state, will not be so
intimate as when the producers and consumers live in the same society;
such trade implies, and even necessarily creates a chain of foreign
dependencies; which work the same effect, as when the mutual dependence
subsisted among the citizens. Now the use of dependencies, I have said,
is to form a band of society, capable of making the necessitous subsist
out of the superfluities of the rich, and to keep mankind in peace and
harmony with one another.

Trade, therefore, and foreign communications, form a new kind of society
among nations; and consequently render the occupation of a statesman
more complex. He must, as before, be attentive to provide food, other
necessaries and employment for all his people; but as the foreign
connections make these very circumstances depend upon the entertaining a
good correspondence with neighbouring nations, he must acquire a proper
knowledge of their domestic situation, so as to reconcile, as much as
may be, the interests of both parties, by engaging the strangers to
furnish articles of the first necessity, when the precious metals cannot
be procured; and to accept, in return, the most consumable superfluities
which industry can invent. And, last of all, he must inspire his own
people with a spirit of emulation in the exercise of frugality,
temperance, oeconomy, and an application to labour and ingenuity. If
this spirit of emulation is not kept up, another will take place; for
emulation is inseparable from the nature of man; and if the citizens are
not made to vie with one another, in the practice of moderation, the
wealth they must acquire, will soon make them vie with strangers, in
luxury and dissipation.

While a spirit of moderation prevails in a trading nation, it may rest
assured, that in as far as it excels the nations with whom it
corresponds in this particular, so far will it increase the proportion
of its wealth, power, and superiority, over them. These are lawful
pursuits among men, when purchased by success in so laudable an
emulation.

If it be said, that superfluity, intemperance, prodigality, and
idleness, qualities diametrically opposite to the former, corrupt the
human mind, and lead to violence and injustice; is it not very wisely
calculated by the Author of all things, that a sober people, living
under a good government, should by industry and moderation, necessarily
acquire wealth, which is the best means of warding off the violence of
those with whom they are bound in the great society of mankind? And is
it not also most wisely ordained, that in proportion as a people
contract vicious habits, which may lead to excess and injustice, the
very consequence of their dissipation (poverty) should deprive them of
the power of doing harm? But such reflections seem rather to be too
great a refinement on my subject, and exceed the bounds of political
oeconomy.

When we treat of a virtuous people applying to trade and industry, let
us consider their _interest_ only, in preserving those sentiments; and
examine the political evil of their falling off from them. When we treat
of a luxurious nation, where the not-working part is given to excesses
in all kinds of consumption, and the working part to labour and
ingenuity, in order to supply them, let us examine the consequences of
such a spirit, with respect to foreign trade: and if we find, that a
luxurious turn in the rich is prejudicial thereto, let us try to
discover the methods of engaging the inhabitants to correct their
manners from a motive of self-interest. These things premised,

I shall now give a short sketch of the general principles upon which a
system of foreign trade may be established and preserved as long as
possible, and of the methods by which it may be again recovered, when,
from the natural advantages and superior ability of administration in
rival nations, (not from vices at home) a people have lost for a time
every advantage they used to draw from their foreign commerce.

The first general principle is to employ, as usefully as possible, a
certain number of the society, in producing objects of the first
necessity, always more than sufficient to supply the inhabitants; and to
contrive means of enabling every one of the free hands to procure
subsistence for himself, by the exercise of some species of industry.

These first objects compassed, I consider the people as abundantly
provided with what is purely necessary; and also with a surplus prepared
for an additional number of free hands, so soon as a demand can be
procured for their labour. In the mean time, the surplus will be an
article of exportation; but no sooner will demand come from abroad, for
a greater quantity of manufactures than formerly, than such demand will
have the effect of gradually multiplying the inhabitants up to the
proportion of the surplus above mentioned, provided the statesman be all
along careful to employ these additional numbers, which an useful
multiplication must produce, in supplying the additional demand: then
with the equivalent they receive from strangers, they will at the same
time enrich the country, and purchase for themselves that part of the
national productions which had been permitted to be exported, only for
want of a demand for it at home.

He must, at the same time, continue to give proper encouragement to the
advancement of agriculture, that there may be constantly found a surplus
of subsistence (for without a surplus there can never be enough) this
must be allowed to go abroad, and ought to be considered as the
provision of those industrious hands which are yet unborn.

He must cut off all foreign competition, beyond a certain standard, for
that quantity of subsistence which is necessary for home consumption;
and, by premiums upon exportation, he must discharge the farmers of any
superfluous load, which may remain upon their hands when prices fall too
low. This important matter shall be explained at large in another place,
when we come to treat of the policy of grain.

If natural causes should produce a rise in the price of subsistence,
which cannot be brought down by extending agriculture, he must then lay
the whole community under contribution, in order to indemnify those who
work for strangers, for the advance upon the price of their food; or he
must indemnify the strangers in another way, for the advance in the
price of manufactures.

He must consider the manufactures of superfluity, as worked up for the
use of strangers, and discourage all domestic competition for them, by
every possible means.

He must do what he can, constantly to proportion the supply to the
demand made for them; and when the first necessarily comes to exceed the
latter, in spight of all his care, he must then consider what remains
over the demand, as a superfluity of the strangers; and for the support
of the equal balance between work and demand, he must promote the sale
of them even within the country, under certain restrictions, until the
hands employed in such branches where a redundancy is found, can be more
usefully set to work in another way.

He must consider the advancement of the common good as a direct object
of private interest to every individual, and by a disinterested
administration of the public money, he must plainly make it appear that
it is so.

From this principle flows the authority, vested in all governments, to
load the community with taxes, in order to advance the prosperity of the
state. And this object can be nowise better obtained than by applying
the amount of them to the keeping an even balance between work and
demand. Upon this the health of a trading state principally depends.

If the failure of foreign demand be found to proceed from the superior
natural advantages of other countries, he must double his diligence to
promote luxury among his neighbours; he must support simplicity at home;
he must increase his bounties upon exportation; and his expence in
relieving manufactures, when the price of their industry falls below the
expence of their subsistence.

While these operations are conducted with coolness and perseverance,
while the allurements of the wealth acquired do not frustrate the
execution, the statesman may depend upon seeing foreigners return to his
ports, so soon as their own dissipation, and want of frugality, come to
compensate the advantages which nature had given them over their frugal
and industrious neighbours.

If this plan be pursued, foreign trade will increase in proportion to
the number of inhabitants; and domestic luxury will serve only as an
instrument in the hands of the statesman to increase demand when the
home supply becomes too great for foreign consumption. In other words,
the rich citizens will be engaged to consume what is superfluous, in
order to keep the balance even in favour of the industrious, and in
favour of the nation.

The whole purport of this plan is to point out the operation of three
very easy principles.

The first, That in a country entirely taken up with the object of
promoting foreign trade, no competition should be allowed to come from
abroad for articles of the first necessity, and principally for food, so
as to raise prices beyond a certain standard.

The second, That no domestic competition should be allowed upon articles
of superfluity, so as to raise prices beyond a certain standard.

The third, That when these standards cannot be preserved, and that from
natural causes, prices get above them, public money must be thrown into
the scale to bring prices to the level of those of exportation.

The greater the extent of foreign trade in any nation, the lower these
standards _must_ be kept; the less the extent of it, the higher they
_may_ be allowed to rise. Consequently,

Were no man in a nation employed in producing the necessaries of life,
but every man in supplying articles of foreign consumption, the prices
of necessaries might be allowed to fall as low as possible. There would
be no occasion for a standard in favour of those who live by producing
them.

Were no man in the state employed in supplying strangers, the prices of
superfluities might be allowed to rise as high as possible, and a
standard would also become useless, as the sole design of it is to
favour exportation.

But as neither of these suppositions can ever take place, and as in
every nation there is a part employed in producing, and a part in
consuming, and that it is only the surplus of industry which can be
exported; a standard is necessary for the support of the reciprocal
interests of both parties at home; and the public money must be made to
operate only upon the price of _the surplus_ of industry so as to make
it exportable, even in cases where the national prices upon home
consumption have got up beyond the standard. Let me set this matter in
another light, the better to communicate an idea which I think a little
obscure.

Were food and other necessaries the pure gift of nature in any country,
I should have laid it down as a principle to discourage all foreign
competition for them, either below or above any certain standard;
because in this case the lower the price the better, since no
inconveniency could result from thence to any industrious person. But
when the production of these is in itself a manufacture, or an object of
industry, a certain standard must be kept up in favour of those who live
by producing them.

On the other hand, as to the manufactures of superfluity, domestic
competition should be discouraged, beyond a certain standard, in order
that prices may not rise above those offered by foreigners; but it might
be encouraged below the standard, in order to promote consumption and
give bread to manufacturers. But were there no foreign demand at all,
there would be no occasion for any standard, and the nation’s wealth
would thereby only circulate in greater or less rapidity in proportion
as prices would rise or fall. The study of the balance between work and
demand, would then become a principal object of attention in the
statesman, not with a view to enrich the state, but in order to preserve
every member of it in health and vigour. On the other hand, the object
of a standard regards foreign trade, and the acquisition of new wealth,
at the expence of other nations. The rich, therefore, at home must not
be allowed to increase their consumption of superfluities beyond the
proportion of the constant supply; because these being intended for
strangers, the only way of preventing them from supplying themselves, is
to prevent prices from getting up beyond the standard, at which
strangers can produce them.

Farther, were every one of the society in the same pursuit of industry,
there would be no occasion for the public to be laid under contribution
for advancing the general welfare; but as there is a part employed in
enriching the state, by the sale of their work to strangers, and a part
employed in making these riches circulate at home, by the consumption of
superfluities, I think it is a good expedient to throw a part of
domestic circulation into the public coffers; that when the consequences
of private wealth come necessarily to raise prices, a statesman may be
enabled to defray the expence of bounties upon that part which can be
exported, and thereby enable the nation to continue to supply foreigners
at the same price as formerly.

The farther these principles can be carried into execution, the longer a
state will flourish; and the longer she will support her superiority.
When foreign demand begins to fail, so as not to be recalled, either
industry must decline, or domestic luxury must begin. The consequences
of both may be easily guessed at, and the principles which influence
them shall be particularly examined in the following chapter.

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                               CHAP. XVI.
   _Illustration of some Principles laid down in the former Chapter,
       relative to the advancement and support of foreign Trade._


I am now to give an illustration of some things laid down, I think, in
too general terms in the former chapter, relating to that species of
trade which is carried on with other nations.

I have constantly in view to separate and distinguish the principles of
foreign trade, from those which only influence the advancement of an
inland commerce, and a brisk circulation: operations which produce very
different effects, equally meriting the attention of a statesman.

The very existence of foreign trade, implies a separate interest between
those nations who are found on the opposite side of the mercantile
contract, as both endeavour to make the best bargain possible for
themselves. These transactions imply a mutual dependence upon one
another, which may either be necessary or contingent. It is necessary,
when one of the nations cannot subsist without the assistance of the
other, as is the case between the province of Holland, and those
countries which supply it with grain; or contingent, when the wants of a
particular nation cannot be supplied by their own inhabitants, from a
want of skill and dexterity, only.

Wherever, therefore, one nation finds another necessarily depending upon
her for particular branches of traffic, there is a certain foundation
for foreign trade; where the dependence is contingent, there is occasion
for management, and for the hand of an able statesman.

The best way to preserve every advantage, is, to examine in how far they
are necessary, and in how far they are only contingent, to consider in
what respect the nation may be most easily rivalled by her neighbours,
and in what respect she has natural advantages which cannot be taken
from her.

The natural advantages are chiefly to be depended on: France, for
example, can never be rivalled in her wines. Other countries may enjoy
great advantages from their situation, mines, rivers, sea ports,
fishing, timber, and certain productions proper to the soil. If you
abstract from these natural advantages, all nations are upon an equal
footing as to trade. Industry and labour are no properties attached to
place, any more than oeconomy and sobriety.

This proposition may be called in question, upon the principles of M. de
Montesquieu, who deduces the origin of many laws, customs, and even
religions, from the influence of the climate. That great man reasoned
from fact and from experience, and from the power and tendency of
natural causes, to produce certain effects when not checked by other
circumstances; but in my method of treating this subject, I suppose
these causes never to be allowed to produce their natural and immediate
effects, when such effects would be followed by a political
inconvenience: because I constantly suppose a statesman at the head of
government, who makes every circumstance concur in promoting the
execution of the plan he has laid down.

_1mo._ If a nation then has formed a scheme of being long great and
powerful by trade, she must first apply closely to the manufacturing
every natural produce of the country. For this purpose a sufficient
number of hands must be employed: for if hands be found wanting, the
natural produce will be exported without receiving any additional value
from labour; and so the consequences of this natural advantage will be
lost.

The price of food, and all necessaries for manufacturers, must be found
at an easy rate.

And, in the last place, if oeconomy and sobriety in the workmen, and
good regulations on the part of the statesman, are not kept up, the end
will not be obtained: for if the manufacture, when brought to its
perfection, does not retain the advantages which the manufacturer had in
the beginning, by employing the natural produce of the country; it is
the same thing as if the advantage had not existed. I shall illustrate
this by an example.

I shall suppose wool to be better, more plentiful, and cheaper, in one
country than in another, and two nations rivals in that trade. It is
natural that the last should desire to buy wool of the first, and that
the other should desire to keep it at home, in order to manufacture it.
Here then is a natural advantage which the first country has over the
latter, and which cannot be taken from her. I shall suppose that
subsistence is as cheap in one country as in the other; that is to say,
that bread and every other necessary of life is at the same price. If
the workmen of the first country (by having been the founders of the
cloth manufacture, and by having had, for a long tract of years, so
great a superiority over other nations, as to make them, in a manner,
absolutely dependent upon them for cloths) shall have raised their
prices from time to time; and if, in consequence of large profits, long
enjoyed without rivalship, these have been so consolidated with the real
value, by an habitual greater expence in living, which implies an
augmentation of wages; that country may thereby lose all the advantages
it had from the low price and superior quality of its wool. But if, on
the other hand, the workmen in the last country work less, be less
dextrous, pay extravagant prices for wool at prime cost, and be at great
expence in carriage; if manufactures cannot be carried on successfully,
but by public authority, and if private workmen be crushed with
excessive taxes upon their industry; all the accidental advantages which
the last country had over the first, may come to be more than balanced,
and the first may regain those which nature first had given her. But
this should by no means make the first country rest secure. These
accidental inconveniencies found in the last may come to cease; and
therefore the only real security of the first for that branch, is the
cheapness of the workmanship.

_2do._ In speaking of a standard, in the last chapter, I established a
distinction between one regulated by the height of foreign demand, and
another kept as low as the possibility of supplying the manufacture can
admit. This requires a little explanation.

It must not here be supposed that a people will ever be brought from a
principle of public spirit, not to profit of a rise in foreign demand;
and as this may proceed from circumstances and events which are entirely
hid from the manufacturers, such revolutions are unavoidable. We must
therefore restrain the generality of our proposition, and observe, that
the indispensible _vibrations_ of this foreign demand do no harm; but
that the statesman should be constantly on his guard to prevent the
_subversion of the balance, or the smallest consolidation of
extraordinary profits with the real value_. This he will accomplish, as
has been observed, by multiplying hands in those branches of
exportation, upon which profits have risen. This will increase the
supply, and even frustrate his own people of extraordinary gains, which
would otherwise terminate in a prejudice to foreign trade.

A statesman may sometimes, out of a principle of benevolence, perhaps of
natural equity towards the classes of the industrious, as well as from
sound policy, permit larger profits, as an encouragement to some of the
more elegant arts, which serve as an ornament to a country, establish a
reputation for taste and refinement in favour of a people, and thereby
make strangers prefer articles of their production, which have no other
superior merit than the name of the country they come from: but even as
to these, he ought to be upon his guard, never to allow them to rise so
high, as to prove an encouragement to other nations, to establish a
successful rivalship.

_3tio._ The encouragement recommended to be given to the domestic
consumption of superfluities, when foreign demand for them happens to
fall so low as to be followed with distress in the workmen, requires a
little farther explanation.

If what I laid down in the last chapter be taken literally, I own it
appears an absurd supposition, because it implies a degree of public
spirit in those who are in a capacity to purchase the superfluities, no
where to be met with, and at the same time a self-denial, in
discontinuing the demand, so soon as another branch of foreign trade is
opened for the employment of the industrious, which contradicts the
principles upon which we have founded the whole scheme of our political
oeconomy.

I have elsewhere observed, that were revolutions to happen as suddenly
as I am obliged to represent them, all would go into confusion.

What, therefore, is meant in this operation comes to this, that when a
statesman finds, that the natural taste of his people does not lead them
to profit of the surplus of commodities which lie upon hand, and which
were usually exported, he should interpose his authority and management
in such a way as to prevent the distress of the workmen, and when, by a
sudden fall in a foreign demand, this distress becomes unavoidable,
without a more powerful interposition, he should then himself become the
purchaser, if others will not; or, by premiums or bounties on the
surplus which lies upon hand, promote the sale of it at any rate, until
the supernumerary hands can be otherwise provided for. And although I
allow that the rich people of a state are not naturally led, from a
principle either of public spirit or self-denial, to render such
political operations effectual to promote the end proposed, yet we
cannot deny, that it is in the power of a good governor, by exposing the
political state of certain classes of the people, to gain upon men of
substance to concur in schemes for their relief; and this is all I
intend to recommend in practice. My point of view is to lay down the
principles, and I never recommend them farther than they are rendered
possible in execution, by preparatory steps, and by properly working on
the spirit of the people.

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                              CHAP. XVII.
                 _Symptoms of Decay in foreign Trade._


If manufacturers are found to be without employment, we are not
immediately to accuse the statesman, or conclude this to proceed from a
decay of trade, until the cause of it be inquired into. If upon
examination it be found, that for some years past food has been at a
higher rate than in neighbouring countries, the statesman may be to
blame: for it is certain, that a trading nation, by turning part of her
commerce into a proper channel, may always be able to establish a just
balance in this particular. And though it be not expedient in years of
scarcity to bring the price of grain very low, yet it is generally
possible to raise the price of it in all rival nations, which, with
regard to the present point, is the same thing.

If this want of employment for manufacturers do not proceed from the
high prices of living, but for want of commissions from the merchants,
the causes of this diminution of demand must be examined into. It may be
accidental, and happen from causes which may cease in a little time, and
trade return to flourish as before. It may also happen upon the
establishment of new undertakings in different places of the country,
from which, by reason of some natural advantage, or a more frugal
disposition in the workmen, or from the proximity of place, markets may
be supplied, which formerly were furnished by those industrious people
who are found without employment. In these last suppositions, the
distress of the manufacturers does not prove any decay of trade in
general, but, on the contrary, may contribute to destroy the bad effects
of consolidated profits, by obliging those who formerly shared them, to
abandon the ease of their circumstances, and submit a-new to a painful
industry, in order to procure subsistence. When such revolutions are
sudden, they prove hard to bear, and throw people into great distress.
It is partly to prevent such inconveniencies, that we have recommended
the lowest standard possible, upon articles of exportation.

Two causes there are, which very commonly mark a decline of trade, to
wit; 1. When foreign markets, usually supplied by a trading nation,
begin to be furnished, let it be in the most trifling article, by
others, not in use to supply them. Or, 2. When the country itself is
furnished from abroad with such manufactures as were formerly made at
home.

These circumstances prove one of two things, either that there are
workmen in other countries, who, from advantages which they have
acquired by nature, or by industry and frugality, finding a demand for
their work, take the bread out of the mouths of those formerly employed,
and deprive them of certain branches of their foreign trade: or, that
these foreign workmen, having profited of the increased luxury and
dissipation of the former traders, have begun to supply the markets with
certain articles of consumption, the profits upon which being small,
are, without much rivalship, insensibly yielded up to them by the
workmen of the other trading nation, who find better bread in serving
their own wealthy countrymen.

Against the first cause of decline, I see no better remedy than
patience, as I have said already, and a perseverance in frugality and
oeconomy, until the unwary beginners shall fall into the inconveniencies
generally attending upon wealth and ease.

The second cause of decline is far more difficult to be removed. The
root of it lies deep, and is ingrafted with the spirit and manners of
the whole people, high and low. The lower classes have contracted a
taste for superfluity and expence, which they are enabled to gratify, by
working for their countrymen; while they despise the branches of foreign
trade as low and unprofitable. The higher classes again depend upon the
lower classes, for the gratification of a thousand little trifling
desires, formed by the taste of dissipation, and supported by habit,
fashion, and a love of expence.

Here then is a system set on foot, whereby the poor are made rich, and
the rich are made happy, in the enjoyment of a perpetual variety of
every thing which can remove the inconveniencies to which human nature
is exposed. Thus both parties become interested to support it, and vie
with one another in the ingenuity of contriving new wants; the one from
the immediate satisfaction of removing them; the other from the profit
of furnishing the means, and the hopes of one day sharing in them.

But even for this great evil, the very nature of man points out a
remedy. It is the business of a statesman to lay hold of it. The remedy
flows from the instability of every taste not founded upon rational
desires.

In every country of luxury, we constantly find certain classes of
workmen in distress, from the change of modes. Were a statesman upon his
guard to employ such as are forced to be idle, before they betake
themselves to new inventions, for the support of the old plan, or before
they contract an abandoned and vitious life, he would get them cheap,
and might turn their labour both to the advantage of the state and to
the discouragement of luxury.

I confess, however, that while a luxurious taste in the rich subsists,
industrious people will always be found to supply the instruments of it
to the utmost extent; and I also allow, that such a taste has infinite
allurements, especially while youth and health enable a rich man to
indulge in it. Those, however, who are systematically luxurious, that
is, from a formed taste and confirmed habit, are but few, in comparison
of those who become so from levity, vanity, and the imitation of others.
The last are those who principally support and extend the system; but
they are not the most incorrigible. Were it not for imitation, every age
would seek after, and be satisfied with the gratification of natural
desires. Twenty-five might think of dress, horses, hunting, dogs, and
generous wines: forty, of a plentiful table, and the pleasures of
society: sixty, of coaches, elbow-chairs, soft carpets, and instruments
of ease. But the taste for imitation blends all ages together. The old
fellow delights in horses and fine clothes; the youth rides in his
chariot on springs, and lolls in an easy chair, large enough to serve
him for a bed. All this proceeds from the superfluity of riches and
taste of imitation, not from the real allurements of ease and taste of
luxury, as every one must feel, who has conversed at all with the great
and rich. Fashion, which I understand here to be a synonimous term for
imitation, leads most people into superfluous expence, which is so far
from being an article of luxury, that it is frequently a load upon the
person who incurs it. All such branches of expence, it is in the power
of a statesman to cut off, by setting his own example, and that of his
favourites and servants, above the caprice of fashion.

The levity and changeableness of mankind, as I have said, will even
assist him. A generation of oeconomists is sometimes found to succeed a
generation of spendthrifts; and we now see, almost over all Europe, a
system of sobriety succeeding an habitual system of drunkenness.
Drunkenness, and a multitude of useless servants, were the luxury of
former times.

Every such revolution may be profited of by an able statesman, who must
set a good example on one hand, while, on the other, he must profit of
every change of taste, in order to re-establish the foreign trade of his
subjects. An example of frugality, in the head of a luxurious people,
would do infinite harm, were it only intended to reform the morals of
the rich, without indemnifying the poor for the diminution upon their
consumption.

At the same time, therefore, that luxury comes to lose ground at home, a
door must be opened, to serve as an out-let for the work of those hands
which must be thereby made idle; and which, consequently, must fall into
distress.

This is no more than the principle before laid down, in the fifteenth
chapter, reversed: there we said, that when foreign demand begins to
decline, domestic luxury must be made to increase, in order to soften
the shock of the sudden revolution in favour of the industrious. For the
same reason here we say, that foreign trade must be opened upon every
diminution of domestic luxury.

How few Princes do we find either frugal or magnificent from political
considerations! And, this being the case, is it not necessary to lay
before them the natural consequences of the one and the other? And it is
still more necessary to point out the methods to be taken in order to
avoid the inconveniencies which may proceed from either.

Under a prodigal administration, the number of people will increase. The
statesman therefore should keep a watchful eye upon the supplying of
subsistence. Under a frugal reign, numbers will diminish, if the
statesman does not open every channel which may carry off the
superfluous productions of industry. Here is the reason: a diminution of
expence at home, is a diminution of employment; and this again implies a
diminution of people; because it interrupts the circulation of the
subsistence which made them live; but if employment is sent far from
abroad, the nation will preserve its people, and the savings of the
Prince may be compensated by the balance coming in from strangers.

These topics are delivered only as hints; and the amplification of them
might not improperly have a place here; but I expect to bring them in
elsewhere to greater advantage, after examining the principles of
taxation, and pointing out those which direct the application of public
money.

------------------------------------------------------------------------



                              CHAP. XVIII.
 _Methods of lowering the Price of Manufactures, in order to make them
                     vendible in foreign Markets._


The multiplicity of relations between the several parts of political
oeconomy, forces me to a frequent repetition of principles. I have no
other rule to judge whether such relations be superfluous, or necessary,
but by the tendency they have to give me a more distinct view of my
subject. This is the case when the same principles are applied to
different combinations of circumstances.

Almost every thing to be said on the head mentioned in the title of this
chapter, has been taken notice of elsewhere; and my present intention is
only to lay together ideas which appear scattered, because they have
been occasionally brought in by their relations to other matters.

The methods of lowering the price of manufactures, so as to render them
exportable, are of two kinds.

The first, such as proceed from a good administration, and which bring
down prices within the country, in consequence of natural causes.

The second, such as operate only upon that part which comes to be
exported, in consequence of a proper application of public money.

As I have not yet inquired into the methods of providing a public fund,
it would, I think, be contrary to order to enter on the disposal of it,
for bringing down the price of manufactures. This operation will come in
more naturally afterwards, and the general distinction here mentioned,
is only introduced by the by, that my readers may retain it and apply it
as we go along.

The end proposed is to lower the price of manufactures, so that they may
be exported. The first thing therefore to be known, is the cause from
whence it happens, that certain manufactures cannot be furnished at home
so cheap as in other countries; the second, how to apply the proper
remedy for lowering the price of them.

The causes of high prices, that is, of prices relatively high to what
they are found to be in other nations, are reducible to four heads;
which I shall lay down in their order, and then point out the methods of
removing them likewise, in their order.

_1mo._ The consolidation of high profits with the real value of the
manufacture. This cause operates in countries where luxury has gained
ground, and when domestic competition has called off too many of the
hands, which were formerly content to serve at a low price, and for
small gains.

_2do._ The rise in the price of articles of the first necessity. This
cause operates when the progress of industry has been more rapid than
that of agriculture. The progress of industry we have shewn necessarily
implies an augmentation of _useful inhabitants_; and as these have
commonly wherewithal to purchase subsistence, the moment their numbers
swell above the proportion of the quantity of it produced by
agriculture, or above what is found in the markets of the country, or
brought from abroad, they enter into competition and raise the price of
it. Here then let it be observed, by the by, that what raises the price
of subsistence is the augmentation of the numbers of useful inhabitants,
that is, of such as are easy in their circumstances. Let the wretched be
ever so many, let the vicious procreation go on ever so far, such
inhabitants will have little effect in raising price, but a very great
one in increasing misery. A proof of this is to be met with in many
provinces where the number of poor is very great, and where at the same
time the price of necessaries is very low; whereas no instance can be
found where a number of the industrious being got together, do not
occasion an immediate rise on most of the articles of subsistence.

_3tio._ The natural advantages of other countries. This operates in
spight of all the precautions of the most frugal and laborious people.
Let them deprive themselves of every superfluity; let them be ever so
diligent and ingenious; let every circumstance be improved by the
statesman to the utmost for the establishment of foreign trade; the
advantage of climate and situation may give such a superiority to the
people of another country, as to render a direct competition with them
impossible.

_4to._ The superior dexterity of other nations in working up their
manufactures, their knowledge in the science of trade, the advantage
they have in turning their money to account in the intervals of their
own direct circulation, the superior abilities of their statesman, the
application of their public money, in one word, the perfection of their
political oeconomy.

Before I enter upon the method of removing these several
inconveniencies, I must observe, that as we are at present treating of
the _relative_ height of the price of manufactures, a competition
between nations is constantly implied. It is this which obliges a
statesman to be principally attentive to the rise of prices. The term
_competition_ is relative to, and conveys the idea of emulation between
two parties striving to compass the same end. I must therefore
distinguish between the endeavours which a nation makes to _retain_ a
superiority already got, and those of another which strives to get the
better of it. The first I shall call a competition to _retain_; the
second, a competition to _acquire_.

The first three heads represent the inconveniencies to which the
competitors to _retain_ are liable; and the fourth comprehends those to
which the competitors to _acquire_ are most commonly exposed.

Having digested our subject into order, I shall run through the
principles which severally influence the removing of every
inconvenience, whether incident to a nation whose foreign trade is
already well established, or to another naturally calculated for entring
into a competition for the acquisition of it.

In proposing a remedy for the particular causes of augmentation here set
down, we must suppose every one entirely simple, and uncompounded with
the others; a thing which in fact seldom happens. This I do for the sake
of distinctness; and the principal difficulty in practice is to combine
the remedies in proportion to the complication of the disease. I now
come to the first of the four causes of high prices, to wit,
consolidated profits.

The whole doctrine of these has been abundantly set forth in the 10th
chapter. We there explained the nature of them, shewed how the
subversion of the balance, by a long preponderancy of the scale of
demand, had the effect of consolidating profits in a country of luxury;
and observed, that the reducing them to the proper standard could never
fail of bringing those who had long enjoyed them, into distress.

The question here is to reduce them, when foreign trade cannot otherwise
be retained, let the consequences be ever so hurtful to certain
individuals. When the well being of a nation comes in competition with a
temporary inconvenience to some of the inhabitants, the general good
must be preferred to particular considerations.

I have observed above, that domestic luxury, by offering high prices
upon certain species of industry, calls off many hands employed to
supply the articles of exportation, upon which profits are generally
very moderate. The first natural and immediate effect of this, is, to
diminish the hands employed in furnishing the foreign demand;
consequently, to diminish the supply; consequently, to occasion a
_simple competition_ on the side of the strangers, who are the
purchasers; consequently, to augment profits, until by their rise and
consolidation the market is deserted.

The very progress here laid down, points out the remedy. The number of
hands employed in these particular branches must be multiplied; and if
the luxurious taste and wealth of the country prevent any one who can do
better, from betaking himself to a species of industry lucrative to the
nation, but ungrateful to those who exercise it, the statesman must
collect the children of the wretched into workhouses, and breed them to
this employment, under the best regulations possible for saving every
article of unnecessary expence; here likewise may be employed
occasionally those above mentioned, whom the change of modes may have
cast out of employment, until they can be better provided for. This is
also an outlet for foundlings, since many of those who work for foreign
exportation, are justly to be ranked in the lowest classes of the
people; and in the first book we proposed, that every one brought up at
the expence of public charity, should be thrown in for recruiting these
classes, which can with greatest difficulty support their own
propagation.

Here let me observe, that although it be true in general, that the
greatest part of exportable manufactures do yield but very middling
profits, from the extension of industry in different countries, yet
sundry exceptions may be found; especially in nations renowned for their
elegance of taste. But how quickly do we see these lucrative branches of
foreign trade cut off, from the very inconvenience we here seek a remedy
for. The reason is plain. When strangers demand such manufactures, they
only share in the instruments of foreign luxury, which bring every where
considerable profits to the manufacturer. These high profits easily
establish a rivalship in favour of the nation to whom they are supplied;
because a hint is sufficient to enable such as exercise a similar
profession in that country, to supply their own inhabitants. This being
the case, an able statesman should be constantly attentive to every
growing taste in foreign nations for the inventions of his people; and
so soon as his luxurious workmen have set any one on foot, he may throw
that branch into the hands of the most frugal, in order to support it,
and give them such encouragement as to prevent, at least, the rivalship
of those strangers who are accustomed to work for large profits. This is
one method of turning a branch of luxury into an article of foreign
trade. Let me illustrate this by an example.

What great advantages do not the French reap from the exportation of
their modes? But we quickly find their varnishes, gauzes, ribbands, and
colifichets, imitated by other nations, for no other reason but because
of the large, or at least consolidated profits enjoyed by the French
workmen themselves, who, fertile in new inventions, and supported by
their reputation for elegance of dress, have got into possession of the
right of prescribing to all Europe the standard of taste in articles of
mere superfluity. This however is no permanent prerogative; and that
elegant people, by long setting the example, and determining the
standard of refinement in some luxurious arts, will at last inspire a
similar taste into their scholars, who will thereby be enabled to
supplant them. Whereas were they careful to supply all their inventions
at the lowest prices possible, they would ever continue to be the only
furnishers.

The method therefore of reducing consolidated profits, whether upon
articles of exportation, or home consumption, is to increase the number
of hands employed in supplying them; and the more gradually this
revolution is made to take place, the fewer inconveniencies will result
to those who will thereby be forced to renounce them.

A country which has an extensive territory, and great opportunities of
extending her agriculture (such as I supposed the present situation of
France to be) may, under a good administration, find the progress of
luxury very compatible with the prosperity of her foreign trade; because
inhabitants may be multiplied at discretion. But so soon as subsistence
becomes hard to be obtained, this expedient is cut off. A statesman must
then make the best of the inhabitants he has, luxury must suffer a
check; and those who are employed in supplying home consumption at high
prices, must be made to reduce their consolidated profits, in order to
bring the total amount of their manufactures within such bounds as to
make them vendible in foreign markets.

If manufacturers become luxurious in their way of living, it must
proceed from their extraordinary profits. These they may still continue
to have, as long as the produce of their work is consumed at home. But
no merchant will pretend to sell it out of the country; because, in this
case, he will find the labour of other people who are less luxurious,
and consequently work cheaper, in competition with him.

To re-establish then the foreign trade, these consolidated profits must
be put an end to, by attacking luxury when circumstances render an
augmentation of people inconvenient, and prices will fall of course.

This will occasion great complaints among all sorts of tradesmen. The
cry will be, that trade is ruined, manufacturers are starving, and the
state is undone: but the truth will be, that manufacturers will, by
their labour, begin to enrich their own nation, at the expence of all
those who trade with her, instead of being enriched at the expence of
their own countrymen; and only by a revolution in the balance of wealth
at home.

It will prove very discouraging to any statesman to attempt a sudden
reform of this abuse of consolidated profits, when he is obliged to
attack the luxury of his own people. The best way therefore is to
prevent matters from coming to such a pass, as to demand so dangerous
and difficult a remedy.

There is hardly a possibility of changing the manners of a people, but
by a proper attention to the education of the youth. All methods,
therefore, should be fallen upon to supply manufactures with new hands;
and lest the corruption of example should get the better of all
precautions, the seat of manufactures might be changed; especially when
they are found in great and populous cities, where living is dear: in
this case, others should be erected in the provinces where living is
cheap. The state must encourage these new undertakings, numbers of
children must be taken in, in order to be bred early to industry and
frugality; this again will encourage people to marry and propagate, as
it will contribute towards discharging them of the load of a numerous
family. If such a plan as this be followed, how inconsiderable will the
number of poor people become in a little time; and as it will insensibly
multiply the useful inhabitants, out of that youth which recruited and
supported the numbers of the poor, so the taxes appropriated for the
relief of poverty may be wholly applied, in order to prevent it.

Laws of naturalization have been often proposed in a nation where
consolidated profits have occasioned the inconveniencies for which we
have here been proposing a remedy. By this expedient many flatter
themselves to draw industrious strangers into the country, who being
accustomed to live more frugally, and upon less profits, may, by their
example and competition, beat down the price of work among the
inhabitants.

Several circumstances concur to defeat the success of this scheme. The
first is, that consolidated profits are not the only inconvenience to be
removed: there is also a complication of high prices upon many
necessaries. The second, as no real change is supposed to be made within
the country, either as to the increase of subsistence, or the regulation
of its price, or manner of living, these strangers, who, as such, must
be exposed to extraordinary expence, are not able to subsist, nor
consequently to work so cheap as they did at home. Besides, what can be
supposed to be their motive of coming, if it be not to have higher
wages, and to live better?

Here then is a nation sending for strangers, in order that they may work
cheaper; and strangers flocking into the country in hopes of selling
their work dearer. This is just the case with two friends who are about
making a bargain; the seller imagines that _his friend_ will not grudge
a good price. The buyer, on the other hand, flatters himself that _his
friend_ will sell to him cheaper than to another. This seldom fails to
produce discontent on both sides.

Besides, unless the quantity of food be increased, if strangers are
imported to eat part of it, natives must in some degree starve; and if
you augment the quantity of food, and keep it at a little lower price
than in neighbouring nations, your own inhabitants will multiply; the
state may take great numbers of them into their service when young; they
soon come to be able to do something in the manufacturing way; they may
be bound for a number of years, sufficient to indemnify the public for
the first expence; and the encouragement alone of having bread cheaper
than elsewhere, will bring you as many strangers as you incline to
receive, provided a continual supply of food can be procured in
proportion to the increase of the people.

But I imagine that it is always better for a state to multiply by means
of its own inhabitants, than by that of strangers; for many reasons
which to me appear obvious.

We come now to the second cause of high prices, to wit, a rise in the
value of the articles of the first necessity, which we have said
proceeds from the progress of industry having outstripped the progress
of agriculture. Let me set this idea in a clearer light; for here it is
shut up in too general terms to be rightly viewed on all sides.

The idea of inhabitants being multiplied beyond the proportion of
subsistence, seems to imply that there are too many already; and the
demand for their industry having been the cause of their multiplication,
proves that formerly there were too few. Add to this, that if,
notwithstanding the rise upon the price of work proceeding from the
scarcity of subsistence, the scale of home demand is found to
preponderate, at the expence of foreign trade, this circumstance proves
farther, that however the inhabitants may be already multiplied above
the proportion of subsistence, their numbers are still too few for what
is demanded of them at home; and for what is required of them towards
promoting the prosperity of their country, in supporting their trade
abroad.

From this exposition of the matter, the remedy appears evident: both
inhabitants and subsistence must be augmented. The question comes to be,
in what manner, and with what precautions, must these operations be
performed?

Inhabitants are multiplied by reducing the price of subsistence, to the
value which demand has fixed upon the work of those who are to consume
it. This is only to be accomplished by augmenting the quantity, by
importation from foreign parts, when the country cannot be made to
produce more of itself.

Here the interposition of a statesman is absolutely necessary; since
great loss may often be incurred by bringing down the price of grain in
a year of scarcity. Premiums, therefore, must be given upon importation,
until a plan can be executed for the extending of agriculture; of which
in another place. This must be gone about with the greatest
circumspection; for if grain be thereby made to fall too low, you ruin
the landed interest, and although (as we have said above) all things
soon become balanced in a trading nation, yet sudden and violent
revolutions, such as this must be, are always to be apprehended. They
are ever dangerous; and the spirit of every class of inhabitants must be
kept up.

By a discredit call upon any branch of industry, the hands employed in
it may be made to abandon it, to the great detriment of the whole. This
will infallibly happen, when violent transitions do not proceed from
natural causes, as in the example here before us, when the price of
grain is supposed to be brought down, from the increase of its quantity
by importation, and not by plenty. Because, upon the falling of the
market by importation, the poor farmer has nothing to make up for the
low price he gets for his grain; whereas, when it proceeds from plenty,
he has an additional quantity.

In years, therefore, of general scarcity, a statesman should not, by
premiums given, reduce the price of grain, but in a reciprocal
proportion to the quantity wanted: that is to say, the more grain is
wanted, the less the price should be diminished.

It may appear a very extensive project for any government to undertake
to keep down the prices of grain, in years of general scarcity. I allow
it to be politically impossible to keep prices low; because if all
Europe be taken together, the produce of the whole is consumed one year
with another, by the inhabitants; and in a year when there is a general
scarcity, it would be very hard, if not impossible, (without having
previously established a plan for this purpose) to make any nation live
in plenty while others are starving. All therefore that is proposed, is
to keep the prices of grain in as just a proportion as possible to the
plenty of the year.

