of such, but those persons would not have ventured a single shilling in
a new enterprise. The connection between industry and revenue was
lost in their ideas. They knew nothing of it, and the remnants of the
industrious, who still cultivated the ancient modes of procuring
wealth, were considered as an inferior class of persons, depending
upon less certain means of existence, and generally greatly straitened
for capital, which, as soon as they possessed in sufficient quantity,
enabled them to follow the same example, and to retire to the less
affluent, but more esteemed and idle practice of living upon interest.
In countries where there are nobility, the capital of the commercial
world is constantly going to them, either by marriage of daughters, or
by the other means, which rich people take to become noble. Even
where there are no nobility, the class of citizens living without any
immediate connection with trade consider themselves as forming the
highest order of society, and they become the envy of the others.
There appears to be no means of preventing capital, when unequally
divided, from being invested in the least profitable way that produces
revenue. When more equally divided, it is employed in the way that
produces the greatest possible income, by setting to work and
maintaining the greatest possible quantity of labour.
If there is not sufficient means of employing capital within a nation or
country that has a very unequal division of wealth, there are plenty of
opportunities furnished by poorer nations. Accordingly, every one of
the nations, states, or towns, that has ever been wealthy, has furnished
those who wanted it with capital, at a low interest. Amsterdam has lent
great sums to England, to Russia, and France. The French owed a very
large sum to Genoa at the beginning of the revolution. Antwerp,
Cologne, and every one of the ancient, rich, and decayed towns had
vested money in the hands of foreign nations, or lent to German
princes, or to the great proprietors of land, on the security of their
estates. The American funds found purchasers amongst the wealthy all
over Europe, when they could not find any in their own states; and, it
is probable, that the far greater portion of their debt is at this time in
the hands of foreigners.
Thus it is that wealthy nations let the means by which the wealth [end
of page #135] was acquired go out of their hands; each individual in a
new state, or in an old, follows his own interest and disposition in the
disposal of his property. In the new state, the individual interest and
that of the country are generally the same; in the old one, they are in
opposition to each other, and that opposition is greatly increased by
the unequal division of property. The middling class of proprietors
never seek the most profitable employment for their money; the very
wealthy are always inclined to seek for good security and certain
payment, without any consideration of the interest of their country.
To counteract the tendency of property to accumulate, without
infringing on the rights of individuals, will be found desirable. In the
Fourth Book =sic--there is none.=, a mode of doing this shall be
attentively taken into consideration.
[end of page #136]
CHAP. VI.
_Of the Interior Causes of Decline, which arise from the Produce of
the Soil becoming unequal to the Sustenance of a luxurious People.--
Of Monopoly_.
It has already been mentioned, and we have seen, in the case of Rome
and Italy, that the country which was sufficient to maintain a certain
population, when the manners of the people were simple, becomes
incapable of doing so, when wealth has introduced luxury.
The case of the Romans, though the most clearly ascertained of any,
and the circumstances the best known, is only in part applicable to an
inquiry into the effects of luxury at the present day. The nature of
luxury, the nature of the wants of man, and the diffusion of that
luxury, its distribution amongst the different classes, are so unlike to
what they were, that the comparison scarcely holds in any single
instance.
A most enormous increase of population (a forced population as it
were) in a small country, together with large tracts of land converted
from agriculture to the purposes of pleasure were the principal causes
why Italy, in latter times, was incapable of supplying itself with corn.
Wherever wealth comes in more easily and in abundance, by other
means than by agriculture, that is to a certain degree neglected. To
cultivate ceases to be an object where it is more easy to purchase. This
certainly is, at all times, and in all places, one of the consequences of
an influx of wealth, from wheresoever it comes, or by whatever means
it is acquired; though, in Italy, it was felt more than perhaps in any
other part of the world. The manner in which wealth comes into a
nation has a great effect on the consumption of produce, owing to the
description of persons into whose hands it first comes. In Rome, the
wealth came into the hands of the great. The slaves and servants,
though more numerous, were, perhaps, fed in the same manner with
the slaves in earlier periods, though probably not with so much
economy. In a manufacturing country, [end of page #137] the greatest
part of the wealth comes first into the hands of the labouring people,
who then live better and consume more of the produce of the earth;
not by eating a greater quantity, but by eating of a different quality.
In every manufacturing or commercial country, wealth displays itself
in general opulence amongst the lower orders, and the means of
supplying that greater consumption is the same as it was in Rome. The
money that arrives from other countries enables the community to
purchase from other countries the deficiency of provisions, and
prevents the evil effects from being felt at the moment.
When, in course of time, there comes to be a difficulty of obtaining
the supply, from the want of produce in the country itself, then the
decline begins; and as no wealth, arising either from conquest,
colonies, or commerce, bears any great proportion to the daily food of
a people, its effect is soon felt in a very ruinous and terrible manner.
England is the greatest country for extensive commerce that ever
existed, yet the amount of the whole of its foreign trade would not do
much more than furnish the people with bread, and certainly not with
all the simple necessaries of life. If, therefore, a country, such as this
is, were unable to furnish itself with the necessaries of life, the whole
balance of trade, now in its favour, would not be sufficient to supply
any considerable deficiency.
The desire of eating animal food, in place of vegetables, is very
general and, amongst a people living by manufactures, will always be
indulged. If the country was fully peopled, before animal food was so
much used; that is, if the population was as great as the vegetable
produce of the country was able to supply; as the same quantity of
ground cannot feed the same number of people with animal food,
there will be a necessity of importing the deficiency.
The change that this produces, when once it begins to operate, is a
most powerful and effectual cause of decline; and, without the
intervention of conquest, or any violent revolution, would of itself be
sufficient to impoverish, in the first instance, and, in the second, to
depopulate a country.
We find every country that was once wealthy, but that has fallen [end
of page #138] into decline, is thinly peopled; and if it were not for the
want of information, from which the cause may be traced, a deficiency
of food might most probably be found to be one of the most efficient.
Flanders, which is one of the most fertile countries in Europe, and has
experienced a partial decline, is probably not near so fully peopled as
it once was. Its present population would not support those armies, or
give it that rank amongst nations which it at one time maintained. It is
true there have been persecutions and emigrations, which must have
reduced the population of the country for a time, but not to an extent
that would account for such a diminution in its numbers, as there is
reason to think has taken place.
Ghent, a town of an amazing size, could, at one time, send out fifty
thousand fighting men. It certainly could not now (that is to say, at the
time the French subdued the country) have furnished one-fourth part
of the number. Ghent is not the only town in this situation, the others
have all fallen off in the same manner. When manufactures declined,
the people did not go to live in the country, for that also is thinly
inhabited, the richness of the soil being taken into consideration.
The peasants of that country lived much better than their French
neighbours; they apparently brought up their children with more ease,
and fed them more fully; but the country was not so populous, in
proportion to its fertility.
In southern climates, where the heat of the sun is great, and vegetation
difficult, unless the crop is of a nature to protect the ground from its
effects, natural grass is never luxuriant; and the cattle are neither so
large nor so fat as in more northerly latitudes. Corn, on the other hand,
which rises to a sufficient height, before the hot season, to protect the
ground from the rays of the sun, is a more profitable crop; and, indeed,
the only one that could (potatoes excepted) support a great population.
In such countries, scarcely any degree of general affluence would
enable the labouring classes to eat animal food. No degree of wealth,
that can well be supposed, would enable the inhabitants of the
southern parts of France, or of Spain, to live on butcher-meat, which,
[end of page #139] if it became to be in general demand, would be
dearer than poultry, or even than game. The absolute necessity of
living on vegetables, or rather the absolute impossibility of contracting
a habit of living on animal food, must, then, in those countries,
counteract the taste, and prevent depopulation being produced by that
cause.--But it is very different with more northerly countries, where it
is almost a matter of indifference, in point of expense, to an individual
who enjoys any degree of affluence, whether he lives on vegetable or
animal food, and where he gives a decided preference to the former.
{115}
It is probable that nature (so admirable in adapting the manners of the
inhabitants to the nature of the country) has made heavy animal food
less congenial to the taste of southern nations than to those of the
north. There is, indeed, reason to believe it is so, but, whether it is or
not, as natural philosophy is not here the study, but political economy,
the fact is, that if southern nations had the same propensity, it would
be impossible to indulge it to an equal extent.
As wealth and power are intimately connected with population, and
depend in a great measure upon it, wherever they are the cause of
introducing a taste that will, in the end, depopulate a country, they
must, in so far, undermine their own support, and bring on decay. This
is a case that applies to all northern nations, and particularly to
Britain; in order, therefore, to treat the subject at full length, it
will be better to enter into the minute examination when we come to
apply the case directly to this country, and seek for a remedy.
---
{115} The proportion between the prices of bread and butcher meat
will help to a conclusion on this subject. The warmer and dryer the
climate, the cheaper bread is in proportion. At Paris, which is a dry,
but not a very warm climate, the proportion, in ordinary times, was as
four to one. A loaf of bread of four pounds, and a pound of meat, were
supposed to be nearly the same price, but the meat was generally the
higher of the two. In England, the proportion (before the late
revolution in prices) was about two to one, and, in Ireland, where the
soil and climate are more moist, and better for cattle, flesh meat was
still cheaper, in proportion. The poverty of the people, indeed,
prevented them from living on animal food, but buttermilk, (an animal
production) and potatoes, a cheaper vegetable, are their chief
sustenance.
-=-
[end of page #140]
Though this cause of depopulation, arising from wealth, increasing the
consumption of food, is peculiar to northern nations, yet there are
others that have a similar effect, that fall more heavily on the
inhabitants of the south.
Rest from labour is, in warm climates, a great propensity, and easily
indulged. In no northern nation could there be found so idle a set of
beings as the Lazzeroni of Naples. If the nations of the north have a
desire to indulge themselves in consuming more, those of the south have
a propensity to be idle, and produce less, the effect of which is in
nearly the same; for, whether they produce any thing or not, they must
consume something. The same listlessness and desire of rest, that
produces idleness and beggary amongst the poor, makes the rich
inclined to have a great retinue of servants, and, as those servants are
idly inclined, they serve for low wages, on condition of having but
light work to perform. Thus it is that the fertility of the soil, and the
other natural advantages are destroyed by the disposition of the
inhabitants.
It does not appear, however, that this disposition was indulged or
encouraged to any hurtful extent, until wealth had vitiated the original
manners of the inhabitants. The Egyptians, Greeks, and Romans, all of
them performed works requiring great exertion. They encouraged
industry and arts, and became great, wealthy, and populous; but, when
once they fell to decline, the same fate attended the descendants of
them all. {116}
Of all the countries that were once great, and have fallen to decay,
Italy has retained its population the best; but, for this, there is an
evident cause to be found in the natural fertility of the country, and the
resource still drawn from foreigners, who have never ceased to visit
that once famous seat of arts and military glory.
The number of horses and of domestic animals maintained by the
---
{116} After the Augustan age, the populace of Rome seem to have
degenerated with great rapidity, as the donations of corn clearly prove.
Had the tributary countries not furnished the means of providing food,
the Goths would have been saved the trouble of sacking the city, as
the people must have perished for want.
-=-
[end of page #141]
fruits of the earth, but producing nothing, as they increase, in every
country where wealth prevails, may be considered as a cause of
depopulation, confined to no part of the world. Thus we find either the
same cause acting throughout, or different causes producing the same
effect in different countries; thereby reducing them all much more
nearly to an equality than we could at first imagine.
