HOW MAN PASSES FROM WEALTH AND FREEDOM TOWARD POVERTY AND SLAVERY.
The views that have thus been presented are entirely in harmony those
of the illustrious author of "The Wealth of Nations." "In seeking for
employment to a capital," says Dr. Smith,
"Manufactures are, upon equal or nearly equal profits, naturally
preferred to foreign commerce, for the same reason that agriculture
is naturally preferred to manufactures. As the capital of the
landlord or farmer is more secure than that of the manufacturer, so
the capital of the manufacturer, being at all times more within his
view and command, is more secure than that of the foreign merchant.
In every period, indeed, of every society, the surplus part both of
the rude and manufactured produce, or that for which there is no
demand at home, must be sent abroad, in order to be exchanged for
something for which there is some demand at home. But whether the
capital which carries this surplus produce abroad be a foreign or
domestic one, is of little importance."
It is thus, in his estimation, of small importance whether the capital
engaged in the work of transportation be foreign or domestic--the
operations most essential to the comfort and improvement of man being,
first, the production, and next, the conversion of the products of the
land, by men occupying towns and cities placed among the producers.
The nearer the market the less must be, as he clearly saw, the loss of
transportation, and the greater the value of the land. If the number
or the capital of those markets were insufficient for the conversion
of all the rude produce of the earth, there would then be
"considerable advantage" to be derived from the export of the surplus
by the aid of foreign capital, thus leaving "the whole stock of the
society" to be employed at home "to more useful purpose." These views
are certainly widely different from those of modern economists, who
see in tables of imports and exports the only criterion of the
condition of society. Commerce, by which is meant exchanges with
distant people, is regarded as the sole measure of the prosperity of a
nation; and yet every man is rejoiced when the market for his products
is brought home to him, and he is thereby enabled to economize
transportation and enrich his land by returning to it the elements of
which-those products had been composed.
"According to the natural course of things," says Dr. Smith, "the
greater part of the capital of every growing society is, first,
directed to agriculture, afterward to manufactures, and, last of all,
to foreign commerce."
This, says he, is in accordance with natural laws. As subsistence
precedes luxuries, so must the production, of commodities precede
their conversion or their exchange.
"Necessity imposes," he continues, "that order of things" which "is
in every country promoted by the natural inclinations of man. If
human institutions had never thwarted those natural inclinations, the
towns could nowhere have increased beyond what the improvement and
cultivation of the territory in which they were situated could
support; till such time, at least, as the whole of that territory was
completely cultivated and improved. Upon equal, or nearly equal
profits, most men will choose to employ their capitals rather in the
improvement and cultivation of land, than either in manufactures or
in foreign trade. The man who employs his capital in land, has it
more under his view and command; and his fortune is much less liable
to accidents than that of the trader, who is obliged frequently to
commit it, not only to the winds and the waves, but to the more
uncertain elements of human folly and injustice, by giving great
credits, in distant countries, to men with whose character and
situation he can seldom be thoroughly acquainted. The capital of the
landlord, on the contrary, which is fixed in the improvement of his
land, seems to be as well secured as the nature of human affairs can
admit of. The beauty of the country, besides the pleasures of a
country life, the tranquillity of mind which it promises, and,
wherever the injustice of human laws does not disturb it, the
independency which it really affords, have charms that, more or less,
attract everybody; and as to cultivate the ground was the original
destination of man, so, in every stage of his existence, he seems to
retain a predilection for this primitive employment.