Now if a government does not interpose, this never is the case. I shall
suppose the inhabitants of a country to consume, in a year of moderate
plenty, six millions of quarters of grain; if in a year of scarcity it
shall be found, that one million of quarters, or indeed a far less
quantity, be wanting, the five millions of quarters produced, will rise
in their price to perhaps double the ordinary value, instead of being
increased only by one fifth. But if you examine the case in countries
where trade is not well established, as in some inland provinces on the
continent, it is no extraordinary thing to see grain bearing three times
the price it is worth in ordinary years of plenty, and yet if in such a
year there were wanting six months provisions for the inhabitants of a
great kingdom, all the rest of Europe would perhaps hardly be able to
keep them from starving.

It is the fear of want, and not real want, which makes grain rise to
immoderate prices. Now as this extraordinary revolution in the rise of
it, does not proceed from a natural cause, to wit, the degree of
scarcity, but to the avarice and evil designs of men who hoard it up, it
produces as bad consequences to that part of the inhabitants of a
country employed in manufactures, as the fall of grain would produce to
the farmers, in case the prices should be, by importation, brought below
the just proportion of the quantity produced in the nation.

Besides the importation of grain, there is another way of increasing the
quantity of it very considerably, in some countries of Europe. In a year
of scarcity, could not the quantity of food be considerably augmented by
a prohibition to make malt liquors, allowing the importation of wines
and brandies; or indeed without laying any restraint upon the liberty of
the inhabitants as to malt liquors, I am persuaded that the liberty of
importing wines duty free, would, in years of scarcity, considerably
augment the quantity of subsistence.

This is not a proper place to examine the inconvenience which might
result to the revenue by such a scheme; because we are here only talking
of those expedients which might be fallen upon to preserve a balance on
foreign trade. An exchequer which is filled at the expence of this, will
not continue long in a flourishing condition.

These appear to be the most rational temporary expedients to diminish
the price of grain in years of scarcity; we shall afterwards examine the
principles upon which a plan may be laid down to destroy all
precariousness in the price of subsistence.

Precautions of another kind must be taken in years of plenty; for high
prices occasioned by exportation are as hurtful to the poor tradesman as
if they were occasioned by scarcity. And low prices occasioned by
superfluity are as hurtful to the poor husbandman as if his crop had
failed him.

A statesman therefore, should be very attentive to put the inland trade
in grain upon the best footing possible, to prevent the frauds of
merchants, and to promote an equal distribution of food in all corners
of the country: and by the means of importation and exportation,
according to plenty and scarcity, to regulate a just proportion between
the general plenty of the year in Europe, and the price of subsistence;
always observing to keep it somewhat lower at home, than it can be found
in any rival nation in trade. If this method be well observed,
inhabitants will multiply; and this is a principal step towards reducing
the expence of manufactures; because you increase the number of hands,
and consequently diminish the price of labour.

Another expedient found to operate most admirable effects in reducing
the price of manufactures (in those countries where living is rendred
dear, by a hurtful competition among the inhabitants for the subsistence
produced) is the invention and introduction of machines. We have, in a
former chapter, answered the principal objections which have been made
against them, in countries where the numbers of the idle, or trifling
industrious, are so great, that every expedient which can abridge
labour, is looked upon as a scheme for starving the poor. There is no
solidity in this objection; and if there were, we are not at present in
quest of plans for feeding the poor; but for accumulating the wealth of
a trading nation, by enabling the industrious to feed themselves at the
expence of foreigners. The introduction of machines is found to reduce
prices in a surprizing manner. And if they have the effect of taking
bread from hundreds, formerly employed in performing their simple
operations, they have that also of giving bread to thousands, by
extending numberless branches of ingenuity, which, without the machines,
would have remained circumscribed within very narrow limits. What
progress has not building made within these hundred years? Who doubts
that the conveniency of great iron works, and saw mills, prompts many to
build? And this taste has greatly contributed to increase, not diminish,
the number both of smiths and carpenters, as well as to extend
navigation. I shall only add in favour of such expedients, that
experience shews the advantage gained by certain machines, is more than
enough to compensate every inconvenience arising from consolidated
profits, and expensive living; and that the first inventors gain thereby
a superiority which nothing but adopting the same invention can
counterbalance.

The third cause of high prices we have said to be owing to the natural
advantages which neighbouring nations reap from their climate, soil, or
situation.

Here no rise of prices is implied in the country in question, they are
only supposed to have become relatively high by the opportunity other
nations have had to furnish the same articles at a lower rate, in
consequence of their natural advantages.

There are two expedients to be used, in order to defeat the bad effects
of a competition which cannot be got the better of in the ordinary way.
The first to be made use of, is, to assist the branches in distress with
the public money. The other is patience, and perseverance in frugality,
as has been already observed. A short example of the first will be
sufficient in this place to make the thing fully understood. I have
already said, that I purposely postpone an ample dissertation upon the
principles which influence such operations.

Let me suppose a nation accustomed to export to the value of a million
sterling of fish every year, undersold in this article by another which
has found a fishery on its own coasts, so abundant as to enable it to
undersell the first by 20 _per cent._ This being the case, the statesman
may buy up all the fish of his subjects, and undersell his competitors
at every foreign market, at the loss of perhaps 250,000_l._ What is the
consequence? That the million he paid for the fish remains at home, and
that 750,000_l._ comes in from abroad for the price of them. How is the
250,000_l._ to be made up? By a general imposition upon all the
inhabitants. This returns into the public coffers, and all stands as it
was. If this expedient be not followed, what are the consequences? That
those employed in the fishery are forced to starve; that the fish taken
either remain upon hand, or if sold by the proprietors, at a great loss;
these are undone, and the nation for the future loses the acquisition of
750,000_l._ a year.

To abridge this operation, premiums are given upon exportation, which
comes to the same thing, and is a refinement on the application of this
very principle: but premiums are often abused. It belongs to the
department of the coercive power of government to put a stop to such
abuse. All I shall say upon the matter is, that if there be crimes
called high treason, which are punished with greater severity than
highway robbery, and assassination, I should be apt (were I a statesman)
to put at the head of that bloody list, every attempt to defeat the
application of public money, for the purposes here mentioned. The
multiplicity of frauds alone, discourages a wise government from
proceeding upon this principle, and disappoints the scheme. If severe
punishment can in its turn put a stop to frauds, I believe it will be
thought very well applied.

While a statesman is thus defending the foreign trade of his country, by
an extraordinary operation performed upon the circulation of its wealth,
he must at the same time employ the second expedient with equal address.
He must be attentive to support sobriety at home, and wait patiently
until abuses among his neighbours shall produce some of the
inconveniencies we have already mentioned. So soon as this comes to be
the case, he has gained his point; the premiums then may cease; the
public money may be turned into another channel; or the tax may be
suppressed altogether, according as circumstances may require.

I need not add, that the more management and discretion is used in such
operations, the less jealousy will be conceived by other rival nations.
And as we are proposing this plan for a state already in possession of a
branch of foreign trade, ready to be disputed by others, having superior
natural advantages, it is to be supposed that the weight of money, at
least, is on her side. This, if rightly employed, will prove an
advantage, more than equal to any thing which can be brought against it;
and if such an operation comes to raise the indignation of her rival, it
will, on the other hand, reconcile the favour of every neutral state,
who will find a palpable benefit from the competition, and will never
fail giving their money to those who sell the cheapest. In a word, no
private trader can stand in competition with a nation’s wealth. Premiums
are an engine in commerce, which nothing can resist but a similar
operation.

Hitherto we have been proposing methods for removing the inconveniencies
which accompany wealth and superiority, and for preserving the
advantages which result from foreign trade already established: we must
now change sides, and adopt the interest of those nations who labour
under the weight of a heavy competition with their rich neighbours,
versed in commerce, dextrous in every art and manufacture, and conducted
by a statesman of superior abilities, who sets all engines to work, in
order to make the most of every favourable circumstance.

It is no easy matter for a state unacquainted with trade and industry,
even to form a distant prospect of rivalship with such a nation, while
the abuses attending upon their wealth are not supposed to have crept in
among them. Consequently, it would be the highest imprudence to attempt
(at first setting out) any thing that could excite their jealousy.

The first thing to be inquired into, is the state of natural advantages.
If any branch of natural produce, such as grain, cattle, wines, fruits,
timber, or the like, are here found of so great importance to the rival
nation, that they will purchase them with money, not with an exchange of
their manufactures, such branches of trade may be kept open with them.
If none such can be found, the first step is to cut off all
communication of trade by exchange with such a people; and to apply
closely to the supply of every want at home, without having recourse to
foreigners.

So soon as these wants begin to be supplied, and that a surplus is
found, other nations must be fought for, who enjoy less advantages; and
trade may be carried on with them in a subaltern way. People here must
glean before they can expect to reap. But by gleaning every year they
will add to their stock of wealth, and the more it is made subservient
to public uses, the faster it will increase.

The beginners will have certain advantages inseparable from their infant
state; to wit, a series of augmentations of all kinds, of which we have
so frequently made mention. If these can be preserved in an equable
progression; if the balance of work and demand, and that of population
and agriculture, can be kept in a gentle vibration, by alternate
augmentations; and if a plan of oeconomy, equally good with that of the
rivals, be set on foot and pursued; time will bring every natural
advantage of climate, soil, situation, and extent, to work their full
effects; and in the end they will decide the superiority.

I shall now conclude my chapter, with some observations on the
difference between theory and practice, so far as regards the present
subject.

In theory, we have considered every one of the causes which produce high
prices, and prevent exportation, as simple and uncompounded: in practice
they are seldom ever so. This circumstance makes the remedies difficult,
and sometimes dangerous. Difficult, from the complication of the
disease; dangerous, because the remedy against consolidated profits will
do infinite harm, if applied to remove that which proceeds from dear
subsistence, as has been said.

Another great difference between theory and practice occurs in the
fourth case; where we suppose a nation unacquainted with trade, to set
out upon a competition with those who are in possession of it. When I
examine the situation of some countries of Europe (Spain perhaps) to
which the application of these principles may be made, I find that it is
precisely in such nations, where the other disadvantages of consolidated
profits, and even the high prices of living, are carried to the greatest
height; and that the only thing which keeps one shilling of specie among
them, is the infinite advantage they draw from the mines, and from the
sale of their pure and unmanufactured natural productions, added to
their simplicity of life, occasioned by the wretchedness of the lower
classes, which alone prevents these also from consuming foreign
commodities. Were money in these countries as equally distributed as in
those of trade and industry, it would quickly be exported. Every one
would extend his consumption of foreign commodities, and the wealth
would disappear. But this is not the case; the rich keep their money in
their coffers; because lending at interest, there, is very wisely laid
under numberless obstructions. The vice, therefore, is not that the
lending of money at interest is forbid, but that the people are not put
in a situation to have any pressing occasion for it, as a means of
advancing their industry. Were they taught to supply their own wants,
the state might encourage circulation by loan; but as they run to
strangers for that supply, money is better locked up.

Upon a right use and application of these general principles, according
to the different combinations of circumstances, in a nation whose
principal object is an extensive and profitable foreign trade, I imagine
a statesman may both establish and preserve, for a very long time, a
great superiority in point of commerce; provided peace can be preserved:
for in time of war, every populous nation, if great and extended, will
find such difficulties in procuring food, and such numbers of hands to
maintain, that what formerly made its greatness, will hasten its ruin.

------------------------------------------------------------------------



                               CHAP. XIX.
   _Of infant, foreign, and inland Trade, with respect to the several
                   Principles which influence them._


I have always found the geography of a country easier to retain, from
the inspection of maps, after travelling over the regions there
represented, than before; as most prefaces are best understood, after
reading the book, which they are calculated to introduce. I intend this
as an apology for presenting my readers with a chapter of distribution
in the middle of my subject.

My intention, at present, is to take a view of the whole region of
trade, divided into its different districts, in order to point out a
ruling principle in each, from which every other must naturally flow, or
may be deduced by an easy reasoning. These I shall lay before my reader,
that from them he may distribute his ideas in the same order I have
done. Hence the terms I shall be obliged to use will be rendred more
adequate, in expressing the combinations I may have occasion to convey
by them.

I divide trade into infant, foreign, and inland.

_1mo._ Infant trade, taken in a general acceptation, may be understood
to be that species, which has for its object the supplying the
necessities of the inhabitants of a country; because it is commonly
antecedent to the supplying the wants of strangers. This species has
been known in all ages, and in all countries, in a less, or greater
degree, in proportion to the multiplication of the wants of mankind, and
in proportion to the numbers of those who depend on their ingenuity for
procuring subsistence.

The general principles which direct a statesman in the proper
encouragement of this commerce, relate to two objects.

1. To promote the ease and happiness of the higher classes in making
their wealth subservient to their wants and inclinations.

2. To promote the ease and happiness of the lower classes, by turning
their natural faculties to an infallible means of relieving their
necessities.

This communicates the idea of a free society; because it implies the
circulation of a real equivalent for every service; to acquire which,
mankind submit with pleasure to the hardest labour.

In the first book, I had little occasion to consider trade under
different denominations; or as influenced by any other principle than
that of promoting the multiplication of mankind, and the extension of
agriculture, _by drawing the wealth of the rich into the hands of the_
industrious. This operation, when carried no farther, is a true
representation of infant trade.

But now I must set the matter in a new light: and consider this infant
trade as a basis for establishing a foreign commerce. In itself it is
only a means of gratifying the desires of those who have the equivalent;
and of providing it for those who have it not. We are next to examine
how, by the care of a statesman, it may prove a method whereby one
society may be put in a situation to acquire a superiority over others;
by diminishing, on one hand, the quantity they have of that general
equivalent, and by increasing, on the other, the absolute quantity of it
at home; in such a manner as not only to promote the circulation of that
part of it which is necessary to supply the wants of all the citizens;
but by a surplus of it, to render other nations dependent upon them, in
most operations of their political oeconomy.

The statesman who resolves to improve this infant trade into foreign
commerce, must examine the wants of other nations, and consider the
productions of his own country. He must then determine, what kinds of
manufactures are best adapted for supplying the first, and for consuming
the latter. He must introduce the use of such manufactures among his
subjects; and endeavour to extend his population, and his agriculture,
by encouragements given to these new branches of consumption. He must
provide his people with the best masters; he must supply them with every
useful machine; and above all, he must relieve them of their work, when
home demand is not sufficient for the consumption of it.

A considerable time must of necessity be required to bring a people to a
dexterity in manufactures. The branches of these are many; and every one
requires a particular slight of hand, and a particular master, to point
out the rudiments of the art. People do not perceive this inconveniency,
in countries where they are already introduced; and many a projector has
been ruined for want of attention to it.

In the more simple operations of manufacturing, where apprenticeships
are not in use, every one teaches another. The new beginners are put
among a number who are already perfect: all the instructions they get,
is, _do as you see others do before you_. This is an advantage which an
established industry has over another newly set on foot; and this I
apprehend to be the reason why we see certain manufactures, after
remaining long in a state of infancy, make in a few years a most
astonishing progress. What loss must be at first incurred! what numbers
of aspiring geniuses overpowered by unsuccessful beginnings, when a
statesman does not concern himself in the operation! If he assists his
subjects, by a prohibition upon foreign work, how often do we see this
expedient become a means of extending the most extravagant profits?
Because he neglects, at the same time, to extend the manufacture by
multiplying the hands employed in it. I allow, that as long as the gates
of a kingdom are kept shut, and that no foreign communication is
permitted, large profits do little harm; and tend to promote dexterity
and refinement. This is a very good method for laying a foundation for
manufactures: but so soon as the dexterity has been sufficiently
encouraged, and that abundance of excellent masters are provided, then
the statesman ought to multiply the number of scholars; and a new
generation must be brought up in frugality, and in the enjoyment of the
most moderate profits, in order to carry the plan into execution.

The ruling principle, therefore, which ought to direct a statesman in
this first species of trade, is to encourage the manufacturing of every
branch of natural productions, by extending the home-consumption of
them; by excluding all competition with strangers; by permitting the
rise of profits, so far as to promote dexterity and emulation in
invention and improvement; by relieving the industrious of their work,
as often as demand for it falls short. And until it can be exported to
advantage, it may be exported with loss, at the expence of the public.
To spare no expence in procuring the ablest masters in every branch of
industry, nor any cost in making the first establishments; providing
machines, and every other thing necessary or useful to make the
undertaking succeed. To keep constantly an eye upon the profits made in
every branch of industry; and so soon as he finds, that the real value
of the manufacture comes so low as to render it exportable, to employ
the hands, as above, and to put an end to these profits he had permitted
only as a means of bringing the manufacture to its perfection. In
proportion as the prices of every species of industry are brought down
to the standard of exportation, in such proportion does this species of
trade lose its original character, and adopt the second.

_2do._ _Foreign trade_ has been explained sufficiently: the ruling
principles of which are to banish luxury; to encourage frugality; to fix
the lowest standard of prices possible; and to watch, with the greatest
attention, over the vibrations of the balance between work and demand.
While this is preserved, no internal vice can affect the prosperity of
it. And when the natural advantages of other nations constitute a
rivalship, not otherwise to be overcome, the statesman must
counterbalance these advantages, by the weight and influence of public
money; and when this expedient also becomes ineffectual, foreign trade
is at an end; and out of its ashes arises the third species, which I
call inland commerce.

_3tio._ The more general principles of _inland trade_ have been
occasionally considered in the first book, and more particularly hinted
at in the 15th chapter of this; but there are still many new relations
to be examined, which will produce new principles, to be illustrated in
the subsequent chapters of this book. I shall, here only point out the
general heads, which will serve to particularize and distinguish this
third species of trade, from the two preceding.

Inland commerce, as here pointed out, is supposed to take place upon the
total extinction of foreign trade. The statesman must in such a case, as
in the other two species, attend to supplying the wants of the rich, in
relieving the necessities of the poor, by the circulation of the
equivalent as above; but as formerly he had it in his eye to watch over
the balance of work and demand, so now he must principally attend to the
balance of wealth, as it vibrates between consumers and manufacturers;
that is, between the rich and the industrious. The effects of this
vibration have been shortly pointed out, Chap. xv.

In conducting a foreign trade, his business was to establish the lowest
standard possible as to prices; and to confine profits within the
narrowest bounds: but as now there is no question of exportation, this
object of his care in a great measure disappears; and high profits made
by the industrious will have then no other effect than to draw the
balance of wealth more speedily to their side. The higher the profits,
the more quickly will the industrious be enriched, the more quickly will
the consumers become poor, and the more necessary will it become to cut
off the nation from every foreign communication in the way of trade.

From this political situation of a state arises the fundamental
principle of taxation; which is, _that, at the time of the vibration of
the balance between the consumer and the manufacturer, the state should
advance the dissipation of the first, and share in the profits of the
latter_. This branch of our subject I shall not here anticipate; but I
shall, in the remaining chapters of this book, make it sufficiently
evident, that so soon as the wealth of a state becomes considerable
enough to introduce luxury, to put an end to foreign trade, and from the
excessive rise of prices to extinguish all hopes of restoring it, then
taxes become necessary, both for preserving the government on the one
hand, and on the other, to serve as an expedient for recalling foreign
trade in spite of all the pernicious effects of luxury to extinguish it.

I hope from this short recapitulation and exposition of principles, I
have sufficiently communicated to my reader the distinctions I wanted to
establish, between what I have called infant, foreign, and inland trade.
Such distinctions are very necessary to be retained; and it is proper
they should be applied in many places of this treatise, in order to
qualify general propositions: these cannot be avoided, and might lead
into error, without a perpetual repetition of such restrictions, which
would tire the reader, appear frivolous to him, perhaps, and divert his
attention.

I only add, that we are not to suppose the commerce of any nation
restricted to any one of the three species. I have considered them
separately, according to custom, in order to point out their different
principles. It is the business of statesmen to compound them according
to circumstances.

------------------------------------------------------------------------



                               CHAP. XX.
                              _Of Luxury._


My reader may perhaps be surprized to find this subject formally
introduced, after all I have said of it in the first book, under a
definition which renders the term sufficiently clear, by distinguishing
it from sensuality and excess; and by confining it to _the providing of
superfluities, in favour of a consumption_, which necessarily must
produce the good effects of giving employment and bread to the
industrious.

The simple acceptation of the term, was the most proper for explaining
the political effects of extraordinary consumption. I cannot however
deny, that the word _luxury_ commonly conveys a more complex idea; and
did I take no notice of this circumstance, it might be thought that I
had purposely restrained a general term to a particular acceptation, in
order to lead to error, and to suppress the vicious influence of modern
oeconomy over the minds of mankind; which influence, if vicious, cannot
fail to affect even their political happiness.

My intention therefore, in this chapter, is to amuse, and to set my
ideas concerning luxury (in the most extensive acceptation of the word)
in such an order, as first to vindicate the definition I have given of
it, by shewing that it is a proper one; and secondly, to reconcile the
sentiments of those who appear to combat one another, on a subject
wherein all must agree, when terms are fully understood.

For this purpose I must distinguish _luxury_ as it affects our different
interests, by producing hurtful consequences; from _luxury_, as it
regards the moderate gratification of our natural or rational desires. I
must separate objects which are but too frequently confounded, and
analyze this complicated term, by specifying the ideas it contains,
under partial definitions.

The interests affected by luxury, I take to be four; _1mo._ _the moral_,
in so far as it does hurt to the mind; _2do._ _the physical_, as it
hurts the body; the _domestic_, as it hurts the fortune; and the
_political_, as it hurts the state.

The natural desires which proceed from our animal oeconomy, and which
are gratified by _luxury_, may be also reduced to four; viz. _hunger_,
_thirst_, _love_, and _ease_ or indolence. The moderate gratification of
these desires, and physical happiness, is the same thing. The immoderate
gratification of them is _excess_; and if this also be implied by
_luxury_, no man, I believe, ever seriously became its apologist.

The first point to be explained, is what is to be understood by
_excess_. What appears an excess to one man, may appear moderation to
another. I therefore measure the _excess_ by the bad effects it produces
on the _mind_, the _body_, the _fortune_, and the _state_: and when we
speak of _luxury_ as a vice, it is requisite to point out the particular
bad effects it produces, to one, more, or all the interests which may be
affected by it: when this is neglected, ambiguities ensue, which involve
people in inextricable disputes.

In order to communicate my thoughts upon this subject with the more
precision, I shall give an example of the harm resulting to the _mind_,
the _body_, the _fortune_, and the _state_, from the excessive
gratification of the several natural desires above-mentioned.

_1mo._ As to the mind, _eating to excess_ produces the inconvenience of
rendring the perceptions dull, and of making a person unfit for study or
application.

_Drinking_ confounds the understanding, and often prevents our
discovering the most palpable relations of things.

_Love_ fixes our ideas too much upon the same object, makes all our
pursuits and pleasures analogous to it, and consequently renders them
trifling and superficial.

_Ease_, that is, too great a fondness for it, destroys activity, damps
our resolutions, and misleads the decisions of our judgment on every
occasion, where one side of the question implies an obstacle to the
enjoyment of a favourite indolence.

These are examples of the evils proceeding from _luxury_ in the most
general acceptation of the term. While the gratification of those
desires is accompanied by no such inconveniencies, I think it is a
proof, that there has been no _moral excess_, or that no moral evil has
been directly implied in the gratification. But I cannot equally
determine, that there has been no luxury in the enjoyment of
superfluity.

_2do._ _The physical_ inconveniencies which follow from all the four,
terminate in the hurt they do the body, health or constitution. If no
such harm follows upon the gratification of our desires, I find no
_physical_ evil: but still _luxury_, I think, may be applied in every
acceptation in which the term can be taken.

_3tio._ If the _domestic_ inconveniences of the four species be
examined, they all center in one, viz. the dissipation of fortune, upon
which depends the future ease of the proprietor, and the well-being of
his posterity. When _luxury_ is examined with respect to this object,
the idea we conceive of it admits of a new modification. An _excess_
here, is compatible with a very moderate gratification of our most
natural desires. It is not _eating_, nor _drinking_, _love_, nor
_indolence_ which are hurtful to the fortune, but the expence attending
such gratifications. All these are frequently indulged even to _excess_,
in a _moral_ and _physical_ sense, by people who are daily becoming more
wealthy by these very means.

_4to._ Some _political_ inconveniencies of _luxury_ have been already
pointed out. The extinction of foreign trade is the most striking. But
the loss of trade, conveys no ideas of any _moral_, _physical_, or
_domestic excess_; and still it is vicious in so far as it affects the
well-being of a state. Besides this particular evil, I very willingly
agree, that in as far as the good government of a state depends upon the
application and capacity, as well as the integrity of those who sit at
the helm, or who are employed in the administration, or direction of
public affairs, in so far may the moral inconveniencies of _luxury_
mentioned above, affect the prosperity of a state. The consequences of
_excessive luxury_, _moral_ and _physical_, as well as the dissipation
of private fortunes, may render both the statesman, and those whom he
employs, negligent in their duty, unfit to discharge it, rapacious and
corrupt. These may, indirectly, be reckoned among the _political_ evils
attending _luxury_, in so far as they take place. But on the other hand,
as they cannot be called the _necessary effects_ of the _cause_ to which
they are here ascribed, that is, to _moral_, _physical_, and _domestic
luxury_, I do not think they can with propriety be implied in the
definition of the term. They are rather to be attributed to the
imperfection of the human mind, than to any other second cause, which
might occasionally contribute to their production. They may proceed from
_avarice_, as well as from _prodigality_.

I hope this short exposition of a matter, not absolutely falling within
the limits of my subject, will suffice to prove that my definition of
_luxury_, describes at least the most essential requisite towards
determining it: _the providing of superfluity with a view to
consumption_. This is inseparable from our ideas of _luxury_; but
vicious _excess_ certainly is not. A sober man may have a most delicate
table, as well as a glutton; and a virtuous man may enjoy the pleasures
of love and ease with as much sensuality as Heliogabalus. But no man can
become luxurious, in our acceptation of the word, without giving bread
to the industrious, without encouraging emulation, industry, and
agriculture; and without producing the circulation of an adequate
equivalent for every service. This last is the palladium of liberty, the
fountain of gentle dependence, and the agreeable band of union among
free societies.

Let me therefore conclude my chapter, with a metaphysical observation.
The use of words, is to express ideas; the more simple any idea is, the
more easy it is to convey it by a word. Whenever, therefore, language
furnishes several words, which are called _synonimous_, we may conclude,
that the idea conveyed by them is not simple. On every such occasion, it
is doing a service to learning, to render them as little synonimous as
possible, and to point out the particular differences between the ideas
they convey.

Now as to the point under consideration. I find the three terms,
_luxury_, _sensuality_, and _excess_, generally considered in a
synonimous light, notwithstanding the characteristic differences which
distinguish them. _Luxury consists in providing the objects of
sensuality, in so far_ _as they are superfluous._ _Sensuality_ consists
_in the actual enjoyment of them_; and _excess_ implies _an abuse of
enjoyment_. A person, therefore, according to these definitions, may be
very _luxurious_ from vanity, pride, ostentation, or with a political
view of encouraging consumption, without having a turn for sensuality,
or a tendency to fall into excess. _Sensuality_, on the other hand,
might have been indulged in a Lacedemonian republic, as well as at the
court of Artaxerxes. _Excess_, indeed, seems more closely connected with
_sensuality_, than with _luxury_; but the difference is so great, that I
apprehend _sensuality_ must in a great measure be extinguished, before
_excess_ can begin.

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                               CHAP. XXI.
                _Of Physical and Political Necessaries._


After having cleared up our ideas concerning _luxury_, it comes very
naturally in, to examine what is meant by _physical necessary_.

I have observed in the third chapter of the first book, that in most
countries where food is limited to a determined quantity, inhabitants
are fed in a regular progression down from plenty and ample subsistence,
to the last period of want, and dying from hunger. _It is ample
subsistence where no degree of superfluity is implied_, which
communicates an idea of the _physical-necessary_. It is the top of this
ladder; it is the first rank among men who enjoy no superfluity
whatsoever. A man enjoys the physical-necessary as to food, when he is
fully fed; if he is likewise sufficiently clothed, and well defended
against every thing which may hurt him, he enjoys his full
physical-necessary. The moment he begins to add to this, he may be
considered as moving upwards into another category, to wit, the class of
the _luxurious_, or consumers of superfluity; of which there are to be
found, in most countries, as many stages upward, as there are stages
downwards, from where he stood before. This is one general idea of the
question. Let me now look for another.

If we examine the state of many animals which have no appetites leading
them to excess, we may form a very just idea of a _physical-necessary_
for man. When they are free from labour, and have food at will, they
enjoy their full physical-necessary. They are then in the height of
beauty, and enjoy the greatest degree of happiness they are capable of.
Animals which are forced to labour, prove to us very plainly, that this
_physical-necessary_ is not fixed to a point, but that it may vary like
most other things: every one perceives the difference between labouring
cattle which are well fed, and those which are middling, or ill fed; all
however, I suppose to live in health, and to work according to their
strength. This represents the nature of a _physical-necessary_ for man.

In many of the inferior classes in every nation, we find various degrees
of ease among the individuals; and yet upon the whole, it would be hard
to determine, which are those who enjoy superfluity; which are those who
possess the pure physical-necessary; and which are those who fall below
it. The cause of this ambiguity must here be explained.

The nature of man furnishes him with some desires relative to his wants,
which do not proceed from his animal oeconomy, but which are entirely
similar to them in their effects. These proceed from the affections of
his mind, are formed by habit and education, and when once _regularly
established_, create another kind of necessary, which, for the sake of
distinction, I shall call _political_. The similitude between these two
species of _necessary_, is therefore the cause of ambiguity.

This _political-necessary_ has for its object, certain articles of
_physical superfluity_, which distinguishes what we call _rank_ in
society.

_Rank_ is determined by birth, education, or habit. A man with
difficulty submits to descend from a higher way of living to a lower;
and when an accidental circumstance has raised him for a while, above
the level of that _rank_ where his _birth_ or _education_ had placed
him, his ambition prompts him to support himself in his elevation. If
his attempt be a rational scheme, he is generally approved of; the
common consent of his fellow-citizens prescribes a certain
_political-necessary_ for him, proportioned to his ambition; and when at
any time _this_ comes to fail, he is considered to be in want.

If on the other hand, a person either from vanity, or from no rational
prospect of success, forms a scheme of rising above the _rank_ where
_birth_ or _education_ had placed him, his fellow-citizens do not
consent to prescribe for him a political-necessary suitable to his
ambition; and when this fails him, he is only considered to fall back
into the class he properly belonged to. But if the political-necessary
suitable to this rank should come to fail, then he is supposed to be
deprived of his _political-necessary_.

The measure of this last species of _necessary_, is determined only by
general opinion, and therefore can never be ascertained justly; and as
this opinion may have for its object even those who are below the level
of the _physical-necessary_; it often happens, that we find great
difficulties in determining its exact limits.

It may appear absurd, to suppose that any one can enjoy _superfluity_
(which we have called the characteristic of _political-necessary_) to
whom any part of the _physical-necessary_ is found wanting. However
absurd this may appear, nothing, however, is more common among men, and
the reason arises from what has been observed above. The desires which
proceed from the affections of his mind, are often so strong, as to make
him comply with them at the expence of becoming incapable of satisfying
that which his animal oeconomy necessarily demands.

From this it happens, that however easy it may be to conceive an
accurate idea of a physical-necessary for _animals_, nothing is more
difficult, than to prescribe the proper limits for it with regard to
_man_.

This being the case, let us suppose the condition of those who enjoy but
little superfluity, and who fill the lower classes of the people, to be
distinguished into three denominations; to wit, the highest, middle, and
lowest degree of physical-necessary; and then let us ask, how we may
come to form an estimation as to the respective value of the consumption
implied in each, in order to determine the minimum as to the profits
upon industry. This question is of great importance; because we have
shewn that the prosperity of foreign trade depends on the cheapness of
manufacturing; and this again depends on the price _of living_, that is
of the physical-necessary for manufacturers.

One very good method of estimating the value of the total consumption
implied by this necessary quantity, is to compute the expence of those
who live in communities, such as in hospitals, workhouses, armies,
convents, according to the different degrees of ease, severally enjoyed
by those who compose them. In running over the few articles of expence
in such establishments, it will be easy to discern between those, which
relate to the supply of the physical, and those which relate to the
supply of the political-necessary: ammunition bread is an example of the
first; a Monk’s hood and long sleeves, are a species of the latter.

When once the real value of a man’s subsistence is found, the statesman
may the better judge of the degree of ease, necessary or expedient for
him to allow to the several classes of the laborious and ingenious
inhabitants.

As we have divided this physical-necessary into three degrees; the
_highest_, _middle_, and _lowest_; the next question is, which of the
three degrees is the most expedient to be established, as the standard
value of the industry of the very lowest class of a people.

I answer, that in a society, it is requisite that the individual of the
most puny constitution for labour and industry, and of the most slender
genius for works of ingenuity, having no natural defect, and enjoying
health, should be able by a labour proportioned to his force, to gain
the _lowest_ degree of the physical-necessary; for in this case, by far
the greatest part of the industrious will be found in the second class,
and the strong and healthy all in the first.

The difference between the highest class and the lowest, I do not
apprehend to be very great. A small quantity added to what is barely
sufficient, makes enough: but this _small quantity_ is the most
difficult to acquire, and this is the most powerful spur to industry.
The moment a person begins to live by his industry, let his livelihood
be ever so poor, he immediately forms little objects of ambition;
compares his situation with that of his fellows who are a degree above
him, and considers a shade more of ease, as I may call it, as an
advancement, not only of his happiness, but of his rank.

There are still more varieties to be met with among those who are
confined to the sphere of the physical-necessary. The labour of a strong
man ought to be otherwise recompensed than that of a puny creature. But
in every state there is found labour of different kinds, some require
more, and some less strength, and all must be paid for; but as a weakly
person does not commonly require so much nourishment as the strong and
robust, the difference of his gains may be compensated by the smalness
of his consumption.

What we mean by the _first class_ of the physical-necessary, is when a
person gains wherewithal to be well fed, well clothed, and well defended
against the injuries of heat and cold, without any superfluity. This I
say, a strong healthy person should be able to gain by the exercise of
the lowest denominations of industrious labour, and that without a
possibility of being deprived of it, by the competition of others of the
same profession.

Could a method be fallen upon to prevent competition among industrious
people of the same profession, the moment they come to be reduced within
the limits of the _physical-necessary_, it would prove the best security
against decline, and the most solid basis of a lasting prosperity.

But as we have observed in the first book, the thing is impossible,
while marriage subsists on the present footing. From this one
circumstance, the condition of the industrious of the same profession,
is rendred totally different. Some are loaded with a family, others are
not. The only expedient, therefore, for a statesman, is to keep the
general principles constantly in his eye, to destroy this competition as
much as he can, at least in branches of exportation; to avoid, in his
administration, every measure which may tend to promote it, by
constituting a particular advantage in favour of some individuals of the
same class; and if the management of public affairs, necessarily implies
such inconveniencies, he must find out a way of indemnifying those who
suffer by the competition.

We may therefore, in this place, lay down two principles: First, that no
competition should be _encouraged_ among those who labour for a
_physical-necessary_; secondly, that in a state which flourishes by her
foreign trade, competition is to be encouraged in every branch of
exportation, until the competitors have reduced one another within the
limits of that necessary.

Farther, I must observe, that this _physical-necessary_ ought to be the
highest degree of ease, which any one should be able to acquire with
labour and industry, where no peculiar ingenuity is required. This also
is a point deserving the attention of a statesman. How frequently do we
find, in great cities, different employments, such as carrying of water,
and other burthens, sawing of wood, &c. erected into confraternities,
which prevent competition, and raise profits beyond the standard of the
_physical-necessary_. This, I apprehend, is a discouragement to
ingenuity, and has the bad effect of rendring living dear, without
answering any one of the intentions of establishing corporations, as
shall be shewn in another place. The _physical-necessary_, therefore,
ought to be the reward of _labour_ and _industry_; whatever any workman
gains above this standard, ought to be in consequence of his superior
_ingenuity_.

It is not at all necessary to prescribe the limits between these two
classes; they will sufficiently distinguish themselves by the simple
operation of competition. Let a particular person fall upon an ingenious
invention, he will profit by it, and rise above the lower classes which
are confined to the physical-necessary; but if the invention be such as
may be easily copied, he will quickly be rivalled to such a degree as to
reduce his profits within the bounds of that _physical-necessary_; so
soon as this comes to be the case, his _ingenuity_ disappears, because
it ceases to be _peculiar_ to him.

Here arises a question: whence does it happen that certain workmen avoid
this competition, and make considerable gains by their employment, while
others are rivalled in their endeavours to retain a bare
physical-necessary?

There is a combination of several causes to operate these effects, which
we shall examine separately; leaving to the reader to judge, how far the
combination of them may extend profits beyond the physical-necessary.

I. We have said (chap. 9.) that the value of a workman’s labour is
determined from the quantity performed, in general, by those of his
profession, neither supposing them the best nor the worst, nor as having
any advantage or disadvantage, from the place of their abode. A workman
therefore, who, to an extraordinary dexterity, joins the advantages of
place, must gain more than another.

II. We have often remarked, that competition between workmen of the same
profession, diminishes the profits upon labour. From this it follows,
that in such arts where the least competition is found, there must be
the largest profits. Now several circumstances prevent competition.
First. An extraordinary dexterity in any art, and especially in those
where the whole excellency depends upon great exactness, such as
watch-making, painting of all kinds, making mathematical instruments,
and the like; all which set a celebrated artist in a manner above a
possibility of rivalship, and make him the master of his price, as
experience shews. 2d. The difficulty of acquiring the dexterity
requisite, resulting both from the time and money necessary to be spent
in apprenticeship, proves a plain obstacle to a numerous competition.
Few there are, who having the stock sufficient to defray the loss of
several years fruitless application, have also the turn necessary to
lead them to that particular branch of ingenuity. 3d. Many there are,
who have skill and capacity sufficient to enter into competition, but
are obliged to work for others, because of the expensive apparatus of
instruments, machines, lodging, and many other things necessary for
setting out as a master in the art. These, and similar causes, prevent
competition, and support large profits. 4th. Masters increase their
profits greatly by sharing that of their journeymen: this share, the
first have a just title to from the constant employment they procure for
the latter; and the certainty these have of gaining their
_physical-necessary_, together with a profit proportional to their
dexterity, makes them willing to share with their master. The 5th cause
of considerable gains, and the last I shall mention, is the most
effectual of all, viz. great oeconomy, and parsimonious living. In
proportion to the concurrence and combination of these circumstances,
the fortune of the artist will increase, which is the answer to the
first part of the question proposed.

We are next to enquire how it happens that many industrious people are
rivalled in an industry which brings no more than a bare
physical-necessary. This proceeds from some disadvantage either in their
personal or political situation. In their personal situation, when they
are loaded with a numerous family, interrupted by sickness, or other
accidental avocations. In their political situation, when they happen to
be under a particular subordination from which others are free, or
loaded with taxes which others do not pay.

I shall only add, that in computing the value of the
_physical-necessary_ of the lowest denomination, a just allowance must
be made for all interruptions of labour: no person can be supposed to
work every free day; and the labour of the year must defray the expence
of the year. This is evident. Farther, neither humanity, or policy, that
is the interest of a state, can suggest a rigorous oeconomy upon this
essential quantity. If the great abuses upon the price of labour are
corrected, those which remain imperceptible to the public eye, will
prove no disadvantage to exportation; and as long as this goes on with
success, the state is in health and vigour. Exportation _of work_ is
another pulse of the political body.

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                              CHAP. XXII.
            _Preliminary Reflections upon inland Commerce._


I resume the subject, which, as a rest to the mind, I dropt at the end
of the 19th chapter.

I am to treat directly of inland commerce, which has been sufficiently
distinguished from infant, and foreign trade.

We are to consider ourselves now as transported into a new country. Here
foreign trade has been carried to the greatest height possible; but the
luxury of the inhabitants, the carelessness, perhaps, of the statesman,
and the natural advantages of other nations, added to the progress of
their industry and refinement, have concurred to cut this branch off,
and thereby to dry up the source which had constantly been augmenting
national opulence.