It has been observed, that when wealth comes to the working orders,
and makes them indulge in animal food, it produces a greater effect,
with respect to the consumption of produce, than if the same wealth
came into the hands of the rich; this is, however, in some degree,
compensated by their not keeping pleasure horses, the greatest of all
consumers of the produce of the earth. One horse will consume as
much as a family of four persons living on corn, and the ordinary
vegetables used in England; and as much as two families, living as
they do in Ireland or Scotland, on oat-meal, milk, and potatoes.
As we find depopulation one of the effects that is universally
occasioned by decline, it must originate in some cause equally
general, and that cause must be one attending the state of wealth and
greatness, for it does not appear to be a necessary effect of decline.
We can very easily conceive a people, degraded and numerous,
reduced to live poorly, as they do in Naples, Cairo, and some other
particular spots: but taking the whole of those countries together, we
find evident marks of a falling off in population; and we find it not
progressive, but of long standing. Those countries seem to have found
a new maximum of population, far inferior to the former standard,
immediately after they ceased to be wealthy and flourishing.
Perhaps it was from this cause that the idea of sumptuary laws
originated; for though, in some cases, the pride of being distinguished
might occasion the sovereign to enact, or the higher orders of society
to solicit them, yet they were always considered as tending to prevent
ruinous extravagance. When states become very wealthy, they may
consider such regulations as ridiculous, and perhaps they may neither
be necessary nor effectual; yet, nevertheless, there must be some cause
for the general opinion of their utility. Though it is not the fashion of
the present times to hold an opinion as good be-[end of page #142]
cause it is general, and its prevalence in ignorant times is considered
as a mark of its being erroneous; yet, observation and common sense
have never been wanting at any period, and it is from those sources
that such maxims and opinions arise. Any man who had travelled, first
through Italy and Spain, and then through England and America,
would be very likely to invent sumptuary laws, if he had never heard
of such a thing before. In the application of sumptuary laws, as a
device, for preventing decline, the traveller might, perhaps, be very
whimsical; sometimes forbidding what would never be attempted; but
there would be nothing at all ridiculous in his general intention. {117}
It will certainly be found that, in all the causes of the decay of nations,
the increase of consumption, and decrease of production, takes the
greatest variety of forms, and disguises itself the most; it is,
therefore, one that is much to be guarded against, particularly as its
effects seem to be difficult to remedy.
As the manner in which a country acquires riches has a considerable
influence on the habits of the people, a country acquiring riches by
conquest, or colonies, must naturally expend it in splendour and
magnificence.
Merchants are less splendid than conquerors and planters. Their
ostentation is of a different sort; and, as the fortunes made in that way
are rather more equally divided, they cannot launch out quite so far.
Besides, merchants are seldom entirely independent of credit and
industry; at least, when acquiring their fortunes they were not so; and,
therefore, whether the necessity continues or not, the habit, once
contracted, is never quite effaced.
Manufacturers, again, are still less splendid than merchants. With
them, the gifts of fortune are more equally divided than with either of
the other three, and they seldom arrive at more than an ordinary
degree of affluence; which affords the means of gratifying personal
wants, of living with hospitality, ease, and comfort.
---
{117} If, for example, it were a law at Manchester or Birmingham,
that no man should keep above fifty servants in livery, or burn more
than three-dozen wax-lights at a time, it would be like mockery, and
would be perfectly useless; at Rome it would be very useful.
-=-
[end of page #143]
The greatest part of manufacturing wealth, and that, indeed, is divided
with a pretty equal hand, is that which goes to the working people,
who spend nearly the whole on personal enjoyment.
The quantity of food that an individual may consume is nearly limited
by nature; but the extent of ground on which that food grows depends
chiefly on the quality. Thus, for example, it will require nearly ten
times the number of acres to maintain one hundred people, who live
on animal food, that =sic= it would require to supply the same persons
living on vegetables; and, as wealth increases, animal food always
obtains the preference. This is evident, from so many proofs, that it
scarcely needs illustration. In London, which is the most wealthy part
of England, there is more animal food consumed than in any other
part, in proportion to the numbers; and, in the country there is always
less than in the towns. In the country, and in the towns of England,
there is more than in any proportional part of Scotland, or in France,
or, indeed, any part of Europe. Expensive as animal food is here, still
it bears less proportion to the wages of labour, or the general wealth,
than in any other country. In every country, as riches have increased,
the consumption of the produce of the earth has augmented.
The Dutch seem to have been well aware of the danger of wealth
making the people consume too much. A man in moderate
circumstances loses his credit there, who roasts his meat instead of
boiling it. It is reckoned wastefulness, and, as such, is the occasion of
confidence being withdrawn from him: it has nearly as bad an effect
on a man's credit, as if he were seen coming from a gaming-house.
It will, perhaps, be said, that the parsimony of the Dutch is ridiculous,
but we ought not to attribute this merely to parsimony, but to a feeling
similar to what we have very properly in England when we see bread
wasted. It arises from a feeling of the general want, not of the
particular loss, which is totally a different thing. If a man give away
imprudently, that loss is to himself, not to the community. As there
cannot be givers without receivers it is a change of hands, but there
ends the matter. A habit of wasting is another [end of page #144]
thing, it is a general loss, and, therefore, hurts the community at large
as well as the individual.
When this augmented consumption takes place, to any great extent, it
is the infallible cause of depopulation. How nearly depopulation and
decline are connected with each other is very easily and well
understood; indeed, it is impossible not to see their intimate
connection. {118}
While the exports of a country amount to a great sum, a few millions
can be spared for the importation of provisions, without any great
difficulty; but the evil may increase imperceptibly, till it becomes
impossible to remedy it. The distress that must be occasioned, in such
a case, is beyond the power of calculation; for though, in times of
plenty, animal food is preferred, whenever there comes any thing like
want, that can only be supplied by corn, and there is no wealth
sufficient, in any country, to procure that for a number of years, to any
great extent. {119}
It is calculated, by the author of the notes on Dr. Smith's Inquiry into
the Wealth of Nations, that, if the supply of corn were to fall short,
one-fourth part, in England, for a number of years running, there
would be no means of finding either corn to buy, ships to transport it,
or money to pay for it, without totally deranging the commerce of the
country.
In every country there are a number of persons who can afford to
---
{118} Till within these twelve or fourteen years, England always was
able to export some grain; but now the demand for importation is great
and regular. It has had a vast influence on the balance of trade, which,
though it has been great some years, has not, upon the whole, been
equal to what it was previous to the American war, when the whole
amount of foreign commerce was not one-half of what it has been for
these last ten years.
{119} If it could be done, it would bring on poverty; but, as the excess
of crops over the consumption is not, in any nation, equal to one-tenth
of its whole revenue; and, as the expense of eatables amount to nearly
one-half, the wealth of a nation would soon be destroyed, if it were
possible to produce from other nations a supply. The calculation
would be nearly as under for England, putting the population at nine
millions.
In ordinary times, nine millions of people living on bread, potatoes,
&c. would require about four millions of acres; but nine millions,
living on animal food, will require thirty-six millions of acres.
-=-
[end of page #145]
live in a more expensive way than the rest; perhaps, this may be
reckoned at one-fourth, but, in countries that are poor, even that fourth
cannot afford to eat animal food. If, however, a country becomes
sufficiently rich for one-sixth to live chiefly on animal food, and the
other five-sixths to live one day in the week on that food, the effect
will be as if one-third lived on it constantly, which would require two-
thirds more territory than when the whole lived on bread.
Those who think that such matters find their own level, and regulate
themselves, may be right in the long run, for so they indeed do. But
how? When poverty and want came, no doubt the consumption of
flesh-meat would be diminished; when the country had no means of
supplying itself as it did when it was rich, famine would play its part
in becoming one of the regulators; but, before this regulation could be
effected, the evil we wish to prevent would have taken place. The
country would be depopulated and ruined. We must, therefore, in
trying to avert the decline of a nation, not set any thing down for the
counteracting and adjusting power, which is known sometimes to
interfere so very advantageously in the affairs of men. Though it is true
that it does interfere, it is in all cases of this sort too late, it is
an effect of the cause which we wish to avoid; we can only look to it here
for stopping the career in process of time, but, never for preventing it.
We know that the extravagance of an individual impairs his fortune,
and, that the diminution of means will, at length, counteract the
extravagance; but, then it will do so when it is too late, and after he is
ruined. Wastefulness may be stopped, but it cannot possibly stop
itself, as the diminution of means is the cause of the extravagance
ceasing, and itself is an effect of the prior existence of the
extravagance.
Regarding men merely then as producing and consuming, (the
proportion between which regulates the wealth of a nation,) we find
that, in their own persons, there is a rooted tendency to bring on the
decline. But we shall farther find that not only do people in wealthy
and luxurious nations produce less and consume more than in nations
less advanced, but they increase the number of unproductive
labourers, all of whom consume without producing. They also main-
[end of page #146] tain animals who consume, but do nothing towards
production. {120} No country, in which the people live much upon
animal food, can be well peopled. Two hundred persons to a square
mile of country is nearly the highest population of any nation in
Europe, that is, as near as may be, three acres and a quarter to each
person; but, on an average, even in France, there are more than four
acres to each.
Supposing that one-half of the land is cultivated, then that gives about
two acres to each person.
Supposing, again, that one-third of this is consumed by horses or other
animals who labour; or, supposing that they do not serve for the food
of man, then there will be nearly about one acre and a quarter for the
maintenance of each person.
It will, however, only require half an acre to one person, if they all
lived on field vegetables; {121} and, if they all lived on fresh meat, it
would require four acres; the natural conclusion is, that one-fourth live
on animal food, and the other three-fourths on vegetables, or what is
the same thing, that the proportions of the two sorts of food are as one
to three.
According to the proportion of the prices in France, of four to one, it
would certainly cost double the price to live on animal food that =sic=
it does on vegetables; that is to say, if the only vegetable was bread,
supposing which is the case, that one pound of meat supplies the place
of two pounds of bread, as it certainly does. In England, where beef is
only twice the price of bread, {122} it is almost a matter of
indifference as to price, whether a working man lives on vegetables or
animal food. To the taste and the stomach, however, it is no matter of
indifference, the animal food, therefore, is preferred; but if it were a
matter of some importance, in point of economy, that would not
prevent the people of a country, flourishing by manufactures, from
---
{120} One good horse well kept, whether for pleasure or labour (it has
already been said) will consume nearly as much as a moderate family.
{121} Vegetables raised in the kitchen-garden would go vastly
further, but this is a rough average, the subject neither admitting of,
nor requiring accurate investigation.
{122} That is about the usual proportion, though about a year ago it
was four times as much in France.
-=-
[end of page #147]
eating it, and thereby at length sinking to a lower degree of population
than a poor country living on vegetable food.
In all nations getting wealthy this is a consideration, but most so when
the wealth is acquired by manufactures, when the lower and numerous
class have an opportunity of gratifying themselves by indulging in the
species of food which they find the most agreeable.
This, like the other changes of manners, of which it is only a part, is a
natural consequence of a propensity inherent in human nature; it
cannot, therefore, be prevented or done away, though it may, to a
certain degree, be counteracted. The manner of counteracting it not
being a general manner, but depending on circumstances, shall be
treated of when investigating the increasing danger, arising from this
cause, in the English nation.
It remains at present for us to examine another evil attendant on the
inadequacy of the soil to supply the consumption of a country.
One of the most alarming circumstances attendant on this situation of
things is, that provisions become an object of monopoly, and the most
dangerous and destructive of all objects. The law has interfered in
regulating the interest of money, but not in the rent of houses or of
other use of property. Circumstances may occur, in which the
necessity of procuring a loan of money is so great, as to induce the
borrower to engage to pay an interest that would be ruinous to
himself, and that would grant the lender the means of extortion, or of
obtaining exorbitant profit. The same interference would be just as
reasonable, wherever the same sort of necessity, by existing, puts one
man in the power of another. This is the case with every necessary
article of provision, which, indeed, may be considered as all one
article, for the price of one is connected with the prices of all the
others.