"Without the assistance of some artificers, indeed, the cultivation
of land cannot be carried on, but with great inconveniency and
continual interruption. Smiths, carpenters, wheelwrights and
ploughwrights, masons and bricklayers, tanners, shoemakers, and
tailors, are people whose service the farmer has frequent occasion
for. Such artificers, too, stand occasionally in need of the
assistance of one another; and as their residence is not, like that
of the farmer, necessarily tied down to a precise spot, they
naturally settle in the neighbourhood of one another, and thus form a
small town or village. The butcher, the brewer, and the baker soon
join them, together with many other artificers and retailers,
necessary or useful for supplying their occasional wants, and who
contribute still further to augment the town. The inhabitants of the
town and those of the country are mutually the servants of one
another. The town is a continual fair or market, to which the
inhabitants of the country resort, in order to exchange their rude
for manufactured produce. It is this commerce which supplies the
inhabitants of the town, both with the materials of their work and
the means of their subsistence. The quantity of the finished work
which they sell to the inhabitants of the country, necessarily
regulates the quantity of the materials and provisions which they
buy. Neither their employment nor subsistence, therefore, can
augment, but in proportion to the augmentation of the demand from the
country for finished work; and this demand can augment only in
proportion to the extension of improvement and cultivation. Had human
institutions, therefore, never disturbed the natural course of
things, the progressive wealth and increase of the towns would, in
every political society, be consequential, and in proportion to the
improvement and cultivation of the territory or country."
The demand on the artisan "can augment only in proportion to the
extension of improvement and cultivation." Nothing can be more true.
The interests of the farmer and the mechanic are in perfect harmony
with each other. The one needs a market for his products, and the
nearer the market the greater must be the produce of his land, because
of his increased power to carry back to it the manure. The other needs
a market for his labour, and the richer the land around him the
greater will be the quantity of products to be offered in exchange for
labour, and the greater his freedom to determine for himself for whom
he will work and what shall be his wages. The combination of effort
between the labourer in the workshop and the labourer on the farm thus
gives value to land, and the more rapid the growth of the value of
land the greater has everywhere been the tendency to the freedom of
man.
These views were opposed to those then universally prevalent.
"England's treasure in foreign trade" had become
"A fundamental maxim in the political economy, not of England only,
but of all other commercial countries. The inland or home trade, the
most important of all, the trade in which an equal capital affords
the greatest revenue, and creates the greatest employment to the
people of the country, was considered as subsidiary only to foreign
trade. It neither brought money into the country, it was said, nor
carried any out of it. The country, therefore, could never become
richer or poorer by means of it, except as far as its prosperity or
decay might indirectly influence the state of foreign trade."
It was against this error chiefly that Dr. Smith cautioned his
countrymen. He showed that it had led, and was leading, to measures
tending to disturb the natural course of things in all the countries
connected with England, and to produce among them a necessity, for
trade while diminishing the power to maintain trade. "Whatever tends,"
says he, "to diminish in any country the number of artificers and
manufacturers, tends to diminish the home market, the most important
of all markets, for the rude produce of the land, and thereby still
further to discourage agriculture," and consequently to diminish the
power of producing things with which to trade. He nowhere refers to
the fact that any system which looks to compelling a nation to export
raw produce, tends necessarily to the impoverishment of the land and
its owner, and to the diminution, of the freedom of the labourer, and
yet that such was the case could scarcely have escaped his
observation. The tendency of the then existing English policy was, as
he showed, to produce in various countries a necessity for exporting
every thing in its rudest form, thus increasing the cost of
transportation, while impoverishing the land and exhausting the
people. The legislature had been, he said, "prevailed upon" to prevent
the establishment of manufactures in the colonies, "sometimes by high
duties, and sometimes by absolute prohibitions." In Grenada, while a
colony of France, every plantation had its own refinery of sugar, but
on its cession to England they were all abandoned, and thus was the
number of artisans diminished, to "the discouragement of agriculture."
The course of proceeding relative to these colonies is thus
described:--
"While Great Britain encourages in America the manufacturing of pig
and bar iron, by exempting them from duties to which the like
commodities are subject when imported from any other country, she
imposes an absolute prohibition upon the erection of steel furnaces
and slit-mills in any of her American plantations: She will not
suffer her colonies to work in those more refined manufactures, even
for their own consumption; but insists upon their purchasing of her
merchants and manufactures all goods of this kind which they have
occasion for.