We must examine the natural effects of this revolution; we must point
out how every inconvenience may be avoided, and how a statesman may
regulate his conduct, so as to prevent the exportation of any part of
that wealth which the nation may have heaped up within herself, during
the prosperity of her foreign trade. How he may keep the whole of his
people constantly employed, and by what means he may promote an equable
circulation of domestic wealth, as an adequate equivalent given by the
rich, for services rendred them by the industrious poor. How, by a
judicious imposition of taxes, he may draw together an equitable
proportion of every man’s annual income, without reducing any one below
the standard of a full physical-necessary. How he may, with this public
fund, preserve in vigour every branch of industry, and be enabled also,
by the means of it, to profit of the smallest revolution in the
situation of other nations, so as to re-establish the foreign trade of
his own people. And lastly, how the society may be thereby sufficiently
defended against foreign enemies, by a body of men regularly supported
and maintained at the public charge, without occasioning any sudden
revolution hurtful to industry, either when it becomes necessary to
increase their numbers, in order to carry on an unavoidable war, or to
diminish them, upon the return of peace and tranquility. This is, in few
words, the object of a statesman’s attention when he is at the head of a
people living upon their own wealth, without any mercantile connections
with strangers.

However hurtful the natural and immediate effects of political causes
may have been formerly, when the mechanism of government was less
compounded than at present, they are now brought under such
restrictions, by the complicated system of modern oeconomy, that the
evil which might otherwise result, is guarded against with ease.

As often, therefore, as we find a notable prejudice resulting to a
state, from a change of their circumstances, _gradually taking place_,
we may safely conclude, that negligence, or want of abilities, in those
who have the direction of public affairs, has more than any other cause
been the occasion of it.

It was observed, in the third chapter of the first book, that before the
introduction of modern oeconomy, which is made to subsist by the means
of taxes, a state was seldom found to be interested in watching over the
actions of the people. They bought and sold, transferred, transported,
modified, and compounded productions and manufactures, for public use,
and private consumption, just as they thought fit. Now it is precisely
in these operations that a modern state is chiefly interested; because
proportional taxes are made to affect a people on every such occasion.

The interest the state has in levying these impositions, gives a
statesman an opportunity of laying such operations under certain
restrictions; by the means of which, upon every change of circumstances,
he can produce the effect he thinks fit. Do the people buy from
foreigners what they can find at home, he imposes a duty upon
importation. Do they sell what they ought to manufacture, he shuts the
gates of the country. Do they transfer or transport at home, he
accelerates or retards the operation, as best suits the common interest.
Do they modify or compound what the public good requires to be consumed
in its simple state, he can either prevent it by a positive prohibition,
or he may permit such consumption to the more wealthy only, by
subjecting it to a duty.

So powerful an influence over the operations of a whole people, vests an
authority in a modern statesman, which was unknown in former ages, under
the most absolute governments. We may discover the effects of this, by
reflecting on the force of some states, at present, in Europe, where the
sovereign power is extremely limited, as to every _arbitrary_ exercise
of it, and where, at the same time, that very power is found to operate
over the wealth of the inhabitants, in a manner far more efficacious
than the most despotic and arbitrary authority can possibly do.

It is the order and regularity in the administration of the complicated
modern oeconomy, which alone can put a statesman in a capacity to exert
the whole force of his people. The more he has their actions under his
direction, the easier it is for him to make them concur in advancing the
general good.

Here it is objected, that any free people who invest a statesman with a
power to control their most trivial actions, must be out of their wits,
and considered as submitting to a voluntary slavery of the worst nature,
as it must be the most difficult to be shaken off. This I agree to;
supposing the power vested to be of an arbitrary nature, such as we have
described in the thirteenth chapter of this book. But while the
legislative power is only exerted in acquiring an influence over the
actions of individuals, in order to promote a scheme of political
oeconomy, uniform and consistent in all its parts, the consequence will
be so far from introducing slavery among the people, that the execution
of the plan will prove absolutely inconsistent with every arbitrary or
irregular measure.

The power of a modern Prince, let him be, by the constitution of his
kingdom, ever so absolute, becomes immediately limited so soon as he
establishes the plan of oeconomy which we are endeavouring to explain.
If his authority formerly resembled the solidity and force of the wedge,
which may indifferently be made use of, for splitting of timber, stones,
and other hard bodies, and which may be thrown aside and taken up again
at pleasure; it will, at length come to resemble the watch, which is
good for no other purpose than to mark the progression of time, and
which is immediately destroyed, if put to any other use, or touched by
any but the gentlest hand.

As modern oeconomy, therefore, is the most effectual bridle ever
invented against the folly of despotism; so the wisdom of so great a
power shines no where with greater lustre, than when we see it exerted
in planning and establishing this oeconomy, as a bridle against the
wanton exercise of power in succeeding generations. I leave it to my
reader to seek for examples in the conduct of our modern Princes, which
may confirm what, I think, reason seems to point out: were they less
striking, I might be tempted to mention them.

The part of our subject we are now to treat of, will present us with a
system of political oeconomy, still more complicated than any thing we
have hitherto met with.

While foreign trade flourishes and is extended, the wealth of a nation
increases daily; but her force is not so easily exerted, as after this
wealth begins to circulate more at home, as we shall easily shew. But,
on the other hand, the force she exerts is much more easily recruited.
In the first case, her frugality enables her to draw new supplies out of
the coffers of her neighbours; in the last, her luxury affords a
resource from the wealth of her own citizens.

In opening my chapter, I have introduced my reader into a new country;
or indeed I may say, that I have brought him back into the same which we
had under our consideration in the first book.

Here luxury and superfluous consumption will strike his view almost at
every step. He will naturally compare the system of frugality, which we
have dismissed, with that of dissipation, which we are now to take up;
and we may very naturally conclude, that the introduction of the latter,
must prove a certain forerunner of destruction. The examples found in
history of the greatest monarchies being broken to pieces, so soon as
the taste of simplicity was lost, seem to justify this conjecture. It
is, therefore, necessary to examine circumstances a little, that we may
compare, in this particular also, the oeconomy of the antients with our
own; in order to discover whether the introduction of luxury be as
hurtful at present, as it formerly proved to those states which made so
great a figure in the world; and which now are only known from history,
and judged of, from the few scattered ruins which remain to bear
testimony of their former greatness.

Luxury is the child of wealth; and wealth is acquired by states, as by
private people, either by a lucrative, or by an onerous title, as the
civilians speak. The lucrative title, by which a state acquires, is
either by rapine, or from her mines; the onerous title, or that for a
valuable consideration, is by industry.

The wealth of the ancient monarchs of Babylon, Persia, Greece, and Rome,
was the effect of rapine; whereas industry enriched the cities of Sydon,
Tyre, Carthage, Athens, and Alexandria. The luxury of the first, proved
the ruin of the luxurious; the luxury of the last, advanced their
grandeur: because they had no rivals to take advantage of the natural
effects of this luxury, in cutting off the profits of foreign trade.
Peace was as hurtful to the plunderers, as war was destructive to the
industrious.

When an empire was at war, its wealth was thereby made to circulate for
an equivalent in services performed. So soon as peace was restored,
every one returned, as it were, to a state of slavery. The monarch then
possessed himself of all the wealth, and distributed it by caprice.
Fortunes were made in an instant, and no body knew how: they were lost
again by transitions equally violent and sudden. The luxury of those
days was attended with the most excessive oppression. Extraordinary
consumption was no proof of the circulation of any adequate equivalent
in favour of the industrious: it had not the effect of giving bread to
the poor, nor of proportionally diminishing the wealth of the rich. The
great constantly remained great; and the more they were prodigal, the
more the small were brought into distress. In one word, luxury had
nothing to recommend it, but that quality which _solely_ constitutes the
abuse of it in modern times; to wit, the excessive gratification of the
passions of the great, which frequently brought on the corruption of
their manners.

When such a state became luxurious, public affairs were neglected;
because it was not from a right administration that wealth was to be
procured. War, under such circumstances, worked effects almost similar
to the springing up of industry in modern times; it procured employment,
and this produced a more regular circulation, as has been said.

On the other hand, the wealth and luxury of the trading cities
abovementioned, which was of the same species with that of modern times,
proceeded from the alienation of their work; that is, from their
industry. Nothing was gained for nothing, and when they were forced to
go to war, they found themselves obliged either to dissipate their
wealth, by hiring troops, or to abandon the resources of it, the labour
of their industrious citizens. Thus the punic wars exalted the grandeur
of plundering Rome, and blotted out the existence of industrious
Carthage. I do not here pretend to vindicate the justness of these
reflections in every circumstance, and it is foreign to my present
purpose to be more particular; all I seek for, is to point out the
different effects of luxury in antient and modern times.

Antient luxury was quite _arbitrary_; consequently could be laid under
no limitations, but produced the worst effects, which _naturally_ and
_mechanically_ could proceed from it.

Modern luxury is _systematical_; it cannot make one step, but at the
expence of an adequate equivalent, acquired by those who stand the most
in need of the protection and assistance of their fellow citizens; and
without producing a vibration in the balance of their wealth. This
balance is in the hands of the statesman, who may receive a contribution
upon every such vibration. He has the reins in his hand, and may turn,
restrain, and direct the luxury of his people, towards whatever object
he thinks fit.

Luxury here is so far from drawing on a neglect of public affairs, that
it requires the closest application to the administration of them, in
order to support it. When these are neglected, the industrious will be
brought to starve, consumption will diminish; that is, luxury will
insensibly disappear, and hoarding will succeed it. These and similar
consequences will undoubtedly take place, and _mechanically_ follow one
another, when a skilful hand is not applied; to prevent them.

It is impossible not to perceive the advantages of supporting a
flourishing inland trade, after the extinction of foreign commerce. By
such means elegance of taste, and the polite arts, may be carried to the
highest pitch. The whole of the inhabitants may be employed in working
and consuming; all may be made to live in plenty and in ease, by the
means of a swift circulation, which will produce a reasonable equality
of wealth among all the inhabitants. Luxury can never be the cause of
inequality. Hoarding and parcimony form great fortunes, luxury
dissipates them and restores equality.

Such a situation would surely be of all others the most agreeable, and
the most advantageous, were all mankind collected into one society, or
were the country where it is established cut off from every
communication with other nations.

The balance between work and demand would then only influence the
balance of wealth among individuals. If hands became scarce, the balance
would turn the quicker in favour of the laborious, and the idle would
grow poor. If hands became too plentiful (which indeed is hardly to be
expected) every thing would be bought the cheaper; but the same quantity
of wealth would still remain without any diminution.

Where is, therefore, the great advantage of foreign trade?

I answer by putting another question. Where is the great advantage of a
person’s making a large fortune in his own country? A man of a small
estate may, no doubt, be as happy as another with a great one; and the
same thing would be true of nations, were all equally inspired with a
spirit of peace and justice; or were they subordinate to a higher
temporal power, which could protect the weak against the violence and
injustice of the strong.

It is, therefore, the separate interests of nations who incline to
communicate together, and consume of one another’s commodities, which
renders the consideration of the principles of trade, a matter of great
importance.

While nations contented themselves with their own productions, while the
difference of their customs, and contrast of their prejudices were
great, the connections between them were not very intimate.

From this proceeds the great diversity of languages and dialects. When a
traveller finds a sudden transition from one language to another, or
from one dialect to another, it is a proof that the manners of such
people have been long different, and that they have had little
communication with one another. On the contrary, when dialects change by
degrees, as in the provinces of the same country, it is a proof that
there has been no great repugnancy in their customs. In like manner,
when we find several languages, at present different, but plainly
deriving from the same source, we may conclude, that there was a time
when such nations were connected by correspondence, or that the language
has been transplanted from one to the other, by the migration of
colonies. But I insensibly wander from my subject.

I have said, that when nations contented themselves with their own
productions, connections between them were not very intimate. While
trade was carried on by the exchange of consumable commodities, this
operation also little interested the state: consumption then was equal
on both sides; and no balance was found upon either. But so soon as the
precious metals became an object of commerce, and when, by being rendred
an universal equivalent for every thing, it became also the measure of
power between nations, then the acquisition, or at least the
preservation of a proportional quantity of it, became, to the more
prudent, an object of the last importance.

We have seen how a foreign trade, well conducted, has the necessary
effect of drawing wealth from all other nations. We have seen in what
manner the benefit resulting from this trade may come to a stop, and how
the balance of it may come round to the other side. We are now to
examine how the same prudence which set foreign trade on foot, and
supported it as long as possible, may guard against a sudden revolution,
and at the same time put an effectual stop to it; to the end that a
nation enriched by commerce may not, by blindly or mechanically carrying
it on, when the balance is against her, fall into those inconveniencies
which other nations must have experienced during her prosperity.

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                              CHAP. XXIII.

_When a Nation, which has enriched herself by a reciprocal Commerce in
Manufactures with other Nations, finds the Balance of Trade turn against
her, it is her Interest to put a Stop to it altogether._

Trade having subsisted long in the nation we are now to keep in our eye,
I shall suppose that, through length of time, her neighbours have
learned to supply one article of their own and other peoples wants
cheaper than she can do. What is to be done? No body will buy from her,
when they can be supplied from another quarter at a less price. I say,
what is to be done? For if there be no check put upon trade, and if the
statesman do not interpose with the greatest care, it is certain, that
merchants will import the produce, and even the manufactures of rival
nations; the inhabitants will buy them preferably to their own; the
wealth of the nation will be exported; and her industrious manufacturers
will be brought to starve. We may therefore look upon this, as a problem
in trade, to be resolved by the principles already established.

First, then, it must be inquired, if, in the branch in which she is
undersold, her rivals enjoy a natural advantage above her, which no
superior industry, frugality, or address on her side, can
counterbalance? If this be the case, there are three different courses
to be pursued, according to circumstances.

_1mo._ To renounce that branch of commerce entirely, and to take the
commodities wanted from foreigners, as they can furnish them cheaper.

_2do._ To prohibit the importation of such commodities altogether.

_3tio._ To impose a duty upon importation, in order to raise the price
of them so high as to make them dearer than the same kind of commodity
produced at home.

The first course may be taken, if, upon examining how the hands employed
in a manufacture may be disposed of, it be found, that they may easily
be thrown into another branch of industry, in which the nation’s natural
advantages are as superior to her rivals, as their’s are superior to
her’s in the branch she intends to abandon; and providing her neighbours
will agree to open their ports to the free importation of the
commodities in question. For though there may be little profit in a
trade by exchange, I still think it adviseable to continue
correspondence, and to avoid every occasion of cutting off commerce with
other nations. A laborious, oeconomical, and sagacious nation, such as I
suppose our traders to be, will be able to profit of many circumstances,
which would infallibly turn to the disadvantage of others less expert in
commerce, with whom she trades; and in expectation of favourable
revolutions, she ought not rashly, nor because of small inconveniencies,
to renounce trading with them; especially if luxury should appear there
to be on the growing hand.

But suppose the rival nation will not consent to receive the
manufactures which the traders may produce with great natural
advantages, what course then is the best to be taken?

I think she ought to encourage the branch in which she is rivalled, for
her own consumption, though she must give over exporting it; and, in
this case, it must be examined, whether that trade with foreigners
should be prohibited altogether, (which is the second course mentioned
above) or whether it be more adviseable to prefer the last scheme, viz.
to allow the commodities to be imported, with a duty which may raise
their price to so just a height as neither to suffer them to be sold so
cheap as to discourage the domestic fabrication, nor dear enough to
raise the profits of manufactures above a reasonable standard, in case
of an augmentation of demand.

The second course must be taken, when the natural advantages of the
foreign nations are so great, as to oblige the statesman to raise duties
to such a height as to give encouragement to smuggling.

The third course seems the best, when the advantages of the rivals are
more inconsiderable; in which case, the traders, may, in time, and by
the progress of luxury among their neighbours, or from other
revolutions, which happen frequently in trading nations, regain their
former advantages.

This may be a decision, in case a nation be rivalled in a branch where
she has not equal advantages with her neighbours; and when she cannot
compensate this inconvenience, either by her frugality or industry, or
by the means of a proper application of her national wealth. These
operations have been already fully explained, and are now considered as
laid aside; not that we suppose they can ever cease to operate their
effects in all nations, but in order to simplify our ideas, and to point
out the principles which ought to direct a statesman upon occasions
where he finds better expedients impracticable, from different
combinations of circumstances.

Let me next suppose a nation to be rivalled, in her staple manufactures;
that is, in those where she has the greatest natural advantages in her
favour.

Whenever such a case happens, it must proceed from some vice within the
state. Either from the progress of luxury in the workmen, which must
proceed from consolidated profits, or from accidental disadvantage; such
as dearness of subsistence, or from taxes injudiciously imposed. These
(I mean all, except the taxes, of which afterwards) must be removed upon
the principles above laid down: and if this cannot be compassed, no
matter why; then comes the fatal period, when all foreign reciprocal
commerce in manufactures must be given up. For if no profit can be made
upon branches where a nation has the greatest natural advantages, it is
more than probable, that every other branch will prove at least equally
disadvantageous. If upon this revolution the ports of the nation be not
shut against the importation of foreign manufactures, merchants will
introduce them, and this will drain off the nation’s wealth, and bring
the industrious to starve.

It is upon this principle that incorporations are established. Of these
we shall say a word, and conclude our chapter.

Cities and corporations, may be considered as nations, where luxury and
taxes have rendred living so expensive, that work cannot be furnished
but at a high rate. If labour, therefore, of all kinds, were permitted
to be brought from the provinces, or from the country, to supply the
demand of the capital and smaller corporations, what would become of
tradesmen and manufactures who have their residence there? If these, on
the other hand, were to remove beyond the liberties of such
corporations, what would become of the public revenue, collected in
these little states, as I may call them?

By the establishment of corporations, a statesman is enabled to raise
high impositions upon all sorts of consumption; and notwithstanding that
these have the necessary consequence of increasing the price of labour,
yet by other regulations, of which afterwards, the bad consequences
thereby resulting to foreign trade may be avoided, and every article of
exportation be prevented from rising above the proper standard for
making it vendible, in spite of all foreign competition.

The plan of modern taxation seems first to have been introduced into
cities, while the country was subject to the barons, and remained in a
manner quite free from them. Cities having obtained the privilege of
incorporation, began, in consequence of the power vested in their
magistrates, to levy taxes: and finding the inconveniences resulting
from external competition (foreign trade) they erected the different
classes of their industrious into confraternities, or corporations of a
lower denomination, with power to prevent the importation of work from
their fellow tradesmen not of the society.

Here arises a question.

Why are corporations complained of in many countries, as being a check
upon industry; if the establishment of them proceeds from so plain a
principle as that here laid down?

Let me draw my answer from another question. Why are they not complained
of in all countries?

The difference between the situation of one country and another, will
plainly point out the principle which ought to regulate the
establishment and government of corporations. When this is well
understood, all disputes concerning the general utility, or harm arising
from them will be at an end: and the question will be brought to the
proper issue; to wit, their relative utility considered with respect to
the actual situation of the country where they are established. In one
province a corporation will be found useful, in another just the
contrary.

First then it must be agreed, on all hands, that the principle laid down
is just. No body ever advanced, that the industry carried on in _towns_,
where living is dear, ought to suffer a competition with that of the
_country_, where living is cheap; I mean for the direct consumption of
the citizens. But it may be advanced, that no subaltern corporation
should enjoy an exclusive privilege against those who share of every
burthen imposed by the great corporation from which they draw their
existence. That they have no right of exclusion against citizens; but
only against strangers who are not under the same jurisdiction, nor
liable to the same burthens. Here the dispute lies between the members
of the great corporation and those of the smaller. Now, I say, while no
other interest is concerned, the decision of this question ought to be
left to the corporation itself. But the moment the public good comes to
be affected by certain privileges enjoyed by individuals, such
privileges should either be abolished, or put under limitations.

In countries where industry stands at a determined height, while the
consumption of cities neither augments nor diminishes; when those who
live upon an income acquired, live uniformly in the same way; when this
regular consumption is regularly supplied, by a certain number of
citizens sufficient to supply it; when the hands employed for this
purpose are in a perfect proportion to the demand made upon them; in
such countries, I say, any diminution of the privileges of corporations
would be a means of overturning the equal balance between work and
demand.

We have said above, that when hands become too many for the work,
profits fall below the necessary standard of subsistence; that the
industrious enter into competition for the physical-necessary, and hurt
one another. Here then is the principle which the corporation ought to
keep in their eye: the profits upon every trade ought to be in
proportion to work.

In order to come the better at the knowledge of this proportion, many
corporations in Germany have the subaltern corporations of trades
restrained to certain numbers. There is a determined number of
apothecaries, joiners, smiths, &c. allowed in every town, and no more;
according as employment is found for them. This seems a good regulation.
I do not say it may not be abused. But the power of administration must
be lodged somewhere; and if in a country where industry is making little
progress, corporations were laid open, the consequence would be, that
every one would starve another, and the consumers would be ill served.

On the other hand, when industry springs up, when the manners of a
people change all of a sudden, or by quick degrees, as has been the case
in many countries in Europe within these threescore years: it is a mark
of a narrow capacity not to perceive that a change of administration
becomes necessary; and if on such revolutions those who are at the head
of corporations should profit of the increase of demand, and occasion
prices to rise in favour of the incorporated workmen, the infallible
consequence will be, to make the city become deserted, and deprived of a
trade, which otherwise would necessarily fall to her share, in
consequence of the advantage she must draw from establishments already
made for supplying every branch of consumption[K]. But let the principle
above mentioned be constantly followed; let profits be kept at a right
standard; let hands be increased according to demand; let the city
workmen gain no advantage over those of the country which may not be
compensated by the difference of the price of subsistence; let the
disadvantages again on the side of the town affect only their own
consumption, not the surplus of their industry; let every convenience
for carrying on foreign trade (every thing here is understood to be
foreign, which does not enter into the consumption of the town) be
provided for in the suburbs, or, if you please, in a place out of the
town walled in for that purpose; let markets there be held for every
kind of work coming from the country; and then the true intent of a
corporation will be answered. If it be found that the prosperity of
trade demands still more liberty, then the corporation may be thrown
open; but on the other hand, every burthen must be taken off, and every
incorporated member must be indemnified by the state, for the loss he is
thereby made to suffer.

Footnote K:

  The cities of the Austrian Netherlands are, from these causes, at
  present in a state of depopulation; and the industrious classes are
  assembling in the villages, which are beginning to rival the
  populousness of cities. In these villages, the privileges of the
  cities are not established. Privileges which will in all probability
  end in their bankruptcy as well as depopulation. The depopulation will
  follow from the causes already mentioned; the bankruptcy from the sums
  these corporations lend the sovereign, on the credit of new
  impositions constantly laying upon every branch of consumption. This
  is so true, that the acquisition of this country (one of the most
  fertile and most populous in Europe) would hardly be worth the having,
  if the debts owing by the corporations were to be fairly paid, and
  their ruinous _privileges_ (as they are called) allowed to subsist
  without alteration.

The great change daily operating on the spirit of European nations,
where corporations have been long established, without any great
inconvenience having been found to arise from them, suggests these
reflections, which seem to flow naturally, from the principles we have
deduced. I shall only add, that from the practice of imposing taxes
within these little republics (as I have called them) Princes seem to
have taken the hint of extending that system; by first appropriating to
the public revenue, what the cities had established in favour of
themselves, and then by enlarging the plan as circumstances favoured
their design. That this is the true origin of the modern plan of
taxation (I mean that upon consumption) may be gathered from hence; that
the right of imposing taxes appears no where, almost, to have been
essentially attached to royalty, even in those kingdoms, where Princes
have long enjoyed an unlimited constitutional authority over the persons
of their subjects. This right I take to be the least equivocal
characteristic of an absolute and unlimited power. I know of no
christian monarchy (except, perhaps, Russia) where either the consent of
states, or the approbation or concurrence of some political body within
the state, has not been requisite to make the imposition of taxes
constitutional; and if more exceptions are found, I believe it will not
be difficult to trace the origin of such an exertion of sovereign
authority, without ascending to a very high antiquity. The prerogative
of Princes in former times, was measured by the power they could
constitutionally exercise over the _persons_ of their subjects; that of
modern princes, by the power they have over their _purse_.

Having, therefore, shewn the necessity of putting a stop to foreign
reciprocal commerce in manufactures, so soon as in every branch this
trade becomes disadvantageous to a nation; the next question comes to
be, how to proceed in the execution, so as to avoid a sudden and violent
revolution in the oeconomy of the state, which is of all things the most
dangerous: the hurt, therefore, ought to be foreseen at a great
distance, in order to be methodically prevented.

------------------------------------------------------------------------



                              CHAP. XXIV.
     _What is the proper Method to put a Stop to a foreign Trade in
     Manufactures, when the Balance of it turns against a Nation?_


It must not be understood, from what was said in the last chapter, that
so soon as the balance of foreign trade, either on the whole, or on any
branch of manufacture, is to be found against a nation, that a statesman
should then at once put a total stop to it. This is too violent a remedy
ever to be applied with success.

It is hardly possible, that a considerable revolution in the trade of a
nation should happen suddenly, either to its advantage, or disadvantage,
unless in times of civil discord, or foreign wars, which at present do
not enter into the question.

A sagacious statesman will, at all times, keep a watchful eye upon every
branch of foreign commerce, especially upon importations. These consist
either in the natural produce of other countries, or in such produce
increased in its value by manufacture.

In all trade two things are to be considered in the commodity sold. The
first is the matter; the second is the labour employed to render this
matter useful.

The matter exported from a country, is what the country loses; the price
of the labour exported, is what it gains.

If the value of the matter imported, be greater than the value of what
is exported, the country gains. If a greater value of labour be
imported, than exported, the country loses. Why? Because in the first
case, strangers must have paid, _in matter_, the surplus of labour
exported; and in the second case, because the country must have paid to
strangers, _in matter_, the surplus of labour imported.

It is therefore a general maxim, to discourage the importation of work,
and to encourage the exportation of it.

When any manufacture begins to be imported, which was usually made at
home, it is a mark that either the price of it begins to rise within the
country, or that strangers are making a new progress in it. On the other
hand, when the importation of manufactures consumed within a country
comes to diminish, and when merchants begin to lose upon such branches
of trade, it is a proof that industry at home is gaining ground in those
articles. The statesman then must take the hint, and set out by clogging
gently the importation of those commodities, not so as to put a stop to
it all at once; because this might have the effect of carrying profits
too high upon the home fabrication of them.

All sudden revolutions are to be avoided. A sudden stop upon a large
importation, raises the prices of domestic industry by jerks, as it
were; they do not rise gradually; and these sudden profits engage too
many people to endeavour to share in them. This occasions a desertion
from other branches of industry equally profitable to the state. Such
revolutions do great harm; because it is a long time before people come
to be informed of their true cause, and during the uncertainty, they
are, as it were, in a wilderness, surprized and delighted with the
consequences, according as their several interests are affected by them.
Every one accounts for the phenomena in a different way. Some are for
applying remedies against the inconveniencies; while others are totally
taken up in profiting to the utmost of every momentary advantage. In a
word, nothing is more hurtful than a sudden revolution, in so
complicated a body as that of the whole class of the industrious, in a
modern society. When therefore such changes happen, in spite of all a
statesman can do, the best way to prevent the inconveniencies which they
draw along with them, is to inform the public of the true causes of
every change, favourable or hurtful to the several classes of
inhabitants. This also seems to be the best method to engage every one
to concur in promoting the proper remedies, when the inconveniencies
themselves cannot be prevented. So much for a scheme of encouraging
growing manufactures, or of supporting them in their decline. I proceed
next to consider the methods of preventing the loss of others already
established.

We have said, that the importation of any article of consumption usually
provided at home, was a proof by no means equivocal of a foreign
rivalship. I shall say nothing, at present, of the methods to be used as
a remedy for this inconvenience: these have been already discussed. We
must now suppose, every one that might be contrived for this purpose, to
become ineffectual; and that foreign industry is so far gaining ground,
as daily, more and more, to supply the several branches of domestic
consumption.

Upon this, the statesman will begin by laying the importation of such
commodities under certain restrictions. If these do not prove
sufficient, they must be increased; and if the augmentation produces
frauds, difficult to be prevented, the articles must be prohibited
altogether. By this method of proceeding, it will be found, that without
any violent or sudden prohibition laid upon foreign trade, by little and
little, every pernicious branch of it will be cut off, till at last it
will cease altogether, as in the case mentioned above; to wit, when the
most advantageous branches cannot be carried on without loss.

Something, however, must here be added, in order to restrain so general
a plan of administration. Nothing is more complex than the interests of
trade, considered with respect to a whole nation. It is hardly possible
for a people to have every branch of trade favourable for the increase
of her wealth: consequently, a statesman who, upon the single inspection
of one branch, would lay the importation of it under limitations, in
proportion as he found the balance upon it unfavourable to the nation,
might very possibly undo a flourishing commerce.

He must first examine minutely every use to which the merchandize
imported is put: if a part is re-exported with profit, this profit must
be deduced from the balance of loss incurred by the consumption of the
remainder. If it be consumed upon the account of other branches of
industry, which are thereby advanced, the balance of loss may still be
more than compensated. If it be a means of supporting a correspondence
with a neighbouring nation, otherwise advantageous, the loss resulting
from it may be submitted to, in a certain degree. But if upon examining
the whole chain of consequences, he finds the nation’s wealth not at all
increased, nor her trade encouraged, in proportion to the damage at
first incurred by the importation, I believe he may decide, that such a
branch of trade is hurtful; and therefore that it ought to be cut off,
in the most prudent manner, according to the general rule.

The first object of the care of a statesman, who conducts a nation,
which is upon the point of losing her foreign trade, without any
prospect or probability of recovering it, is to preserve her wealth
already acquired. No motive ought to engage him to sacrifice this
wealth, the safety alone of the whole society excepted, when suddenly
threatned by foreign enemies. The gratification of particular people’s
habitual desires, although the wealth they possess may enable them,
without the smallest hurt to their private fortunes, to consume the
productions of other nations; the motive of preventing hoards; that of
promoting a brisk circulation within the country; the advantages to be
made by merchants, who may enrich themselves by carrying on a trade
disadvantageous to the nation; even, to say all in one word, the
supporting of the same number of inhabitants, ought not to engage his
consent to the diminution of national wealth.

Here follow my reasons for carrying this proposition so very far, even
to the length of sacrificing a part of the inhabitants of a country to
the preservation of its wealth; and I flatter myself, that when duly
examined, I may avoid the smallest imputation of Machiavellian
principles, in consequence of so bold an assertion.

While a people are fed with the produce of their own lands, the
preservation of their numbers is quite consistent with the preservation
of their wealth. If, therefore, in such a case, their numbers should be
diminished upon a decay of foreign trade, either by their food’s being
exported, or by their lands becoming uncultivated, I should never
hesitate to lay the blame upon the statesman’s administration.

But an industrious people may (as has been said) carry their numbers far
beyond the proportion of their own subsistence. The deficiency must be
supplied from abroad, and must be paid with the balance of the trade in
their favour. Now when this balance comes to turn against them, and
when, consequently, a stop is put to the disadvantageous foreign trade,
upon the principles we have been laying down, the statesman is reduced
to this alternative; either annually to allow a part of the wealth
already got, to be exported, in order to buy subsistence for the
_surplus_ of his people, as I may call them, or to reduce their numbers
by degrees, either by encouragements given to their leaving the country,
or by establishing colonies, &c. until they are brought down to the just
proportion of national subsistence. If he prefers the first, supposing
the execution of such a plan to be possible, the consequence will be,
that so soon as all the wealth is spent, the whole society, except the
proprietors of the lands, and these who cultivate them, must go to
destruction. If he prefers the second, he remains independent of all the
world with respect to the inhabitants he preserves. They remain in a
capacity of maintaining themselves, and he may alter the plan of his
political oeconomy as best suits his circumstances, relatively to other
nations. While all his subjects are employed and provided for, he will
remain at the head of a flourishing and happy people.

It may be here objected, that the first alternative is an impossible
supposition. I allow it to be so, if you suppose it to be carried the
length to which I have traced it; because no power whatsoever in a
statesman, can go so far as to preserve numbers at the expence of the
whole riches of his people. But I can very easily suppose a case, where
numbers may be supported at an eminent loss to a state which finds
itself in the situation in which we have represented it in our
supposition.

Suppose a prince, upon the failure of his foreign trade, to increase his
army, in proportion as he finds his industrious hands laid idle by a
deficiency of demand for their labour; and let him fill his magazines
for their subsistence by foreign importation, leaving the produce of his
country to feed the rest of his subjects. By such a plan, every body
will remain employed, and also provided for, and such a prince may be
looked upon as a most humane governor. This I willingly agree to. I
should love such a prince; but the more I loved him, the more I should
regret that his project must fail, from a physical impossibility of its
being long supported; and when it comes to fail by the exhausting of his
wealth, it will not be his regrets which will give bread to his
soldiers, nor employment to his industrious subjects, who will no longer
find an equivalent for their labour.

Let this suffice at present, upon the general principles which influence
the stop necessary to be put to the importation of foreign commodities,
and to the diminution of national wealth, in the case we have had before
us.

Next as to the articles of exportation. The most profitable branches of
exportation are those of work, the less profitable those of pure natural
produce. When work cannot be exported in all its perfection, because of
its high price, it is better to export it with a moderate degree of
perfection, than not at all; and if even this cannot be done to
advantage, then will a people be obliged to renounce working except for
themselves: and then, if domestic consumption does not increase in
proportion to the deficiency of foreign demand, a certain number of
hands will be idle, and a certain quantity of natural produce will
remain upon hand. The first must disappear in a short time; they will
starve or desert; the last will become an article of exportation. Here
then is a new species of trade which takes place upon the extinction of
the other. When a nation has been forced to reduce her exportations to
articles of pure natural produce, in conformity to the principles we
have been laying down, then the plan proposed in the title of this
chapter is executed. She is then brought as low in point of trade as she
can be, but at the same time, she may enjoy her natural advantages in
spite of fortune; and in proportion to them, she may, with a good
government and frugality, retain a balance of trade in her favour, which
will constantly go on in augmenting her national wealth.

There is, therefore, a period at which foreign trade may stop in every
article, but in natural produce. I do not know whether this period be at
a great distance, when the state of trade is considered relatively to
certain nations of Europe.

Were industry and frugality found to prevail equally in every part of
the great political bodies, or were luxury and superfluous consumption,
every where carried to the same height, trade might, without any hurt,
be thrown entirely open. It would then cease to be an object of a
statesman’s care and concern. On the other hand, were all nations
equally careful to check every branch of unprofitable commerce, a
general stagnation of trade would soon be brought about. Manufactures
would no more be the object of traffic; every nation would supply
itself, and nothing would be either exported or imported but natural
productions.

But as industry and idleness, luxury and frugality, are constantly
changing their balance throughout the nations of Europe, able merchants
make it their business to inform themselves of these fluctuations, and
able statesmen profit of the discovery for the re-establishment of their
own commerce; and when they find that this can no more be carried on
with the manufactures or produce of their own country, they engage their
merchants to become carriers for their neighbours, and by these means,
form as it were a third and last entrenchment, which, while they can
defend it, will not suffer their foreign trade to be quite extinguished;
because, by this last expedient, it may continue for some time to
increase their national stock. It is in order to cut off even this
resource, that some nations lay not only importations under restraint,
but also the importers[L]. Let such precautions be carried to a certain
length on all hands, and we shall see an end to the whole system of
foreign trade, so much alamode, that it appears to become more and more
the object of the attention as well as of the imitation of all modern
statesmen.

Footnote L:

  By the act of navigation in England.

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                               CHAP. XXV.
 _When a rich Nation finds her Foreign Trade reduced to the Articles of
Natural Produce, what is the best plan to be followed? and what are the
            Consequences of such a Change of Circumstances?_


There is now no more question of a trading nation; this character is
lost, the moment there is a stop put to the export of the labour and
ingenuity of her people.

The first objects of her care should be to increase, by every possible
means, the quantity of her natural produce; to be as frugal as possible
in the consumption of it, and to export the surplus to the best
advantage.

If she finds her exportation of subsistence going forward, while some of
her people remain in want, she may rest assured that industry is made to
suffer by some internal vice; and the most probable cause of such an
effect will be found to be an unequal competition between those of the
lower classes, who work for a physical-necessary. This must be removed,
and the statesman should never rest, until he has set the balance of
work and demand so far right, as to prevent at least _the scale of work_
from preponderating; for this is the door by which misery gets in among
the people.

_The scale of demand_ preponderating, will not now be so hurtful, as
this alteration of the balance will only raise prices, and accelerate
circulation, and keep the other balance, to wit, that of wealth (of
which we shall treat in the following chapter) in a constant vibration,
without diminution of the public stock.

Another object of a statesman’s care in these supposed circumstances, is
to suffer no work whatever, nor the natural produce of any other country
conducive to luxury, to be imported; for although I have said, that
superfluous consumption can do little harm when the interests of foreign
trade do not enter into the question so as to prevent exportation, by
raising prices at home; and though the importation of foreign produce,
in exchange for like commodities of national growth, does no hurt to a
state with respect to her wealth, yet if such importation be an article
of mere superfluity, I think a statesman should prudently discourage it;
because the search of superfluities is of itself a proof of a luxurious
turn, and I should wish to see this turn improved so as to promote
national purposes only, that is, to the augmentation and subsistence of
useful inhabitants.

Let me illustrate this by an example. Foreign wines, I shall suppose,
become alamode, as a part of the luxury of an elegant table. A
statesman, by his example, may discourage this, and introduce many other
articles of expence in entertainments sufficient to compensate it. The
furniture of apartments may be rendred more magnificent, ornaments of
the side board, decoration of deserts, new amusements immediately after
dinner might be introduced, which would have an air of refinement and
delicacy.

By such examples he might easily substitute one expence, which might
become a national improvement, in the place of another, where the luxury
produces no such effect. And when prodigality and expence have neither
the good effect of giving bread to the poor, nor of accelerating
circulation at home in favour of the public, I can see no reason why a
statesman should interest himself for their support; and much less, why
a speculative person, who examines only the methods of making mankind
happy by their mutual services to each other, should strain a subject,
in order to find arguments proper to make either the apology or
panegyric of the various schemes of dissipation.

I need not add, as a restriction of this principle of discouraging the
importation of foreign commodities (which become articles of a greater
superfluous home-consumption) that when such a branch of trade becomes
necessary to be carried on, in order to engage a neighbouring nation to
consume of home-superfluities; in this case, the luxury of the consumers
of the foreign produce, has an evident tendency to national improvement.
If delicate wines, and raw silk, are imported as a return for salt
herrings and raw hides, the support of such a trade is only the means of
making the rich consume these articles of home-production, by converting
them into burgundy and velvet.

These considerations regard the augmentation, or at least the
preservation of national wealth. If they are attended to, it is hardly
possible that any part of what is already acquired, can go abroad; and
in this case the whole balance of the exportation of natural produce
becomes clear gain.

There are still several things to be observed with regard to the
exportation of natural produce. Such articles as are in great abundance,
and are not produced in other countries, as wines in the southern
countries of Europe, ought always to be exported by the inhabitants,
because considerable profits must be made upon a trade where there is no
rivalship; and on such occasions, a people ought to be wise enough to
keep such profits for themselves.

But if other nations will not receive them, unless they be imported by
their own subjects, then the statesman may impose a duty upon
exportation, which is one way of sharing the profits with the carriers.
All the precaution necessary, in imposing this duty, is not to raise it
so high as to diminish the demand; nor to give an encouragement to a
neighbouring nation, to enter into competition for such a branch of
trade.

Neighbouring states which furnish the same articles of natural produce,
regulate, commonly, the duties upon exportation, in such a manner as
nearly to compensate all differences which strangers may find, between
trading with the one or with the other. Or they grant particular
privileges in point of trade, to the nations with whom they find it most
for their advantage to trade.

If the natural advantages upon such articles are less considerable, no
duty can be imposed. Exportation may then be encouraged by granting
still greater privileges to strangers or others, who may promote the
exportation at little cost to the state.

If in the last place, the natural produce of a country be common to
others, where it is perhaps equally plentiful; it will be difficult to
procure the exportation of it; and yet it may happen, that too great an
abundance of it at home, may occasion inconveniencies. In this case, the
statesman must give a premium or bounty upon exportation, as the only
method of getting rid of a superfluity, which may influence so much the
whole mass of the commodity produced, as to sink the price of the
industry of those employed in it, below the standard of their
physical-necessary. By giving, therefore, this premium, he supports
industry in that branch; he takes nothing from the national wealth; and
the exportation, which takes place in consequence of the bounty, is all
clear gain. This is an uncommon operation in trade, but it has so
intimate a connection with the doctrine of taxes, and the proper
application of public money, that I will postpone the farther
consideration of it until I come to that branch of my subject; and the
rather, that this book is swelling beyond its due proportion.