Provisions, indeed, are, in general, articles that cannot be preserved
for any very great length of time; but then, again, they are articles of a
nature that the consumers must have within a limited time also, and
for which they are inclined to give an exorbitant price rather than not
to have. The interference of the law between a man and the use of his
property, ought to be as seldom as possible; but it has never been
maintained as a general principle, that it ought never to interfere. [end
of page #148] If it is at any time, or in any case, right to interfere
legally, the question of when it is to be done becomes merely one of
expediency, one of circumstance, but not one that admits of a general
decision.
A writer of great (and deservedly great) reputation has said so much
on this subject, and treated it in a way that both reason and experience
prove to be wrong, that it is become indispensably necessary to argue
the point. {123} Monopoly, regrating, and forestalling, which two last
are only particular modes of monopolizing, have been considered as
chimeras, as imaginary practices that have never existed, and that
cannot possibly exist. They have been likewise assimilated to
witchcraft, an ideal belief, arising in the times of ignorance. It is now
become the creed of legislators and ministers, that trade should be left
to regulate itself, that monopoly cannot exist.
With all the respect justly due to the learned writer who advanced so
bold an opinion, it may be asked, since many instances occur, both in
sacred and profane history, in ancient times, and in our own days, of
provisions, on particular occasions, selling at one hundred times their
natural price, (and, every price above the natural one, is called a
monopoly price,) how can it be asserted that they may not become an
object of monopoly in a more general way, though not at so exorbitant
a price?
How, it may be asked, can this thing, that has so often occurred in an
extreme degree, a thing that is allowed to be possible, be compared
with the miraculous effect of witchcraft, of the existence of which
there does not appear to be one authentic record? The one, at all
events, a natural, and the other, a supernatural effect. How are those to
be admitted in fair comparison?
If we know that, at the siege of Mantua, the provisions rose to one
hundred times their usual price, we may believe the same thing
possible, at the siege of Jerusalem, two thousand years ago, and at the
siege of Leyden, or at that of Paris. If we know that a guinea is given
for a
---
{123} Dr. Smith, in his Inquiry into the Nature and Causes of the
Wealth of Nations. The author of the notes, and continuation, has,
indeed, answered his arguments; but that does not render it less
necessary to do so here.
-=-
[end of page #149]
bad dinner at an inn, which is not worth a shilling, merely because
some particular circumstance has drawn more people together than
can be provided for; and, because hunger admits not patiently of
delay, can we dispute the inclination to extortion on the one hand, and
the disposition to submit to it on the other?
If that is admitted, the interference of the law is allowable on the same
principle on which it regulates the interest of money, though not to the
same extent; that is, it is allowable, in particular instances, where the
effects are similar, but not in all instances, because, in all instances,
they are not similar. {124}
The rate of provisions is then liable, on particular occasions, to rise to
a monopoly price, such as that of those rare productions of nature, the
quantity of which cannot be increased, whatever the demand may be.
{125} It follows, as an evident consequence, that the price increases
as the scarcity augments; but, if it only did so, the evil would not be
so great as it really is. In the first place, the anxiety attendant on
the risk of wanting so necessary an article creates a greater competition
amongst buyers than the degree of scarcity would occasion in an article
of less necessity and importance. In a wealthy nation, the evil is
still farther increased, by two other causes.
The high price which one part of the society is able to afford, and the
wealth of those who sell, enables them to keep back the provisions
from the market; the first cause operates in all countries nearly alike,
for, the anxiety to have food is nearly equal all the world over. But the
last two operate more or less, according to the wealth of the buyers
and of the sellers, as the eagerness and ability of the former to
purchase, and the interest and ability of the latter to keep back from
selling, are regulated by the degree of wealth in a country. {126}
---
{124} The law concerning money is a general law, because, at all
times, there are some individuals in want of it, and would be liable to
grant exorbitant interest. It is not so with provisions, for, it is only
occasionally that they cannot be had at reasonable prices.
{125} Dr. Smith divides produce into three different sorts; the two
first are such as can be only produced in a certain quantity, whatever
the demand may be; and such as can be produced always in sufficient
quantity.
{126} This was proved by what happened in Paris in 1789, and in
England in 1790. The [end of page #150] want in Paris was so real
that there often was not, in that great city, bread, and materials to
make it, more than sufficient for twenty-four hours: yet it never rose
to above double the usual price, or twopence English the pound, (that
is, sixteen sols for the four-pound loaf,) although the people were
obliged to wait from six in the morning till two or three in the
afternoon, before they could get a loaf a piece, and more they were not
permitted to purchase or carry away. In London, where bread could
always be had in plenty, for money, it rose to more than three times
the usual price, (one and tenpence the quartern loaf,) yet bread is a
much more necessary article to the poor in Paris than in London. But
the case was, in London, the people are richer, and, in each place, it
rose as high as the people were found able to pay.
-=-
When the necessaries of life become dear, and arrive at a monopoly-
price, then all taxes and other burthens laid on the people become a
matter comparatively of little importance. In England, where the taxes
are higher than in any nation in the world, they do not come on the
poor to above three pounds a head; {127} and, of those, at least one-
half can be avoided by a little self-denial. But, when the provisions
increase one-half in price, it amounts to at least four pounds a head to
each person; so that the effect falls on the population of the country,
with a most extraordinary degree of severity.
But, great as this evil is, it has, by the circumstances and nature of
things, a tendency to increase the very cause in which it originates.
Though the highness of price diminishes the consumption of victuals
in general, it diminishes the consumption of vegetable food, or bread,
more than it does that of animal food. Though all sorts of eatables rise
in price, in times of scarcity, yet bread, being the article that excites
the greatest anxiety, rises higher in proportion than the others. This
affords an encouragement to gratify the propensity for eating animal
food; and this propensity is encouraged by an absurd and mistaken
policy, by which (or perhaps rather an affectation of policy) economy
in bread is prescribed, and not in other food; so that when people
devour animal food, and increase the evil, they think they are most
patriotically and humanely diminishing it. {128}
---
{127} The whole taxes in this country do not amount to above four
pounds a head, of which one-third is paid entirely by those wealthy, or
at least affluent; it is, then, putting the share paid by the labouring
body very high to put it at three pounds each person.
{128} Both in France and England, during the last scarcity, the use of
every other sort of [end of page #151] food was recommended, to save
the consumption of bread-corn. Potatoes are the only substitute that
tended really to relieve the distress; all others, and, in particular,
animal food, had an effect in augmenting it.
-=-
The danger of wanting food, though very formidable, does not act so
instantaneously as to serve as an excuse for want of reflection, like an
alarm of fire, where the anxiety to escape sometimes prevents the
possibility of doing so; yet the fact is, that all the measures that have
generally been taken, in times of scarcity, have tended rather to
increase than to diminish the evil.
In monopoly, a sort of combination is supposed to exist between the
sellers of an article, when the article does not happen to be all in the
hands of one person, or one body of persons. But combinations are of
various sorts; there are express combinations entered into by people
having the same interest for a particular purpose. Those are done by a
sort of an agreement, when the interest of the individual and of the
body are the same. Such combinations are generally effectual, {129}
but unlawful. There are combinations not less effectual, that arise
merely from circulating intelligence of prices, and certain
circumstances on which prices are known to depend, amongst all
those concerned, who immediately know how to act in unison.--This
is not unlawful.
An elegant historian has said that there was a time when the sovereign
pontiff, like the leader of a band of musicians, could regulate all the
clergy in Europe, so that the same tones should proceed from all the
pulpits on the same day. The list of prices, at a great corn-market, has
the same effect on the minds of all the sellers within a certain distance.
Intelligence now flies so swift that there is no interval of uncertainty;
the whole of the dealers know how to act, according to circumstances,
and they are all led to act nearly as if they were in one single body.
Like gamesters, who have won a great deal, rather than hasten to sell,
even when they fear that prices may fall, they keep back their stock,
and risk to lose something of what they have gained, by continuing to
speculate on the agreeable and winning chance by which they have
already profited.
---
{129} There are sometimes combinations which it is the interest of a
whole body to preserve, but of each individual to break, if he can with
impunity; such generally soon fall to the ground.
-=-
[end of page #152]
The dealers in an article of ready sale, or for which there is a certain
demand, have never any difficulty, in a wealthy country, of procuring
money to make purchases, or to enable them to keep their stock; and
the gains are so immense that there is no speculation equally
attractive.
As the rent of land, in England, is reckoned at twenty-five millions a
year; and it is reckoned that, in a common year, the rent is worth one-
third of the produce; it follows that, of all sorts of produce of land, the
value is seventy-five millions. But, in the year 1799, when the prices
were more than doubled, the value was one hundred and fifty millions,
of which the landlord received (as usual) twenty-five to his share,
leaving for the farmer, &c. one hundred and twenty-five, instead of
fifty, the usual sum. As the wages of servants remained the same, and,
in an ordinary year, would amount to one-third of the rent, eight
millions went for that, leaving one-hundred and seventeen millions, in
place of forty-two, the usual residue. Two-thirds of the value of rent,
or sixteen millions, is, in an ordinary year, supposed to go for seed,
the maintenance of cattle, and labourers; so that, in that year, the
portion so consumed must be estimated at double value, or thirty-four
millions, which, deducted from one hundred and seventeen, leaves
eighty-three for the farmers, in place of twenty-five, in an ordinary
year: so that, when the price doubles, the farmers =sic= profit does
more than triple. In the year 1799, the farmers were known to have the
profit of four ordinary years, supposing that they had been the actual
sellers in the market. The fact was otherwise no doubt, with regard to
those who pocketed the profit, which went in part only to farmers, and
the rest went to the monopolists, dealers, regraters, forestallers, &c.
who advanced money to keep up the price. To the public who paid,
the matter is the same, and, to the business itself, there is little
difference as to who profited, or who found capital; for, as they shared
the profit amongst them, and as they received three times as much as
in an ordinary year, they could, out of the sales of the first four or five
months, make all the payments [end of page #153] for the whole year
to the landlord; and, therefore, could have the means of keeping the
remainder, just as long as they thought proper.
Thus, then, while there is any degree of scarcity, the provisions of a
country are at a monopoly-price; and the dealers act, though
individually, as if they enjoyed one general monopoly. {130}
Before leaving his important subject, it is necessary to observe, that,
though dealers in provisions, in times of any degree of scarcity, that is,
when there is not quite enough fully to supply the consumption of the
country, act, in keeping up prices, as if they had an exclusive privilege
for monopoly, yet that is the only cases =sic= in which they do so. A
single monopolizer can diminish the quantity, and perhaps destroy a
part of it with advantage to himself. Thus the Dutch East India
company were said to have done with the spices. {131} But the
individual dealer, though he is interested in a general high price and
monopoly, is still more interested in selling as much as he can; and the
higher the price, the more careful he is not to waste or consume more
than he can help. In this respect, the monopoly of the many is not half
so hurtful as the individual monopoly. This proves that all the vulgar
errors, which occasion reports of farmers and dealers destroying their
corn, are not only without foundation, but would produce an effect
quite contrary to the avaricious principle, by which such men are
considered as being governed. {132}
---
{130} There is one moment only when they do not, that is, when they
find out, for certain, that prices are going to fall. There, for a moment,
individual interest, and general interest are opposite, and they hasten
to sell, and to reduce the price too much. But even this does not
relieve the public; for, though it makes the reduction very rapid for a
time, and may sometimes bring it below the level, it quickly rises
again and finishes when the panic amongst the dealers is over, by
remaining higher than it ought to be.