"She prohibits the exportation from one province to another by water,
and even the carriage by land upon horseback, or in a cart, of hats,
of wools, and woollen goods, of the produce of America; a regulation
which effectually prevents the establishment of any manufacture of
such commodities for distant sale, and confines the industry of her
colonists in this way to such coarse and household manufactures as a
private family commonly makes for its own use, or for that of some of
its neighbours in the same province."
His views, in regard to such measures, are thus given:--
"To prohibit a great people from making all they can of every part of
their own produce, or from employing their stock and industry in a
way that they judge most advantageous to themselves, is a manifest
violation of the most sacred rights of mankind."
Further to carry out this view of compelling the people of the
colonies to abstain from manufacturing for themselves, and to carry
their products to distant markets, to the exhaustion of the land and
to the diminution of the value of labour, bounties were paid on the
importation into England of various articles of raw produce, while the
export of various raw materials, of artisans, and of machinery, was
prohibited. The whole object of the system was, he said, to "raise up
colonies of customers, a project," he added, "fit only for a nation of
shopkeepers." Indeed, he thought it "unfit even for a nation of
shopkeepers," although "extremely fit for a nation whose government
was influenced by shopkeepers." He was therefore entirely opposed to
all such arrangements as the Methuen treaty, by which, in
consideration of obtaining the control of the market of Portugal for
the sale of her manufactures, Great Britain agreed to give to the
wines of that country great advantage over those of France.
Against all the errors of the system, Dr. Smith, however, raised in
vain his warning voice. "England's treasure" was, it was thought, to
be found "in foreign trade," and every measure adopted by the
government had in view the extension of that trade. With each new
improvement of machinery there was a new law prohibiting its export.
The laws against the export of artisans were enforced, and a further
one prohibited the emigration of colliers. The reader will readily see
that a law prohibiting the export of cotton or woollen machinery was
precisely equivalent to a law to compel all the producers of wool or
cotton to seek the distant market of England if they desired to
convert their products into cloth. The inventors of machinery, and the
artisans who desired to work it, were thus deprived of freedom of
action, in order that foreigners might be made the slaves of those who
controlled the spinning-jenny, the loom, and the steam-engine, in
whose hands it was desired to centralize the control of the farmers
and planters of the world. England was to be made "the workshop of the
world," although her people had been warned that the system was not
only unnatural, but in the highest degree unjust, and even more
impolitic than unjust, because while tending to expel capital and
labour from the great and profitable home market, it tended greatly to
the "discouragement of agriculture" in the colonies and nations
subjected to the system, and to prevent the natural increase of the
smaller and less profitable distant market upon which she was becoming
more and more dependent.
By degrees the tendency of the system became obvious. Bounties on the
import of wood, and wool, and flax, and other raw materials, tended to
"the discouragement of agriculture" at home, and bounties on the
export of manufactures tended to drive into the work of converting,
and exchanging the products of other lands the labour and capital that
would otherwise have been applied to the work of production at home.
The necessary consequence of this was, that the difficulty of
obtaining these raw materials, instead of diminishing with the
progress of population, tended to increase, and then it was, at the
distance of a quarter of a century from the date of the publication of
"_The Wealth of Nations_," that the foundation of the new school was
laid by Mr. Malthus, who taught that all the distress existing in the
world was the inevitable consequence of a great law of nature, which
provided that food should increase only in arithmetical progression,
while population might increase in geometrical progression. Next came
Mr. Ricardo, who furnished a law of the occupation of the earth,
showing, and conclusively, as he supposed, that the work of
cultivation was always commenced on the rich soils, yielding a large
return to labour, and that as population increased, men were compelled
to resort to others, each in succession less fertile than its
predecessor--the consequence of which was that labour became daily
less productive, the power to obtain food diminished, and the power to
demand rent increased, the poor becoming daily poorer, weaker, and
more enslaved, as the rich became richer and more powerful. Next came
the elder Mill, who showed that, in obedience to the law thus
propounded by Mr. Ricardo, the return to capital and labour applied to
the work of cultivation must be "continually decreasing," and the
annual fund from which sayings are made, continually diminishing. "The
difficulty of making savings is thus," he adds, "continually
augmented, and at last they must totally cease." He regarded it
therefore as certain that "wages would be reduced so low that a
portion of the population would regularly die from the consequences of
want." In such a state of things, men sell themselves, their wives, or
their children, for mere food. We see, thus, that the modern British
theory looks directly to the enslavement of man.