I have little occasion to speak of importations, into a country which
exports no manufactures. The ruling principle in such cases, is to
suffer no importation but what tends to encourage the exportation of the
surplus of natural produce, and which, at the same time, has no tendency
to rival any branch of domestic industry. Thus it is much better for a
northern country to pamper the taste of her rich inhabitants with wines
and spices, than to discourage agriculture by the importation of rice
and foreign grain; supposing the alternative quite optional, and the one
as well as the other to be the returns of her own superfluity.

I come next to the consideration of her inland trade, and consumption of
her own manufactures. Here there is no question of either an increase or
diminution of her wealth, but only of making it circulate in the best
manner to keep every body employed. Several considerations must here
influence our statesman’s conduct, and a due regard must be had to every
one of them. I shall reduce them to three different heads, and pass them
in review very cursorily, as we have already explained sufficiently the
principles upon which they depend.

_1mo._ To regulate consumption and the progress of luxury, in proportion
to the hands which are found to supply them.

_2do._ To regulate the multiplication of inhabitants according to the
extent of the fertility of the soil. These two considerations must
constantly go hand in hand.

In so far therefore, as the statesman finds his country still capable of
improvement, in so far he may encourage a demand for work, and even
countenance new branches of superfluous consumption; since the
equivalent to be given for them must of necessity prove an encouragement
to agriculture. But whenever the country becomes thoroughly cultivated
and peopled to the full proportion of its own produce, a check must be
put to multiplication, that is, to luxury, or misery and depopulation
will follow; unless indeed, we suppose that numbers are to be supported
at the expence of national wealth, the fatal consequences of which we
have already pointed out.

_3tio._ He should regulate the distribution of the classes of his
people, according to the political situation of the country.

This is the most complicated case of all. It would be imprudent, for
example, in a very small state situated on the continent, to distribute
all its inhabitants into producers and consumers, as we have called them
on several occasions; that is, into those who live upon a revenue
already acquired, and those who are constantly employed in acquiring one
by supplying the wants of the other. There must be a third class; to
wit, those who are maintained and taken care of at the expence of the
whole community, to serve as a defence. This set of men give no real
equivalent for what they receive; that is to say, none which can
circulate or pass from hand to hand; but still they are usefully
employed as members of a society mutually tied together by the band of
reciprocal dependence. Here is no vice implied; but at the same time,
the statesman must attend to the consequences of such a distribution of
classes.

The richer any state is, the more it has to fear from its neighbours:
consequently, the greater proportion of the inhabitants must be
maintained for its defence, at the expence of the industry of the other
inhabitants. This must diminish the number of free hands employed in
manufactures, and in supplying articles of consumption: consequently, it
would be imprudent to encourage the progress of luxury, while public
safety calls for a diminution of the hands which must supply it. If in
such circumstances luxury do not suffer a check, demand will rise above
the proper standard; living will become dearer daily, prices will rise,
and they will prove an obstacle to the recovery of foreign trade; an
object of which a prudent statesman will never lose sight for a moment.

It is for these and other such considerations, that many small states
are found to fortify their capital; to keep a body of soldiers in
constant pay, bearing a great proportion to the number of the
inhabitants; to form arsenals well stored with artillery, and to
institute sumptuary laws and other regulations proper to check luxury.
Nothing so wise in every respect! Their territory cannot be extended nor
improved, nor can their inhabitants be augmented, but at the expence of
their wealth; for such as gained their livelihood at the expence of
strangers, are at present out of the question. Were their own citizens
therefore permitted, out of the abundance of their wealth, to give bread
to as many as their extravagance could maintain, the public stock would
be constantly diminishing, in proportion to the foreign subsistence
imported for these supernumeraries, fed at the expence of the luxurious;
which would be just so much lost.

In other states which are extended, powerful by means of wealth, and
strong by nature and situation, whose safety is connected with the
general system of European politicks, which secures them against
conquest; such as Spain, France, Great Britain, &c. the progress of
luxury does little harm (as these territories are still capable of
infinite improvements) provided it does not descend to the lower classes
of the people.

It ought to be the particular care of a statesman to check its progress
there, otherwise there will be small hopes of ever recovering foreign
trade. Whereas, if the lower classes of a people continue frugal and
industrious, from these very circumstances trade may open anew, and be
recovered by degrees, in proportion as luxury comes to get footing in
other nations, where the common people are less laborious and frugal.

Luxury, among those who live upon a revenue already got, and who, by
their rank in the state, are not calculated for industry, has the good
effect of affording bread to those who supply them; but there never can
be any advantage in having luxury introduced among the lower classes,
because it is then only a means of rendring their subsistence more
chargeable, and consequently more precarious.

Having thus briefly laid together the principal objects of a statesman’s
care, upon the cessation of the foreign trade of his people, I shall
finish my chapter, by pointing out some general consequences which
reason and experience shew to be naturally connected with such a
revolution; not with regard to industry and inland trade, but as they
influence the spirit, government, and manners of a people.

Nothing is more certain than that the spirit of a nation changes
according to circumstances. While foreign trade flourishes, the minds of
the monied people are turned to gain. Money, in such hands, is generally
employed to procure more, not to purchase instruments of luxury; except
for the consumption of those prodigal strangers who are thereby becoming
daily poorer. It is this desire of becoming rich, which produces
frugality. A man is always frugal while he is making a fortune; another
very commonly becomes extravagant in the enjoyment of it; just so would
it be with nations, were a wise statesman never to interpose.

When, by the cessation of foreign trade, the mercantile part of a nation
find themselves cut off from the profits they used to draw from
strangers; and on the other hand, perceive the barriers of the nation
gradually shutting against every article of unprofitable correspondence,
they begin to withdraw their stocks from trade, and seek to place them
within the country. This money is often lent to landed men, hitherto
living within bounds, for two most substantial reasons. First, because
there was little money to be borrowed, from the high rate of interest,
owing to the great profits on foreign trade; and because the national
stock was then only forming. The second, because the taste of the times
was frugality. But when once the money which was formerly employed in
buying up loads of work for the foreign markets, falls into the hands of
landed men, they begin to acquire a taste for luxury. This taste is
improved and extended by an infinity of arts, which employ the hands
formerly taken up in furnishing branches of exportation. Thus by degrees
we see a rich, industrious, frugal, trading nation, transformed into a
rich, ingenious, luxurious, and polite nation.

As the statesman formerly kept his attention fixed on the preservation
of an equal balance between work and demand, and on every branch of
commerce, in order to prevent the carrying off any part of the wealth
already acquired; he must now direct his attention towards the effects
of the domestic operations of that wealth. He was formerly interested in
its accumulation; he must now guard against the consequences of this.

While the bulk of a nation’s riches is in foreign trade, they do not
circulate within the country; they circulate with strangers, against
whom the balance is constantly found. In this case, the richest man in a
state may appear among the poorest at home. In foreign countries you may
hear of the wealth of a merchant, who is your next door neighbour at
home, and who, from his way of living, you never knew to be worth a
shilling. The circulation of money for home-consumption will then be
very small; consequently, taxes must be very low; consequently,
government will be poor.

So soon as all this load of money which formerly was continually going
backwards and forwards, without almost penetrating, as one may say, into
the country, is taken out of foreign trade, and thrown into domestic
circulation, a new scene opens.

Every one now begins to appear rich. That wealth which formerly made the
admiration of foreigners, now astonishes the proprietors themselves. The
use of money, formerly, was to make more of it: the use of money now, is
to give it in exchange for those or such like commodities, which were
then consumed by strangers only.

It is this revolution in the spirit of a people, which renders the
consideration of the balance of their wealth an object of the greatest
political concern; because the constant fluctuation of it, among the
several classes of inhabitants, is what lays the foundation of public
opulence.

A government must always be respected, feared, and obeyed by the people
governed; consequently, it must be powerful, and its power must be of a
nature analogous to that of the subjects. If you suppose a great
authority vested in the grandees of a kingdom, in consequence of the
number and dependence of their vassals, the crown must have still a more
powerful vassalage at its command: if they are powerful by riches, the
crown must be rich. Without preserving this just balance, no government
can subsist. All power consists in men, or in money.

If therefore we suppose a vast quantity of wealth thrown into domestic
circulation, the statesman must follow new maxims. He must promote the
circulation of it so as to fill up the blank of foreign consumption, and
preserve all the industrious who have enriched him. The quicker the
circulation is found to be, the better opportunity will the industrious
have of becoming rich speedily; and the idle and extravagant will become
the more quickly poor. Another consequence equally certain, is, that the
quicker the circulation, the sooner will wealth become equally divided;
and the more equality there is found in wealth, the more equality will
be found in power. From these principles it will follow, that upon such
a revolution of national circumstances, a popular government may very
probably take place, if the statesman do not take proper care to prevent
it.

This is done by the imposition of taxes, and these are differently laid
on, according to the spirit of the government.

By taxes a statesman is enriched, and by means of his wealth, he is
enabled to keep his subjects in awe, and to preserve his dignity and
consideration.

By the distribution of taxes, and manner of levying them, the power is
thrown into such hands as the spirit of the constitution requires it
should be found in. Are they imposed in a monarchy where every man is
taught to tremble at the King’s name, the great men will be made rich by
his bounty, and the lower classes will be loaded and kept poor; that
they may, on easier terms, be engaged to fill those armies which the
Prince entertains to support his authority at home, and his influence
abroad.

Here independent people will always be looked upon with an evil eye, and
considered as rivals to the Prince, who ought to be the only independent
person in the state.

In limited governments, where the sovereign has not the sole power of
taxation, they will be laid on more equally, and less arbitrarily;
providing the theory of them in general be well understood. Here every
man must know _what_ he is to pay, and _when_; and the amount of the tax
must bear a proportion, on one hand, to the exigencies of the state; and
on the other, to the quantity of circulation which takes place upon the
payment of it: that is, a man must not be made to pay all the state can
demand of him for a year, upon his making a trifling, though most
essential acquisition of a necessary article of subsistence.

I think I have observed one remarkable difference in the point of view
in levying taxes in countries where these two forms of government are
established.

Under the pure monarchy, the Prince seems jealous, as it were, of
growing wealth, and therefore imposes taxes upon people, who are growing
richer. Under the limited government they are calculated chiefly to
affect those who are growing poorer.

Thus the monarch imposes a tax upon industry; where every one is rated
in proportion to the gain _he is supposed_ to make by his profession.
The poll-tax and _taille_, are likewise proportioned to the _supposed_
opulence of every one liable to them. These, with others of the same
nature, are calculated (as it is alledged) to establish an equality in
the load supported by the subjects; by making the industrious, and money
gatherers, contribute in proportion to their gains, although the capital
stock from which these profits arise be concealed from the eyes of the
public.

In limited governments, impositions are more generally laid upon
consumption. They encourage industry, and leave the full profits of it
to make up a stock for the industrious person. When the stock is made,
that is, when it ceases to grow, it commonly begins to decrease: the
number of prudent people, who live precisely upon their income, is very
small. It is therefore upon the dissipation of wealth, in the hands of
private people, that the state is enriched. Thus the career towards
poverty is only a little abridged: he who is in the way of spending his
estate will get at the end of it, if his life be spared; and therefore
there is no harm done to him, and much good done to the state, in making
a part of his wealth circulate through the public coffers.

The only precaution necessary to be taken in taxing consumption, is, to
render the impositions equal, and to prevent their affecting what is
purely necessary; or operating an unequal competition between people of
the same denomination. Such impositions have still a worse effect, than
those which fall upon growing wealth: they prevent the poor from being
able to subsist themselves. A fellow feeling excites compassion among
those of the lower classes; they endeavour to assist each other, and by
this operation, like a pack of cards, set up by children upon a table,
the first that is thrown down tumbles down another, until all are laid
flat; that is, misery invades the lower classes: more than one half of a
people.

From these principles (which I have been obliged to anticipate) we may
gather the necessity of taxes, in states where foreign trade begins to
decay. Without them, there is no security for a government against the
power of domestic wealth. Formerly, Princes lived upon their domain, or
patrimonial estate. What domain would be sufficient, at present, to
support the expence of government? And if a government is not able to
hold the reins of every principle of action within the state, it is no
government, but an idol, that is, an object of a voluntary respect. The
statesman, therefore, must hold the reins; and not commit the management
of the horses to the discretion of those whom he is employed to conduct.

Another consequence of taxes, is, that the more luxury prevails, the
more the state becomes rich: if luxury, therefore, breeds
licentiousness, it at the same time provides a curb against its bad
effects.

This augmentation of wealth produces a double advantage to the
statesman: for besides the increase of the public revenue, the progress
of luxury changing the balance of wealth constantly, by removing it from
the rich and extravagant, to the poor and laborious, renders those who
were formerly rich, and consequently powerful, dependent upon him for
their support. By the acquisition of such persons, he gains additional
credit, and supports his authority. Thus wealth and power circulate, and
go hand in hand.

It may be asked, how these principles can be reconciled with the vigour
and strength commonly found in the government of flourishing trading
nations; for in such we must suppose few taxes? consequently, a poor and
therefore a weak government; and a rich, consequently, a powerful
people?

I answer, that under such circumstances, a people are commonly taken up
with their trade, and are therefore peaceable; and as their wealth does
not appear, being constantly in circulation with strangers, the
influence of it is not felt at home. While wealth is employed in pursuit
of farther gains, it cannot give power; consequently, as to all
political effects at home, it is as if it did not exist; and therefore
there is no occasion for the state to be possessed of a wealth they have
no occasion to employ. If such a nation be attacked by her enemies, she
becomes wealthy in an instant, every one contributes to ward off the
common danger: but if, on the contrary, her tranquillity is disturbed at
home, the rebellion generally proves successful; which is a confirmation
of the principles laid down. I might illustrate this by many historical
remarks. I shall only suggest to my reader, to examine the nature of the
Dutch revolutions, and to compare the success of rebellions in France
and England, during the last century, with others of a fresher date.
Here the reader may consult the learned Mr. Hume’s observation upon the
commencement of the civil war. _History of Great Britain_, Vol. I. p.
325.

When, therefore, foreign trade has ceased for some time, and luxury has
filled up the void, a considerable part of national wealth begins to
circulate through the public treasury. It is natural then for great men
to resort to court, in order to partake of the profits of government;
and for the statesman to be fond of attaching such people to his
interest, in order to be a constant check upon the turbulent spirit,
which new gotten wealth may excite in the minds of one set of people,
and desperate fortunes in those of others.

While there was little circulation of money in Europe, and few taxes,
there was small profit to be made in following of Kings. These were more
formidable to their enemies, than profitable to their friends. The great
men of the state lived upon their lands, and their grandeur resembled
that of the Prince; it consisted in the number and dependence of their
vassals; who got as little by their Lord, as he did by the King. The
poor in those days were plundered of the little money they had, by the
great; now the great are stripped of the largest sums, by the numbers of
poor, who demand from them on all hands, the just equivalent of their
industry.

When Princes find their great men all about them, all asking, and all
depending for different marks of their favour, they may perceive the
great change of their situation, produced by luxury, and a swift
circulation. This revolution has not been sudden, it has been the work
of several centuries; and I think we may distinguish three different
stages during this period.

The first during the grandeur of the feudal government: then the great
Barons were to be consulted, and engaged to concur in the King’s wars,
because it was they who paid the expence, and suffered the greatest
loss. These are called by some the days of liberty; because the states
of every country in Europe, almost, were then in all their glory: they
are called so with great reason, when we consider the condition of the
great only.

In those days there were seldom any troubles or disturbances in the
state, seldom any civil wars levied against the King, but such as were
supported by the grandees; who, either jealous of their own just rights,
or ambitious of acquiring others at the expence of the crown, used to
compel their vassals, or engage them by the constitutional influence
they had over them, to disturb the public tranquillity.

The second stage, I think, may be said to have begun with the times of
industry, and the springing up of trade. Such Princes, whose subjects
began to enrich themselves at the expence of other nations, found, on
one side, the means of limiting the power of the great lords, in favour
of the extension of public liberty. The lords, on the other side, when
they wanted to disturb the public tranquillity, did not, as formerly,
vindicate their own privileges, so much as they combined with the
people, and moved them to revolt, on popular considerations.

This may be called the period of confusion, out of which has arisen
certain determined forms of government; some drawing nearer to the
monarchical, others nearer to the popular form, according as the power
of Princes has been more or less able to support itself, during the
shock of the revolution, and the overturn of the balance between public
and private opulence.

The third and last stage, of which I shall speak at present, may be
fixed at that period when the proportion of the public revenue became
adequate to the mass of national wealth; when general laws were made to
govern, and not the arbitrary power of the great. The grandees now, from
being a bridle on royal authority, are often found dependent upon it for
their support. The extraordinary flux of money into the treasury,
enables Princes to keep splendid courts, where every kind of pleasure
and amusement is to be had. This draws together the rich men of the
state. The example of the sovereign prompts these to an imitation of his
expence, this imitation increases consumption, which in its turn
augments the King’s income, as it diminishes that of every other person.

When the great men of a kingdom have exhausted their estates, in paying
a regular court to the Prince, they employ the credit they have acquired
with him during the time of their dissipation, to obtain marks of his
favour, in order to support them in their decline. By these they are
enabled to live in as much state as before. They find no difference in
their situation; unless perhaps they should accidentally reflect, that
the fund which produced their former opulence, was in their own
possession; whereas that of their present wealth is in the hands of
their master.

To compensate this difference, they are made to acquire, by the favour
of the court, advantages which they never could have enjoyed from the
largest independent fortune.

The luxurious system of living, every where introduced, draws the
wealthy together, either in the capital or in other great cities of the
kingdom; where every one compares the expence and figure he makes, with
that of others who are about him. A person honoured with the King’s
favour, of the same quality with another, acquires, by this
circumstance, a great superiority. He commands, I shall suppose, in a
place; he is the person to whom people must apply, in order to obtain
favours, perhaps justice; he is adorned with a title, or outward mark of
distinction, which procure him respect and consideration; and, which is
still more, he is on the road to a farther elevation. It requires a
great stock both of philosophy and good sense, not to be dazzled with
these advantages. Independency, compared with them, is but a negative
happiness. To be truly happy, we must have power, and have other people
to depend on us.

------------------------------------------------------------------------



                              CHAP. XXVI.
  _Of the Vibration of the Balance of Wealth between the Subjects of a
                             modern State._


We have frequently mentioned this balance, as an object of great
importance to a statesman who is at the head of a luxurious nation;
which having lost its foreign trade, has substituted, in the place of
it, an extensive inland commerce. This will supply the loss of the
former, so far, as equally to provide employment, and, consequently,
subsistence, to every one inclined to be industrious; although it must
prove quite ineffectual for augmenting the national wealth already
acquired.

I shall first explain what I mean by the balance of wealth vibrating
between the members of a society, and from that will be seen why I rank
this also among the political balances of a modern state.

It has been observed in the beginning of the nineteenth chapter, that
the great characteristic of what we call liberty, is the circulation of
an adequate equivalent for every service.

By wealth, I understand this circulating adequate equivalent.

The desires of the rich, and the means of gratifying them, make them
call for the services of the poor: the necessities of the poor, and
their desire of becoming rich, make them chearfully answer the summons;
they submit to the hardest labour, and comply with the inclinations of
the wealthy, for the sake of an equivalent in money.

This permutation between the two classes, is what we call circulation;
and the effects produced by it, upon the political situation of the
parties at the precise time of the circulation, and the consequences
after it is compleatly effected, explains what is called the balance of
wealth.

To render our ideas more correct, let us consider the money on one side,
and the prestations, as the civilians call them, or performances of any
kind, on the other, as _reciprocal_ equivalents for one another; and
then let us examine the nature of those prestations which tend to put
these equivalents into circulation; that is to say, what are the things
which money can purchase.

These we may divide, with the lawyers, into corporeal and incorporeal.
The corporeal may again be divided into consumable and inconsumable; and
the incorporeal into personal service, and what the lawyers call _jura_,
rights in or to any thing whatever. I cannot fully explain myself
without the help of this distribution.

Let us next consider the effects of the circulation of money, as it has
for its object, the acquisition of the four several species here laid
down.

1. Of inconsumable things. 2. Of things consumable. 3. Of personal
service. 4. Of rights acquired in or to any thing whatever.

I. The only thing inconsumable is the surface of the earth. This must
not be taken in a philosophical, and far less in a chemical sense. A
thing is consumed, so far as it concerns our inquiry, the moment it
becomes useless, or even when it is lost.

The surface of the earth, therefore, is the only thing inconsumable;
because, generally speaking, it never can cease to be useful, and never
can be lost; it may be changed, but the earth must always have a
surface. What is said of the surface, may be understood likewise of that
small part of its body accessible to man, for supplying him with what he
finds useful there, as the produce of mines.

Next to the earth itself, nothing is less consumable than her metals,
consequently coin may very properly be classed under the head of things
inconsumable; although it may be lost, and even worn out in circulation.

Let us now consider the effects of circulation in the purchase of land.
(A), I shall suppose, has a piece of land, and (B) has one thousand
pounds weight of gold coin, which the laws of society have constituted
to be an adequate circulating equivalent for every thing vendible. They
agree to make an exchange. Before the exchange the balance of their
wealth is equal; the coin is worth the land, the land is worth the coin;
the exchange makes no alteration, nor has it the effect of making any
afterwards; the new landlord may apply himself to the improvement of the
soil, the monied man to the turning of his thousand weight of gold coin
to the best advantage; consequently, by this transaction, no vibration
of the balance seems to be affected.

If coin itself be the object of sale, the consequences are much the
same. (A) has a guinea, (B) has twenty one shillings, the exchange they
make produces no alteration in their circumstances. The same holds good
in other species of circulation, such as the transmission of money by
inheritance. (A) dies and leaves his money to (B); here the possessor of
the money only changes his name, perhaps his inclinations, and that is
all. In like manner a person pays his debts, and withdraws his bond, or
other security; no balance is affected by this circulation, matters
stand between the parties just as before.

The nature, therefore, of circulation, when one inconsumable commodity
is given for another, is, that it operates no vibration in the balance
of wealth between the parties; because, in order to produce this, one
must remain richer than he was before, and the other proportionally
poorer.

II. Under the second head of alienation, to wit, that of consumable
commodities, is comprehended every thing corporeal, except money, and
land, which money may purchase. In these, two things deserve attention.
First, the simple substance, or the production of nature; the other, the
modification, or the work of man. The first I shall call the _intrinsic
worth_, the other, the _useful value_. The value of the first, must
always be estimated according to its usefulness after the modification
it has received is entirely destroyed, and when by the nature of the
thing both must be consumed together, then the total value is the sum of
both. The value of the second must be estimated according to the labour
it has cost to produce it. An example will make this plain.

The intrinsic worth of any silk, woollen, or linnen manufacture, is less
than the primitive value employed, because it is rendred almost
unserviceable for any other use but that for which the manufacture is
intended. But the intrinsic substance of a loaf of bread loses nothing
by the modification, because the last cannot be consumed without the
first. In a piece of silver plate curiously wrought, the intrinsic worth
subsists entire, and independent of the useful value, because it loses
nothing by the modification. The intrinsic value, therefore, is
constantly something real in itself: the labour employed in the
modification represents a portion of a man’s time, which having been
usefully employed, has given a form to some substance which has rendred
it useful, ornamental, or in short, fit for man, mediately or
immediately.

Let us now apply these distinctions to the different circumstances which
attend consumption, in order to perceive their effects.

The consumption of the intrinsic value of any commodity, takes place the
moment the matter employed begins to diminish, and is compleated so soon
as it is consumed totally. The consumption of the useful value proceeds
in like manner, in proportion as the use it is put to makes the value of
it diminish, or disappear altogether.

Let us next take an example, and examine the effects of circulation in
the purchase of things consumable, as to the vibration of the balance of
wealth. (A) has a piece of coin, (B) has something which his labour has
produced; they make an exchange. (A) hitherto has neither gained or
lost, neither has (B); but (A) begins to make use of what he had
purchased with his coin, and in using it a part disappears; that moment
the balance begins to turn against him. (B) on the other hand, exchanges
his piece of coin with another, whom we shall call (C), and gets in
return a piece of wood; if (B) puts this piece of wood into the fire, in
proportion as the wood consumes, the balance is returning to its level
between (A) and (B), and is changing in favour of (C). If (B), instead
of burning his wood, makes a beam of it for supporting his house, the
balance will turn more slowly, because the wood is then longer in
consuming: but if he makes some useful piece of furniture of one part of
his wood, he may warm himself with the remaining part of it, and with
the coin he gets for his work, may buy a beam for his house, and even
food to eat. If (B) stops at this period, and works no more, he will
find himself just upon a level with (A); so soon as his fire is burnt
out, his beam rotten, and his food consumed, and the whole balance will
be found in favour of (C), providing that by his industry he has been
able to procure for himself all necessaries, and preserve the piece of
coin entire. Here then is the spur to industry; to wit, the acquisition
of this balance, which gives a relative superiority even among those of
the lowest classes, and determines their rank as well as their
political-necessary, according to the principles laid down in the
twenty-first chapter.

The essential characteristic of this vibration of the balance of wealth,
is the change in the relative proportion of riches between individuals.
But it must be observed, that under this second species we are to
consider the change of proportion no farther than as it is produced by
the circulation of a free adequate equivalent, of such a nature as to be
transferable to another hand without any diminution. The consumption,
therefore, is the only thing which makes the balance turn. While the
consumable commodity remains entire in the hands of the purchaser, he
still remains possessor of the value, and may, by inverting the
operation, return to the possession of the same species of wealth he had
before.

Here it may he asked, if money be absolutely necessary for producing a
vibration of this balance by the means of consumption. We may easily
conceive the greatest inequality between the numbers of a state, without
supposing the existence of money. We may suppose the property of lands
unequally divided, and a great surplus of subsistence found in the hands
of one individual, which may by him be given in exchange for the produce
of industry. Under such circumstances then it may be asked, if without
money there can be no such thing as a vibration in the balance of
wealth; supposing in this case, the term _wealth_ to imply, in general,
the means of purchasing whatever man can perform or produce.

I answer, that no doubt the balance may be susceptible of small
vibrations, because even in the exchange of consumable commodities, the
consumption may go on faster on one side than on the other; but I think,
unless the inconsumable fund of wealth (which is what gives the
superiority, and which in the example alledged, we supposed to be coin)
can be made to change hands according to the adequate proportion of the
consumption made, we cannot say properly, that a vibration can be
operated in any considerable degree.

Let us suppose (A) to be a proprietor of a bit of land, and (B) an
industrious workman; in order that (B) may purchase the land of (A,) it
must be supposed that (A) is very extravagant, and that he inclines to
consume a much greater proportion of work than what is equivalent to all
the surplus-produce of his land. Now in order to supply (A) to the value
of the land itself, (B) must distribute his work to many different
persons, and take in exchange, not such things as he has use for
himself, but such as may be found useful to (A). But so soon as (A) has
paid to (B) the whole surplus of his land, what fund of credit will he
find in order to engage (B) to furnish more? He cannot pay him in land,
because this fund is not susceptible of circulation; and every expedient
that could be fallen upon to keep accounts clear between them, is
neither more or less than the introduction of _money_, either _real_ or
_symbolical_. These terms must be explained.

By real money, is meant what we call coin, or a modification of the
precious metals, which by general agreement among men, and under the
authority of a state, carries along with it its own intrinsic value.

By symbolical money, I understand what is commonly called credit, or an
expedient for keeping accounts of debt and credit between parties,
expressed in those denominations of money which are realized in the
coin. Bank notes, credit in bank, bills, bonds, and merchants books
(where credit is given and taken) are some of the many species of credit
included under the term _symbolical money_.

In the example before us, we may suppose that (A) having no more
circulating equivalent to give (B) for his work, and being desirous to
consume of it to the value of his land, shall agree to issue notes of
hand, every one of which shall carry in it a right to an acre of land,
to a fruit tree, to ten yards of the course of a river, &c. and that
every such parcel of property, shall be esteemed at a certain proportion
of work. This agreement made, he goes on with his consumption, and pays
regularly, and adequately, the value of what he receives; and in
proportion as consumption proceeds on the side of (A), the balance of
wealth must turn in favour of (B); whereas while (A) kept his bit of
land, and (B) his faculty of working up an equivalent for the surplus of
it, the balance stood even; because the land on one hand, and the
industry on the other, produced adequate equivalents for each other. The
produce of both was consumable, and supposed to be consumed; which
operation being over, the land and the industry remained as before,
ready to produce anew. Here then is the effect of credit or symbolical
money; and here I ask, whether or not the notes of hand given by (A) to
(B), do not contain as real a value, as if he had given gold or silver?
and farther, whether or not it appears, that the country where they live
becomes any richer by this invention? does this note any more than
declare who is the proprietor of the value contained?

Nothing is so easy as to invent a money which may make land circulate as
well as houses, and every other thing which is of a nature to preserve
the same value during the time of circulation. Whatever has a value, may
change hands for an equivalent, and whenever this value is determined,
and cannot vary, it may be made to circulate; and in the circulation to
produce a vibration in the balance of wealth, as well as a pound of gold
or silver made into coin.

Those nations, therefore, who only circulate their metals, confine
industry to the proportion of the mass of them. Those who would
circulate their lands, their houses, their manufactures, nay their
personal service, even their hours, might produce an encouragement for
industry far beyond what could be done by metals only. And this may be
done, when the progress of industry demands a circulation beyond their
power.

This anticipation of the subject of the following book, is here thrown
in, only to enable my reader to form to himself an idea of the extent of
the subject we are at present upon, and to help him to judge to what
length luxury, that is consumption, maybe carried. Since, by what we
have said, it appears that there is no impossibility for a people to
throw the whole intrinsic value of their country into circulation. All
may be cut into paper, as it were, or stamped upon copper, tin, or iron,
and made to pass current as an adequate equivalent for the produce of
industry; and as there is no bounds to be set to consumption and
prodigality, it might he possible, by such an invention, in the compass
of a year, to circulate an equivalent in consumable commodities produced
by industry, for the whole property of the most extended and most
wealthy kingdom. That this is no chimerical supposition, appears plain
by the activity of many modern geniuses, who, in an inconsiderable space
of time, find means to get through the greatest fortunes; that is to
say, in our language, they throw them into circulation by the means of
the symbolical money of bonds, mortgages, and accounts. But does this
species of circulation increase the riches of a state? surely no more
than it would increase the riches of France or England, to carry all the
plate in the two kingdoms to be coined at the mint. The use of
symbolical money is no more than to enable those who have effects, which
by their nature cannot circulate (and which, by the bye, are the
principal cause of inequality) to give an adequate circulating
equivalent for the services they demand, to the full extent of all their
worth. In other words, it is a method of melting down, as it were, the
very causes of inequality, and of rendring fortunes equal.

The patrons therefore of Agrarian laws and of universal equality,
instead of crying down luxury and superfluous consumption, ought rather
to be contriving methods for rendring them more universal. If they blame
what is called perpetual substitutions of property or entails (made by
parents in favour of their posterity as yet unborn) because they are in
some respects prejudicial to industry; they should not, I think, find
fault with that charming leveler _dissipation_, that nurse of industry,
and the only thing intended to be prevented by such dispositions.

Some have persuaded themselves, that an equality of fortune would banish
luxury and superfluous consumption. Among the rest, is M. de
Montesquieu, an author for whom I have the highest esteem, and who has,
in this respect, been copied by many others. But I never found his idea
set in a clear light. Equality of fortune would certainly change the
nature of luxury, it would diminish the consumption of some, and would
augment the consumption of others; but without making people idle, it
could never destroy industry itself, and while this subsists in an equal
degree, there must be the same quantity of what it produces regularly
consumed. Farther, this proposition never can be advanced, but on the
supposition that the luxurious person, that is the consumer, must be
richer than he who supplies him. This I cannot by any means admit to be
true. Must the carter who drinks a pot of beer be richer than the
alehouseman? Must a country girl who buys a bit of ribband, be richer
than the haberdasher who sells it? Must the beau be richer than his
taylor? the traveller than the banker who gives him his money? the
client than the lawyer? the sick than the physician?

How then does it appear that equality must prevent luxury, unless we
suppose every one confined to an absolute physical-necessary, and either
deprived of the faculty of contriving, or of the power of acquiring any
thing beyond it. This principle Lycurgus alone laid down for the basis
of his republic; and yet riches were known in Sparta as well as poverty.

Absolute equality, _de facto_, is an absurd supposition, if applied to
human society. Must not frugality amass, and prodigality dissipate?
These opposite dispositions, are of themselves sufficient to destroy at
once, the best regulations for supporting equality, and, when carried to
a certain length, must substitute in its place as great an inequality as
the quantity of circulation is capable to produce. Whatever circulates,
may stagnate. Why was there so great equality at Sparta? because there
was little circulation. Why are the Capucins in a state of perfect
equality? because among them there is no circulation at all.

If therefore such variations in the balance of wealth depend on the
difference of _genius_ among men, what scheme can be laid down for
preserving equality, better than that of an unlimited industry
equivalent to an universal circulation of all property, whereby
dissipation may correct the effects of hoarding, and hoarding again
those of dissipation? This is the most effectual remedy both against
poverty and overgrown riches; because the rich and the poor are thereby
perpetually made to change conditions. In these alterations in their
respective situations, the parties who are changing by degrees, must
surely in their progress towards a total alteration, become, at one time
or other, upon a level, that is, to an equality; as the buckets in a
well meet, before they can pass one another.

_3tio._ The first species of things incorporeal, which may be purchased
with money, is personal service; such as the attendance of a menial
servant, the advice of a physician, of a lawyer, the assistance of
skilful people in order to acquire knowledge, the service of those
employed in the administration of public affairs at home and abroad, or
for the defence of a kingdom by sea, or land; the residence of great men
at court, who do honour to princes, and make their authority respected;
and even when money is given to procure amusement, pleasure, or
dissipation, when no durable and transferable value is given in return.

There is a kind of resemblance between the species here enumerated, and
what we called the _useful value_ in consumable commodities. In the one
and the other, there is an equivalent given for a man’s time usefully
employed; but the difference between them lies in this: that the _useful
value_ being supported, or having for a substratum, as the schoolmen
call it, the intrinsic substance, is thereby rendred permanent and
vendible; whereas here, for want of a permanent and transferable
substance, the personal services though producing advantages which are
sufficiently felt, cannot however be transferred for the adequate price
they cost.

The circulation produced by this third species of acquisition, operates
an instantaneous vibration of the balance. The moment the personal
service is performed, it may be said to be consumed; and although the
purchaser has received a just equivalent for the money given, and in
some cases may even be thereby put in a situation to indemnify himself
of all his expence, by performing the like services to others, yet every
body must perceive that such services cannot properly be considered as a
circulation of the former.

_4to._ The acquisition of the other species of things incorporeal, that
is, rights, produces little more balance, when an adequate circulating
equivalent is given for them, than the sale of land; because a right
implies no more than a power to use, that is, to consume; and by the
use, the right is not diminished: it is balanced by the use of the
money; the money therefore and the right being both permanent, there is
no vibration in the scales. Of this species are all servitudes; the
purchasing of privileges or immunities, even the lending of money at
interest, may here not improperly be classed.

Here it will, perhaps, be alledged, that an example be given, where the
creation of such a right, though purchased with an adequate circulating
equivalent, produces the greatest vibration in the balance of wealth
possible. It is when a state contracts debts, and when the public
creditors acquire a right to general impositions on the people for the
payment of their interest.

This objection requires a little explanation, and I have proposed it
chiefly for the sake of introducing an illustration of my subject.

If it be said, that in this example a vibration in the balance of wealth
_within the state_ is implied, then I say that it must take place either
1st. between the creditors and the state, or 2d. between the state and
the people, or 3d. between the creditors and the people. But,

_1mo._ The creditors acquire no balance against the state, because they
have given one inconsumable commodity for another; to wit, money for an
annual income. The money is worth the income, the income is worth the
money. If therefore any change in the balance comes afterwards to take
place, it must be in consequence of other operations quite independent
of this transaction. But let us suppose, which is but too frequently the
case, that here money must be considered as a consumable commodity,
because it is only borrowed to be spent. In this light does not the
creditor seem to acquire a balance in his favour against the state, so
soon as the money is actually spent. I answer in the negative: because a
state by expending the money borrowed, remains with respect to the
creditors just as wealthy as before. It is the people who pay the
interest, for which the state gives them in return no adequate
_transferable_ equivalent.

_2do._ Here it is urged, that this being the case, the state has
acquired a balance against the people according to the principles above
laid down, where it was said, that upon occasions, where money is given
for personal service, and where nothing transferable is given in return,
the balance turns instantaneously in favour of him who received the
money.

To this I answer, that as to the interest paid by the people, the state
does not receive it for herself, but for the creditors. The personal
services are then supposed to be already paid for, and the vibration has
taken place before the interest becomes due. Therefore the balance does
not turn between the state and the people.

In levying of taxes which are destined to pay the interest of money
already spent, the public gives no adequate equivalent on one hand; and
on the other, it is not enriched with respect to the people, any more
than it was impoverished with respect to the creditors, by spending the
money borrowed; and since there is no reciprocal change in the situation
of the two parties, I do not see how we can infer any vibration in the
balance of wealth between them. We shall presently see between whom the
balance is made to vibrate.

_3tio._ The balance between the creditors and the people is what at
first sight appears to be principally affected; because the first
receive a constant retribution from the latter, in consequence of the
loan. But neither is any true vibration found here, either adequate to
the loan, or to the money spent. _1mo._ Because the creditors themselves
are part of the people who contribute towards all impositions on
consumptions, which are commonly the most regular, the most permanent,
and the most familiarly appropriated for the payment of the interest.
_2do._ Because the money spent by the state, if spent at home, returns
to other hands indeed, but still returns to the people, of whom we are
here speaking. And _3tio._ because there is no transaction at all
between the creditors and the people.

Objection. By this way of reasoning it would appear, that the exhausting
a people by taxes, makes no vibration in the balance of their wealth.

Answer. If the people be exhausted, it must be by enriching strangers.
This case should at present be excluded, as we have laid aside the
consideration of foreign relations. But allowing this circumstance also
to be implied in the objections made, I agree that every penny of money
sent out of a country, for no real and permanent equivalent received in
return, operates a vibration in the wealth between nation and nation;
but none between subject and subject. To this it is answered, that when
taxes are high, many people are ruined while others are enriched. This
operates a vibration. I allow it; but then I reply, that by the very
supposition in every such case, the money must remain at home; whereas
in the former, it was supposed to be expended abroad. Now we are not at
present examining the effects of debts and taxes, in changing the
balance between man and man, but only between the three cumulative
interests above specified, the state, the people, and the creditors.

Let me now ask, what is the effect of taxes on the vibration of the
balance of wealth between individuals?

I answer, that whoever pays a tax, appears to pay for a personal
service. He receives no corporeal equivalent which can be alienated by
him for the same value; and he who is employed by the state, and is paid
with the produce of taxes, acquires a balance in his favour against
those who pay them. When the amount of taxes goes abroad for foreign
services, there can be no alteration upon the balance at home, as has
been said; neither is there any when it remains at home: the people and
the creditors are as rich as before. Let this suffice at present, as to
the effects of debts and taxes upon the balance of national wealth.

Industry is the only method of making wealth circulate, so as to change
its balance between the parties; all kinds of circulation which operate
no such change, are foreign to the present purpose.

A man dies and leaves his wealth to another, no body loses by this, but
he who is no more; a second pays his debts, neither debtor, or creditor
can be said to change circumstances by the operation. A merchant buys a
quantity of merchandize for ready money, he thereby loses no balance of
his wealth; it is true he has given money for consumable effects; but
the balance does not operate until the consumption takes place, and as
he is not supposed to buy in order to consume, I rank this branch of
circulation among those which do not influence the balance.

Thus we find two different kinds of circulation in a state; one which
makes the balance turn, and one which does not. These objects are of no
small consequence to be attended to in the right imposition of taxes, as
shall, in its proper place, be more fully explained. At present it is
sufficient to observe, that the proper time of laying on taxes is at the
time of circulation: because the imposition may then be always exactly
proportioned to the sum circulating; consequently, to the faculties of
the persons severally interested.