{131} If diminishing the quantity one-quarter rises =sic= the price
one-half, then the monopolist gains, if he possesses the whole market;
but the individual dealer, if he were to burn his whole stock, would
not diminish the quantity in the country one-thousandth part, and
therefore make no sensible difference.
{132} Both in London and Paris, the reports of this sort, and, (making
a little allowance for the language and nature of the people,)
exceedingly similar in nature and tendency, prevailed during the
scarcity of 1789 and 1799.
-=-
[end of page #154]
Monopoly of this sort, by raising the prices of the necessaries of life,
in the end, augments the prices of labour, the rent of land, and the
taxes of a country. We have already examined the tendency of all this;
it is only necessary to observe that the rise in prices, or depreciation of
money, which other causes bring on by degrees, this brings on
violently and suddenly. {133} This cause will always exist in a
country that cannot provide enough for its own subsistence.
How far this may go it is not easy to say; for if it is clear that the
farmer, by double prices, gets eighty-three pounds in place of twenty-
five, he can certainly afford to give his landlord something more. If he
gave him double the usual rent, it would still leave more than double
for himself. {134}
Of all the causes, then, that hasten the crisis of a country, none is
equal to that of the produce becoming unequal to the maintenance of
the inhabitants; for it is only in that case that the effects of monopoly
are to be dreaded.
In the case of animal food becoming too much in request, there is a
remedy which may be easily applied; of which it will be our purpose
to speak, in treating of the application of the present inquiry to the
advantage of the British dominions.
---
{133} The few years of dearth altered wages and rent more than had
been known for half a century before. Wages rose more, from 1790 to
1802, than they had done from 1740 to 1790.
{134} As the usual rent was twenty-five, and the usual profit twenty-
five, the landlord and tenant had fifty to divide, at ordinary prices; but,
at double prices, they had eighty-three added to twenty-five, or one
hundred and seven to divide: so that, if the farmer gave fifty, that is,
double, he would still have fifty-seven to himself, which is more than
double, by nearly one-third over and above.
No allowance has been made in this calculation for the diminution in
quantity. The reason is, that was comparatively very small; increased
consumption, rather than deficiency of produce, being the cause.
Besides, we only stated the rise as being double the usual price,
whereas, it was three times greater. [end of page #155]
-=-
CHAP. VII.
_Of the Increase of the Poor, as general Affluence becomes greater.--
Of Children left unprovided for.--Of their Division into two Classes--
Those that can labour more or less, and those that can do no Labour_.
In the career of wealth, in its early state, when individual industry is
almost without any aid from capital, men are as nearly on an equality
as the nature of things can admit. But, in proportion as capital comes
in to the aid of industry, that equality dies away, and men, who have
nothing but industry, lose their means of exerting it with advantage,
some become then incapable of maintaining their rank in society
altogether.
At the same time that this is taking place, articles of every sort, that
are necessary for the existence of men, are becoming dearer. As some
ranks of society have been described as bringing up their children not
to know the existence of necessity, others, who are depressed below
the natural situation of men, are bringing them up to feel the extreme
pressure of want.
There is no situation of things in which a man, with natural strength,
and a very slender capacity, may not gain sufficient to maintain
himself, if he will be industrious; but, in a wealthy country, numbers
are so pressed upon by penury, in their younger years, that neither the
powers of their body, nor of their mind, arrive at maturity.
Accustomed, from an early age, to depend rather upon chance, or
charity, for existence, than upon industry, or energy of their own, they
neither know the value of labour, nor are they accustomed to look to it
for a supply to their wants.
Whilst the foundation of idleness and poverty is laid in, for one part of
a nation, from the affluence of their parents, another portion seems as
if it were chained down to misery, from the indigence in which they
were born and brought up. [end of page #156]
The depressed and degraded populace of great and wealthy cities are
not the accidental victims of misfortune; they are born to its hard
inheritance, and their numbers contaminate more, who, were it not for
their own misconduct and imprudence, might have shared a better lot.
When nations increase in wealth, the fate of individuals ceases to
become an object of attention; and, of all the animals that exist, and
are capable of labour, the least value is set upon the human species.
{135} Like individuals who rise to wealth, and forget their origin,
societies forget the first foundation of all wealth, happiness, and
power. That individuals should do so is not to be wondered at. They
never saw society in an infant state; nor is it the business of individual
citizens to occupy themselves with public affairs; but those who are
intrusted with their management, and whose business is to know the
original sources of prosperity, ought to attend to and counteract this
growing evil.
When the Romans were poor, the people depended on exertion, and
they enjoyed plenty; but when Lucullus and other citizens were
squandering millions, at a single banquet, the people were clamouring
for bread. While the person of a Roman lady was ornamented with the
wealth of a province, the multitude were covered with rags, and
depressed with misery. It would have been no hard matter, then, to
have foretold the fate of Rome. The natural order of things was
deranged to too violent an extreme to be of long duration. The state
was become like a wall that had declined from the perpendicular,
while age was every day weakening the cement, by which it was held
together, and though of the time and hour of destruction no man knew,
the event was certain.
It would, at first sight, appear that great cities are the only places in
which misery of this description arises; but that is not the case.
---
{135} It was never heard of, that a young horse, or any useful animal
of the brute creation, was left to die with hunger in a land of plenty;
but it happens to many of the human race, because there is no
provision made, by which those who furnish them food may be repaid
by their labour, which would be a very easy matter to adjust, if a little
attention were paid to the subject.
-=-
[end of page #157]
Great cities are the refuge of the miserable, who, perhaps, find it in
some shapes augmented, by a residence in so friendless an asylum; but
there they avoid shame, they see not the faces that have smiled upon
them in better days; they are more at ease amongst strangers, and they
are kept in countenance by companions in penury and want. {136}
In every wealthy nation, the rich shun the view of wretchedness,
which is attended with a silent reproach. Those who have property,
mistrust the honesty, and blame the conduct of those who have none.
In this state of things, the country affords no retreat nor residence, and
want and wretchedness find the evils of a crowded society, where they
pass unnoticed, much more tolerable.
In most countries, the law has taken precautions to punish, or to stop
the evil in the individual; but in no great and wealthy country has it
been thought of sufficient importance to take effectual means to
prevent it.
In small states, when society is new, and under some absolute
sovereigns, (remarkable for their penetration, genius, and love of their
people,) a momentary stop has been put to this career of misery; but,
in the first place, there has been no such monarch in any wealthy
country; and, in the second, as soon as power fell into other hands, the
progress has begun again where it left off.
One great cause of the increase of mendicity is the increase of
unproductive labourers, as a state becomes more wealthy, who, dying
before their children are able to provide for themselves, increase the
number of the indigent. Men living by active industry naturally marry
at an early age; menial servants, revenue officers, and all those who
administer to the gratifications of a wealthy and luxurious people,
marry later in life; and besides their not having an industrious example
to set before their children, are torn from them sooner, by the course
of things.
---
{136} If one of the brute creation is in want, it will supply that where
it is most easily to be had, physical difficulty is the only one it knows;
bodily pain the only one it feels. But men are different, they often
undergo great want amongst strangers, to avoid more insufferable
feelings amongst friends.
-=-
[end of page #158]
It has been noticed, that, in every society, as wealth increases
hospitality dies away. And those good offices interchanged between
man and man, to which life owes many of its comforts in a less
advanced state of society, and which protect individuals from the
frowns of fortune, gradually disappear. The social feelings become
less active, and men turn selfish and interested, thinking for
themselves, and careless for the community; while, on the other hand,
the causes for poverty increase; on the other, the means of relief are
misapplied, neglected, or squandered away. The funds that ought to be
administered with disinteredness and integrity are committed to the
hands of men who live on the general misfortune, and thus the
wretched, who are relieved, are not fairly treated, while the public,
that is burthened with their misfortunes, is loaded far beyond its
proper degree.
The population of a country is diminished in a double ratio as the poor
increases: they create nothing, but they consume; and if a country sees
one-tenth of its population living on charity, it is equivalent at least to
seeing one-seventh diminished in numbers altogether.
Most sorts of labour require those employed in it to have some capital,
such as decent clothes, or tools, or money to live upon till wages are
due. Little as that capital is, yet thousands are reduced to absolute
beggary for want of it; their industry finding no means of exertion. A
man becomes dependant =sic= on charity for existence; and, though
able to work, eats the bread of idleness, and that without being in
fault.
The number of persons absolutely unable to labour is nearly the same
in every country, and is not much augmented by its wealth; so that if
there were, as there easily might be, always employment for those
who would otherwise be entitled to relief, and if they were allowed a
fair price for their labour, they would then cease either to be a burthen
to themselves or to the public.
Little coercion would, in this case, be necessary. A few proper
regulations, to prevent theft and losses, would be all that could be
wanted with those who could labour; and those who could not, being
few in number, would be provided for in a better manner than when
[end of page #159] they can be, where their portion is shared with
those who are able to procure for themselves an existence.
We must by no means look for relief, in cases of this sort, from
difficult or intricate management and regulation. If we look at the
nature of things, it points out the way.
Those that cannot labour are the only persons who ought to be a
burthen on the public; and they are the only ones that would be so, if
the matters were properly regulated and attended to. As it is in most
countries, there are many who cannot get work to do, and those are
provided for in different ways, but always at the expense of the public.
Sometimes it is by a regular assessment, sometimes by theft and
depredation, sometimes by individual charity, or those other means to
which a man has recourse before he will absolutely starve for want.
Those who, from philanthropy, are for relieving all, soon find
themselves deceived, and unable to proceed. Those who, disgusted
with the vices of a few, consider them all as equally culpable are much
to blame. Surely, the individual case of a fellow-creature in misfortune
is worth attending to; and he must be ignorant indeed who cannot, in
most instances, avoid deception. [end of page #160]
CHAP. VIII.
_Of the Tendency of Capital and Industry to leave a wealthy Country,
and of the Depreciation of Money in agricultural and commercial
Countries_.
As the increase of capital in every country is the consequence of
former productive industry, so also is it the support of future exertion.
When the capital of a country has become sufficient for all the
employment that can be procured for it, the first effect is the lowering
of interest, which sinks down under the rate appointed by law, and
under the rate at which it is lent out at in other countries.
When capital is not in sufficient quantity, those who want to borrow
are more numerous than those who have money to lend; then the
competition is amongst the borrowers to obtain the preference, and
they all give as high an interest as the law allows, and would give
more if they could avoid the penalty, which, in all countries, has been
attached to accepting more than the regulated sum; a sum regulated
merely to prevent the effect of competition, which might induce
people to give more than in the end they would find they could afford
to pay.
When capital becomes over abundant, the very reverse takes place; the
lenders become rivals, and offer to lend at an under rate of interest.
The first effect of this is, that people who were but scantily supplied
with capital before borrow, and carry on business more at ease, so that
more capital is employed in business, and new employments are found
out for capital.
The usual employments for a superabundant capital are improving
lands, building houses, erecting machines, digging canals, &c. for the
use of trade; and finally, giving longer credit to merchants in other
countries, {137} as well as to those who are running in debt in their
own. The stock on hand in manufactured goods increases something
also. But when all these have taken place, to as great an extent as
wanted, then the money begins to flow into other countries. By
degrees, more money is sent away than should go, and the persons
who are the proprietors of it frequently follow.
