THANKS TO
THE GUTENBERG PROJECT
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AN (abridged) Abridged and formatted by Neil Jumonville, 2006
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INTRODUCTION AND PLAN OF THE WORK.
The annual labour of every nation is the fund which originally
supplies it with all the necessaries and conveniencies of life which
it annually consumes, and which consist always either in the immediate
produce of that labour, or in what is purchased with that produce from
other nations.
According, therefore, as this produce, or what is purchased
with it,
bears a greater or smaller proportion to the number of those who are
to consume it, the nation will be better or worse supplied with all
the necessaries and conveniencies for which it has occasion.
But this proportion must in every nation be regulated by two
different
circumstances: first, by the skill, dexterity, and judgment with which
its labour is generally applied; and, secondly, by the proportion
between the number of those who are employed in useful labour, and
that of those who are not so employed. Whatever be the soil, climate,
or extent of territory of any particular nation, the abundance or
scantiness of its annual supply must, in that particular situation,
depend upon those two circumstances.
The abundance or scantiness of this supply, too, seems to depend
more
upon the former of those two circumstances than upon the latter. Among
the savage nations of hunters and fishers, every individual who is
able to work is more or less employed in useful labour, and endeavours
to provide, as well as he can, the necessaries and conveniencies of
life, for himself, and such of his family or tribe as are either too
old, or too young, or too infirm, to go a-hunting and fishing. Such
nations, however, are so miserably poor, that, from mere want, they
are frequently reduced, or at least think themselves reduced, to the
necessity sometimes of directly destroying, and sometimes of
abandoning their infants, their old people, and those afflicted with
lingering diseases, to perish with hunger, or to be devoured by wild
beasts. Among civilized and thriving nations, on the contrary, though
a great number of people do not labour at all, many of whom consume
the produce of ten times, frequently of a hundred times, more labour
than the greater part of those who work; yet the produce of the whole
labour of the society is so great, that all are often abundantly
supplied; and a workman, even of the lowest and poorest order, if he
is frugal and industrious, may enjoy a greater share of the
necessaries and conveniencies of life than it is possible for any
savage to acquire.
The causes of this improvement in the productive powers of labour,
and
the order according to which its produce is naturally distributed
among the different ranks and conditions of men in the society, make
the subject of the first book of this Inquiry.
Whatever be the actual state of the skill, dexterity, and judgment,
with which labour is applied in any nation, the abundance or
scantiness of its annual supply must depend, during the continuance of
that state, upon the proportion between the number of those who are
annually employed in useful labour, and that of those who are not so
employed. The number of useful and productive labourers, it will
hereafter appear, is everywhere in proportion to the quantity of
capital stock which is employed in setting them to work, and to the
particular way in which it is so employed. The second book, therefore,
treats of the nature of capital stock, of the manner in which it is
gradually accumulated, and of the different quantities of labour which
it puts into motion, according to the different ways in which it is
employed.
Nations tolerably well advanced as to skill, dexterity, and
judgment,
in the application of labour, have followed very different plans in
the general conduct or direction of it; and those plans have not all
been equally favourable to the greatness of its produce. The policy of
some nations has given extraordinary encouragement to the industry of
the country; that of others to the industry of towns. Scarce any
nation has dealt equally and impartially with every sort of industry.
Since the down-fall of the Roman empire, the policy of Europe has been
more favourable to arts, manufactures, and commerce, the industry of
towns, than to agriculture, the Industry of the country. The
circumstances which seem to have introduced and established this
policy are explained in the third book.
Though those different plans were, perhaps, first introduced
by the
private interests and prejudices of particular orders of men, without
any regard to, or foresight of, their consequences upon the general
welfare of the society; yet they have given occasion to very different
theories of political economy; of which some magnify the importance of
that industry which is carried on in towns, others of that which is
carried on in the country. Those theories have had a considerable
influence, not only upon the opinions of men of learning, but upon the
public conduct of princes and sovereign states. I have endeavoured, in
the fourth book, to explain as fully and distinctly as I can those
different theories, and the principal effects which they have produced
in different ages and nations.
To explain in what has consisted the revenue of the great body
of the
people, or what has been the nature of those funds, which, in
different ages and nations, have supplied their annual consumption, is
the object of these four first books. The fifth and last book treats
of the revenue of the sovereign, or commonwealth. In this book I have
endeavoured to shew, first, what are the necessary expenses of the
sovereign, or commonwealth; which of those expenses ought to be
defrayed by the general contribution of the whole society, and which
of them, by that of some particular part only, or of some particular
members of it: secondly, what are the different methods in which the
whole society may be made to contribute towards defraying the expenses
incumbent on the whole society, and what are the principal advantages
and inconveniencies of each of those methods; and, thirdly and lastly,
what are the reasons and causes which have induced almost all modern
governments to mortgage some part of this revenue, or to contract
debts; and what have been the effects of those debts upon the real
wealth, the annual produce of the land and labour of the society.
BOOK I.
OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE
POWERS OF LABOUR, AND
OF THE ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY DISTRIBUTED
AMONG THE DIFFERENT RANKS OF THE PEOPLE.
CHAPTER I.
OF THE DIVISION OF LABOUR.
The greatest improvements in the productive powers of labour,
and the
greater part of the skill, dexterity, and judgment, with which it is
anywhere directed, or applied, seem to have been the effects of the
division of labour. The effects of the division of labour, in the
general business of society, will be more easily understood, by
considering in what manner it operates in some particular
manufactures. It is commonly supposed to be carried furthest in some
very trifling ones; not perhaps that it really is carried further in
them than in others of more importance: but in those trifling
manufactures which are destined to supply the small wants of but a
small number of people, the whole number of workmen must necessarily
be small; and those employed in every different branch of the work can
often be collected into the same workhouse, and placed at once under
the view of the spectator.
In those great manufactures, on the contrary, which are destined
to
supply the great wants of the great body of the people, every
different branch of the work employs so great a number of workmen,
that it is impossible to collect them all into the same workhouse. We
can seldom see more, at one time, than those employed in one single
branch. Though in such manufactures, therefore, the work may really be
divided into a much greater number of parts, than in those of a more
trifling nature, the division is not near so obvious, and has
accordingly been much less observed.
To take an example, therefore, from a very trifling manufacture,
but
one in which the division of labour has been very often taken notice
of, the trade of a pin-maker: a workman not educated to this business
(which the division of labour has rendered a distinct trade, nor
acquainted with the use of the machinery employed in it (to the
invention of which the same division of labour has probably given
occasion), could scarce, perhaps, with his utmost industry, make one
pin in a day, and certainly could not make twenty. But in the way in
which this business is now carried on, not only the whole work is a
peculiar trade, but it is divided into a number of branches, of which
the greater part are likewise peculiar trades. One man draws out the
wire; another straights it; a third cuts it; a fourth points it; a
fifth grinds it at the top for receiving the head; to make the head
requires two or three distinct operations; to put it on is a peculiar
business; to whiten the pins is another; it is even a trade by itself
to put them into the paper; and the important business of making a pin
is, in this manner, divided into about eighteen distinct operations,
which, in some manufactories, are all performed by distinct hands,
though in others the same man will sometimes perform two or three of
them. I have seen a small manufactory of this kind, where ten men only
were employed, and where some of them consequently performed two or
three distinct operations. But though they were very poor, and
therefore but indifferently accommodated with the necessary machinery,
they could, when they exerted themselves, make among them about twelve
pounds of pins in a day. There are in a pound upwards of four thousand
pins of a middling size. Those ten persons, therefore, could make
among them upwards of forty-eight thousand pins in a day. Each person,
therefore, making a tenth part of forty-eight thousand pins, might be
considered as making four thousand eight hundred pins in a day. But if
they had all wrought separately and independently, and without any of
them having been educated to this peculiar business, they certainly
could not each of them have made twenty, perhaps not one pin in a day;
that is, certainly, not the two hundred and fortieth, perhaps not the
four thousand eight hundredth, part of what they are at present
capable of performing, in consequence of a proper division and
combination of their different operations.
In every other art and manufacture, the effects of the division
of
labour are similar to what they are in this very trifling one, though,
in many of them, the labour can neither be so much subdivided, nor
reduced to so great a simplicity of operation. The division of labour,
however, so far as it can be introduced, occasions, in every art, a
proportionable increase of the productive powers of labour. The
separation of different trades and employments from one another, seems
to have taken place in consequence of this advantage. This separation,
too, is generally carried furthest in those countries which enjoy the
highest degree of industry and improvement; what is the work of one
man, in a rude state of society, being generally that of several in an
improved one. In every improved society, the farmer is generally
nothing but a farmer; the manufacturer, nothing but a manufacturer.
The labour, too, which is necessary to produce any one complete
manufacture, is almost always divided among a great number of hands.
How many different trades are employed in each branch of the linen and
woollen manufactures, from the growers of the flax and the wool, to
the bleachers and smoothers of the linen, or to the dyers and dressers
of the cloth! The nature of agriculture, indeed, does not admit of so
many subdivisions of labour, nor of so complete a separation of one
business from another, as manufactures. It is impossible to separate
so entirely the business of the grazier from that of the corn-farmer,
as the trade of the carpenter is commonly separated from that of the
smith. The spinner is almost always a distinct person from the,
weaver; but the ploughman, the harrower, the sower of the seed, and
the reaper of the corn, are often the same. The occasions for those
different sorts of labour returning with the different seasons of the
year, it is impossible that one man should be constantly employed in
any one of them. This impossibility of making so complete and entire a
separation of all the different branches of labour employed in
agriculture, is perhaps the reason why the improvement of the
productive powers of labour, in this art, does not always keep pace
with their improvement in manufactures. The most opulent nations,
indeed, generally excel all their neighbours in agriculture as well as
in manufactures; but they are commonly more distinguished by their
superiority in the latter than in the former. Their lands are in
general better cultivated, and having more labour and expense bestowed
upon them, produce more in proportion to the extent and natural
fertility of the ground. But this superiority of produce is seldom
much more than in proportion to the superiority of labour and expense.
In agriculture, the labour of the rich country is not always much more
productive than that of the poor; or, at least, it is never so much
more productive, as it commonly is in manufactures. The corn of the
rich country, therefore, will not always, in the same degree of
goodness, come cheaper to market than that of the poor. The corn of
Poland, in the same degree of goodness, is as cheap as that of France,
notwithstanding the superior opulence and improvement of the latter
country. The corn of France is, in the corn-provinces, fully as good,
and in most years nearly about the same price with the corn of
England, though, in opulence and improvement, France is perhaps
inferior to England. The corn-lands of England, however, are better
cultivated than those of France, and the corn-lands of France are said
to be much better cultivated than those of Poland. But though the poor
country, notwithstanding the inferiority of its cultivation, can, in
some measure, rival the rich in the cheapness and goodness of its
corn, it can pretend to no such competition in its manufactures, at
least if those manufactures suit the soil, climate, and situation, of
the rich country. The silks of France are better and cheaper than
those of England, because the silk manufacture, at least under the
present high duties upon the importation of raw silk, does not so well
suit the climate of England as that of France. But the hardware and
the coarse woollens of England are beyond all comparison superior to
those of France, and much cheaper, too, in the same degree of
goodness. In Poland there are said to be scarce any manufactures of
any kind, a few of those coarser household manufactures excepted,
without which no country can well subsist.
This great increase in the quantity of work, which, in consequence
of
the division of labour, the same number of people are capable of
performing, is owing to three different circumstances; first, to the
increase of dexterity in every particular workman; secondly, to the
saving of the time which is commonly lost in passing from one species
of work to another; and, lastly, to the invention of a great number of
machines which facilitate and abridge labour, and enable one man to do
the work of many.
First, the improvement of the dexterity of the workmen, necessarily
increases the quantity of the work he can perform; and the division of
labour, by reducing every man's business to some one simple operation,
and by making this operation the sole employment of his life,
necessarily increases very much the dexterity of the workman. A common
smith, who, though accustomed to handle the hammer, has never been
used to make nails, if, upon some particular occasion, he is obliged
to attempt it, will scarce, I am assured, be able to make above two or
three hundred nails in a day, and those, too, very bad ones. A smith
who has been accustomed to make nails, but whose sole or principal
business has not been that of a nailer, can seldom, with his utmost
diligence, make more than eight hundred or a thousand nails in a day.
I have seen several boys, under twenty years of age, who had never
exercised any other trade but that of making nails, and who, when they
exerted themselves, could make, each of them, upwards of two thousand
three hundred nails in a day. The making of a nail, however, is by no
means one of the simplest operations. The same person blows the
bellows, stirs or mends the fire as there is occasion, heats the iron,
and forges every part of the nail: in forging the head, too, he is
obliged to change his tools. The different operations into which the
making of a pin, or of a metal button, is subdivided, are all of them
much more simple, and the dexterity of the person, of whose life it
has been the sole business to perform them, is usually much greater.
The rapidity with which some of the operations of those manufactures
are performed, exceeds what the human hand could, by those who had
never seen them, he supposed capable of acquiring.
Secondly, The advantage which is gained by saving the time commonly
lost in passing from one sort of work to another, is much greater than
we should at first view be apt to imagine it. It is impossible to pass
very quickly from one kind of work to another, that is carried on in a
different place, and with quite different tools. A country weaver, who
cultivates a small farm, must loose a good deal of time in passing
from his loom to the field, and from the field to his loom. When the
two trades can be carried on in the same workhouse, the loss of time
is, no doubt, much less. It is, even in this case, however, very
considerable. A man commonly saunters a little in turning his hand
from one sort of employment to another. When he first begins the new
work, he is seldom very keen and hearty; his mind, as they say, does
not go to it, and for some time he rather trifles than applies to good
purpose. The habit of sauntering, and of indolent careless
application, which is naturally, or rather necessarily, acquired by
every country workman who is obliged to change his work and his tools
every half hour, and to apply his hand in twenty different ways almost
every day of his life, renders him almost always slothful and lazy,
and incapable of any vigorous application, even on the most pressing
occasions. Independent, therefore, of his deficiency in point of
dexterity, this cause alone must always reduce considerably the
quantity of work which he is capable of performing.
Thirdly, and lastly, everybody must be sensible how much labour
is
facilitated and abridged by the application of proper machinery. It is
unnecessary to give any example. I shall only observe, therefore, that
the invention of all those machines by which labour is so much
facilitated and abridged, seems to have been originally owing to the
division of labour. Men are much more likely to discover easier and
readier methods of attaining any object, when the whole attention of
their minds is directed towards that single object, than when it is
dissipated among a great variety of things. But, in consequence of the
division of labour, the whole of every man's attention comes naturally
to be directed towards some one very simple object. It is naturally to
be expected, therefore, that some one or other of those who are
employed in each particular branch of labour should soon find out
easier and readier methods of performing their own particular work,
whenever the nature of it admits of such improvement. A great part of
the machines made use of in those manufactures in which labour is most
subdivided, were originally the invention of common workmen, who,
being each of them employed in some very simple operation, naturally
turned their thoughts towards finding out easier and readier methods
of performing it. Whoever has been much accustomed to visit such
manufactures, must frequently have been shewn very pretty machines,
which were the inventions of such workmen, in order to facilitate and
quicken their own particular part of the work. In the first fire
engines {this was the current designation for steam engines}, a boy
was constantly employed to open and shut alternately the communication
between the boiler and the cylinder, according as the piston either
ascended or descended. One of those boys, who loved to play with his
companions, observed that, by tying a string from the handle of the
valve which opened this communication to another part of the machine,
the valve would open and shut without his assistance, and leave him at
liberty to divert himself with his play-fellows. One of the greatest
improvements that has been made upon this machine, since it was first
invented, was in this manner the discovery of a boy who wanted to save
his own labour.
All the improvements in machinery, however, have by no means
been the
inventions of those who had occasion to use the machines. Many
improvements have been made by the ingenuity of the makers of the
machines, when to make them became the business of a peculiar trade;
and some by that of those who are called philosophers, or men of
speculation, whose trade it is not to do any thing, but to observe
every thing, and who, upon that account, are often capable of
combining together the powers of the most distant and dissimilar
objects in the progress of society, philosophy or speculation becomes,
like every other employment, the principal or sole trade and
occupation of a particular class of citizens. Like every other
employment, too, it is subdivided into a great number of different
branches, each of which affords occupation to a peculiar tribe or
class of philosophers; and this subdivision of employment in
philosophy, as well as in every other business, improve dexterity, and
saves time. Each individual becomes more expert in his own peculiar
branch, more work is done upon the whole, and the quantity of science
is considerably increased by it.
It is the great multiplication of the productions of all the
different
arts, in consequence of the division of labour, which occasions, in a
well-governed society, that universal opulence which extends itself to
the lowest ranks of the people. Every workman has a great quantity of
his own work to dispose of beyond what he himself has occasion for;
and every other workman being exactly in the same situation, he is
enabled to exchange a great quantity of his own goods for a great
quantity or, what comes to the same thing, for the price of a great
quantity of theirs. He supplies them abundantly with what they have
occasion for, and they accommodate him as amply with what he has
occasion for, and a general plenty diffuses itself through all the
different ranks of the society.
Observe the accommodation of the most common artificer or daylabourer
in a civilized and thriving country, and you will perceive that the
number of people, of whose industry a part, though but a small part,
has been employed in procuring him this accommodation, exceeds all
computation. The woollen coat, for example, which covers the
day-labourer, as coarse and rough as it may appear, is the produce of
the joint labour of a great multitude of workmen. The shepherd, the
sorter of the wool, the wool-comber or carder, the dyer, the
scribbler, the spinner, the weaver, the fuller, the dresser, with many
others, must all join their different arts in order to complete even
this homely production. How many merchants and carriers, besides, must
have been employed in transporting the materials from some of those
workmen to others who often live in a very distant part of the
country? How much commerce and navigation in particular, how many
ship-builders, sailors, sail-makers, rope-makers, must have been
employed in order to bring together the different drugs made use of by
the dyer, which often come from the remotest corners of the world?
What a variety of labour, too, is necessary in order to produce the
tools of the meanest of those workmen! To say nothing of such
complicated machines as the ship of the sailor, the mill of the
fuller, or even the loom of the weaver, let us consider only what a
variety of labour is requisite in order to form that very simple
machine, the shears with which the shepherd clips the wool. The miner,
the builder of the furnace for smelting the ore the feller of the
timber, the burner of the charcoal to be made use of in the
smelting-house, the brickmaker, the bricklayer, the workmen who attend
the furnace, the millwright, the forger, the smith, must all of them
join their different arts in order to produce them. Were we to
examine, in the same manner, all the different parts of his dress and
household furniture, the coarse linen shirt which he wears next his
skin, the shoes which cover his feet, the bed which he lies on, and
all the different parts which compose it, the kitchen-grate at which
he prepares his victuals, the coals which he makes use of for that
purpose, dug from the bowels of the earth, and brought to him,
perhaps, by a long sea and a long land-carriage, all the other
utensils of his kitchen, all the furniture of his table, the knives
and forks, the earthen or pewter plates upon which he serves up and
divides his victuals, the different hands employed in preparing his
bread and his beer, the glass window which lets in the heat and the
light, and keeps out the wind and the rain, with all the knowledge and
art requisite for preparing that beautiful and happy invention,
without which these northern parts of the world could scarce have
afforded a very comfortable habitation, together with the tools of all
the different workmen employed in producing those different
conveniencies; if we examine, I say, all these things, and consider
what a variety of labour is employed about each of them, we shall be
sensible that, without the assistance and co-operation of many
thousands, the very meanest person in a civilized country could not be
provided, even according to, what we very falsely imagine, the easy
and simple manner in which he is commonly accommodated. Compared,
indeed, with the more extravagant luxury of the great, his
accommodation must no doubt appear extremely simple and easy; and yet
it may be true, perhaps, that the accommodation of an European prince
does not always so much exceed that of an industrious and frugal
peasant, as the accommodation of the latter exceeds that of many an
African king, the absolute masters of the lives and liberties of ten
thousand naked savages.
CHAPTER II.
OF THE PRINCIPLE WHICH GIVES OCCASION TO THE DIVISION OF LABOUR.
This division of labour, from which so many advantages are derived,
is
not originally the effect of any human wisdom, which foresees and
intends that general opulence to which it gives occasion. It is the
necessary, though very slow and gradual, consequence of a certain
propensity in human nature, which has in view no such extensive
utility; the propensity to truck, barter, and exchange one thing for
another.
Whether this propensity be one of those original principles
in human
nature, of which no further account can be given, or whether, as seems
more probable, it be the necessary consequence of the faculties of
reason and speech, it belongs not to our present subject to inquire.
It is common to all men, and to be found in no other race of animals,
which seem to know neither this nor any other species of contracts.
Two greyhounds, in running down the same hare, have sometimes the
appearance of acting in some sort of concert. Each turns her towards
his companion, or endeavours to intercept her when his companion turns
her towards himself. This, however, is not the effect of any contract,
but of the accidental concurrence of their passions in the same object
at that particular time. Nobody ever saw a dog make a fair and
deliberate exchange of one bone for another with another dog. Nobody
ever saw one animal, by its gestures and natural cries signify to
another, this is mine, that yours; I am willing to give this for that.
When an animal wants to obtain something either of a man, or of
another animal, it has no other means of persuasion, but to gain the
favour of those whose service it requires. A puppy fawns upon its dam,
and a spaniel endeavours, by a thousand attractions, to engage the
attention of its master who is at dinner, when it wants to be fed by
him. Man sometimes uses the same arts with his brethren, and when he
has no other means of engaging them to act according to his
inclinations, endeavours by every servile and fawning attention to
obtain their good will. He has not time, however, to do this upon
every occasion. In civilized society he stands at all times in need of
the co-operation and assistance of great multitudes, while his whole
life is scarce sufficient to gain the friendship of a few persons. In
almost every other race of animals, each individual, when it is grown
up to maturity, is entirely independent, and in its natural state has
occasion for the assistance of no other living creature. But man has
almost constant occasion for the help of his brethren, and it is in
vain for him to expect it from their benevolence only. He will be more
likely to prevail if he can interest their self-love in his favour,
and shew them that it is for their own advantage to do for him what he
requires of them. Whoever offers to another a bargain of any kind,
proposes to do this. Give me that which I want, and you shall have
this which you want, is the meaning of every such offer; and it is in
this manner that we obtain from one another the far greater part of
those good offices which we stand in need of. It is not from the
benevolence of the butcher the brewer, or the baker that we expect our
dinner, but from their regard to their own interest. We address
ourselves, not to their humanity, but to their self-love, and never
talk to them of our own necessities, but of their advantages. Nobody
but a beggar chooses to depend chiefly upon the benevolence of his
fellow-citizens. Even a beggar does not depend upon it entirely. The
charity of well-disposed people, indeed, supplies him with the whole
fund of his subsistence. But though this principle ultimately provides
him with all the necessaries of life which he has occasion for, it
neither does nor can provide him with them as he has occasion for
them. The greater part of his occasional wants are supplied in the
same manner as those of other people, by treaty, by barter, and by
purchase. With the money which one man gives him he purchases food.
The old clothes which another bestows upon him he exchanges for other
clothes which suit him better, or for lodging, or for food, or for
money, with which he can buy either food, clothes, or lodging, as he
has occasion.
As it is by treaty, by barter, and by purchase, that we obtain
from
one another the greater part of those mutual good offices which we
stand in need of, so it is this same trucking disposition which
originally gives occasion to the division of labour. In a tribe of
hunters or shepherds, a particular person makes bows and arrows, for
example, with more readiness and dexterity than any other. He
frequently exchanges them for cattle or for venison, with his
companions; and he finds at last that he can, in this manner, get more
cattle and venison, than if he himself went to the field to catch
them. From a regard to his own interest, therefore, the making of bows
and arrows grows to be his chief business, and he becomes a sort of
armourer. Another excels in making the frames and covers of their
little huts or moveable houses. He is accustomed to be of use in this
way to his neighbours, who reward him in the same manner with cattle
and with venison, till at last he finds it his interest to dedicate
himself entirely to this employment, and to become a sort of
house-carpenter. In the same manner a third becomes a smith or a
brazier; a fourth, a tanner or dresser of hides or skins, the
principal part of the clothing of savages. And thus the certainty of
being able to exchange all that surplus part of the produce of his own
labour, which is over and above his own consumption, for such parts of
the produce of other men's labour as he may have occasion for,
encourages every man to apply himself to a particular occupation, and
to cultivate and bring to perfection whatever talent of genius he may
possess for that particular species of business.
The difference of natural talents in different men, is, in reality,
much less than we are aware of; and the very different genius which
appears to distinguish men of different professions, when grown up to
maturity, is not upon many occasions so much the cause, as the effect
of the division of labour. The difference between the most dissimilar
characters, between a philosopher and a common street porter, for
example, seems to arise not so much from nature, as from habit,
custom, and education. When they came in to the world, and for the
first six or eight years of their existence, they were, perhaps, very
much alike, and neither their parents nor play-fellows could perceive
any remarkable difference. About that age, or soon after, they come to
be employed in very different occupations. The difference of talents
comes then to be taken notice of, and widens by degrees, till at last
the vanity of the philosopher is willing to acknowledge scarce any
resemblance. But without the disposition to truck, barter, and
exchange, every man must have procured to himself every necessary and
conveniency of life which he wanted. All must have had the same duties
to perform, and the same work to do, and there could have been no such
difference of employment as could alone give occasion to any great
difference of talents.
As it is this disposition which forms that difference of talents,
so
remarkable among men of different professions, so it is this same
disposition which renders that difference useful. Many tribes of
animals, acknowledged to be all of the same species, derive from
nature a much more remarkable distinction of genius, than what,
antecedent to custom and education, appears to take place among men.
By nature a philosopher is not in genius and disposition half so
different from a street porter, as a mastiff is from a grey-hound, or
a grey-hound from a spaniel, or this last from a shepherd's dog. Those
different tribes of animals, however, though all of the same species
are of scarce any use to one another. The strength of the mastiff is
not in the least supported either by the swiftness of the greyhound,
or by the sagacity of the spaniel, or by the docility of the
shepherd's dog. The effects of those different geniuses and talents,
for want of the power or disposition to barter and exchange, cannot be
brought into a common stock, and do not in the least contribute to the
better accommodation and conveniency of the species. Each animal is
still obliged to support and defend itself, separately and
independently, and derives no sort of advantage from that variety of
talents with which nature has distinguished its fellows. Among men, on
the contrary, the most dissimilar geniuses are of use to one another;
the different produces of their respective talents, by the general
disposition to truck, barter, and exchange, being brought, as it were,
into a common stock, where every man may purchase whatever part of the
produce of other men's talents he has occasion for,
CHAPTER III.
THAT THE DIVISION OF LABOUR IS LIMITED BY THE EXTENT OF THE MARKET.
As it is the power of exchanging that gives occasion to the
division
of labour, so the extent of this division must always be limited by
the extent of that power, or, in other words, by the extent of the
market. When the market is very small, no person can have any
encouragement to dedicate himself entirely to one employment, for want
of the power to exchange all that surplus part of the produce of his
own labour, which is over and above his own consumption, for such
parts of the produce of other men's labour as he has occasion for.
There are some sorts of industry, even of the lowest kind, which
can
be carried on nowhere but in a great town. A porter, for example, can
find employment and subsistence in no other place. A village is by
much too narrow a sphere for him; even an ordinary market-town is
scarce large enough to afford him constant occupation. In the lone
houses and very small villages which are scattered about in so desert
a country as the highlands of Scotland, every farmer must be butcher,
baker, and brewer, for his own family. In such situations we can
scarce expect to find even a smith, a carpenter, or a mason, within
less than twenty miles of another of the same trade. The scattered
families that live at eight or ten miles distance from the nearest of
them, must learn to perform themselves a great number of little pieces
of work, for which, in more populous countries, they would call in the
assistance of those workmen. Country workmen are almost everywhere
obliged to apply themselves to all the different branches of industry
that have so much affinity to one another as to be employed about the
same sort of materials. A country carpenter deals in every sort of
work that is made of wood; a country smith in every sort of work that
is made of iron. The former is not only a carpenter, but a joiner, a
cabinet-maker, and even a carver in wood, as well as a wheel-wright, a
plough-wright, a cart and waggon-maker. The employments of the latter
are still more various. It is impossible there should be such a trade
as even that of a nailer in the remote and inland parts of the
highlands of Scotland. Such a workman at the rate of a thousand nails
a-day, and three hundred working days in the year, will make three
hundred thousand nails in the year. But in such a situation it would
be impossible to dispose of one thousand, that is, of one day's work
in the year. As by means of water-carriage, a more extensive market is
opened to every sort of industry than what land-carriage alone can
afford it, so it is upon the sea-coast, and along the banks of
navigable rivers, that industry of every kind naturally begins to
subdivide and improve itself, and it is frequently not till a long
time after that those improvements extend themselves to the inland
parts of the country. A broad-wheeled waggon, attended by two men, and
drawn by eight horses, in about six weeks time, carries and brings
back between London and Edinburgh near four ton weight of goods. In
about the same time a ship navigated by six or eight men, and sailing
between the ports of London and Leith, frequently carries and brings
back two hundred ton weight of goods. Six or eight men, therefore, by
the help of water-carriage, can carry and bring back, in the same
time, the same quantity of goods between London and Edinburgh as fifty
broad-wheeled waggons, attended by a hundred men, and drawn by four
hundred horses. Upon two hundred tons of goods, therefore, carried by
the cheapest land-carriage from London to Edinburgh, there must be
charged the maintenance of a hundred men for three weeks, and both the
maintenance and what is nearly equal to maintenance the wear and tear
of four hundred horses, as well as of fifty great waggons. Whereas,
upon the same quantity of goods carried by water, there is to be
charged only the maintenance of six or eight men, and the wear and
tear of a ship of two hundred tons burthen, together with the value of
the superior risk, or the difference of the insurance between land and
water-carriage. Were there no other communication between those two
places, therefore, but by land-carriage, as no goods could be
transported from the one to the other, except such whose price was
very considerable in proportion to their weight, they could carry on
but a small part of that commerce which at present subsists between
them, and consequently could give but a small part of that
encouragement which they at present mutually afford to each other's
industry. There could be little or no commerce of any kind between the
distant parts of the world. What goods could bear the expense of
land-carriage between London and Calcutta? Or if there were any so
precious as to be able to support this expense, with what safety could
they be transported through the territories of so many barbarous
nations? Those two cities, however, at present carry on a very
considerable commerce with each other, and by mutually affording a
market, give a good deal of encouragement to each other's industry.
Since such, therefore, are the advantages of water-carriage,
it is
natural that the first improvements of art and industry should be made
where this conveniency opens the whole world for a market to the
produce of every sort of labour, and that they should always be much
later in extending themselves into the inland parts of the country.
The inland parts of the country can for a long time have no other
market for the greater part of their goods, but the country which lies
round about them, and separates them from the sea-coast, and the great
navigable rivers. The extent of the market, therefore, must for a long
time be in proportion to the riches and populousness of that country,
and consequently their improvement must always be posterior to the
improvement of that country. In our North American colonies, the
plantations have constantly followed either the sea-coast or the banks
of the navigable rivers, and have scarce anywhere extended themselves
to any considerable distance from both.
The nations that, according to the best authenticated history,
appear
to have been first civilized, were those that dwelt round the coast of
the Mediterranean sea. That sea, by far the greatest inlet that is
known in the world, having no tides, nor consequently any waves,
except such as are caused by the wind only, was, by the smoothness of
its surface, as well as by the multitude of its islands, and the
proximity of its neighbouring shores, extremely favourable to the
infant navigation of the world; when, from their ignorance of the
compass, men were afraid to quit the view of the coast, and from the
imperfection of the art of ship-building, to abandon themselves to the
boisterous waves of the ocean. To pass beyond the pillars of Hercules,
that is, to sail out of the straits of Gibraltar, was, in the ancient
world, long considered as a most wonderful and dangerous exploit of
navigation. It was late before even the Phoenicians and Carthaginians,
the most skilful navigators and ship-builders of those old times,
attempted it; and they were, for a long time, the only nations that
did attempt it.
Of all the countries on the coast of the Mediterranean sea,
Egypt
seems to have been the first in which either agriculture or
manufactures were cultivated and improved to any considerable degree.
Upper Egypt extends itself nowhere above a few miles from the Nile;
and in Lower Egypt, that great river breaks itself into many different
canals, which, with the assistance of a little art, seem to have
afforded a communication by water-carriage, not only between all the
great towns, but between all the considerable villages, and even to
many farm-houses in the country, nearly in the same manner as the
Rhine and the Maese do in Holland at present. The extent and easiness
of this inland navigation was probably one of the principal causes of
the early improvement of Egypt.
The improvements in agriculture and manufactures seem likewise
to have
been of very great antiquity in the provinces of Bengal, in the East
Indies, and in some of the eastern provinces of China, though the
great extent of this antiquity is not authenticated by any histories
of whose authority we, in this part of the world, are well assured. In
Bengal, the Ganges, and several other great rivers, form a great
number of navigable canals, in the same manner as the Nile does in
Egypt. In the eastern provinces of China, too, several great rivers
form, by their different branches, a multitude of canals, and, by
communicating with one another, afford an inland navigation much more
extensive than that either of the Nile or the Ganges, or, perhaps,
than both of them put together. It is remarkable, that neither the
ancient Egyptians, nor the Indians, nor the Chinese, encouraged
foreign commerce, but seem all to have derived their great opulence
from this inland navigation.
All the inland parts of Africa, and all that part of Asia which
lies
any considerable way north of the Euxine and Caspian seas, the ancient
Scythia, the modern Tartary and Siberia, seem, in all ages of the
world, to have been in the same barbarous and uncivilized state in
which we find them at present. The sea of Tartary is the frozen ocean,
which admits of no navigation; and though some of the greatest rivers
in the world run through that country, they are at too great a
distance from one another to carry commerce and communication through
the greater part of it. There are in Africa none of those great
inlets, such as the Baltic and Adriatic seas in Europe, the
Mediterranean and Euxine seas in both Europe and Asia, and the gulfs
of Arabia, Persia, India, Bengal, and Siam, in Asia, to carry maritime
commerce into the interior parts of that great continent; and the
great rivers of Africa are at too great a distance from one another to
give occasion to any considerable inland navigation. The commerce,
besides, which any nation can carry on by means of a river which does
not break itself into any great number of branches or canals, and
which runs into another territory before it reaches the sea, can never
be very considerable, because it is always in the power of the nations
who possess that other territory to obstruct the communication between
the upper country and the sea. The navigation of the Danube is of very
little use to the different states of Bavaria, Austria, and Hungary,
in comparison of what it would be, if any of them possessed the whole
of its course, till it falls into the Black sea.
CHAPTER IV.
OF THE ORIGIN AND USE OF MONEY.
When the division of labour has been once thoroughly established,
it
is but a very small part of a man's wants which the produce of his own
labour can supply. He supplies the far greater part of them by
exchanging that surplus part of the produce of his own labour, which
is over and above his own consumption, for such parts of the produce
of other men's labour as he has occasion for. Every man thus lives by
exchanging, or becomes, in some measure, a merchant, and the society
itself grows to be what is properly a commercial society.
But when the division of labour first began to take place, this
power
of exchanging must frequently have been very much clogged and
embarrassed in its operations. One man, we shall suppose, has more of
a certain commodity than he himself has occasion for, while another
has less. The former, consequently, would be glad to dispose of; and
the latter to purchase, a part of this superfluity. But if this latter
should chance to have nothing that the former stands in need of, no
exchange can be made between them. The butcher has more meat in his
shop than he himself can consume, and the brewer and the baker would
each of them be willing to purchase a part of it. But they have
nothing to offer in exchange, except the different productions of
their respective trades, and the butcher is already provided with all
the bread and beer which he has immediate occasion for. No exchange
can, in this case, be made between them. He cannot be their merchant,
nor they his customers; and they are all of them thus mutually less
serviceable to one another. In order to avoid the inconveniency of
such situations, every prudent man in every period of society, after
the first establishment of the division of labour, must naturally have
endeavoured to manage his affairs in such a manner, as to have at all
times by him, besides the peculiar produce of his own industry, a
certain quantity of some one commodity or other, such as he imagined
few people would be likely to refuse in exchange for the produce of
their industry. Many different commodities, it is probable, were
successively both thought of and employed for this purpose. In the
rude ages of society, cattle are said to have been the common
instrument of commerce; and, though they must have been a most
inconvenient one, yet, in old times, we find things were frequently
valued according to the number of cattle which had been given in
exchange for them. The armour of Diomede, says Homer, cost only nine
oxen; but that of Glaucus cost a hundred oxen. Salt is said to be the
common instrument of commerce and exchanges in Abyssinia; a species of
shells in some parts of the coast of India; dried cod at Newfoundland;
tobacco in Virginia; sugar in some of our West India colonies; hides
or dressed leather in some other countries; and there is at this day a
village In Scotland, where it is not uncommon, I am told, for a
workman to carry nails instead of money to the baker's shop or the
ale-house.