In all excises, or taxes upon consumption, it is the money of the
consumer which is taxed, in the instant of the payment; so that he
against whom the balance is to turn, has the additional load to pay.
This species of tax, imposed at the time of circulation, is what
produces the largest sums to a state. I never heard of a proper
expedient for taxing the person in whose favour the balance is to turn,
though from the principles which are afterwards to be laid down, we may
perhaps discover one.

As for the other species of circulation, where the balance does not
turn, it is not so much the custom to impose very considerable taxes
upon it: there are however several examples to be met with which point
out how they may be imposed. The casualties paid upon the change of
vassals, or upon the fall of lives, in leases upon upon lands in
England; the confirmation of testaments in Scotland; investitures in
Germany; the _centiéme denier_, the _lods et ventes_, and the _control_
upon the acts of notaries in France; the emoluments of the _Rota_ in
Spain, and in many Roman Catholic countries, are of this species. Upon
the same principle, taxes more or less considerable might be laid upon
every branch of this kind of circulation; for which purpose, it would be
highly necessary to find out all the ramifications of it, by analysing
it to the bottom, as we have hitherto run through it very superficially.

------------------------------------------------------------------------



                              CHAP. XXVII.
_Circulation and the Balance of Wealth, objects worthy of the attention
                        of a modern Statesman._


Having explained the nature of circulation, and of this balance, we are
next to point out the objects of a statesman’s attention concerning
them.

I. _He ought to form to himself a clear and distinct idea of the nature,
properties, and effects of circulation; a word frequently made use of
without much meaning, and in a vague and undetermined sense._

The term _circulation_ is, perhaps, one of the most expressive in any
language, and is therefore easily understood. It represents the
successive transition of money, or transferable commodities, from hand
to hand, and their return, as it were in a circle, to the point from
which they set out. This is the rough idea which every one, who
understands the word at all, must form of its meaning. But a statesman’s
perceptions must be more accurate as well as more complex.

He must combine the consequences which result from this successive
transition, and attend to the effects produced by it. He must not only
consider the money, which is a permanent value, passing from hand to
hand, but weigh the consequences of the variety of consumption which it
draws along with it, in its progress.

Before a guinea can travel from London to York, it may be the means of
consuming a thousand times its value, and as much more, before it can
return to London again. Every stop the guinea makes in its course, marks
a want of desire to consume, in him who possesses it. If, therefore, in
any country, there were but one guinea in circulation, all consumption
would stop (or barter would take place) the moment it fell into the
hands of a miser. This leads us to the second object of a statesman’s
attention.

II. _He ought at all times to maintain a just proportion between the
produce of industry, and the quantity of circulating equivalent, in the
hands of his subjects, for the purchase of it; that, by a steady and
judicious administration, he may have it in his power at all times,
either to check prodigality and hurtful luxury, or to extend industry
and domestic consumption, according as the circumstances of his people
shall require the one or the other corrective, to be applied to the
natural bent and spirit of the times._

For this purpose, he must examine the situation of his country,
relatively to three objects, viz. the propensity of the rich to consume;
the disposition of the poor to be industrious; and the proportion of
circulating money, with respect to the one and the other.

If the quantity of money in circulation is below the proportion of the
two first, industry will never be able to exert itself; because the
equivalent in the hands of the consumers, is then below the proportion
of their desires to consume, and of those of the industrious to produce.
Let me illustrate this by a familiar example taken from a party at
quadrille.

When, on dealing the cards, every one puts in a fish into the stake,
according to the old English fashion, a very few are sufficient for the
circulation of the game: but when you play the aces, the consolation and
the multiplication of beasts according to the French custom, you must
have a box with contracts, fishes, and counters; so reducing all to the
lowest denomination, every player has occasion for above five hundred
marks. It is therefore plain, that the number of marks must be in
proportion to the circulation of the game. But at play, as in a state,
circumstances render this circulation very irregular. Fortune may run so
equally among the players, during a considerable time, that none of them
may have occasion to pay away above the value of a hundred counters, and
while this equality continues, there is not found the smallest
interruption in the circulation. But let one of the players have a run
of luck, you will soon see three of the boxes empty, and all the
circulating marks heaped up before the winner. Fortune at quadrille,
forms stagnations of the circulating equivalent, as industry and
frugality form them in a state. At this period of the game, must not the
players stop, or must they not fall upon a way of drawing back their
marks into circulation? If they borrow back from the winner, this
represents loan. If they buy back their marks with money from their
purses, it represents what I call throwing solid property into
circulation.

From this familiar example, we may judge how necessary it is that the
circulating fund be constantly kept up to the proportion of the
occasions for it. It is impossible to determine the proportion of coin
necessary for carrying on the circulation of a country, especially of
one where neither loan, or paper credit, that is the melting down of
solid property, are familiarly known. Here is the reason: the solution
of the question does not depend upon the quantity of coin alone, but
also upon the disposition of those who are the possessors of it; and as
these are constantly changing, the question thereby becomes insoluble.

It is, therefore, the business of a statesman, who intends to promote
circulation, to be upon his guard against every cause of stagnation; and
when he has it not in his power to remove these political obstructions,
as I may call them, by drawing the coin of the country out of its
repositories; he ought (in proportion as the other political interests
of his people are found to require it) to facilitate the introduction of
symbolical money to supply its place.

A great political genius is better discovered by the extent of his
perceptions, than by the minute exactness of them in every part of the
detail. It is far better for a statesman to be able to discern (though
superficially) every object of government under all its relations, than
to be able to trace any one with the greatest accuracy. This is apt to
occupy him too much, and no one relation should ever engross his whole
attention.

I cannot omit in this place taking notice of a very judicious remark of
M. de Melon, an eminent political French writer, who was employed by the
Duke of Orleans in state affairs, during his regency of the kingdom.

“It belongs only (says he) to one who has had the direction of every
branch of government to lay down a general plan of administration, and
even then, one must not expert from such a person, very particular
details with respect to many objects, of which he himself is entirely
ignorant, and which he has been obliged to confide to the care of others
subordinate to him. A person who can stoop to a minute exactness in
small affairs, proves commonly very unequal to the administration of
great ones. It is enough for such a person to know principles by
experience and reflection, and to apply fundamental maxims as occasion
requires.”

I apply this observation to the point in hand. A statesman who allows
himself to be entirely taken up in promoting circulation, and the
advancement of every species of luxurious consumption, may carry matters
too far, and destroy the industry he wishes to promote. This is the
case, when the consequences of domestic consumption raises prices, and
thereby hurts exportation.

A principal object of his attention must therefore be, to judge when it
is proper to encourage consumption, in favour of industry; and when to
discourage it, in favour of a reformation upon the growth of luxury.

If the country he governs be in a state of simplicity, and that he
wishes to awaken a taste for industry and refinement, he must, as has
been said, encourage domestic consumption, for the sake of multiplying,
and giving bread to the industrious; he must facilitate circulation, by
drawing into the hands of the public what coin there is in the country,
in case he finds any part of it locked up; and he must supply the actual
deficiency of the metals, by such a proportion of paper credit, as may
abundantly supply the deficiency.

In every country where simplicity prevails, and where there is any
considerable quantity of coin, a great proportion of it must be locked
up: because the consumption there must be small; consequently, little
circulation; consequently, either little coin, or many treasures. In
such cases, therefore, a statesman must engage the possessors of these
riches to part with them, at the desire of those who can give security
for their worth: and he must establish the standard of an annual
retribution for the loan. If this be difficult to be brought about, from
the want of confidence in the monied men, he may, in their favour,
contrive expedients to become the borrower himself, at the expence of
the alienation of certain rights, or the creation of new privileges, in
lieu of interest; and when he has engaged them to part with their coin,
he may lend it out to such as have both solid property and a desire to
consume; but who, for want of a circulating fund to purchase
superfluities, have hitherto lived in simplicity.

The introduction, therefore, of loans upon interest, is a very good
expedient to accelerate circulation, and give birth to industry.

OBJ. But here it is objected, that such a plan is looked upon by some
nations to be contrary to the precepts of the christian religion, and
therefore a statesman cannot permit it.

To this I can make no answer, because I am no casuist; but I can propose
an expedient which will supply the defect of borrowing at interest; and
as it may serve to illustrate the principles I am now upon, I shall here
introduce it.

The intention of permitting loans upon interest, is not to provide a
revenue to those who have ready money locked up, but to obtain the use
of a circulating equivalent to those who have a sufficient security to
pledge for it. If the statesman, therefore, shall find himself withheld
by the canons of his church, from drawing the coin of his subjects into
circulation, by permitting the loan of it upon interest, nothing is more
easy than to invent another species of circulation, where no interest at
all is necessary.

Let him open an office, where every proprietor of lands may receive, by
virtue of a mortgage thereon, a certain proportional value of
circulating paper of different denominations, the most proper for
circulation. He may therein specify a term of payment in favour of the
debtor, to give him an opportunity to call in his obligation, and
relieve the engagement of his property. But that term being elapsed, the
land is to belong to the creditor, or the paper to become payable by the
state, if required, which may in consequence become authorised either to
sell the land engaged, or to retain a proportional value of the income,
or of the property of the land itself, as shall be judged most
expedient.

Farther, let him constitute a real security for all debts upon every
species of solid property, with the greatest facility in the liquidation
of them, in favour of those who shall have given credit to the
proprietors for merchandise of any kind. To compass this, let all
entails, substitutions, and _fidei commissa_, or trusts, restraining the
alienation of land-property, be dissolved; and let such property be
rendred as saleable as houshold furniture. Let such principles influence
the spirit of the government; let this sort of paper credit be modified
and extended according to circumstances, and a taste for consumption
will soon take place.

The greatest of all obstacles to industry in its infancy, is the general
want of credit on both sides. The consumers having no circulating value,
the difficulty of liquidating what they owe by the alienation of their
lands, prevents their getting credit; and the many examples of
industrious people giving way, on account of bad payments, discourages
others from assisting them in the beginning of their undertaking.

From these principles we may gather, that a statesman who intends to
increase industry and domestic consumption, should set out by providing
a circulating fund of one kind or other, which ought always to be ready,
and constantly at the command of those who have any sort of real
equivalent to give for the consumption they incline to make: for as
specie may often times be wanting, a contrivance must be fallen upon
immediately to supply that want.

The utility of this kind of credit, or paper money, is principally at
the instant of its entring into circulation, because it is then only
that it supplies the want of real specie; and by this invention, the
desire to consume creates, as it were, the circulating equivalent,
without which the alienation of the produce of industry would not have
taken place; consequently, the industry itself would have suffered a
check.

But in the after circulation of this paper money from hand to hand, this
utility comes to cease; because the subsequent consumer, who has another
man’s paper to give in exchange, is already provided with a circulating
equivalent, and therefore were it not for the wearing of the specie, or
difficulty of procuring it, it is quite indifferent both to the state,
as well as to circulation, whether this paper continues to pass current,
or whether it be taken up, and realized by the debtor, and gold and
silver be made to circulate in its place.

Let me now endeavour, to make this whole doctrine still more plain, by
an example.

Suppose a country where there is a million of pieces of gold employed
necessarily in carrying on the ordinary circulation, a million of pieces
of the same value locked up, because the proprietors have no desire to
spend them. Suppose the revenue of the solid property of the country to
be worth also a million a year; and that if the fund itself could be
sold, it might be worth twenty millions of the same specie. Suppose no
such thing as credit or paper money to be known, and that every man who
inclines to make any consumption, must be provided previously with a
part of the circulating million, before he can satisfy his inclination.

Under these circumstances, the statesman resolves to establish industry,
and finding that by his people’s taking a taste for a greater
consumption, the million which was formerly sufficient for carrying on
circulation, is no longer so; he proposes to those who have the other
million locked up, to borrow it from them at _5 per cent._ and the
better to engage them to comply with his proposal, he offers to impose
duties upon the whole of the inhabitants to the annual amount of fifty
thousand pieces of gold, to be paid annually to the creditors, in return
for their treasure. If this scheme be adopted, he may lend out his
million in small sums, to every one who inclines to borrow, upon good
security; or by premiums and other encouragements given to his infant
manufactures, he may throw it into the hands of the public, that is,
into circulation. Here is one method of increasing the quantity of a
circulating fund, when an augmentation upon the consumption of the
produce of industry comes to demand it.

But let us now suppose this regular plan of borrowing to be contrary to
what is called the constitution of the state, to religion, or to the
spirit of the people, what must be done to supply the place of such a
scheme?

The statesman must then fall upon another contrivance, by extending the
use of pledges, and instead of moveables, accept of lands, houses, &c.
The _Monte pieta_ at Rome issues paper money upon moveable security
deposited in their hands. Let the statesman, without exacting interest,
do the same upon the lands of his subjects, the best of all securities.
While the lands subsist, this paper money must retain its value; because
I suppose the regulations to be such as to make it convey an
indisputable right to the lands engaged. The advantage of such an
establishment will be, that as formerly no man could purchase the
smallest produce of industry, without having a part of the circulating
million of pieces of gold; every body now who has an inclination to
consume, may immediately procure paper money in proportion to his worth,
and receive in return whatever he desires to possess.

Now let me suppose that this paper money shall in time, and from the
growing taste for superfluities, amount to the value of five millions of
pieces of gold. I ask, whether the real value of this paper is any way
diminished, because it exceeds, by far, all the gold and silver in the
country, and consequently cannot all at once be liquidated by the means
of the coin? Certainly not: because it does not draw its value from any
representation of these metals, but from the lands to which it conveys a
right. Next, I ask, if the country is thereby become any richer? I
answer, also, in the negative: because the property of the lands, if
sold, being supposed worth twenty millions, the proprietors of the paper
are here supposed to have acquired, by their industry, five millions of
the twenty; and no more than the remaining fifteen millions belong to
the landlords.

Let us now suppose a million of this paper money to fall into the hands
of those who have no inclination to spend it. This is the case of the
frugal, or money hoarding persons, and they will naturally chuse to
realize their paper, by taking possession of the lands represented by
it. The moment this operation takes place, the million of paper money is
annihilated, and the circulating capital is reduced to four millions of
paper, and one million of specie. Suppose, on the other hand, that those
who have treasures which they cannot lend at interest, seeing a paper
money in circulation, which conveys a right to solid property, shall
purchase it with their million of pieces of gold, and then lay hold of a
proportional part of the land: what effect will this double operation
produce upon the circulating fund? I answer, that instead of being
composed as formerly, of one million of coin and five millions of paper,
it will, at first, on the buying up of the paper, consist of two
millions of coin and five millions of paper; and so soon as the million
of paper bought up comes to be realized upon the land, and thereby
extinguished, the circulating coin will be two millions, and the paper
will be reduced to four. Here then is a very rational method of drawing
all the coin of the country from the treasures of the frugal, without
the help of interest. Let me take one step farther, and then I will
stop, that I may not too far anticipate the subject of the following
book.

I suppose, that the statesman perceiving that the constant circulation
of the coin insensibly wears it away, and reflecting that the value of
it is entirely in proportion to its weight, and that the diminution of
the mass must be an effectual diminution of the real riches of his
country, shall call in the metals and deposit them in a treasure, and
shall deliver, in their place, a paper money having a security upon the
coin locked up. Is it not plain, that while the treasure remains, the
paper circulated will carry along with it as real (though not so
intrinsic) a value as the coin itself could have done? But if this
treasure comes to be spent, what will the case be then? It is evident,
that the paper conveying a right to the coin, will then as effectually
lose its value, as the other species of paper conveying a right to the
lands, and issued, as we have supposed, by the proprietors of them,
would have done, had an earthquake swallowed up, or a foreign conqueror
seized the solid property engaged as a security for this paper.

The expedient, therefore, of symbolical money, which is no more than a
species of what is called credit, is principally useful to encourage
consumption, and to increase the demand for the produce of industry. And
the bringing the largest quantity of coin possible into a country,
cannot supply the want of it in this respect; because the credit is
constantly at hand to every one who has property, and the other may fail
them on a thousand occasions. A man who has credit may always purchase,
though he may be many times without a shilling in his pocket.

Whenever, therefore, the interest of a state requires that the rich
inhabitants should increase their consumption, in favour of the
industrious poor; then the statesman should fall upon every method to
maintain a proportion between the progress of industry, and the gradual
augmentation of the circulating fund, by enabling the inhabitants to
throw with ease their solid property into circulation whenever coin is
found wanting. Here entails are pernicious.

On the other hand, when luxury begins to make too great a progress, and
when it threatens to be prejudicial to foreign trade, then might solid
property be rendred more unwieldy; and entails might then become useful:
all moveable debts, except bills of exchange in foreign circulation,
might be stripped of their privileges, and particularly, as in France,
of the right of arresting the person of the debtor. Usury ought then to
be punished severely; even something like the _Senatus Consultum
Macedonianum_, which made the contract of loan void on the side of the
borrowers, while they remained under the power of their fathers, might
be introduced. Merchants accounts should no more be allowed to enjoy a
preference to other debts; but on the contrary, be made liable to a
short prescription. In a word, domestic circulation should be clogged,
and foreign circulation accelerated. When foreign trade again comes to a
stop, then the former plan may be taken up a-new, and domestic
circulation accelerated and facilitated, in proportion as the produce of
industry and taste of superfluity require it.

III. _A statesman ought carefully to distinguish between those branches
of circulation which operate a vibration in the balance of wealth, and
those_ _which do not, in order to regulate the taxes which he may think
proper to lay upon his people._

In treating of this third object of a statesman’s attention, I shall
confine myself to the application of those principles which point out
the necessity of taxation among a luxurious people, become wealthy by
the means of trade, where the industrious can no longer be made to
subsist but by means of a great domestic circulation, which is the
object of our present inquiry.

In every case where the balance of wealth is made to vibrate by
circulation, there is an opportunity of imposing a tax upon
consumptions, perfectly proportioned to the quantity of the circulation.
Now by the imposition of taxes, and the right employment of the amount
of them, a statesman has it in his power to retard or to promote the
consumption of any branch of industry. By the imposition of duties he
may either check luxury when he finds it calling off too many hands from
other more necessary occupations; or by granting premiums, he may
promote consumption or exportation upon branches where it is expedient
to increase the hands employed, which last is the reverse of taxation;
or in the third place, when foreign trade begins to bear a small
proportion to domestic consumption, he may profit of luxury, and draw a
part of the wealth of the luxurious into the public treasure, by
_gently_ augmenting the impositions upon it; for when taxes are gently
increased, consumption is not checked; consequently, this is the proper
method to be followed, when luxury does no harm. But when it proves
hurtful, the rise in the impositions should be sudden, that they may
operate the effects of violent revolutions which are always accompanied
with inconveniencies, and on such occasions every inconvenience will
mark the success of the operation. An example will make this plain.

If you want to check the drinking of spirituous liquors, let every
alteration of your oeconomy concerning them, either as to the
impositions upon the consumption, or regulations in the retailing them,
proceed by jerks as it were; if you want to increase the revenue, from
the propensity people have to poison themselves with spirits, your
augmentations and alterations may be gentle and progressive.

Here let me observe by the way, that the best method for a statesman to
curb any sort of vice among his people, is to set out by facilitating
the gratification of it, in order to bring it once upon a regular and
systematical footing, and then by sudden and violent revolutions in the
administration of the oeconomy of it, to destroy it and root it out.

Were all the strumpets in London received into a large and convenient
building, whither the dissolute might repair for a while with secrecy
and security, in a short time, no loose women would be found in the
streets. And it cannot be doubted, but that by having them all together
under certain regulations, which might render their lives more easy than
they are at present, the progress of debauchery, and its hurtful
consequences, might in a great measure be prevented. At Paris, they are
to be found in their houses, because the police never troubles them
there while they commit no riot or disturbance. But when they are
persecuted in their habitations, they break forth into the streets, and
by the open exercise of their profession, the delicacy of modesty is
universally hurt and but too frequently blunted, and the example that
those prostitutes openly set to their own sex, debauches more women than
all the rakes in town do.

I hope this digression will not be misconstructed into an apology for
public stews, where, in place of following good regulations for
suppressing the vices with which they are filled, the principal object
is frequently to encourage the abuses for the sake of making them turn
to account as a branch of revenue. Such a plan of administration
represents a statesman who turns against his people, those arms which he
had provided for their defence. My intention is very different, it is to
curb vice as much as possible, and to shut up what cannot be rooted out
within the bounds of order, and to remove it as a nusance from the eyes
of the public, and from the contagious imitation of the innocent. I now
come to the object of a statesman’s attention, relative to that branch
of circulation which implies no vibration of the balance of wealth
between the parties concerned.

The more perfect and the more extended any statesman’s knowledge is of
the circumstances and situation of every individual in the state which
he governs, the more he has it in his power to do them good or harm. I
always suppose his inclinations to be virtuous and benevolent.

The circulation of large sums of money brings riches to light for a
moment, which before and after are commonly hid from the eyes of the
public. Those branches of property therefore, which have once made their
appearance in this species of circulation, should not be lost sight of
until they come naturally to melt away, by returning into the other
branch of which we have been speaking; that is, until they are fairly
spent, and the balance be made to turn against the former proprietors of
them. After this revolution, they will circulate for a while in small
sums, and remain imperceptible, but in time they will come to form new
stagnations; then they will be lent out again, or employed in the
purchase of lands; and falling once more under the eyes of the state,
they will again become an object of the same attention as formerly.

Nothing is more reasonable, than that all property which produces an
annual determined income, should be made to contribute to the common
burthens of a state. But those taxes which are intended to operate upon
so moveable a property as ready money, ought to be imposed with a most
gentle hand, and even so as not to appear directly to affect it. The
statesman here must load his wealthy citizens with duties, as Horace
loads his sovereign with adulation, never addressing his compliments
directly to the emperor, but conveying them to him in the most elegant
manner, through the channel of an interposed person. Thus people
possessing large capitals of ready money, which in a moment they can
transport beyond the reach of the most extended jurisdiction, may have
certain privileges granted them which may attach them to the country (in
England, for example, a vote in a county or burrow) and then in
consequence of their rank, not because of their money, be made to come
under a sort of capitation, or other similar imposition bearing another
name. Might not the creditors of that nation be represented in
parliament, and in consequence of so great a privilege, and the
additional security thereby granted to the funds, be made afterwards to
come under taxations as well as other proprietors of a determined
revenue. An admirable hint for the imposition of such taxes, is to be
met with in a certain great European monarchy, where the highest order
of knighthood is distinguished with a ribband, a star, and a pension of
about an hundred and thirty pounds sterling a year. But so soon as any
one is raised to that dignity, he pays exactly that very sum in lieu of
capitation. The pension was given by the prince who instituted the
order; the capitation followed in a subsequent reign, and now appears
rather a mark of distinction than a burthen.

IV. _The next object of a statesman’s attention proper to be taken
notice of, is the different political considerations which must occur to
him when he compares the turning of the balance of wealth against the
industrious members of a state, with those vibrations which take place
against the not working part of the inhabitants. In other words, the
different effect of taxes, as they severally affect those who consume in
order to reproduce, and those who consume in order to gratify their
desires._

The one and the other consumption implies a vibration in the balance of
wealth, and whenever there is a vibration, there we have said that a
proportional tax may be imposed.

But as the intention of taxes, as I understand them, is only to advance
the public good (by throwing a part of the wealth of the rich into the
hands of the industrious poor, and not to exhaust one part of a nation
to enrich another, no necessary article of consumption should be taxed
to an industrious person, but in such a way as to enable him to draw
back the full amount of it, from those who consume his work. By this
means, the whole load of taxes must fall upon the other category of
inhabitants, to wit, those who live upon the produce of a fund already
acquired.

Let me here observe, by the way, that if taxes are rightly laid on, no
industrious person, any more than another who lives upon his income,
will ever be able to draw back one farthing of such impositions as he
has paid _upon his consumption of superfluity_. This shall in its proper
place be made sufficiently plain; at present it would be a superfluous
anticipation of the doctrine of taxation, to point out the methods of
compassing this end. My intention at present is only to recapitulate the
objects of a statesman’s attention, with regard to the consequences of
circulation, and the vibrations of the balance of wealth; and having
shewn how nearly those principles are connected with those of taxation,
this alone is sufficient to shew their importance.

V. _A statesman ought to attend to the difference between the foreign
and domestic circulation of the national wealth._

This object, though in part relative to foreign commerce, must not be
passed over without observation. In fact, there is no nation entirely
deprived of foreign communications; therefore, although a statesman, who
is at the head of a luxurious people, may act in general as if there
were none at all, yet still he must be attentive to the consequences of
circulation with his neighbours, in so far as it takes place.

Every commercial correspondence with foreign nations, not carried on by
the exchange of consumable commodities, must produce a vibration of the
balance of wealth, either in favour or prejudice of the interest we have
in our eye. But it does not follow, because there is a vibration, that
therefore a statesman has the same liberty of imposing taxes upon every
article of consumption, as if the two scales were vibrating within the
country subject to his administration.

When the consumers are his subjects, he may safely impose the tax, and
if he raises it by degrees, so high as to diminish the consumption, and
reduce the amount of the imposition, he will probably gain on the other
hand, by discouraging the foreign importation, and by keeping the
nation’s wealth at home, more than he possibly could have got by the
amount of his tax, in consequence of the dissipation of it.

When the foreigners are the consumers, the case is very different: for
you cannot oblige a man who is not your subject, to pay beyond the
advantage he gains by your correspondence. It is therefore, as has been
said, only upon the exportation of goods, where the nation has great
natural advantages over her neighbours, that any duty can be raised.

VI. The last object I shall mention as worthy of a statesman’s
attention, is, _the rules of conduct he should prescribe to himself, as
to the extending or contracting taxation, according as he finds a
variation in the proportion between the_ _FOREIGN_ _and_ _DOMESTIC_
_circulation of his country_.

For this purpose he must know exactly the proportions of the one and the
other; he must compare the quantity of domestic consumption, with the
produce of industry and quantity of importations.

If domestic consumption be equal to the sum of both, the country must
annually lose the value imported. In this case, taxes are to be raised
by sudden jerks, especially upon importations; not to increase the
produce of them, but to prevent the increase of luxury, and dissipation
of national wealth.

If domestic consumption do not exceed the produce of industry, this will
prove that exportation is at least equal to importation. In this case
the exportation must be supported; and when that can no otherwise be
done, a part of the taxes levied upon home consumption must be
distributed in premiums upon the articles of exportation; and when this
also becomes ineffectual, then all importations for consumption must be
cut off, according to the principles above laid down.

If the domestic consumption should really fall short of the produce of
industry, it marks a flourishing foreign trade. Prices then must be kept
low, as has been abundantly explained; consequently, there will be less
profit from taxes; because every penny imposed, which affects the price
of exportable goods, must be refunded out of the net produce of them,
and all the expence of collecting that part is entirely lost to the
public: the remainder, therefore, will be greater or less, according as
foreign trade is great or small.

In proportion, therefore, as domestic circulation gains ground upon the
foreign, taxes become necessary; in order, with the amount of them, to
correct the bad effects of luxury, in raising prices, by giving larger
premiums to support exportation. And in proportion as a statesman’s
endeavours to support the trade of his country becomes ineffectual, from
the growing taste of dissipation in his subjects, the utility of an
opulent exchequer will be more and more discovered; as he will be
thereby enabled to support his authority against the influence of the
great load of riches thrown into domestic circulation, and to defend his
luxurious and wealthy subjects from the effects of the jealousy of those
nations which enriched them.

To conclude, the exportation of work, and the supporting a superiority
in the competition of foreign markets (as has been said, and as shall be
farther explained) seem to be the most rational inducements to engage a
statesman to begin a scheme of imposing considerable taxes upon his
people, while they enjoy any share of foreign commerce. If such taxes
continue to subsist after the extinction of it, and are then found
necessary; this necessity is itself a consequence of the change made on
the spirit and manners of a people become rich and luxurious.

The charge of government, under such circumstances, must greatly
increase, as well as the price of every thing. Is it not very natural,
that he who is employed by the state should receive an equivalent
proportioned to the value of his services? Is it to be supposed, that a
person born in a high rank, who, from this circumstance alone, acquires
an advantage, in most nations, hardly to be made up by any acquired
abilities, will dedicate his time and his attendance for the
remuneration which might satisfy his inferiors? The talents of great men
deserve reward as much as those of the lowest among the industrious; and
the state is with reason made to pay for every service she receives.
This circulation of an adequate equivalent, we have said to be the
palladium of liberty, the band of gentle dependence among freemen; and
the same spirit ought to animate every part of the political body. That
_nothing is to be done for nothing_, is a fundamental political maxim in
every free government, and obligations, not liquidated by a just
equivalent, form pretensions beyond their worth; and are constantly
accompanied with discontent at one time or other.

Another use of taxes, after the extinction of foreign trade, is to
assist circulation, by performing, as it were, the function of the heart
of a child, when at its birth that of the mother can be of no farther
life to it. The public treasure, by receiving from the amount of taxes,
a continual flux of money, may throw it out into the most proper
channels, and thereby keep that industry alive, which formerly
flourished, and alone depended upon the prosperity of foreign commerce.

In proportion, therefore, as a statesman perceives the rivers of wealth,
(as we have called them above) which were in brisk circulation with all
the world, begin to flow abroad more slowly, and to form stagnations,
which break out into domestic circulation, he ought to set a plan of
taxation on foot, as a fund for premiums to indemnify exportation for
the loss it must sustain from the rise of prices, occasioned by luxury;
and also for securing the state itself, against the influence of
domestic riches, as well as for recompensing those who are employed in
its service.

This system ought to be carried on and extended, in proportion to the
decay of foreign trade; and when this comes in a manner to cease, then
the increase of taxes, and the judicious application of them, going hand
in hand, the state itself will support circulation, by receiving with
one hand, and giving out with the other; until by a prudent management
under the care and direction of an able statesman, through time and
perseverance, every internal vice be corrected, and foreign commerce be
made to flourish once more, from the principles we have been laying
down, and from what may be farther said to illustrate them in the
subsequent books of this inquiry.

While industry is kept alive there is still ground for hope. Manners
change, and the same luxury which extinguished foreign trade, by calling
home the wealth employed in that species of circulation, may afterwards,
by keeping industry alive at home, and by throwing a sufficient power of
wealth into the hands of a good statesman, render the recovery of that
trade no difficult project, to one who has an instrument in his
possession, so irresistible in removing every obstacle in the way of his
undertaking.

This represents a new circulation; to wit, that of the spirit and
manners of a people, who, under the government of able statesmen, may
prosper in every situation; and since, from the nature of man, no
prosperity can be permanent, the next best thing to be done, is, to
yield to the force which cannot be resisted; and, by address and
management, reconduct a people to the height of their former prosperity,
after having made them travel (as I may say) with as little
inconvenience as possible, through all the stages of decline.

------------------------------------------------------------------------



                             CHAP. XXVIII.
_Circulation considered with regard to the rise and fall of the Price of
                     Subsistence and Manufactures._


The intention of this chapter is to apply the principles we have been in
search of, to the solution of some questions, which have been treated by
those great masters of political reasoning, Messrs. de Montesquieu and
Hume. The ideas they have broached are so pretty, and the theory they
have laid down for determining the rise and fall of prices so simple,
and so extensive, that it is no wonder to see it adopted by almost every
one who has writ after them.

I have not forgot how much I was pleased when first I perused these
authors, from the easy distribution which a general theory enabled me to
make of certain classes of my ideas then lying without order, in that
great repository of human crudities, the memory; which frequently
retains more materials, than people, commonly, have either time, or
perhaps capacity rightly to digest.

I am very far from pretending to any superiority of understanding over
those gentlemen whose opinions I intend to review: accident alone has
led me to a more minute examination of the particular circumstances,
upon which they have founded their general combinations; and in
consequence of my inquiries, I think I have discovered, that in this, as
in every other part of the science of political oeconomy, there is
hardly such a thing as a general rule to be laid down.

There is no real or adequate proportion between the value of money and
of goods; and yet in every country we find one established. How is this
to be accounted for?

We have, in the fourth chapter of this book, already inquired into the
principles which point out the influence of trade upon the variation of
the price of goods; but the question now comes to be, how to fix and
determine the fundamental price, which is the object of variation. It
has been said, that the price of a manufacture is to be known by the
expence of living of the workman, the sum it costs him to bring his work
to perfection, and his reasonable profit. We are now to examine what it
is, which in all countries must determine the standard prices of these
articles of the first necessity; since the value of them does
necessarily influence that of all others.

The best way to come at truth, in all questions of this nature, is, to
simplify them as much as possible, that they may be first clearly
understood.

Whenever a question arises about price, an alienation is necessarily
implied; and when we suppose a common standard in the price of any
thing, we must suppose the alienation of it to be frequent and familiar.
Now I must here observe, that in countries where simplicity reigns
(which are those where the decision of this question ought regularly to
be sought for, since it is there only where a complication of
circumstances do not concur to raise the prices of subsistence) it is
hardly possible to determine any standard for the price of articles of
the first necessity.

Let us examine the state of those hunting Indians who live by their bow,
and of other nations where the inhabitants exercise, I may say
universally, that species of agriculture which I have called a direct
method of subsistence, and we shall find, that the articles of food and
necessaries are hardly found in commerce: no person purchases them;
because the principal occupation of every body is to procure them for
himself. What answer would a Scotch highlander have given any one, fifty
years ago, who would have asked him, for how much he sold a quart of his
milk, a dozen of his eggs, or a load of his turf? In many provinces,
unacquainted with trade and industry, there are many things which bear
no determined price; because they are seldom or never sold.

Sale alone can determine prices, and frequent sale can only fix a
standard. Now the frequent sale of articles of the first necessity marks
a distribution of inhabitants into _labourers_, and what we have called
_free hands_. The first are those who produce the necessaries of life;
the last are those who must buy them: and as the fund with which they
purchase is produced from their industry, it follows, that without
industry there can be no sale of articles of subsistence; consequently,
no standard price determined.

Another consequence of this reasoning, is, that the sale of subsistence
implies a superfluity of it in the hands of the seller, and a proper
equivalent for it in the hands of the buyer; and when the equivalent is
not money, it also implies a superfluity of the produce of some sort of
industry; consequently, by the exchange of superfluities upon certain
articles, a man procures to himself a sufficiency upon every one. This
represents that gentle dependence which unites the members of a free
society.

Does it not follow from this analysis of the question, that the prices
of articles of the first necessity, depend rather upon the occupation
and distribution of the classes of inhabitants, than either upon the
abundance of those necessaries, or of the money to purchase them; since
many examples may be found, where these articles have borne little or no
price, even in countries where money was not wanting. The reason
therefore of low prices, is not the vast abundance of the things to be
sold, but the little occasion any body has to buy them; every one being
provided for them in one way or other, without being obliged to go to
market.

How many familiar examples occur every where of this oeconomy! do we not
find in every country, even when the numbers of the industrious free are
multiplied exceedingly, more than one half of the inhabitants fed
directly from the earth? The whole class of farmers does not go to
market for subsistence. Ask a country gentleman the expence of his
living, he will tell you the sum of money he yearly spends, perhaps the
quantity of his rents in kind, which he consumes in his house, and the
rent of the lands he holds himself in farm; but it will never come into
his head to reckon the value of every chicken, sheep, or bullock, with
which his farm provides him, which he consumes without estimation, and
which in many countries he could not dispose of for any determined
value.

From this I still conclude, that it is only in countries of industry
where the standard prices of articles of the first necessity can be
determined; and since in these, many circumstances concur to render them
either higher or lower than in other countries, it follows, that in
themselves they bear no determined proportion whatsoever, to the
quantity of gold and silver in the country, as I hope presently to make
still more evident.

What is it then which determines the standard value of these articles,
in countries of industry? Here follows, in my humble opinion, the best
answer to this question.

The standard price of subsistence is determined from two considerations.
The first from the number of those who are obliged to buy, that is to
say, of those who have them not of their own, and who are not provided
with them, in lieu of service, by those who have. The second is, from
the degree of employment found for those who are obliged to purchase
them.

The _number_ of the buyers of subsistence, nearly determines the
_quantity_ sold; because it is a necessary article, and must be provided
in a determined proportion for every one: and the more the sale is
frequent, the more the price is determined. Next as to the standard:
this, I apprehend, must depend upon the faculties of the buyers; and
these again must be determined by the extent of those of the greatest
numbers of them; that is to say, by the extent of the faculties of the
lower classes of the people. This is the reason why bread, in the
greatest famine, never can rise above a certain price; for did it exceed
the faculties of the great classes of a people, their demand must be
withdrawn, which would leave the market overstocked for the consumption
of the rich; consequently, such persons, who in times of scarcity are
forced to starve, can only be such whose faculties fall, unfortunately,
below the standard of those of the great class: consequently, in
countries of industry, the price of subsistence never can rise beyond
the powers to purchase of that numerous class who enjoy
physical-necessaries; consequently, never to such an immoderate height
as to starve considerable numbers of the people; a thing which very
commonly happens in countries where industry is little known, where
multitudes depend merely upon the charity of others, and who have no
resource left, so soon as this comes to fail them.

The faculties, therefore, of those who labour for a physical-necessary,
must, in industrious nations, determine the standard value of
subsistence, and the value in money which they receive for their work,
will determine the standard of their faculties, which must rise or fall
according to the proportion of the demand for their labour.

By this exposition of the matter, I do not pretend to have dissipated
every obscurity. The question still remains complex, as the nature of it
requires it should do; and the solution of it depends upon farther
considerations, which now lead me to the examination of the doctrine of
Messrs. de Montesquieu and Hume, concerning the influence of riches upon
the increase of prices. I shall begin by shortly laying this doctrine
before my readers, in three propositions.

_1mo._ The prices (say they) of commodities, are always proportioned to
the plenty of money in the country. So that the augmentation of wealth,
even fictitious, such as paper, affects the state of prices, _in
proportion_ to its quantity.

_2do._ The coin and current money in a country, is the representation of
all the labour and commodities of it. So that _in proportion_ as there
is more or less of this representation, (money) there goes a greater of
less quantity of the thing represented (commodities, &c.) to the same
quantity of it. From this it follows, that

_3tio._ Increase commodities, they become cheaper; increase money, they
rise in their value.

Nothing can be more beautiful than these ideas. They appear at first
sight, sufficiently extensive to comprehend every variation of
circumstances which can happen. Who was the first author of this
doctrine, I cannot say. I find it in Mr. Locke, and in the Spectator for
the 19th of October, 1711; but they have been beautifully illustrated by
Monsr. de Montesquieu; and Mr. Hume has extended the theory, and
diversified it prettily in his political discourse; which have done much
honour to that gentleman, and drawn the approbation of the learned world
so much, that there is hardly a nation in Europe which has not the
pleasure of reading them in their own language.

Upon examining this theory, when I came to treat of the matters it is
calculated to influence, I found I could not make answer to the
principles I had pursued, in the most natural order in which I had been
able to deduce them: and this consideration obliged me, with regret, to
lay it aside, and to follow another, much more complex. I have already
expressed the mortification I have always had upon finding myself forced
to strike out a general rule, and this, of all others, had at first hit
my fancy the most; but I am obliged to confess, that upon a close
examination of the three propositions, I am obliged to range this
ingenious exposition of a most interesting subject, among those general
and superficial maxims which never fail to lead to error.

In order to set the matter in as clear a light as possible, I shall make
a short application of my own principles, relating to the decision of
the main question, the causes of the rise and fall of prices, and
conclude my chapter with some remarks upon the three propositions above
laid down, submitting the whole to the better judgment of my reader.

I have laid it down as a principle, that it is the complicated
operations of demand and competition, which determines the standard
price of every thing. If there be many labourers, and little demand,
work will be cheap. If the increase of riches, therefore, have the
effect of _raising_ demand, work will increase in its value, because
_there_ competition is implied; but if it has only the effect of
_augmenting_ demand, prices will stand as formerly. What then will
become of the additional quantity of coin, or paper money? I answer,
that in both cases it will enter into circulation, in proportion to the
_rise_ or _augmentation_ of demand; with this difference, that in the
first case, it will have the effect of raising prices; because the
supply is not supposed to augment in proportion: in the second, prices
will stand as they were; because the supply is supposed to augment in
proportion. These are the consequences of the augmentation of wealth,
when it has the effect of either _raising_ or _augmenting_ demand. But
if upon this revolution it be found that the state of demand remains
without any variation, then _the additional coin_ will probably be
locked up, or converted into plate; because they who have it, not being
inspired with a desire of increasing their consumption, and far less
with the generous sentiment of giving their money away, their riches
will remain without producing more effect than if they had remained in
the mine. As for the paper money, so soon as it has served the first
purpose of supplying the demand of him who borrowed it, (because he had
at that time no coin) it will return upon the debtor in it, and become
realized; because of the little use found for it in carrying on
circulation.