In this manner, step by step, did the British political economists
pass from the school of Adam Smith, in which it was taught that
agriculture preceded manufactures and commerce, the latter of which
were useful to the extent that they aided the former,--to that new one
in which was, and is, taught, that manufactures and commerce were the
great and profitable pursuits of man, and that agriculture, because of
the "constantly increasing sterility of the soil," was the least
profitable of all. Hence it is that we see England to have been
steadily passing on in the same direction, and devoting all her
energies to the prevention of the establishment, in any country of the
world, of markets in which the raw produce of the land could be
exchanged directly with the artisan for the products of his labour.
For a time this prospered, but at length the eyes of the world were
opened to the fact that they and their land were being impoverished as
she was being enriched; and that the effect of the system was that of
constituting herself _sole buyer_ of the raw products of their labour
and their land, and _sole seller_ of the manufactured commodities to
be given in exchange for them, with power to fix the prices of both;
and thus that she was really acting in the capacity of mistress of the
world, with power to impose taxes at discretion. By degrees, machinery
and artisans were smuggled abroad, and new machinery was made, and
other nations turned their attention more and more to manufacturing;
and now it became necessary to make new exertions for the purpose of
securing to England the monopoly she had so long enjoyed. To enable
her to do this we find her at length throwing open her ports for the
free admission of corn and numerous other of the raw products of the
earth, free from the payment of any duty whatever, and thus offering
to the various nations of the world a bounty on the further exhaustion
of their land. The adoption of this measure would, it was supposed,
induce Prussia, Austria, Russia, and Denmark, and all America, to
devote themselves exclusively to the cultivation of the earth,
abandoning all attempts at the creation of nearer places of exchange;
and thus that all the world outside of England would become producers
of raw materials to be carried to that single and distant market,
there to be consumed or converted, and the refuse thereof to be
deposited on the land of England. That such was the object of this
measure was admitted by all. It was announced as a boon to the
agriculturists of the world. How far it was calculated to be so, the
reader may judge, after satisfying himself of the truth of the
following propositions:--
I. That if there is to be but one place of exchange or manufacture for
the world, all the rest of the people of the world must limit
themselves to agriculture.
II. That this necessarily implies the absence of towns, or local
places of exchange, and a necessity for resorting to a place of
exchange far distant.
III. That the distance of the place of consumption from the place of
production forbids the possibility of returning to the land any of the
manure yielded by its products.
IV. That this in turn implies the exhaustion of the land and the
impoverishment of its owner.
V. That the impoverishment of the land renders necessary a removal to
new and more distant lands.
VI. That this renders necessary a larger amount of transportation,
while the impoverishment of the farmer increases the difficulty of
making roads.
VII. That the increased distance of the market produces a steadily
increased necessity for limiting the work of cultivation to the
production of those commodities which can be obtained from high and
dry lands, and that the quantity of products tends therefore to
diminish with the increased distance from market.
VIII. That with each step in the progress of exhausting the land, men
are compelled to separate more widely from each other, and that there
is therefore a steady diminution in the power of association for the
making of roads, or the establishment of schools, and that the small
towns, or near places of exchange, tend gradually toward depopulation
and ruin.