In all countries, however, men seem at last to have been determined
by
irresistible reasons to give the preference, for this employment, to
metals above every other commodity. Metals can not only be kept with
as little loss as any other commodity, scarce any thing being less
perishable than they are, but they can likewise, without any loss, be
divided into any number of parts, as by fusion those parts can easily
be re-united again; a quality which no other equally durable
commodities possess, and which, more than any other quality, renders
them fit to be the instruments of commerce and circulation. The man
who wanted to buy salt, for example, and had nothing but cattle to
give in exchange for it, must have been obliged to buy salt to the
value of a whole ox, or a whole sheep, at a time. He could seldom buy
less than this, because what he was to give for it could seldom be
divided without loss; and if he had a mind to buy more, he must, for
the same reasons, have been obliged to buy double or triple the
quantity, the value, to wit, of two or three oxen, or of two or three
sheep. If, on the contrary, instead of sheep or oxen, he had metals to
give in exchange for it, he could easily proportion the quantity of
the metal to the precise quantity of the commodity which he had
immediate occasion for.
Different metals have been made use of by different nations
for this
purpose. Iron was the common instrument of commerce among the ancient
Spartans, copper among the ancient Romans, and gold and silver among
all rich and commercial nations.
Those metals seem originally to have been made use of for this
purpose
in rude bars, without any stamp or coinage. Thus we are told by Pliny
(Plin. Hist Nat. lib. 33, cap. 3), upon the authority of Timaeus, an
ancient historian, that, till the time of Servius Tullius, the Romans
had no coined money, but made use of unstamped bars of copper, to
purchase whatever they had occasion for. These rude bars, therefore,
performed at this time the function of money.
The use of metals in this rude state was attended with two very
considerable inconveniences; first, with the trouble of weighing, and
secondly, with that of assaying them. In the precious metals, where a
small difference in the quantity makes a great difference in the
value, even the business of weighing, with proper exactness, requires
at least very accurate weights and scales. The weighing of gold, in
particular, is an operation of some nicety In the coarser metals,
indeed, where a small error would be of little consequence, less
accuracy would, no doubt, be necessary. Yet we should find it
excessively troublesome if every time a poor man had occasion either
to buy or sell a farthing's worth of goods, he was obliged to weigh
the farthing. The operation of assaying is still more difficult, still
more tedious; and, unless a part of the metal is fairly melted in the
crucible, with proper dissolvents, any conclusion that can be drawn
from it is extremely uncertain. Before the institution of coined
money, however, unless they went through this tedious and difficult
operation, people must always have been liable to the grossest frauds
and impositions; and instead of a pound weight of pure silver, or pure
copper, might receive, in exchange for their goods, an adulterated
composition of the coarsest and cheapest materials, which had,
however, in their outward appearance, been made to resemble those
metals. To prevent such abuses, to facilitate exchanges, and thereby
to encourage all sorts of industry and commerce, it has been found
necessary, in all countries that have made any considerable advances
towards improvement, to affix a public stamp upon certain quantities
of such particular metals, as were in those countries commonly made
use of to purchase goods. Hence the origin of coined money, and of
those public offices called mints; institutions exactly of the same
nature with those of the aulnagers and stamp-masters of woollen and
linen cloth. All of them are equally meant to ascertain, by means of a
public stamp, the quantity and uniform goodness of those different
commodities when brought to market.
The first public stamps of this kind that were affixed to the
current
metals, seem in many cases to have been intended to ascertain, what it
was both most difficult and most important to ascertain, the goodness
or fineness of the metal, and to have resembled the sterling mark
which is at present affixed to plate and bars of silver, or the
Spanish mark which is sometimes affixed to ingots of gold, and which,
being struck only upon one side of the piece, and not covering the
whole surface, ascertains the fineness, but not the weight of the
metal. Abraham weighs to Ephron the four hundred shekels of silver
which he had agreed to pay for the field of Machpelah. They are said,
however, to be the current money of the merchant, and yet are received
by weight, and not by tale, in the same manner as ingots of gold and
bars of silver are at present. The revenues of the ancient Saxon kings
of England are said to have been paid, not in money, but in kind, that
is, in victuals and provisions of all sorts. William the Conqueror
introduced the custom of paying them in money. This money, however,
was for a long time, received at the exchequer, by weight, and not by
tale,
The inconveniency and difficulty of weighing those metals with
exactness, gave occasion to the institution of coins, of which the
stamp, covering entirely both sides of the piece, and sometimes the
edges too, was supposed to ascertain not only the fineness, but the
weight of the metal. Such coins, therefore, were received by tale, as
at present, without the trouble of weighing.
The denominations of those coins seem originally to have expressed
the
weight or quantity of metal contained in them. In the time of Servius
Tullius, who first coined money at Rome, the Roman as or pondo
contained a Roman pound of good copper. It was divided, in the same
manner as our Troyes pound, into twelve ounces, each of which
contained a real ounce of good copper. The English pound sterling, in
the time of Edward I. contained a pound, Tower weight, of silver of a
known fineness. The Tower pound seems to have been something more than
the Roman pound, and something less than the Troyes pound. This last
was not introduced into the mint of England till the 18th of Henry the
VIII. The French livre contained, in the time of Charlemagne, a pound,
Troyes weight, of silver of a known fineness. The fair of Troyes in
Champaign was at that time frequented by all the nations of Europe,
and the weights and measures of so famous a market were generally
known and esteemed. The Scots money pound contained, from the time of
Alexander the First to that of Robert Bruce, a pound of silver of the
same weight and fineness with the English pound sterling. English,
French, and Scots pennies, too, contained all of them originally a
real penny-weight of silver, the twentieth part of an ounce, and the
two hundred-and-fortieth part of a pound. The shilling, too, seems
originally to have been the denomination of a weight. "When wheat is
at twelve shillings the quarter," says an ancient statute of Henry
III. "then wastel bread of a farthing shall weigh eleven shillings and
fourpence". The proportion, however, between the shilling, and either
the penny on the one hand, or the pound on the other, seems not to
have been so constant and uniform as that between the penny and the
pound. During the first race of the kings of France, the French sou or
shilling appears upon different occasions to have contained five,
twelve, twenty, and forty pennies. Among the ancient Saxons, a
shilling appears at one time to have contained only five pennies, and
it is not improbable that it may have been as variable among them as
among their neighbours, the ancient Franks. From the time of
Charlemagne among the French, and from that of William the Conqueror
among the English, the proportion between the pound, the shilling, and
the penny, seems to have been uniformly the same as at present, though
the value of each has been very different; for in every country of the
world, I believe, the avarice and injustice of princes and sovereign
states, abusing the confidence of their subjects, have by degrees
diminished the real quantity of metal, which had been originally
contained in their coins. The Roman as, in the latter ages of the
republic, was reduced to the twenty-fourth part of its original value,
and, instead of weighing a pound, came to weigh only half an ounce.
The English pound and penny contain at present about a third only; the
Scots pound and penny about a thirty-sixth; and the French pound and
penny about a sixty-sixth part of their original value. By means of
those operations, the princes and sovereign states which performed
them were enabled, in appearance, to pay their debts and fulfil their
engagements with a smaller quantity of silver than would otherwise
have been requisite. It was indeed in appearance only; for their
creditors were really defrauded of a part of what was due to them. All
other debtors in the state were allowed the same privilege, and might
pay with the same nominal sum of the new and debased coin whatever
they had borrowed in the old. Such operations, therefore, have always
proved favourable to the debtor, and ruinous to the creditor, and have
sometimes produced a greater and more universal revolution in the
fortunes of private persons, than could have been occasioned by a very
great public calamity.
It is in this manner that money has become, in all civilized
nations,
the universal instrument of commerce, by the intervention of which
goods of all kinds are bought and sold, or exchanged for one another.
What are the rules which men naturally observe, in exchanging
them
either for money, or for one another, I shall now proceed to examine.
These rules determine what may be called the relative or exchangeable
value of goods.
The word VALUE, it is to be observed, has two different meanings,
and
sometimes expresses the utility of some particular object, and
sometimes the power of purchasing other goods which the possession of
that object conveys. The one may be called 'value in use;' the other,
'value in exchange.' The things which have the greatest value in use
have frequently little or no value in exchange; and, on the contrary,
those which have the greatest value in exchange have frequently little
or no value in use. Nothing is more useful than water; but it will
purchase scarce any thing; scarce any thing can be had in exchange for
it. A diamond, on the contrary, has scarce any value in use; but a
very great quantity of other goods may frequently be had in exchange
for it.
In order to investigate the principles which regulate the exchangeable
value of commodities, I shall endeavour to shew,
First, what is the real measure of this exchangeable value;
or wherein
consists the real price of all commodities.
Secondly, what are the different parts of which this real price
is
composed or made up.
And, lastly, what are the different circumstances which sometimes
raise some or all of these different parts of price above, and
sometimes sink them below, their natural or ordinary rate; or, what
are the causes which sometimes hinder the market price, that is, the
actual price of commodities, from coinciding exactly with what may be
called their natural price.
I shall endeavour to explain, as fully and distinctly as I can,
those
three subjects in the three following chapters, for which I must very
earnestly entreat both the patience and attention of the reader: his
patience, in order to examine a detail which may, perhaps, in some
places, appear unnecessarily tedious; and his attention, in order to
understand what may perhaps, after the fullest explication which I am
capable of giving it, appear still in some degree obscure. I am always
willing to run some hazard of being tedious, in order to be sure that
I am perspicuous; and, after taking the utmost pains that I can to be
perspicuous, some obscurity may still appear to remain upon a subject,
in its own nature extremely abstracted.
CHAPTER V.
OF THE REAL AND NOMINAL PRICE OF COMMODITIES, OR OF
THEIR PRICE IN
LABOUR, AND THEIR PRICE IN MONEY.
Every man is rich or poor according to the degree in which he
can
afford to enjoy the necessaries, conveniencies, and amusements of
human life. But after the division of labour has once thoroughly taken
place, it is but a very small part of these with which a man's own
labour can supply him. The far greater part of them he must derive
from the labour of other people, and he must be rich or poor according
to the quantity of that labour which he can command, or which he can
afford to purchase. The value of any commodity, therefore, to the
person who possesses it, and who means not to use or consume it
himself, but to exchange it for other commodities, is equal to the
quantity of labour which it enables him to purchase or command. Labour
therefore, is the real measure of the exchangeable value of all
commodities.
The real price of every thing, what every thing really costs
to the
man who wants to acquire it, is the toil and trouble of acquiring it.
What every thing is really worth to the man who has acquired it and
who wants to dispose of it, or exchange it for something else, is the
toil and trouble which it can save to himself, and which it can impose
upon other people. What is bought with money, or with goods, is
purchased by labour, as much as what we acquire by the toil of our own
body. That money, or those goods, indeed, save us this toil. They
contain the value of a certain quantity of labour, which we exchange
for what is supposed at the time to contain the value of an equal
quantity. Labour was the first price, the original purchase money that
was paid for all things. It was not by gold or by silver, but by
labour, that all the wealth of the world was originally purchased; and
its value, to those who possess it, and who want to exchange it for
some new productions, is precisely equal to the quantity of' labour
which it can enable them to purchase or command.
Wealth, as Mr Hobbes says, is power. But the person who either
acquires, or succeeds to a great fortune, does not necessarily acquire
or succeed to any political power, either civil or military. His
fortune may, perhaps, afford him the means of acquiring both; but the
mere possession of that fortune does not necessarily convey to him
either. The power which that possession immediately and directly
conveys to him, is the power of purchasing a certain command over all
the labour, or over all the produce of labour which is then in the
market. His fortune is greater or less, precisely in proportion to the
extent of this power, or to the quantity either of other men's labour,
or, what is the same thing, of the produce of other men's labour,
which it enables him to purchase or command. The exchangeable value of
every thing must always be precisely equal to the extent of this power
which it conveys to its owner.
But though labour be the real measure of the exchangeable value
of all
commodities, it is not that by which their value is commonly
estimated. It is often difficult to ascertain the proportion between
two different quantities of labour. The time spent in two different
sorts of work will not always alone determine this proportion. The
different degrees of hardship endured, and of ingenuity exercised,
must likewise be taken into account. There may be more labour in an
hour's hard work, than in two hours easy business; or in an hour's
application to a trade which it cost ten years labour to learn, than
in a month's industry, at an ordinary and obvious employment. But it
is not easy to find any accurate measure either of hardship or
ingenuity. In exchanging, indeed, the different productions of
different sorts of labour for one another, some allowance is commonly
made for both. It is adjusted, however, not by any accurate measure,
but by the higgling and bargaining of the market, according to that
sort of rough equality which, though not exact, is sufficient for
carrying on the business of common life.
Every commodity, besides, Is more frequently exchanged for,
and
thereby compared with, other commodities, than with labour. It is more
natural, therefore, to estimate its exchangeable value by the quantity
of some other commodity, than by that of the labour which it can
produce. The greater part of people, too, understand better what is
meant by a quantity of a particular commodity, than by a quantity of
labour. The one is a plain palpable object; the other an abstract
notion, which though it can be made sufficiently intelligible, is not
altogether so natural and obvious.
But when barter ceases, and money has become the common instrument
of
commerce, every particular commodity is more frequently exchanged for
money than for any other commodity. The butcher seldom carries his
beef or his mutton to the baker or the brewer, in order to exchange
them for bread or for beer; but he carries them to the market, where
he exchanges them for money, and afterwards exchanges that money for
bread and for beer. The quantity of money which he gets for them
regulates, too, the quantity of bread and beer which he can afterwards
purchase. It is more natural and obvious to him, therefore, to
estimate their value by the quantity of money, the commodity for which
he immediately exchanges them, than by that of bread and beer, the
commodities for which he can exchange them only by the intervention of
another commodity; and rather to say that his butcher's meat is worth
three-pence or fourpence a-pound, than that it is worth three or four
pounds of bread, or three or four quarts of small beer. Hence it comes
to pass, that the exchangeable value of every commodity is more
frequently estimated by the quantity of money, than by the quantity
either of labour or of any other commodity which can be had in
exchange for it.
Gold and silver, however, like every other commodity, vary in
their
value; are sometimes cheaper and sometimes dearer, sometimes of easier
and sometimes of more difficult purchase. The quantity of labour which
any particular quantity of them can purchase or command, or the
quantity of other goods which it will exchange for, depends always
upon the fertility or barrenness of the mines which happen to be known
about the time when such exchanges are made. The discovery of the
abundant mines of America, reduced, in the sixteenth century, the
value of gold and silver in Europe to about a third of what it had
been before. As it cost less labour to bring those metals from the
mine to the market, so, when they were brought thither, they could
purchase or command less labour; and this revolution in their value,
though perhaps the greatest, is by no means the only one of which
history gives some account. But as a measure of quantity, such as the
natural foot, fathom, or handful, which is continually varying in its
own quantity, can never be an accurate measure of the quantity of
other things; so a commodity which is itself continually varying in
its own value, can never be an accurate measure of the value of other
commodities. Equal quantities of labour, at all times and places, may
be said to be of equal value to the labourer. In his ordinary state of
health, strength, and spirits; in the ordinary degree of his skill and
dexterity, he must always lay down the same portion of his ease, his
liberty, and his happiness. The price which he pays must always be the
same, whatever may be the quantity of goods which he receives in
return for it. Of these, indeed, it may sometimes purchase a greater
and sometimes a smaller quantity; but it is their value which varies,
not that of the labour which purchases them. At all times and places,
that is dear which it is difficult to come at, or which it costs much
labour to acquire; and that cheap which is to be had easily, or with
very little labour. Labour alone, therefore, never varying in its own
value, is alone the ultimate and real standard by which the value of
all commodities can at all times and places be estimated and compared.
It is their real price; money is their nominal price only.
But though equal quantities of labour are always of equal value
to the
labourer, yet to the person who employs him they appear sometimes to
be of greater, and sometimes of smaller value. He purchases them
sometimes with a greater, and sometimes with a smaller quantity of
goods, and to him the price of labour seems to vary like that of all
other things. It appears to him dear in the one case, and cheap in the
other. In reality, however, it is the goods which are cheap in the one
case, and dear in the other.
In this popular sense, therefore, labour, like commodities,
may be
said to have a real and a nominal price. Its real price may be said to
consist in the quantity of the necessaries and conveniencies of life
which are given for it; its nominal price, in the quantity of money.
The labourer is rich or poor, is well or ill rewarded, in proportion
to the real, not to the nominal price of his labour.
The distinction between the real and the nominal price of commodities
and labour is not a matter of mere speculation, but may sometimes be
of considerable use in practice. The same real price is always of the
same value; but on account of the variations in the value of gold and
silver, the same nominal price is sometimes of very different values.
When a landed estate, therefore, is sold with a reservation of a
perpetual rent, if it is intended that this rent should always be of
the same value, it is of importance to the family in whose favour it
is reserved, that it should not consist in a particular sum of money.
Its value would in this case be liable to variations of two different
kinds: first, to those which arise from the different quantities of
gold and silver which are contained at different times in coin of the
same denomination; and, secondly, to those which arise from the
different values of equal quantities of gold and silver at different
times.
Princes and sovereign states have frequently fancied that they
had a
temporary interest to diminish the quantity of pure metal contained in
their coins; but they seldom have fancied that they had any to augment
it. The quantity of metal contained in the coins, I believe of all
nations, has accordingly been almost continually diminishing, and
hardly ever augmenting. Such variations, therefore, tend almost always
to diminish the value of a money rent.
The discovery of the mines of America diminished the value of
gold and
silver in Europe. This diminution, it is commonly supposed, though I
apprehend without any certain proof, is still going on gradually, and
is likely to continue to do so for a long time. Upon this supposition,
therefore, such variations are more likely to diminish than to augment
the value of a money rent, even though it should be stipulated to be
paid, not in such a quantity of coined money of such a denomination
(in so many pounds sterling, for example), but in so many ounces,
either of pure silver, or of silver of a certain standard.
The rents which have been reserved in corn, have preserved their
value
much better than those which have been reserved in money, even where
the denomination of the coin has not been altered. By the 18th of
Elizabeth, it was enacted, that a third of the rent of all college
leases should be reserved in corn, to be paid either in kind, or
according to the current prices at the nearest public market. The
money arising from this corn rent, though originally but a third of
the whole, is, in the present times, according to Dr. Blackstone,
commonly near double of what arises from the other two-thirds. The old
money rents of colleges must, according to this account, have sunk
almost to a fourth part of their ancient value, or are worth little
more than a fourth part of the corn which they were formerly worth.
But since the reign of Philip and Mary, the denomination of the
English coin has undergone little or no alteration, and the same
number of pounds, shillings, and pence, have contained very nearly the
same quantity of pure silver. This degradation, therefore, in the
value of the money rents of colleges, has arisen altogether from the
degradation in the price of silver.
When the degradation in the value of silver is combined with
the
diminution of the quantity of it contained in the coin of the same
denomination, the loss is frequently still greater. In Scotland, where
the denomination of the coin has undergone much greater alterations
than it ever did in England, and in France, where it has undergone
still greater than it ever did in Scotland, some ancient rents,
originally of considerable value, have, in this manner, been reduced
almost to nothing.
Equal quantities of labour will, at distant times, be purchased
more
nearly with equal quantities of corn, the subsistence of the labourer,
than with equal quantities of gold and silver, or, perhaps, of any
other commodity. Equal quantities of corn, therefore, will, at distant
times, be more nearly of the same real value, or enable the possessor
to purchase or command more nearly the same quantity of the labour of
other people. They will do this, I say, more nearly than equal
quantities of almost any other commodity; for even equal quantities of
corn will not do it exactly. The subsistence of the labourer, or the
real price of labour, as I shall endeavour to shew hereafter, is very
different upon different occasions; more liberal in a society
advancing to opulence, than in one that is standing still, and in one
that is standing still, than in one that is going backwards. Every
other commodity, however, will, at any particular time, purchase a
greater or smaller quantity of labour, in proportion to the quantity
of subsistence which it can purchase at that time. A rent, therefore,
reserved in corn, is liable only to the variations in the quantity of
labour which a certain quantity of corn can purchase. But a rent
reserved in any other commodity is liable, not only to the variations
in the quantity of labour which any particular quantity of corn can
purchase, but to the variations in the quantity of corn which can be
purchased by any particular quantity of that commodity.
Though the real value of a corn rent, it is to be observed,
however,
varies much less from century to century than that of a money rent, it
varies much more from year to year. The money price of labour, as I
shall endeavour to shew hereafter, does not fluctuate from year to
year with the money price of corn, but seems to be everywhere
accommodated, not to the temporary or occasional, but to the average
or ordinary price of that necessary of life. The average or ordinary
price of corn, again is regulated, as I shall likewise endeavour to
shew hereafter, by the value of silver, by the richness or barrenness
of the mines which supply the market with that metal, or by the
quantity of labour which must be employed, and consequently of corn
which must be consumed, in order to bring any particular quantity of
silver from the mine to the market. But the value of silver, though it
sometimes varies greatly from century to century, seldom varies much
from year to year, but frequently continues the same, or very nearly
the same, for half a century or a century together. The ordinary or
average money price of corn, therefore, may, during so long a period,
continue the same, or very nearly the same, too, and along with it the
money price of labour, provided, at least, the society continues, in
other respects, in the same, or nearly in the same, condition. In the
mean time, the temporary and occasional price of corn may frequently
be double one year of what it had been the year before, or fluctuate,
for example, from five-and-twenty to fifty shillings the quarter. But
when corn is at the latter price, not only the nominal, but the real
value of a corn rent, will be double of what it is when at the former,
or will command double the quantity either of labour, or of the
greater part of other commodities; the money price of labour, and
along with it that of most other things, continuing the same during
all these fluctuations.
Labour, therefore, it appears evidently, is the only universal,
as
well as the only accurate, measure of value, or the only standard by
which we can compare the values of different commodities, at all
times, and at all places. We cannot estimate, it is allowed, the real
value of different commodities from century to century by the
quantities of silver which were given for them. We cannot estimate it
from year to year by the quantities of corn. By the quantities of
labour, we can, with the greatest accuracy, estimate it, both from
century to century, and from year to year. From century to century,
corn is a better measure than silver, because, from century to
century, equal quantities of corn will command the same quantity of
labour more nearly than equal quantities of silver. From year to year,
on the contrary, silver is a better measure than corn, because equal
quantities of it will more nearly command the same quantity of labour.
But though, in establishing perpetual rents, or even in letting
very
long leases, it may be of use to distinguish between real and nominal
price; it is of none in buying and selling, the more common and
ordinary transactions of human life.
At the same time and place, the real and the nominal price of
all
commodities are exactly in proportion to one another. The more or less
money you get for any commodity, in the London market, for example,
the more or less labour it will at that time and place enable you to
purchase or command. At the same time and place, therefore, money is
the exact measure of the real exchangeable value of all commodities.
It is so, however, at the same time and place only.
Though at distant places there is no regular proportion between
the
real and the money price of commodities, yet the merchant who carries
goods from the one to the other, has nothing to consider but the money
price, or the difference between the quantity of silver for which he
buys them, and that for which he is likely to sell them. Half an ounce
of silver at Canton in China may command a greater quantity both of
labour and of the necessaries and conveniencies of life, than an ounce
at London. A commodity, therefore, which sells for half an ounce of
silver at Canton, may there be really dearer, of more real importance
to the man who possesses it there, than a commodity which sells for an
ounce at London is to the man who possesses it at London. If a London
merchant, however, can buy at Canton, for half an ounce of silver, a
commodity which he can afterwards sell at London for an ounce, he
gains a hundred per cent. by the bargain, just as much as if an ounce
of silver was at London exactly of the same value as at Canton. It is
of no importance to him that half an ounce of silver at Canton would
have given him the command of more labour, and of a greater quantity
of the necessaries and conveniencies of life than an ounce can do at
London. An ounce at London will always give him the command of double
the quantity of all these, which half an ounce could have done there,
and this is precisely what he wants.
As it is the nominal or money price of goods, therefore, which
finally
determines the prudence or imprudence of all purchases and sales, and
thereby regulates almost the whole business of common life in which
price is concerned, we cannot wonder that it should have been so much
more attended to than the real price.
In such a work as this, however, it may sometimes be of use
to compare
the different real values of a particular commodity at different times
and places, or the different degrees of power over the labour of other
people which it may, upon different occasions, have given to those who
possessed it. We must in this case compare, not so much the different
quantities of silver for which it was commonly sold, as the different
quantities or labour which those different quantities of silver could
have purchased. But the current prices of labour, at distant times and
places, can scarce ever be known with any degree of exactness. Those
of corn, though they have in few places been regularly recorded, are
in general better known, and have been more frequently taken notice of
by historians and other writers. We must generally, therefore, content
ourselves with them, not as being always exactly in the same
proportion as the current prices of labour, but as being the nearest
approximation which can commonly be had to that proportion. I shall
hereafter have occasion to make several comparisons of this kind.
In the progress of industry, commercial nations have found it
convenient to coin several different metals into money; gold for
larger payments, silver for purchases of moderate value, and copper,
or some other coarse metal, for those of still smaller consideration,
They have always, however, considered one of those metals as more
peculiarly the measure of value than any of the other two; and this
preference seems generally to have been given to the metal which they
happen first to make use of as the instrument of commerce. Having once
begun to use it as their standard, which they must have done when they
had no other money, they have generally continued to do so even when
the necessity was not the same.
The Romans are said to have had nothing but copper money till
within
five years before the first Punic war (Pliny, lib. xxxiii. cap. 3),
when they first began to coin silver. Copper, therefore, appears to
have continued always the measure of value in that republic. At Rome
all accounts appear to have been kept, and the value of all estates to
have been computed, either in asses or in sestertii. The as was always
the denomination of a copper coin. The word sestertius signifies two
asses and a half. Though the sestertius, therefore, was originally a
silver coin, its value was estimated in copper. At Rome, one who owed
a great deal of money was said to have a great deal of other people's
copper.
The northern nations who established themselves upon the ruins
of the
Roman empire, seem to have had silver money from the first beginning
of their settlements, and not to have known either gold or copper
coins for several ages thereafter. There were silver coins in England
in the time of the Saxons; but there was little gold coined till the
time of Edward III nor any copper till that of James I. of Great
Britain. In England, therefore, and for the same reason, I believe, in
all other modern nations of Europe, all accounts are kept, and the
value of all goods and of all estates is generally computed, in
silver: and when we mean to express the amount of a person's fortune,
we seldom mention the number of guineas, but the number of pounds
sterling which we suppose would be given for it.
Originally, in all countries, I believe, a legal tender of payment
could be made only in the coin of that metal which was peculiarly
considered as the standard or measure of value. In England, gold was
not considered as a legal tender for a long time after it was coined
into money. The proportion between the values of gold and silver money
was not fixed by any public law or proclamation, but was left to be
settled by the market. If a debtor offered payment in gold, the
creditor might either reject such payment altogether, or accept of it
at such a valuation of the gold as he and his debtor could agree upon.
Copper is not at present a legal tender, except in the change of the
smaller silver coins.
In this state of things, the distinction between the metal which
was
the standard, and that which was not the standard, was something more
than a nominal distinction.
In process of time, and as people became gradually more familiar
with
the use of the different metals in coin, and consequently better
acquainted with the proportion between their respective values, it
has, in most countries, I believe, been found convenient to ascertain
this proportion, and to declare by a public law, that a guinea, for
example, of such a weight and fineness, should exchange for
one-and-twenty shillings, or be a legal tender for a debt of that
amount. In this state of things, and during the continuance of any one
regulated proportion of this kind, the distinction between the metal,
which is the standard, and that which is not the standard, becomes
little more than a nominal distinction.
In consequence of any change, however, in this regulated proportion,
this distinction becomes, or at least seems to become, something more
than nominal again. If the regulated value of a guinea, for example,
was either reduced to twenty, or raised to two-and-twenty shillings,
all accounts being kept, and almost all obligations for debt being
expressed, in silver money, the greater part of payments could in
either case be made with the same quantity of silver money as before;
but would require very different quantities of gold money; a greater
in the one case, and a smaller in the other. Silver would appear to be
more invariable in its value than gold. Silver would appear to measure
the value of gold, and gold would not appear to measure the value of
silver. The value of gold would seem to depend upon the quantity of
silver which it would exchange for, and the value of silver would not
seem to depend upon the quantity of gold which it would exchange for.
This difference, however, would be altogether owing to the custom of
keeping accounts, and of expressing the amount of all great and small
sums rather in silver than in gold money. One of Mr Drummond's notes
for five-and-twenty or fifty guineas would, after an alteration of
this kind, be still payable with five-and-twenty or fifty guineas, in
the same manner as before. It would, after such an alteration, be
payable with the same quantity of gold as before, but with very
different quantities of silver. In the payment of such a note, gold
would appear to be more invariable in its value than silver. Gold
would appear to measure the value of silver, and silver would not
appear to measure the value of gold. If the custom of keeping
accounts, and of expressing promissory-notes and other obligations for
money, in this manner should ever become general, gold, and not
silver, would be considered as the metal which was peculiarly the
standard or measure of value.
In reality, during the continuance of any one regulated proportion
between the respective values of the different metals in coin, the
value of the most precious metal regulates the value of the whole
coin. Twelve copper pence contain half a pound avoirdupois of copper,
of not the best quality, which, before it is coined, is seldom worth
seven-pence in silver. But as, by the regulation, twelve such pence
are ordered to exchange for a shilling, they are in the market
considered as worth a shilling, and a shilling can at any time be had
for them. Even before the late reformation of the gold coin of Great
Britain, the gold, that part of it at least which circulated in London
and its neighbourhood, was in general less degraded below its standard
weight than the greater part of the silver. One-and-twenty worn and
defaced shillings, however, were considered as equivalent to a guinea,
which, perhaps, indeed, was worn and defaced too, but seldom so much
so. The late regulations have brought the gold coin as near, perhaps,
to its standard weight as it is possible to bring the current coin of
any nation; and the order to receive no gold at the public offices but
by weight, is likely to preserve it so, as long as that order is
enforced. The silver coin still continues in the same worn and
degraded state as before the reformation of the cold coin. In the
market, however, one-and-twenty shillings of this degraded silver coin
are still considered as worth a guinea of this excellent gold coin.
The reformation of the gold coin has evidently raised the value
of the
silver coin which can be exchanged for it.
In the English mint, a pound weight of gold is coined into forty-four
guineas and a half, which at one-and-twenty shillings the guinea, is
equal to forty-six pounds fourteen shillings and sixpence. An ounce of
such gold coin, therefore, is worth £ 3:17:10½ in silver. In England,
no duty or seignorage is paid upon the coinage, and he who carries a
pound weight or an ounce weight of standard gold bullion to the mint,
gets back a pound weight or an ounce weight of gold in coin, without
any deduction. Three pounds seventeen shillings and tenpence halfpenny
an ounce, therefore, is said to be the mint price of gold in England,
or the quantity of gold coin which the mint gives in return for
standard gold bullion.
Before the reformation of the gold coin, the price of standard
gold
bullion in the market had, for many years, been upwards of £3:18s.
sometimes £ 3:19s, and very frequently £4 an ounce; that sum, it
is
probable, in the worn and degraded gold coin, seldom containing more
than an ounce of standard gold. Since the reformation of the gold
coin, the market price of standard gold bullion seldom exceeds £
3:17:7 an ounce. Before the reformation of the gold coin, the market
price was always more or less above the mint price. Since that
reformation, the market price has been constantly below the mint
price. But that market price is the same whether it is paid in gold or
in silver coin. The late reformation of the gold coin, therefore, has
raised not only the value of the gold coin, but likewise that of the
silver coin in proportion to gold bullion, and probably, too, in
proportion to all other commodities; though the price of the greater
part of other commodities being influenced by so many other causes,
the rise in the value of either gold or silver coin in proportion to
them may not be so distinct and sensible.
In the English mint, a pound weight of standard silver bullion
is
coined into sixty-two shillings, containing, in the same manner, a
pound weight of standard silver. Five shillings and twopence an ounce,
therefore, is said to be the mint price of silver in England, or the
quantity of silver coin which the mint gives in return for standard
silver bullion. Before the reformation of the gold coin, the market
price of standard silver bullion was, upon different occasions, five
shillings and fourpence, five shillings and fivepence, five shillings
and sixpence, five shillings and sevenpence, and very often five
shillings and eightpence an ounce. Five shillings and sevenpence,
however, seems to have been the most common price. Since the
reformation of the gold coin, the market price of standard silver
bullion has fallen occasionally to five shillings and threepence, five
shillings and fourpence, and five shillings and fivepence an ounce,
which last price it has scarce ever exceeded. Though the market price
of silver bullion has fallen considerably since the reformation of the
gold coin, it has not fallen so low as the mint price.
In the proportion between the different metals in the English
coin, as
copper is rated very much above its real value, so silver is rated
somewhat below it. In the market of Europe, in the French coin and in
the Dutch coin, an ounce of fine gold exchanges for about fourteen
ounces of fine silver. In the English coin, it exchanges for about
fifteen ounces, that is, for more silver than it is worth, according
to the common estimation of Europe. But as the price of copper in bars
is not, even in England, raised by the high price of copper in English
coin, so the price of silver in bullion is not sunk by the low rate of
silver in English coin. Silver in bullion still preserves its proper
proportion to gold, for the same reason that copper in bars preserves
its proper proportion to silver.
Upon the reformation of the silver coin, in the reign of William
III.,
the price of silver bullion still continued to be somewhat above the
mint price. Mr Locke imputed this high price to the permission of
exporting silver bullion, and to the prohibition of exporting silver
coin. This permission of exporting, he said, rendered the demand for
silver bullion greater than the demand for silver coin. But the number
of people who want silver coin for the common uses of buying and
selling at home, is surely much greater than that of those who want
silver bullion either for the use of exportation or for any other use.
There subsists at present a like permission of exporting gold bullion,
and a like prohibition of exporting gold coin; and yet the price of
gold bullion has fallen below the mint price. But in the English coin,
silver was then, in the same manner as now, under-rated in proportion
to gold; and the gold coin (which at that time, too, was not supposed
to require any reformation) regulated then, as well as now, the real
value of the whole coin. As the reformation of the silver coin did not
then reduce the price of silver bullion to the mint price, it is not
very probable that a like reformation will do so now.
Were the silver coin brought back as near to its standard weight
as
the gold, a guinea, it is probable, would, according to the present
proportion, exchange for more silver in coin than it would purchase in
bullion. The silver coin containing its full standard weight, there
would in this case, be a profit in melting it down, in order, first to
sell the bullion for gold coin, and afterwards to exchange this gold
coin for silver coin, to be melted down in the same manner. Some
alteration in the present proportion seems to be the only method of
preventing this inconveniency.
The inconveniency, perhaps, would be less, if silver was rated
in the
coin as much above its proper proportion to gold as it is at present
rated below it, provided it was at the same time enacted, that silver
should not be a legal tender for more than the change of a guinea, in
the same manner as copper is not a legal tender for more than the
change of a shilling. No creditor could, in this case, be cheated in
consequence of the high valuation of silver in coin; as no creditor
can at present be cheated in consequence of the high valuation of
copper. The bankers only would suffer by this regulation. When a run
comes upon them, they sometimes endeavour to gain time, by paying in
sixpences, and they would be precluded by this regulation from this
discreditable method of evading immediate payment. They would be
obliged, in consequence, to keep at all times in their coffers a
greater quantity of cash than at present; and though this might, no
doubt, be a considerable inconveniency to them, it would, at the same
time, be a considerable security to their creditors.
Three pounds seventeen shillings and tenpence halfpenny (the
mint
price of gold) certainly does not contain, even in our present
excellent gold coin, more than an ounce of standard gold, and it may
be thought, therefore, should not purchase more standard bullion. But
gold in coin is more convenient than gold in bullion; and though, in
England, the coinage is free, yet the gold which is carried in bullion
to the mint, can seldom be returned in coin to the owner till after a
delay of several weeks. In the present hurry of the mint, it could not
be returned till after a delay of several months. This delay is
equivalent to a small duty, and renders gold in coin somewhat more
valuable than an equal quantity of gold in bullion. If, in the English
coin, silver was rated according to its proper proportion to gold, the
price of silver bullion would probably fall below the mint price, even
without any reformation of the silver coin; the value even of the
present worn and defaced silver coin being regulated by the value of
the excellent gold coin for which it can be changed.