Let the specie of a country, therefore, be augmented or diminished, in
ever so great a proportion, commodities will still rise and fall
according to the principles of demand and competition, and these will
constantly depend upon the inclinations of those who have _property_ or
any kind of _equivalent_ whatsoever to give; but never upon the quantity
of _coin_ they are possessed of.

Let the quantity of the coin be ever so much increased, it is the desire
of spending it alone, which will raise prices. Let it be diminished ever
so low, while there is real property of any denomination in the country,
and a competition to consume in those who possess it, prices will be
high, by the means of barter, symbolical money, mutual prestations, and
a thousand other inventions. Let me give an example.

Suppose a country where prices are determined, and where the specie is
sufficient for the circulation: is it not plain, that if this country
has a communication with other nations, there must be a proportion
between the prices of many kinds of merchandize, there and elsewhere,
and that the sudden augmentation or diminution of the specie, supposing
it could _of itself_ operate the effects of raising or sinking prices,
would be restrained in its operation by foreign competition? But let us
suppose it cut off from every communication whatsoever, which seems the
only case, where this theory can operate with any appearance of
justness, will any body pretend, that the frugal or extravagant turn of
the inhabitants, will have no influence upon prices, and will it be
asserted, that no variation in the spirit of a people, as to frugality
and dissipation, can take place, except upon a variation in the quantity
of their gold and silver?

It may be answered, that as to articles of superfluity, no doubt the
genius of a people may influence prices, in combination with the
quantity of the specie; but that in articles of indispensible necessity,
they must constantly remain in proportion to the mass of riches. This I
cannot by any means admit to be just. Let me take the example of grain,
which is the most familiar. Is it not plain, from what we have said
above, that the proportion of wealth, found in the hands of the lowest
class of the people, constantly regulates the price of it; consequently,
let the rich be ever so wealthy, the price of subsistence can never rise
above the faculties of the poor. And is it not also plain, that those of
the lowest class of the people, _who purchase subsistence_, must buy it
with the returns they receive from the rich for their industry? Now if
the quantity of the wealth of the latter, does not regulate their demand
for the service of the former, must it not follow, that the price of
grain, as well as of every other thing offered to sale, must depend upon
the degree of competition among the rich for the labour of the poor,
that is, upon the demand for industry, and not on the quantity of wealth
in the country?

No body ever denied, that the extraordinary demand for a commodity had
the effect of raising the price of it: and certainly no body will deny,
that the demand for a particular commodity may be greater at one time
than at another, though the same quantity of that commodity be found at
both times in the country; and the same quantity of specie likewise not
only in the country, but also in circulation.

I acknowledge that in a country where there is much coin, and where
credit is little known, a high and extraordinary demand for an article
of superfluity, may raise the price more than in another where the coin
is more scarce; because on certain occasions, the price of a thing has
no other bounds than the extent of the faculties of the buyer. In like
manner, in other countries where there is almost no coin, nor credit, it
may be impossible for the highest demand to raise the price of such
things even to the common standard established in those where there is
great wealth. But these instances appear to be too particular to serve
for the foundation of a general rule, with respect to the state of
prices in the present situation of the nations of Europe, which, less or
more, are all in communication with one another.

I cannot here omit taking notice of two very remarkable circumstances
which we learn from undoubted historical authority, which seem to
contradict one another, and to throw a great obscurity upon the
principles I have been endeavouring to explain. I shall therefore
introduce them by way of illustration, and when they are examined, I
hope they will confirm my doctrine.

The first is, that in Scotland, formerly, when coin and credit were
certainly very rare, the price of eight pounds weight of oat meal, which
is now commonly sold at eight pence sterling, was then valued at no more
than two thirds of one penny: and that a labouring man used to receive
one penny and one third of a penny sterling for his week’s subsistence;
that is to say, the value of sixteen pounds of oatmeal, which to this
day is the regulated quantity given for that purpose.

There is a very curious confirmation of the authenticity of this
computation, in an hospital at old Aberdeen; where in former times, some
proprietors of lands had settled a certain quantity of oat meal in
favours of the poor of the hospital, with a liberty to the hospital to
accept the meal in kind, or the conversion at two thirds of a penny for
every eight pounds weight. They imprudently chose the last, and to this
very day they are paid according to this standard. Now it is certainly
impossible that any degree of plenty whatsoever, or any failing of
demand, could at present reduce the price of that commodity so very low;
consequently, it may be said that it is the augmentation of wealth, not
that of demand which raises prices.

The second fact we learn from antiquity, that at the time when Greece
and Rome abounded in wealth, when every rarity, and the work of the
choicest artists was carried to an excessive price, an ox was bought for
a mere trifle, and grain was cheaper perhaps than ever it was in
Scotland.

If the application of our principles to the circumstances of those
times, produce a solution of these apparent inconsistencies; and if we
thereby can discover that the low prices of grain, both in Scotland,
where there was little money, and at Rome where there was a great deal,
was entirely owing to the little demand for articles of subsistence;
will it not follow, that our principle is just, and that the other,
notwithstanding of the ingenuity of the thought, must fail in exactness;
since it will appear, that low prices may be equally compatible with
wealth, and with poverty.

Now as to Scotland in former times, as in all countries where there is
little industry; where the inhabitants are mostly fed directly from the
earth, without any alienation of her fruits taking place; where
agriculture is exercised purely as a method of subsisting; where rents
are low, and where, consequently, the free hands, who live upon them for
the price of their industry, must be few; the demand for grain in the
public markets must be very small; consequently, prices will be very
low, whether there be little, or whether there be much money in the
country. The reason is plain. The demand is proportioned here, not to
the number of those who consume, but of those who buy: now those who
consume, are all the inhabitants, but those who buy, are only the few
industrious who are free, and who gain an independent livelihood by
their own labour and ingenuity: now the price of their week’s
subsistence was one penny one third, consequently the subsistence they
bought could not rise above this standard.

Next as to the state of Greece and Rome, where slavery was established.
Those who were fed by the labour of their own slaves, by those of the
state, or by the grain gratuitously distributed to the people, had no
occasion to go to market; consequently, they did not enter into
competition with the buyers. Farther, the simplicity of manners, and the
few manufactures then known, made wants in general less extensive;
consequently, the number of the industrious free was small, and _they_
were the only persons who _could_ have occasion to purchase food and
necessaries; consequently, the competition of the buyers must have been
small in proportion, and prices low.

Add to this, the reflections which naturally present themselves upon
examining the nature of providing the markets. These were supplied
partly from the surplus produced upon the lands of the great men,
laboured by slaves; who being fed from the lands, the surplus cost in a
manner nothing to the proprietors; and as the number of those who had
occasion to buy, were very few, this surplus was sold cheap. Besides,
the grain distributed to the people gratis, must necessarily have kept
down the market, as a part of it would naturally, sometimes, be found
superfluous to those who received it; and consequently, come to be sold
in competition with that raised at private expence.

But when a fine mullet was brought to market, or when an artist appeared
with a curious piece of work, the case was very different. There was
plenty of money in the country, in the hands of the rich, who all
appeared in competition for the preference; consequently, prices rose to
an extravagant height. The luxury of those times, though excessive, was
confined to a few, and as money, in general, circulated but slowly
through the hands of the multitude, it was constantly stagnating in
those of the rich, who found no measure, but their own caprice, in
regulating the prices of what they wished to possess, and had money to
purchase.

From what has been said, it appears, that the riches of a country has no
determined influence upon prices; although, I allow, they may
accidentally affect them: and if we depart from the principles above
laid down, to wit, that prices are regulated by the complicated
operation of demand and competition, in order, to follow the other, we
must add a restriction (which I observe Mr. Hume has attended to on one
occasion, although he has lost sight of it on several others) to wit,
_that the price of every commodity is in proportion to the sum of money
circulating in the market for that commodity_; which is _almost_ my
proposition in other words: for the money to be employed in the purchase
of any commodity, is just the measure of the demand. But even here, the
money in the market _destined_ only for the purchase of a particular
commodity, does not regulate the price of it. Nothing but the finishing
of the transaction, that is, the convention between the buyer and
seller, can determine the price, and this must depend upon inclination,
not weight of money, as an example will make plain.

I shall suppose grain to have been at forty shillings _per_ quarter, in
a country market, for several months together, where the ordinary demand
for the current consumption is twenty quarters every market day. If at
any time an extraordinary demand should happen, which may exceed all
that is to be found in the market, there will be a competition among the
buyers, which will have the effect of raising the market. Now, according
to the doctrine of our learned authors, it may be said, that the corn
rises in proportion to the quantity of the specie which is in the
market, and that it is because of this increase of specie, that the
grain rises in its price. I answer, first, allowing this to be true, can
it be said, that a particular temporary, or perhaps accidental demand
for a few quarters of corn, more than usual, implies any augmentation of
the quantity of money in the country, or indeed the smallest variation
either upon the total consumption, or quantity of grain contained in it?
For if the demand has risen in one market, it must probably have
diminished in another, as the same inhabitants cannot consume in two
places. This I think every person must be convinced of, without farther
illustration. But I say farther, that prices will not rise in proportion
to the money in the market; but in proportion to the desire of acquiring
grain in those who have that money.

Suppose the whole quantity of grain in the market to be thirty quarters;
if there be no demand for more, these will be sold at forty shillings,
as the twenty quarters would have been. But suppose the demand to be for
sixty quarters, and that there is a hundred and twenty pounds sterling
ready to be employed for corn, does it follow, that grain will rise to
four pounds a quarter, because the money in the market bears this
proportion to the quantity of grain? Certainly not.

We must therefore, I think, adopt the other principle, and follow the
proportions of demand and competition; and then we shall find, that if
the sellers want to raise their price up to the proportion of the
specie, all demand will cease, as effectually as if it had never been
made; and the sellers will afterwards be obliged to accept of such a
moderate augmentation as shall be in proportion _to the urgency of the
demand_, but never in proportion _to the money_ ready to be employed.

The circulation of every country, as we have shewn above, must ever be
_in proportion to the industry of the inhabitants, producing the
commodities which come to market_: whatever part of these commodities is
consumed by the very people who produce them, enters not into
circulation, nor does it in anywise affect prices. If the coin of a
country, therefore, falls below the _proportion_[M] of the produce of
industry _offered to sale_, industry itself will come to a stop; or
inventions, such as symbolical money, will be fallen upon to provide an
equivalent for it. But if the specie be found above the proportion of
the industry, it will have no effect in raising prices, nor will it
enter into circulation: it will be hoarded up in treasures, where it
must wait not only the call of a desire in the proprietors to consume,
but of the industrious to satisfy this call.

Footnote M:

  Let it be observed, that _proportion_, here, does not mean _value_.

We may therefore conclude, in consequence of the principles we have laid
down, that whatever be the quantity of money in any nation, in
correspondence with the rest of the world, there never can remain, _in
circulation_, but a quantity nearly proportional to the consumption of
the rich, and to the labour and industry of the poor inhabitants. The
value of each particular species of which consumption is determined by a
complication of circumstances at home and abroad; consequently, the
proportion is not determined by the _quantity_ of money actually in the
country.

If the contrary is maintained, and if it be affirmed that the proportion
between specie and manufactures is reciprocal and determined, then I am
authorised to draw this conclusion, to wit: That if the _greatest_
produce of industry _must_ be sold for _what specie_ is found in the
country, _let the sum be ever so small_, so in like manner, the
_smallest_ produce of industry _must_ be sold for _all the specie_ found
in the country, _let the sum be ever so great_. Consequently, in the
first case, we must suppose, that the industrious will never seek for a
better price from abroad; and in the second, that the monied people
_must_ spend all they have in supplying their most moderate wants, and
never seek for cheaper merchandize than what they can find at home.
Consequently, there can be no foreign trade, nor can there ever be any
hoarding.

I shall now conclude my chapter, with a few observations upon the three
propositions as they stand in their order.

PROP. 1. Prices are in proportion to the plenty of money. And thus the
augmenting even of fictitious wealth, such as paper, affects the state
of prices, according to its quantity.

From this Mr. Hume disapproves of the introduction of paper money, when
specie is wanting, and says, that if nothing were allowed to circulate
but gold and silver, the quantity being less, prices would be lower.

This is neither more or less, in my humble opinion, than a project to
destroy credit, with a view to support trade and industry. Because it
would effectually prevent any person from making a consumption, except
at the time he happened to be provided with ready money. Does the paper
money in England, keep up the prices of grain at present, January 1759?
And will not every article of necessaries fall, in a short time, as low
in that country as in any other in Europe, if the same measures continue
to be followed?

Were all paper money in that kingdom proscribed at once, no doubt the
prices of many things would fall very considerably; but such a fall
would neither be universal or equable. The reason of this fall would not
be, because the specie would become proportionally divided among all the
inhabitants, according to the value of their property; nor because of
the small quantity of it, since prices abroad would still regulate many
at home: but because of the sudden revolution, and the violent overturn
thereby produced on the balance of work and demand. The scale of the
first would preponderate to such a degree, that those classes of the
industrious, who work for daily subsistence in furnishing superfluities,
would enter into so strong a competition with one another, that their
work would fall to nothing, while subsistence would remain at the price
of exportation. If it be asked what could occasion this difference. I
answer, because the workmen who supply superfluities, adapted to the
state of their nation, would find no more demand for them, from the want
of credit, or of a circulating fund to buy with, and strangers would not
profit of the fall in the price of a superfluity not adapted to their
own taste; but they would very willingly become purchasers of every
bushel of grain become superfluous, by starving so many of the
inhabitants; and this would keep the price of subsistence upon a pretty
even level with that of other countries.

But if we suppose all communication cut off with strangers, would this
proportion between money and prices then hold true? By no means. Here is
the reason: there are many ways of alienating goods or natural produce,
without the assistance of specie. Immense quantities of both may be
consumed by barter, or in lieu of service, where money is never heard
of: now all this portion alienated, enters into the mass of what is
called produce and manufactures which come to market; but can have no
influence upon the specie, nor can specie have any upon it, since the
money remains inactive during those operations.

Another reason is, that there is no such thing as preserving specie in
an equal repartition, so as to serve the occasions of every body in
proportion to their worth. The reason is manifest: money, like every
other thing, will come into the hands of those who give the greatest
value for it, and when the quantity of it is small in any country, where
nothing can be procured without it, such proprietors of lands as have
the greatest desire to consume, will purchase the specie at a higher
interest, or with more of their lands than others.

This alone is sufficient to prove that the repartition of specie can
never be in proportion to property; and this also destroys the
supposition of prices rising and falling, according to the proportion of
it, even in a country cut off from every foreign communication. Here is
the proof: any individual who has, by mortgaging his lands, got together
a large proportion of the specie of his country, will raise prices in
his neighbourhood, by making an extraordinary demand for work; and the
rest of the same country, drained of their circulating value, must
diminish their demand; consequently, prices will fall elsewhere. I now
come to the second proposition.

The coin and current money of a country, is the _representation_ of all
its labour and commodities; so that in proportion as there is more or
less of this _representation_, a greater or less quantity of it will go
for the same quantity of the thing represented.

To this _representation_ I cannot agree, and I apprehend it to be the
source of error. A proper equivalent for labour and manufactures, may,
in one sense, be called a _representation_; but there is no necessity
for this equivalent to consist in coin. Are not meat and clothes an
equivalent for personal service? Is not a free house and a bit of land,
a very good equivalent for all the manufactures a country weaver can
work up for me who am his landlord? If there were not one penny of coin
in a country, would it follow, that there could be no alienation, or
that every thing might there be got for nothing?

Coin has an intrinsic value; and when it comes into a country, it adds
to the value of the country, as if a portion of territory were added to
it: but it has no title to represent any thing vendible, by preference,
or to be considered as the only equivalent for all things alienable. It
is made a common price, on no other account than because of its rarity,
its solidity, its being of a nature to circulate, and to suffer a
correct division without end, and to carry its value along with it,
which is a proper equivalent for every thing; and at the same time it is
by its nature little liable to vary.

Were, indeed, a statesman to perform the operation of circulation and
commerce, by calling in, from time to time, all the proprietors of
specie in one body, and all those of alienable commodities, workmen, &c.
in another; and were he, after informing himself of the respective
quantities of each, to establish a general tariff of prices, according
to our author’s rule; this idea of _representation_ might easily be
admitted; because the parcels of manufactures would then seem to be
adapted to the pieces of the specie, as the rations of forage for the
horses of an army are made larger or smaller, according as the magazines
are well or ill provided at the time: but has this any resemblance to
the operations of commerce?

The idea of coin being the _representation_ of all the industry and
manufactures of a country, is pretty; and has been invented for the sake
of making a general rule for operating an easy distribution of things
extremely complex in their nature. From this comes error. We substitute
a complex term, sometimes in one sense, and sometimes in another, and we
draw conclusions as if it expressed a fixed and determined idea.

If in algebra, _x_, _y_, _z_, &c. ever stood for more than a single
idea, the science would become useless; but as they never represent but
the very same notion, they never change their nature through all manner
of transpositions.

It is not the same of terms in any other science, as abundantly appears
from the question now before us: coin is called a _representation_,
because it is an equivalent; and because it is a _representation_, it
must bear an exact proportion to the thing represented. And since in
some particular examples, this representation _appears_ to hold;
therefore the rule is made general, although circumstances may be
different. If, for example, a merchant, or a private person, has upon
hand a thousand pounds worth of grain, no doubt that the thousandth part
of the merchandize is worth the thousandth part of the sum; because both
are determined in their quantity and quality: but the parcels of this
corn, though exactly proportioned to the price of the whole, do not draw
their value from this proportion, but from the total value of the whole
mass; which is determined from the complicated operations of demand and
competition, as has been said, and not from the specie of the country,
which can bear no proportion either to the quantity or quality of the
grain.

There may be vast quantities of coin in a country of little industry;
and, _vice versa_, coin is constantly an _equivalent_, but never a
_representation_, more than any other equivalent which may be contrived.
Were the doctrine of this second proposition true, every commodity in a
country should be sold like a parcel of the grain in the foregoing
example, by the rule of three; as the property of all the labour and
manufactures of the country is to the part I intend to alienate, so is
all the gold and silver in the country to the part I am entitled to
receive. This way of regulating prices may be very ingenious, but it is
not very common. I now proceed to the third and last proposition.

Increase the commodities, they become cheaper: increase the money, they
rise in their value.

This proposition is much too general: the first part of it is commonly
true, the last part is more commonly false.

What can increase commodities, but a demand for them? If the demand be
equal to the augmentation, there will be no alteration in the price.

Let extraordinary plenty increase subsistence, it will naturally fall in
the price; but it may be hoarded up, and made to rise in spite of the
plenty; it may be demanded from abroad; this also will make it rise.

Let the production of superfluities, not exportable, be produced by
workmen whose branch is overstocked, prices will undoubtedly fall.

The same observations are true of a diminution in the quantity of
commodities. If this diminishes by degrees, from a diminution of demand,
the price of them will not rise.

If the quantity of subsistence falls below the necessary consumption of
the inhabitants, prices will undoubtedly rise.

If the articles of superfluity are diminished, prices will only rise in
proportion to the eagerness to buy, that is, to the competition, not to
the deficiency. On the other hand, as to coin or money,

Increase the money, nothing can be concluded as to prices, because it is
not certain, that people will increase their expences in proportion to
their wealth; and although they should, the moment their additional
demand has the effect of producing a sufficient supply, prices will
return to the old standard.

But diminish the quantity of specie _employed in circulation_, you both
retard this, and hurt the industrious; because we suppose the former
quantity exactly sufficient to preserve both in the just proportion to
the desires and wants of the inhabitants.

These are but a few of the numberless modifications necessary to be
applied to this general rule; and I hope what I have said, will justify
the observation I have made on the whole doctrine; to wit, that it is
much more specious than solid, in every one of its three branches.

Let me just propose one question more upon this subject, and then I
shall conclude.

Suppose the specie of Europe to continue increasing in quantity every
year, until it amounts to ten times the present quantity, would prices
rise in proportion?

I answer, that such an augmentation might happen, without the smallest
alteration upon prices, or that it might occasion a very great one,
according to circumstances. If industry increases to ten times what it
is at present, that is to say, were the produce of it increased to ten
times its present value, according to the actual standard of prices, the
value of every manufacture and produce might remain without alteration.
This supposition is possible; because no man can tell to what extent
demand may carry industry. If, on the other hand, the scale of demand
could be supposed to preponderate, so as to draw all the wealth into
circulation, without having the effect of augmenting the supply (which I
take to be impossible) then prices would rise to ten times the present
standard, at least in many articles.

This solution is entirely consistent both with Mr. Hume’s principle and
mine; because nothing is so easy in an hypothesis, as to establish
proportions between things, which in themselves are beyond all the
powers of computation.

------------------------------------------------------------------------



                              CHAP. XXIX.
  _Circulation with foreign Nations, the same thing as the Balance of
                                Trade._


We have endeavoured to shew in a former chapter, how the circulation of
money, given in exchange for consumable commodities, produces a
vibration in the balance of domestic wealth: we are now to apply the
same principles to the circulation of foreign trade; in order to find
out, if there can really be such a thing as a balance upon it, which may
enrich one country, and impoverish another.

It has been said, that when money is given for a consumable commodity,
the person who gets it acquires a balance in his favour, so soon as he
with whom he has exchanged, has begun to consume.

That if two consumable commodities are exchanged, the balance comes to a
level, when both are consumed. That it is only the wealth which is found
in circulation, which can change its balance, and the remainder must be
found locked up, made into plate, or employed in foreign trade. And it
has been observed, that the quantity of money found in circulation, is
ever in proportion to the sale of the produce of industry and
manufactures; and that when the quantity of metals is not sufficient to
carry on a circulation, proportioned to the demands of those who have
any real equivalent to give, that symbolical money may be made to fill
up the void, when the interest of the state comes to require it.

We have also laid it down as a kind of general rule, that while luxury
only tends to keep up demand to the reasonable proportion of power and
inclination in the industrious part of a people to supply it, that then
it is advantageous to a nation; and that so soon as it begins to make
the scale of home-demand preponderate, by forming a competition among
the natives, to consume what strangers seek for, that then it is
hurtful, and has an evident tendency to root out foreign trade. These
principles are all analogous to one another, and should be retained
while we examine the question before us.

I must still add, that the fluctuation of the balance of wealth is
constantly inclining in favour of the industrious, and against the idle
consumer. This however admits of a restriction, viz. The industrious
must be supposed to be frugal; and the idle, extravagant. For if the
industrious man consumes the produce of his industry, he will only have
laboured to increase his consumption, not his wealth: and if the idle
person, by his frugality, keeps within the bounds of his yearly income,
he will thereby repair every disadvantage incurred by his sloth, the
balance then will stand even between them; the industry in one scale,
and the fund already provided in the other, will keep both parties on a
level as before.

In order, therefore, to make the balance of domestic wealth turn in
favour of a poor man, he must be both industrious and frugal.

Now let us apply these principles to a whole nation, considered as an
individual in the great society of mankind. A private person who
conducts his affairs with prudence, must either be in a way of growing
richer by his industry, or of spending his income with oeconomy and
discretion: so I must suppose a nation which is well governed, either to
be growing rich by foreign trade, or at least in a state of not becoming
poorer by it.

It is the duty of every statesman to watch over the conduct of those who
hold the foreign correspondence, as it is the duty of the master of a
family to watch over those he sends to market.

I find it is the opinion of the learned Mr. Hume, that there is no such
thing as a balance of trade, that money over all the world is like a
fluid, which must ever be upon a level, and that so soon as in any
nation that level is destroyed by any accident, while the nation
preserves the number of its inhabitants, and its industry, the wealth
must return to a level as before.

To prove this, he supposes four fifths of all the money in Great Britain
annihilated in one night, the consequence of which he imagines would be,
that all labour and commodities would sink in their price, and that
foreign markets would be thereby entirely supplied by that industrious
people, who would immediately begin to draw back such a proportion of
wealth, as would put them again upon a level with their neighbours.

This reasoning is consistent with the principles we have examined, and
humbly rejected in the preceding chapter; both stand upon the same
foundation, and lead to a chain of consequences totally different from
the whole plan of this inquiry.

My intention is not so much to refute the opinions of others, as briefly
to pass them in review. General propositions, such as those we have been
treating of, are only true or false, according as they are understood to
be accompanied with certain restrictions, applications, and limitations:
I shall therefore say nothing as to the proposition itself, but only
examine how far the example he has taken of the sudden annihilation of a
great proportion of a nation’s wealth, can naturally be followed by the
consequences he supposes.

For this purpose, let me suggest another consequence (different from
that of the author, and flowing from the doctrine we have established)
which possibly might happen, upon the annihilation of four fifths of all
the money in Great Britain. I shall take no notice of the effects which
so sudden a revolution might occasion; these have not been attended to
by the author, and therefore I shall consider them as out of the
question. I suppose the event to have happened, prices to have been
reduced, and every immediate inconvenience to have been prevented. My
only inquiry shall be directed towards the unavoidable consequences of
such a revolution, as to foreign trade, as to drawing back the money
annihilated, and as to the preserving the same number of inhabitants,
and the same degree of industry as before. If I can shew, that the event
alone of annihilating the specie, and reducing prices in proportion,
(which I shall allow to be the consequence of it) will have the effect
of annihilating both industry and the industrious, it cannot afterwards
be insisted on, that the revolution can have the effect of drawing back
a proportional part of the general wealth of Europe: because the
preservation of the industrious is considered as the requisite for this
purpose.

Here then is the consequence, which, in my humble opinion, would very
probably happen upon so extraordinary an emergency; and I flatter myself
that my reader has already anticipated my decision.

The inhabitants of Great Britain, who, upon such an occasion, would be
found in possession of all the exportable necessaries of life, and of
many other kinds of goods demanded in foreign markets, instead of
selling them to their poor countrymen, for a price proportioned to our
author’s tariff, and to the diminution of the specie, which he takes to
be the representation of them, would export them to France, to Holland,
or to any other country where they could get the best price, and the
inhabitants of Britain would starve.

If it be replied, that the exportation would not be allowed. I answer,
that such a prohibition would be highly seasonable; but quite contrary
to the principle of laying trade open, and impossible to be effectual,
as that author justly observes, when he says, “Can one imagine, that all
commodities could be sold in France, for a tenth of the price they would
yield on the other side of the Pyrenees, without finding their way
thither, and drawing from that immense treasure?” Suppose this phrase to
run thus. Can any one imagine, that provisions could be sold in Britain,
for a fourth part of the price they would yield on the other side of the
water, without finding their way thither, and drawing from that immense
treasure? This is entirely consistent with our principles, and ruins the
whole of Mr. Hume’s former supposition: because the exportation of them
would annihilate the inhabitants.

From this I conclude, that a nation, though industrious and populous,
may reduce itself to poverty in the midst of wealthy neighbours, as a
private person, though rich, may reduce himself to want, in the midst of
the amusements and luxury of London or of Paris. And that both the one
and the other, by following a different conduct, may amass great sums of
wealth, far above the proportion of it among their neighbours.

This is not a matter of long discussion. It is not by the importation of
foreign commodities, and by the exportation of gold and silver, that a
nation becomes poor; it is by consuming those commodities when imported.
The moment the consumption begins, the balance turns; consequently, it
is evidently against the principles which we now examine, either to sell
at home, or destroy confiscated goods. The only way of repairing the
damage done by such frauds, is to export the merchandize, and by selling
them cheap in other countries, to hurt the trade of the country which
first had furnished them. From this also we may conclude, that those
nations which trade to India, by sending out gold and silver, for a
return in superfluities of the most consumable nature, the consumption
of which they prohibit at home, do not in effect spend their own specie,
but that of their neighbours who purchase the returns of it for their
own consumption. Consequently, a nation may become immensely rich by the
constant exportation of her specie, and importation of all sorts of
consumable commodities. But she would do well to beware of this trade,
when her inhabitants have taken a luxurious turn, lest she should come
to resemble the drunkard who commenced wine merchant, in order to make
excellent chear in wine with all his friends who came to see him; or the
millener, who took it into her head to wear the fine laces she used to
make up for her customers.

If a rich nation, where luxury is carried to the highest pitch, where a
desire of gain serves as a spur to industry, where all the poor are at
work, in order to turn the balance of domestic wealth in their favour,
if such a nation, I say, is found to consume not only the whole work of
the inhabitants, but even that of other countries, it must have a
balance of trade against it, equivalent to the foreign consumption; and
this must be paid for in specie, or in an annual interest, to the
diminution of the former capital. Let this trade continue long, they
will not only come at the end of their metals, but they may even succeed
in exporting their lands. This last appears a paradox, and yet it is no
uncommon thing. The Corsicans have exported, that is sold, the best part
of their island to Genoa; and now, after having spent the price in
wearing damask and velvet, they want to bring it back, by confiscating
the property of the Genoese, who have both paid for the island, and
drawn back the price of it by the balance of their trade against these
islanders. It were to be wished that Corsica alone afforded an example
of this kind.

Is it not, therefore, the duty of a statesman to prevent the consumption
of foreign produce? If tapestry or other elegant furniture, such as is
seen in a certain great capital in Europe, were allowed to be imported
into a neighbouring nation, who doubts but this article would carry
money out of that nation?

It may be answered, that as much elegance of another kind may be sent in
return. True; and it would be very lucky if this could be the case; but
then you must suppose an equality of elegance in both countries, and
farther, you must suppose a reciprocal taste for the respective species
of elegance. Now the taste of one country may, indeed, be common to
both; but it may happen that the taste of the one may not be that of the
other, though nothing inferior, perhaps, in the opinion of a third
party. And the difference may proceed from this; that the young people
of one country travel into the other, where the inhabitants stay at
home: a circumstance which would prove very prejudicial to the country
of the travellers, if a wise statesman did not, by seasonable
prohibitions upon certain articles of foreign consumption, prevent the
bad consequences of adopting a taste for what his subjects cannot
produce.

This furnishes a hint, that it might not be a bad maxim in a great
monarchy, to have houses built in the capital for every foreign
minister, where the general distribution of the apartments of each might
be, as much as possible, analogous to the taste of the country for whose
minister it is calculated: but as to the furniture, to have it made of
the most elegant domestic manufactures easily exportable, nicely adapted
also to the uses and fashions of every foreign country. Such a
regulation could never fail of being highly acceptable, as it would
prove a great saving to foreign ministers, and would insensibly give
them a taste for the manufactures and luxury of the country they reside
in. On the other hand, I would be so far from expecting a return of this
civility, that I would recommend a set of furniture, as a gratification,
to every minister sent abroad, who should regularly sell it off upon the
expiration of his commission. Such an expence would not cost one penny
to the nation, and would be a means of captivating unwary strangers, who
might be thereby made to pay dearly for such marks of politeness and
civility. I return.

Without being expert in the computation of exports and imports, or very
accurate in combining the different courses of exchange between the
different cities of Europe, a statesman may lay it down as a maxim, that
whatever foreign commodity, of whatsoever kind it be, is found to be
consumed within the nation he governs, so far the balance of trade is
against her; and that so far as any commodity produced either by the
soil, or labour of the inhabitants, is consumed by foreigners, so far
the balance is for her.

A nation may in some measure be compared to a country gentleman, who
lives upon his land. This I suppose to be his all. From it he draws
directly his nourishment, perhaps his clothes are worked up in his
family. If he be so very frugal as never to go to market for any thing,
any spare produce which he can sell, is clear money in his purse. If he
indulges now and then in a bottle of wine, which his farm does not
produce, he must go to market with his purse in his hand; and so soon as
his bottle is out, I think he is effectually so much poorer than he was
before. If he goes on, and increases his consumption of such things as
he is obliged to buy, he will run out the money he had in his purse, and
be reduced to the simple production of his farm. If then this country
gentleman be poorer, certainly some body is richer; and as it is no body
in his family, it must be some of his neighbours.

Just so a nation which has no occasion to have recourse to foreign
markets, in order to supply her own consumption, must certainly grow
rich in proportion to her exportation.

These riches again will not circulate at home, in proportion to the
domestic consumption of natural produce and manufactures, but in
proportion to the alienation of them for money: the surpluswealth will
stagnate in one way or other, in the hands of the money gatherers, who
are the small consumers.

While there is found a sufficient quantity of money for carrying on
reciprocal alienations; those money gatherers will not be able to employ
their stagnated wealth within the nation; but so soon as this gathering
has the effect of diminishing the specie, below the proportion found
necessary to carry on the circulation, it will begin to be lent out, and
so return to circulate for a time, until by the operation of the same
causes it will fall back into its former repositories.

Should it be here objected, that upon the augmentation of a nation’s
riches, no money can stagnate; because _prices rising in proportion to
the augmentation of them_, all the additional wealth must be thrown into
circulation: surely both reason and experience must point out the
weakness of such an objection.

While a favourable balance, therefore, is preserved upon foreign trade,
a nation grows richer daily; and still prices remain regulated as
before, by the complicated operations of demand and competition; and
when one nation is grown richer, others must be growing poorer: this is
an example of a favourable balance of trade.

When this superfluity of riches is only profited of by the luxurious
individuals, instead of being turned to profit by the state itself, with
a view to secure the advantages thereby acquired, then the balance takes
a contrary turn: this is the case whenever foreign importations for
consumption, are either permitted as a gratification to the luxurious
desires of the wealthy, or because of the rise in the price of goods at
home, in consequence of domestic competition. If it be permitted purely
in favour of the first, it marks a levity and want of attention unworthy
of a statesman: if on account of the second, it shews either an
ignorance of the real consequences of so temporary an expedient, or a
disregard for the welfare of the lower classes of the people.

Every augmentation of prices at home, must be a necessary consequence of
many domestic circumstances, and must be removed by correcting them, as
has been, I think, made clear. But let it be supposed, that from the
augmentation of wealth _alone_, manufactures can no more produce work so
cheap as other nations; I think that both in humanity and prudence, a
people should submit to the inconvenience of paying dearer. In humanity,
because by the introduction of foreign manufactures, you starve those
very people, who by their labour have enriched you: in prudence, because
by opening your ports to such importation you deliberately throw away
that superiority of riches you have been at so much pains to acquire.

I freely grant, that particular people do not regulate either their
expence or their schemes of getting money, with a view to promote the
public good. One who has a coat to buy, will be very glad to find a
piece of foreign manufacture at a cheap rate; another will wish to
smuggle a piece of goods on which there is a high duty. But the question
is, whether a statesman is to allow this foreign consumption? I think it
is much the same question, as if it were asked, whether the master of a
family should, in good oeconomy, allow his servants to invite their
friends to drink in his cellar, instead of carrying them to a public
house.

But suppose it said, that “by laying trade open, you are sure that
wealth will naturally come to a balance, in all countries, and that all
fears of a wrong balance of trade are only the effect of a gloomy
imagination.” See Mr. Hume’s _Political Discourses_, Sect. v.

Several answers may be made to this objection. The first, that it is in
order to prevent this kind of balance, that every nation gives
themselves disquiet: for by balance here, is understood an equality of
wealth; and it is rich nations only who are anxious, lest they should be
brought to such an equality. In the question here before us, it is the
loss of the superiority which is understood by a balance turning against
a nation. If, therefore, it be the interest of a nation, poor in respect
of its neighbours, to have trade laid open, that wealth may, like a
fluid, come to an equilibrium; I am sure it is the interest of a rich
nation, to cut off the communication of hurtful trade, by such
impediments as restrictions, duties, and prohibitions, upon importation;
that thereby, as by dykes, its wealth may be kept _above_ the level of
the surrounding element.

Another answer is, that laying trade open would not have the effect
proposed; because it would destroy industry in some countries, at least,
if not every where. A manufacture must be very solidly established
indeed, not to suffer any prejudice by a permission to import the like
commodities from other countries. The very nature of luxury is such,
that it prompts people often to consume, from caprice and novelty, what
is really inferior to home-production. It may be answered, that this
argument cuts two ways: for if a nation from caprice consumes foreign
commodities, why may not other nations from caprice likewise, take off
those which are left on hand? This reasoning may appear good, in a
theory which does not take in every political consideration. But a poor
manufacturer who cannot find work, because the branch he works in is
supplied from abroad, cannot live till the caprice of foreigners makes
them demand his labour. If a certain number of inhabitants be employed
in a necessary branch of consumption, there must be a _certain_ demand
preserved for it; and whatever can render this precarious, will ruin the
undertaking, and those employed in it.

A third answer is, that any nation who would open its ports to all
manner of foreign importation, without being assured of a reciprocal
permission from all its neighbours, would, I think, very soon be ruined;
and if this be true, it is a proof that a balance of trade is a possible
supposition, and that proper restrictions upon importation may turn to
the advantage of a state.

In order to promote industry, a statesman must act, as well as permit
and protect. Could ever the woollen manufacture have been introduced
into France, from the consideration of the great advantage England had
drawn from it, if the King had not undertaken the support of it, by
granting many privileges to the undertakers, and by laying strict
prohibitions on all foreign cloths? Is there any other way of
establishing a new manufacture any where?

Laying, therefore, trade quite open would have this effect, it would
destroy at first, at least, all the luxurious arts; consequently, it
would diminish consumption; consequently, diminish the quantity of
circulating cash; consequently, it would promote hoarding; and
consequently, would bring on poverty in all the _states_ of Europe.
Nothing, I imagine, but an universal monarchy, governed by the same
laws, and administred according to one plan well concerted, can be
compatible with an universally open trade. While there are different
states, there must be different interests; and when no one statesman is
found at the head of these interests, there can be no such thing as a
common good; and when there is no common good, every interest must be
considered separately. But as this scheme of laying trade quite open, is
not a thing likely to happen, we may save ourselves the trouble of
inquiring more particularly into what might be its consequences; it is
enough to observe, that they must, in their nature, be exceedingly
complex, and if we have mentioned some of them, it has only been to
apply principles, and shew how consequences _may_ follow one another: to
foretel what _must_ follow is exceedingly difficult, if not impossible.

In discoursing of the balance of trade, I have hitherto considered it
only so far as the specie of a country is augmented by it. In the
subsequent book, when we shall have occasion to bring this subject once
more upon the carpet, I shall shew how a balance may be extremely
favourable without augmenting the mass of the precious metals; to wit,
by providing subsistence for an additional number of inhabitants; by
increasing the quantity of shipping, which is an article of wealth; by
constituting all other nations debtors to it; by the importation of many
durable commodities, which may be considered also as articles of wealth;
as a well furnished house, a well stored cellar, an ample wardrobe, and
a fine stable of horses, are articles which enhance the value of the
inheritance of a landed man.

Then we shall have occasion to shew how industry heightens the permanent
value of a nation, as agriculture increases its annual produce.

------------------------------------------------------------------------



                               CHAP. XXX.
    _Miscellaneous Questions and Observations relative to Trade and
                               Industry._


It is now time to draw to a conclusion of this book. The subject of
trade and industry is inexhaustible, if considered in all its branches,
and traced through every consequence. My intention has been to inquire
into the original principles which influence general operations, and
which, less or more, enter into every combination. I have represented
trade in its infancy, manhood, and old age; and have endeavoured to
prescribe a general regimen of health for every period. It is sufficient
to be thoroughly master of the principles, to be able to apply them to
particular cases, providing every circumstance be exactly known.

The intention of this chapter, is, to review some parts of our subject,
which I think have not received all the light necessary to be thrown
upon them, to suggest some remarkable differences between antient and
modern oeconomy, with regard to circulation and industry; and, in
general, to lay certain circumstances together, which may point out the
spirit of modern times, from which we are endeavouring to extract a set
of consistent principles. Every thing which points out relations is
useful; because we know nothing, but through this channel. Now certain
relations are too frequently taken for granted, and nothing is more
essential in political reasonings, than to point them out clearly, to
proceed by the shortest steps, and still to keep experience and matter
of fact before our eyes, when we draw a conclusion from a general
proposition. Let the conclusion appear ever so just, if, when compared
with experience, a disagreement appears, it is ten to one we have
overlooked some circumstance, which ought to have entred into the
combination.