IX. That the more men separate from each other the less is the power
to procure machinery, and the greater the necessity for cultivating
the poorest soils, even though surrounded by lead, iron, and copper
ore, coal, lime, and all other of the elements of which machinery is
composed.
X. That with the diminished power of association, children grow up
uneducated, and men and women become rude and barbarous.
XI. That the power to apply labour productively tends steadily to
diminish, and that women, in default of other employment, are forced
to resort to the field, and to become slaves to their fathers,
husbands, and brothers.
XII. That the power to accumulate capital tends likewise to
diminish--that land becomes from day to day more consolidated--and
that man sinks gradually into the condition of a slave to the landed
or other capitalist.
XIII. That with this steady passage of man from the state of a freeman
to that of a slave, he has steadily less to sell, and can therefore
purchase less; and that thus the only effect of a policy which compels
the impoverishment of the land and its owner is to destroy the
customer, who, under a different system of policy, might have become a
larger purchaser from year to year.
That the object of the present English policy is that of converting
all the nations of the world into purely agricultural communities will
not be denied; but as it may be doubted if the effects would be such
as are here described, it is proposed now to inquire into the movement
of some of the non-manufacturing communities of the world, with a view
to determine if the facts observed are in correspondence with those
that, reasoning _a priori_, we should be led to expect. Before
entering upon this examination, the reader is, however, requested to
peruse the following extracts from "Gee on Trade," in which is
described the former colonial system, and afterward the extract from a
recent despatch of Lord Grey, late Colonial Secretary, with a view to
satisfy himself how perfectly identical are the objects now sought to
be attained with those desired by the statesmen of the last century,
and denounced by Adam Smith.
JOSHUA GEE--1750.
First--"Manufactures in American colonies should be discouraged,
prohibited."
"Great Britain with its dependencies is doubtless as well able to
subsist within itself as any nation in Europe. We have an
enterprising people, fit for all the arts of peace or war. We have
provisions in abundance, and those of the best sort, and we are able
to raise sufficient for double the number of inhabitants. We have the
very best materials for clothing, and want nothing either for use or
for luxury, but what we have at home, or might have from our
colonies; so that we might make such an intercourse of trade among
ourselves, or between us and them, as would maintain a vast
navigation. But, we ought always to keep a watchful eye over our
colonies, _to restrain them from setting up any of the manufactures
which are carried on in Great Britain_; and any such attempts should
be crushed in the beginning, for if they are suffered to grow up to
maturity it will be difficult to suppress them."
"Our colonies are much in the same state as Ireland was in when they
began the woollen manufactory, _and as their numbers increase, will
fall upon manufactures for clothing themselves, if due care be not
taken to find employment_ for them in raising such productions as may
enable them to furnish themselves with all the necessaries from us."
"I should, therefore, think it worthy the care of the government to
endeavour by all possible means to encourage them in the raising of
silk, hemp, flax, iron, (_only pig, to be hammered in England_,)
potash, &c., by giving them competent bounties in the beginning, and
sending over skilful and judicious persons, at the public charge, to
assist and instruct them in the most proper methods of management,
which in my apprehension would lay a foundation for establishing the
most profitable trade of any we have. And considering the commanding
situation of our colonies along the seacoast, the great convenience
of navigable rivers in all of them, the cheapness of land, and the
easiness of raising provisions, great numbers of people would
transport themselves thither to settle upon such improvements. Now,
as people have been filled with fears that the colonies, if
encouraged to raise rough materials, would set up for themselves, a
little regulation would be necessary; and as they will have the
providing rough materials for themselves, a _little regulation_ would
remove all those jealousies out of the way. They have never thrown or
wove any silk, as yet, that we have heard of,--therefore, if a law
was made prohibiting the use of any throwing mill, of doubling or
throstling silk, with any machine whatever, they would then send it
_to us raw_. And as they will have the providing rough materials to
themselves, so shall we have the manufacturing of them. If
encouragement be given for raising hemp, flax, &c., doubtless they
will soon begin to manufacture, if not prevented. Therefore, to stop
the progress of any such manufacture, it is proposed that no _weaver_
have _liberty_ to set up any looms, without first registering at an
office kept for that purpose, and the name and place of abode of any
journeyman that shall work for him. But if any _particular
inhabitant_ shall be inclined to have any linen or woollen made of
their own spinning, they should not be abridged of the same liberty
that they now make use of, namely to have a weaver who shall be
_licensed_ by the Governor, and have it wrought up for the use of the
family, but not to be sold to any person in a private manner, nor
exposed to any market or fair, upon pain of forfeiture." "That all
slitting mills and engines for drawing wire, or weaving stockings,
_be put down_." "That all negroes shall be prohibited from weaving
either linen or woollen, or spinning or combing of wool, or working
at any manufacture of iron, further than making it into pig or
bar-iron. That they also be prohibited from manufacturing _hats,
stockings, or leather of any kind_. This limitation will not abridge
the planters of any liberty they now enjoy--on the contrary, it will
then turn their industry to promoting and raising those rough
materials."