If the capital that leaves a country were only that which cannot find
employment in it, the harm would not be great, though it would tend
to enrich other countries, and bring them nearer a level. But that is not
the case, the advantage of lending money abroad, if regularly paid at a
higher interest than can be obtained at home, induces people to draw
their money from trade, and vest it in the hands of foreigners. The
Venetians, the Genoese, the Dutch, the Hanseatic Towns, and the
cities of Flanders, did this; and the capital, which, when employed at
home, formerly maintained perhaps one hundred people in affluence
and industry, only supported one single family living in indolence and
splendid penury. {138}
After being in possession of money for a considerable time, men
prefer a certain employment at a low interest to one attended with risk,
even where the interest is higher; and when great sums have been got
by trade, those who have got them retire and live on the interest,
which men, who have only gained a small capital cannot do.
There are many other circumstances, besides the abundance of capital,
that tend to carry it away from a wealthy country. The depreciation of
money that takes place, in every country that grows
---
{137} As the subject is here treated in the general way, applicable to
all nations, the employment found by national debt, and the funds
rising is not taken into account, as it will be noticed in the case of
England. When money is plenty, all individuals in trade give longer
credit; but this employs little more capital, when they give it to each
other it employs no more, but when to consumers it does.
{138} The manner in which those families live is peculiar to
themselves; great shew with great economy, and without the smallest
spark of love, either for their fellow-citizens or their country.
-=-
[end of page #162]
rich, falls nearly all on the lender at interest, {139} who, as he cannot
bring back things to their former value, seeks enjoyment in another
country, and obtains, by change of place, what he lost by lapse of
time.
The weight of taxes is another cause that drives capital from wealthy
to poorer countries; and last of all, in case of anxiety, or of mistrust,
the capitalists are generally the first to emigrate. [{140}] Anxiety and
mistrust are periodical amongst a wealthy people.
As the burthens sustained by a people in prosperity are generally
great, in proportion to their capital and industry, it is clear, that when
capital and industry diminish, the burthens, (which do not admit of
being diminished in the same proportion,) fall more heavily on those
who remain; this increased cause produces, naturally, an increased
effect. Thus, like a falling column, the weight increases, and the
momentum becomes irresistible.
It is then that necessity, the spur to industry in new and rising nations,
(that spur which taxes and rent continue to excite, for the good of
mankind, for a certain period,) begins to crush what it had raised, and
to stab where it formerly stimulated. Then it is that the money-lenders,
who, at first, sent off their capital, having ceased to be engaged in
trade, withdraw, by degrees, and rather content themselves with a
diminished income in another country, than struggle with the
difficulties they find they have to encounter in their own.
---
{139} Money lent out at interest loses, money laid out in purchases
gains, in a country that is advancing in riches.
If a man, who had 2000 L. thirty years ago, had laid out 1000 L. at
interest, and, with the other bought land, he would, indeed, have got
less rent for his land at first, but now it would be doubled, he would
get 60 L. a year, and if he wished to sell he would get 2000 L.
whereas, the other 1000 L. would only produce 50 L. and, if called in,
the single thousand would be all he would receive.
{140} [Transcriber's note: footnote not assigned a place in the original
text, intended location assumed to be as shown] This was seen at the
beginning of the French revolution, though the assignats, by lowering
the rate of exchange, frightened many from transferring their money, at
an apparent loss of twelve or fifteen per cent. But those that overlooked
this loss have rejoiced in it ever since, as the others have repented
bitterly the avarice that made them risk all to save a little, and to
become beggars.
-=-
[end of page #163]
It is difficult to say at what point this would stop, if the effect
produced did not affix the boundary.
The prices of land, of rent, of houses, and of provisions, sink low, and
induce some people to remain; for, as those articles cannot be
transported, or carried off, and are always worth possessing and
enjoying, it is clear there must be a term set to the decay and
emigration, by the nature of things. Unfortunately for countries that
have been great, that term does not seem to arrive till it is reduced far
below the level of other nations. {141}
There are, however, some peculiar causes that operate in some modern
nations, in counteracting this effect, so far as it is occasioned by a
superabundance of capital; but, as this is not general to all nations, the
proper place for speaking of it will be when we come to treat of the
tendency of capital to quit this country.
The effects, arising from that depreciation of money, which takes
place in every wealthy country, are great and numerous, and have
been always found where wealth abounded. The people in such
countries can easily command the labour of others that are not so rich,
but the others cannot afford to pay for theirs; this tends to remove
industry. On the other hand, if a supply of the necessaries of life are
wanted in a rich country, they may be obtained from countries where
the value of money is less, without throwing prices out of their level;
whereas, in the country where money is of great value, that is not the
case.
The price of bread, for instance, is, at Paris, one penny the pound, and
in London at eight-pence the quartern loaf, which weighs just four
French pounds, the price is exactly double. If every thing was
conducted in a fair way, corn, from all countries, where it is equally as
cheap as in France, might be brought and sold in London, at the
---
{141} At Bruges, (in Flanders) at Antwerp, Cologne, Ghent, or any of
those decayed towns, house-rent was fallen, before the French
revolution, to little more than an acknowledgement for occupation,
where the houses were large and retired. This induced people to live at
those places, who would not otherwise have done so. Small houses,
lately built, were more expensive than the large old ones, built in the
time that commerce flourished.
-=-
[end of page #164]
usual market price; but, before Paris could get a supply from London,
the bread would cost three times its usual price. This circumstance, if
properly managed, might be turned to advantage; why it is not, is
difficult to say, and is a proof that there are either regulations, or
practices without regulation, that counteract the true nature of things;
for it would not cost a farthing a pound to bring the corn from Paris to
the London market.
Paris is only mentioned here for the sake of comparison, and because
the average prices have nearly the proportion of one to two. The
reasons why corn is not brought from thence are no secret, but the
same reasoning will apply to American corn, corn from Barbary, or
the Baltic, and from other places, where the value of money is greater
than in England. {142}
The principal of the other effects of the depreciation of money are to
be found in the chapter on the exterior Causes of the Decline of
Nations, as it is in its foreign transactions that the depreciation of
money is the most felt.
In the interior, that depreciation only acts when there is a considerable
lapse of time, during which the value has altered; it has, in general, no
effect on transactions that are begun and finished within a short
period, and in the interior of the country itself.
The depreciation of money, wherever it takes place, would cause an
increase of taxes, even if there were no other reason for it; but, in so
far it counteracts itself, by making them to be more easily born. =sic=
Whatever its particular effects may be, and however complicated they
are, the general tendency of the depreciation of money is to depress
industry in that country, and to encourage it in others, where the value
is greater than in it.
---
{142} In America the value of money is less than in England,
compared with wages; but the usual proportion, between the wages of
labour and the price of corn, is different in that country from every
other with which we have any connection.
-=-
[end of page #165]
CHAP. IX.
_Conclusion of the interior Causes.--Their Co-operation.--Their
general Effect on the Government and on the People.--The Danger
arising from them does not appear till the Progress in Decline is far
advanced_.
Though these causes enumerated have all one general tendency, yet
their distinguishing characteristics deserve attention.
Some begin their operation from the moment the wealth of a country
commences, others are only felt late in the progress of its decline. The
effects of some may be diminished greatly, others may be prevented
entirely; but, in all cases, the attention of government is necessary, and
that before the operation of decline is actually commenced; for,
prevention, and not remedy, is what ought to be aimed at, besides
which, when decline has once begun, governments are too feeble to be
capable of any effectual regulations.
To assist nature, in every case where her operations are favourable to
the enjoyment and happiness of men, and to counteract those that are
unfavourable, is the business of individuals and of states. What the
individual is unable to do, should be done by those to whom the care
of public affairs is given; by those who act for the benefit of all, and in
the name of all.
From the first approaches of a state to wealth and greatness, we find
that there are a combination of causes that begin to operate in
promoting its decline. The first moving principle, necessity, is
gradually done away, and with it flies industry; so that, from one
generation to another, both the moral and physical man becomes
changed, till he is unable to sustain the weight that he has raised; and,
at last, he is crushed by the decent =sic= of the ponderous mass.
While a gradual progress destroys that industry, from which all wealth
springs, other causes act to remove or misapply the labour [end of
page #166] that is left, while others again are putting capital to flight,
or leading to a misapplication of it.
Last of all come discord and war, the most universal cause of all those
that tend to depopulate a country, and to diminish as well as degrade
the inhabitants, thus giving durability to misfortune, and rendering
hopeless the fate of a fallen nation.
Amongst all the causes of decline, one alone is found that has a double
effect, and counteracts in one direction what it promotes in another.
This is taxation, a very certain cause of ruin if carried too far, and
always dangerous; but, for a length of time, having a very powerful
effect in repressing the progress of luxury, in continuing the action of
necessity, the mother of industry, and in preventing that species of
consumption that lays the foundation for the depopulation of a
country.
From this it would seem to be almost as dangerous to take off the
burthens that have been laid upon a people, as to lay them on with too
heavy a hand. There is not any example worth noticing of such a case,
therefore, it must stand on its own ground: history informs us nothing
on the subject.
The supposed case would be thus. That a nation should rise to a high
pitch of wealth by industry, and support a heavy load of taxes, still
increasing in wealth, and superior to most other nations. We are to
suppose the load of taxes greatly diminished, and then to investigate
the consequences.
Perhaps this is an useless hyyothesis =sic=, the case never has been, and
perhaps never will be; but, still it is, at least, a possible case; it is
a matter of curiosity, at least, if it is not one of utility, and I have a
great example to plead as my apology. Dr. Adam Smith amused himself in
his inquiry into the causes of the wealth of nations =sic= in a similar
manner, by a hypothesis concerning the taxation of the British
colonies.
Supposing the pressure of necessity were to be suddenly taken away,
those whose income is regulated by their efforts would relax in
exertion; that is to say, the productive labourers of the country would
relax, while those whose incomes are fixed, that is principally [end of
page #167] the unproductive labourers, would become comparatively
more opulent, and their luxury would increase.
This is an effect very different from what the public expects. The most
useful class would gain little or nothing, while the drones of society
would find their wealth greatly augmented, which would be one of the
most unfortunate effects that could well be conceived, and might very
soon bring about a very serious and disagreeable event.
In the course of investigating the national debt of England, in the
Fourth Book =sic--there is none.=, it will be necessary to examine this
at length, but, there it will be attended with another circumstance, not
one of general consideration; (as national debt is not any general or
necessary appendage to a government) namely, the letting loose a
great monied capital, which must either be employed here, or it will
seek employment in another country, which may rise on the ruin of
this.
In considering the reduction of taxes that have been long standing, and
have risen to a great amount, there is certainly reason to fear evil
consequences, though this is no argument in favour of taxation; on the
contrary, it is a reason for avoiding it, for, it is in all cases dangerous
to do what it will be attended with danger to undo.
Though the precise case of taxes being done away may never come
before us, there is, at this time, an operation going on that is nearly
similar, and the result of which will soon be known.
The French people were loaded with nearly twenty-five millions
sterling annually to the church, and they do not now pay three. This,
indeed, was partly in taxes, and part in church-lands; they have also
got rid of a great deal of rent, by the sale of emigrant estates, the lands
have got into the hands of men, who mostly cultivate them
themselves, and have no rent to pay.
On the supposition that the new government is not more expensive
than the old, (and it ought not to be so, the debts having been nearly
all wiped off,) the burthens on industry will be much less than
formerly, it will then be curious to observe if agriculture flourishes
more, if prices are reduced, and if the taxes that still remain are better
paid. There are, indeed, many concomitant circumstances that will
tend to derange the experiment, or render the conclusion uncertain;
but, still it is an in-[end of page #168] teresting and a great event, and
will be worth attentive observation. {143}
We must, so far as this investigation goes, conclude, that, unless the
natural tendency of things to decline is powerfully counteracted, every
country that rises to wealth must have a fall; and that, therefore, it
merits investigation, whether it is or is not possible to counteract the
tendency to decline, without interrupting the progress towards greater
prosperity, and, to manage matters so, that whether it is not possible,
after having attained the summit of wealth, we may remain there
instead of immediately descending, as most nations have hitherto
done.