To illustrate this, let me cite a mistake of my own, which I purposely
left uncorrected, in the second chapter of the first book, where I very
confidently declare, that a statesman, who, upon certain occasions,
which seem favourable for raising great sums upon a people, increases
taxes only in proportion to the interest of the money borrowed, must be
shortsighted and regardless of futurity. This, I remember, appeared to
me at the time I wrote, so clear and evident, that I thought I ran no
risk in making it enter into a preliminary chapter. But when I came to
look a little more particularly into the matter, I found I had been
grosly mistaken; as I hope to shew evidently in its proper place. Had
every such mistake been treated with the same indulgence, I should have
been more employed in the correction of my own blunders, than in the
prosecution of my subject. People who reason with tolerable exactness on
such subjects, generally fall into mistakes, from the generality of
their propositions. These may commonly be true enough, within the
compass of the author’s combinations at the time, and yet may not be
true in every other case. From which I infer, that every one of my
readers, who can form combinations more extensive than mine, will find
sufficient matter for criticism in every page of this inquiry. So much
the better: it is by such criticisms and discussions, that particular
branches of knowledge are brought to the certainty of science.

The more simple any plan of political oeconomy is, the more it is easy
to govern by general rules; the more complex it becomes, the more it is
necessary for a statesman to enter into combinations. But when general
rules have been long established, they gain such an authority over the
minds of a people, that any deviation from them appears like heresy in
religion: and how seldom does it happen, that a people is blessed with a
governor, who has both penetration to discover, art to persuade, and
power to execute a plan adapted to every combination of circumstances.

No change can happen in a state, but what is advantageous to some class
or other, and when the public good requires that a stop should be put to
such advantages, numbers of discontented people will always be found.
Circumstances, therefore, ought to be well weighed before new plans of
administration are entred upon; and when once adopted, those who pretend
to criticise, must suppose themselves provided with superior talents and
better informations as to every circumstance, than the author of the
innovation. For this reason, there is little danger in censuring a
statesman’s opinion, when he delivers it; but a great deal in finding
fault with his conduct, when his motives are not known.

In the former chapters, we have been treating of the nature and
consequences of circulation, the effects of augmentations and
diminutions of specie, and the doctrine of Mr. Hume concerning the
balance of trade. The perspicuity with which this author writes, renders
his ideas easy to conceive; and when people understand one another, most
disputes are soon at an end.

In order, therefore, to throw a little more light upon the nature of the
balance of trade between nations, let me examine the following questions
while we have the subject of the last chapter fresh in our memory.

QUEST. 1. Can any judgment be formed concerning the state of the balance
of trade of a nation, barely from the quantity of specie that is found
in it?

I answer in the negative. A great proportion of all the specie of
Europe, may be found in a country against which the balance of trade has
stood regularly for many years. An inconsiderable proportion of it may
be found in another, which has had it as regularly in its favour for the
same time.

The balance upon every article of trade, may be favourable to a nation
which squanders away more than the returns of it, upon foreign wars.

The balance of every article of trade, may be against a country which
receives more than all the loss incurred, either from her mines, from
countries tributary to her, or who willingly furnish subsidies upon many
political considerations.

Besides these varieties, there are still other combinations, relative to
the specie itself. The money found in a country, may either be said to
belong _absolutely_ to the country, when neither the state itself, or
the particular people of it, are in debt to foreigners; or only so _by
virtue of a loan_. Now, whether it is borrowed or not, the property of
it belongs to the country; but the difference consists in this, that
when it is borrowed, the acquisition of the metals adds nothing to the
national patrimony, that is to say, there is no acquisition of wealth
thereby made; but when it is gained by industry, the money adds to the
real value of the country, in consequence of the principles laid down in
the 26th chapter.

May not a nation then, having very little gold and silver, open a
subscription for millions, at so much _per cent_? Will not strangers
lend to her; when her own subjects cannot? May she not yearly, by paying
away the interest of the money borrowed, and by a heavy balance of trade
against her, be constantly diminishing her specie, and yet by new
contracts, keep up, and even increase the mass of the circulating value,
to such a degree, as to be possessed of a greater proportion of specie
than any of her neighbours? Farther,

Is it not certain, that all nations will endeavour to throw their ready
money, not necessary for their own circulation, into that country where
the interest of money is high with respect to their own, and where
consequently the value of property in land is low; since they may either
draw a high interest from it, or make the acquisition of solid property?
Forbidding therefore the acquisition of solid property to strangers, is,
in effect, a prohibition upon the gratuitous importation of specie. I
allow there may be examples of people who make such purchases, with a
view to draw the rents of the lands bought, out of the country; but
whatever be the intention at the time of purchase, such however is the
effect of an established fortune in a country, that, sooner or later, it
draws the proprietor to it; and when this does not happen, a subsequent
alienation commonly takes place.

Were the purchase, therefore, of lands permitted universally, and were
it established, that property in land, to a certain value, should give a
right to naturalization, no doubt large sums would be brought into those
countries, where lands are found cheapest; and as no exportable
commodity is given in return, the specie of such countries might mark
the quantity of lands sold, as well as that of merchandize exported. For
want of a sufficient extension of these and many other combinations,
which it would be easy to contrive, Mr. Belloni, in his _Dissertation
upon Commerce_, Chap. I. Sect. 5. falls into several mistakes, when he
judges of the exportation of commodities of a particular country, by the
quantities of money found in it.

_Essendo adunque da ciò venuto_ (says he) _che l’abondanza del danaro,
ovunque si ritrovi, significa l’abodanza stessa delle cose, delle quali
egli é misura: perciò diviziosi meritamente sono stati detti quegli
uomini, e ricco altersi quel regno, dove si ritrova gran copia di
danaro. Dal altro canto poi, se si considera lo stato di un regno, ed il
danaro, che è dentro di esso, tenendo sempre salda l’essenza della
moneta (che altro non sia, che misura di cose, e prezzo, che viene in
compenso di mercanzie) ovunque di essa vedrasi affluenza, ognuno ben
vede, doversi subito necessariamente arguire, un gran traffico di quel
dominio, con esito di merci, in uso degli esteri, e all’incontro ovunque
questa venga a mancare, doversene dedurre grande introito di merci, che
sieno subentrate nel luogo della moneta, e che l’abbiano fatta uscire._

These consequences are only just so far as money comes into, or goes out
of a country, as the price of merchandize exported or imported. But how
much money has not this author himself drawn into Rome from England, for
the exportation of nothing but the bills of travellers?

On the other hand, may not a country, which is actually in possession of
great quantities of gold and silver, call in these metals, and
circulate, in their place, a symbolical money? May not a nation then, as
well as a private person, employ this specie in a profitable foreign
trade, and gain daily by it? May she not, after some time, withdraw her
stock, by calling in her debts? And may she not also call in her paper,
and remain with an additional acquisition of specie in her pocket?
Consequently, during the circulation of the paper, no judgment can be
formed as to the balance of her trade, by examining the state of her
specie; because I can suppose that at this time every shilling of it may
be in the hands of strangers. Consequently, the richest nation in Europe
may be the poorest in circulating specie.

“The writings of Mr. Gee (says Mr. Hume, in his _Political Discourse
upon the Balance of Trade_) struck all the nation with a pannic fear, by
shewing from a long enumeration of particulars, that the balance
inclined so much against us, and for so considerable sums, that in the
space of five or six years, there would not remain one shilling in
England. But happily twenty years are elapsed since, we have supported a
long and expensive foreign war, and nevertheless, it is commonly
believed, that money is at present as plentiful in the kingdom as ever.”
I quote from the French translation.

Mr. Gee was in the wrong to conclude, that the balance of trade would
have the effect of carrying off the coin: and Mr. Hume has been misled
by this mistake, to conclude, that Mr. Gee’s calculations were false. I
know nothing as to the matter of fact; nor whether Mr. Gee was a good or
a bad judge of the question he treated; but from what has been said, I
hope it appears, that the state of the coin in England, at the time Mr.
Hume wrote, was no proof on either side.

To judge of the balance of trade is one thing; to judge of the wealth of
a nation as to specie is another. England may greatly increase her
specie by her trade, and greatly diminish it by her wars: perhaps this
may be the fact. She may also, at certain times, have a balance of trade
against her; and great sums laid out in foreign wars, may be the means
of making it return in her favour. Should that nation begin to pay off
her debts to strangers, in ready coin, might she not soon diminish,
perhaps exhaust, the specie she is now possessed of; yet surely none
ever became poorer by paying off their debts. Nothing is so easy as to
have specie, when one has solid property to pledge for it; and nothing
can be worse judged, than to purchase specie from strangers, at the
expence of paying an interest for it, when they can contrive a
circulating value in paper money, representing the solid value which
must have been pledged to strangers for the loan of their metals.

But still it may be asked, how it happens, that notwithstanding of the
most unfavourable balance of trade, no nation is ever found to be
entirely drained of her specie; and since we have proved, that the
specie of a country may be diminished by a disadvantageous trade, what
are the principles which prevent the total dissipation of it?

This is a very curious question, and opens a door to a multitude of new
ideas, which will furnish abundant matter of speculation, when we come
to treat more directly of credit. I shall here examine it in general,
only for the sake of applying the principles we have laid down.

I. It may be said, that as common prudence prevents a private person
from spending to his last shilling; so the like prudence commonly
engages a people to put a stop to trade, before it has had time totally
to drain them. Although most people drink wine, there is no reason why
every body should be drunk.

II. Nothing is so complicated as the balance of trade, considered among
many nations. The general wealth circulates from one to another, as the
money which the farmer gives the landlord circulates back to the farmer.
In the number of hands through which the money passes, some are of the
class of the luxurious, some of the frugal; the first represents those
nations who lose by the balance, the latter those who gain. But the most
industrious nations of all, and those who, considered abstractedly from
extraordinary accidents, appear in the way to swallow up the wealth of
the rest, are, by the means of such accidents, made liable to terrible
restitutions. How many millions, for example, has England restored to
the continent, in consequence of her wars and subsidies? She then lays a
foundation for many more years of favourable balance, and accordingly we
see it return to her, as the money which the state spends within the
nation, returns into the exchequer at the end of the year.

III. It may be asked, how it happens that no nation has ever spent to
its last farthing, as many an individual has done? I answer, that I am
far from believing that this has never happened; nay, I believe there is
nothing more frequent or familiar than this very case, providing the
riches of a country be here supposed to mean no more than the specie
_absolutely_ belonging to herself, not borrowed from other nations.

I have said above, that the acquisition of money by industry, increased
the real value of a country, as much as the addition of a portion of
territory: now what should hinder a people from spending their ready
money, and, at the same time, preserving their land? Because a young
gentleman, whose father has left him a fine estate in land, and ten
thousand pounds in ready money, has spent the ten thousand pounds, does
it follow, that he is without a shilling? Upon this view of the
question, it will, I believe, be granted, that Dr. Swift’s idea that all
the specie of Ireland would in a short time be exported, in consequence
of an unfavourable balance of trade, is very far from being chimerical,
and might be exactly true; although at this time there be six times more
in circulation than ever; just as a person who is running through his
fortune, has commonly more money in his hands than his father used to
have, when he was acquiring it. Let Ireland pay her debts to England,
and then count her specie. Let England pay her’s to all the world, and
then weigh her gold and silver. Suppose that on summing up the accounts,
there is not found one shilling in either country, is this any proof of
their being undone? By no means: _coin is one article of our wealth, but
never can be the measure of it_.

I know little of the state of Ireland; but if it be true, that paper
money is increasing daily in that country, it is, I suppose, because the
specie is daily exported to England, as the returns of estates belonging
to people who reside there, and that the Irish, instead of buying it
back again for their own use in circulation, augment their paper, in
proportion to the progress of their industry; and only buy such
quantities of specie as are necessary for paying the balance of their
trade. Now by buying specie, I do not suppose, that they bring any over
to Ireland, in order to send it back to England; but that they send over
goods to the value, which the English merchants pay in specie, or in
English paper, to those who are creditors upon Ireland, for the value of
their rents, &c.

Suppose then, for a farther illustration of some principles, that all
the lands of Ireland belonged to Englishmen residing in their own
country, and annually drawing from Ireland the income belonging to them,
what would the consequence be? As long as this portion of the produce of
lands, which goes for rent, (and which, as we have said, is the fund
provided for the subsistence of the free hands who purchase their own
necessaries) could be bought and consumed by the Irish themselves, that
is, in other words, while in Ireland there was a demand for this portion
of the fruits, it would be paid for, either in coin, to the diminution
of their specie, or in something which might be converted into money;
that is, by the produce of their industry, and thus, by the means of
trade, would come into the hands of the English proprietors, either in
specie, or in any other form they judged proper.

That so soon as the demand for this portion of fruits came to fail, for
want of money, or industry, in Ireland to purchase it, what remained on
hand would be sent over to England in kind; or by the way of trade, be
made to circulate with other nations (in beef, butter, tallow, &c.) who
would give silver and gold for it, to the proprietors of the Irish
lands. By such a diminution of demand in the country, for the fruits of
the earth, the depopulation of Ireland would be implied; because they
who consumed them formerly, consume them no more; that is to say, they
either died, or left the country.

To conclude, a great part of the value of a country is its produce and
manufactures; but it does not follow, as Mr. Belloni asserts, that these
should as necessarily draw a proportional sum of the gold and silver of
Europe into that country, as a shoal of small fishes draws water fowl,
or as charity draws the poor, or as beauty draws admiration.

QUEST. 2. Can no rule be found to judge of the balance of trade from the
state of specie, or at least to perceive the effects of that balance in
augmenting or diminishing the mass of riches?

Could it be supposed that specie never circulated between nations, but
in the way of trade, and in exchange for exportable commodities, this
would be a rule.

In nations where the earth produces neither gold or silver, and where
these metals are imported as the returns of industry only, the balance
in their favour, from the introduction of specie, to this day, would be
measured by the quantity of it which they possess. Here Mr. Belloni’s
opinion is just.

Farther, the consumption made by any nation for the same term of years,
is equal to the whole natural produce and labour of the inhabitants for
that time, _minus_ the quantity of such produce and labour, as is, or
has been equal in value to the actual national specie.

On the other hand, in nations where gold and silver are produced by the
earth, the balance of trade against them, from the time these metals
became the object of trade, to this day, may be estimated by the
quantity of them which has been exported.

And farther, the consumption made by such nations, for the same term of
years, is equal to the whole natural produce and labour of the
inhabitants for that time, _plus_ the quantity of such produce and
labour, as is, or has been equal to the quantity of these metals
exported.

These positions are by much too general to be laid down as principles,
because trade is not concerned in every acquisition or alienation of
specie; but they may serve, in the mean time, to illustrate the doctrine
we have been considering, and even in many cases may be found pretty
exact. For example,

If it be true, that in any nation of Europe, there be now just as much
silver and gold as there was ten years ago, and if that nation during
this period, has supported, without borrowing from strangers, an
expensive war which may have cost it, I suppose, five millions, it is
certain, that during this period, the home consumption must have been
the value of five millions less than the natural produce, labour, and
industry of the inhabitants; which sum of five millions must have come
from abroad, in return for a like value of the production, labour, &c.
remaining over and above their own consumption.

In this supposition, the national wealth (the metals) remains as before,
the balance of it only is changed. How this change is performed, and
what are its consequences, may be discovered by an application of the
principles already laid down.

QUEST. 3. What were the effects of riches before the introduction of
trade and industry?

I never can sufficiently recommend to my readers to compare
circumstances, in the oeconomy of the antients, with that of modern
times; because I see a multitude of new doctrines laid down, which, I
think, never would have been broached, had such circumstances been
properly attended to. I have endeavoured to shew, that the price of
goods, but especially of articles of the first necessity, have little or
no connection with the quantities of specie in a country. The slightest
inspection into the state of circulation, in different ages, will
fortify our reasoning: but the general taste of dissipation which is
daily gaining ground, makes people now begin to imagine, that wealth and
circulation are synonimous terms; whereas nothing is more contrary both
to reason and matter of fact. A slight review of this matter, in
different ages, will set it in a clearer light than a more abstract
reasoning can.

It is a question with me, whether the mines of Potosi and Brasil, have
produced more riches to Spain and Portugal, within these two hundred
years, than the treasures heaped up in Asia, Greece, and Egypt, after
the death of Alexander, furnished to the Romans, during the two hundred
years which followed the defeat of Perseus, and the conquest of
Macedonia.

From the treasures mentioned by all the historians who have writ of the
conquest of those kingdoms by the Romans, I do not think I am far from
truth, when I compare the treasures of the frugal Greeks to the mines of
the new world.

What effect, as to circulation, had the accumulation of these vast
treasures? Not any to accelerate it, surely: and no person, the least
conversant in antiquity, will pretend that the circulating specie in
those times, bore as great a proportion to their treasures, as what is
at present circulating among us, bears to the wealth of the most
oeconomising Prince in Europe. If any one doubt of this particular, let
him listen to Appian, who says, that the successors of Alexander, the
possessors of those immense riches, lived with the greatest frugality.
Those treasures were then, as I have said, a real addition to the value
of their kingdoms; but had not the smallest influence upon prices. In
those days of small circulation, the prices of every thing must have
been vastly low, not from the great abundance of them, but because of
the little demand; and as a proof of this, I cite the example of a
country, which, within the space of fifty years, possessed in _specie_
at one time, considerably beyond the worth of the land, houses, slaves,
merchandize, natural produce, moveables, and ready money, at another.
The example is mentioned by Mr. Hume, and I am surprized the consequence
of it did not strike him. For if the money they possessed was greatly
above the worth of all their property, moveable and immoveable, surely
it never could be considered as a representation of their industry,
which made so small a part of the whole. Athens possessed, before the
Peloponesian war, a treasure of ten thousand talents; and fifty years
afterwards, all Athens, in the several articles above specified, did not
amount to the value of six thousand. Hume’s _Political Discourses upon
the Balance of Trade_.

These treasures were spent in the war, and they had been laid up for no
other purpose. Therefore I was in the right, when I observed above,
Chap. 22. that war in antient times, had the effect that industry has
now: it was the only means of making wealth circulate. But peace
producing a general stagnation of circulation, people returned to the
antient simplicity of their manners, and the prices of subsistence
remained on the former footing; because there was no increase of
appetite, or rising of demand upon any necessary article. So much for
the state of wealth during the days of frugality.

The Romans subdued all those kingdoms of the Greeks, and drew their
treasures to Rome. The republic went to destruction, and a succession of
the most prodigal Princes ever known in history succeeded one another
for about two hundred years. Those monstrous treasures were then thrown
into circulation, and I must now give an idea of the effects produced by
such a revolution.

I have already observed (Chap. 28.) that in consequence of the great
prodigality of those times, the prices of superfluities rose to a
monstrous height; while those of necessaries kept excessively low. The
fact is indisputable, and any one who inclines to satisfy himself
farther, may look into that valuable collection of examples of antient
luxury, wealth, and at the same time of simplicity, found in Mr.
Wallace’s _Dissertation upon the Numbers of Mankind in antient and
modern Times_, p. 132. et seq.

But how is it to be accounted for, that the prices of superfluities
should stand so high, while necessaries were so low? The reason is
plain, from the principles we have laid down. The circulation of money
had no resemblance to that of modern times: fortunes were made by
corruption, fraud, concussion, rapine, and penury; not by trade and
industry. Seneca amassed in four years 2,400,000 pounds sterling. An
augur was worth 3 millions sterling. M. Antony owed on the Ides of
March, 322,916 pounds sterling, and paid it before the calends of April.
We know of no such circulation. Every revolution was violent: the
powerful were rapacious and prodigal, the weak were poor and lived in
the greatest simplicity: consequently, the objects of the desires of the
rich were immensely dear; and the necessaries for the poor were
excessively cheap. This is a confirmation of the principles we have laid
down in Chap. 28. that the price of subsistence must ever be in
proportion to the faculties of the numerous classes of those who buy:
that the price of every thing must be in proportion to the demand made
for it; and that in every case, where the supply can naturally increase
in proportion to the demand, there must be a determined proportion
between the price of such articles and that of subsistence. Now in the
examples given by Mr. Wallace, of such articles as were found at
monstrous prices, we only find such as could not be increased according
to demand: here is the enumeration of them. Large asses brought from
Spain, peacocks, fine doves, mullets, lampreys, peaches, large
asparagus, purple, wool, jewels, carpets, _vestes Byssinæ_, slaves
skilled in the finer arts, pictures, statues, books, and rewards to
those who taught the sciences. By casting a glance upon the catalogue,
we may easily perceive that the extraordinary price must have proceeded
from the impossibility of augmenting the supply in proportion to the
demand; not from the abundance of the money, which had no effect in
raising the price of necessaries. The cheapness again of these, did not
proceed from vast plenty; but because the price must have remained in
proportion to the faculties of the numerous poor; and because the
augmentation of the wealth of the rich never could increase their
consumption of any necessary article. Had the Roman empire been governed
with order and tranquility, this taste of luxury, by precipitating money
into the hands of the numerous classes, would, in time, have wrought the
effects of multiplying the number of the industrious, by purging the
lands; consequently, of increasing the demand for vendible subsistence;
consequently, of raising the price of it. And on the other hand, the
adequate proportion between services and rewards given by the public,
would have checked the other branch of circulation which produced those
monstrous fortunes, to wit, rapine and corruption: and industry
receiving a regular encouragement, every article of extraordinary demand
for delicate aliments, birds, fishes, fruits, &c. would have been
supplied with sufficient abundance; and consequently, would have fallen
in its price. But when either despotism or slavery were the patrimonial
inheritance of every one on coming into the world, we are not to expect
to see the same principles operate, as in ages where the monarch and the
peasant are born equally free to enjoy the provision made for them by
their forefathers.

I shall now come nearer home, and examine a very remarkable difference
between the oeconomy in practice some hundred years ago, and that of the
present time, with regard to the method of levying men and money.

This change is a consequence of trade and industry, and as I have been
preparing the way for the introduction of other matters which equally
owe their existence to them, it may not be improper, in this last
chapter, to point out the natural causes of this change in modern
politics. When people consider effects only, without examining the
causes which produce them, they commonly blame rashly, or fall into an
idle admiration of fortune. It is only by tracing natural causes, that
we come at the means of forming a solid judgment of the nature of every
abuse, and of every advantage.

The general taste for the extension of industry, is what has brought
such loads of money into circulation; not the discovery of America. We
read of treasures in antient times which appear to rival the wealth of
modern Europe. Appian, as cited by Mr. Hume, mentions a treasure of the
Kings of Egypt, of near two hundred millions sterling; and says, that
all the successors of Alexander were nearly as rich, and fully as
frugal. Frugality then is compatible with the greatest wealth. Therefore
the wealth of America, has not been the cause of European refinement;
but the extension of civil liberty has obliged the possessors of
treasures, which in all ages have been coveted by man, to open their
repositories, in order to procure the service of those who formerly made
a branch of the property of the most wealthy. This is the foundation of
trade and industry.

Why, therefore, has trade and industry laid the foundation of taxes and
standing armies, which appear so contrary to the one and the other?

I answer shortly, that very little change has been made as to things
themselves by that revolution; but with respect to the order of things,
the difference is great. Trade and industry cannot flourish without
method and regularity; taxes and standing armies are only a systematical
execution of the old plan, for preserving the power, safety, and
independence of the nations of Europe.

Taxes are no more than the liquidation of those services which formerly
were performed in kind. Standing armies are become necessary, that the
call of the rich luxurious, who are insatiable in their demand for the
service of the poor, may not be able to engross also the hands necessary
for the defence of the state. Personal services were the taxes of former
times. Let no man imagine, that ever any state could subsist without the
contribution of its subjects. But a more authentic proof of this opinion
is, that in the year 1443, while Charles the VIIth was engaged in the
long war with the Kings of England, who disputed with him the monarchy
of France, the services of the vassals of that kingdom (by the edict of
Saumur of the 14th of September) were formally converted into the
perpetual _Taille_; and this may be considered, as the foundation of the
regular military force of the French nation. No body, in those days,
imagined such an imposition to be oppressive or unjust: and if those who
remain subject to it, appear under oppression at present, it is only
because they continue in their antient situation. Personal services are
the heaviest of all impositions.

QUEST. 4. Why, therefore, are taxes so generally cried out against, why
do they appear so new an invention, and why do people flatter
themselves, that there is a possibility of putting an end to so general
an oppression? I answer, because people commonly attend to words, and
not to things. In former times, the great bulk of the inhabitants lived
upon the lands, and were bound to personal service. This kind of
imposition was familiar, general, and equal; every class of the people
was bound to services analogous to their rank in the state. The
industrious who lived without any dependence upon the lands, and who did
not enjoy the privileges of cities and corporations, were so few, that
they were not an object of public attention. Farther, most privileges
then known, were in consequence of land-property; consequently, those
independent people were in a manner without protection, they were
vassals to no body; consequently, had no body to interest themselves for
them; consequently, were a prey to every one who had power, and no body
was sorry to see a rich fellow, who had got plenty of ready money, and
who seemed to do nothing for it, plundered by a lord who appeared in the
service of his country. We see in the time of the croisades how odious
all those money gatherers were; these were what we now call traders, it
was principally in hatred to them, that the borrowing of money at
interest was declared antichristian; because the Jews were principally
in those days the merchants or the money lenders.

In the beginning of the sixteenth century, when Princes began to take a
taste for magnificence, finding no body, almost, within their own
country capable to supply them, they used to send to Flanders and
Venice, the great trading states in those days, for many kinds of
manufactures. This is the fountain of foreign trade in Europe. These two
states perceiving the great benefit resulting to them from this new
taste of dissipation, gave great encouragement to the industrious. Had
they begun to impose high taxes upon them, they would have ruined all.
Industry, then, was encouraged at first, and little loaded with any
imposition. This is perfectly consistent with our doctrine. Some
Princes, perceiving the daily diminution of their wealth, made efforts
to restore this antient simplicity, by forbidding this hurtful trade;
others, such as Francis I. of France, and Henry VIII. of England,
endeavoured all they could to establish industry in their own states.
For this purpose, great privileges were granted to the industrious, who
thereby increased daily. But this revolution naturally purged the lands,
and by that operation diminished the number of personal service-men; or,
as in France, where personal service was at an end, the number of those
subject to the _taille_. I shall not trace this progress very minutely,
but come directly to the period of extensive taxation. When industry was
fairly established, and when nations began to be well clothed with the
produce of their own soil, wrought up in a thousand different forms, by
their own industrious subjects, Princes soon perceived their treasures
to melt away, and saw plainly, that without a method of drawing back the
money from this new class of inhabitants, the whole wealth of the state
would come to center in their hands; but the means of coming at money
was extremely difficult. The proprietors of the riches had no solid
property in proportion; and their money was inaccessible. Some betook
themselves to violence, and others to fraud: the one and the other
produced the worst effects. The violence destroyed industry, and rendred
the industrious miserable: for we have observed, that when inhabitants
are once purged from off the lands, they have no resource left them but
their industry; whereas let a peasant be robbed ever so often of his
money, he still has the earth to maintain him. The fraudulent corrupted
the great; the ministers of Princes became the terror of every man who
had money; they enriched themselves by accepting of compositions, and
the state remained constantly in want. At last, the scheme of
proportional taxes took place: but for this purpose it was necessary to
obtain the consent of the whole state; for no Prince’s power extended so
far, and they were not come to the time of being able to enlarge their
prerogative. Such impositions, therefore, were first introduced in
republics, and mixed governments. In monarchies they were established
with more difficulty; because the great were equally affected by them
with the small. But when long and expensive wars rendred supplies of
money absolutely necessary, then were taxes consented to; and the Prince
who had not power enough to _establish_ them, easily found means to
_keep them up_, when once introduced.

From this progress we may easily discover the reason why taxes are cried
out against. The system appears new, because we remember, in a manner,
the doubling of the impositions, and we see them daily gaining ground;
but we never reflect on the change of circumstances, and seldom attend
to the consequences of that new species of circulation, which is carried
on between the public and those employed by it. The state now pays for
every service, because the people furnish it with money for this
purpose.

If the blood therefore be let out, in modern times, at a thousand
orifices of the body politic, there are just as many absorbitories (if I
may be allowed such an expression) opened to receive it back. From this
last circumstance I imply the perpetuity of taxes, while this system of
political oeconomy prevails. We have not as yet seen an example of any
state abolishing them, though many indeed have had such a scheme in
view. But to resume my former comparison, I may suggest, that if all the
orifices through which the blood issues, should be bound up, all the
absorbitories which are fed with the returning blood, must be starved.
But more of this in its proper place.

QUEST. 5. Why are standing armies a consequence of trade and industry?

In the first place, armies in all ages, past, present, and to come, have
been, are, and will be calculated for offensive and defensive war; while
therefore war subsists among men, armies in one way or other, will be
necessary.

The advantage of regular armies has been known in all ages; and yet we
find, that for many centuries they appeared in a manner discontinued;
that is to say, we read neither of legions, nor of regiments, nor of any
denomination of bodies of warlike men, kept up and exercised in time of
peace, as was the custom while the Roman empire subsisted: and now,
since trade has been established, we see the antient Roman military
oeconomy again revived. Let us therefore apply our principles, in order
to account for this revolution also.

During the Roman empire, there was a very great flux of money into the
coffers of the state, which proceeded more from rapine than from taxes.
Consequently, it was an easy matter to keep up large bodies of regular
forces.

With these they subdued the world, as I may call it, that is, all the
polite nations then known; the Carthaginians, Greeks, and Asiatics. Had
they remained satisfied, their empire might possibly have subsisted;
because people who are rich, luxurious, and polite, are commonly
peaceable. But nothing could satisfy their ambition: they conquered
Gaul, and stretched the boundary of their empire from the streights of
Gibraltar to the mouth of the Rhine. All was peaceable on that side, and
in two or three centuries, both Spain and Gaul had adopted the spirit,
language, and manners of the Roman people. But when they passed the
Rhine, the Danube, and the Euphrates, they found mankind still less
cultivated, and very little known. Their enemies fled before them, and
left a territory which was not worth possessing. This of all barriers is
the strongest. By carrying on war against such people, the match was
very unequal; those nations had every thing to gain, and nothing to
lose; the Romans had all to lose, and nothing to win. Those wars
continued until the Barbarians learned the Roman discipline, and became
warriors. It was the most profitable trade for them, as well as the only
means of safety. That this was the plan of their oeconomy appears
plainly from the form of government every where established by them.
Where every free man was a soldier, there was no occasion for a regular
militia.

Men are governed by prejudice more than by reason: to this I attribute
the sudden change in the government of Europe. In place of one man
governing the world, as was the case of the Emperors, the new spirit
was, that all soldiers were equal, and a King was but _primus inter
pares_. The sudden revolution had the effect of ruining every thing:
learning, industry, politics, all went to wreck. _One hundred years of
barbarity must ruin the effects of a thousand centuries of politeness._
This is the date of the annihilation of standing armies. A powerful
Prince, such as Charles the Great, who acted in a high sphere, and who
made the world his own, might, during his lifetime, establish the old
oeconomy. But the general establishment of the feudal form of
government, which, no doubt, was the best for preserving a great empire,
filled with barbarity every where, joined with the weakness of that
Prince’s successors, introduced a new form less barbarous than the
former, but equally compatible with a numerous standing militia. Every
Baron became a sovereign, and his vassals were bred to arms; but as they
were forced to attend the plough for subsistence, as well as the camp;
wars were carried on consistently with agriculture. Certain months of
the year were appropriated for war; others for peace. This was easily
accomplished: war was constantly at the door; a campaign was finished in
a week, because every man’s nearest neighbour was commonly his worst
enemy.

Europe remained in this general state of confusion for some centuries.
Princes had, during that period, a most precarious authority, and when
any nation chanced to be under the government of one who had talents to
unite his subjects, he became so formidable that there was no
possibility of resisting him. In those days, it was a hard matter to
form an idea of a balance of power; because there was no rule to
determine the force of nations. Under the Otho’s, Germany threatned
Italy with chains; under Edward and Henry, England seemed on the road of
adding all France to her monarchy; Ferdinand the catholic, laid the
foundation of the Spanish greatness, and his successors bid fair for the
universal monarchy of Europe. In our days, the acquisition of a small
province, nay of a considerable town, is not to be made by conquest,
without a general convention between all the powers of Europe, and those
who are conversant in foreign affairs, can estimate, in a minute, the
force of Princes, by the troops they are able to maintain; nothing is so
easy as to lay down, on a sheet of paper, a state of all the armed men
in Europe. A Prince can hardly add a soldier to a company, but all the
world is informed of it. Excepting the extent of their credit, and the
talents of their generals and counsellors, every thing relative to power
is become the object of computation. Hence the balance of power,
formerly unknown, is now become familiar. So much is sufficient for the
matter of fact; let us now examine why _trade_ and _industry_ have given
rise to so regular a system of war.

The reason is, because in a state where those are introduced, every
thing must be made regular, or all will go to wreck. The keeping up of
large armies, is the remains of that turbulent spirit which animated
royalty for so many centuries. All literature is filled with warlike
sentiments, from.the books of Moses to the news papers of this day. A
young person cannot learn to read without imbibing the fire of war. But
as nothing is so evident, from the consideration of the total revolution
in the spirit of the people of Europe, as that war is inconsistent with
the prosperity of a modern state, I sometimes allow my imagination to
carry me so far as to believe the time is at hand when war will come to
cease. But there is no such thing as predicting in political matters:
general peace is a contingent consequence which a thousand accidents may
prevent; and one among the rest is, that the whole plan of modern policy
may be broken to pieces, before Princes come to discover that it is
their interest to be quiet. The ambition of one, arms all the rest, and
when once they are at the head of their armies, want of money only
assembles a congress, not to make peace, but that the parties may have
some years to gather new force.

It is not therefore trade and industry which have given birth to
standing armies, they have only rendred war impossible without them. It
is the ambition of Princes to extend their dominion, and even sometimes
to extend their commerce, which gives occasion to war. And we see daily
how difficult it becomes to provide troops for this purpose, from no
other reason so much as from the progress of trade and industry. Those
who have the money cannot have the men, those who have the men cannot
have the money. Do we not see how the greatest monarchy in Europe, the
Prince who has the most millions of subjects, cannot preserve the rank
of power he has prescribed to himself (_his political-necessary for
war_) without a body of above thirty thousand strangers, in the time of
the most profound peace, and after the greatest reduction judged
consistent with the safety of the country? These cost vastly more than
national troops, and brave men of all countries are alike; so that the
only reason for keeping up so large a body of foreigners, is to
facilitate augmentations when occasion requires it; and not to spare the
subjects who are willing to serve, but to spare agriculture and
industry, after the superfluities of these have fallen in, to compleat
that body of troops which experience has determined to be proportioned
to such superfluities.

From this short exposition let me deduce a principle. That since every
state has occasion, according to the present system of Europe, for a
certain number of armed men for their defence, the first care of a
statesman, is, to discover to what number those of his subjects, who
willingly prefer the conditions offered for military service to the
occupations of industry, may amount. If he finds these exceed the number
wanted for recruiting the army, it is a good reason to diminish the pay;
until the encouragement comes upon a level with the supply demanded. If
on the contrary, the number of volunteers falls below the standard
required, he must examine the state of the balance of work and demand,
before he can give any farther encouragement. If this balance stands
even, he must take care that the pay given to soldiers be not carried so
high, as to engage those of the lowest class of profitable industry to
desert it.

What measures, therefore, can be fallen upon? There are two. Either to
hire foreign troops, as many states do; and I suppose for good reasons,
only because it is done. But I should prefer another method, which is to
create a new class of inhabitants, appropriated for supplying the army,
upon the principle above laid down, that he who feeds may have as many
mouths as he pleases.

I would therefore fix the military pay at a rate below the profits of
useful industry, and accept of such as should offer. For the
augmentation of this class, I would receive all male children who should
be given or exposed by their parents. These should be bred to every sort
of labour for which the state has occasion, and their numbers might be
carried to twenty _per cent._ above that which might be judged necessary
in time of the hottest war. Out of this class only, the standing forces
might be recruited: those who remained might be employed in every public
service; such as working in arsenals, docks, highways, public buildings,
&c. By taking care of the children of this whole class, their numbers
would rise to whatever height might be judged necessary. The same spirit
would be kept up; they might serve by turns, and all become disciplined.
This is a good scheme, in many cases, and is an improvement upon the
distribution of the inhabitants: the execution is gradual; therefore no
sudden revolution is implied. But it is fit only for a state which can
augment its numbers, without seeking for subsistence from without. It
would spare the land and manufactures, and be a ready outlet for all
supernumeraries in every class.

This subject shall be resumed in the fifth book, when we come to the
application of the amount of taxes. At present it has found a place,
only because the support of a national force has been ranked among the
objects of attention of those statesmen who are at the head of rich and
luxurious nations which have lost their foreign trade.

QUEST. 6. What are the principles upon which the relative force of
nations is to be estimated?

Without some limitations, no question can be more difficult to resolve
than this; it must therefore be examined only in so far as it comes
under the influence of certain principles. It is as impossible to
estimate the real force of a nation, as it is to estimate that of any
considerable quantity of gun-powder, and for the same reason. The nation
cannot exert all its force at once, no more than the powder can be all
inflamed at once, and the successive efforts of a small power, are never
equally effectual with the momentous shock of a great one. In
proportion, therefore, as the spirit of individuals is moved to concur
with the public measure, a people become powerful; and as I know of no
principle which can regulate such affections of the mind, we must throw
them quite out of the question, and measure the power of nations by the
quantity of men and money at a statesman’s command, in consequence of
the oeconomy he has established. Let me then suppose two nations, where
the number of inhabitants, and weight of gold and silver are absolutely
the same, military genius and discipline quite equal. From what has been
said, we must determine that nation to be the strongest, which, without
disturbing the oeconomy of their state, can raise the greatest
proportion of men, and draw the greatest proportion of money into the
public coffers.

When the number of inhabitants is given, the first thing to be known is
the nature of the produce of the country, whether mostly in corn, wine,
or pasture: the more the ground is laboured, and the more crops it
yearly produces, the fewer free hands it will maintain in proportion to
the whole, this computation must then proceed upon the principles laid
down above, Book I. Chap. 8.

When once you come at the number of free hands, you must examine the
state of luxury. Luxury is justly said to effeminate a nation, because
the great multitude of hands taken up in supplying the instruments of it
to the rich, diminishes greatly the number of such as can be employed in
war. If manufacturers and folks accustomed to a sedentary life, are at a
certain age taken from trades, to compose armies, they will make bad
soldiers; and the strength of a nation lies chiefly in the valour and
strength of the soldiery. Luxury therefore effeminates a nation in
general; but it does not follow from hence, that the most luxurious are
the most effeminate, and most improper for war; on the contrary, they
are found to be the bravest and most proper. The effeminacy and baseness
of mind, in point of courage, are found in the sedentary multitude. The
truth of this might be proved from many examples in antient history, if
the present situation of Europe left the smallest room to doubt of it.

The more therefore that luxury prevails in a country, the fewer good
troops can be raised in it, and _vice versa_. But it is not sufficient
to have men for war, the men must be enabled to subsist, and in the
modern way of making war, their subsistence and other expences require
large sums of money. We must then examine what proportion of the general
wealth may be applied to this purpose.

If in any country the riches be found in few hands, the state will be
poor; because the opulence of the public treasure depends greatly upon a
right and proportional distribution of wealth among the inhabitants.
Riches are only acquired three ways. First, Gratuitously, as by
succession, gift, or the like; secondly, by industry; and lastly, by
penury. Those who are poor are seldom enriched gratuitously, never by
penury, and always by industry; when a poor man grows rich in any state,
he changes in so far the balance of wealth, for what is added to him is
taken from another. When a spirit of industry prevails, the balance is
always turning in favour of the industrious, and as it is a pretty
general rule, that the rich are not the most laborious, so the balance
is generally turning against them. This being the case, the more that
industry prevails, the quicker will this revolution be brought on. By
such revolutions, wealth becomes _equably distributed_; for by being
_equably distributed_, I do not mean, that every individual comes to
have an _equal_ share, but an equal chance, I may say a certainty, of
becoming rich in proportion to his industry. Riches which are acquired
by succession, or any other gratuitous means, do not in the least
contribute to circulation, the owner, as has been said, only changes his
name. Those made by penury or hoarding, instead of adding to, evidently
diminish circulation. It is, therefore, by industry alone that wealth is
made to circulate, and it is by its circulation only, that money is
useful. When large sums are locked up, they produce nothing; they are
therefore locked up not to be useful while they remain secreted; but
that they may be useful when brought out in order to be alienated. In a
state, therefore, where there are a few very rich and many very poor,
there must be much money locked up; for without money none can be rich,
and if it were not locked up it must fall into the hands of the poor.
Why? Because the rich will not give it to the rich, gratuitously, nor
will they labour to acquire it; either then the common people must be
lazy and unwilling to work, or the rich must be so penurious and
addicted to hoarding as to keep it out of the hands of the poor. In both
which cases, if there be money in the country, it must be found in
coffers.