A small seignorage or duty upon the coinage of both gold and
silver,
would probably increase still more the superiority of those metals in
coin above an equal quantity of either of them in bullion. The coinage
would, in this case, increase the value of the metal coined in
proportion to the extent of this small duty, for the same reason that
the fashion increases the value of plate in proportion to the price of
that fashion. The superiority of coin above bullion would prevent the
melting down of the coin, and would discourage its exportation. If,
upon any public exigency, it should become necessary to export the
coin, the greater part of it would soon return again, of its own
accord. Abroad, it could sell only for its weight in bullion. At home,
it would buy more than that weight. There would be a profit,
therefore, in bringing it home again. In France, a seignorage of about
eight per cent. is imposed upon the coinage, and the French coin, when
exported, is said to return home again, of its own accord.
The occasional fluctuations in the market price of gold and
silver
bullion arise from the same causes as the like fluctuations in that of
all other commodities. The frequent loss of those metals from various
accidents by sea and by land, the continual waste of them in gilding
and plating, in lace and embroidery, in the wear and tear of coin, and
in that of plate, require, in all countries which possess no mines of
their own, a continual importation, in order to repair this loss and
this waste. The merchant importers, like all other merchants, we may
believe, endeavour, as well as they can, to suit their occasional
importations to what they judge is likely to be the immediate demand.
With all their attention, however, they sometimes overdo the business,
and sometimes underdo it. When they import more bullion than is
wanted, rather than incur the risk and trouble of exporting it again,
they are sometimes willing to sell a part of it for something less
than the ordinary or average price. When, on the other hand, they
import less than is wanted, they get something more than this price.
But when, under all those occasional fluctuations, the market price
either of gold or silver bullion continues for several years together
steadily and constantly, either more or less above, or more or less
below the mint price, we may be assured that this steady and constant,
either superiority or inferiority of price, is the effect of something
in the state of the coin, which, at that time, renders a certain
quantity of coin either of more value or of less value than the
precise quantity of bullion which it ought to contain. The constancy
and steadiness of the effect supposes a proportionable constancy and
steadiness in the cause.
The money of any particular country is, at any particular time
and
place, more or less an accurate measure or value, according as the
current coin is more or less exactly agreeable to its standard, or
contains more or less exactly the precise quantity of pure gold or
pure silver which it ought to contain. If in England, for example,
forty-four guineas and a half contained exactly a pound weight of
standard gold, or eleven ounces of fine gold, and one ounce of alloy,
the gold coin of England would be as accurate a measure of the actual
value of goods at any particular time and place as the nature of the
thing would admit. But if, by rubbing and wearing, forty-four guineas
and a half generally contain less than a pound weight of standard
gold, the diminution, however, being greater in some pieces than in
others, the measure of value comes to be liable to the same sort of
uncertainty to which all other weights and measures are commonly
exposed. As it rarely happens that these are exactly agreeable to
their standard, the merchant adjusts the price of his goods as well as
he can, not to what those weights and measures ought to be, but to
what, upon an average, he finds, by experience, they actually are. In
consequence of a like disorder in the coin, the price of goods comes,
in the same manner, to be adjusted, not to the quantity of pure gold
or silver which the coin ought to contain, but to that which, upon an
average, it is found, by experience, it actually does contain.
By the money price of goods, it is to be observed, I understand
always
the quantity of pure gold or silver for which they are sold, without
any regard to the denomination of the coin. Six shillings and eight
pence, for example, in the time of Edward I., I consider as the same
money price with a pound sterling in the present times, because it
contained, as nearly as we can judge, the same quantity of pure
silver.
CHAPTER VI.
OF THE COMPONENT PART OF THE PRICE OF COMMODITIES.
In that early and rude state of society which precedes both
the
accumulation of stock and the appropriation of land, the proportion
between the quantities of labour necessary for acquiring different
objects, seems to be the only circumstance which can afford any rule
for exchanging them for one another. If among a nation of hunters, for
example, it usually costs twice the labour to kill a beaver which it
does to kill a deer, one beaver should naturally exchange for or be
worth two deer. It is natural that what is usually the produce of two
days or two hours labour, should be worth double of what is usually
the produce of one day's or one hour's labour.
If the one species of labour should be more severe than the
other,
some allowance will naturally be made for this superior hardship; and
the produce of one hour's labour in the one way may frequently
exchange for that of two hour's labour in the other.
Or if the one species of labour requires an uncommon degree
of
dexterity and ingenuity, the esteem which men have for such talents,
will naturally give a value to their produce, superior to what would
be due to the time employed about it. Such talents can seldom be
acquired but in consequence of long application, and the superior
value of their produce may frequently be no more than a reasonable
compensation for the time and labour which must be spent in acquiring
them. In the advanced state of society, allowances of this kind, for
superior hardship and superior skill, are commonly made in the wages
of labour; and something of the same kind must probably have taken
place in its earliest and rudest period.
In this state of things, the whole produce of labour belongs
to the
labourer; and the quantity of labour commonly employed in acquiring or
producing any commodity, is the only circumstance which can regulate
the quantity of labour which it ought commonly to purchase, command,
or exchange for.
As soon as stock has accumulated in the hands of particular
persons,
some of them will naturally employ it in setting to work industrious
people, whom they will supply with materials and subsistence, in order
to make a profit by the sale of their work, or by what their labour
adds to the value of the materials. In exchanging the complete
manufacture either for money, for labour, or for other goods, over and
above what may be sufficient to pay the price of the materials, and
the wages of the workmen, something must be given for the profits of
the undertaker of the work, who hazards his stock in this adventure.
The value which the workmen add to the materials, therefore, resolves
itself in this case into two parts, of which the one pays their wages,
the other the profits of their employer upon the whole stock of
materials and wages which he advanced. He could have no interest to
employ them, unless he expected from the sale of their work something
more than what was sufficient to replace his stock to him; and he
could have no interest to employ a great stock rather than a small
one, unless his profits were to bear some proportion to the extent of
his stock.
The profits of stock, it may perhaps be thought, are only a
different
name for the wages of a particular sort of labour, the labour of
inspection and direction. They are, however, altogether different, are
regulated by quite different principles, and bear no proportion to the
quantity, the hardship, or the ingenuity of this supposed labour of
inspection and direction. They are regulated altogether by the value
of the stock employed, and are greater or smaller in proportion to the
extent of this stock. Let us suppose, for example, that in some
particular place, where the common annual profits of manufacturing
stock are ten per cent. there are two different manufactures, in each
of which twenty workmen are employed, at the rate of fifteen pounds a
year each, or at the expense of three hundred a-year in each
manufactory. Let us suppose, too, that the coarse materials annually
wrought up in the one cost only seven hundred pounds, while the finer
materials in the other cost seven thousand. The capital annually
employed in the one will, in this case, amount only to one thousand
pounds; whereas that employed in the other will amount to seven
thousand three hundred pounds. At the rate of ten per cent. therefore,
the undertaker of the one will expect a yearly profit of about one
hundred pounds only; while that of the other will expect about seven
hundred and thirty pounds. But though their profits are so very
different, their labour of inspection and direction may be either
altogether or very nearly the same. In many great works, almost the
whole labour of this kind is committed to some principal clerk. His
wages properly express the value of this labour of inspection and
direction. Though in settling them some regard is had commonly, not
only to his labour and skill, but to the trust which is reposed in
him, yet they never bear any regular proportion to the capital of
which he oversees the management; and the owner of this capital,
though he is thus discharged of almost all labour, still expects that
his profit should bear a regular proportion to his capital. In the
price of commodities, therefore, the profits of stock constitute a
component part altogether different from the wages of labour, and
regulated by quite different principles.
In this state of things, the whole produce of labour does not
always
belong to the labourer. He must in most cases share it with the owner
of the stock which employs him. Neither is the quantity of labour
commonly employed in acquiring or producing any commodity, the only
circumstance which can regulate the quantity which it ought commonly
to purchase, command or exchange for. An additional quantity, it is
evident, must be due for the profits of the stock which advanced the
wages and furnished the materials of that labour.
As soon as the land of any country has all become private property,
the landlords, like all other men, love to reap where they never
sowed, and demand a rent even for its natural produce. The wood of the
forest, the grass of the field, and all the natural fruits of the
earth, which, when land was in common, cost the labourer only the
trouble of gathering them, come, even to him, to have an additional
price fixed upon them. He must then pay for the licence to gather
them, and must give up to the landlord a portion of what his labour
either collects or produces. This portion, or, what comes to the same
thing, the price of this portion, constitutes the rent of land, and in
the price of the greater part of commodities, makes a third component
part.
The real value of all the different component parts of price,
it must
be observed, is measured by the quantity of labour which they can,
each of them, purchase or command. Labour measures the value, not only
of that part of price which resolves itself into labour, but of that
which resolves itself into rent, and of that which resolves itself
into profit.
In every society, the price of every commodity finally resolves
itself
into some one or other, or all of those three parts; and in every
improved society, all the three enter, more or less, as component
parts, into the price of the far greater part of commodities.
In the price of corn, for example, one part pays the rent of
the
landlord, another pays the wages or maintenance of the labourers and
labouring cattle employed in producing it, and the third pays the
profit of the farmer. These three parts seem either immediately or
ultimately to make up the whole price of corn. A fourth part, it may
perhaps be thought is necessary for replacing the stock of the farmer,
or for compensating the wear and tear of his labouring cattle, and
other instruments of husbandry. But it must be considered, that the
price of any instrument of husbandry, such as a labouring horse, is
itself made up of the same time parts; the rent of the land upon which
he is reared, the labour of tending and rearing him, and the profits
of the farmer, who advances both the rent of this land, and the wages
of this labour. Though the price of the corn, therefore, may pay the
price as well as the maintenance of the horse, the whole price still
resolves itself, either immediately or ultimately, into the same three
parts of rent, labour, and profit.
In the price of flour or meal, we must add to the price of the
corn,
the profits of the miller, and the wages of his servants; in the price
of bread, the profits of the baker, and the wages of his servants; and
in the price of both, the labour of transporting the corn from the
house of the farmer to that of the miller, and from that of the miller
to that of the baker, together with the profits of those who advance
the wages of that labour.
The price of flax resolves itself into the same three parts
as that of
corn. In the price of linen we must add to this price the wages of the
flax-dresser, of the spinner, of the weaver, of the bleacher, etc.
together with the profits of their respective employers.
As any particular commodity comes to be more manufactured, that
part
of the price which resolves itself into wages and profit, comes to be
greater in proportion to that which resolves itself into rent. In the
progress of the manufacture, not only the number of profits increase,
but every subsequent profit is greater than the foregoing; because the
capital from which it is derived must always be greater. The capital
which employs the weavers, for example, must be greater than that
which employs the spinners; because it not only replaces that capital
with its profits, but pays, besides, the wages of the weavers: and the
profits must always bear some proportion to the capital.
In the most improved societies, however, there are always a
few
commodities of which the price resolves itself into two parts only the
wages of labour, and the profits of stock; and a still smaller number,
in which it consists altogether in the wages of labour. In the price
of sea-fish, for example, one part pays the labour of the fisherman,
and the other the profits of the capital employed in the fishery. Rent
very seldom makes any part of it, though it does sometimes, as I shall
shew hereafter. It is otherwise, at least through the greater part of
Europe, in river fisheries. A salmon fishery pays a rent; and rent,
though it cannot well be called the rent of land, makes a part of the
price of a salmon, as well as wares and profit. In some parts of
Scotland, a few poor people make a trade of gathering, along the
sea-shore, those little variegated stones commonly known by the name
of Scotch pebbles. The price which is paid to them by the
stone-cutter, is altogether the wages of their labour; neither rent
nor profit makes an part of it.
But the whole price of any commodity must still finally resolve
itself
into some one or other or all of those three parts; as whatever part
of it remains after paying the rent of the land, and the price of the
whole labour employed in raising, manufacturing, and bringing it to
market, must necessarily be profit to somebody.
As the price or exchangeable value of every particular commodity,
taken separately, resolves itself into some one or other, or all of
those three parts; so that of all the commodities which compose the
whole annual produce of the labour of every country, taken complexly,
must resolve itself into the same three parts, and be parcelled out
among different inhabitants of the country, either as the wages of
their labour, the profits of their stock, or the rent of their land.
The whole of what is annually either collected or produced by the
labour of every society, or, what comes to the same thing, the whole
price of it, is in this manner originally distributed among some of
its different members. Wages, profit, and rent, are the three original
sources of all revenue, as well as of all exchangeable value. All
other revenue is ultimately derived from some one or other of these.
Whoever derives his revenue from a fund which is his own, must
draw it
either from his labour, from his stock, or from his land. The revenue
derived from labour is called wages; that derived from stock, by the
person who manages or employs it, is called profit; that derived from
it by the person who does not employ it himself, but lends it to
another, is called the interest or the use of money. It is the
compensation which the borrower pays to the lender, for the profit
which he has an opportunity of making by the use of the money. Part of
that profit naturally belongs to the borrower, who runs the risk and
takes the trouble of employing it, and part to the lender, who affords
him the opportunity of making this profit. The interest of money is
always a derivative revenue, which, if it is not paid from the profit
which is made by the use of the money, must be paid from some other
source of revenue, unless perhaps the borrower is a spendthrift, who
contracts a second debt in order to pay the interest of the first. The
revenue which proceeds altogether from land, is called rent, and
belongs to the landlord. The revenue of the farmer is derived partly
from his labour, and partly from his stock. To him, land is only the
instrument which enables him to earn the wages of this labour, and to
make the profits of this stock. All taxes, and all the revenue which
is founded upon them, all salaries, pensions, and annuities of every
kind, are ultimately derived from some one or other of those three
original sources of revenue, and are paid either immediately or
mediately from the wages of labour, the profits of stock, or the rent
of land.
When those three different sorts of revenue belong to different
persons, they are readily distinguished; but when they belong to the
same, they are sometimes confounded with one another, at least in
common language.
A gentleman who farms a part of his own estate, after paying
the
expense of cultivation, should gain both the rent of the landlord and
the profit of the farmer. He is apt to denominate, however, his whole
gain, profit, and thus confounds rent with profit, at least in common
language. The greater part of our North American and West Indian
planters are in this situation. They farm, the greater part of them,
their own estates: and accordingly we seldom hear of the rent of a
plantation, but frequently of its profit.
Common farmers seldom employ any overseer to direct the general
operations of the farm. They generally, too, work a good deal with
their own hands, as ploughmen, harrowers, etc. What remains of the
crop, after paying the rent, therefore, should not only replace to
them their stock employed in cultivation, together with its ordinary
profits, but pay them the wages which are due to them, both as
labourers and overseers. Whatever remains, however, after paying the
rent and keeping up the stock, is called profit. But wages evidently
make a part of it. The farmer, by saving these wages, must necessarily
gain them. Wages, therefore, are in this case confounded with profit.
An independent manufacturer, who has stock enough both to purchase
materials, and to maintain himself till he can carry his work to
market, should gain both the wages of a journeyman who works under a
master, and the profit which that master makes by the sale of that
journeyman's work. His whole gains, however, are commonly called
profit, and wages are, in this case, too, confounded with profit.
A gardener who cultivates his own garden with his own hands,
unites in
his own person the three different characters, of landlord, farmer,
and labourer. His produce, therefore, should pay him the rent of the
first, the profit of the second, and the wages of the third. The
whole, however, is commonly considered as the earnings of his labour.
Both rent and profit are, in this case, confounded with wages.
As in a civilized country there are but few commodities of which
the
exchangeable value arises from labour only, rent and profit
contributing largely to that of the far greater part of them, so the
annual produce of its labour will always be sufficient to purchase or
command a much greater quantity of labour than what was employed in
raising, preparing, and bringing that produce to market. If the
society were annually to employ all the labour which it can annually
purchase, as the quantity of labour would increase greatly every year,
so the produce of every succeeding year would be of vastly greater
value than that of the foregoing. But there is no country in which the
whole annual produce is employed in maintaining the industrious. The
idle everywhere consume a great part of it; and, according to the
different proportions in which it is annually divided between those
two different orders of people, its ordinary or average value must
either annually increase or diminish, or continue the same from one
year to another.
CHAPTER VII.
OF THE NATURAL AND MARKET PRICE OF COMMODITIES.
There is in every society or neighbourhood an ordinary or average
rate, both of wages and profit, in every different employment of
labour and stock. This rate is naturally regulated, as I shall shew
hereafter, partly by the general circumstances of the society, their
riches or poverty, their advancing, stationary, or declining
condition, and partly by the particular nature of each employment.
There is likewise in every society or neighbourhood an ordinary
or
average rate of rent, which is regulated, too, as I shall shew
hereafter, partly by the general circumstances of the society or
neighbourhood in which the land is situated, and partly by the natural
or improved fertility of the land.
These ordinary or average rates may be called the natural rates
of
wages, profit and rent, at the time and place in which they commonly
prevail.
When the price of any commodity is neither more nor less than
what is
sufficient to pay the rent of the land, the wages of the labour, and
the profits of the stock employed in raising, preparing, and bringing
it to market, according to their natural rates, the commodity is then
sold for what may be called its natural price.
The commodity is then sold precisely for what it is worth, or
for what
it really costs the person who brings it to market; for though, in
common language, what is called the prime cost of any commodity does
not comprehend the profit of the person who is to sell it again, yet,
if he sells it at a price which does not allow him the ordinary rate
of profit in his neighbourhood, he is evidently a loser by the trade;
since, by employing his stock in some other way, he might have made
that profit. His profit, besides, is his revenue, the proper fund of
his subsistence. As, while he is preparing and bringing the goods to
market, he advances to his workmen their wages, or their subsistence;
so he advances to himself, in the same manner, his own subsistence,
which is generally suitable to the profit which he may reasonably
expect from the sale of his goods. Unless they yield him this profit,
therefore, they do not repay him what they may very properly be said
to have really cost him.
Though the price, therefore, which leaves him this profit, is
not
always the lowest at which a dealer may sometimes sell his goods, it
is the lowest at which he is likely to sell them for any considerable
time; at least where there is perfect liberty, or where he may change
his trade as often as he pleases.
The actual price at which any commodity is commonly sold, is
called
its market price. It may either be above, or below, or exactly the
same with its natural price.
The market price of every particular commodity is regulated
by the
proportion between the quantity which is actually brought to market,
and the demand of those who are willing to pay the natural price of
the commodity, or the whole value of the rent, labour, and profit,
which must be paid in order to bring it thither. Such people may be
called the effectual demanders, and their demand the effectual demand;
since it maybe sufficient to effectuate the bringing of the commodity
to market. It is different from the absolute demand. A very poor man
may be said, in some sense, to have a demand for a coach and six; he
might like to have it; but his demand is not an effectual demand, as
the commodity can never be brought to market in order to satisfy it.
When the quantity of any commodity which is brought to market
falls
short of the effectual demand, all those who are willing to pay the
whole value of the rent, wages, and profit, which must be paid in
order to bring it thither, cannot be supplied with the quantity which
they want. Rather than want it altogether, some of them will be
willing to give more. A competition will immediately begin among them,
and the market price will rise more or less above the natural price,
according as either the greatness of the deficiency, or the wealth and
wanton luxury of the competitors, happen to animate more or less the
eagerness of the competition. Among competitors of equal wealth and
luxury, the same deficiency will generally occasion a more or less
eager competition, according as the acquisition of the commodity
happens to be of more or less importance to them. Hence the exorbitant
price of the necessaries of life during the blockade of a town, or in
a famine.
When the quantity brought to market exceeds the effectual demand,
it
cannot be all sold to those who are willing to pay the whole value of
the rent, wages, and profit, which must be paid in order to bring it
thither. Some part must be sold to those who are willing to pay less,
and the low price which they give for it must reduce the price of the
whole. The market price will sink more or less below the natural
price, according as the greatness of the excess increases more or less
the competition of the sellers, or according as it happens to be more
or less important to them to get immediately rid of the commodity. The
same excess in the importation of perishable, will occasion a much
greater competition than in that of durable commodities; in the
importation of oranges, for example, than in that of old iron.
When the quantity brought to market is just sufficient to supply
the
effectual demand, and no more, the market price naturally comes to be
either exactly, or as nearly as can be judged of, the same with the
natural price. The whole quantity upon hand can be disposed of for
this price, and can not be disposed of for more. The competition of
the different dealers obliges them all to accept of this price, but
does not oblige them to accept of less.
The quantity of every commodity brought to market naturally
suits
itself to the effectual demand. It is the interest of all those who
employ their land, labour, or stock, in bringing any commodity to
market, that the quantity never should exceed the effectual demand;
and it is the interest of all other people that it never should fall
short of that demand.
If at any time it exceeds the effectual demand, some of the
component
parts of its price must be paid below their natural rate. If it is
rent, the interest of the landlords will immediately prompt them to
withdraw a part of their land; and if it is wages or profit, the
interest of the labourers in the one case, and of their employers in
the other, will prompt them to withdraw a part of their labour or
stock, from this employment. The quantity brought to market will soon
be no more than sufficient to supply the effectual demand. All the
different parts of its price will rise to their natural rate, and the
whole price to its natural price.
If, on the contrary, the quantity brought to market should at
any time
fall short of the effectual demand, some of the component parts of its
price must rise above their natural rate. If it is rent, the interest
of all other landlords will naturally prompt them to prepare more land
for the raising of this commodity; if it is wages or profit, the
interest of all other labourers and dealers will soon prompt them to
employ more labour and stock in preparing and bringing it to market.
The quantity brought thither will soon be sufficient to supply the
effectual demand. All the different parts of its price will soon sink
to their natural rate, and the whole price to its natural price.
The natural price, therefore, is, as it were, the central price,
to
which the prices of all commodities are continually gravitating.
Different accidents may sometimes keep them suspended a good deal
above it, and sometimes force them down even somewhat below it. But
whatever may be the obstacles which hinder them from settling in this
centre of repose and continuance, they are constantly tending towards
it.
The whole quantity of industry annually employed in order to
bring any
commodity to market, naturally suits itself in this manner to the
effectual demand. It naturally aims at bringing always that precise
quantity thither which may be sufficient to supply, and no more than
supply, that demand.
But, in some employments, the same quantity of industry will,
in
different years, produce very different quantities of commodities;
while, in others, it will produce always the same, or very nearly the
same. The same number of labourers in husbandry will, in different
years, produce very different quantities of corn, wine, oil, hops,
etc. But the same number of spinners or weavers will every year
produce the same, or very nearly the same, quantity of linen and
woollen cloth. It is only the average produce of the one species of
industry which can be suited, in any respect, to the effectual demand;
and as its actual produce is frequently much greater, and frequently
much less, than its average produce, the quantity of the commodities
brought to market will sometimes exceed a good deal, and sometimes
fall short a good deal, of the effectual demand. Even though that
demand, therefore, should continue always the same, their market price
will be liable to great fluctuations, will sometimes fall a good deal
below, and sometimes rise a good deal above, their natural price. In
the other species of industry, the produce of equal quantities of
labour being always the same, or very nearly the same, it can be more
exactly suited to the effectual demand. While that demand continues
the same, therefore, the market price of the commodities is likely to
do so too, and to be either altogether, or as nearly as can be judged
of, the same with the natural price. That the price of linen and
woollen cloth is liable neither to such frequent, nor to such great
variations, as the price of corn, every man's experience will inform
him. The price of the one species of commodities varies only with the
variations in the demand; that of the other varies not only with the
variations in the demand, but with the much greater, and more
frequent, variations in the quantity of what is brought to market, in
order to supply that demand.
The occasional and temporary fluctuations in the market price
of any
commodity fall chiefly upon those parts of its price which resolve
themselves into wages and profit. That part which resolves itself into
rent is less affected by them. A rent certain in money is not in the
least affected by them, either in its rate or in its value. A rent
which consists either in a certain proportion, or in a certain
quantity, of the rude produce, is no doubt affected in its yearly
value by all the occasional and temporary fluctuations in the market
price of that rude produce; but it is seldom affected by them in its
yearly rate. In settling the terms of the lease, the landlord and
farmer endeavour, according to their best judgment, to adjust that
rate, not to the temporary and occasional, but to the average and
ordinary price of the produce.
Such fluctuations affect both the value and the rate, either
of wages
or of profit, according as the market happens to be either overstocked
or understocked with commodities or with labour, with work done, or
with work to be done. A public mourning raises the price of black
cloth ( with which the market is almost always understocked upon such
occasions), and augments the profits of the merchants who possess any
considerable quantity of it. It has no effect upon the wages of the
weavers. The market is understocked with commodities, not with labour,
with work done, not with work to be done. It raises the wages of
journeymen tailors. The market is here understocked with labour. There
is an effectual demand for more labour, for more work to be done, than
can be had. It sinks the price of coloured silks and cloths, and
thereby reduces the profits of the merchants who have any considerable
quantity of them upon hand. It sinks, too, the wages of the workmen
employed in preparing such commodities, for which all demand is
stopped for six months, perhaps for a twelvemonth. The market is here
overstocked both with commodities and with labour.
But though the market price of every particular commodity is
in this
manner continually gravitating, if one may say so, towards the natural
price; yet sometimes particular accidents, sometimes natural causes,
and sometimes particular regulations of policy, may, in many
commodities, keep up the market price, for a long time together, a
good deal above the natural price.
When, by an increase in the effectual demand, the market price
of some
particular commodity happens to rise a good deal above the natural
price, those who employ their stocks in supplying that market, are
generally careful to conceal this change. If it was commonly known,
their great profit would tempt so many new rivals to employ their
stocks in the same way, that, the effectual demand being fully
supplied, the market price would soon be reduced to the natural price,
and, perhaps, for some time even below it. If the market is at a great
distance from the residence of those who supply it, they may sometimes
be able to keep the secret for several years together, and may so long
enjoy their extraordinary profits without any new rivals. Secrets of
this kind, however, it must be acknowledged, can seldom be long kept;
and the extraordinary profit can last very little longer than they are
kept.
Secrets in manufactures are capable of being longer kept than
secrets
in trade. A dyer who has found the means of producing a particular
colour with materials which cost only half the price of those commonly
made use of, may, with good management, enjoy the advantage of his
discovery as long as he lives, and even leave it as a legacy to his
posterity. His extraordinary gains arise from the high price which is
paid for his private labour. They properly consist in the high wages
of that labour. But as they are repeated upon every part of his stock,
and as their whole amount bears, upon that account, a regular
proportion to it, they are commonly considered as extraordinary
profits of stock.
Such enhancements of the market price are evidently the effects
of
particular accidents, of which, however, the operation may sometimes
last for many years together.
Some natural productions require such a singularity of soil
and
situation, that all the land in a great country, which is fit for
producing them, may not be sufficient to supply the effectual demand.
The whole quantity brought to market, therefore, may be disposed of to
those who are willing to give more than what is sufficient to pay the
rent of the land which produced them, together with the wages of the
labour and the profits of the stock which were employed in preparing
and bringing them to market, according to their natural rates. Such
commodities may continue for whole centuries together to be sold at
this high price; and that part of it which resolves itself into the
rent of land, is in this case the part which is generally paid above
its natural rate. The rent of the land which affords such singular and
esteemed productions, like the rent of some vineyards in France of a
peculiarly happy soil and situation, bears no regular proportion to
the rent of other equally fertile and equally well cultivated land in
its neighbourhood. The wages of the labour, and the profits of the
stock employed in bringing such commodities to market, on the
contrary, are seldom out of their natural proportion to those of the
other employments of labour and stock in their neighbourhood.
Such enhancements of the market price are evidently the effect
of
natural causes, which may hinder the effectual demand from ever being
fully supplied, and which may continue, therefore, to operate for
ever.
A monopoly granted either to an individual or to a trading company,
has the same effect as a secret in trade or manufactures. The
monopolists, by keeping the market constantly understocked by never
fully supplying the effectual demand, sell their commodities much
above the natural price, and raise their emoluments, whether they
consist in wages or profit, greatly above their natural rate.
The price of monopoly is upon every occasion the highest which
can be
got. The natural price, or the price of free competition, on the
contrary, is the lowest which can be taken, not upon every occasion
indeed, but for any considerable time together. The one is upon every
occasion the highest which can be squeezed out of the buyers, or which
it is supposed they will consent to give; the other is the lowest
which the sellers can commonly afford to take, and at the same time
continue their business.
The exclusive privileges of corporations, statutes of apprenticeship,
and all those laws which restrain in particular employments, the
competition to a smaller number than might otherwise go into them,
have the same tendency, though in a less degree. They are a sort of
enlarged monopolies, and may frequently, for ages together, and in
whole classes of employments, keep up the market price of particular
commodities above the natural price, and maintain both the wages of
the labour and the profits of the stock employed about them somewhat
above their natural rate.
Such enhancements of the market price may last as long as the
regulations of policy which give occasion to them.
The market price of any particular commodity, though it may
continue
long above, can seldom continue long below, its natural price.
Whatever part of it was paid below the natural rate, the persons whose
interest it affected would immediately feel the loss, and would
immediately withdraw either so much land or no much labour, or so much
stock, from being employed about it, that the quantity brought to
market would soon be no more than sufficient to supply the effectual
demand. Its market price, therefore, would soon rise to the natural
price; this at least would be the case where there was perfect
liberty.
The same statutes of apprenticeship and other corporation laws,
indeed, which, when a manufacture is in prosperity, enable the workman
to raise his wages a good deal above their natural rate, sometimes
oblige him, when it decays, to let them down a good deal below it. As
in the one case they exclude many people from his employment, so in
the other they exclude him from many employments. The effect of such
regulations, however, is not near so durable in sinking the workman's
wages below, as in raising them above their natural rate. Their
operation in the one way may endure for many centuries, but in the
other it can last no longer than the lives of some of the workmen who
were bred to the business in the time of its prosperity. When they are
gone, the number of those who are afterwards educated to the trade
will naturally suit itself to the effectual demand. The policy must be
as violent as that of Indostan or ancient Egypt (where every man was
bound by a principle of religion to follow the occupation of his
father, and was supposed to commit the most horrid sacrilege if he
changed it for another), which can in any particular employment, and
for several generations together, sink either the wages of labour or
the profits of stock below their natural rate.
This is all that I think necessary to be observed at present
concerning the deviations, whether occasional or permanent, of the
market price of commodities from the natural price.
The natural price itself varies with the natural rate of each
of its
component parts, of wages, profit, and rent; and in every society this
rate varies according to their circumstances, according to their
riches or poverty, their advancing, stationary, or declining
condition. I shall, in the four following chapters, endeavour to
explain, as fully and distinctly as I can, the causes of those
different variations.
First, I shall endeavour to explain what are the circumstances
which
naturally determine the rate of wages, and in what manner those
circumstances are affected by the riches or poverty, by the advancing,
stationary, or declining state of the society.
Secondly, I shall endeavour to shew what are the circumstances
which
naturally determine the rate of profit; and in what manner, too, those
circumstances are affected by the like variations in the state of the
society.
Though pecuniary wages and profit are very different in the
different
employments of labour and stock; yet a certain proportion seems
commonly to take place between both the pecuniary wages in all the
different employments of labour, and the pecuniary profits in all the
different employments of stock. This proportion, it will appear
hereafter, depends partly upon the nature of the different
employments, and partly upon the different laws and policy of the
society in which they are carried on. But though in many respects
dependent upon the laws and policy, this proportion seems to be little
affected by the riches or poverty of that society, by its advancing,
stationary, or declining condition, but to remain the same, or very
nearly the same, in all those different states. I shall, in the third
place, endeavour to explain all the different circumstances which
regulate this proportion.
In the fourth and last place, I shall endeavour to shew what
are the
circumstances which regulate the rent of land, and which either raise
or lower the real price of all the different substances which it
produces.
CHAPTER VIII.
OF THE WAGES OF LABOUR.
The produce of labour constitutes the natural recompence or
wages of
labour.
In that original state of things which precedes both the appropriation
of land and the accumulation of stock, the whole produce of labour
belongs to the labourer. He has neither landlord nor master to share
with him.
Had this state continued, the wages of labour would have augmented
with all those improvements in its productive powers, to which the
division of labour gives occasion. All things would gradually have
become cheaper. They would have been produced by a smaller quantity of
labour; and as the commodities produced by equal quantities of labour
would naturally in this state of things be exchanged for one another,
they would have been purchased likewise with the produce of a smaller
quantity.
But though all things would have become cheaper in reality,
in
appearance many things might have become dearer, than before, or have
been exchanged for a greater quantity of other goods. Let us suppose,
for example, that in the greater part of employments the productive
powers of labour had been improved to tenfold, or that a day's labour
could produce ten times the quantity of work which it had done
originally; but that in a particular employment they had been improved
only to double, or that a day's labour could produce only twice the
quantity of work which it had done before. In exchanging the produce
of a day's labour in the greater part of employments for that of a
day's labour in this particular one, ten times the original quantity
of work in them would purchase only twice the original quantity in it.
Any particular quantity in it, therefore, a pound weight, for example,
would appear to be five times dearer than before. In reality, however,
it would be twice as cheap. Though it required five times the quantity
of other goods to purchase it, it would require only half the quantity
of labour either to purchase or to produce it. The acquisition,
therefore, would be twice as easy as before.
But this original state of things, in which the labourer enjoyed
the
whole produce of his own labour, could not last beyond the first
introduction of the appropriation of land and the accumulation of
stock. It was at an end, therefore, long before the most considerable
improvements were made in the productive powers of labour; and it
would be to no purpose to trace further what might have been its
effects upon the recompence or wages of labour.
As soon as land becomes private property, the landlord demands
a share
of almost all the produce which the labourer can either raise or
collect from it. His rent makes the first deduction from the produce
of the labour which is employed upon land.
It seldom happens that the person who tills the ground has wherewithal
to maintain himself till he reaps the harvest. His maintenance is
generally advanced to him from the stock of a master, the farmer who
employs him, and who would have no interest to employ him, unless he
was to share in the produce of his labour, or unless his stock was to
be replaced to him with a profit. This profit makes a second deduction
from the produce of the labour which is employed upon land.
The produce of almost all other labour is liable to the like
deduction
of profit. In all arts and manufactures, the greater part of the
workmen stand in need of a master, to advance them the materials of
their work, and their wages and maintenance, till it be completed. He
shares in the produce of their labour, or in the value which it adds
to the materials upon which it is bestowed; and in this share consists
his profit.
It sometimes happens, indeed, that a single independent workman
has
stock sufficient both to purchase the materials of his work, and to
maintain himself till it be completed. He is both master and workman,
and enjoys the whole produce of his own labour, or the whole value
which it adds to the materials upon which it is bestowed. It includes
what are usually two distinct revenues, belonging to two distinct
persons, the profits of stock, and the wages of labour.
Such cases, however, are not very frequent; and in every part
of
Europe twenty workmen serve under a master for one that is
independent, and the wages of labour are everywhere understood to be,
what they usually are, when the labourer is one person, and the owner
of the stock which employs him another.
What are the common wages of labour, depends everywhere upon
the
contract usually made between those two parties, whose interests are
by no means the same. The workmen desire to get as much, the masters
to give as little, as possible. The former are disposed to combine in
order to raise, the latter in order to lower, the wages of labour.
It is not, however, difficult to foresee which of the two parties
must, upon all ordinary occasions, have the advantage in the dispute,
and force the other into a compliance with their terms. The masters,
being fewer in number, can combine much more easily: and the law,
besides, authorises, or at least does not prohibit, their
combinations, while it prohibits those of the workmen. We have no acts
of parliament against combining to lower the price of work, but many
against combining to raise it. In all such disputes, the masters can
hold out much longer. A landlord, a farmer, a master manufacturer, or
merchant, though they did not employ a single workman, could generally
live a year or two upon the stocks, which they have already acquired.
Many workmen could not subsist a week, few could subsist a month, and
scarce any a year, without employment. In the long run, the workman
may be as necessary to his master as his master is to him; but the
necessity is not so immediate.
We rarely hear, it has been said, of the combinations of masters,
though frequently of those of workmen. But whoever imagines, upon this
account, that masters rarely combine, is as ignorant of the world as
of the subject. Masters are always and everywhere in a sort of tacit,
but constant and uniform, combination, not to raise the wages of
labour above their actual rate. To violate this combination is
everywhere a most unpopular action, and a sort of reproach to a master
among his neighbours and equals. We seldom, indeed, hear of this
combination, because it is the usual, and, one may say, the natural
state of things, which nobody ever hears of. Masters, too, sometimes
enter into particular combinations to sink the wages of labour even
below this rate. These are always conducted with the utmost silence
and secrecy till the moment of execution; and when the workmen yield,
as they sometimes do without resistance, though severely felt by them,
they are never heard of by other people. Such combinations, however,
are frequently resisted by a contrary defensive combination of the
workmen, who sometimes, too, without any provocation of this kind,
combine, of their own accord, to raise tile price of their labour.
