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.
------------------------------------------------------------------------
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.