From these positions it may be concluded, that wealth which produces
nothing to its owner, cannot be supposed to produce any thing to the
state: consequently, that state in which there is the quickest
circulation of money, is, _cæteris paribus_, that in which the greatest
proportion of the general wealth may be raised for the public service.
This is all that is necessary to observe at present: when we have
examined the nature of credit and taxes, and the principles upon which
they may be levied in different countries, and under different forms of
government, we shall discover more rules for estimating the force of
different states.

The principles of industry have been so interwoven with those of trade,
through all the chapters of this second book, that it is now proper,
before we dismiss the subject, to examine a little into the nature of
the first, considered more abstractedly, and more detached from its
relation to the equivalent given for it, which is the proper
characteristic of trade, and from which proceeds the intimate connection
between them.

The object of our enquiry hitherto has been to discover the method of
engaging a free people in the advancement of the one and the other, as a
means of making their society live in ease, by reciprocally contributing
to the relief of each others wants. Let us next examine some farther
consequences. We are now to cast our eyes upon another view of this
extensive landscape, where the personal advantages, immediately felt
from this gentle band of mutual dependence, are not to fix our attention
so much as the effects produced by industry upon the face of things, and
manners of a people.

The better to transmit this idea, which I find a little dark, let me
say, that hitherto we have treated our subject, according to the
principles which should direct a statesman, to advance trade and
industry, by engaging the rich to give bread to the poor. Now we are to
examine the consequences resulting from the execution of this plan; and
compare the difference between a country which has been inhabited by a
people abundantly provided for without industry and labour, and one
occupied by another who have subsisted by these means: and farther, we
are to examine industry as producing effects more or less hurtful to the
simplicity of manners, and more or less permanent and beneficial,
according as it has been directed towards different objects.

I can easily suppose a nation living in the greatest simplicity, even
going naked, but abundantly fed, either with the spontaneous fruits of
the earth, or by an agriculture proportioned to the wants of every one,
and where very little alienation or exchange takes place. From this
primitive life, as I may call it, the degrees of industry, like
imperceptible shades, may be augmented; and the augmentation, as I
apprehend, is to be measured, not so much by the degree of occupation
which the inhabitants pursue, as by the quantity of permutation among
them; because I think permutation implies superfluity of something[N].

Footnote N:

  Our first parents, placed in Paradise, were fed from the hand of God,
  and freed by the constitution of their nature, from every uneasy
  animal desire. Since the fall, the whole human species have been
  employed in contriving and executing methods for relieving the wants
  which are the consequences of such desires.

  Hence I conclude, that had the fall never taken place, the pursuits of
  man would have been totally different from what they are at present.
  May I be allowed to suppose, that in such a happy state, he might have
  been endowed with a faculty of transmitting his most complex ideas
  with the same perspicuity with which we now transmit those relating to
  geometry, numbers, colours, &c. From this I infer, there would have
  been no difference of sentiment, no dispute, no competition between
  man and man. The progress in acquiring useful knowledge, the pleasure
  of communicating discoveries, would alone have provided a fund of
  happiness, as inexhaustible as knowledge itself.

  Mankind, therefore, set out upon a system of living without labour,
  without industry, without wants, without dependence, without
  subordination; consequently, had they remained in that state, the
  lapse of time would have produced no change upon any thing, but the
  state of knowledge. Banished from Paradise, man began to plow the
  ground, consequently to change her surface: he built houses, made
  bridges, traced roads, and by degrees has come, in different ages, to
  please and gratify his inclinations, by numberless occupations and
  pursuits, constantly dictated to him by his wants; that is, by his
  imperfections, and by the desires which they inspire. When these are
  satisfied, his physical happiness is carried as far as possible; but
  as mankind seldom remain in a state of contentment, and that our
  nature constantly prompts us to add something new to our former
  enjoyments, so it naturally happens, that societies once established,
  and living in peace, pass from one degree of refinement to another,
  that is to say, man daily becomes more laborious.

A people then lives in the utmost simplicity, when the earth is so far
in common, as that none can acquire the property of it, but in virtue of
his possession as the means of subsistence; and when every one is
employed in providing necessaries for himself, and for those who belong
to him. The moment any one has occasion for the service of another,
independent of him, he must have an equivalent to give. This equivalent
must be something moveable, some fruit of the earth, pure or modified,
superfluous, not necessary, not the earth itself, because this is the
foundation of his subsistence; and he can never alienate what is
essential to his being, in order to procure a superfluity. From this we
may deduce a principle that the alienation of consumable commodities is
a consequence of superfluity alone, as this again is the bane of
simplicity. Consequently, he who would carry simplicity to the utmost
length, ought to proscribe all alienation; consequently, all dependence
among men; consequently, all subordination: every one ought to be
entirely dependent upon his own labour, and nothing else.

Were man either restored to his primitive state of innocence, or reduced
to a state of brutality; were his pursuits either purely spiritual, or
did they extend no farther than to the gratification of his animal
desires, and acquisition of his physical-necessary; such an oeconomy
might be compatible with society. But as we stand in a middle state
between the two, and have certain desires which participate of the one
and of the other, the gratification of which constitute what we have
called our _political-necessary_ (which we cannot procure to ourselves,
because the very nature of it implies superiority and subordination, as
well as a mutual dependence among men) a total obstruction to alienation
becomes compatible with government, consequently with human society; and
this being the case, all simplicity of manners is only relative. Our
fathers looked upon the manners of their ancestors as simple, these
again admired the simplicity of the patriarchs; and perhaps the time may
come, when the manners of the eighteenth century may be called the noble
simplicity of the antients.

As simplicity of manners is therefore relative, let us decide, that as
long as superfluity does more good in providing for the poor, than hurt
in corrupting the rich; so far it is to be approved of and no farther.

Here it is urged, that since superfluity is only good, so far as it
provides subsistence for the poor, why may not the pursuits of industry
be turned towards objects which cannot corrupt the mind? Why, in place
of fine clothes, elegant entertainments, magnificent furniture, carving,
gildings, and embroidery, with all the splendor to be seen in palaces,
gardens, operas, balls, and masquerades, processions, shews,
horse-races, and diversions of every kind, why might not, I say, the
multitudes which are employed in supplying these transitory
gratifications of human weakness (not to call them by a worse name) be
employed in making highways, bridges, canals, fountains, fortifications,
harbours, public buildings, and a thousand other works, both useful to
society, and of good example to succeeding generations? Such employments
are eternal monuments of grandeur, they are of lasting utility, and are
no more to be compared to the trifling industry of our days, than an
Egyptian pyramid is to be compared with the luxury of Cleopatra, or the
_via appia_ with the suppers of Heliogabalus. This was the taste in the
virtuous days of antient simplicity: the greatness of a people appeared
in the magnificence of useful works, and as virtue disappeared, a luxury
resembling that of modern times took place. The aqueducts, common
sewers, temples, highways, and burying places were the ornaments of
consular Rome. The imperial grandeur of that city shone out in
amphitheatres and baths; and the turpitude of manners (say the patrons
of simplicity) which brought on the decline, ought to terrify those who
make the apology of modern luxury and dissipation.

In order to set this question in a clear light, and to do justice both
to the antients and moderns, let us once more enter into an examination
of circumstances, and seek for effects in the causes which produce them.
These are uniform in all ages; and if manners are different, the
difference must be accounted for, without overturning the principles of
reason and common sense.

QUEST. 7. In what manner, therefore, may a statesman establish industry,
so as not to destroy simplicity, nor occasion a sudden revolution in the
manners of his people, the great classes of which are supposed to live
secure in ease and happiness; and, at the same time, so as to provide
every one with necessaries who may be in want?

The observations we are going to make will point out the answer to this
question: they will unfold still farther the political oeconomy of the
antients, and explain how manners remained so pure from vicious luxury,
notwithstanding the great and sumptuous works carried on, which strike
us with so lofty an idea of their useful magnificence and noble
simplicity. These observations will also confirm the justness of a
distinction made, in the first chapter of this book, between labour and
industry; by shewing that _labour_ may ever be procured, even by force,
at the expence of furnishing man with his physical-necessary, from which
no superfluity can proceed: whereas industry cannot be established, but
by an adequate equivalent, proportioned, not to the absolutely
necessary, but to the reasonable desire of the industrious; which
equivalent becomes afterwards the means of diffusing a luxurious
disposition among all the classes of a people.

If a statesman finds certain individuals in want, he must either feed
them, in which case he may employ them as he thinks fit; or he must give
them a piece of land, as the means of feeding themselves. If he gives
the land, he can require no equivalent for it, because a person who has
nothing can give nothing but his labour; and if he be obliged to labour
for his food, he cannot purchase with labour the earth itself, which is
the object of it. If it be asked, whether a statesman does better to
give the food, or to give the land? I think it will appear very evident,
that the first is the better course, because he can then exact an
equivalent; and since in either way the person is fed, the produce of
his labour is always clear gain. But in order to give the food, he must
have it to give; in which case, it must either be a surplus-produce of
public lands, or a contribution from the people. In both which cases, is
implied a labour carried on beyond the personal wants of those who
labour the ground. If this fund be applied in giving bread to those whom
he employs in improving the soil of the country in general, it will have
no immediate effect of destroying the simplicity of their manners; it
will only extend the fund of their subsistence. If he employs them in
making highways, aqueducts, common sewers, bridges, and the like; it
will extend the correspondence between the different places of the
country, and render living in cities more easy and agreeable: and these
changes have an evident tendency towards destroying simplicity. But here
let it be remarked, that the simplicity of individuals is not hurt by
the industry carried on at the expence of the public. The superfluous
food at the statesman’s disposal, is given to people in necessity, who
are employed in relieving _the wants of the public, not of private
persons_. But if, in consequence of the roads made, any inhabitant shall
incline to remove from place to place in a chariot, instead of riding on
horseback, or walking, he must engage some body to make the machine:
this is a farther extension to occupation, on the side of those who
labour; but the consequence of the employment is very different, when
considered with regard to the simplicity of manners. The reason is
plain: the ingenuity here must be paid for; and this superfluity in the
hands of the workman is a fund for his becoming luxurious.

Industry destroys simplicity of manners in him who gives an equivalent
for an article of superfluity; and the equivalent given frequently gives
rise to a subordinate species of luxury in the workman. When industry
therefore meets with encouragement from individuals, who give an
equivalent in order to satisfy growing desires, it is a proof that they
are quitting the simplicity of their manners. In this case, the wants
and desires of mankind prove the mother of industry, which was the
supposition in the first book; because, in fact, the industry of Europe
is owing to this cause alone.

But the industry of antient times was very different, where the
multitude of slaves ready to execute whatever was demanded, either by
the state or by their masters, for the equivalent of simple maintenance
only, prevented wealth from ever falling into the hands of industrious
free men; and he who has no circulating equivalent to give for
satisfying a desire of superfluity, must remain in his former
simplicity. The labour therefore of those days producing no circulation,
could not corrupt the manners of the people; because, remaining
constantly poor, they never could increase their consumption of
superfluity.

I must, in this place, insert the authority of an antient author, in
order both to illustrate and to prove the justness of this
representation of the political oeconomy of the antients.

There remains a discourse of Xenophon upon the improvement of the
revenue of the state of Athens. Concerning the authenticity of this
work, I have not the smallest doubt. It is a _chef d’oeuvre_ of its
kind, and from it more light is to be had, in relation to the subject we
are here upon, than from any thing I have ever seen, antient or modern.

From this antient monument we learn the sentiments of the author with
regard to the proper employment of the three principal classes of the
Athenian people, viz. the citizens, the strangers, and the slaves. From
the plan he lays down we plainly discover, that, in the state of Athens,
(more renowned than any other of antiquity for the arts of luxury and
refinement) it never entred into the imagination of any politician to
introduce industry even among the lowest classes of the _citizens_; and
Xenophon’s plan was to reap all the benefits we at present enjoy from
it, without producing any change upon the spirit of the Athenian people.

The state at this time was in use to impose taxes upon their confederate
cities, in order to maintain their own common people, and Xenophon’s
intention in this discourse was, not to lay down a plan to make them
maintain themselves by industry, but to improve the revenue of the state
in such a manner as out of it to give every citizen a pension of three
oboli a day, or three pence three farthings of our money.

I shall not here go through every branch of his plan, nor point out the
resources he had fallen upon to form a sufficient fund for that purpose;
but he says, that in case of any deficiency in the domestic revenue of
the state, people from all quarters, Princes and strangers of note, in
all countries, would be proud of contributing towards it, for the honour
of being recorded in the public monuments of Athens, and having their
names transmitted to posterity as benefactors to the state in the
execution of so grand a design.

In our days, such an idea would appear ridiculous; in the days of
Xenophon, it was perfectly rational. At that time great quantities of
gold and silver were found locked up in the coffers of the rich: this
was in a great measure useless to them, in the common course of life,
and was the more easily parted with from a sentiment of vanity or
ostentation.

In our days, the largest income is commonly found too small for the
current expence of the proprietor. From whence it happens, that
presents, great expence at funerals and marriages, godfathers gifts, &c.
so very familiar among ourselves in former times, are daily going out of
fashion. These are extraordinary and unforeseen expences which our
ancestors were fond of, because they flattered their vanity, without
diminishing the fund of their current expence: but as now we have no
full coffers to fly to, we find them excessively burthensome, and
endeavour to retrench them as soon as we can, not from frugality, God
knows, but in consequence o£ a change in our manners.

Besides providing this daily pension of three pence three farthings a
day for every citizen of Athens, rich and poor, he proposed to build, at
the public charge, many trading vessels, a great many inns and houses of
entertainment for all strangers in the sea ports, to erect shops,
warehouses, exchanges, &c. the rents of which would increase the
revenue, and add great beauty and magnificence to the city. In short,
Xenophon recommends to the state to perform, by the hands of their
slaves and strangers, what a free people in our days are constantly
employed in doing in every country of industry. While the Athenian
citizens continued to receive their daily pensions, proportioned to the
value of their pure physical-necessary, their business being confined to
their service in the army in time of war, their attendance in public
assemblies, and the theatres in times of peace, clothed like a parcel of
capucins, they, as became freemen, were taught to despise industrious
labour, and to glory in the austerity and simplicity of their manners.
The pomp and magnificence of the Persian Emperors were a subject of
ridicule in Greece, and a proof of their barbarity, and of the slavery
of their subjects. From this plain representation of Xenophon’s plan, I
hope, the characteristic difference between antient and modern oeconomy
is manifest; and for such readers as take a particular delight in
comparing the systems of simplicity and luxury, I recommend the perusal
of this most valuable discourse.

Combining, therefore, all these circumstances, and comparing them with
the contrast which is found as to every particular, in our times, I
think it is but doing justice to the moderns, to allow, that the
extensive luxury which daily diffuses itself through every class of a
people, is more owing to the abolishing of slavery, the equal
distribution of riches, and the circulation of an adequate equivalent
for every service, than to any greater corruption of our manners, than
what prevailed among the antients.

In order to have industry directed towards the object of public utility,
the public, not individuals, must have the equivalent to give. Must not
the employment be adapted to the taste of him who purchases it? Now, in
antient times, most public works were performed either by slaves, or at
the price of the pure physical-necessary of free men. We find the price
of a pyramid, recorded to us by Herodotus, in the quantity of turnips,
onions, and garlic, consumed by the builders of it. Those who made the
_via appia_, I apprehend, were just as poor when it was finished as the
day it was begun; and this must always be the case, when the work
requires no peculiar dexterity in the workmen. If, on the other hand,
examples can be brought where workmen gained high wages, then the
consequences must have been the same as in our days.

So long, therefore, as industry is not directed to such objects as
require a particular address, which, by the principles laid down in the
twenty first chapter, raise profits above the physical-necessary, the
industrious never can become rich; and if they are paid in money, this
money must return into the hands of those who feed them: and if no
superfluity be found any where, but in the hands of the state, such
industry may consume a surplus of subsistence, but never can draw one
penny into circulation. This I apprehend to be a just application of our
principles, to the state of industry under the Roman republic, and that
species of industry which we call _labour_. We are not therefore to
ascribe the taste for employment in those days to the virtue of the
times. A man who had riches, and who spent them, spent them no doubt
then, as at present, to gratify his desires; and if the simplicity of
the times furnished no assistance to his own invention, in diversifying
them, the consequence was, that the money was not spent, but locked up.
I have heard many a man say, had I so much money I should not know how
to spend it. The thing is certainly true; for people do not commonly
take it into their head to lay it out for the public.

No body, I believe, will deny that money is better employed in building
a house, or in producing something useful and permanent, than in
providing articles of mere transitory superfluity. But what principle of
politics can influence the taste of the proprietors of wealth? This
being the case, a statesman is brought to a dilemma; either to allow
industry to run into a channel little beneficial to the state, little
permanent in its nature, or to deprive the poor of the advantage
resulting from it. May I not farther suggest, that a statesman, who is
at the head of a people, whose taste is directed towards a trifling
species of expence, does very well to diminish the fund of their
prodigality, by calling in, by means of taxes, a part of the circulating
equivalent which they gave for it? When once he is enriched by these
contributions, he comes to be in the same situation with antient
statesmen, with this difference, that they had their slaves at their
command, whom they fed and provided for; and that he has the free, for
the sake of an equivalent with which they feed and provide for
themselves. He then can set public works on foot, and inspire, by his
example, a taste for industry of a more rational kind, which may advance
the public good, and procure a lasting benefit to the nation.

I have said above, that the acquisition of money, by the sale of
industry to strangers, or in return for consumable commodities, was a
way of augmenting the general worth of a nation. Now I say, that whoever
can transform the most consumable commodities of a country into the most
durable and most beneficial works, makes a high improvement. If
therefore meat and drink, which are of all things the most consumable,
can be turned into harbours, high roads, canals, and public buildings,
is not the improvement inexpressible? This is in the power of every
statesman to accomplish, who has subsistence at his disposal; and beyond
the power of all those who have it not. There is no occasion for money
to improve a country. All the magnificent buildings which ornament
Italy, are a much more proper representation of a scanty subsistence,
than of the gold and silver found in that country at the time they were
executed. Let me now conclude with a few miscellaneous observations on
what has been said.

OBSER. 1. When I admire the magnificence and grandeur of publick works
in any country, such as stupendous churches, amphitheatres, roads,
dykes, canals; in a word, when I examine Holland, the greatest work
perhaps ever done by man, I am never struck with the expence. I compare
them with the numbers of men who have lived to perform them. When I see
another country well inhabited, where no such works appear, the contrast
suggests abundance of reflections.

As to the first, I conclude, that while these works were carried on,
either slavery, or taxes must have been established; because it seldom
happens, that a Prince will, out of his own patrimony, launch out into
such expences, purely to serve the public. Public works are carried on
by the public; and for this purpose, either the persons or purses of
individuals, must be at its command. The first I call slavery; that is
service: the second taxes; that is public contributions in money or in
necessaries.

OBSER. 2. I farther conclude, that nothing is to be gathered from those
works, which should engage us to entertain a high opinion of the wealth,
or other species of magnificence in the people who executed them. All
that can be determined positively concerning their oeconomy as to this
particular, is, that at the time they were performed, agriculture must
have been exercised as a trade, in order to furnish a surplus sufficient
to maintain the workmen; or that subsistence must have come from abroad,
either as a return for other species of industry, or gratuitously, that
is, by rapine, tribute, &c.

OBSER. 3. That the consequence of such works, is, to make meat, drink,
and necessaries circulate, from the hands of those who have a
superfluity of them, into those who are employed to labour; or to oblige
those who formerly worked for themselves only, to work also in part for
others. To execute this, there must be a subordination: for who will
increase his labour, voluntarily, in order to feed people who do not
work for him, but for the public? This combination was neglected
throughout the first book; because we there left mankind at liberty to
follow the bent of their inclinations. This was necessary to give a
right idea of the subject we then intended to treat, and to point out
the different effects of slavery and liberty; but now, that we have
formed trading nations, and riveted a multitude of reciprocal
dependencies, which tie the members together, there is less danger of
introducing restraints; because the advantages which people find, from a
well ordered society, make them put up the better with the
inconveniencies of supporting and improving it. It is an universal
principle, that instruction must be given with gentleness. A young horse
is to be caressed when the saddle is first put upon his back: any thing
that appears harsh, let it be ever so useful or necessary, must be
suspended in the beginning, in order to captivate the inclination of the
creature which we incline to instruct.

OBSER. 4. When a statesman knows the extent and quality of the territory
of his country, so as to be able to estimate what numbers it may feed;
he may lay down his plan of political oeconomy, and chalk out a
distribution of inhabitants, as if the number were already compleat. It
will depend upon his judgment alone, and upon the combination of
circumstances, foreign and domestic, to distribute, and to employ the
classes, at every period during this execution, in the best manner to
advance agriculture, so as to bring all the lands to a thorough
cultivation. A ruling principle here, is, to keep the husbandmen closely
employed, that their surplus may be carried as high as possible; because
this surplus is the main spring of all alienation and industry. The next
thing is to make this surplus circulate; no man must eat of it for
nothing. What a prodigious difference does a person find, when he
considers two countries, equally great, equally fertile, equally
cultivated, equally peopled, the one under the oeconomy here
represented; the other, where every one is employed in feeding and
providing for himself only.

A statesman, therefore, under such circumstances, should reason thus: I
have a country which maintains a million of inhabitants, I suppose, and
which is capable of maintaining as many more; I find every one employed
in providing for himself, and considering the simplicity of their
manners, a far less number will be sufficient to do all the work: the
consequence is, that many are almost idle, while others, who have many
children, are starving. Let me call my people together, and shew them
the inconvenience of having no roads. He proposes that every one who
chooses to work at those shall be fed and taken care of by the
community, and his lands distributed to those who incline to take them.
The advantage is felt, the people are engaged to work a little harder,
so as to overtake the cultivations of the portions of those who have
abandoned them. Upon this revolution, labour is increased, the soil
continues cultivated as before, and the additional labour of the farmers
appears in a fine high road. Is this any more than a method to engage
one part of a people to labour, in order to maintain another?

OBSER. 5. Here I ask, whether it be not better to feed a man, in order
to make him labour and be useful, than to feed him in order to make him
live and digest his victuals? This last was the case of multitudes
during the ages of antient slavery, as well as the consequence of ill
directed modern charity. One and the other being equally well calculated
for producing a simplicity of manners: and Horace has painted it to the
life, when he says,

             _Nos numerus sumus, et fruges consumere nati._

This I have heard humorously translated, though nastily I confess; We
add to the number of t—d-mills. A very just representation of many of
the human species! to their shame be it spoken, as it equally casts a
reflection on religion and on government.

Consistently with these principles, we find no great or public work
carried on in countries of great liberty. Nothing of that kind is to be
seen among the Tartars, or hunting Indians. These I call free nations,
but not our European republics, where I have found just as much
subordination and constraint as any where else.

I have, on several occasions, let drop some expressions with regard to
charity, which I am sensible might be misinterpreted. It will therefore
be proper to make some apology, which no body can suspect of
insincerity; because my reason for introducing it, is with a view to a
farther illustration of my subject.

When I see a rich and magnificent monastery of begging friars, adorned
with profusion of sculpture, a stupendous pile of building, stately
towers, incrustations of marble, beautiful pavements; when I compare the
execution and the expence of all these, with the faculties of a person
of the largest fortune, I find there is no proportion between what the
beggars have executed with the produce of private charities, and what
any Lord has done with his overgrown estate. Nay monasteries there are
which, had they been executed by Princes, would have been cited by
historians, from generation to generation, as eternal monuments of the
greatest prodigality and dissipation. Here then is an effect of charity,
which I have heard condemned by many, and I think without much reason.
What prostitution of riches! say they: how usefully might all this money
have been employed, in establishing manufactures, building a navy, and
in many other good purposes? Whereas I am so entirely taken up with the
effects arising from the execution of the work, that I seldom give
myself time to reflect upon its intention. The building of this
monastery has fed the industrious poor, has encouraged the liberal arts,
has improved the taste of the inhabitants, has opened the door to the
curiosity of strangers: and when I examine my purse, I find that in
place of having contributed to the building of it from a charitable
disposition, my curiosity to see it has obliged me to contribute my
proportion of the expence. I spend my money in that country, and so do
other strangers, without bringing away any thing for it. No balance of
trade is clearer than this. The miraculous tongue of St. Anthony of
Padua, has brought more clear money into that city than the industry of
a thousand weavers could have done: the charity given is not to the
monks, but to the poor whom they employ. If young wits, therefore, make
a jest of such a devotion; I ask, who ought to be laughed at, those who
give, or those who receive money for the show?

In a country where such works are usually carried on, they cease in a
great measure to be useful, whenever they are finished; and a new one
should be set on foot directly, or what will become of those who are
without work? It must not be concluded from this, that the usefulness of
public works is not a principal consideration. The more a work is useful
after it is done, so much the better; because it may then have the
effect of giving bread to those who have not built it. But whether
useful or not afterwards, it must be useful while it is going on; and
many, who with pleasure will give a thousand pounds to adorn a church,
would not give a shilling to build Westminster bridge, or the port of
Rochefort; and the poor live equally by the execution of either.
Expensive public works, are therefore a means of giving bread to the
poor, of advancing industry, without hurting the simplicity of manners;
which is an answer to the seventh question.

OBSER. 6. Great works found in one country, and none found in another,
is no proof that the first have surpassed the second in labour and
industry: the contrast only marks the different division of property, or
taste of expence. Every undertaking marks a particular interest. Palaces
are a representation of rich individuals; snug boxes, in the
neighbourhood of cities, represent small but easy fortunes; hutts point
out poverty; aqueducts, highways, &c. testify an opulent common good:
and if these be found in a country where no vestige of private expence
appears, I then must conclude, they have been executed by slaves, or by
oppression; otherwise somebody, at least, would have gained by the
execution; and his gains would appear in one species of expence or
another.

OBSER. 7. In countries where fortunes have been unequally divided, where
there have been few rich and many poor, it is common to find lasting
monuments of labour; because great fortunes only are capable of
producing them. As a proof of this let us compare the castles of antient
times (I mean four or five hundred years ago) with the houses built of
late. At that time fortunes were much more unequal than at present, and
accordingly we find the habitations of the great in most countries not
numerous, but of an extraordinary bulk and solidity. Now a building is
never to be judged of by the money it cost, but by the labour it
required. From the houses in a country I judge of the opulence of the
great, and of the proportion of fortunes among the inhabitants. The
taste in which these old castles are built, marks the power of those who
built them, and, as their numbers are small, we may judge, from the
nature of man, who loves imitation, that the only reason for it was,
that there were few in a condition to build them. Why do we find in
modern times a far less disproportion between the conveniency with which
every body is lodged, than formerly; but only because riches are more
equally divided, from the operations of industry above-described.

OBSER. 8. From this we may gather, that lasting monuments are no
adequate measure of the industry of a country. The expence of a modern
prince, in a splendid court, numerous armies, frequent journeys,
magnificent banquets, operas, masquerades, tournaments, and shews, may
give employment and bread to as many hands, as the taste of him who
built the pyramid; and the smoke of the gun-powder at his reviews, of
the flambeaus and wax lights at his entertainments, may be of as great
use to posterity, as the shadow of the pyramid, which is the only
visible effect produced by it; but the one remains for ever, the other
leaves no vestige behind it. The very remaining of the work, however
useless in itself, becomes useful, in so far as it is ornamental,
inspires noble sentiments of emulation to succeeding princes, the
effects of which will still be productive of the good consequences of
keeping people employed. The expence of the other flatters the senses,
and gives delight: there is no question of choice here. All useless
expence gratifies vanity only; accident alone makes one species
permanent, another transitory.

Those who have money may be _engaged_ to part with it in favour of the
poor, but never forced to part with it, to the prejudice of their
posterity. Inspire, if you can, a good and useful taste of expence;
nothing so right; but never check the dissipation of ready money, with a
view to preserve private fortunes. Leave such precautions to the
prudence of every individual. Every man, no doubt, has as good a right
to perpetuate and provide for his own posterity, as a state has to
perpetuate the welfare of the whole community; it is the combination of
every private interest which forms the common weal. From this I
conclude, that, without the strongest reasons to the contrary, perpetual
substitutions of property should be left as free to those who possess
lands, as locking up in chests should be permitted to those who have
much money.

QUEST. 8. What are the principles which influence the establishment of
mercantile companies; and what effects do these produce upon the
interests of trade?

There is a close connexion between the principles relating to companies,
and those we have examined in the twenty third chapter, concerning
corporations. The one and the other have excellent consequences, and
both are equally liable to abuse. A right examination of principles is
the best method to advance the first and to prevent the latter.

The advantages of companies are chiefly two.

1. That by uniting the _stocks_ of several merchants together, an
enterprise far beyond the force of any one, becomes practicable to the
community.

2. That by uniting the _interests_ of several merchants, who direct
their _foreign_ commerce towards the same object, the competition
between them _abroad_ is taken away; and whatever is thus gained, is so
much clear profit, not only to the company, but to the society of which
they are members.

It is in consideration of the last circumstance, that companies for
foreign commerce have a claim to extensive privileges. But no
encouragement given to such associations should be carried farther than
the public good necessarily requires it should be. The public may reward
the ingenuity, industry and inventions of particular members, and
support a private undertaking as far as is reasonable; but every
encouragement given, ought to be at the expence of the whole community,
not at that of particular denominations of inhabitants.

The disadvantages proceeding from companies are easily to be guessed at,
from the very nature of the advantages we have been setting forth: and
the relation between the one and the other will point out the remedies.

1. The weight of money in the hands of companies, and the public
encouragement given, them, crush the efforts of private adventurers,
while their success inspires emulation, and a desire in every individual
to carry on a trade equally profitable.

Here a statesman ought nicely to examine the advantages which the
company reaps from the incorporation of their stock, and those which
proceed from the public encouragement given to the undertaking; that
with an impartial hand, he may make an equal distribution of public
benefits. And when he finds it impossible to contribute to the
advancement of the public good, by communicating the privileges of
companies to private adventurers, he ought to facilitate the admittance
of every person properly qualified into such associations.

2. The second disadvantage of companies, is, a concomitant of that
benefit so sensibly felt by the state, from the union of their interest,
while they purchase in foreign markets: the same union which, at the
time of buying, secures the company from all competitions, proves
equally disadvantageous to those who purchase from them at home. They
are masters of their price, and can regulate their profits by the
_height_ of demand; whereas they ought to keep them constantly
proportioned to the real value of the merchandize.

The advantages resulting from the union of many private stocks is common
to all companies; but those we have mentioned to proceed from the union
of their interest, is peculiar to those who carry on an exclusive trade
in certain distant parts of the world. We have, in a former chapter,
laid down the maxims which influence the conduct of a statesman in
regulating the prices of merchandize, by watching over the balance of
work and demand, and by preserving the principles of competition in
their full activity. But here a case presents itself, where, upon one
side of the contract, competition can have no effect, and where its
introduction, by destroying the exclusive privilege of the company to
trade in certain countries, is forbid for the sake of the public good.

What method, therefore, can be fallen upon to preserve the advantage
which the nation reaps from the company’s buying in foreign parts
without being exposed to competition; and at the same time to prevent
the disadvantage to which the individuals of the society are exposed at
home, when they endeavour, in competition with one another, to purchase
from a company, who, in virtue of the same exclusive privilege, are
united in their interest, and become masters to demand what price they
think fit.

It may be answered, that it cannot be said of companies as of private
dealers, that they profit of every little circumstance of competition,
to raise their price. Those have a fixed standard, and all the world
buys from them at the same rate; so that retailers, who supply the
consumption, have in one respect this notable advantage, that all buying
at the same price, no one can undersell another; and the competition
between them secures the public from exorbitant prices.

I agree that these advantages are felt, and that they are real; but
still they prove no more than that the establishment of companies is not
so hurtful to the interest of those who consume their goods, as it would
be could they profit to the utmost of their exclusive privilege in
selling by retail. But it does not follow from this, that the profits
upon such a trade do not rise (in consequence of their privilege) above
the standard proper for making the whole commerce of a nation flourish.
The very jealousy and dissatisfaction, conceived by other merchants,
equally industrious and equally well deserving of the public, because of
the great advantages enjoyed by those incorporated, under the protection
of exclusive privileges, is a hurt to trade in general, is contrary to
that principle of impartiality which should animate a good statesman,
and should be prevented if possible. Let us therefore go to the bottom
of this affair; and, by tracing the progress of such mercantile
undertakings, as are proper objects for the foundation of companies, and
which entitle them to demand and to obtain certain exclusive privileges,
let us endeavour to find out a method by which a statesman may establish
such societies, so as to have it in his power to lay their inland sales
under certain regulations, capable to supply the want of competition;
and to prevent the profits of exclusive trade from rising, considerably,
above the level of _that_ which is carried on without any such
assistance from the public.

While the interest of companies is in few hands, the union of the
members is more intimate, and their affairs are carried on with more
secrecy. This is always the case in the infancy of such undertakings.
But the want of experience frequently occasions considerable losses; and
while this continues to be the case, no complaints are heard against
such associations. Few pretend to rival their undertaking, and it
becomes at first more commonly the object of raillery than of jealousy.
During this period, the statesman should lay the foundation of his
authority; he ought to spare no pains nor encouragement to support the
undertaking; he ought to inquire into the capacity of those at the head
of it; order their projects to be laid before him; and when he finds
them reasonable, and well planned, he ought to take unforeseen losses
upon himself: he is working for the public, not for the company; and the
more care and expence he is at in setting the undertaking on foot, the
more he has a right to direct the prosecution of it towards the general
good. This kind of assistance given, entitles him to the inspection of
their books; and from this, more than any thing, he will come at an
exact knowledge of every circumstance relating to their trade. By this
method of proceeding, there will be no complaints on the side of the
adventurers, they will engage with chearfulness, being made certain of
the public assistance, in every reasonable undertaking; their stock
becomes in a manner insured, individuals are encouraged to give them
credit, and from creditors they will naturally become associates in the
undertaking. So soon as the project comes to such a bearing as to draw
jealousy, the bottom may be enlarged by opening the doors to new
associates, in place of permitting the original proprietors to augment
their stock with borrowed money; and thus the fund of the company may be
increased in proportion to the employment found for it, and every one
will be satisfied.

When things are conducted in this way, the authority of public
inspection is no curb upon trade; the individuals who serve the company
are cut off from the possibility of defrauding: no mysteries, no
secrets, from which abuses arise, will be encouraged; trade will become
honourable and secure, not fraudulent and precarious; because it will
grow under the inspection of its protector, who only protects it for the
public good.

Why do companies demand exclusive privileges, and why are they ever
granted, but as a recompense to those who have been at great expence in
acquiring a knowledge which has cost nothing to the state? And why do
they exert their utmost efforts to conceal the secrets of their trade,
and to be the only sharers in the profits of it, but to make the public
refund tenfold the expence of their undertaking.

When companies are once firmly established, the next care of a
statesman, is, to prevent the profits of their trade from rising above a
certain standard. We speak at present of those only, who, by exclusive
privileges, are exposed to no competition at their sales. One very good
method to keep down prices, is, to lay companies under a necessity of
increasing their stock as their trade can bear it, by the admission of
new associates; for by increasing the company’s stock, you increase, I
suppose, the quantity of goods they dispose of, and consequently
diminish the competition of those who demand of them: but as even this
will not have the effect, of reducing prices to the adequate value of
the merchandize (a thing only to be done by competition) the statesman
himself may interpose an extraordinary operation. He may support high
profits to the company, upon all articles of luxury consumed at home, in
favour of keeping down the prices of such goods as are either for
exportation or manufacture.

This can only be done when he has companies to deal with: in every other
case, the principles of competition between different merchants, trading
in the same goods, upon separate interests, makes the thing impossible.
But where the interests of the sellers, which are the company, are
united, and where there is no competition, they are masters of their
price, according to the principles laid down in the seventh chapter.
Now, provided the dividend upon the whole stock be a sufficient
recompense both for the value of the fund, and the industry of those who
are employed to turn it to account, the end is accomplished.
Extraordinary profits upon any particular species of trade cast a
discouragement upon all others.

We very frequently see that great trading companies become the means of
establishing public credit; on which occasions, it is proper to
distinguish between the trading stock of the company, which remains in
their possession, and the actions, bonds, annuities, contracts, &c.
which carry their name, and which have nothing but the name in common.
The price of the first is constantly regulated by the profits upon the
trade; the price of the other, by the current value of money.

Let me next observe the advantage which might result to a nation, from a
prudent interposition of the statesman, in the regulation of a tarif of
prices for such goods as are put to sale without any competition on the
side of the sellers.

The principles we have laid down, direct us to proscribe, as much as
possible, all foreign consumption, especially that of work; and to
encourage as much as possible the exportation of it. Now, if what the
India company of England, for example, sells to strangers, and exports
for a return in money, is equal to the money she herself has formerly
exported, the balance upon the India trade will stand even. But if the
competition of the French and Dutch is found hurtful to the English
company in her outward sales, may not the government of that nation lend
a hand towards raising the profits of the company, upon tea, china, and
japan wares, which are articles of superfluity consumed by the rich, in
order to enable the company to afford her silk and cotton stuffs to
strangers, at a more reasonable rate? These operations, I say, are
practicable, where a company sells without competition, but are never to
be undertaken, but when the state of its affairs are perfectly well
known; because the prices of exportable goods might, perhaps, be kept up
by abuse and mismanagement, and not by the superior advantages which
other nations have in carrying on a like commerce. The only remedy
against abuse is reformation. But how often do we see a people laid
under contribution in order to support that evil!

Companies, we have said, owe their beginning to the difficulties to
which an infant commerce is exposed: these difficulties once surmounted,
and the company established upon a solid foundation, new objects of
profit present themselves daily; so much, that the original institution
is frequently eclipsed, by the accessary interests of the society. It is
therefore the business of a statesman to take care that the exclusive
privileges granted to a society, for a certain purpose, be not extended
to other interests, nowise relative to that which set the society on
foot, and gave it a name. And when exclusive privileges are given, a
statesman should never fail to stipulate for himself, a particular
privilege of inspection into all the affairs of the company, in order to
be able to take measures which effectually prevent bad consequences to
the general, interest of the nation, or to that of particular classes.

Let this suffice at present, as to the privileges enjoyed by companies
in foreign trade. Let me now examine the nature of such societies in
general, in order to discover their influence on the mercantile
interests of a nation, and how they tend to bring every branch of trade
to perfection, when they are established and carried on under the eye of
a wise administration.

Besides the advantages and disadvantages above mentioned, there are
others found to follow the establishment of trading companies. The first
proceed from _union_, that is, a common interest; the last from
_disunion_, that is, from separate interests.

A common interest unites, and a separate interest disunites the members
of every society; and did not the first preponderate among mankind,
there would be no society at all. Those of the same nation may have a
common interest relative to foreigners, and a separate interest relative
to one another; those of the same profession may have a common interest
relative to the object of their industry, and a separate interest
relative to the carrying it on: the members of the same mercantile
company may have the same interest in the dividend, and a separate
interest in the administration of the fund which produces it. The
children of the same family; nay even a man and his wife, though tied by
the bonds of a common interest, may be disjoined by the effects of a
separate one. Mankind are like loadstones, they draw by one pole, and
repel by another. And a statesman, in order to cement his society,
should know how to engage every one, as far as possible, to turn his
attracting pole towards the particular center of common good.

From this emblematical representation of human society, I infer, that it
is dangerous to the common interest, to permit too close an union
between the members of any subaltern society. When the members of these
are bound together, as it were by every articulation, they in some
measure become independent of the great body; when the union is less
intimate, they admit of other connections, which cement them to the
general mass[O].

Footnote