Their usual pretences are, sometimes the high price of provisions,
sometimes the great profit which their masters make by their work. But
whether their combinations be offensive or defensive, they are always
abundantly heard of. In order to bring the point to a speedy decision,
they have always recourse to the loudest clamour, and sometimes to the
most shocking violence and outrage. They are desperate, and act with
the folly and extravagance of desperate men, who must either starve,
or frighten their masters into an immediate compliance with their
demands. The masters, upon these occasions, are just as clamorous upon
the other side, and never cease to call aloud for the assistance of
the civil magistrate, and the rigorous execution of those laws which
have been enacted with so much severity against the combination of
servants, labourers, and journeymen. The workmen, accordingly, very
seldom derive any advantage from the violence of those tumultuous
combinations, which, partly from the interposition of the civil
magistrate, partly from the superior steadiness of the masters, partly
from the necessity which the greater part of the workmen are under of
submitting for the sake of present subsistence, generally end in
nothing but the punishment or ruin of the ringleaders.
But though, in disputes with their workmen, masters must generally
have the advantage, there is, however, a certain rate, below which it
seems impossible to reduce, for any considerable time, the ordinary
wages even of the lowest species of labour.
A man must always live by his work, and his wages must at least
be
sufficient to maintain him. They must even upon most occasions be
somewhat more, otherwise it would be impossible for him to bring up a
family, and the race of such workmen could not last beyond the first
generation. Mr Cantillon seems, upon this account, to suppose that the
lowest species of common labourers must everywhere earn at least
double their own maintenance, in order that, one with another, they
may be enabled to bring up two children; the labour of the wife, on
account of her necessary attendance on the children, being supposed no
more than sufficient to provide for herself: But one half the children
born, it is computed, die before the age of manhood. The poorest
labourers, therefore, according to this account, must, one with
another, attempt to rear at least four children, in order that two
may have an equal chance of living to that age. But the necessary
maintenance of four children, it is supposed, may be nearly equal to
that of one man. The labour of an able-bodied slave, the same author
adds, is computed to be worth double his maintenance; and that of the
meanest labourer, he thinks, cannot be worth less than that of an
able-bodied slave. Thus far at least seems certain, that, in order to
bring up a family, the labour of the husband and wife together must,
even in the lowest species of common labour, be able to earn something
more than what is precisely necessary for their own maintenance; but
in what proportion, whether in that above-mentioned, or many other, I
shall not take upon me to determine.
There are certain circumstances, however, which sometimes give
the
labourers an advantage, and enable them to raise their wages
considerably above this rate, evidently the lowest which is consistent
with common humanity.
When in any country the demand for those who live by wages,
labourers,
journeymen, servants of every kind, is continually increasing; when
every year furnishes employment for a greater number than had been
employed the year before, the workmen have no occasion to combine in
order to raise their wages. The scarcity of hands occasions a
competition among masters, who bid against one another in order to get
workmen, and thus voluntarily break through the natural combination of
masters not to raise wages. The demand for those who live by wages, it
is evident, cannot increase but in proportion to the increase of the
funds which are destined to the payment of wages. These funds are of
two kinds, first, the revenue which is over and above what is
necessary for the maintenance; and, secondly, the stock which is over
and above what is necessary for the employment of their masters.
When the landlord, annuitant, or monied man, has a greater revenue
than what he judges sufficient to maintain his own family, he employs
either the whole or a part of the surplus in maintaining one or more
menial servants. Increase this surplus, and he will naturally increase
the number of those servants.
When an independent workman, such as a weaver or shoemaker,
has got
more stock than what is sufficient to purchase the materials of his
own work, and to maintain himself till he can dispose of it, he
naturally employs one or more journeymen with the surplus, in order to
make a profit by their work. Increase this surplus, and he will
naturally increase the number of his journeymen.
The demand for those who live by wages, therefore, necessarily
increases with the increase of the revenue and stock of every country,
and cannot possibly increase without it. The increase of revenue and
stock is the increase of national wealth. The demand for those who
live by wages, therefore, naturally increases with the increase of
national wealth, and cannot possibly increase without it.
It is not the actual greatness of national wealth, but its continual
increase, which occasions a rise in the wages of labour. It is not,
accordingly, in the richest countries, but in the most thriving, or in
those which are growing rich the fastest, that the wages of labour are
highest. England is certainly, in the present times, a much richer
country than any part of North America. The wages of labour, however,
are much higher in North America than in any part of England. In the
province of New York, common labourers earned in 1773, before the
commencement of the late disturbances, three shillings and sixpence
currency, equal to two shillings sterling, a-day; ship-carpenters, ten
shillings and sixpence currency, with a pint of rum, worth sixpence
sterling, equal in all to six shillings and sixpence sterling;
house-carpenters and bricklayers, eight shillings currency, equal to
four shillings and sixpence sterling; journeymen tailors, five
shillings currency, equal to about two shillings and tenpence
sterling. These prices are all above the London price; and wages are
said to be as high in the other colonies as in New York. The price of
provisions is everywhere in North America much lower than in England.
A dearth has never been known there. In the worst seasons they have
always had a sufficiency for themselves, though less for exportation.
If the money price of labour, therefore, be higher than it is anywhere
in the mother-country, its real price, the real command of the
necessaries and conveniencies of life which it conveys to the
labourer, must be higher in a still greater proportion.
But though North America is not yet so rich as England, it is
much
more thriving, and advancing with much greater rapidity to the further
acquisition of riches. The most decisive mark of the prosperity of any
country is the increase of the number of its inhabitants. In Great
Britain, and most other European countries, they are not supposed to
double in less than five hundred years. In the British colonies in
North America, it has been found that they double in twenty or
five-and-twenty years. Nor in the present times is this increase
principally owing to the continual importation of new inhabitants, but
to the great multiplication of the species. Those who live to old age,
it is said, frequently see there from fifty to a hundred, and
sometimes many more, descendants from their own body. Labour is there
so well rewarded, that a numerous family of children, instead of being
a burden, is a source of opulence and prosperity to the parents. The
labour of each child, before it can leave their house, is computed to
be worth a hundred pounds clear gain to them. A young widow with four
or five young children, who, among the middling or inferior ranks of
people in Europe, would have so little chance for a second husband, is
there frequently courted as a sort of fortune. The value of children
is the greatest of all encouragements to marriage. We cannot,
therefore, wonder that the people in North America should generally
marry very young. Notwithstanding the great increase occasioned by
such early marriages, there is a continual complaint of the scarcity
of hands in North America. The demand for labourers, the funds
destined for maintaining them increase, it seems, still faster than
they can find labourers to employ.
Though the wealth of a country should be very great, yet if
it has
been long stationary, we must not expect to find the wages of labour
very high in it. The funds destined for the payment of wages, the
revenue and stock of its inhabitants, may be of the greatest extent;
but if they have continued for several centuries of the same, or very
nearly of the same extent, the number of labourers employed every year
could easily supply, and even more than supply, the number wanted the
following year. There could seldom be any scarcity of hands, nor could
the masters be obliged to bid against one another in order to get
them. The hands, on the contrary, would, in this case, naturally
multiply beyond their employment. There would be a constant scarcity
of employment, and the labourers would be obliged to bid against one
another in order to get it. If in such a country the wages off labour
had ever been more than sufficient to maintain the labourer, and to
enable him to bring up a family, the competition of the labourers and
the interest of the masters would soon reduce them to the lowest rate
which is consistent with common humanity. China has been long one of
the richest, that is, one of the most fertile, best cultivated, most
industrious, and most populous, countries in the world. It seems,
however, to have been long stationary. Marco Polo, who visited it more
than five hundred years ago, describes its cultivation, industry, and
populousness, almost in the same terms in which they are described by
travellers in the present times. It had, perhaps, even long before his
time, acquired that full complement of riches which the nature of its
laws and institutions permits it to acquire. The accounts of all
travellers, inconsistent in many other respects, agree in the low
wages of labour, and in the difficulty which a labourer finds in
bringing up a family in China. If by digging the ground a whole day he
can get what will purchase a small quantity of rice in the evening, he
is contented. The condition of artificers is, if possible, still
worse. Instead of waiting indolently in their work-houses for the
calls of their customers, as in Europe, they are continually running
about the streets with the tools of their respective trades, offering
their services, and, as it were, begging employment. The poverty of
the lower ranks of people in China far surpasses that of the most
beggarly nations in Europe. In the neighbourhood of Canton, many
hundred, it is commonly said, many thousand families have no
habitation on the land, but live constantly in little fishing-boats
upon the rivers and canals. The subsistence which they find there is
so scanty, that they are eager to fish up the nastiest garbage thrown
overboard from any European ship. Any carrion, the carcase of a dead
dog or cat, for example, though half putrid and stinking, is as
welcome to them as the most wholesome food to the people of other
countries. Marriage is encouraged in China, not by the profitableness
of children, but by the liberty of destroying them. In all great
towns, several are every night exposed in the street, or drowned like
puppies in the water. The performance of this horrid office is even
said to be the avowed business by which some people earn their
subsistence.
China, however, though it may, perhaps, stand still, does not
seem to
go backwards. Its towns are nowhere deserted by their inhabitants. The
lands which had once been cultivated, are nowhere neglected. The same,
or very nearly the same, annual labour, must, therefore, continue to
be performed, and the funds destined for maintaining it must not,
consequently, be sensibly diminished. The lowest class of labourers,
therefore, notwithstanding their scanty subsistence, must some way or
another make shift to continue their race so far as to keep up their
usual numbers.
But it would be otherwise in a country where the funds destined
for
the maintenance of labour were sensibly decaying. Every year the
demand for servants and labourers would, in all the different classes
of employments, be less than it had been the year before. Many who had
been bred in the superior classes, not being able to find employment
in their own business, would be glad to seek it in the lowest. The
lowest class being not only overstocked with its own workmen, but with
the overflowings of all the other classes, the competition for
employment would be so great in it, as to reduce the wages of labour
to the most miserable and scanty subsistence of the labourer. Many
would not be able to find employment even upon these hard terms, but
would either starve, or be driven to seek a subsistence, either by
begging, or by the perpetration perhaps, of the greatest enormities.
Want, famine, and mortality, would immediately prevail in that class,
and from thence extend themselves to all the superior classes, till
the number of inhabitants in the country was reduced to what could
easily be maintained by the revenue and stock which remained in it,
and which had escaped either the tyranny or calamity which had
destroyed the rest. This, perhaps, is nearly the present state of
Bengal, and of some other of the English settlements in the East
Indies. In a fertile country, which had before been much depopulated,
where subsistence, consequently, should not be very difficult, and
where, notwithstanding, three or four hundred thousand people die of
hunger in one year, we maybe assured that the funds destined for the
maintenance of the labouring poor are fast decaying. The difference
between the genius of the British constitution, which protects and
governs North America, and that of the mercantile company which
oppresses and domineers in the East Indies, cannot, perhaps, be better
illustrated than by the different state of those countries.
The liberal reward of labour, therefore, as it is the necessary
effect, so it is the natural symptom of increasing national wealth.
The scanty maintenance of the labouring poor, on the other hand, is
the natural symptom that things are at a stand, and their starving
condition, that they are going fast backwards.
In Great Britain, the wages of labour seem, in the present times,
to
be evidently more than what is precisely necessary to enable the
labourer to bring up a family. In order to satisfy ourselves upon this
point, it will not be necessary to enter into any tedious or doubtful
calculation of what may be the lowest sum upon winch it is possible to
do this. There are many plain symptoms, that the wages of labour are
nowhere in this country regulated by this lowest rate, which is
consistent with common humanity.
First, in almost every part of Great Britain there is a distinction,
even in the lowest species of labour, between summer and winter wages.
Summer wages are always highest. But, on account of the extraordinary
expense of fuel, the maintenance of a family is most expensive in
winter. Wages, therefore, being highest when this expense is lowest,
it seems evident that they are not regulated by what is necessary for
this expense, but by the quantity and supposed value of the work. A
labourer, it may be said, indeed, ought to save part of his summer
wages, in order to defray his winter expense; and that, through the
whole year, they do not exceed what is necessary to maintain his
family through the whole year. A slave, however, or one absolutely
dependent on us for immediate subsistence, would not be treated in
this manner. His daily subsistence would be proportioned to his daily
necessities.
Secondly, the wages of labour do not, in Great Britain, fluctuate
with
the price of provisions. These vary everywhere from year to year,
frequently from month to month. But in many places, the money price of
labour remains uniformly the same, sometimes for half a century
together. If, in these places, therefore, the labouring poor can
maintain their families in dear years, they must be at their ease in
times of moderate plenty, and in affluence in those of extraordinary
cheapness. The high price of provisions during these ten years past,
has not, in many parts of the kingdom, been accompanied with any
sensible rise in the money price of labour. It has, indeed, in some;
owing, probably, more to the increase of the demand for labour, than
to that of the price of provisions.
Thirdly, as the price of provisions varies more from year to
year than
the wages of labour, so, on the other hand, the wages of labour vary
more from place to place than the price of provisions. The prices of
bread and butchers' meat are generally the same, or very nearly the
same, through the greater part of the united kingdom. These, and most
other things which are sold by retail, the way in which the labouring
poor buy all things, are generally fully as cheap, or cheaper, in
great towns than in the remoter parts of the country, for reasons
which I shall have occasion to explain hereafter. But the wages of
labour in a great town and its neighbourhood, are frequently a fourth
or a fifth part, twenty or five-and--twenty per cent. higher than at a
few miles distance. Eighteen pence a day may be reckoned the common
price of labour in London and its neighbourhood. At a few miles
distance, it falls to fourteen and fifteen pence. Tenpence may be
reckoned its price in Edinburgh and its neighbourhood. At a few miles
distance, it falls to eightpence, the usual price of common labour
through the greater part of the low country of Scotland, where it
varies a good deal less than in England. Such a difference of prices,
which, it seems, is not always sufficient to transport a man from one
parish to another, would necessarily occasion so great a
transportation of the most bulky commodities, not only from one parish
to another, but from one end of the kingdom, almost from one end of
the world to the other, as would soon reduce them more nearly to a
level. After all that has been said of the levity and inconstancy of
human nature, it appears evidently from experience, that man is, of
all sorts of luggage, the most difficult to be transported. If the
labouring poor, therefore, can maintain their families in those parts
of the kingdom where the price of labour is lowest, they must be in
affluence where it is highest.
Fourthly, the variations in the price of labour not only do
not
correspond, either in place or time, with those in the price of
provisions, but they are frequently quite opposite.
Grain, the food of the common people, is dearer in Scotland
than in
England, whence Scotland receives almost every year very large
supplies. But English corn must be sold dearer in Scotland, the
country to which it is brought, than in England, the country from
which it comes; and in proportion to its quality it cannot be sold
dearer in Scotland than the Scotch corn that comes to the same market
in competition with it. The quality of grain depends chiefly upon the
quantity of flour or meal which it yields at the mill; and, in this
respect, English grain is so much superior to the Scotch, that though
often dearer in appearance, or in proportion to the measure of its
bulk, it is generally cheaper in reality, or in proportion to its
quality, or even to the measure of its weight. The price of labour, on
the contrary, is dearer in England than in Scotland. If the labouring
poor, therefore, can maintain their families in the one part of the
united kingdom, they must be in affluence in the other. Oatmeal,
indeed, supplies the common people in Scotland with the greatest and
the best part of their food, which is, in general, much inferior to
that of their neighbours of the same rank in England. This difference,
however, in the mode of their subsistence, is not the cause, but the
effect, of the difference in their wages; though, by a strange
misapprehension, I have frequently heard it represented as the cause.
It is not because one man keeps a coach, while his neighbour walks
a-foot, that the one is rich, and the other poor; but because the one
is rich, he keeps a coach, and because the other is poor, he walks
a-foot.
During the course of the last century, taking one year with
another,
grain was dearer in both parts of the united kingdom than during that
of the present. This is a matter of fact which cannot now admit of any
reasonable doubt; and the proof of it is, if possible, still more
decisive with regard to Scotland than with regard to England. It is in
Scotland supported by the evidence of the public fiars, annual
valuations made upon oath, according to the actual state of the
markets, of all the different sorts of grain in every different county
of Scotland. If such direct proof could require any collateral
evidence to confirm it, I would observe, that this has likewise been
the case in France, and probably in most other parts of Europe. With
regard to France, there is the clearest proof. But though it is
certain, that in both parts of the united kingdom grain was somewhat
dearer in the last century than in the present, it is equally certain
that labour was much cheaper. If the labouring poor, therefore, could
bring up their families then, they must be much more at their ease
now. In the last century, the most usual day-wages of common labour
through the greater part of Scotland were sixpence in summer, and
fivepence in winter. Three shillings a-week, the same price, very
nearly still continues to be paid in some parts of the Highlands and
Western islands. Through the greater part of the Low country, the most
usual wages of common labour are now eight pence a-day; tenpence,
sometimes a shilling, about Edinburgh, in the counties which border
upon England, probably on account of that neighbourhood, and in a few
other places where there has lately been a considerable rise in the
demand for labour, about Glasgow, Carron, Ayrshire, etc. In England,
the improvements of agriculture, manufactures, and commerce, began
much earlier than in Scotland. The demand for labour, and consequently
its price, must necessarily have increased with those improvements. In
the last century, accordingly, as well as in the present, the wages of
labour were higher in England than in Scotland. They have risen, too,
considerably since that time, though, on account of the greater
variety of wages paid there in different places, it is more difficult
to ascertain how much. In 1614, the pay of a foot soldier was the same
as in the present times, eightpence a-day. When it was first
established, it would naturally be regulated by the usual wages of
common labourers, the rank of people from which foot soldiers are
commonly drawn. Lord-chief-justice Hales, who wrote in the time of
Charles II. computes the necessary expense of a labourer's family,
consisting of six persons, the father and mother, two children able to
do something, and two not able, at ten shillings a-week, or twenty-six
pounds a-year. If they cannot earn this by their labour, they must
make it up, he supposes, either by begging or stealing. He appears to
have enquired very carefully into this subject {See his scheme for the
maintenance of the poor, in Burn's History of the Poor Laws.}. In
1688, Mr Gregory King, whose skill in political arithmetic is so much
extolled by Dr Davenant, computed the ordinary income of labourers and
out-servants to be fifteen pounds a-year to a family, which he
supposed to consist, one with another, of three and a half persons.
His calculation, therefore, though different in appearance,
corresponds very nearly at bottom with that of Judge Hales. Both
suppose the weekly expense of such families to be about twenty-pence
a-head. Both the pecuniary income and expense of such families have
increased considerably since that time through the greater part of the
kingdom, in some places more, and in some less, though perhaps scarce
anywhere so much as some exaggerated accounts of the present wages of
labour have lately represented them to the public. The price of
labour, it must be observed, cannot be ascertained very accurately
anywhere, different prices being often paid at the same place and for
the same sort of labour, not only according to the different abilities
of the workman, but according to the easiness or hardness of the
masters. Where wages are not regulated by law, all that we can pretend
to determine is, what are the most usual; and experience seems to shew
that law can never regulate them properly, though it has often
pretended to do so.
The real recompence of labour, the real quantity of the necessaries
and conveniencies of life which it can procure to the labourer, has,
during the course of the present century, increased perhaps in a still
greater proportion than its money price. Not only grain has become
somewhat cheaper, but many other things, from which the industrious
poor derive an agreeable and wholesome variety of food, have become a
great deal cheaper. Potatoes, for example, do not at present, through
the greater part of the kingdom, cost half the price which they used
to do thirty or forty years ago. The same thing may be said of
turnips, carrots, cabbages; things which were formerly never raised
but by the spade, but which are now commonly raised by the plough. All
sort of garden stuff, too, has become cheaper. The greater part of the
apples, and even of the onions, consumed in Great Britain, were, in
the last century, imported from Flanders. The great improvements in
the coarser manufactories of both linen and woollen cloth furnish the
labourers with cheaper and better clothing; and those in the
manufactories of the coarser metals, with cheaper and better
instruments of trade, as well as with many agreeable and convenient
pieces of household furniture. Soap, salt, candles, leather, and
fermented liquors, have, indeed, become a good deal dearer, chiefly
from the taxes which have been laid upon them. The quantity of these,
however, which the labouring poor an under any necessity of consuming,
is so very small, that the increase in their price does not compensate
the diminution in that of so many other things. The common complaint,
that luxury extends itself even to the lowest ranks of the people, and
that the labouring poor will not now be contented with the same food,
clothing, and lodging, which satisfied them in former times, may
convince us that it is not the money price of labour only, but its
real recompence, which has augmented.
Is this improvement in the circumstances of the lower ranks
of the
people to be regarded as an advantage, or as an inconveniency, to the
society? The answer seems at first abundantly plain. Servants,
labourers, and workmen of different kinds, make up the far greater
part of every great political society. But what improves the
circumstances of the greater part, can never be regarded as any
inconveniency to the whole. No society can surely be flourishing and
happy, of which the far greater part of the members are poor and
miserable. It is but equity, besides, that they who feed, clothe, and
lodge the whole body of the people, should have such a share of the
produce of their own labour as to be themselves tolerably well fed,
clothed, and lodged.
Poverty, though it no doubt discourages, does not always prevent,
marriage. It seems even to be favourable to generation. A half-starved
Highland woman frequently bears more than twenty children, while a
pampered fine lady is often incapable of bearing any, and is generally
exhausted by two or three. Barrenness, so frequent among women of
fashion, is very rare among those of inferior station. Luxury, in the
fair sex, while it inflames, perhaps, the passion for enjoyment, seems
always to weaken, and frequently to destroy altogether, the powers of
generation.
But poverty, though it does not prevent the generation, is extremely
unfavourable to the rearing of children. The tender plant is produced;
but in so cold a soil, and so severe a climate, soon withers and dies.
It is not uncommon, I have been frequently told, in the Highlands of
Scotland, for a mother who has born twenty children not to have two
alive. Several officers of great experience have assured me, that, so
far from recruiting their regiment, they have never been able to
supply it with drums and fifes, from all the soldiers' children that
were born in it. A greater number of fine children, however, is seldom
seen anywhere than about a barrack of soldiers. Very few of them, it
seems, arrive at the age of thirteen or fourteen. In some places, one
half the children die before they are four years of age, in many
places before they are seven, and in almost all places before they are
nine or ten. This great mortality, however will everywhere be found
chiefly among the children of the common people, who cannot afford to
tend them with the same care as those of better station. Though their
marriages are generally more fruitful than those of people of fashion,
a smaller proportion of their children arrive at maturity. In
foundling hospitals, and among the children brought up by parish
charities, the mortality is still greater than among those of the
common people.
Every species of animals naturally multiplies in proportion
to the
means of their subsistence, and no species can ever multiply be yond
it. But in civilized society, it is only among the inferior ranks of
people that the scantiness of subsistence can set limits to the
further multiplication of the human species; and it can do so in no
other way than by destroying a great part of the children which their
fruitful marriages produce.
The liberal reward of labour, by enabling them to provide better
for
their children, and consequently to bring up a greater number,
naturally tends to widen and extend those limits. It deserves to be
remarked, too, that it necessarily does this as nearly as possible in
the proportion which the demand for labour requires. If this demand is
continually increasing, the reward of labour must necessarily
encourage in such a manner the marriage and multiplication of
labourers, as may enable them to supply that continually increasing
demand by a continually increasing population. If the reward should at
any time be less than what was requisite for this purpose, the
deficiency of hands would soon raise it; and if it should at any time
be more, their excessive multiplication would soon lower it to this
necessary rate. The market would be so much understocked with labour
in the one case, and so much overstocked in the other, as would soon
force back its price to that proper rate which the circumstances of
the society required. It is in this manner that the demand for men,
like that for any other commodity, necessarily regulates the
production of men, quickens it when it goes on too slowly, and stops
it when it advances too fast. It is this demand which regulates and
determines the state of propagation in all the different countries of
the world; in North America, in Europe, and in China; which renders it
rapidly progressive in the first, slow and gradual in the second, and
altogether stationary in the last.
The wear and tear of a slave, it has been said, is at the expense
of
his master; but that of a free servant is at his own expense. The wear
and tear of the latter, however, is, in reality, as much at the
expense of his master as that of the former. The wages paid to
journeymen and servants of every kind must be such as may enable them,
one with another to continue the race of journeymen and servants,
according as the increasing, diminishing, or stationary demand of the
society, may happen to require. But though the wear and tear of a free
servant be equally at the expense of his master, it generally costs
him much less than that of a slave. The fund destined for replacing or
repairing, if I may say so, the wear and tear of the slave, is
commonly managed by a negligent master or careless overseer. That
destined for performing the same office with regard to the freeman is
managed by the freeman himself. The disorders which generally prevail
in the economy of the rich, naturally introduce themselves into the
management of the former; the strict frugality and parsimonious
attention of the poor as naturally establish themselves in that of the
latter. Under such different management, the same purpose must require
very different degrees of expense to execute it. It appears,
accordingly, from the experience of all ages and nations, I believe,
that the work done by freemen comes cheaper in the end than that
performed by slaves. It is found to do so even at Boston, New-York,
and Philadelphia, where the wages of common labour are so very high.
The liberal reward of labour, therefore, as it is the effect
of
increasing wealth, so it is the cause of increasing population. To
complain of it, is to lament over the necessary cause and effect of
the greatest public prosperity.
It deserves to be remarked, perhaps, that it is in the progressive
state, while the society is advancing to the further acquisition,
rather than when it has acquired its full complement of riches, that
the condition of the labouring poor, of the great body of the people,
seems to be the happiest and the most comfortable. It is hard in the
stationary, and miserable in the declining state. The progressive
state is, in reality, the cheerful and the hearty state to all the
different orders of the society; the stationary is dull; the declining
melancholy.
The liberal reward of labour, as it encourages the propagation,
so it
increases the industry of the common people. The wages of labour are
the encouragement of industry, which, like every other human quality,
improves in proportion to the encouragement it receives. A plentiful
subsistence increases the bodily strength of the labourer, and the
comfortable hope of bettering his condition, and of ending his days,
perhaps, in ease and plenty, animates him to exert that strength to
the utmost. Where wages are high, accordingly, we shall always find
the workmen more active, diligent, and expeditious, than where they
are low; in England, for example, than in Scotland; in the
neighbourhood of great towns, than in remote country places. Some
workmen, indeed, when they can earn in four days what will maintain
them through the week, will be idle the other three. This, however, is
by no means the case with the greater part. Workmen, on the contrary,
when they are liberally paid by the piece, are very apt to overwork
themselves, and to ruin their health and constitution in a few years.
A carpenter in London, and in some other places, is not supposed to
last in his utmost vigour above eight years. Something of the same
kind happens in many other trades, in which the workmen are paid by
the piece; as they generally are in manufactures, and even in country
labour, wherever wages are higher than ordinary. Almost every class of
artificers is subject to some peculiar infirmity occasioned by
excessive application to their peculiar species of work. Ramuzzini, an
eminent Italian physician, has written a particular book concerning
such diseases. We do not reckon our soldiers the most industrious set
of people among us; yet when soldiers have been employed in some
particular sorts of work, and liberally paid by the piece, their
officers have frequently been obliged to stipulate with the
undertaker, that they should not be allowed to earn above a certain
sum every day, according to the rate at which they were paid. Till
this stipulation was made, mutual emulation, and the desire of greater
gain, frequently prompted them to overwork themselves, and to hurt
their health by excessive labour. Excessive application, during four
days of the week, is frequently the real cause of the idleness of the
other three, so much and so loudly complained of. Great labour, either
of mind or body, continued for several days together is, in most men,
naturally followed by a great desire of relaxation, which, if not
restrained by force, or by some strong necessity, is almost
irresistible. It is the call of nature, which requires to be relieved
by some indulgence, sometimes of ease only, but sometimes too of
dissipation and diversion. If it is not complied with, the
consequences are often dangerous and sometimes fatal, and such as
almost always, sooner or later, bring on the peculiar infirmity of the
trade. If masters would always listen to the dictates of reason and
humanity, they have frequently occasion rather to moderate, than to
animate the application of many of their workmen. It will be found, I
believe, in every sort of trade, that the man who works so moderately,
as to be able to work constantly, not only preserves his health the
longest, but, in the course of the year, executes the greatest
quantity of work.
In cheap years it is pretended, workmen are generally more idle,
and
in dear times more industrious than ordinary. A plentiful subsistence,
therefore, it has been concluded, relaxes, and a scanty one quickens
their industry. That a little more plenty than ordinary may render
some workmen idle, cannot be well doubted; but that it should have
this effect upon the greater part, or that men in general should work
better when they are ill fed, than when they are well fed, when they
are disheartened than when they are in good spirits, when they are
frequently sick than when they are generally in good health, seems not
very probable. Years of dearth, it is to be observed, are generally
among the common people years of sickness and mortality, which cannot
fail to diminish the produce of their industry.
In years of plenty, servants frequently leave their masters,
and trust
their subsistence to what they can make by their own industry. But the
same cheapness of provisions, by increasing the fund which is destined
for the maintenance of servants, encourages masters, farmers
especially, to employ a greater number. Farmers, upon such occasions,
expect more profit from their corn by maintaining a few more labouring
servants, than by selling it at a low price in the market. The demand
for servants increases, while the number of those who offer to supply
that demand diminishes. The price of labour, therefore, frequently
rises in cheap years.
In years of scarcity, the difficulty and uncertainty of subsistence
make all such people eager to return to service. But the high price of
provisions, by diminishing the funds destined for the maintenance of
servants, disposes masters rather to diminish than to increase the
number of those they have. In dear years, too, poor independent
workmen frequently consume the little stock with which they had used
to supply themselves with the materials of their work, and are obliged
to become journeymen for subsistence. More people want employment than
easily get it; many are willing to take it upon lower terms than
ordinary; and the wages of both servants and journeymen frequently
sink in dear years.
Masters of all sorts, therefore, frequently make better bargains
with
their servants in dear than in cheap years, and find them more humble
and dependent in the former than in the latter. They naturally,
therefore, commend the former as more favourable to industry.
Landlords and farmers, besides, two of the largest classes of masters,
have another reason for being pleased with dear years. The rents of
the one, and the profits of the other, depend very much upon the price
of provisions. Nothing can be more absurd, however, than to imagine
that men in general should work less when they work for themselves,
than when they work for other people. A poor independent workman will
generally be more industrious than even a journeyman who works by the
piece. The one enjoys the whole produce of his own industry, the other
shares it with his master. The one, in his separate independent state,
is less liable to the temptations of bad company, which, in large
manufactories, so frequently ruin the morals of the other. The
superiority of the independent workman over those servants who are
hired by the month or by the year, and whose wages and maintenance are
the same, whether they do much or do little, is likely to be still
greater. Cheap years tend to increase the proportion of independent
workmen to journeymen and servants of all kinds, and dear years to
diminish it.
A French author of great knowledge and ingenuity, Mr Messance,
receiver of the taillies in the election of St Etienne, endeavours to
shew that the poor do more work in cheap than in dear years, by
comparing the quantity and value of the goods made upon those
different occasions in three different manufactures; one of coarse
woollens, carried on at Elbeuf; one of linen, and another of silk,
both which extend through the whole generality of Rouen. It appears
from his account, which is copied from the registers of the public
offices, that the quantity and value of the goods made in all those
three manufactories has generally been greater in cheap than in dear
years, and that it has always been; greatest in the cheapest, and
least in the dearest years. All the three seem to be stationary
manufactures, or which, though their produce may vary somewhat from
year to year, are, upon the whole, neither going backwards nor
forwards.
The manufacture of linen in Scotland, and that of coarse woollens
in
the West Riding of Yorkshire, are growing manufactures, of which the
produce is generally, though with some variations, increasing both in
quantity and value. Upon examining, however, the accounts which have
been published of their annual produce, I have not been able to
observe that its variations have had any sensible connection with the
dearness or cheapness of the seasons. In 1740, a year of great
scarcity, both manufactures, indeed, appear to have declined very
considerably. But in 1756, another year or great scarcity, the Scotch
manufactures made more than ordinary advances. The Yorkshire
manufacture, indeed, declined, and its produce did not rise to what it
had been in 1755, till 1766, after the repeal of the American stamp
act. In that and the following year, it greatly exceeded what it had
ever been before, and it has continued to advance ever since.
The produce of all great manufactures for distant sale must
necessarily depend, not so much upon the dearness or cheapness of the
seasons in the countries where they are carried on, as upon the
circumstances which affect the demand in the countries where they are
consumed; upon peace or war, upon the prosperity or declension of
other rival manufactures and upon the good or bad humour of their
principal customers. A great part of the extraordinary work, besides,
which is probably done in cheap years, never enters the public
registers of manufactures. The men-servants, who leave their masters,
become independent labourers. The women return to their parents, and
commonly spin, in order to make clothes for themselves and their
families. Even the independent workmen do not always, work for public
sale, but are employed by some of their neighbours in manufactures for
family use. The produce of their labour, therefore, frequently makes
no figure in those public registers, of which the records are
sometimes published with so much parade, and from which our merchants
and manufacturers would often vainly pretend to announce the
prosperity or declension of the greatest empires.
Through the variations in the price of labour not only do not
always
correspond with those in the price of provisions, but are frequently
quite opposite, we must not, upon this account, imagine that the price
of provisions has no influence upon that of labour. The money price of
labour is necessarily regulated by two circumstances; the demand for
labour, and the price of the necessaries and conveniencies of life.
The demand for labour, according as it happens to be increasing,
stationary, or declining, or to require an increasing, stationary, or
declining population, determines the quantities of the necessaries and
conveniencies of life which must be given to the labourer; and the
money price of labour is determined by what is requisite for
purchasing this quantity. Though the money price of labour, therefore,
is sometimes high where the price of provisions is low, it would be
still higher, the demand continuing the same, if the price of
provisions was high.
It is because the demand for labour increases in years of sudden
and
extraordinary plenty, and diminishes in those of sudden and
extraordinary scarcity, that the money price of labour sometimes rises
in the one, and sinks in the other.
In a year of sudden and extraordinary plenty, there are funds
in the
hands of many of the employers of industry, sufficient to maintain and
employ a greater number of industrious people than had been employed
the year before; and this extraordinary number cannot always be had.
Those masters, therefore, who want more workmen, bid against one
another, in order to get them, which sometimes raises both the real
and the money price of their labour.
The contrary of this happens in a year of sudden and extraordinary
scarcity. The funds destined for employing industry are less than they
had been the year before. A considerable number of people are thrown
out of employment, who bid one against another, in order to get it,
which sometimes lowers both the real and the money price of labour. In
1740, a year of extraordinary scarcity, many people were willing to
work for bare subsistence. In the succeeding years of plenty, it was
more difficult to get labourers and servants. The scarcity of a dear
year, by diminishing the demand for labour, tends to lower its price,
as the high price of provisions tends to raise it. The plenty of a
cheap year, on the contrary, by increasing the demand, tends to raise
the price of labour, as the cheapness of provisions tends to lower it.
In the ordinary variations of the prices of provisions, those two
opposite causes seem to counterbalance one another, which is probably,
in part, the reason why the wages of labour are everywhere so much
more steady and permanent than the price of provisions.
The increase in the wages of labour necessarily increases the
price of
many commodities, by increasing that part of it which resolves itself
into wages, and so far tends to diminish their consumption, both at
home and abroad. The same cause, however, which raises the wages of
labour, the increase of stock, tends to increase its productive
powers, and to make a smaller quantity of labour produce a greater
quantity of work. The owner of the stock which employs a great number
of labourers necessarily endeavours, for his own advantage, to make
such a proper division and distribution of employment, that they may
be enabled to produce the greatest quantity of work possible. For the
same reason, he endeavours to supply them with the best machinery
which either he or they can think of. What takes place among the
labourers in a particular workhouse, takes place, for the same reason,
among those of a great society. The greater their number, the more
they naturally divide themselves into different classes and
subdivisions of employments. More heads are occupied in inventing the
most proper machinery for executing the work of each, and it is,
therefore, more likely to be invented. There me many commodities,
therefore, which, in consequence of these improvements, come to be
produced by so much less labour than before, that the increase of
its price is more than compensated by the diminution of its quantity.
BOOK II.
OF THE NATURE, ACCUMULATION, AND EMPLOYMENT OF STOCK.
INTRODUCTION.
In that rude state of society, in which there is no division
of
labour, in which exchanges are seldom made, and in which every man
provides every thing for himself, it is not necessary that any stock
should be accumulated, or stored up before-hand, in order to carry on
the business of the society. Every man endeavours to supply, by his
own industry, his own occasional wants, as they occur. When he is
hungry, he goes to the forest to hunt; when his coat is worn out, he
clothes himself with the skin of the first large animal he kills: and
when his hut begins to go to ruin, he repairs it, as well as he can,
with the trees and the turf that are nearest it.