Second--"The advantages to Great Britain from keeping the colonies
dependent on her for their essential supplies."
"If we examine into the circumstances of the inhabitants of our
plantations, and our own, it will appear that _not one-fourth part of
their product redounds to their own profit, for out of all that comes
here, they only carry back clothing and other accommodations for
their families_, all of which is of the merchandise and manufacture
of this kingdom." "All these advantages we receive by the
plantations, _besides the mortgages on the planters' estates and the
high interest they pay us, which is very considerable_, and,
therefore, very great care ought to be taken, in regulating all the
affairs of the colonists, that the planters are not put under too
many difficulties, but encouraged to go on cheerfully." "New England
and the northern colonies have not commodities and products enough to
send us in return for purchasing their necessary clothing, but are
under very great difficulties; and, therefore, any ordinary sort sell
with them,--and when they have _grown out of fashion with us, they
are new-fashioned enough for them_."
LORD GREY--1850.
"If, as has been alleged by the complainants, and as in some
instances would appear to be the case, any of the duties comprised in
the tariff have been imposed, not for the purpose of revenue, but
with a view of protecting the interest of the Canadian manufacturer,
her Majesty's government are clearly of opinion that such a course is
injurious alike to the interests of the mother country and to those
of the colony. Canada possesses natural advantages for the production
of articles which will always exchange in the markets of this country
for those manufactured goods of which she stands in need. By such
exchange she will obtain these goods much more cheaply than she could
manufacture, them for herself, and she will secure an advantageous
market for the _raw produce_ which she is best able to raise. On the
other hand, by closing her markets against British manufactures, or
_rendering their introduction more costly_, she enhances their price
to the consumer, and by the imposition of protective duties, for the
purpose of fostering an unnatural trade, she gives a wrong direction
to capital, by withdrawing it from more profitable employment, and
causing it to be invested in the manufacture of articles which might
be imported at a cost below that of production in the colony, while
at the same time she inflicts a blow on her export trade by rendering
her markets less eligible to the British customer." "If the merchant
finds that by exporting his goods to Canada, they produce him in
return a _large quantity of corn_, and thus yield a greater profit
than they would if exported to any other country, he will of course
give the preference to Canada. But if by reason of increased import
duties, those goods produce a diminished return the result will be
either that the Canadian farmer must submit to a proportionate
reduction in the price of his produce, or the British manufacturer
must resort to another market. It is, therefore, obvious, that it is
not less the interest of Canada herself than of Great Britain, that
this tariff of import duties should undergo a careful revision."
The phraseology of the two is different, but the object is the
same--that of rendering it necessary to send all the raw products of
the land to a market far distant, and thus depriving the farmer or
planter of the power to return any portion of the loan made to him by
the earth, and which she is always willing to renew, on the simple
condition that when the borrower has used it, he shall return to the
lender the elements of which it had been composed.