From individuals, the exertion necessary is not to be expected; but, it
may be looked for from the government of a country, which, though
composed of individuals, the succession of persons is differently
carried on; it is not from age to age, and from an old father to a young
son, but from men in the vigour of life, to men in the vigour of life,
who, while they are occupied in public affairs, may be considered,
with respect to whatever is to be done for the good of the nation, (for
its prosperity, defence, or protection,) as animated with the same
spirit, without any interruption.
With respect to the interior causes of decline, they may be
counteracted always with more or less effect, by a proper system of
govern-
---
{143} The burthens on the industry of old France, were,
Livres.
Rent of land 700,000,000
Revenues of clergy 600,000,000
Taxes, including the expense of levying 800,000,000
____________
2,100,000,000
In sterling money L. 87,500,000
Half land now occupied by the cultivators, }
and the remainder let at lower rents } 350,000,000
Revenues of clergy, and the expenses 50,000,000
Taxes as before 800,000,000
_____________
1,200,000,000
Or in sterling money L. 50,400,000
This makes a diminution of L. 37,100,000; or something more than a
third of the whole expense, and more than all the taxes to the state
estimated at the highest rate.
-=-
[end of page #169]
ment. In the latter portion of this work we shall endeavour to shew
how that may be attempted with safety, if not accomplished with full
success.
Before, however, we conclude this subject, and rely on government, it
is necessary to mention that, in treating with other nations, a kind of
overbearing haughty pride is natural to those who govern a powerful
and wealthy people. In that case, they act as individuals, and are not to
be trusted; and the less so, that a nation of proud pampered citizens is
but too apt to applaud insolence in those who govern them.
This pride has been a very constant forerunner of the fall of wealthy
and great nations, and, in Rome excepted, it has never failed. The
emperors of Rome were much less haughty than the ambassadors of
the republic; a love of false splendour had supplanted a ferocious
affectation of dignity, yet, the former was the less humiliating of the
two to other nations. {144}
While the rulers of wealthy nations are apt to act haughtily to others,
they are liable to fall into another error, in mistaking the strength of
their own people, and loading them too heavily, trusting too much
both to their internal energy, and external force.
As the near observers of the inability of the people are generally afraid
to carry unwelcome tidings to their superior; and, if they did, as he is
seldom inclined to give credit to unwelcome news, the ruin of a nation
has probably made a very considerable progress before he, whose
business it is to put a stop to it, is aware of the danger.
The continual clamour that is made about every new burthen that is
laid on, and the cry of ruin, which perpetually is sounded in the ears of
a minister, and of those who execute his orders, are some ex-
---
{144} The appearance of virtue and self-command, which the
republican Romans preserved, added to the bravery with which they
maintained whatever claims they put in, overawed a great part of their
enemies; and those, who were not absolutely overawed thought that
defeat and submission were, at least, robbed of their shame, when
such was the character of the conqueror; and the claim once allowed
was no longer questioned. Very different was the case, when the
emperor was a fidler, or a buffoon, the senators puppets, and the pro-
consuls themselves robbers.
-=-
[end of page #170]
cuses for their not attending to them; but the consequence is not the
less fatal to the nation on that account.
A nation that is feeble has, at least, the advantage of knowing it, and is
not insensible if she receives a wound; but the government of a
powerful nation is like the pilot of a ship, who navigates in a sea, the
depth of which he cannot sound, and who spreads all his sails: if he
strikes upon a rock, his ship is dashed to pieces in a moment. The
other, sailing amongst shallows and sands, proceeds with caution,
avoids them if possible, and, if she touches, it is so gently, that even
her feeble frame is scarcely injured.
The rulers of nations appear, in general, not to be aware of the evil
that arises from the government they have to manage becoming too
unwieldly =sic=, or too complicated; in either case, a check, though
but of short duration, is irretrievable. This is a great oversight, and, at
least, greatly augments the chances against the durability of a
government. In proportion as the machine is unmanageable and
complex, the embarrassment of those who have the conduct of it will
be great, and the enemies will be proportionately bold and audacious.
In all such conflicts, much depends on the spirit of the combatants,
and more still on that of those who, at first, are lookers on, who act in
consequence of the opinion they have of the force or feebleness of
either party. {145}
The tendency that a nation has to decline is not, then, in general,
counteracted, by the government; but, on the contrary, is pushed on by
it, and precipitated into the gulf. No wonder, then, that the career is
rapid, and the fall irretrievable.
It is, nevertheless, to the government, and to it alone, that we must
look for that counteracting force that is to stay the general current.
Individuals can only look to their own conduct, and they neither can
---
{145} Not only when the French revolution began, but a hundred
times afterwards, did the party triumph that appeared the strongest,
merely because it appeared so. All those who stand neutral at first,
take a side the moment they have fixed their opinion as to the strength
of the contending parties, and this decision is always in favour of the
party they think the strongest.
-=-
[end of page #171]
be expected to have time nor inclination to study the public welfare,
and, even if they had, they would want the means.
Government can never be better employed than in counteracting this
tendency to decay. It has the means, and is but performing its duty in
doing so. The previous step to all this, however, is a knowledge of
what is to be done, a full sense of the necessity of doing it, and a
disposition to submit to the regimen necessary.
For this purpose, both the government and the people must give up
something. The people must allow government to interfere in the
education of children, and, in that, give up a little of their liberty;
{146} and those who govern must attend to many things which are
generally neglected. To do the routine business of the day is the
occupation of most of the governments of Europe, whether in war or
at peace; they therefore habitually become agents of necessity, and
what can be procrastinated is never done; that is to say, what is good
is very seldom done, and what is necessary to prevent immediate evil,
is always the chief, and sometimes the only, occupation.
There are some men in the world who prosper merely because they
look beforehand, and conduct their affairs. There are others who, with
equal industry, and much more trouble and care, are always a little
behind, and allow their affairs to conduct them; such men never
succeed, and, if they can keep off the extreme of misfortune, it is all
that is to be expected.
Most governments, in wealthy nations, are like those latter species of
individuals,--they do not conduct their affairs, but are conducted by
them, and think they succeed, when the necessary business of the day
is done. This listlessness must be done away, and, though the
---
{146} From the impossibility of a nation, once immersed in sloth and
luxury, returning to the tone and energy of a new people, we may
judge of the impossibility of a nation going on progressively towards
wealth, not suffering from the manner of educating children. The
leading distinction between a rising and a fallen people is the
disposition to industry and exertion, in the one, and to sloth and
negligence, in the other. It is while a nation is increasing in wealth that
this alteration gradually takes place; and, as this is the main point on
which all depends, the nation is safe when it is well attended to, even
if other things are, in some degree, neglected.
-=-
[end of page #172]
governments of countries that are wealthy have no occasion, like Peter
the Great, or the founders of new states, to create new institutions, and
eternally try to ameliorate, they ought to be very carefully and
constantly employed in preventing those good things that they enjoy
from escaping their grasp, so far as it depends upon interior
arrangement. Exterior causes are not within their power to regulate,
therefore they should be the more attentive to those that are; and,
though exterior causes are out of their dominion, yet, sometimes, by
wise interior regulations, the evil effects of exterior ones may be
prevented. Nothing of all this can be done, however, until the
government rises above the routine business of the day, and until all
the necessary and pressing business is got over. The first thing, then,
for a government is to extricate itself from the situation of one who
struggles with necessity, after which, but not before, it may study what
is beneficial, and of permanent utility.
So far it would appear all nations are situated alike, with regard to the
general tendency to decay; {147} and so far all of them may be guided
by general rules, but as to the particular manner of applying those
rules, it must depend on the peculiar circumstances of the nation to
which they are meant to be applied.
In general, revenue has become the great object with modern nations:
and, as their rulers have not ventured to tax the necessaries of the
people to any high degree, but have laid their vices, rather than their
wants, under contribution, the revenue-system, (as it may be called,)
tends to make a government encourage expensive vice, by which it
profits, and check innocent enjoyment, by which it has nothing to
gain. This is a terrible, but it is a very prevalent system; it is immoral,
inhuman, and impolitic.
So far as this goes, a government, instead of checking, accelerates the
decline of a people; but, as this is not a natural cause of decline, as
it is not universal or necessary, it is to be considered with due
---
{147} The Chinese, and, in general, the nations of Asia have not been
considered as included in this inquiry. The Chinese, in particular, are a
people in a permanent situation: they do not increase in riches, and
they seem to have no tendency to decline. Their laws and mode of
education and living remain the same.
-=-
[end of page #173]
regard to particular circumstances. In general, we may say, that, in
place of inviting the lower classes to pass their time in drinking, by the
innumerable receptacles that there are for those who are addicted to
that vice, every impediment should be put in the way. Drinking is a
vice, the disposition to which grows with its gratification; most other
avocations (for drinking in moderation is only such) have no tendency
of the sort. Those enjoyments which have a tendency to degenerate
into vice should be kept under some check; those which have no such
tendency ought to be encouraged; for, where the main and general
mass of the population of a country is corrupted, it is impossible to
prevent its decline. If it remains uncorrupted, the matter is very easy,
or, more properly, it may be said that prosperity is the natural
consequence.
Manners will always be found of more consequence than laws, and
they depend, in a great measure, on the wise regulations of
government in every country.
Not only do most governments profit by laying the vices of the people
under contribution; but, as revenue is, by a very false rule, taken as a
criterion from which the prosperity of a nation may be estimated, the
very evil that brings on decay serves to disguise its approach. A nation
may be irretrievably undone, before it is perceived that it has any
tendency to decline; it is, therefore, unwise for governments to wait
till they see the effects of decay, and then to hope to counteract them;
they must look before-hand, and prevent, otherwise all their exertions
will prove ineffectual. [end of page #174]
CHAP. X.
_Of the external Causes of Decline.--the Envy and Enmity of other
Nations.--their Efforts, both in Peace and War, to bring Wealthy
Nations down to their level_.
The external causes of the decline of nations are much more simple
in themselves than the internal ones, besides which, their action is
more visible; the way of operation is such as to excite attention, and
has made them thought more worthy of being recorded.
The origin of envy and enmity are the same. The possession of what is
desirable, in a superior degree, is the cause of envy. That occasions
injurious and unjust proceedings, and enmity is the consequence,
though both originated in the same feeling at first, they assume
distinct characteristics in the course of time.
The desire of possession, in order to enjoy, is the cause of enmity and
envy; and all the crimes of nations, and of individuals, have the same
common origin.
It follows, as a natural consequence, arising from this state of things,
that those nations which enjoyed a superior degree of wealth, became
the objects of the envy of others. If that wealth was accompanied by
sufficient power for its protection, then the only way to endeavour to
share it was by imitation; but if the wealth was found unprotected,
then conquest or violence was always considered as the most ready
way of obtaining possession.
The wandering Arabs, who are the only nations that profess robbery at
the present day, (by land,) follow still the same maxim with regard to
those whose wealth they mean to enjoy. If too powerful to be
compelled by force to give up what they have got, they traffic and
barter with the merchants of a caravan; but if they find themselves
able to take, they never give themselves the trouble to adopt the
legitimate but less expeditious method of plunder and robbery =sic=.
[end of page #175]
As it has been found that wealth operates, by degrees, in destroying
the bravery of a people, after a certain time, so it happens that, in the
common course of things, a moment arrives when it is considered
safe, by some one power or other, to attack the wealthy nation, and
partake of its riches; thus it was that the cities of Tyre and of Babylon
were attacked by Alexander; and thus it was that his successors, in
their turn, were attacked and conquered by the Romans; and, again,
the Romans themselves, by the barbarous nations of the north.