But when the division of labour has once been thoroughly introduced,
the produce of a man's own labour can supply but a very small part of
his occasional wants. The far greater part of them are supplied by the
produce of other men's labour, which he purchases with the produce,
or, what is the same thing, with the price of the produce, of his own.
But this purchase cannot be made till such time as the produce of his
own labour has not only been completed, but sold. A stock of goods of
different kinds, therefore, must be stored up somewhere, sufficient to
maintain him, and to supply him with the materials and tools of his
work, till such time at least as both these events can be brought
about. A weaver cannot apply himself entirely to his peculiar
business, unless there is before-hand stored up somewhere, either in
his own possession, or in that of some other person, a stock
sufficient to maintain him, and to supply him with the materials and
tools of his work, till he has not only completed, but sold his web.
This accumulation must evidently be previous to his applying his
industry for so long a time to such a peculiar business.
As the accumulation of stock must, in the nature of things,
be
previous to the division of labour, so labour can be more and more
subdivided in proportion only as stock is previously more and more
accumulated. The quantity of materials which the same number of people
can work up, increases in a great proportion as labour comes to be
more and more subdivided; and as the operations of each workman are
gradually reduced to a greater degree of simplicity, a variety of new
machines come to be invented for facilitating and abridging those
operations. As the division of labour advances, therefore, in order to
give constant employment to an equal number of workmen, an equal stock
of provisions, and a greater stock of materials and tools than what
would have been necessary in a ruder state of things, must be
accumulated before-hand. But the number of workmen in every branch of
business generally increases with the division of labour in that
branch; or rather it is the increase of their number which enables
them to class and subdivide themselves in this manner.
As the accumulation of stock is previously necessary for carrying
on
this great improvement in the productive powers of labour, so that
accumulation naturally leads to this improvement. The person who
employs his stock in maintaining labour, necessarily wishes to employ
it in such a manner as to produce as great a quantity of work as
possible. He endeavours, therefore, both to make among his workmen the
most proper distribution of employment, and to furnish them with the
best machines which he can either invent or afford to purchase. His
abilities, in both these respects, are generally in proportion to the
extent of his stock, or to the number of people whom it can employ.
The quantity of industry, therefore, not only increases in every
country with the increase of the stock which employs it, but, in
consequence of that increase, the same quantity of industry produces a
much greater quantity of work.
Such are in general the effects of the increase of stock upon
industry
and its productive powers.
In the following book, I have endeavoured to explain the nature
of
stock, the effects of its accumulation into capital of different
kinds, and the effects of the different employments of those capitals.
This book is divided into five chapters. In the first chapter, I have
endeavoured to shew what are the different parts or branches into
which the stock, either of an individual, or of a great society,
naturally divides itself. In the second, I have endeavoured to explain
the nature and operation of money, considered as a particular branch
of the general stock of the society. The stock which is accumulated
into a capital, may either be employed by the person to whom it
belongs, or it may be lent to some other person. In the third and
fourth chapters, I have endeavoured to examine the manner in which it
operates in both these situations. The fifth and last chapter treats
of the different effects which the different employments of capital
immediately produce upon the quantity, both of national industry, and
of the annual produce of land and labour.
CHAPTER III.
OF THE ACCUMULATION OF CAPITAL, OR OF PRODUCTIVE AND
UNPRODUCTIVE
LABOUR.
There is one sort of labour which adds to the value of the subject
upon which it is bestowed; there is another which has no such effect.
The former as it produces a value, may be called productive, the
latter, unproductive labour. {Some French authors of great learning
and ingenuity have used those words in a different sense. In the last
chapter of the fourth book, I shall endeavour to shew that their sense
is an improper one.} Thus the labour of a manufacturer adds generally
to the value of the materials which he works upon, that of his own
maintenance, and of his master's profit. The labour of a menial
servant, on the contrary, adds to the value of nothing. Though the
manufacturer has his wages advanced to him by his master, he in
reality costs him no expense, the value of those wages being generally
restored, together with a profit, in the improved value of the subject
upon which his labour is bestowed. But the maintenance of a menial
servant never is restored. A man grows rich by employing a multitude
of manufacturers; he grows poor by maintaining a multitude or menial
servants. The labour of the latter, however, has its value, and
deserves its reward as well as that of the former. But the labour of
the manufacturer fixes and realizes itself in some particular subject
or vendible commodity, which lasts for some time at least after that
labour is past. It is, as it were, a certain quantity of labour
stocked and stored up, to be employed, if necessary, upon some other
occasion. That subject, or, what is the same thing, the price of that
subject, can afterwards, if necessary, put into motion a quantity of
labour equal to that which had originally produced it. The labour of
the menial servant, on the contrary, does not fix or realize itself in
any particular subject or vendible commodity. His services generally
perish in the very instant of their performance, and seldom leave any
trace of value behind them, for which an equal quantity of service
could afterwards be procured.
The labour of some of the most respectable orders in the society
is,
like that of menial servants, unproductive of any value, and does not
fix or realize itself in any permanent subject, or vendible commodity,
which endures after that labour is past, and for which an equal
quantity of labour could afterwards be procured. The sovereign, for
example, with all the officers both of justice and war who serve under
him, the whole army and navy, are unproductive labourers. They are the
servants of the public, and are maintained by a part of the annual
produce of the industry of other people. Their service, how
honourable, how useful, or how necessary soever, produces nothing for
which an equal quantity of service can afterwards be procured. The
protection, security, and defence, of the commonwealth, the effect of
their labour this year, will not purchase its protection, security,
and defence, for the year to come. In the same class must be ranked,
some both of the gravest and most important, and some of the most
frivolous professions; churchmen, lawyers, physicians, men of letters
of all kinds; players, buffoons, musicians, opera-singers,
opera-dancers, etc. The labour of the meanest of these has a certain
value, regulated by the very same principles which regulate that of
every other sort of labour; and that of the noblest and most useful,
produces nothing which could afterwards purchase or procure an equal
quantity of labour. Like the declamation of the actor, the harangue of
the orator, or the tune of the musician, the work of all of them
perishes in the very instant of its production.
Both productive and unproductive labourers, and those who do
not
labour at all, are all equally maintained by the annual produce of the
land and labour of the country. This produce, how great soever, can
never be infinite, but must have certain limits. According, therefore,
as a smaller or greater proportion of it is in any one year employed
in maintaining unproductive hands, the more in the one case, and the
less in the other, will remain for the productive, and the next year's
produce will be greater or smaller accordingly; the whole annual
produce, if we except the spontaneous productions of the earth, being
the effect of productive labour.
Though the whole annual produce of the land and labour of every
country is no doubt ultimately destined for supplying the consumption
of its inhabitants, and for procuring a revenue to them; yet when it
first comes either from the ground, or from the hands of the
productive labourers, it naturally divides itself into two parts. One
of them, and frequently the largest, is, in the first place, destined
for replacing a capital, or for renewing the provisions, materials,
and finished work, which had been withdrawn from a capital; the other
for constituting a revenue either to the owner of this capital, as the
profit of his stock, or to some other person, as the rent of his land.
Thus, of the produce of land, one part replaces the capital of the
farmer; the other pays his profit and the rent of the landlord; and
thus constitutes a revenue both to the owner of this capital, as the
profits of his stock, and to some other person as the rent of his
land. Of the produce of a great manufactory, in the same manner, one
part, and that always the largest, replaces the capital of the
undertaker of the work; the other pays his profit, and thus
constitutes a revenue to the owner of this capital.
That part of the annual produce of the land and labour of any
country
which replaces a capital, never is immediately employed to maintain
any but productive hands. It pays the wages of productive labour only.
That which is immediately destined for constituting a revenue, either
as profit or as rent, may maintain indifferently either productive or
unproductive hands.
Whatever part of his stock a man employs as a capital, he always
expects it to be replaced to him with a profit. He employs it,
therefore, in maintaining productive hands only; and after having
served in the function of a capital to him, it constitutes a revenue
to them. Whenever he employs any part of it in maintaining
unproductive hands of any kind, that part is from that moment
withdrawn from his capital, and placed in his stock reserved for
immediate consumption.
Unproductive labourers, and those who do not labour at all,
are all
maintained by revenue; either, first, by that part of the annual
produce which is originally destined for constituting a revenue to
some particular persons, either as the rent of land, or as the profits
of stock; or, secondly, by that part which, though originally destined
for replacing a capital, and for maintaining productive labourers
only, yet when it comes into their hands, whatever part of it is over
and above their necessary subsistence, may be employed in maintaining
indifferently either productive or unproductive hands. Thus, not only
the great landlord or the rich merchant, but even the common workman,
if his wages are considerable, may maintain a menial servant; or he
may sometimes go to a play or a puppet-show, and so contribute his
share towards maintaining one set of unproductive labourers; or he may
pay some taxes, and thus help to maintain another set, more honourable
and useful, indeed, but equally unproductive. No part of the annual
produce, however, which had been originally destined to replace a
capital, is ever directed towards maintaining unproductive hands, till
after it has put into motion its full complement of productive labour,
or all that it could put into motion in the way in which it was
employed. The workman must have earned his wages by work done, before
he can employ any part of them in this manner. That part, too, is
generally but a small one. It is his spare revenue only, of which
productive labourers have seldom a great deal. They generally have
some, however; and in the payment of taxes, the greatness of their
number may compensate, in some measure, the smallness of their
contribution. The rent of land and the profits of stock are
everywhere, therefore, the principal sources from which unproductive
hands derive their subsistence. These are the two sorts of revenue of
which the owners have generally most to spare. They might both
maintain indifferently, either productive or unproductive hands. They
seem, however, to have some predilection for the latter. The expense
of a great lord feeds generally more idle than industrious people The
rich merchant, though with his capital he maintains industrious people
only, yet by his expense, that is, by the employment of his revenue,
he feeds commonly the very same sort as the great lord.
The proportion, therefore, between the productive and unproductive
hands, depends very much in every country upon the proportion between
that part of the annual produce, which, as soon as it comes either
from the ground, or from the hands of the productive labourers, is
destined for replacing a capital, and that which is destined for
constituting a revenue, either as rent or as profit. This proportion
is very different in rich from what it is in poor countries.
Thus, at present, in the opulent countries of Europe, a very
large,
frequently the largest, portion of the produce of the land, is
destined for replacing the capital of the rich and independent farmer;
the other for paying his profits, and the rent of the landlord. But
anciently, during the prevalency of the feudal government, a very
small portion of the produce was sufficient to replace the capital
employed in cultivation. It consisted commonly in a few wretched
cattle, maintained altogether by the spontaneous produce of
uncultivated land, and which might, therefore, be considered as a part
of that spontaneous produce. It generally, too, belonged to the
landlord, and was by him advanced to the occupiers of the land. All
the rest of the produce properly belonged to him too, either as rent
for his land, or as profit upon this paltry capital. The occupiers of
land were generally bond-men, whose persons and effects were equally
his property. Those who were not bond-men were tenants at will; and
though the rent which they paid was often nominally little more than a
quit-rent, it really amounted to the whole produce of the land. Their
lord could at all times command their labour in peace and their
service in war. Though they lived at a distance from his house, they
were equally dependent upon him as his retainers who lived in it. But
the whole produce of the land undoubtedly belongs to him, who can
dispose of the labour and service of all those whom it maintains. In
the present state of Europe, the share of the landlord seldom exceeds
a third, sometimes not a fourth part of the whole produce of the land.
The rent of land, however, in all the improved parts of the country,
has been tripled and quadrupled since those ancient times; and this
third or fourth part of the annual produce is, it seems, three or four
times greater than the whole had been before. In the progress of
improvement, rent, though it increases in proportion to the extent,
diminishes in proportion to the produce of the land.
In the opulent countries of Europe, great capitals are at present
employed in trade and manufactures. In the ancient state, the little
trade that was stirring, and the few homely and coarse manufactures
that were carried on, required but very small capitals. These,
however, must have yielded very large profits. The rate of interest
was nowhere less than ten per cent. and their profits must have been
sufficient to afford this great interest. At present, the rate of
interest, in the improved parts of Europe, is nowhere higher than six
per cent.; and in some of the most improved, it is so low as four,
three, and two per cent. Though that part of the revenue of the
inhabitants which is derived from the profits of stock, is always much
greater in rich than in poor countries, it is because the stock is
much greater; in proportion to the stock, the profits are generally
much less.
That part of the annual produce, therefore, which, as soon as
it comes
either from the ground, or from the hands of the productive labourers,
is destined for replacing a capital, is not only much greater in rich
than in poor countries, but bears a much greater proportion to that
which is immediately destined for constituting a revenue either as
rent or as profit. The funds destined for the maintenance of
productive labour are not only much greater in the former than in the
latter, but bear a much greater proportion to those which, though they
may be employed to maintain either productive or unproductive hands,
have generally a predilection for the latter.
The proportion between those different funds necessarily determines
in
every country the general character of the inhabitants as to industry
or idleness. We are more industrious than our forefathers, because, in
the present times, the funds destined for the maintenance of industry
are much greater in proportion to those which are likely to be
employed in the maintenance of idleness, than they were two or three
centuries ago. Our ancestors were idle for want of a sufficient
encouragement to industry. It is better, says the proverb, to play for
nothing, than to work for nothing. In mercantile and manufacturing
towns, where the inferior ranks of people are chiefly maintained by
the employment of capital, they are in general industrious, sober, and
thriving; as in many English, and in most Dutch towns. In those towns
which are principally supported by the constant or occasional
residence of a court, and in which the inferior ranks of people are
chiefly maintained by the spending of revenue, they are in general
idle, dissolute, and poor; as at Rome, Versailles, Compeigne, and
Fontainbleau. If you except Rouen and Bourdeaux, there is little trade
or industry in any of the parliament towns of France; and the inferior
ranks of people, being chiefly maintained by the expense of the
members of the courts of justice, and of those who come to plead
before them, are in general idle and poor. The great trade of Rouen
and Bourdeaux seems to be altogether the effect of their situation.
Rouen is necessarily the entrepot of almost all the goods which are
brought either from foreign countries, or from the maritime provinces
of France, for the consumption of the great city of Paris. Bourdeaux
is, in the same manner, the entrepot of the wines which grow upon the
banks of the Garronne, and of the rivers which run into it, one of the
richest wine countries in the world, and which seems to produce the
wine fittest for exportation, or best suited to the taste of foreign
nations. Such advantageous situations necessarily attract a great
capital by the great employment which they afford it; and the
employment of this capital is the cause of the industry of those two
cities. In the other parliament towns of France, very little more
capital seems to be employed than what is necessary for supplying
their own consumption; that is, little more than the smallest capital
which can be employed in them. The same thing may be said of Paris,
Madrid, and Vienna. Of those three cities, Paris is by far the most
industrious, but Paris itself is the principal market of all the
manufactures established at Paris, and its own consumption is the
principal object of all the trade which it carries on. London, Lisbon,
and Copenhagen, are, perhaps, the only three cities in Europe, which
are both the constant residence of a court, and can at the same time
be considered as trading cities, or as cities which trade not only for
their own consumption, but for that of other cities and countries. The
situation of all the three is extremely advantageous, and naturally
fits them to be the entrepots of a great part of the goods destined
for the consumption of distant places. In a city where a great revenue
is spent, to employ with advantage a capital for any other purpose
than for supplying the consumption of that city, is probably more
difficult than in one in which the inferior ranks of people have no
other maintenance but what they derive from the employment of such a
capital. The idleness of the greater part of the people who are
maintained by the expense of revenue, corrupts, it is probable, the
industry of those who ought to be maintained by the employment of
capital, and renders it less advantageous to employ a capital there
than in other places. There was little trade or industry in Edinburgh
before the Union. When the Scotch parliament was no longer to be
assembled in it, when it ceased to be the necessary residence of the
principal nobility and gentry of Scotland, it became a city of some
trade and industry. It still continues, however, to be the residence
of the principal courts of justice in Scotland, of the boards of
customs and excise, etc. A considerable revenue, therefore, still
continues to be spent in it. In trade and industry, it is much
inferior to Glasgow, of which the inhabitants are chiefly maintained
by the employment of capital. The inhabitants of a large village, it
has sometimes been observed, after having made considerable progress
in manufactures, have become idle and poor, in consequence of a great
lord's having taken up his residence in their neighbourhood.
The proportion between capital and revenue, therefore, seems
everywhere to regulate the proportion between industry and idleness
Wherever capital predominates, industry prevails; wherever revenue,
idleness. Every increase or diminution of capital, therefore,
naturally tends to increase or diminish the real quantity of industry,
the number of productive hands, and consequently the exchangeable
value of the annual produce of the land and labour of the country, the
real wealth and revenue of all its inhabitants.
Capitals are increased by parsimony, and diminished by prodigality
and
misconduct.
Whatever a person saves from his revenue he adds to his capital,
and
either employs it himself in maintaining an additional number of
productive hands, or enables some other person to do so, by lending it
to him for an interest, that is, for a share of the profits. As the
capital of an individual can be increased only by what he saves from
his annual revenue or his annual gains, so the capital of a society,
which is the same with that of all the individuals who compose it, can
be increased only in the same manner.
Parsimony, and not industry, is the immediate cause of the increase
of
capital. Industry, indeed, provides the subject which parsimony
accumulates; but whatever industry might acquire, if parsimony did not
save and store up, the capital would never be the greater.
Parsimony, by increasing the fund which is destined for the
maintenance of productive hands, tends to increase the number of those
hands whose labour adds to the value of the subject upon winch it is
bestowed. It tends, therefore, to increase the exchangeable value of
the annual produce of the land and labour of the country. It puts into
motion an additional quantity of industry, which gives an additional
value to the annual produce.
What is annually saved, is as regularly consumed as what is
annually
spent, and nearly in the same time too: but it is consumed by a
different set of people. That portion of his revenue which a rich man
annually spends, is, in most cases, consumed by idle guests and menial
servants, who leave nothing behind them in return for their
consumption. That portion which he annually saves, as, for the sake of
the profit, it is immediately employed as a capital, is consumed in
the same manner, and nearly in the same time too, but by a different
set of people: by labourers, manufacturers, and artificers, who
reproduce, with a profit, the value of their annual consumption. His
revenue, we shall suppose, is paid him in money. Had he spent the
whole, the food, clothing, and lodging, which the whole could have
purchased, would have been distributed among the former set of people.
By saving a part of it, as that part is, for the sake of the profit,
immediately employed as a capital, either by himself or by some other
person, the food, clothing, and lodging, which may be purchased with
it, are necessarily reserved for the latter. The consumption is the
same, but the consumers are different.
By what a frugal man annually saves, he not only affords maintenance
to an additional number of productive hands, for that of the ensuing
year, but like the founder of a public work-house he establishes, as
it were, a perpetual fund for the maintenance of an equal number in
all times to come. The perpetual allotment and destination of this
fund, indeed, is not always guarded by any positive law, by any
trust-right or deed of mortmain. It is always guarded, however, by a
very powerful principle, the plain and evident interest of every
individual to whom any share of it shall ever belong. No part of it
can ever afterwards be employed to maintain any but productive hands,
without an evident loss to the person who thus perverts it from its
proper destination.
The prodigal perverts it in this manner: By not confining his
expense
within his income, he encroaches upon his capital. Like him who
perverts the revenues of some pious foundation to profane purposes, he
pays the wages of idleness with those funds which the frugality of his
forefathers had, as it were, consecrated to the maintenance of
industry. By diminishing the funds destined for the employment of
productive labour, he necessarily diminishes, so far as it depends
upon him, the quantity of that labour which adds a value to the
subject upon which it is bestowed, and, consequently, the value of the
annual produce of the land and labour of the whole country, the real
wealth and revenue of its inhabitants. If the prodigality of some were
not compensated by the frugality of others, the conduct of every
prodigal, by feeding the idle with the bread of the industrious, would
tend not only to beggar himself, but to impoverish his country.
Though the expense of the prodigal should be altogether in home
made,
and no part of it in foreign commodities, its effect upon the
productive funds of the society would still be the same. Every year
there would still be a certain quantity of food and clothing, which
ought to have maintained productive, employed in maintaining
unproductive hands. Every year, therefore, there would still be some
diminution in what would otherwise have been the value of the annual
produce of the land and labour of the country.
This expense, it may be said, indeed, not being in foreign goods,
and
not occasioning any exportation of gold and silver, the same quantity
of money would remain in the country as before. But if the quantity of
food and clothing which were thus consumed by unproductive, had been
distributed among productive hands, they would have reproduced,
together with a profit, the full value of their consumption. The same
quantity of money would, in this case, equally have remained in the
country, and there would, besides, have been a reproduction of an
equal value of consumable goods. There would have been two values
instead of one.
The same quantity of money, besides, can not long remain in
any
country in which the value of the annual produce diminishes. The sole
use of money is to circulate consumable goods. By means of it,
provisions, materials, and finished work, are bought and sold, and
distributed to their proper consumers. The quantity of money,
therefore, which can be annually employed in any country, must be
determined by the value of the consumable goods annually circulated
within it. These must consist, either in the immediate produce of the
land and labour of the country itself, or in something which had been
purchased with some part of that produce. Their value, therefore, must
diminish as the value of that produce diminishes, and along with it
the quantity of money which can be employed in circulating them. But
the money which, by this annual diminution of produce, is annually
thrown out of domestic circulation, will not be allowed to lie idle.
The interest of whoever possesses it requires that it should be
employed; but having no employment at home, it will, in spite of all
laws and prohibitions, be sent abroad, and employed in purchasing
consumable goods, which may be of some use at home. Its annual
exportation will, in this manner, continue for some time to add
something to the annual consumption of the country beyond the value of
its own annual produce. What in the days of its prosperity had been
saved from that annual produce, and employed in purchasing gold and
silver, will contribute, for some little time, to support its
consumption in adversity. The exportation of gold and silver is, in
this case, not the cause, but the effect of its declension, and may
even, for some little time, alleviate the misery of that declension.
The quantity of money, on the contrary, must in every country
naturally increase as the value of the annual produce increases. The
value of the consumable goods annually circulated within the society
being greater, will require a greater quantity of money to circulate
them. A part of the increased produce, therefore, will naturally be
employed in purchasing, wherever it is to be had, the additional
quantity of gold and silver necessary for circulating the rest. The
increase of those metals will, in this case, be the effect, not the
cause, of the public prosperity. Gold and silver are purchased
everywhere in the same manner. The food, clothing, and lodging, the
revenue and maintenance, of all those whose labour or stock is
employed in bringing them from the mine to the market, is the price
paid for them in Peru as well as in England. The country which has
this price to pay, will never belong without the quantity of those
metals which it has occasion for; and no country will ever long retain
a quantity which it has no occasion for.
Whatever, therefore, we may imagine the real wealth and revenue
of a
country to consist in, whether in the value of the annual produce of
its land and labour, as plain reason seems to dictate, or in the
quantity of the precious metals which circulate within it, as vulgar
prejudices suppose; in either view of the matter, every prodigal
appears to be a public enemy, and every frugal man a public
benefactor.
The effects of misconduct are often the same as those of prodigality.
Every injudicious and unsuccessful project in agriculture, mines,
fisheries, trade, or manufactures, tends in the same manner to
diminish the funds destined for the maintenance of productive labour.
In every such project, though the capital is consumed by productive
hands only, yet as, by the injudicious manner in which they are
employed, they do not reproduce the full value of their consumption,
there must always be some diminution in what would otherwise have been
the productive funds of the society.
It can seldom happen, indeed, that the circumstances of a great
nation
can be much affected either by the prodigality or misconduct of
individuals; the profusion or imprudence of some being always more
than compensated by the frugality and good conduct of others.
With regard to profusion, the principle which prompts to expense
is
the passion for present enjoyment; which, though sometimes violent and
very difficult to be restrained, is in general only momentary and
occasional. But the principle which prompts to save, is the desire of
bettering our condition; a desire which, though generally calm and
dispassionate, comes with us from the womb, and never leaves us till
we go into the grave. In the whole interval which separates those two
moments, there is scarce, perhaps, a single instance, in which any man
is so perfectly and completely satisfied with his situation, as to be
without any wish of alteration or improvement of any kind. An
augmentation of fortune is the means by which the greater part of men
propose and wish to better their condition. It is the means the most
vulgar and the most obvious; and the most likely way of augmenting
their fortune, is to save and accumulate some part of what they
acquire, either regularly and annually, or upon some extraordinary
occasion. Though the principle of expense, therefore, prevails in
almost all men upon some occasions, and in some men upon almost all
occasions; yet in the greater part of men, taking the whole course of
their life at an average, the principle of frugality seems not only to
predominate, but to predominate very greatly.
With regard to misconduct, the number of prudent and successful
undertakings is everywhere much greater than that of injudicious and
unsuccessful ones. After all our complaints of the frequency of
bankruptcies, the unhappy men who fall into this misfortune, make but
a very small part of the whole number engaged in trade, and all other
sorts of business; not much more, perhaps, than one in a thousand.
Bankruptcy is, perhaps, the greatest and most humiliating calamity
which can befal an innocent man. The greater part of men, therefore,
are sufficiently careful to avoid it. Some, indeed, do not avoid it;
as some do not avoid the gallows.
Great nations are never impoverished by private, though they
sometimes
are by public prodigality and misconduct. The whole, or almost the
whole public revenue is, in most countries, employed in maintaining
unproductive hands. Such are the people who compose a numerous and
splendid court, a great ecclesiastical establishment, great fleets and
armies, who in time of peace produce nothing, and in time of war
acquire nothing which can compensate the expense of maintaining them,
even while the war lasts. Such people, as they themselves produce
nothing, are all maintained by the produce of other men's labour. When
multiplied, therefore, to an unnecessary number, they may in a
particular year consume so great a share of this produce, as not to
leave a sufficiency for maintaining the productive labourers, who
should reproduce it next year. The next year's produce, therefore,
will be less than that of the foregoing; and if the same disorder
should continue, that of the third year will be still less than that
of the second. Those unproductive hands who should be maintained by a
part only of the spare revenue of the people, may consume so great a
share of their whole revenue, and thereby oblige so great a number to
encroach upon their capitals, upon the funds destined for the
maintenance of productive labour, that all the frugality and good
conduct of individuals may not be able to compensate the waste and
degradation of produce occasioned by this violent and forced
encroachment.
This frugality and good conduct, however, is, upon most occasions,
it
appears from experience, sufficient to compensate, not only the
private prodigality and misconduct of individuals, but the public
extravagance of government. The uniform, constant, and uninterrupted
effort of every man to better his condition, the principle from which
public and national, as well as private opulence is originally
derived,is frequently powerful enough to maintain the natural progress
of things towards improvement, in spite both of the extravagance of
government, and of the greatest errors of administration. Like the
unknown principle of animal life, it frequently restores health and
vigour to the constitution, in spite not only of the disease, but of
the absurd prescriptions of the doctor.
The annual produce of the land and labour of any nation can
be
increased in its value by no other means, but by increasing either the
number of its productive labourers, or the productive powers of those
labourers who had before been employed. The number of its productive
labourers, it is evident, can never be much increased, but in
consequence of an increase of capital, or of the funds destined for
maintaining them. The productive powers of the same number of
labourers cannot be increased, but in consequence either of some
addition and improvement to those machines and instruments which
facilitate and abridge labour, or of more proper division and
distribution of employment. In either case, an additional capital is
almost always required. It is by means of an additional capital only,
that the undertaker of any work can either provide his workmen with
better machinery, or make a more proper distribution of employment
among them. When the work to be done consists of a number of parts, to
keep every man constantly employed in one way, requires a much greater
capital than where every man is occasionally employed in every
different part of the work. When we compare, therefore, the state of a
nation at two different periods, and find that the annual produce of
its land and labour is evidently greater at the latter than at the
former, that its lands are better cultivated, its manufactures more
numerous and more flourishing, and its trade more extensive; we may be
assured that its capital must have increased during the interval
between those two periods, and that more must have been added to it by
the good conduct of some, than had been taken from it either by the
private misconduct of others, or by the public extravagance of
government. But we shall find this to have been the case of almost all
nations, in all tolerably quiet and peaceable times, even of those who
have not enjoyed the most prudent and parsimonious governments. To
form a right judgment of it, indeed, we must compare the state of the
country at periods somewhat distant from one another. The progress is
frequently so gradual, that, at near periods, the improvement is not
only not sensible, but, from the declension either of certain branches
of industry, or of certain districts of the country, things which
sometimes happen, though the country in general is in great
prosperity, there frequently arises a suspicion, that the riches and
industry of the whole are decaying.
The annual produce of the land and labour of England, for example,
is
certainly much greater than it was a little more than a century ago,
at the restoration of Charles II. Though at present few people, I
believe, doubt of this, yet during this period five years have seldom
passed away, in which some book or pamphlet has not been published,
written, too, with such abilities as to gain some authority with the
public, and pretending to demonstrate that the wealth of the nation
was fast declining; that the country was depopulated, agriculture
neglected, manufactures decaying, and trade undone. Nor have these
publications been all party pamphlets, the wretched offspring of
falsehood and venality. Many of them have been written by very candid
and very intelligent people, who wrote nothing but what they believed,
and for no other reason but because they believed it.
The annual produce of the land and labour of England, again,
was
certainly much greater at the Restoration than we can suppose it to
have been about a hundred years before, at the accession of Elizabeth.
At this period, too, we have all reason to believe, the country was
much more advanced in improvement, than it had been about a century
before, towards the close of the dissensions between the houses of
York and Lancaster. Even then it was, probably, in a better condition
than it had been at the Norman conquest: and at the Norman conquest,
than during the confusion of the Saxon heptarchy. Even at this early
period, it was certainly a more improved country than at the invasion
of Julius Caesar, when its inhabitants were nearly in the same state
with the savages in North America.
In each of those periods, however, there was not only much private
and
public profusion, many expensive and unnecessary wars, great
perversion of the annual produce from maintaining productive to
maintain unproductive hands; but sometimes, in the confusion of civil
discord, such absolute waste and destruction of stock, as might be
supposed, not only to retard, as it certainly did, the natural
accumulation of riches, but to have left the country, at the end of
the period, poorer than at the beginning. Thus, in the happiest and
most fortunate period of them all, that which has passed since the
Restoration, how many disorders and misfortunes have occurred, which,
could they have been foreseen, not only the impoverishment, but the
total ruin of the country would have been expected from them? The fire
and the plague of London, the two Dutch wars, the disorders of the
revolution, the war in Ireland, the four expensive French wars of
1688, 1701, 1742, and 1756, together with the two rebellions of 1715
and 1745. In the course of the four French wars, the nation has
contracted more than £145,000,000 of debt, over and above all the
other extraordinary annual expense which they occasioned; so that the
whole cannot be computed at less than £200,000,000. So great a share
of the annual produce of the land and labour of the country, has,
since the Revolution, been employed upon different occasions, in
maintaining an extraordinary number of unproductive hands. But had not
those wars given this particular direction to so large a capital, the
greater part of it would naturally have been employed in maintaining
productive hands, whose labour would have replaced, with a profit, the
whole value of their consumption. The value of the annual produce of
the land and labour of the country would have been considerably
increased by it every year, and every years increase would have
augmented still more that of the following year. More houses would
have been built, more lands would have been improved, and those which
had been improved before would have been better cultivated; more
manufactures would have been established, and those which had been
established before would have been more extended; and to what height
the real wealth and revenue of the country might by this time have
been raised, it is not perhaps very easy even to imagine.
But though the profusion of government must undoubtedly have
retarded
the natural progress of England towards wealth and improvement, it has
not been able to stop it. The annual produce of its land and labour is
undoubtedly much greater at present than it was either at the
Restoration or at the Revolution. The capital, therefore, annually
employed in cultivating this land, and in maintaining this labour,
must likewise be much greater. In the midst of all the exactions of
government, this capital has been silently and gradually accumulated
by the private frugality and good conduct of individuals, by their
universal, continual, and uninterrupted effort to better their own
condition. It is this effort, protected by law, and allowed by liberty
to exert itself in the manner that is most advantageous, which has
maintained the progress of England towards opulence and improvement in
almost all former times, and which, it is to be hoped, will do so in
all future times. England, however, as it has never been blessed with
a very parsimonious government, so parsimony has at no time been the
characteristic virtue of its inhabitants. It is the highest
impertinence and presumption, therefore, in kings and ministers to
pretend to watch over the economy of private people, and to restrain
their expense, either by sumptuary laws, or by prohibiting the
importation of foreign luxuries. They are themselves always, and
without any exception, the greatest spendthrifts in the society. Let
them look well after their own expense, and they may safely trust
private people with theirs. If their own extravagance does not ruin
the state, that of the subject never will.
As frugality increases, and prodigality diminishes, the public
capital, so the conduct of those whose expense just equals their
revenue, without either accumulating or encroaching, neither increases
nor diminishes it. Some modes of expense, however, seem to contribute
more to the growth of public opulence than others.
The revenue of an individual may be spent, either in things
which are
consumed immediately, and in which one day's expense can neither
alleviate nor support that of another; or it may be spent in things
mere durable, which can therefore be accumulated, and in which every
day's expense may, as he chooses, either alleviate, or support and
heighten, the effect of that of the following day. A man of fortune,
for example, may either spend his revenue in a profuse and sumptuous
table, and in maintaining a great number of menial servants, and a
multitude of dogs and horses; or, contenting himself with a frugal
table, and few attendants, he may lay out the greater part of it in
adorning his house or his country villa, in useful or ornamental
buildings, in useful or ornamental furniture, in collecting books,
statues, pictures; or in things more frivolous, jewels, baubles,
ingenious trinkets of different kinds; or, what is most trifling of
all, in amassing a great wardrobe of fine clothes, like the favourite
and minister of a great prince who died a few years ago. Were two men
of equal fortune to spend their revenue, the one chiefly in the one
way, the other in the other, the magnificence of the person whose
expense had been chiefly in durable commodities, would be continually
increasing, every day's expense contributing something to support and
heighten the effect of that of the following day; that of the other,
on the contrary, would be no greater at the end of the period than at
the beginning. The former too would, at the end of the period, be the
richer man of the two. He would have a stock of goods of some kind or
other, which, though it might not be worth all that it cost, would
always be worth something. No trace or vestige of the expense of the
latter would remain, and the effects of ten or twenty years' profusion
would be as completely annihilated as if they had never existed.
As the one mode of expense is more favourable than the other
to the
opulence of an individual, so is it likewise to that of a nation. The
houses, the furniture, the clothing of the rich, in a little time,
become useful to the inferior and middling ranks of people. They are
able to purchase them when their superiors grow weary of them; and the
general accommodation of the whole people is thus gradually improved,
when this mode of expense becomes universal among men of fortune. In
countries which have long been rich, you will frequently find the
inferior ranks of people in possession both of houses and furniture
perfectly good and entire, but of which neither the one could have
been built, nor the other have been made for their use. What was
formerly a seat of the family of Seymour, is now an inn upon the Bath
road. The marriage-bed of James I. of Great Britain, which his queen
brought with her from Denmark, as a present fit for a sovereign to
make to a sovereign, was, a few years ago, the ornament of an alehouse
at Dunfermline. In some ancient cities, which either have been long
stationary, or have gone somewhat to decay, you will sometimes scarce
find a single house which could have been built for its present
inhabitants. If you go into those houses, too, you will frequently
find many excellent, though antiquated pieces of furniture, which are
still very fit for use, and which could as little have been made for
them. Noble palaces, magnificent villas, great collections of books,
statues, pictures, and other curiosities, are frequently both an
ornament and an honour, not only to the neighbourhood, but to the
whole country to which they belong. Versailles is an ornament and an
honour to France, Stowe and Wilton to England. Italy still continues
to command some sort of veneration, by the number of monuments of this
kind which it possesses, though the wealth which produced them has
decayed, and though the genius which planned them seems to be
extinguished, perhaps from not having the same employment.
The expense, too, which is laid out in durable commodities,
is
favourable not only to accumulation, but to frugality. If a person
should at any time exceed in it, he can easily reform without exposing
himself to the censure of the public. To reduce very much the number
of his servants, to reform his table from great profusion to great
frugality, to lay down his equipage after he has once set it up, are
changes which cannot escape the observation of his neighbours, and
which are supposed to imply some acknowledgment of preceding bad
conduct. Few, therefore, of those who have once been so unfortunate as
to launch out too far into this sort of expense, have afterwards the
courage to reform, till ruin and bankruptcy oblige them. But if a
person has, at any time, been at too great an expense in building, in
furniture, in books, or pictures, no imprudence can be inferred from
his changing his conduct. These are things in which further expense is
frequently rendered unnecessary by former expense; and when a person
stops short, he appears to do so, not because he has exceeded his
fortune, but because he has satisfied his fancy.
The expense, besides, that is laid out in durable commodities,
gives
maintenance, commonly, to a greater number of people than that which
is employed in the most profuse hospitality. Of two or three hundred
weight of provisions, which may sometimes be served up at a great
festival, one half, perhaps, is thrown to the dunghill, and there is
always a great deal wasted and abused. But if the expense of this
entertainment had been employed in setting to work masons, carpenters,
upholsterers, mechanics, etc. a quantity of provisions of equal value
would have been distributed among a still greater number of people,
who would have bought them in pennyworths and pound weights, and not
have lost or thrown away a single ounce of them. In the one way,
besides, this expense maintains productive, in the other unproductive
hands. In the one way, therefore, it increases, in the other it does
not increase the exchangeable value of the annual produce of the land
and labour of the country.
I would not, however, by all this, be understood to mean, that
the one
species of expense always betokens a more liberal or generous spirit
than the other. When a man of fortune spends his revenue chiefly in
hospitality, he shares the greater part of it with his friends and
companions; but when he employs it in purchasing such durable
commodities, he often spends the whole upon his own person, and gives
nothing to any body without an equivalent. The latter species of
expense, therefore, especially when directed towards frivolous
objects, the little ornaments of dress and furniture, jewels,
trinkets, gew-gaws, frequently indicates, not only a trifling, but a
base and selfish disposition. All that I mean is, that the one sort of
expense, as it always occasions some accumulation of valuable
commodities, as it is more favourable to private frugality, and,
consequently, to the increase of the public capital, and as it
maintains productive rather than unproductive hands, conduces more
than the other to the growth of public opulence.
BOOK III.
OF THE DIFFERENT PROGRESS OF OPULENCE IN DIFFERENT NATIONS
CHAPTER I.
OF THE NATURAL PROGRESS OF OPULENCE.
The great commerce of every civilized society is that carried
on
between the inhabitants of the town and those of the country. It
consists in the exchange of rude for manufactured produce, either
immediately, or by the intervention of money, or of some sort of paper
which represents money. The country supplies the town with the means
of subsistence and the materials of manufacture. The town repays this
supply, by sending back a part of the manufactured produce to the
inhabitants of the country. The town, in which there neither is nor
can be any reproduction of substances, may very properly be said to
gain its whole wealth and subsistence from the country. We must not,
however, upon this account, imagine that the gain of the town is the
loss of the country. The gains of both are mutual and reciprocal, and
the division of labour is in this, as in all other cases, advantageous
to all the different persons employed in the various occupations into
which it is subdivided. The inhabitants of the country purchase of the
town a greater quantity of manufactured goods with the produce of a
much smaller quantity of their own labour, than they must have
employed had they attempted to prepare them themselves. The town
affords a market for the surplus produce of the country, or what is
over and above the maintenance of the cultivators; and it is there
that the inhabitants of the country exchange it for something else
which is in demand among them. The greater the number and revenue of
the inhabitants of the town, the more extensive is the market which it
affords to those of the country; and the more extensive that market,
it is always the more advantageous to a great number. The corn which
grows within a mile of the town, sells there for the same price with
that which comes from twenty miles distance. But the price of the
latter must, generally, not only pay the expense of raising it and
bringing it to market, but afford, too, the ordinary profits of
agriculture to the farmer. The proprietors and cultivators of the
country, therefore, which lies in the neighbourhood of the town, over
and above the ordinary profits of agriculture, gain, in the price of
what they sell, the whole value of the carriage of the like produce
that is brought from more distant parts; and they save, besides, the
whole value of this carriage in the price of what they buy. Compare
the cultivation of the lands in the neighbourhood of any considerable
town, with that of those which lie at some distance from it, and you
will easily satisfy yourself bow much the country is benefited by the
commerce of the town. Among all the absurd speculations that have been
propagated concerning the balance of trade, it has never been
pretended that either the country loses by its commerce with the town,
or the town by that with the country which maintains it.
As subsistence is, in the nature of things, prior to conveniency
and
luxury, so the industry which procures the former, must necessarily be
prior to that which ministers to the latter. The cultivation and
improvement of the country, therefore, which affords subsistence,
must, necessarily, be prior to the increase of the town, which
furnishes only the means of conveniency and luxury. It is the surplus
produce of the country only, or what is over and above the maintenance
of the cultivators, that constitutes the subsistence of the town,
which can therefore increase only with the increase of the surplus
produce. The town, indeed, may not always derive its whole subsistence
from the country in its neighbourhood, or even from the territory to
which it belongs, but from very distant countries; and this, though it
forms no exception from the general rule, has occasioned considerable
variations in the progress of opulence in different ages and nations.
That order of things which necessity imposes, in general, though
not
in every particular country, is in every particular country promoted
by the natural inclinations of man. If human institutions had never
thwarted those natural inclinations, the towns could nowhere have
increased beyond what the improvement and cultivation of the territory
in which they were situated could support; till such time, at least,
as the whole of that territory was completely cultivated and improved.
Upon equal, or nearly equal profits, most men will choose to employ
their capitals, rather in the improvement and cultivation of land,
than either in manufactures or in foreign trade. The man who employs
his capital in land, has it more under his view and command; and his
fortune is much less liable to accidents than that of the trader, who
is obliged frequently to commit it, not only to the winds and the
waves, but to the more uncertain elements of human folly and
injustice, by giving great credits, in distant countries, to men with
whose character and situation he can seldom be thoroughly acquainted.
The capital of the landlord, on the contrary, which is fixed in the
improvement of his land, seems to be as well secured as the nature of
human affairs can admit of. The beauty of the country, besides, the
pleasure of a country life, the tranquillity of mind which it
promises, and, wherever the injustice of human laws does not disturb
it, the independency which it really affords, have charms that, more
or less, attract everybody; and as to cultivate the ground was the
original destination of man, so, in every stage of his existence, he
seems to retain a predilection for this primitive employment.
Without the assistance of some artificers, indeed, the cultivation
of
land cannot be carried on, but with great inconveniency and continual
interruption. Smiths, carpenters, wheelwrights and ploughwrights,
masons and bricklayers, tanners, shoemakers, and tailors, are people
whose service the farmer has frequent occasion for. Such artificers,
too, stand occasionally in need of the assistance of one another; and
as their residence is not, like that of the farmer, necessarily tied
down to a precise spot, they naturally settle in the neighbourhood of
one another, and thus form a small town or village. The butcher, the
brewer, and the baker, soon join them, together with many other
artificers and retailers, necessary or useful for supplying their
occasional wants, and who contribute still further to augment the
town. The inhabitants of the town, and those of the country, are
mutually the servants of one another. The town is a continual fair or
market, to which the inhabitants of the country resort, in order to
exchange their rude for manufactured produce. It is this commerce
which supplies the inhabitants of the town, both with the materials of
their work, and the means of their subsistence. The quantity of the
finished work which they sell to the inhabitants of the country,
necessarily regulates the quantity of the materials and provisions
which they buy. Neither their employment nor subsistence, therefore,
can augment, but in proportion to the augmentation of the demand from
the country for finished work; and this demand can augment only in
proportion to the extension of improvement and cultivation. Had human
institutions, therefore, never disturbed the natural course of things,
the progressive wealth and increase of the towns would, in every
political society, be consequential, and in proportion to the
improvement and cultivation of the territory of country.
In our North American colonies, where uncultivated land is still
to be
had upon easy terms, no manufactures for distant sale have ever yet
been established in any of their towns. When an artificer has acquired
a little more stock than is necessary for carrying on his own business
in supplying the neighbouring country, he does not, in North America,
attempt to establish with it a manufacture for more distant sale, but
employs it in the purchase and improvement of uncultivated land. From
artificer he becomes planter; and neither the large wages nor the easy
subsistence which that country affords to artificers, can bribe him
rather to work for other people than for himself. He feels that an
artificer is the servant of his customers, from whom he derives his
subsistence; but that a planter who cultivates his own land, and
derives his necessary subsistence from the labour of his own family,
is really a master, and independent of all the world.
In countries, on the contrary, where there is either no uncultivated
land, or none that can be had upon easy terms, every artificer who has
acquired more stock than he can employ in the occasional jobs of the
neighbourhood, endeavours to prepare work for more distant sale. The
smith erects some sort of iron, the weaver some sort of linen or
woollen manufactory. Those different manufactures come, in process of
time, to be gradually subdivided, and thereby improved and refined in
a great variety of ways, which may easily be conceived, and which it
is therefore unnecessary to explain any farther.
In seeking for employment to a capital, manufactures are, upon
equal
or nearly equal profits, naturally preferred to foreign commerce, for
the same reason that agriculture is naturally preferred to
manufactures. As the capital of the landlord or farmer is more secure
than that of the manufacturer, so the capital of the manufacturer,
being at all times more within his view and command, is more secure
than that of the foreign merchant. In every period, indeed, of every
society, the surplus part both of the rude and manufactured produce,
or that for which there is no demand at home, must be sent abroad, in
order to be exchanged for something for which there is some demand at
home. But whether the capital which carries this surplus produce
abroad be a foreign or a domestic one, is of very little importance.
If the society has not acquired sufficient capital, both to cultivate
all its lands, and to manufacture in the completest manner the whole
of its rude produce, there is even a considerable advantage that the
rude produce should be exported by a foreign capital, in order that
the whole stock of the society may be employed in more useful
purposes. The: wealth of ancient Egypt, that of China and Indostan,
sufficiently demonstrate that a nation may attain a very high degree
of opulence, though the greater part of its exportation trade be
carried on by foreigners. The progress of our North American and West
Indian colonies, would have been much less rapid, had no capital but
what belonged to themselves been employed in exporting their surplus
produce.
According to the natural course of things, therefore, the greater
part
of the capital of every growing society is, first, directed to
agriculture, afterwards to manufactures, and, last of all, to foreign
commerce. This order of things is so very natural, that in every
society that had any territory, it has always, I believe, been in some
degree observed. Some of their lands must have been cultivated before
any considerable towns could be established, and some sort of coarse
industry of the manufacturing kind must have been carried on in those
towns, before they could well think of employing themselves in foreign
commerce.
But though this natural order of things must have taken place
in some
degree in every such society, it has, in all the modern states of
Europe, been in many respects entirely inverted. The foreign commerce
of some of their cities has introduced all their finer manufactures,
or such as were fit for distant sale; and manufactures and foreign
commerce together have given birth to the principal improvements of
agriculture. The manners and customs which the nature of their
original government introduced, and which remained after that
government was greatly altered, necessarily forced them into this
unnatural and retrograde order.
CHAPTER II.
OF THE DISCOURAGEMENT OF AGRICULTURE IN THE ANCIENT
STATE OF EUROPE,
AFTER THE FALL OF THE ROMAN EMPIRE.
When the German and Scythian nations overran the western provinces
of
the Roman empire, the confusions which followed so great a revolution
lasted for several centuries. The rapine and violence which the
barbarians exercised against the ancient inhabitants, interrupted the
commerce between the towns and the country. The towns were deserted,
and the country was left uncultivated; and the western provinces of
Europe, which had enjoyed a considerable degree of opulence under the
Roman empire, sunk into the lowest state of poverty and barbarism.
During the continuance of those confusions, the chiefs and principal
leaders of those nations acquired, or usurped to themselves, the
greater part of the lands of those countries. A great part of them was
uncultivated; but no part of them, whether cultivated or uncultivated,
was left without a proprietor. All of them were engrossed, and the
greater part by a few great proprietors.
This original engrossing of uncultivated lands, though a great,
might
have been but a transitory evil. They might soon have been divided
again, and broke into small parcels, either by succession or by
alienation. The law of primogeniture hindered them from being divided
by succession; the introduction of entails prevented their being broke
into small parcels by alienation.
When land, like moveables, is considered as the means only of
subsistence and enjoyment, the natural law of succession divides it,
like them, among all the children of the family; of all of whom the
subsistence and enjoyment may be supposed equally dear to the father.
This natural law of succession, accordingly, took place among the
Romans who made no more distinction between elder and younger, between
male and female, in the inheritance of lands, than we do in the
distribution of moveables. But when land was considered as the means,
not of subsistence merely, but of power and protection, it was thought
better that it should descend undivided to one. In those disorderly
times, every great landlord was a sort of petty prince. His tenants
were his subjects. He was their judge, and in some respects their
legislator in peace and their leader in war. He made war according to
his own discretion, frequently against his neighbours, and sometimes
against his sovereign. The security of a landed estate, therefore, the
protection which its owner could afford to those who dwelt on it,
depended upon its greatness. To divide it was to ruin it, and to
expose every part of it to be oppressed and swallowed up by the
incursions of its neighbours. The law of primogeniture, therefore,
came to take place, not immediately indeed, but in process of time, in
the succession of landed estates, for the same reason that it has
generally taken place in that of monarchies, though not always at
their first institution. That the power, and consequently the security
of the monarchy, may not be weakened by division, it must descend
entire to one of the children. To which of them so important a
preference shall be given, must be determined by some general rule,
founded not upon the doubtful distinctions of personal merit, but upon
some plain and evident difference which can admit of no dispute. Among
the children of the same family there can be no indisputable
difference but that of sex, and that of age. The male sex is
universally preferred to the female; and when all other things are
equal, the elder everywhere takes place of the younger. Hence the
origin of the right of primogeniture, and of what is called lineal
succession.
Laws frequently continue in force long after the circumstances
which
first gave occasion to them, and which could alone render them
reasonable, are no more. In the present state of Europe, the
proprietor of a single acre of land is as perfectly secure in his
possession as the proprietor of 100,000. The right of primogeniture,
however, still continues to be respected; and as of all institutions
it is the fittest to support the pride of family distinctions, it is
still likely to endure for many centuries. In every other respect,
nothing can be more contrary to the real interest of a numerous
family, than a right which, in order to enrich one, beggars all the
rest of the children.
Entails are the natural consequences of the law of primogeniture.
They
were introduced to preserve a certain lineal succession, of which the
law of primogeniture first gave the idea, and to hinder any part of
the original estate from being carried out of the proposed line,
either by gift, or device, or alienation; either by the folly, or by
the misfortune of any of its successive owners. They were altogether
unknown to the Romans. Neither their substitutions, nor fidei
commisses, bear any resemblance to entails, though some French lawyers
have thought proper to dress the modern institution in the language
and garb of those ancient ones.
When great landed estates were a sort of principalities, entails
might
not be unreasonable. Like what are called the fundamental laws of some
monarchies, they might frequently hinder the security of thousands
from being endangered by the caprice or extravagance of one man. But
in the present state of Europe, when small as well as great estates
derive their security from the laws of their country, nothing can be
more completely absurd. They are founded upon the most absurd of all
suppositions, the supposition that every successive generation of men
have not an equal right to the earth, and to all that it possesses;
but that the property of the present generation should be restrained
and regulated according to the fancy of those who died, perhaps five
hundred years ago. Entails, however, are still respected, through the
greater part of Europe; In those countries, particularly, in which
noble birth is a necessary qualification for the enjoyment either of
civil or military honours. Entails are thought necessary for
maintaining this exclusive privilege of the nobility to the great
offices and honours of their country; and that order having usurped
one unjust advantage over the rest of their fellow-citizens, lest
their poverty should render it ridiculous, it is thought reasonable
that they should have another. The common law of England, indeed, is
said to abhor perpetuities, and they are accordingly more restricted
there than in any other European monarchy; though even England is not
altogether without them. In Scotland, more than one fifth, perhaps
more than one third part of the whole lands in the country, are at
present supposed to be under strict entail.
Great tracts of uncultivated land were in this manner not only
engrossed by particular families, but the possibility of their being
divided again was as much as possible precluded for ever. It seldom
happens, however, that a great proprietor is a great improver. In the
disorderly times which gave birth to those barbarous institutions, the
great proprietor was sufficiently employed in defending his own
territories, or in extending his jurisdiction and authority over those
of his neighbours. He had no leisure to attend to the cultivation and
improvement of land. When the establishment of law and order afforded
him this leisure, he often wanted the inclination, and almost always
the requisite abilities. If the expense of his house and person either
equalled or exceeded his revenue, as it did very frequently, he had no
stock to employ in this manner. If he was an economist, he generally
found it more profitable to employ his annual savings in new purchases
than in the improvement of his old estate. To improve land with
profit, like all other commercial projects, requires an exact
attention to small savings and small gains, of which a man born to a
great fortune, even though naturally frugal, is very seldom capable.
The situation of such a person naturally disposes him to attend rather
to ornament, which pleases his fancy, than to profit, for which he has
so little occasion. The elegance of his dress, of his equipage, of his
house and household furniture, are objects which, from his infancy, he
has been accustomed to have some anxiety about. The turn of mind which
this habit naturally forms, follows him when he comes to think of the
improvement of land. He embellishes, perhaps, four or five hundred
acres in the neighbourhood of his house, at ten times the expense
which the land is worth after all his improvements; and finds, that if
he was to improve his whole estate in the same manner, and he has
little taste for any other, he would be a bankrupt before he had
finished the tenth part of it. There still remain, in both parts of
the united kingdom, some great estates which have continued, without
interruption, in the hands of the same family since the times of
feudal anarchy. Compare the present condition of those estates with
the possessions of the small proprietors in their neighbourhood, and
you will require no other argument to convince you how unfavourable
such extensive property is to improvement.
If little improvement was to be expected from such great proprietors,
still less was to be hoped for from those who occupied the land under
them. In the ancient state of Europe, the occupiers of land were all
tenants at will. They were all, or almost all, slaves, but their
slavery was of a milder kind than that known among the ancient Greeks
and Romans, or even in our West Indian colonies. They were supposed to
belong more directly to the land than to their master. They could,
therefore, be sold with it, but not separately. They could marry,
provided it was with the consent of their master; and he could not
afterwards dissolve the marriage by selling the man and wife to
different persons. If he maimed or murdered any of them, he was liable
to some penalty, though generally but to a small one. They were not,
however, capable of acquiring property. Whatever they acquired was
acquired to their master, and he could take it from them at pleasure.
Whatever cultivation and improvement could be carried on by means of
such slaves, was properly carried on by their master. It was at his
expense. The seed, the cattle, and the instruments of husbandry, were
all his. It was for his benefit. Such slaves could acquire nothing but
their daily maintenance. It was properly the proprietor himself,
therefore, that in this case occupied his own lands, and cultivated
them by his own bondmen. This species of slavery still subsists in
Russia, Poland, Hungary, Bohemia, Moravia, and other parts of Germany.
It is only in the western and south-western provinces of Europe that
it has gradually been abolished altogether.
But if great improvements are seldom to be expected from great
proprietors, they are least of all to be expected when they employ
slaves for their workmen. The experience of all ages and nations, I
believe, demonstrates that the work done by slaves, though it appears
to cost only their maintenance, is in the end the dearest of any. A
person who can acquire no property can have no other interest but to
eat as much and to labour as little as possible. Whatever work he does
beyond what is sufficient to purchase his own maintenance, can be
squeezed out of him by violence only, and not by any interest of his
own. In ancient Italy, how much the cultivation of corn degenerated,
how unprofitable it became to the master, when it fell under the
management of slaves, is remarked both by Pliny and Columella. In the
time of Aristotle, it had not been much better in ancient Greece.
Speaking of the ideal republic described in the laws of Plato, to
maintain 5000 idle men (the number of warriors supposed necessary for
its defence), together with their women and servants, would require,
he says, a territory of boundless extent and fertility, like the
plains of Babylon.
The pride of man makes him love to domineer, and nothing mortifies
him
so much as to be obliged to condescend to persuade his inferiors.
Wherever the law allows it, and the nature of the work can afford it,
therefore, he will generally prefer the service of slaves to that of
freemen. The planting of sugar and tobacco can afford the expense of
slave cultivation. The raising of corn, it seems, in the present
times, cannot. In the English colonies, of which the principal produce
is corn, the far greater part of the work is done by freemen. The late
resolution of the Quakers in Pennsylvania, to set at liberty all their
negro slaves, may satisfy us that their number cannot be very great.
Had they made any considerable part of their property, such a
resolution could never have been agreed to. In our sugar colonies., on
the contrary, the whole work is done by slaves, and in our tobacco
colonies a very great part of it. The profits of a sugar plantation in
any of our West Indian colonies, are generally much greater than those
of any other cultivation that is known either in Europe or America;
and the profits of a tobacco plantation, though inferior to those of
sugar, are superior to those of corn, as has already been observed.
Both can afford the expense of slave cultivation but sugar can afford
it still better than tobacco. The number of negroes, accordingly, is
much greater, in proportion to that of whites, in our sugar than in
our tobacco colonies.
To the slave cultivators of ancient times gradually succeeded
a
species of farmers, known at present in France by the name of
metayers. They are called in Latin Coloni Partiarii. They have been so
long in disuse in England, that at present I know no English name for
them. The proprietor furnished them with the seed, cattle, and
instruments of husbandry, the whole stock, in short, necessary for
cultivating the farm. The produce was divided equally between the
proprietor and the farmer, after setting aside what was judged
necessary for keeping up the stock, which was restored to the
proprietor, when the farmer either quitted or was turned out of the
farm.
Land occupied by such tenants is properly cultivated at the
expense of
the proprietors, as much as that occupied by slaves. There is,
however, one very essential difference between them. Such tenants,
being freemen, are capable of acquiring property; and having a certain
proportion of the produce of the land, they have a plain interest that
the whole produce should be as great as possible, in order that their
own proportion may be so. A slave, on the contrary, who can acquire
nothing but his maintenance, consults his own ease, by making the land
produce as little as possible over and above that maintenance. It is
probable that it was partly upon account of this advantage, and partly
upon account of the encroachments which the sovereigns, always jealous
of the great lords, gradually encouraged their villains to make upon
their authority, and which seem, at least, to have been such as
rendered this species of servitude altogether inconvenient, that
tenure in villanage gradually wore out through the greater part of
Europe. The time and manner, however, in which so important a
revolution was brought about, is one of the most obscure points in
modern history. The church of Rome claims great merit in it; and it is
certain, that so early as the twelfth century, Alexander III.
published a bull for the general emancipation of slaves. It seems,
however, to have been rather a pious exhortation, than a law to which
exact obedience was required from the faithful. Slavery continued to
take place almost universally for several centuries afterwards, till
it was gradually abolished by the joint operation of the two interests
above mentioned; that of the proprietor on the one hand, and that of
the sovereign on the other. A villain, enfranchised, and at the same
time allowed to continue in possession of the land, having no stock of
his own, could cultivate it only by means of what the landlord
advanced to him, and must therefore have been what the French call a
metayer.
It could never, however, be the interest even of this last species
of
cultivators, to lay out, in the further improvement of the land, any
part of the little stock which they might save from their own share of
the produce; because the landlord, who laid out nothing, was to get
one half of whatever it produced. The tithe, which is but a tenth of
the produce, is found to be a very great hindrance to improvement. A
tax, therefore, which amounted to one half, must have been an
effectual bar to it. It might be the interest of a metayer to make the
land produce as much as could be brought out of it by means of the
stock furnished by the proprietor; but it could never be his interest
to mix any part of his own with it. In France, where five parts out of
six of the whole kingdom are said to be still occupied by this species
of cultivators, the proprietors complain, that their metayers take
every opportunity of employing their master's cattle rather in
carriage than in cultivation; because, in the one case, they get the
whole profits to themselves, in the other they share them with their
landlord. This species of tenants still subsists in some parts of
Scotland. They are called steel-bow tenants. Those ancient English
tenants, who are said by Chief-Baron Gilbert and Dr Blackstone to have
been rather bailiffs of the landlord than farmers, properly so called,
were probably of the same kind.
To this species of tenantry succeeded, though by very slow degrees,
farmers, properly so called, who cultivated the land with their own
stock, paying a rent certain to the landlord. When such farmers have a
lease for a term of years, they may sometimes find it for their
interest to lay out part of their capital in the further improvement
of the farm; because they may sometimes expect to recover it, with a
large profit, before the expiration of the lease. The possession, even
of such farmers, however, was long extremely precarious, and still is
so in many parts of Europe. They could, before the expiration of their
term, be legally ousted of their leases by a new purchaser; in
England, even, by the fictitious action of a common recovery. If they
were turned out illegally by the violence of their master, the action
by which they obtained redress was extremely imperfect. It did not
always reinstate them in the possession of the land, but gave them
damages, which never amounted to a real loss. Even in England, the
country, perhaps of Europe, where the yeomanry has always been most
respected, it was not till about the 14th of Henry VII. that the
action of ejectment was invented, by which the tenant recovers, not
damages only, but possession, and in which his claim is not
necessarily concluded by the uncertain decision of a single assize.
This action has been found so effectual a remedy, that, in the modern
practice, when the landlord has occasion to sue for the possession of
the land, he seldom makes use of the actions which properly belong to
him as a landlord, the writ of right or the writ of entry, but sues in
the name of his tenant, by the writ of ejectment. In England,
therefore the security of the tenant is equal to that of the
proprietor. In England, besides, a lease for life of forty shillings
a-year value is a freehold, and entitles the lessee to a vote for a
member of parliament; and as a great part of the yeomanry have
freeholds of this kind, the whole order becomes respectable to their
landlords, on account of the political consideration which this gives
them. There is, I believe, nowhere in Europe, except in England, any
instance of the tenant building upon the land of which he had no
lease, and trusting that the honour of his landlord would take no
advantage of so important an improvement. Those laws and customs, so
favourable to the yeomanry, have perhaps contributed more to the
present grandeur of England, than all their boasted regulations of
commerce taken together.
The law which secures the longest leases against successors
of every
kind, is, so far as I know, peculiar to Great Britain. It was
introduced into Scotland so early as 1449, by a law of James II. Its
beneficial influence, however, has been much obstructed by entails;
the heirs of entail being generally restrained from letting leases for
any long term of years, frequently for more than one year. A late act
of parliament has, in this respect, somewhat slackened their fetters,
though they are still by much too strait. In Scotland, besides, as no
leasehold gives a vote for a member of parliament, the yeomanry are
upon this account less respectable to their landlords than in England.
In other parts of Europe, after it was found convenient to secure
tenants both against heirs and purchasers, the term of their security
was still limited to a very short period; in France, for example, to
nine years from the commencement of the lease. It has in that country,
indeed, been lately extended to twentyseven, a period still too short
to encourage the tenant to make the most important improvements. The
proprietors of land were anciently the legislators of every part of
Europe. The laws relating to land, therefore, were all calculated for
what they supposed the interest of the proprietor. It was for his
interest, they had imagined, that no lease granted by any of his
predecessors should hinder him from enjoying, during a long term of
years, the full value of his land. Avarice and injustice are always
short-sighted, and they did not foresee how much this regulation must
obstruct improvement, and thereby hurt, in the long-run, the real
interest of the landlord.
The farmers, too, besides paying the rent, were anciently, it
was
supposed, bound to perform a great number of services to the landlord,
which were seldom either specified in the lease, or regulated by any
precise rule, but by the use and wont of the manor or barony. These
services, therefore, being almost entirely arbitrary, subjected the
tenant to many vexations. In Scotland the abolition of all services
not precisely stipulated in the lease, has, in the course of a few
years, very much altered for the better the condition of the yeomanry
of that country.
The public services to which the yeomanry were bound, were not
less
arbitrary than the private ones. To make and maintain the high roads,
a servitude which still subsists, I believe, everywhere, though with
different degrees of oppression in different countries, was not the
only one. When the king's troops, when his household, or his officers
of any kind, passed through any part of the country, the yeomanry were
bound to provide them with horses, carriages, and provisions, at a
price regulated by the purveyor. Great Britain is, I believe, the only
monarchy in Europe where the oppression of purveyance has been
entirely abolished. It still subsists in France and Germany.
The public taxes, to which they were subject, were as irregular
and
oppressive as the services The ancient lords, though extremely
unwilling to grant, themselves, any pecuniary aid to their sovereign,
easily allowed him to tallage, as they called it, their tenants, and
had not knowledge enough to foresee how much this must, in the end,
affect their own revenue. The taille, as it still subsists in France.
may serve as an example of those ancient tallages. It is a tax upon
the supposed profits of the farmer, which they estimate by the stock
that he has upon the farm. It is his interest, therefore, to appear to
have as little as possible, and consequently to employ as little as
possible in its cultivation, and none in its improvement. Should any
stock happen to accumulate in the hands of a French farmer, the taille
is almost equal to a prohibition of its ever being employed upon the
land. This tax, besides, is supposed to dishonour whoever is subject
to it, and to degrade him below, not only the rank of a gentleman, but
that of a burgher; and whoever rents the lands of another becomes
subject to it. No gentleman, nor even any burgher, who has stock, will
submit to this degradation. This tax, therefore, not only hinders the
stock which accumulates upon the land from being employed in its
improvement, but drives away all other stock from it. The ancient
tenths and fifteenths, so usual in England in former times, seem, so
far as they affected the land, to have been taxes of the same nature
with the taille.
Under all these discouragements, little improvement could be
expected
from the occupiers of land. That order of people, with all the liberty
and security which law can give, must always improve under great
disadvantage. The farmer, compared with the proprietor, is as a
merchant who trades with burrowed money, compared with one who trades
with his own. The stock of both may improve; but that of the one, with
only equal good conduct, must always improve more slowly than that of
the other, on account of the large share of the profits which is
consumed by the interest of the loan. The lands cultivated by the
farmer must, in the same manner, with only equal good conduct, be
improved more slowly than those cultivated by the proprietor, on
account of the large share of the produce which is consumed in the
rent, and which, had the farmer been proprietor, he might have
employed in the further improvement of the land. The station of a
farmer, besides, is, from the nature of things, inferior to that of a
proprietor. Through the greater part of Europe, the yeomanry are
regarded as an inferior rank of people, even to the better sort of
tradesmen and mechanics, and in all parts of Europe to the great
merchants and master manufacturers. It can seldom happen, therefore,
that a man of any considerable stock should quit the superior, in
order to place himself in an inferior station. Even in the present
state of Europe, therefore, little stock is likely to go from any
other profession to the improvement of land in the way of farming.
More does, perhaps, in Great Britain than in any other country, though
even there the great stocks which are in some places employed in
farming, have generally been acquired by fanning, the trade, perhaps,
in which, of all others, stock is commonly acquired most slowly. After
small proprietors, however, rich and great farmers are in every
country the principal improvers. There are more such, perhaps, in
England than in any other European monarchy. In the republican
governments of Holland, and of Berne in Switzerland, the farmers are
said to be not inferior to those of England.
The ancient policy of Europe was, over and above all this,
unfavourable to the improvement and cultivation of land, whether
carried on by the proprietor or by the farmer; first, by the general
prohibition of the exportation of corn, without a special licence,
which seems to have been a very universal regulation; and, secondly,
by the restraints which were laid upon the inland commerce, not only
of corn, but of almost every other part of the produce of the farm, by
the absurd laws against engrossers, regraters, and forestallers, and
by the privileges of fairs and markets. It has already been observed
in what manner the prohibition of the exportation of corn, together
with some encouragement given to the importation of foreign corn,
obstructed the cultivation of ancient Italy, naturally the most
fertile country in Europe, and at that time the seat of the greatest
empire in the world. To what degree such restraints upon the inland
commerce of this commodity, joined to the general prohibition of
exportation, must have discouraged the cultivation of countries less
fertile, and less favourably circumstanced, it is not, perhaps, very
easy to imagine.
CHAPTER III.
OF THE RISE AND PROGRESS OF CITIES AND TOWNS, AFTER
THE FALL OF THE
ROMAN EMPIRE.
The inhabitants of cities and towns were, after the fall of
the Roman
empire, not more favoured than those of the country. They consisted,
indeed, of a very different order of people from the first inhabitants
of the ancient republics of Greece and Italy. These last were composed
chiefly of the proprietors of lands, among whom the public territory
was originally divided, and who found it convenient to build their
houses in the neighbourhood of one another, and to surround them with
a wall, for the sake of common defence. After the fall of the Roman
empire, on the contrary, the proprietors of land seem generally to
have lived in fortified castles on their own estates, and in the midst
of their own tenants and dependants. The towns were chiefly inhabited
by tradesmen and mechanics, who seem, in those days, to have been of
servile, or very nearly of servile condition. The privileges which we
find granted by ancient charters to the inhabitants of some of the
principal towns in Europe, sufficiently show what they were before
those grants. The people to whom it is granted as a privilege, that
they might give away their own daughters in marriage without the
consent of their lord, that upon their death their own children, and
not their lord, should succeed to their goods, and that they might
dispose of their own effects by will, must, before those grants, have
been either altogether, or very nearly, in the same state of villanage
with the occupiers of land in the country.
They seem, indeed, to have been a very poor, mean set of people,
who
seemed to travel about with their goods from place to place, and from
fair to fair, like the hawkers and pedlars of the present times. In
all the different countries of Europe then, in the same manner as in
several of the Tartar governments of Asia at present, taxes used to be
levied upon the persons and goods of travellers, when they passed
through certain manors, when they went over certain bridges, when they
carried about their goods from place to place in a fair, when they
erected in it a booth or stall to sell them in. These different taxes
were known in England by the names of passage, pontage, lastage, and
stallage. Sometimes the king, sometimes a great lord, who had, it
seems, upon some occasions, authority to do this, would grant to
particular traders, to such particularly as lived in their own
demesnes, a general exemption from such taxes. Such traders, though in
other respects of servile, or very nearly of servile condition, were
upon this account called free traders. They, in return, usually paid
to their protector a sort of annual poll-tax. In those days protection
was seldom granted without a valuable consideration, and this tax
might perhaps be considered as compensation for what their patrons
might lose by their exemption from other taxes. At first, both those
poll-taxes and those exemptions seem to have been altogether personal,
and to have affected only particular individuals, during either their
lives, or the pleasure of their protectors. In the very imperfect
accounts which have been published from Doomsday-book, of several of
the towns of England, mention is frequently made, sometimes of the tax
which particular burghers paid, each of them, either to the king, or
to some other great lord, for this sort of protection, and sometimes
of the general amount only of all those taxes. {see Brady's Historical
Treatise of Cities and Boroughs, p. 3. etc.}
But how servile soever may have been originally the condition
of the
inhabitants of the towns, it appears evidently, that they arrived at
liberty and independency much earlier than the occupiers of land in
the country. That part of the king's revenue which arose from such
poll-taxes in any particular town, used commonly to be let in farm,
during a term of years, for a rent certain, sometimes to the sheriff
of the county, and sometimes to other persons. The burghers themselves
frequently got credit enough to be admitted to farm the revenues of
this sort winch arose out of their own town, they becoming jointly and
severally answerable for the whole rent. {See Madox, Firma Burgi, p.
18; also History of the Exchequer, chap. 10, sect. v, p. 223, first
edition.} To let a farm in this manner, was quite agreeable to the
usual economy of, I believe, the sovereigns of all the different
countries of Europe, who used frequently to let whole manors to all
the tenants of those manors, they becoming jointly and severally
answerable for the whole rent; but in return being allowed to collect
it in their own way, and to pay it into the king's exchequer by the
hands of their own bailiff, and being thus altogether freed from the
insolence of the king's officers; a circumstance in those days
regarded as of the greatest importance.
At first, the farm of the town was probably let to the burghers,
in
the same manner as it had been to other farmers, for a term of years
only. In process of time, however, it seems to have become the general
practice to grant it to them in fee, that is for ever, reserving a
rent certain, never afterwards to be augmented. The payment having
thus become perpetual, the exemptions, in return, for which it was
made, naturally became perpetual too. Those exemptions, therefore,
ceased to be personal, and could not afterwards be considered as
belonging to individuals, as individuals, but as burghers of a
particular burgh, which, upon this account, was called a free burgh,
for the same reason that they had been called free burghers or free
traders.
Along with this grant, the important privileges, above mentioned,
that
they might give away their own daughters in marriage, that their
children should succeed to them, and that they might dispose of their
own effects by will, were generally bestowed upon the burghers of the
town to whom it was given. Whether such privileges had before been
usually granted, along with the freedom of trade, to particular
burghers, as individuals, I know not. I reckon it not improbable that
they were, though I cannot produce any direct evidence of it. But
however this may have been, the principal attributes of villanage and
slavery being thus taken away from them, they now at least became
really free, in our present sense of the word freedom.
Nor was this all. They were generally at the same time erected
into a
commonalty or corporation, with the privilege of having magistrates
and a town-council of their own, of making bye-laws for their own
government, of building walls for their own defence, and of reducing
all their inhabitants under a sort of military discipline, by obliging
them to watch and ward; that is, as anciently understood, to guard and
defend those walls against all attacks and surprises, by night as well
as by day. In England they were generally exempted from suit to the
hundred and county courts: and all such pleas as should arise among
them, the pleas of the crown excepted, were left to the decision of
their own magistrates. In other countries, much greater and more
extensive jurisdictions were frequently granted to them. {See Madox,
Firma Burgi. See also Pfeffel in the Remarkable events under Frederick
II. and his Successors of the House of Suabia.}
It might, probably, be necessary to grant to such towns as were
admitted to farm their own revenues, some sort of compulsive
jurisdiction to oblige their own citizens to make payment. In those
disorderly times, it might have been extremely inconvenient to have
left them to seek this sort of justice from any other tribunal. But it
must seem extraordinary, that the sovereigns of all the different
countries of Europe should have exchanged in this manner for a rent
certain, never more to be augmented, that branch of their revenue,
which was, perhaps, of all others, the most likely to be improved by
the natural course of things, without either expense or attention of
their own; and that they should, besides, have in this manner
voluntarily erected a sort of independent republics in the heart of
their own dominions.