Besides those great revolutions, of which the consequences were
permanent, there have been endless and innumerable struggles for the
possession of wealth, amongst different nations; but the real and
leading causes are so uniform, and so evident, that there is not a
shadow of a doubt left on that subject.
Mr. Burke had good reason to say that the external causes were much
easier traced, and more simple, than the internal ones; for, the Romans
excepted, the instances of rich nations attacking and conquering poor
ones are very rare indeed.
The Romans had erected their republic on a different plan from that of
any other; they had neither arts, industry, nor territory of their own,
and they conquered nations upon speculation, and for the sake of
civilizing the people, and making them contribute revenue; how they
were successful has been explained. But even the Romans would not
have attacked poor nations, if they had been, at an earlier period,
possessed of the means of attacking those that were wealthy.
Necessity obliged them to begin with Italy: their safety made them
defend themselves against the Gauls, and, till they had a navy, it was
impracticable to carry their conquests into Asia or Africa; but, after
they had conquered Carthage, they lost very little time in attacking
Egypt, and those countries occupied by the successors of Alexander.
The taking of Constantinople was the last decided victory of this sort,
and in nothing but time and circumstance did it differ from the others;
in all the great outlines it was exactly the same. [end of page #176]
The effeminacy and luxury of the rich, those interior causes, of which
we have already spoken, always give facility to those efforts which
envy and avarice excite.
The rivalship, in time of peace, is a contest confined to modern
nations; or, at least, but little known to the ancients. Indeed, it is
only amongst commercial nations that it can exist. There can be no
competition in agriculture; and, indeed, it is only in war, or in
commerce, that nations can interfere with each other.
The Phoenicians were the only commercial people of antiquity.
Carthage was the colony, and received the Indian produce at second
hand. It was in no way a rival.
When Solomon mounted on the throne of his father David, he applied
himself to commerce; but the wisdom and power he possessed were
such as bore down all opposition during his reign. Having married the
daughter of the King of Egypt, who assisted him in several conquests,
he founded the city of Palmyra, or Tadmore in the Wilderness, for the
greater conveniency of the Eastern trade. The King of Tyre was his
ally, but he was so, most probably, from necessity, for the alliance was
very unnatural; and, soon after the death of Solomon, the Tyrians
excited the King of Babylon to destroy Jerusalem: so, that if there had
been, in ancient times, more people concerned in commerce, there is
no doubt there would likewise have been more envy and rivality.
=sic=
The cities of Italy, the Dutch, the Flemish, the English, and the
French, have been incessantly struggling to supplant each other in
manufactures and commerce; and the war of custom-house duties and
drawbacks has become very active and formidable.
This modern species of warfare is not only less bloody, but the object
is more legitimate, and the consequences neither so sudden nor so
fatal as open force; to which is to be added, that if a nation will but
determine to be industrious, it never can be greatly injured. If it
enjoyed any peculiarly great advantages, those may, indeed, be
wrested from it, but that is only taking away what it has no right to
possess, and what it may always do without. [end of page #177]
The intention of this inquiry is not to discover a method by which a
nation may engross the trade that ought to belong to others, it is only
to enable it, by industry and other means, to guard against the
approaches of adversity, which tend to sink it far below its level,
thereby making way for the elevation of some other nation, on the
ruins of its greatness.
As, in the interior causes of decline, we have traced the most part to
the manners and habits of the people, so, in the exterior causes, it will
be found that much depends upon the conduct of the government. [end
of page #178]
CHAP. XI.
_Why the Intercourse between Nations is ultimately in Favour of the
poorer one, though not so at first_.
In all commercial intercourse with each other, (or competition in
selling to a third nation,) the poorer nation has the advantage in its
gain; but this advantage is generally prevented by the length of credit
which the wealthy nation is enabled to give, by which manufacturers
are sometimes ruined in their own country by strangers, who can
neither rival them in lowness of price nor goodness in quality.
In countries that are poor, those who have the selling, but not the
manufacturing of goods, are so much greater gainers by selling goods
purchased on credit, of which they can keep a good stock and
assortment, than in selling from a shop or store scantily supplied with
ready money, that there is not almost any question about either price
or quality; there is not scarcely an alternative. In one line, a man can
begin who has scarcely any capital, and do a great deal of business; he
can even afford to sell the articles he purchases on credit with very
little profit, because they procure him ready money; whereas, if he
sells an article upon which he has no credit, he must replace it with
another, by paying money immediately. The consequence is, that
while those who sell to the public are poor, the nation or manufacturer
that gives the longest credit will have the preference; but this is daily
diminishing, for even with the capital of the rich nation itself, the
manufactures of the poor one are encouraged; the manner is as
follows:
A, at New York, purchases goods for one thousand pounds from B, at
London, which he sells without any profit, and, perhaps, at a
considerable loss; because B gives him twelve months credit. But A,
who has, by this means, got hold of money, as if by a loan, will not lay
that out with B, nor let him touch it till the year's end; and, having
made no profit by the sale of B's goods, he must turn to advantage the
money he obtained for them. According to the situation of mat-[end
of page #179] ters in the country, and the nature of A's concerns, he
will make more or less, but what he makes it is not the business to
investigate; it is sufficient to know, that he will lay his ready money
out with those who will sell cheap, in order to get by it; that is to say,
he will lay it out with some person in his own country. {148} Thus,
though the rich nation sells goods on credit at a price which cannot be
obtained for them by the purchaser, yet its capital serves to give
activity to the manufacturers in the poor country. It is true, that this
operation is slow, but it produces an effect in time, and finishes by
robbing the wealthy nation of its superiority, obtained by giving credit.
It is thus that in all their intercourse, the first advantage is to the
rich nation, but terminates in favour of the poor; for whenever equality
of prices are the question, and both can give sufficient credit, the
poorer nation has the advantage in point of price.
With regard to rivalling each other, in a third place, the poor nation
has the advantage, if the merchants there have the means of paying
with ready money, because the price is lower than that of the richer
country. {149} If they have not that means, they cannot deal with
them, but must wait till they have, by perseverance; and, in course of
time, come to have the means when the poor nation is certain to enter
into competition with advantage.
But this is not the only way in which the capital of a rich nation is
employed in fostering a rivalship in a poorer nation. Were the
manufacturers the only persons who sold goods, it would be confined
to this; but that is not the case, for merchants, who are the sellers,
study only where they can purchase the cheapest; thus English
merchants purchase cloths in Silesia, watches in Switzerland, fire-
arms at Liege,
---
{148} The Dutch used to give long credit, and buy with ready money,
by which means they had great advantage for a long time; but, at last,
the ready money they paid to some, and the credit they gave to others,
set their industry at work, and they became rivals. Dutch capital was,
at one period, of great service to the English, as that of England now is
to the Americans.
{149} This is not meant to apply to any particular sort of manufacture.
In some, a nation may have a permanent advantage over another; in
others, only a temporary one, and in the greater portion no other
advantage than what arises from superior capital.
-=-
[end of page #180]
in preference to laying out the money in England or Ireland; and they
will give credit, as before explained, to the nation that wants it.
In this manner it is, that the capital of a rich country supplies the want
of it in poorer ones, and that, by degrees, a nation saps the foundation
of its own wealth and greatness, and gives encouragement to them in
others.
It is then that the weight of taxes, the high price of commodities, and
the various causes which encumber those who live in wealthy nations,
begin to produce a pernicious effect. The tendency of industry is to
remove its abode, and the capital of the merchants, who know no
country, but understand arithmetic, and the profits of trade, gives the
industry the means of doing it with more ease and promptitude.
The Dutch, for the last century, employed their capital in this manner,
and, at one time, were the chief carriers, for they secured custom by
paying readily and giving credit largely. They ruined many of their
own manufactures in this manner, but it is impossible to separate the
calculation of gain from the mercantile system and mercantile practice
in individuals; therefore it is no reproach to their patriotism, for
patriotism cannot be the rule in purchasing goods from an individual.
A merchant can have no other rule, but his own advantage, or, if he
has, he will soon be ruined.
There are many manufactures in England that originally rose by
means of Dutch capital, not lent capital, but by ready money paid for
goods, which were carried to other nations, and sold here upon credit.
The English have, for a long time, been able to do this piece of
business for themselves; and, of course, the Dutch did not find the
same means of supporting their carrying trade; and as they had ruined
many of their own manufactures, they sunk both as a commercial and
manufacturing people.
If the time should ever come that capital should be so abundant in all
nations, as that obtaining credit will not be an object, then it will be
seen that no nation will have so very great a share of manufactures
and commerce more than others, as has hitherto been the case.
In countries where the common practice is to sell, chiefly, for [end of
page #181] ready money, great fortunes are seldom gained. Even in
wealthy countries, in branches of business where no credit is given,
great fortunes are very seldom got, and for a very simple reason. The
business is pretty equally divided. But in a country that gives long
credits, or in a branch of trade on which long credits are given, we
always see some individuals gaining immense fortunes, by means of
doing a great deal more business than others, who, having less capital,
are enabled to do less.
There is not any one thing in which a nation resembles an individual
so much, as in mercantile transactions; the rule of one is the rule of all,
and the rich individual acts like a rich nation, and the poor one like a
poor nation. The consequences are the same in both cases. The rich
carry on an extensive trade, by means of great capital; the poor, a
limited one, dependant =sic= chiefly on industry; but wherever the
poor persevere in good conduct, they finish by getting the command
of the capital of the rich, and then becoming their rivals.
There is one thing peculiar to the intercourse of rich and poor nations,
in which it differs from the intercourse between rich and poor
individuals in the same country. Money, which is the common
measure of value, has a different price in different countries, and,
indeed, in different parts of the same country. If a man, from a poor
country, carries a bushel of corn with him into a rich, he can live as
long upon it as if he had remained where he was; but if he carry the
money, that would have bought a bushel of corn at home, he perhaps
may not be able to live upon it half so long. {150}
The effect that this produces, in the intercourse between two countries,
is, that in proportion as the difference becomes greater, the rich
country feels it can command more of the industry of the poor, and the
poor feels it can command less of the industry of the rich; so that
---
{150} In common life, this difference, between carrying money and
necessaries, is perfectly well understood, but it is experience that is
the teacher; and the rough countryman, or woman, when they have the
opportunity of judging from fact, understand the motives as well as
the most profound and ingenius =sic= writer on political economy.
-=-
[end of page #182]
when their industry can be both applied, with any degree of equality,
to the same object, the poor supplies the rich, and therefore increases
its own wealth.
It is thus that great numbers of the people in London are fed with
butcher-meat from Scotland, and wear shoes from Yorkshire; but there
would be a very limited sale in either of those places for meat from
Smithfield, or shoes manufactured in London. {151}
This diminution of the value of money, that takes place in all rich
countries, serves farther to increase the advantage of poorer ones in
manufacturing, and accelerates the natural effect of competition,
which is facilitated, as has been said, by the capital of the rich country
giving activity to the industry of the poorer one.
This last neither can be called an exterior nor an interior cause, as it is
derived entirely from the relative situations of the two countries, and
belongs to both, or originates in both; but, as it raises the poor nation
nearer the level of the rich one, its effect gradually becomes less
powerful. Though there is no means of preventing the operation of
two nations coming nearly to a level by this means, yet it does not
appear to be a necessary consequence that the nation that was the
richer should become the poorer. As this, however, has been a general
case, we must conclude it to be a natural one, but there we stop, and
make a distinction between what is natural only, and what is a
necessary effect. Their coming to a level was a necessary effect; but,
though the other may be natural, it cannot be necessary, and therefore
may be counteracted; to find the means of doing this, is all that is
proposed by the present inquiry.