In order to understand this, it must be remembered, that, in
those
days, the sovereign of perhaps no country in Europe was able to
protect, through the whole extent of his dominions, the weaker part of
his subjects from the oppression of the great lords. Those whom the
law could not protect, and who were not strong enough to defend
themselves, were obliged either to have recourse to the protection of
some great lord, and in order to obtain it, to become either his
slaves or vassals; or to enter into a league of mutual defence for the
common protection of one another. The inhabitants of cities and
burghs, considered as single individuals, had no power to defend
themselves; but by entering into a league of mutual defence with their
neighbours, they were capable of making no contemptible resistance.
The lords despised the burghers, whom they considered not only as a
different order, but as a parcel of emancipated slaves, almost of a
different species from themselves. The wealth of the burghers never
failed to provoke their envy and indignation, and they plundered them
upon every occasion without mercy or remorse. The burghers naturally
hated and feared the lords. The king hated and feared them too; but
though, perhaps, he might despise, he had no reason either to hate or
fear the burghers. Mutual interest, therefore, disposed them to
support the king, and the king to support them against the lords. They
were the enemies of his enemies, and it was his interest to render
them as secure and independent of those enemies as he could. By
granting them magistrates of their own, the privilege of making
bye-laws for their own government, that of building walls for their
own defence, and that of reducing all their inhabitants under a sort
of military discipline, he gave them all the means of security and
independency of the barons which it was in his power to bestow.
Without the establishment of some regular government of this kind,
without some authority to compel their inhabitants to act according to
some certain plan or system, no voluntary league of mutual defence
could either have afforded them any permanent security, or have
enabled them to give the king any considerable support. By granting
them the farm of their own town in fee, he took away from those whom
he wished to have for his friends, and, if one may say so, for his
allies, all ground of jealousy and suspicion, that he was ever
afterwards to oppress them, either by raising the farm-rent of their
town, or by granting it to some other farmer.
The princes who lived upon the worst terms with their barons,
seem
accordingly to have been the most liberal in grants of this kind to
their burghs. King John of England, for example, appears to have been
a most munificent benefactor to his towns. {See Madox.} Philip I. of
France lost all authority over his barons. Towards the end of his
reign, his son Lewis, known afterwards by the name of Lewis the Fat,
consulted, according to Father Daniel, with the bishops of the royal
demesnes, concerning the most proper means of restraining the violence
of the great lords. Their advice consisted of two different proposals.
One was to erect a new order of jurisdiction, by establishing
magistrates and a town-council in every considerable town of his
demesnes. The other was to form a new militia, by making the
inhabitants of those towns, under the command of their own
magistrates, march out upon proper occasions to the assistance of the
king. It is from this period, according to the French antiquarians,
that we are to date the institution of the magistrates and councils of
cities in France. It was during the unprosperous reigns of the princes
of the house of Suabia, that the greater part of the free towns of
Germany received the first grants of their privileges, and that the
famous Hanseatic league first became formidable. {See Pfeffel.}
The militia of the cities seems, in those times, not to have
been
inferior to that of the country; and as they could be more readily
assembled upon any sudden occasion, they frequently had the advantage
in their disputes with the neighbouring lords. In countries such as
Italy or Switzerland, in which, on account either of their distance
from the principal seat of government, of the natural strength of the
country itself, or of some other reason, the sovereign came to lose
the whole of his authority; the cities generally became independent
republics, and conquered all the nobility in their neighbourhood;
obliging them to pull down their castles in the country, and to live,
like other peaceable inhabitants, in the city. This is the short
history of the republic of Berne, as well as of several other cities
in Switzerland. If you except Venice, for of that city the history is
somewhat different, it is the history of all the considerable Italian
republics, of which so great a number arose and perished between the
end of the twelfth and the beginning of the sixteenth century.
In countries such as France and England, where the authority
of the
sovereign, though frequently very low, never was destroyed altogether,
the cities had no opportunity of becoming entirely independent. They
became, however, so considerable, that the sovereign could impose no
tax upon them, besides the stated farm-rent of the town, without their
own consent. They were, therefore, called upon to send deputies to the
general assembly of the states of the kingdom, where they might join
with the clergy and the barons in granting, upon urgent occasions,
some extraordinary aid to the king. Being generally, too, more
favourable to his power, their deputies seem sometimes to have been
employed by him as a counterbalance in those assemblies to the
authority of the great lords. Hence the origin of the representation
of burghs in the states-general of all great monarchies in Europe.
Order and good government, and along with them the liberty and
security of individuals, were in this manner established in cities, at
a time when the occupiers of land in the country, were exposed to
every sort of violence. But men in this defenceless state naturally
content themselves with their necessary subsistence; because, to
acquire more, might only tempt the injustice of their oppressors. On
the contrary, when they are secure of enjoying the fruits of their
industry, they naturally exert it to better their condition, and to
acquire not only the necessaries, but the conveniencies and elegancies
of life. That industry, therefore, which aims at something more than
necessary subsistence, was established in cities long before it was
commonly practised by the occupiers of land in the country. If, in the
hands of a poor cultivator, oppressed with the servitude of villanage,
some little stock should accumulate, he would naturally conceal it
with great care from his master, to whom it would otherwise have
belonged, and take the first opportunity of running away to a town.
The law was at that time so indulgent to the inhabitants of towns, and
so desirous of diminishing the authority of the lords over those of
the country, that if he could conceal himself there from the pursuit
of his lord for a year, he was free for ever. Whatever stock,
therefore, accumulated in the hands of the industrious part of the
inhabitants of the country, naturally took refuge in cities, as the
only sanctuaries in which it could be secure to the person that
acquired it.
The inhabitants of a city, it is true, must always ultimately
derive
their subsistence, and the whole materials and means of their
industry, from the country. But those of a city, situated near either
the sea-coast or the banks of a navigable river, are not necessarily
confined to derive them from the country in their neighbourhood. They
have a much wider range, and may draw them from the most remote
corners of the world, either in exchange for the manufactured produce
of their own industry, or by performing the office of carriers between
distant countries, and exchanging the produce of one for that of
another. A city might, in this manner, grow up to great wealth and
splendour, while not only the country in its neighbourhood, but all
those to which it traded, were in poverty and wretchedness. Each of
those countries, perhaps, taken singly, could afford it but a small
part, either of its subsistence or of its employment; but all of them
taken together, could afford it both a great subsistence and a great
employment. There were, however, within the narrow circle of the
commerce of those times, some countries that were opulent and
industrious. Such was the Greek empire as long as it subsisted, and
that of the Saracens during the reigns of the Abassides. Such, too,
was Egypt till it was conquered by the Turks, some part of the coast
of Barbary, and all those provinces of Spain which were under the
government of the Moors.
The cities of Italy seem to have been the first in Europe which
were
raised by commerce to any considerable degree of opulence. Italy lay
in the centre of what was at that time the improved and civilized part
of the world. The crusades, too, though, by the great waste of stock
and destruction of inhabitants which they occasioned, they must
necessarily have retarded the progress of the greater part of Europe,
were extremely favourable to that of some Italian cities. The great
armies which marched from all parts to the conquest of the Holy Land,
gave extraordinary encouragement to the shipping of Venice, Genoa, and
Pisa, sometimes in transporting them thither, and always in supplying
them with provisions. They were the commissaries, if one may say so,
of those armies; and the most destructive frenzy that ever befel the
European nations, was a source of opulence to those republics.
The inhabitants of trading cities, by importing the improved
manufactures and expensive luxuries of richer countries, afforded some
food to the vanity of the great proprietors, who eagerly purchased
them with great quantities of the rude produce of their own lands. The
commerce of a great part of Europe in those times, accordingly,
consisted chiefly in the exchange of their own rude, for the
manufactured produce of more civilized nations. Thus the wool of
England used to be exchanged for the wines of France, and the fine
cloths of Flanders, in the same manner as the corn in Poland is at
this day, exchanged for the wines and brandies of France, and for the
silks and velvets of France and Italy.
A taste for the finer and more improved manufactures was, in
this
manner, introduced by foreign commerce into countries where no such
works were carried on. But when this taste became so general as to
occasion a considerable demand, the merchants, in order to save the
expense of carriage, naturally endeavoured to establish some
manufactures of the same kind in their own country. Hence the origin
of the first manufactures for distant sale, that seem to have been
established in the western provinces of Europe, after the fall of the
Roman empire.
No large country, it must be observed, ever did or could subsist
without some sort of manufactures being carried on in it; and when it
is said of any such country that it has no manufactures, it must
always be understood of the finer and more improved, or of such as are
fit for distant sale. In every large country both the clothing and
household furniture or the far greater part of the people, are the
produce of their own industry. This is even more universally the case
in those poor countries which are commonly said to have no
manufactures, than in those rich ones that are said to abound in them.
In the latter you will generally find, both in the clothes and
household furniture of the lowest rank of people, a much greater
proportion of foreign productions than in the former.
Those manufactures which are fit for distant sale, seem to have
been
introduced into different countries in two different ways.
Sometimes they have been introduced in the manner above mentioned,
by
the violent operation, if one may say so, of the stocks of particular
merchants and undertakers, who established them in imitation of some
foreign manufactures of the same kind. Such manufactures, therefore,
are the offspring of foreign commerce; and such seem to have been the
ancient manufactures of silks, velvets, and brocades, which flourished
in Lucca during the thirteenth century. They were banished from thence
by the tyranny of one of Machiavel's heroes, Castruccio Castracani. In
1310, nine hundred families were driven out of Lucca, of whom
thirty-one retired to Venice, and offered to introduce there the silk
manufacture. {See Sandi Istoria civile de Vinezia, part 2 vol. i, page
247 and 256.} Their offer was accepted, many privileges were conferred
upon them, and they began the manufacture with three hundred workmen.
Such, too, seem to have been the manufactures of fine cloths that
anciently flourished in Flanders, and which were introduced into
England in the beginning of the reign of Elizabeth, and such are the
present silk manufactures of Lyons and Spitalfields. Manufactures
introduced in this manner are generally employed upon foreign
materials, being imitations of foreign manufactures. When the Venetian
manufacture was first established, the materials were all brought from
Sicily and the Levant. The more ancient manufacture of Lucca was
likewise carried on with foreign materials. The cultivation of
mulberry trees, and the breeding of silk-worms, seem not to have been
common in the northern parts of Italy before the sixteenth century.
Those arts were not introduced into France till the reign of Charles
IX. The manufactures of Flanders were carried on chiefly with Spanish
and English wool. Spanish wool was the material, not of the first
woollen manufacture of England, but of the first that was fit for
distant sale. More than one half the materials of the Lyons
manufacture is at this day foreign silk; when it was first
established, the whole, or very nearly the whole, was so. No part of
the materials of the Spitalfields manufacture is ever likely to be the
produce of England. The seat of such manufactures, as they are
generally introduced by the scheme and project of a few individuals,
is sometimes established in a maritime city, and sometimes in an
inland town, according as their interest, judgment, or caprice, happen
to determine.
At other times, manufactures for distant sale grow up naturally,
and
as it were of their own accord, by the gradual refinement of those
household and coarser manufactures which must at all times be carried
on even in the poorest and rudest countries. Such manufactures are
generally employed upon the materials which the country produces, and
they seem frequently to have been first refined and improved In such
inland countries as were not, indeed, at a very great, but at a
considerable distance from the sea-coast, and sometimes even from all
water carriage. An inland country, naturally fertile and easily
cultivated, produces a great surplus of provisions beyond what is
necessary for maintaining the cultivators; and on account of the
expense of land carriage, and inconveniency of river navigation, it
may frequently be difficult to send this surplus abroad. Abundance,
therefore, renders provisions cheap, and encourages a great number of
workmen to settle in the neighbourhood, who find that their industry
can there procure them more of the necessaries and conveniencies of
life than in other places. They work up the materials of manufacture
which the land produces, and exchange their finished work, or, what is
the same thing, the price of it, for more materials and provisions.
They give a new value to the surplus part of the rude produce, by
saving the expense of carrying it to the water-side, or to some
distant market; and they furnish the cultivators with something in
exchange for it that is either useful or agreeable to them, upon
easier terms than they could have obtained it before. The cultivators
get a better price for their surplus produce, and can purchase cheaper
other conveniencies which they have occasion for. They are thus both
encouraged and enabled to increase this surplus produce by a further
improvement and better cultivation of the land; and as the fertility
of she land had given birth to the manufacture, so the progress of the
manufacture reacts upon the land, and increases still further it's
fertility. The manufacturers first supply the neighbourhood, and
afterwards, as their work improves and refines, more distant markets.
For though neither the rude produce, nor even the coarse manufacture,
could, without the greatest difficulty, support the expense of a
considerable land-carriage, the refined and improved manufacture
easily may. In a small bulk it frequently contains the price of a
great quantity of rude produce. A piece of fine cloth, for example
which weighs only eighty pounds, contains in it the price, not only of
eighty pounds weight of wool, but sometimes of several thousand weight
of corn, the maintenance of the different working people, and of their
immediate employers. The corn which could with difficulty have been
carried abroad in its own shape, is in this manner virtually exported
in that of the complete manufacture, and may easily be sent to the
remotest corners of the world. In this manner have grown up naturally,
and, as it were, of their own accord, the manufactures of Leeds,
Halifax, Sheffield, Birmingham, and Wolverhampton. Such manufactures
are the offspring of agriculture. In the modern history of Europe,
their extension and improvement have generally been posterior to those
which were the offspring of foreign commerce. England was noted for
the manufacture of fine cloths made of Spanish wool, more than a
century before any of those which now flourish in the places above
mentioned were fit for foreign sale. The extension and improvement of
these last could not take place but in consequence of the extension
and improvement of agriculture, the last and greatest effect of
foreign commerce, and of the manufactures immediately introduced by
it, and which I shall now proceed to explain.
CHAPTER IV.
HOW THE COMMERCE OF TOWNS CONTRIBUTED TO THE IMPROVEMENT
OF THE
COUNTRY.
The increase and riches of commercial and manufacturing towns
contributed to the improvement and cultivation of the countries to
which they belonged, in three different ways:
First, by affording a great and ready market for the rude produce
of
the country, they gave encouragement to its cultivation and further
improvement. This benefit was not even confined to the countries in
which they were situated, but extended more or less to all those with
which they had any dealings. To all of them they afforded a market for
some part either of their rude or manufactured produce, and,
consequently, gave some encouragement to the industry and improvement
of all. Their own country, however, on account of its neighbourhood,
necessarily derived the greatest benefit from this market. Its rude
produce being charged with less carriage, the traders could pay the
growers a better price for it, and yet afford it as cheap to the
consumers as that of more distant countries.
Secondly, the wealth acquired by the inhabitants of cities was
frequently employed in purchasing such lands as were to be sold, of
which a great part would frequently be uncultivated. Merchants are
commonly ambitious of becoming country gentlemen, and, when they do,
they are generally the best of all improvers. A merchant is accustomed
to employ his money chiefly in profitable projects; whereas a mere
country gentleman is accustomed to employ it chiefly in expense. The
one often sees his money go from him, and return to him again with a
profit; the other, when once he parts with it, very seldom expects to
see any more of it. Those different habits naturally affect their
temper and disposition in every sort of business. The merchant is
commonly a bold, a country gentleman a timid undertaker. The one is
not afraid to lay out at once a large capital upon the improvement of
his land, when he has a probable prospect of raising the value of it
in proportion to the expense; the other, if he has any capital, which
is not always the case, seldom ventures to employ it in this manner.
If he improves at all, it is commonly not with a capital, but with
what he can save out or his annual revenue. Whoever has had the
fortune to live in a mercantile town, situated in an unimproved
country, must have frequently observed how much more spirited the
operations of merchants were in this way, than those of mere country
gentlemen. The habits, besides, of order, economy, and attention, to
which mercantile business naturally forms a merchant, render him much
fitter to execute, with profit and success, any project of
improvement.
Thirdly, and lastly, commerce and manufactures gradually introduced
order and good government, and with them the liberty and security of
individuals, among the inhabitants of the country, who had before
lived almost in a continual state of war with their neighbours, and of
servile dependency upon their superiors. This, though it has been the
least observed, is by far the most important of all their effects. Mr
Hume is the only writer who, so far as I know, has hitherto taken
notice of it.
In a country which has neither foreign commerce nor any of the
finer
manufactures, a great proprietor, having nothing for which he can
exchange the greater part of the produce of his lands which is over
and above the maintenance of the cultivators, consumes the whole in
rustic hospitality at home. If this surplus produce is sufficient to
maintain a hundred or a thousand men, he can make use of it in no
other way than by maintaining a hundred or a thousand men. He is at
all times, therefore, surrounded with a multitude of retainers and
dependants, who, having no equivalent to give in return for their
maintenance, but being fed entirely by his bounty, must obey him, for
the same reason that soldiers must obey the prince who pays them.
Before the extension of commerce and manufactures in Europe, the
hospitality of the rich and the great, from the sovereign down to the
smallest baron, exceeded every thing which, in the present times, we
can easily form a notion of Westminster-hall was the dining-room of
William Rufus, and might frequently, perhaps, not be too large for his
company. It was reckoned a piece of magnificence in Thomas Becket,
that he strewed the floor of his hall with clean hay or rushes in the
season, in order that the knights and squires, who could not get
seats, might not spoil their fine clothes when they sat down on the
floor to eat their dinner. The great Earl of Warwick is said to have
entertained every day, at his different manors, 30,000 people; and
though the number here may have been exaggerated, it must, however,
have been very great to admit of such exaggeration. A hospitality
nearly of the same kind was exercised not many years ago in many
different parts of the Highlands of Scotland. It seems to be common in
all nations to whom commerce and manufactures are little known. I have
seen, says Doctor Pocock, an Arabian chief dine in the streets of a
town where he had come to sell his cattle, and invite all passengers,
even common beggars, to sit down with him and partake of his banquet.
The occupiers of land were in every respect as dependent upon
the
great proprietor as his retainers. Even such of them as were not in a
state of villanage, were tenants at will, who paid a rent in no
respect equivalent to the subsistence which the land afforded them. A
crown, half a crown, a sheep, a lamb, was some years ago, in the
Highlands of Scotland, a common rent for lands which maintained a
family. In some places it is so at this day; nor will money at present
purchase a greater quantity of commodities there than in other places.
In a country where the surplus produce of a large estate must be
consumed upon the estate itself, it will frequently be more convenient
for the proprietor, that part of it be consumed at a distance from his
own house, provided they who consume it are as dependent upon him as
either his retainers or his menial servants. He is thereby saved from
the embarrassment of either too large a company, or too large a
family. A tenant at will, who possesses land sufficient to maintain
his family for little more than a quit-rent, is as dependent upon the
proprietor as any servant or retainer whatever, and must obey him with
as little reserve. Such a proprietor, as he feeds his servants and
retainers at his own house, so he feeds his tenants at their houses.
The subsistence of both is derived from his bounty, and its
continuance depends upon his good pleasure.
Upon the authority which the great proprietors necessarily had,
in
such a state of things, over their tenants and retainers, was founded
the power of the ancient barons. They necessarily became the judges in
peace, and the leaders in war, of all who dwelt upon their estates.
They could maintain order, and execute the law, within their
respective demesnes, because each of them could there turn the whole
force of all the inhabitants against the injustice of anyone. No other
person had sufficient authority to do this. The king, in particular,
had not. In those ancient times, he was little more than the greatest
proprietor in his dominions, to whom, for the sake of common defence
against their common enemies, the other great proprietors paid certain
respects. To have enforced payment of a small debt within the lands of
a great proprietor, where all the inhabitants were armed, and
accustomed to stand by one another, would have cost the king, had he
attempted it by his own authority, almost the same effort as to
extinguish a civil war. He was, therefore, obliged to abandon the
administration of justice, through the greater part of the country, to
those who were capable of administering it; and, for the same reason,
to leave the command of the country militia to those whom that militia
would obey.
It is a mistake to imagine that those territorial jurisdictions
took
their origin from the feudal law. Not only the highest jurisdictions,
both civil and criminal, but the power of levying troops, of coining
money, and even that of making bye-laws for the government of their
own people, were all rights possessed allodially by the great
proprietors of land, several centuries before even the name of the
feudal law was known in Europe. The authority and jurisdiction of the
Saxon lords in England appear to have been as great before the
Conquest as that of any of the Norman lords after it. But the feudal
law is not supposed to have become the common law of England till
after the Conquest. That the most extensive authority and
jurisdictions were possessed by the great lords in France allodially,
long before the feudal law was introduced into that country, is a
matter of fact that admits of no doubt. That authority, and those
jurisdictions, all necessarily flowed from the state of property and
manners just now described. Without remounting to the remote
antiquities of either the French or English monarchies, we may find,
in much later times, many proofs that such effects must always flow
from such causes. It is not thirty years ago since Mr Cameron of
Lochiel, a gentleman of Lochaber in Scotland, without any legal
warrant whatever, not being what was then called a lord of regality,
nor even a tenant in chief, but a vassal of the Duke of Argyll, and
with out being so much as a justice of peace, used, notwithstanding,
to exercise the highest criminal jurisdictions over his own people. He
is said to have done so with great equity, though without any of the
formalities of justice; and it is not improbable that the state of
that part of the country at that time made it necessary for him to
assume this authority, in order to maintain the public peace. That
gentleman, whose rent never exceeded £500 a-year, carried, in 1745,
800 of his own people into the rebellion with him.
The introduction of the feudal law, so far from extending, may
be
regarded as an attempt to moderate, the authority of the great
allodial lords. It established a regular subordination, accompanied
with a long train of services and duties, from the king down to the
smallest proprietor. During the minority of the proprietor, the rent,
together with the management of his lands, fell into the hands of his
immediate superior; and, consequently, those of all great proprietors
into the hands of the king, who was charged with the maintenance and
education of the pupil, and who, from his authority as guardian, was
supposed to have a right of disposing of him in marriage, provided it
was in a manner not unsuitable to his rank. But though this
institution necessarily tended to strengthen the authority of the
king, and to weaken that of the great proprietors, it could not do
either sufficiently for establishing order and good government among
the inhabitants of the country; because it could not alter
sufficiently that state of property and manners from which the
disorders arose. The authority of government still continued to be, as
before, too weak in the head, and too strong in the inferior members;
and the excessive strength of the inferior members was the cause of
the weakness of the head. After the institution of feudal
subordination, the king was as incapable of restraining the violence
of the great lords as before. They still continued to make war
according to their own discretion, almost continually upon one
another, and very frequently upon the king; and the open country still
continued to be a scene of violence, rapine, and disorder.
But what all the violence of the feudal institutions could never
have
effected, the silent and insensible operation of foreign commerce and
manufactures gradually brought about. These gradually furnished the
great proprietors with something for which they could exchange the
whole surplus produce of their lands, and which they could consume
themselves, without sharing it either with tenants or retainers. All
for ourselves, and nothing for other people, seems, in every age of
the world, to have been the vile maxim of the masters of mankind. As
soon, therefore, as they could find a method of consuming the whole
value of their rents themselves, they had no disposition to share them
with any other persons. For a pair of diamond buckles, perhaps, or for
something as frivolous and useless, they exchanged the maintenance,
or, what is the same thing, the price of the maintenance of 1000 men
for a year, and with it the whole weight and authority which it could
give them. The buckles, however, were to be all their own, and no
other human creature was to have any share of them; whereas, in the
more ancient method of expense, they must have shared with at least
1000 people. With the judges that were to determine the preference,
this difference was perfectly decisive; and thus, for the
gratification of the most childish, the meanest, and the most sordid
of all vanities they gradually bartered their whole power and
authority.
In a country where there is no foreign commerce, nor any of
the finer
manufactures, a man of £10,000 a-year cannot well employ his revenue
in any other way than in maintaining, perhaps, 1000 families, who are
all of them necessarily at his command. In the present state of
Europe, a man of £10,000 a-year can spend his whole revenue, and he
generally does so, without directly maintaining twenty people, or
being able to command more than ten footmen, not worth the commanding.
Indirectly, perhaps, he maintains as great, or even a greater number
of people, than he could have done by the ancient method of expense.
For though the quantity of precious productions for which he exchanges
his whole revenue be very small, the number of workmen employed in
collecting and preparing it must necessarily have been very great. Its
great price generally arises from the wages of their labour, and the
profits of all their immediate employers. By paying that price, he
indirectly pays all those wages and profits, and thus indirectly
contributes to the maintenance of all the workmen and their employers.
He generally contributes, however, but a very small proportion to that
of each; to a very few, perhaps, not a tenth, to many not a hundredth,
and to some not a thousandth, or even a ten thousandth part of their
whole annual maintenance. Though he contributes, therefore, to the
maintenance of them all, they are all more or less independent of him,
because generally they can all be maintained without him.
When the great proprietors of land spend their rents in maintaining
their tenants and retainers, each of them maintains entirely all his
own tenants and all his own retainers. But when they spend them in
maintaining tradesmen and artificers, they may, all of them taken
together, perhaps maintain as great, or, on account of the waste which
attends rustic hospitality, a greater number of people than before.
Each of them, however, taken singly, contributes often but a very
small share to the maintenance of any individual of this greater
number. Each tradesman or artificer derives his subsistence from the
employment, not of one, but of a hundred or a thousand different
customers. Though in some measure obliged to them all, therefore, he
is not absolutely dependent upon any one of them.
The personal expense of the great proprietors having in this
manner
gradually increased, it was impossible that the number of their
retainers should not as gradually diminish, till they were at last
dismissed altogether. The same cause gradually led them to dismiss the
unnecessary part of their tenants. Farms were enlarged, and the
occupiers of land, notwithstanding the complaints of depopulation,
reduced to the number necessary for cultivating it, according to the
imperfect state of cultivation and improvement in those times. By the
removal of the unnecessary mouths, and by exacting from the farmer the
full value of the farm, a greater surplus, or, what is the same thing,
the price of a greater surplus, was obtained for the proprietor, which
the merchants and manufacturers soon furnished him with a method of
spending upon his own person, in the same manner as he had done the
rest. The cause continuing to operate, he was desirous to raise his
rents above what his lands, in the actual state of their improvement,
could afford. His tenants could agree to this upon one condition only,
that they should be secured in their possession for such a term of
years as might give them time to recover, with profit, whatever they
should lay not in the further improvement of the land. The expensive
vanity of the landlord made him willing to accept of this condition;
and hence the origin of long leases.
Even a tenant at will, who pays the full value of the land,
is not
altogether dependent upon the landlord. The pecuniary advantages which
they receive from one another are mutual and equal, and such a tenant
will expose neither his life nor his fortune in the service of the
proprietor. But if he has a lease for along term of years, he is
altogether independent; and his landlord must not expect from him even
the most trifling service, beyond what is either expressly stipulated
in the lease, or imposed upon him by the common and known law of the
country.
The tenants having in this manner become independent, and the
retainers being dismissed, the great proprietors were no longer
capable of interrupting the regular execution of justice, or of
disturbing the peace of the country. Having sold their birth-right,
not like Esau, for a mess of pottage in time of hunger and necessity,
but, in the wantonness of plenty, for trinkets and baubles, fitter to
be the playthings of children than the serious pursuits of men, they
became as insignificant as any substantial burgher or tradesmen in a
city. A regular government was established in the country as well as
in the city, nobody having sufficient power to disturb its operations
in the one, any more than in the other.
It does not, perhaps, relate to the present subject, but I cannot
help
remarking it, that very old families, such as have possessed some
considerable estate from father to son for many successive
generations, are very rare in commercial countries. In countries which
have little commerce, on the contrary, such as Wales, or the Highlands
of Scotland, they are very common. The Arabian histories seem to be
all full of genealogies; and there is a history written by a Tartar
Khan, which has been translated into several European languages, and
which contains scarce any thing else; a proof that ancient families
are very common among those nations. In countries where a rich man can
spend his revenue in no other way than by maintaining as many people
as it can maintain, he is apt to run out, and his benevolence, it
seems, is seldom so violent as to attempt to maintain more than he can
afford. But where he can spend the greatest revenue upon his own
person, he frequently has no bounds to his expense, because he
frequently has no bounds to his vanity, or to his affection for his
own person. In commercial countries, therefore, riches, in spite of
the most violent regulations of law to prevent their dissipation, very
seldom remain long in the same family. Among simple nations, on the
contrary, they frequently do, without any regulations of law; for
among nations of shepherds, such as the Tartars and Arabs, the
consumable nature of their property necessarily renders all such
regulations impossible.
A revolution of the greatest importance to the public happiness,
was
in this manner brought about by two different orders of people, who
had not the least intention to serve the public. To gratify the most
childish vanity was the sole motive of the great proprietors. The
merchants and artificers, much less ridiculous, acted merely from a
view to their own interest, and in pursuit of their own pedlar
principle of turning a penny wherever a penny was to be got. Neither
of them had either knowledge or foresight of that great revolution
which the folly of the one, and the industry of the other, was
gradually bringing about.
It was thus, that, through the greater part of Europe, the commerce
and manufactures of cities, instead of being the effect, have been the
cause and occasion of the improvement and cultivation of the country.
This order, however, being contrary to the natural course of
things,
is necessarily both slow and uncertain. Compare the slow progress of
those European countries of which the wealth depends very much upon
their commerce and manufactures, with the rapid advances of our North
American colonies, of which the wealth is founded altogether in
agriculture. Through the greater part of Europe, the number of
inhabitants is not supposed to double in less than five hundred years.
In several of our North American colonies, it is found to double in
twenty or five-and-twenty years. In Europe, the law of primogeniture,
and perpetuities of different kinds, prevent the division of great
estates, and thereby hinder the multiplication of small proprietors. A
small proprietor, however, who knows every part of his little
territory, views it with all the affection which property, especially
small property, naturally inspires, and who upon that account takes
pleasure, not only in cultivating, but in adorning it, is generally of
all improvers the most industrious, the most intelligent, and the most
successful. The same regulations, besides, keep so much land out of
the market, that there are always more capitals to buy than there is
land to sell, so that what is sold always sells at a monopoly price.
The rent never pays the interest of the purchase-money, and is,
besides, burdened with repairs and other occasional charges, to which
the interest of money is not liable. To purchase land, is, everywhere
in Europe, a most unprofitable employment of a small capital. For the
sake of the superior security, indeed, a man of moderate
circumstances, when he retires from business, will sometimes choose to
lay out his little capital in land. A man of profession, too whose
revenue is derived from another source often loves to secure his
savings in the same way. But a young man, who, instead of applying to
trade or to some profession, should employ a capital of two or three
thousand pounds in the purchase and cultivation of a small piece of
land, might indeed expect to live very happily and very independently,
but must bid adieu for ever to all hope of either great fortune or
great illustration, which, by a different employment of his stock, he
might have had the same chance of acquiring with other people. Such a
person, too, though he cannot aspire at being a proprietor, will often
disdain to be a farmer. The small quantity of land, therefore, which
is brought to market, and the high price of what is brought thither,
prevents a great number of capitals from being employed in its
cultivation and improvement, which would otherwise have taken that
direction. In North America, on the contrary, fifty or sixty pounds is
often found a sufficient stock to begin a plantation with. The
purchase and improvement of uncultivated land is there the most
profitable employment of the smallest as well as of the greatest
capitals, and the most direct road to all the fortune and illustration
which can be required in that country. Such land, indeed, is in North
America to be had almost for nothing, or at a price much below the
value of the natural produce; a thing impossible in Europe, or indeed
in any country where all lands have long been private property. If
landed estates, however, were divided equally among all the children,
upon the death of any proprietor who left a numerous family, the
estate would generally be sold. So much land would come to market,
that it could no longer sell at a monopoly price. The free rent of the
land would go no nearer to pay the interest of the purchase-money, and
a small capital might be employed in purchasing land as profitable as
in any other way.
England, on account of the natural fertility of the soil, of
the great
extent of the sea-coast in proportion to that of the whole country,
and of the many navigable rivers which run through it, and afford the
conveniency of water carriage to some of the most inland parts of it,
is perhaps as well fitted by nature as any large country in Europe to
be the seat of foreign commerce, of manufactures for distant sale, and
of all the improvements which these can occasion. From the beginning
of the reign of Elizabeth, too, the English legislature has been
peculiarly attentive to the interest of commerce and manufactures, and
in reality there is no country in Europe, Holland itself not excepted,
of which the law is, upon the whole, more favourable to this sort of
industry. Commerce and manufactures have accordingly been continually
advancing during all this period. The cultivation and improvement of
the country has, no doubt, been gradually advancing too; but it seems
to have followed slowly, and at a distance, the more rapid progress of
commerce and manufactures. The greater part of the country must
probably have been cultivated before the reign of Elizabeth; and a
very great part of it still remains uncultivated, and the cultivation
of the far greater part much inferior to what it might be, The law of
England, however, favours agriculture, not only indirectly, by the
protection of commerce, but by several direct encouragements. Except
in times of scarcity, the exportation of corn is not only free, but
encouraged by a bounty. In times of moderate plenty, the importation
of foreign corn is loaded with duties that amount to a prohibition.
The importation of live cattle, except from Ireland, is prohibited at
all times; and it is but of late that it was permitted from thence.
Those who cultivate the land, therefore, have a monopoly against their
countrymen for the two greatest and most important articles of land
produce, bread and butcher's meat. These encouragements, although at
bottom, perhaps, as I shall endeavour to show hereafter, altogether
illusory, sufficiently demonstrate at least the good intention of the
legislature to favour agriculture. But what is of much more importance
than all of them, the yeomanry of England are rendered as secure, as
independent, and as respectable, as law can make them. No country,
therefore, which the right of primogeniture takes place, which pays
tithes, and where perpetuities, though contrary to the spirit of the
law, are admitted in some cases, can give more encouragement to
agriculture than England. Such, however, notwithstanding, is the state
of its cultivation. What would it have been, had the law given no
direct encouragement to agriculture besides what arises indirectly
from the progress of commerce, and had left the yeomanry in the same
condition as in most other countries of Europe? It is now more than
two hundred years since the beginning of the reign of Elizabeth, a
period as long as the course of human prosperity usually endures.
France seems to have had a considerable share of foreign commerce,
near a century before England was distinguished as a commercial
country. The marine of France was considerable, according to the
notions of the times, before the expedition of Charles VIII. to
Naples. The cultivation and improvement of France, however, is, upon
the whole, inferior to that of England. The law of the country has
never given the same direct encouragement to agriculture.
The foreign commerce of Spain and Portual to the other parts
of
Europe, though chiefly carried on in foreign ships, is very
considerable. That to their colonies is carried on in their own, and
is much greater, on account of the great riches and extent of those
colonies. But it has never introduced any considerable manufactures
for distant sale into either of those countries, and the greater part
of both still remains uncultivated. The foreign commerce of Portugal
is of older standing than that of any great country in Europe, except
Italy.
Italy is the only great country of Europe which seems to have
been
cultivated and improved in every part, by means of foreign commerce
and manufactures for distant sale. Before the invasion of Charles
VIII., Italy, according to Guicciardini, was cultivated not less in
the most mountainous and barren parts of the country, than in the
plainest and most fertile. The advantageous situation of the country,
and the great number of independent status which at that time
subsisted in it, probably contributed not a little to this general
cultivation. It is not impossible, too, notwithstanding this general
expression of one of the most judicious and reserved of modern
historians, that Italy was not at that time better cultivated than
England is at present.
The capital, however, that is acquired to any country by commerce
and
manufactures, is always a very precarious and uncertain possession,
till some part of it has been secured and realized in the cultivation
and improvement of its lands. A merchant, it has been said very
properly, is not necessarily the citizen of any particular country. It
is in a great measure indifferent to him from what place he carries on
his trade; and a very trifling disgust will make him remove his
capital, and, together with it, all the industry which it supports,
from one country to another. No part of it can be said to belong to
any particular country, till it has been spread, as it were, over the
face of that country, either in buildings, or in the lasting
improvement of lands. No vestige now remains of the great wealth said
to have been possessed by the greater part of the Hanse Towns, except
in the obscure histories of the thirteenth and fourteenth centuries.