---
{151} If it was not for taxes and rent, that are chiefly spent in large
towns, as well as law-expenses, and the prices of luxuries, of dress,
and furniture, the cities, like London, would soon be reduced.
-=-
[end of page #183]
CHAP. XII.
_Conclusion of exteror Causes.--Are seldom of much Importance,
unless favoured by interior ones.--Rich Nations, with care, capable,
in most Cases, of prolonging their Prosperity.--Digression on the
Importance of Public Revenue, illustrated by a statistical Chart_.
The exterior causes of the decline of any nation, that has risen above
its level, though formidable, are nothing, in comparison to the interior
causes, and are of no great effect without their co-operation.
As the government of a country has an influence over the interior
causes, so its alliances, and the laws of nations, though not very well
attended to, (yet seldom altogether forgot,) have a tendency to stop the
progress of the exterior causes, before they advance too far; that is to
say, before they absolutely depress a nation.
For several centuries, the stronger nations of Europe protected the
weaker, and the matter was carried so far, that the weak powers
generally gained the most. Prussia and Sardinia are two examples of
nations rising by political connections; and though the system is lately
changed, and Poland has been despoiled and divided amongst nations,
to each of which it was superior in power only two centuries ago, and
though Holland and Switzerland groan under the yoke of France, yet,
it is to be hoped, the old system is not abandoned, otherwise there will
be no end to the encroachments of the great powers on the smaller.
The means of communicating, between nations, are now easy; they
have felt the advantage of preserving a sort of balance, {152} and the
ad-
---
{152} The expression, balance of power, gives a false idea. It seems
to imply, that alliances in Europe were so nicely arranged, as to make
the force of nations, in opposite interests, equal; but this never was the
case for half an hour, nor was it ever intended. The whole [end of page
#184] that is meant, is to prevent the present order from being
overturned, by one nation annihilating or subduing another; and then,
by their united strength, swallowing up a third, as was the case with
the Romans.
-=-
vantages are so great, that they probably never will be entirely
abandoned, though we have strong proofs, of late years, that they are
not always held very sacred.
The chart subjoined to this, giving a statistical representation of the
powers of Europe, shews nearly in what manner power is distributed
at this time; the population and extent are there represented with
accuracy: these are the foundation of power; and the amount of the
revenue may be said to shew the means, which a nation has of
exerting that power. (For the description and explanation see the page
opposite the chart). [Transcriber's note: seemingly a reference to Chart
No. 2; the explanation in fact appears on page 190.]
The balance of power, however well attended to, could not prevent the
decline of a nation from interior causes. It may prevent the operation
of exterior causes from pushing a nation to the extreme of humiliation,
by taking advantage of its internal situation. But the decline of almost
every nation has commenced within its own bosom, and has been
completed by causes acting from without.
The common termination of the interior causes of decline is revolt, or
a division into parties, when the party that has the disadvantage
generally calls in some neighbour to its aid. This is the most miserable
fate that can befal =sic= a country, and no punishment is sufficiently
severe for the men, who have so far lost every sentiment of patriotism
as to have recourse to such a step.
The exterior causes of decline, namely, rivalship in peace and the
combined efforts of enemies in war may be considered as irresistible,
if the government, which has the direction of a nation, does not act
wisely; but, if it does, they may be put at defiance. If a nation
preserves its interior sources of prosperity, and acts with moderation
and firmness towards others, their envy and efforts will be without
effect, and need never be a cause of much uneasiness.
In its relation to other nations, the government of a country acts like
an individual. The first thing is to regulate its interior affairs, and,
the next is, in treating with others, to consider circumstances, and take
justice and moderation for a rule of conduct. [end of page #185]
The circuitous politics attributed to ambassadors, who represent states,
is a common theme of invective: as custom has established it as a sort
of rule, in all such transactions as they conduct, to conceal a part of
what is meant, to demand more than is expected to be obtained, and
offer less than is intended to be given, there is no immediate remedy;
but this is only in the mode and manner of treating, and does not
necessarily imply unfair intention. If it has become a custom to ask
three by way of obtaining two, and of offering only two to prevent the
necessity of giving four, (which would be expected if three, the
number intended to be given, were offered at first) it is an abuse of
language, in so far that what is expressed is neither meant by one, nor
understood by the other to be meant; but, it is nothing more: neither is
it a custom void of meaning; it is founded on the nature of man.
If men were perfect, and capable of seeing at one view what was fair,
each might come prepared to ask exactly what he wanted, and
determined not to yield any thing; and it would result from their being
perfect, that each would just demand what was right, and the other
was disposed to give; but, as men are not perfect, and as it is the
inclination and even the duty of each to obtain the most favourable
terms he can, (and as he does not see exactly what is right,) he
naturally demands more than he has a right to expect, or than the other
is disposed to give. If ambassadors met together with a determination
to speak explicitly at first, and with a determination not to recede, the
consequence would probably be, that they would not treat at all, so
that the mode of receding a little does not absolutely imply that more
is asked than is wished for, but that each party over-rates its own
pretensions, in order to obtain what is right.
One thing is certain, that the treaties that have been the best observed
have been those founded on equity, where the contracting parties were
neither of them under the influence of fear or necessity.
The exterior dangers of a country are not only more simple in their
nature than the interior ones, but, being less silent and gradual in their
progress have been more noticed by historians.
Even the ambitious rapacity of the Romans was first directed [end of
page #186] against Carthage, on account of its pride and injustice in
attacking other states; and, in the history of the nations of the world,
there is scarcely a single example of national prosperity being
unattended with some degree of pride, arrogance, and injustice; nor
can it easily be otherwise, for, notwithstanding all the boasted law of
nations, power seems amongst them to be one of the principal claims
on which right is founded, though, in the moral nature of things,
power and right have not the most distant connection.
It is then an object for those who govern nations, in the first place, to
counteract as much as possible the internal tendency to decline,
arising from the causes that have been enumerated; and, after having
done that, to regulate their conduct with regard to other nations, so as
to protect themselves from those external causes of decline, on the
existence of which they have no direct influence, but which are not
capable of producing any great effect, unless favoured by the internal
state of the country, and by the unwise conduct of those by whom it is
governed.
========
_Digression concerning the Importance of Public Revenue_.
No state, what ever its wealth may be, can possess power, unless a
certain portion of that wealth is applicable to public purposes. As the
want of revenue has not been a very common cause of weakness, we
shall give, as an example, the almost solitary, but very strong, case of
Poland. Its feebleness, in repelling the attacks of its enemies, was
occasioned, in a great measure, by want of revenue. It was with far
superior population, with more fertile soil, and a people no way
inferior in bravery, greatly inferior in actual exertion to Prussia.
When, at last, the Poles, seeing their danger, united together, and were
willing to make every personal exertion and sacrifice, to preserve their
country, they had no means of executing their good intentions. They
had not kept up an army when it was not wanted, and they could not,
on the emergency, create one when it was become necessary. [end of
page #187]
The definition given of power makes it a relative thing, and, therefore,
the revenue necessary to maintain that power or force must be relative
also; it, therefore, depends on circumstances, what is to be considered
as a sufficient or insufficient revenue.
If the United States of America were accessible with ease to European
nations, or if they had powerful neighbours on their own soil, they
would find their present revenues quite unequal to preserving their
independence; but, as it is, perhaps they are the most wealthy
civilized nation in the world, if an excess of revenue constitutes
wealth.
In Europe, whatever nations are unable to keep up forces sufficient to
make those exertions which, according to their alliances and dangers,
may be necessary, they are weak from want of revenue, and ought to
augment it.
In the course of making greater exertions than the revenues would
bear, some nations have contracted debts. It is not the purpose here to
enter into the complication such debts occasion, and the alterations
they make on the revenue, and the disposal of the revenue of a
country; but, so far as that subject is yet understood, it appears that the
clear revenue, after paying the interest of the debt, ought to be as great
as it would be altogether, if there were no debt; that is to say, after
paying interest, there ought to remain a sufficient surplus to pay all the
expenses necessary for government and defence.
The money that goes for the payment of interest has some tendency to
increase the influence of government at home, but is of no manner of
use with regard to enemies.
From the statistical chart here annexed, which shews the relative
proportion of the revenues of all the nations in Europe, as well as their
actual amount, it is perfectly clear, that, great and extensive as the
Russian empire is, it will not be very powerful until its revenues are
considerably increased.
The great value of money, and the prices of provisions, and many
sorts of warlike stores, enable great armies to be maintained in that
country, even with small revenues; but the Russians can make no great
effort, at a distance from home, till their revenues are augmented.
The revenues of Spain are considerable; but the free revenue is not,
[end of page #188] and it has no credit to supply the place. The same
thing may be said of Portugal; and if England had no credit, it would
be in the same situation; but as it has better credit than any nation ever
had, so, likewise, it is the only one whose efforts have never been in
any way, or at any time, either restricted or suspended, for want of
money to carry them into effect.
The Dutch were, at one time, situated nearly as England is now; they
had not sufficient free revenue, but they had good credit; of which,
however, they were not willing to make the necessary use, and the
French marched into Amsterdam with greater ease than the Russians
did into Warsaw.
The greatest victories of the French, during the revolution, were
gained at a time when her regular revenues were inconsiderable, and
when she was in a state of absolute bankruptcy. This is considered by
some as a proof that force is independent of revenue, and that
Frederick the Great was mistaken in saying, that money was the
sinews of war; but this case has been misunderstood as well as
misrepresented.
Though, in general, regular resources for money are necessary to
support war, and regular resources imply revenue, it never was
asserted, that, if irregular resources could be obtained, they would not
answer the same purpose, so long as they lasted. During the first five
years of the French revolution, a sum equal to at least four hundred
millions sterling was consumed, besides what was pillaged from the
enemy. So that at the time that France was without regular revenue,
she was actually expending seventy-five millions sterling per annum:
a sum greater than any other nation ever had at its disposal.
The impossibility of such a resource continuing is of no importance in
the present argument, although it is luckily of very great importance to
the peace of mankind. France supported war, for a certain time, by
consuming capital, and without revenue, but not without money; so
that what his Prussian Majesty said, stands uncontroverted, and the
necessity of revenue, regular and durable, for the maintenance of
regular and durable force, is established beyond the power of
contradiction. [end of page #189]
EXPLANATION OF STATISTICAL CHART, NO. 2.
In this chart, the different nations of Europe are represented by circles,
bearing the proportion of their relative extent. This is done in order to
give a better idea of the proportions than a geographical map, where
the dissimilar and irregular forms prevent the eye from making a
comparison.
The graduated scale of lines represents millions of pounds sterling;
and the red lines, that rise on the left of each circle, express the
number of inhabitants in millions, which may be known by observing
at what cross-line the red one stops.
The yellow lines, on the right of the circles, shew the amount of
revenue in pounds sterling.
The nations stained green, are maritime powers; those stained pale
red, are only powerful by land.
The dotted lines, to connect the extremities of the lines of population
and revenue, serve, by their descent from right to left, or from left to
right, to shew how revenue and population are proportioned to each
other.
The impression made by this chart is such, that it is impossible not to
see by what means Sweden and Denmark are of little importance, as
to wealth or power; for, though population and territory are the
original foundation of power, finances are the means of exerting it.
What must the consequences be if the Russian empire should one day
become like other nations? If ever that should happen, it either will be
divided, or it will crush all Europe.
The prodigious territory of Russia, and the immense revenues of
England, are the most astonishing things represented in that chart;
they are out of all proportion to the rest. [end of page #190]
=========