It is even uncertain where some of them were situated, or to what
towns in Europe the Latin names given to some of them belong. But
though the misfortunes of Italy, in the end of the fifteenth and
beginning of the sixteenth centuries, greatly diminished the commerce
and manufactures of the cities of Lombardy and Tuscany, those
countries still continue to be among the most populous and best
cultivated in Europe. The civil wars of Flanders, and the Spanish
government which succeeded them, chased away the great commerce of
Antwerp, Ghent, and Bruges. But Flanders still continues to be one of
the richest, best cultivated, and most populous provinces of Europe.
The ordinary revolutions of war and government easily dry up the
sources of that wealth which arises from commerce only. That which
arises from the more solid improvements of agriculture is much more
durable, and cannot be destroyed but by those more violent convulsions
occasioned by the depredations of hostile and barbarous nations
continued for a century or two together; such as those that happened
for some time before and after the fall of the Roman empire in the
western provinces of Europe.
BOOK IV.
OF SYSTEMS OF POLITICAL ECONOMY.
Political economy, considered as a branch of the science of
a
statesman or legislator, proposes two distinct objects; first, to
provide a plentiful revenue or subsistence for the people, or, more
properly, to enable them to provide such a revenue or subsistence for
themselves; and, secondly, to supply the state or commonwealth with a
revenue sufficient for the public services. It proposes to enrich both
the people and the sovereign.
The different progress of opulence in different ages and nations,
has
given occasion to two different systems of political economy, with
regard to enriching the people. The one may be called the system of
commerce, the other that of agriculture. I shall endeavour to explain
both as fully and distinctly as I can, and shall begin with the system
of commerce. It is the modern system, and is best understood in our
own country and in our own times.
CHAPTER I.
OF THE PRINCIPLE OF THE COMMERCIAL OR MERCANTILE SYSTEM.
That wealth consists in money, or in gold and silver, is a popular
notion which naturally arises from the double function of money, as
the instrument of commerce, and as the measure of value. In
consequence of its being the instrument of commerce, when we have
money we can more readily obtain whatever else we have occasion for,
than by means of any other commodity. The great affair, we always
find, is to get money. When that is obtained, there is no difficulty
in making any subsequent purchase. In consequence of its being the
measure of value, we estimate that of all other commodities by the
quantity of money which they will exchange for. We say of a rich man,
that he is worth a great deal, and of a poor man, that he is worth
very little money. A frugal man, or a man eager to be rich, is said to
love money; and a careless, a generous, or a profuse man, is said to
be indifferent about it. To grow rich is to get money; and wealth and
money, in short, are, in common language, considered as in every
respect synonymous.
A rich country, in the same manner as a rich man, is supposed
to be a
country abounding in money; and to heap up gold and silver in any
country is supposed to be the readiest way to enrich it. For some time
after the discovery of America, the first inquiry of the Spaniards,
when they arrived upon any unknown coast, used to be, if there was any
gold or silver to be found in the neighbourhood? By the information
which they received, they judged whether it was worth while to make a
settlement there, or if the country was worth the conquering. Plano
Carpino, a monk sent ambassador from the king of France to one of the
sons of the famous Gengis Khan, says, that the Tartars used frequently
to ask him, if there was plenty of sheep and oxen in the kingdom of
France? Their inquiry had the same object with that of the Spaniards.
They wanted to know if the country was rich enough to be worth the
conquering. Among the Tartars, as among all other nations of
shepherds, who are generally ignorant of the use of money, cattle are
the instruments of commerce and the measures of value. Wealth,
therefore, according to them, consisted in cattle, as, according to
the Spaniards, it consisted in gold and silver. Of the two, the Tartar
notion, perhaps, was the nearest to the truth.
Mr Locke remarks a distinction between money and other moveable
goods.
All other moveable goods, he says, are of so consumable a nature, that
the wealth which consists in them cannot be much depended on; and a
nation which abounds in them one year may, without any exportation,
but merely by their own waste and extravagance, be in great want of
them the next. Money, on the contrary, is a steady friend, which,
though it may travel about from hand to hand, yet if it can be kept
from going out of the country, is not very liable to be wasted and
consumed. Gold and silver, therefore, are, according to him, the must
solid and substantial part of the moveable wealth of a nation; and to
multiply those metals ought, he thinks, upon that account, to be the
great object of its political economy.
Others admit, that if a nation could be separated from all the
world,
it would be of no consequence how much or how little money circulated
in it. The consumable goods, which were circulated by means of this
money, would only be exchanged for a greater or a smaller number of
pieces; but the real wealth or poverty of the country, they allow,
would depend altogether upon the abundance or scarcity of those
consumable goods. But it is otherwise, they think, with countries
which have connections with foreign nations, and which are obliged to
carry on foreign wars, and to maintain fleets and armies in distant
countries. This, they say, cannot be done, but by sending abroad money
to pay them with; and a nation cannot send much money abroad, unless
it has a good deal at home. Every such nation, therefore, must
endeavour, in time of peace, to accumulate gold and silver, that when
occasion requires, it may have wherewithal to carry on foreign wars.
In consequence of those popular notions, all the different nations
of
Europe have studied, though to little purpose, every possible means of
accumulating gold and silver in their respective countries. Spain and
Portugal, the proprietors of the principal mines which supply Europe
with those metals, have either prohibited their exportation under the
severest penalties, or subjected it to a considerable duty. The like
prohibition seems anciently to have made a part of the policy of most
other European nations. It is even to be found, where we should least
of all expect to find it, in some old Scotch acts of Parliament, which
forbid, under heavy penalties, the carrying gold or silver forth of
the kingdom. The like policy anciently took place both in France and
England.
When those countries became commercial, the merchants found
this
prohibition, upon many occasions, extremely inconvenient. They could
frequently buy more advantageously with gold and silver, than with any
other commodity, the foreign goods which they wanted, either to import
into their own, or to carry to some other foreign country. They
remonstrated, therefore, against this prohibition as hurtful to trade.
They represented, first, that the exportation of gold and silver,
in
order to purchase foreign goods, did not always diminish the quantity
of those metals in the kingdom; that, on the contrary, it might
frequently increase the quantity; because, if the consumption of
foreign goods was not thereby increased in the country, those goods
might be re-exported to foreign countries, and being there sold for a
large profit, might bring back much more treasure than was originally
sent out to purchase them. Mr Mun compares this operation of foreign
trade to the seed-time and harvest of agriculture. "If we only
behold," says he, "the actions of the husbandman in the seed time,
when he casteth away much good corn into the ground, we shall account
him rather a madman than a husbandman. But when we consider his
labours in the harvest, which is the end of his endeavours, we shall
find the worth and plentiful increase of his actions."
They represented, secondly, that this prohibition could not
hinder the
exportation of gold and silver, which, on account of the smallness of
their bulk in proportion to their value, could easily be smuggled
abroad. That this exportation could only be prevented by a proper
attention to what they called the balance of trade. That when the
country exported to a greater value than it imported, a balance became
due to it from foreign nations, which was necessarily paid to it in
gold and silver, and thereby increased the quantity of those metals in
the kingdom. But that when it imported to a greater value than it
exported, a contrary balance became due to foreign nations, which was
necessarily paid to them in the same manner, and thereby diminished
that quantity: that in this case, to prohibit the exportation of
those metals, could not prevent it, but only, by making it more
dangerous, render it more expensive: that the exchange was thereby
turned more against the country which owed the balance, than it
otherwise might have been; the merchant who purchased a bill upon the
foreign country being obliged to pay the banker who sold it, not only
for the natural risk, trouble, and expense of sending the money
thither, but for the extraordinary risk arising from the prohibition;
but that the more the exchange was against any country, the more the
balance of trade became necessarily against it; the money of that
country becoming necessarily of so much less value, in comparison with
that of the country to which the balance was due. That if the exchange
between England and Holland, for example, was five per cent. against
England, it would require 105 ounces of silver in England to purchase
a bill for 100 ounces of silver in Holland: that 105 ounces of silver
in England, therefore, would be worth only 100 ounces of silver in
Holland, and would purchase only a proportionable quantity of Dutch
goods; but that 100 ounces of silver in Holland, on the contrary,
would be worth 105 ounces in England, and would purchase a
proportionable quantity of English goods; that the English goods which
were sold to Holland would be sold so much cheaper, and the Dutch
goods which were sold to England so much dearer, by the difference of
the exchange: that the one would draw so much less Dutch money to
England, and the other so much more English money to Holland, as this
difference amounted to: and that the balance of trade, therefore,
would necessarily be so much more against England, and would require a
greater balance of gold and silver to be exported to Holland.
Those arguments were partly solid and partly sophistical. They
were
solid, so far as they asserted that the exportation of gold and silver
in trade might frequently be advantageous to the country. They were
solid, too, in asserting that no prohibition could prevent their
exportation, when private people found any advantage in exporting
them. But they were sophistical, in supposing, that either to preserve
or to augment the quantity of those metals required more the attention
of government, than to preserve or to augment the quantity of any
other useful commodities, which the freedom of trade, without any such
attention, never fails to supply in the proper quantity. They were
sophistical, too, perhaps, in asserting that the high price of
exchange necessarily increased what they called the unfavourable
balance of trade, or occasioned the exportation of a greater quantity
of gold and silver. That high price, indeed, was extremely
disadvantageous to the merchants who had any money to pay in foreign
countries. They paid so much dearer for the bills which their bankers
granted them upon those countries. But though the risk arising from
the prohibition might occasion some extraordinary expense to the
bankers, it would not necessarily carry any more money out of the
country. This expense would generally be all laid out in the country,
in smuggling the money out of it, and could seldom occasion the
exportation of a single sixpence beyond the precise sum drawn for. The
high price of exchange, too, would naturally dispose the merchants to
endeavour to make their exports nearly balance their imports, in order
that they might have this high exchange to pay upon as small a sum as
possible. The high price of exchange, besides, must necessarily have
operated as a tax, in raising the price of foreign goods, and thereby
diminishing their consumption. It would tend, therefore, not to
increase, but to diminish, what they called the unfavourable balance
of trade, and consequently the exportation of gold and silver.
Such as they were, however, those arguments convinced the people
to
whom they were addressed. They were addressed by merchants to
parliaments and to the councils of princes, to nobles, and to country
gentlemen; by those who were supposed to understand trade, to those
who were conscious to them selves that they knew nothing about the
matter. That foreign trade enriched the country, experience
demonstrated to the nobles and country gentlemen, as well as to the
merchants; but how, or in what manner, none of them well knew. The
merchants knew perfectly in what manner it enriched themselves, it was
their business to know it. But to know in what manner it enriched the
country, was no part of their business. The subject never came into
their consideration, but when they had occasion to apply to their
country for some change in the laws relating to foreign trade. It then
became necessary to say something about the beneficial effects of
foreign trade, and the manner in which those effects were obstructed
by the laws as they then stood. To the judges who were to decide the
business, it appeared a most satisfactory account of the matter, when
they were told that foreign trade brought money into the country, but
that the laws in question hindered it from bringing so much as it
otherwise would do. Those arguments, therefore, produced the
wished-for effect. The prohibition of exporting gold and silver was,
in France and England, confined to the coin of those respective
countries. The exportation of foreign coin and of bullion was made
free. In Holland, and in some other places, this liberty was extended
even to the coin of the country. The attention of government was
turned away from guarding against the exportation of gold and silver,
to watch over the balance of trade, as the only cause which could
occasion any augmentation or diminution of those metals. From one
fruitless care, it was turned away to another care much more
intricate, much more embarrassing, and just equally fruitless. The
title of Mun's book, England's Treasure in Foreign Trade, became a
fundamental maxim in the political economy, not of England only, but
of all other commercial countries. The inland or home trade, the most
important of all, the trade in which an equal capital affords the
greatest revenue, and creates the greatest employment to the people of
the country, was considered as subsidiary only to foreign trade. It
neither brought money into the country, it was said, nor carried any
out of it. The country, therefore, could never become either richer or
poorer by means of it, except so far as its prosperity or decay might
indirectly influence the state of foreign trade.
A country that has no mines of its own, must undoubtedly draw
its gold
and silver from foreign countries, in the same manner as one that has
no vineyards of its own must draw its wines. It does not seem
necessary, however, that the attention of government should be more
turned towards the one than towards the other object. A country that
has wherewithal to buy wine, will always get the wine which it has
occasion for; and a country that has wherewithal to buy gold and
silver, will never be in want of those metals. They are to be bought
for a certain price, like all other commodities; and as they are the
price of all other commodities, so all other commodities are the price
of those metals. We trust, with perfect security, that the freedom of
trade, without any attention of government, will always supply us with
the wine which we have occasion for; and we may trust, with equal
security, that it will always supply us with all the gold and silver
which we can afford to purchase or to employ, either in circulating
our commodities or in other uses.
The quantity of every commodity which human industry can either
purchase or produce, naturally regulates itself in every country
according to the effectual demand, or according to the demand of those
who are willing to pay the whole rent, labour, and profits, which must
be paid in order to prepare and bring it to market. But no commodities
regulate themselves more easily or more exactly, according to this
effectual demand, than gold and silver; because, on account of the
small bulk and great value of those metals, no commodities can be more
easily transported from one place to another; from the places where
they are cheap, to those where they are dear; from the places where
they exceed, to those where they fall short of this effectual demand.
If there were in England, for example, an effectual demand for an
additional quantity of gold, a packet-boat could bring from Lisbon, or
from wherever else it was to be had, fifty tons of gold, which could
be coined into more than five millions of guineas. But if there were
an effectual demand for grain to the same value, to import it would
require, at five guineas a-ton, a million of tons of shipping, or a
thousand ships of a thousand tons each. The navy of England would not
be sufficient.
When the quantity of gold and silver imported into any country
exceeds
the effectual demand, no vigilance of government can prevent their
exportation. All the sanguinary laws of Spain and Portugal are not
able to keep their gold and silver at home. The continual importations
from Peru and Brazil exceed the effectual demand of those countries,
and sink the price of those metals there below that in the
neighbouring countries. If, on the contrary, in any particular
country, their quantity fell short of the effectual demand, so as to
raise their price above that of the neighbouring countries, the
government would have no occasion to take any pains to import them. If
it were even to take pains to prevent their importation, it would not
be able to effectuate it. Those metals, when the Spartans had got
wherewithal to purchase them, broke through all the barriers which the
laws of Lycurgus opposed to their entrance into Lacedaemon. All the
sanguinary laws of the customs are not able to prevent the importation
of the teas of the Dutch and Gottenburg East India companies; because
somewhat cheaper than those of the British company. A pound of tea,
however, is about a hundred times the bulk of one of the highest
prices, sixteen shillings, that is commonly paid for it in silver, and
more than two thousand times the bulk of the same price in gold, and,
consequently, just so many times more difficult to smuggle.
It is partly owing to the easy transportation of gold and silver,
from
the places where they abound to those where they are wanted, that the
price of those metals does not fluctuate continually, like that of the
greater part of other commodities, which are hindered by their bulk
from shifting their situation, when the market happens to be either
over or under-stocked with them. The price of those metals, indeed, is
not altogether exempted from variation; but the changes to which it is
liable are generally slow, gradual, and uniform. In Europe, for
example, it is supposed, without much foundation, perhaps, that during
the course of the present and preceding century, they have been
constantly, but gradually, sinking in their value, on account of the
continual importations from the Spanish West Indies. But to make any
sudden change in the price of gold and silver, so as to raise or lower
at once, sensibly and remarkably, the money price of all other
commodities, requires such a revolution in commerce as that occasioned
by the discovery of America.
If, not withstanding all this, gold and silver should at any
time fall
short in a country which has wherewithal to purchase them, there are
more expedients for supplying their place, than that of almost any
other commodity. If the materials of manufacture are wanted, industry
must stop. If provisions are wanted, the people must starve. But if
money is wanted, barter will supply its place, though with a good deal
of inconveniency. Buying and selling upon credit, and the different
dealers compensating their credits with one another, once a-month, or
once a-year, will supply it with less inconveniency. A well-regulated
paper-money will supply it not only without any inconveniency, but, in
some cases, with some advantages. Upon every account, therefore, the
attention of government never was so unnecessarily employed, as when
directed to watch over the preservation or increase of the quantity of
money in any country.
No complaint, however, is more common than that of a scarcity
of
money. Money, like wine, must always be scarce with those who have
neither wherewithal to buy it, nor credit to borrow it. Those who have
either, will seldom be in want either of the money, or of the wine
which they have occasion for. This complaint, however, of the scarcity
of money, is not always confined to improvident spendthrifts. It is
sometimes general through a whole mercantile town and the country in
its neighbourhood. Over-trading is the common cause of it. Sober men,
whose projects have been disproportioned to their capitals, are as
likely to have neither wherewithal to buy money, nor credit to borrow
it, as prodigals, whose expense has been disproportioned to their
revenue. Before their projects can be brought to bear, their stock is
gone, and their credit with it. They run about everywhere to borrow
money, and everybody tells them that they have none to lend. Even such
general complaints of the scarcity of money do not always prove that
the usual number of gold and silver pieces are not circulating in the
country, but that many people want those pieces who have nothing to
give for them. When the profits of trade happen to be greater than
ordinary over-trading becomes a general error, both among great and
small dealers. They do not always send more money abroad than usual,
but they buy upon credit, both at home and abroad, an unusual quantity
of goods, which they send to some distant market, in hopes that the
returns will come in before the demand for payment. The demand comes
before the returns, and they have nothing at hand with which they can
either purchase money or give solid security for borrowing. It is not
any scarcity of gold and silver, but the difficulty which such people
find in borrowing, and which their creditor find in getting payment,
that occasions the general complaint of the scarcity of money.
It would be too ridiculous to go about seriously to prove, that
wealth
does not consist in money, or in gold and silver; but in what money
purchases, and is valuable only for purchasing. Money, no doubt, makes
always a part of the national capital; but it has already been shown
that it generally makes but a small part, and always the most
unprofitable part of it.
It is not because wealth consists more essentially in money
than in
goods, that the merchant finds it generally more easy to buy goods
with money, than to buy money with goods; but because money is the
known and established instrument of commerce, for which every thing is
readily given in exchange, but which is not always with equal
readiness to be got in exchange for every thing. The greater part of
goods, besides, are more perishable than money, and he may frequently
sustain a much greater loss by keeping them. When his goods are upon
hand, too, he is more liable to such demands for money as he may not
be able to answer, than when he has got their price in his coffers.
Over and above all this, his profit arises more directly from selling
than from buying; and he is, upon all these accounts, generally much
more anxious to exchange his goods for money than his money for goods.
But though a particular merchant, with abundance of goods in his
warehouse, may sometimes be ruined by not being able to sell them in
time, a nation or country is not liable to the same accident, The
whole capital of a merchant frequently consists in perishable goods
destined for purchasing money. But it is but a very small part of the
annual produce of the land and labour of a country, which can ever be
destined for purchasing gold and silver from their neighbours. The far
greater part is circulated and consumed among themselves; and even of
the surplus which is sent abroad, the greater part is generally
destined for the purchase of other foreign goods. Though gold and
silver, therefore, could not be had in exchange for the goods destined
to purchase them, the nation would not be ruined. It might, indeed,
suffer some loss and inconveniency, and be forced upon some of those
expedients which are necessary for supplying the place of money. The
annual produce of its land and labour, however, would be the same, or
very nearly the same as usual; because the same, or very nearly the
same consumable capital would be employed in maintaining it. And
though goods do not always draw money so readily as money draws goods,
in the long-run they draw it more necessarily than even it draws them.
Goods can serve many other purposes besides purchasing money, but
money can serve no other purpose besides purchasing goods. Money,
therefore, necessarily runs after goods, but goods do not always or
necessarily run after money. The man who buys, does not always mean to
sell again, but frequently to use or to consume; whereas he who sells
always means to buy again. The one may frequently have done the whole,
but the other can never have done more than the one half of his
business. It is not for its own sake that men desire money, but for
the sake of what they can purchase with it.
Consumable commodities, it is said, are soon destroyed; whereas
gold
and silver are of a more durable nature, and were it not for this
continual exportation, might be accumulated for ages together, to the
incredible augmentation of the real wealth of the country. Nothing,
therefore, it is pretended, can be more disadvantageous to any
country, than the trade which consists in the exchange of such lasting
for such perishable commodities. We do not, however, reckon that trade
disadvantageous, which consists in the exchange of the hardware of
England for the wines of France, and yet hardware is a very durable
commodity, and were it not for this continual exportation, might too
be accumulated for ages together, to the incredible augmentation of
the pots and pans of the country. But it readily occurs, that the
number of such utensils is in every country necessarily limited by the
use which there is for them; that it would be absurd to have more pots
and pans than were necessary for cooking the victuals usually consumed
there; and that, if the quantity of victuals were to increase, the
number of pots and pans would readily increase along with it; a part
of the increased quantity of victuals being employed in purchasing
them, or in maintaining an additional number of workmen whose business
it was to make them. It should as readily occur, that the quantity of
gold and silver is, in every country, limited by the use which there
is for those metals; that their use consists in circulating
commodities, as coin, and in affording a species of household
furniture, as plate; that the quantity of coin in every country is
regulated by the value of the commodities which are to be circulated
by it; increase that value, and immediately a part of it will be sent
abroad to purchase, wherever it is to be had, the additional quantity
of coin requisite for circulating them: that the quantity of plate is
regulated by the number and wealth of those private families who
choose to indulge themselves in that sort of magnificence; increase
the number and wealth of such families, and a part of this increased
wealth will most probably be employed in purchasing, wherever it is to
be found, an additional quantity of plate; that to attempt to increase
the wealth of any country, either by introducing or by detaining in it
an unnecessary quantity of gold and silver, is as absurd as it would
be to attempt to increase the good cheer of private families, by
obliging them to keep an unnecessary number of kitchen utensils. As
the expense of purchasing those unnecessary utensils would diminish,
instead of increasing, either the quantity or goodness of the family
provisions; so the expense of purchasing an unnecessary quantity of
gold and silver must, in every country, as necessarily diminish the
wealth which feeds, clothes, and lodges, which maintains and employs
the people. Gold and silver, whether in the shape of coin or of plate,
are utensils, it must be remembered, as much as the furniture of the
kitchen. Increase the use of them, increase the consumable commodities
which are to be circulated, managed, and prepared by means of them,
and you will infallibly increase the quantity; but if you attempt by
extraordinary means to increase the quantity, you will as infallibly
diminish the use, and even the quantity too, which in those metals can
never be greater than what the use requires. Were they ever to be
accumulated beyond this quantity, their transportation is so easy, and
the loss which attends their lying idle and unemployed so great, that
no law could prevent their being immediately sent out of the country.
It is not always necessary to accumulate gold and silver, in
order to
enable a country to carry on foreign wars, and to maintain fleets and
armies in distant countries. Fleets and armies are maintained, not
with gold and silver, but with consumable goods. The nation which,
from the annual produce of its domestic industry, from the annual
revenue arising out of its lands, and labour, and consumable stock,
has wherewithal to purchase those consumable goods in distant
countries, can maintain foreign wars there.
A nation may purchase the pay and provisions of an army in a
distant
country three different ways; by sending abroad either, first, some
part of its accumulated gold and silver; or, secondly, some part of
the annual produce of its manufactures; or, last of all, some part of
its annual rude produce.
The gold and silver which can properly be considered as accumulated,
or stored up in any country, may be distinguished into three parts;
first, the circulating money; secondly, the plate of private families;
and, last of all, the money which may have been collected by many
years parsimony, and laid up in the treasury of the prince.
It can seldom happen that much can be spared from the circulating
money of the country; because in that there can seldom be much
redundancy. The value of goods annually bought and sold in any country
requires a certain quantity of money to circulate and distribute them
to their proper consumers, and can give employment to no more. The
channel of circulation necessarily draws to itself a sum sufficient to
fill it, and never admits any more. Something, however, is generally
withdrawn from this channel in the case of foreign war. By the great
number of people who are maintained abroad, fewer are maintained at
home. Fewer goods are circulated there, and less money becomes
necessary to circulate them. An extraordinary quantity of paper money
of some sort or other, too, such as exchequer notes, navy bills, and
bank bills, in England, is generally issued upon such occasions, and,
by supplying the place of circulating gold and silver, gives an
opportunity of sending a greater quantity of it abroad. All this,
however, could afford but a poor resource for maintaining a foreign
war, of great expense, and several years duration.
The melting down of the plate of private families has, upon
every
occasion, been found a still more insignificant one. The French, in
the beginning of the last war, did not derive so much advantage from
this expedient as to compensate the loss of the fashion.
The accumulated treasures of the prince have in former times
afforded
a much greater and more lasting resource. In the present times, if you
except the king of Prussia, to accumulate treasure seems to be no part
of the policy of European princes.
The funds which maintained the foreign wars of the present century,
the most expensive perhaps which history records, seem to have had
little dependency upon the exportation either of the circulating
money, or of the plate of private families, or of the treasure of the
prince. The last French war cost Great Britain upwards of £90,000,000,
including not only the £75,000,000 of new debt that was contracted,
but the additional 2s. in the pound land-tax, and what was annually
borrowed of the sinking fund. More than two-thirds of this expense
were laid out in distant countries; in Germany, Portugal, America, in
the ports of the Mediterranean, in the East and West Indies. The kings
of England had no accumulated treasure. We never heard of any
extraordinary quantity of plate being melted down. The circulating
gold and silver of the country had not been supposed to exceed
£18,000,000. Since the late recoinage of the gold, however, it is
believed to have been a good deal under-rated. Let us suppose,
therefore, according to the most exaggerated computation which I
remember to have either seen or heard of, that, gold and silver
together, it amounted to £30,000,000. Had the war been carried on by
means of our money, the whole of it must, even according to this
computation, have been sent out and returned again, at least twice in
a period of between six and seven years. Should this be supposed, it
would afford the most decisive argument, to demonstrate how
unnecessary it is for government to watch over the preservation of
money, since, upon this supposition, the whole money of the country
must have gone from it, and returned to it again, two different times
in so short a period, without any body's knowing any thing of the
matter. The channel of circulation, however, never appeared more empty
than usual during any part of this period. Few people wanted money who
had wherewithal to pay for it. The profits of foreign trade, indeed,
were greater than usual during the whole war, but especially towards
the end of it. This occasioned, what it always occasions, a general
over-trading in all the ports of Great Britain; and this again
occasioned the usual complaint of the scarcity of money, which always
follows over-trading. Many people wanted it, who had neither
wherewithal to buy it, nor credit to borrow it; and because the
debtors found it difficult to borrow, the creditors found it difficult
to get payment. Gold and silver, however, were generally to be had for
their value, by those who had that value to give for them.
The enormous expense of the late war, therefore, must have been
chiefly defrayed, not by the exportation of gold and silver, but by
that of British commodities of some kind or other. When the
government, or those who acted under them, contracted with a merchant
for a remittance to some foreign country, he would naturally endeavour
to pay his foreign correspondent, upon whom he granted a bill, by
sending abroad rather commodities than gold and silver. If the
commodities of Great Britain were not in demand in that country, he
would endeavour to send them to some other country in which he could
purchase a bill upon that country. The transportation of commodities,
when properly suited to the market, is always attended with a
considerable profit; whereas that of gold and silver is scarce ever
attended with any. When those metals are sent abroad in order to
purchase foreign commodities, the merchant's profit arises, not from
the purchase, but from the sale of the returns. But when they are sent
abroad merely to pay a debt, he gets no returns, and consequently no
profit. He naturally, therefore, exerts his invention to find out a
way of paying his foreign debts, rather by the exportation of
commodities, than by that of gold and silver. The great quantity of
British goods, exported during the course of the late war, without
bringing back any returns, is accordingly remarked by the author of
the Present State of the Nation.
Besides the three sorts of gold and silver above mentioned,
there is
in all great commercial countries a good deal of bullion alternately
imported and exported, for the purposes of foreign trade. This
bullion, as it circulates among different commercial countries, in the
same manner as the national coin circulates in every country, may be
considered as the money of the great mercantile republic. The national
coin receives its movement and direction from the commodities
circulated within the precincts of each particular country; the money
in the mercantile republic, from those circulated between different
countries. Both are employed in facilitating exchanges, the one
between different individuals of the same, the other between those of
different nations. Part of this money of the great mercantile republic
may have been, and probably was, employed in carrying on the late war.
In time of a general war, it is natural to suppose that a movement and
direction should be impressed upon it, different from what it usually
follows in profound peace, that it should circulate more about the
seat of the war, and be more employed in purchasing there, and in the
neighbouring countries, the pay and provisions of the different
armies. But whatever part of this money of the mercantile republic
Great Britain may have annually employed in this manner, it must have
been annually purchased, either with British commodities, or with
something else that had been purchased with them; which still brings
us back to commodities, to the annual produce of the land and labour
of the country, as the ultimate resources which enabled us to carry on
the war. It is natural, indeed, to suppose, that so great an annual
expense must have been defrayed from a great annual produce. The
expense of 1761, for example, amounted to more than £19,000,000. No
accumulation could have supported so great an annual profusion. There
is no annual produce, even of gold and silver, which could have
supported it. The whole gold and silver annually imported into both
Spain and Portugal, according to the best accounts, does not commonly
much exceed £6,000,000 sterling, which, in some years, would scarce
have paid four months expense of the late war.
The commodities most proper for being transported to distant
countries, in order to purchase there either the pay and provisions of
an army, or some part of the money of the mercantile republic to be
employed in purchasing them, seem to be the finer and more improved
manufactures; such as contain a great value in a small bulk, and can
therefore be exported to a great distance at little expense. A country
whose industry produces a great annual surplus of such manufactures,
which are usually exported to foreign countries, may carry on for many
years a very expensive foreign war, without either exporting any
considerable quantity of gold and silver, or even having any such
quantity to export. A considerable part of the annual surplus of its
manufactures must, indeed, in this case, be exported without bringing
back any returns to the country, though it does to the merchant; the
government purchasing of the merchant his bills upon foreign
countries, in order to purchase there the pay and provisions of an
army. Some part of this surplus, however, may still continue to bring
back a return. The manufacturers during; the war will have a double
demand upon them, and be called upon first to work up goods to be sent
abroad, for paying the bills drawn upon foreign countries for the pay
and provisions of the army: and, secondly, to work up such as are
necessary for purchasing the common returns that had usually been
consumed in the country. In the midst of the most destructive foreign
war, therefore, the greater part of manufactures may frequently
flourish greatly; and, on the contrary, they may decline on the return
of peace. They may flourish amidst the ruin of their country, and
begin to decay upon the return of its prosperity. The different state
of many different branches of the British manufactures during the late
war, and for some time after the peace, may serve as an illustration
of what has been just now said.
No foreign war, of great expense or duration, could conveniently
be
carried on by the exportation of the rude produce of the soil. The
expense of sending such a quantity of it into a foreign country as
might purchase the pay and provisions of an army would be too great.
Few countries, too, produce much more rude produce than what is
sufficient for the subsistence of their own inhabitants. To send
abroad any great quantity of it, therefore, would be to send abroad a
part of the necessary subsistence of the people. It is otherwise with
the exportation of manufactures. The maintenance of the people
employed in them is kept at home, and only the surplus part of their
work is exported. Mr Hume frequently takes notice of the inability of
the ancient kings of England to carry on, without interruption, any
foreign war of long duration. The English in those days had nothing
wherewithal to purchase the pay and provisions of their armies in
foreign countries, but either the rude produce of the soil, of which
no considerable part could be spared from the home consumption, or a
few manufactures of the coarsest kind, of which, as well as of the
rude produce, the transportation was too expensive. This inability did
not arise from the want of money, but of the finer and more improved
manufactures. Buying and selling was transacted by means of money in
England then as well as now. The quantity of circulating money must
have borne the same proportion, to the number and value of purchases
and sales usually transacted at that time, which it does to those
transacted at present; or, rather, it must have borne a greater
proportion, because there was then no paper, which now occupies a
great part of the employment of gold and silver. Among nations to whom
commerce and manufactures are little known, the sovereign, upon
extraordinary occasions, can seldom draw any considerable aid from his
subjects, for reasons which shall be explained hereafter. It is in
such countries, therefore, that he generally endeavours to accumulate
a treasure, as the only resource against such emergencies. Independent
of this necessity, he is, in such a situation, naturally disposed to
the parsimony requisite for accumulation. In that simple state, the
expense even of a sovereign is not directed by the vanity which
delights in the gaudy finery of a court, but is employed in bounty to
his tenants, and hospitality to his retainers. But bounty and
hospitality very seldom lead to extravagance; though vanity almost
always does. Every Tartar chief, accordingly, has a treasure. The
treasures of Mazepa, chief of the Cossacks in the Ukraine, the famous
ally of Charles XII., are said to have been very great. The French
kings of the Merovingian race had all treasures. When they divided
their kingdom among their different children, they divided their
treasures too. The Saxon princes, and the first kings after the
Conquest, seem likewise to have accumulated treasures. The first
exploit of every new reign was commonly to seize the treasure of the
preceding king, as the most essential measure for securing the
succession. The sovereigns of improved and commercial countries are
not under the same necessity of accumulating treasures, because they
can generally draw from their subjects extraordinary aids upon
extraordinary occasions. They are likewise less disposed to do so.
They naturally, perhaps necessarily, follow the mode of the times; and
their expense comes to be regulated by the same extravagant vanity
which directs that of all the other great proprietors in their
dominions. The insignificant pageantry of their court becomes every
day more brilliant; and the expense of it not only prevents
accumulation, but frequently encroaches upon the funds destined for
more necessary expenses. What Dercyllidas said of the court of Persia,
may be applied to that of several European princes, that he saw there
much splendour, but little strength, and many servants, but few
soldiers.
The importation of gold and silver is not the principal, much
less the
sole benefit, which a nation derives from its foreign trade. Between
whatever places foreign trade is carried on, they all of them derive
two distinct benefits from it. It carries out that surplus part of the
produce of their land and labour for which there is no demand among
them, and brings back in return for it something else for which there
is a demand. It gives a value to their superfluities, by exchanging
them for something else, which may satisfy a part of their wants and
increase their enjoyments. By means of it, the narrowness of the home
market does not hinder the division of labour in any particular branch
of art or manufacture from being carried to the highest perfection. By
opening a more extensive market for whatever part of the produce of
their labour may exceed the home consumption, it encourages them to
improve its productive power, and to augment its annual produce to the
utmost, and thereby to increase the real revenue and wealth of the
society. These great and important services foreign trade is
continually occupied in performing to all the different countries
between which it is carried on. They all derive great benefit from it,
though that in which the merchant resides generally derives the
greatest, as he is generally more employed in supplying the wants, and
carrying out the superfluities of his own, than of any other
particular country. To import the gold and silver which may be wanted
into the countries which have no mines, is, no doubt a part of the
business of foreign commerce. It is, however, a most insignificant
part of it. A country which carried on foreign trade merely upon this
account, could scarce have occasion to freight a ship in a century.
It is not by the importation of gold and silver that the discovery
of
America has enriched Europe. By the abundance of the American mines,
those metals have become cheaper. A service of plate can now be
purchased for about a third part of the corn, or a third part of the
labour, which it would have cost in the fifteenth century. With the
same annual expense of labour and commodities, Europe can annually
purchase about three times the quantity of plate which it could have
purchased at that time. But when a commodity comes to be sold for a
third part of what bad been its usual price, not only those who
purchased it before can purchase three times their former quantity,
but it is brought down to the level of a much greater number of
purchasers, perhaps to more than ten, perhaps to more than twenty
times the former number. So that there may be in Europe at present,
not only more than three times, but more than twenty or thirty times
the quantity of plate which would have been in it, even in its present
state of improvement, had the discovery of the American mines never
been made. So far Europe has, no doubt, gained a real conveniency,
though surely a very trifling one. The cheapness of gold and silver
renders those metals rather less fit for the purposes of money than
they were before. In order to make the same purchases, we must load
ourselves with a greater quantity of them, and carry about a shilling
in our pocket, where a groat would have done before. It is difficult
to say which is most trifling, this inconveniency, or the opposite
conveniency. Neither the one nor the other could have made any very
essential change in the state of Europe. The discovery of America,
however, certainly made a most essential one. By opening a new and
inexhaustible market to all the commodities of Europe, it gave
occasion to new divisions of labour and improvements of art, which in
the narrow circle of the ancient commerce could never have taken
place, for want of a market to take off the greater part of their
produce. The productive powers of labour were improved, and its
produce increased in all the different countries of Europe, and
together with it the real revenue and wealth of the inhabitants. The
commodities of Europe were almost all new to America, and many of
those of America were new to Europe. A new set of exchanges,
therefore, began to take place, which had never been thought of
before, and which should naturally have proved as advantageous to the
new, as it certainly did to the old continent. The savage injustice of
the Europeans rendered an event, which ought to have been beneficial
to all, ruinous and destructive to several of those unfortunate
countries.
The discovery of a passage to the East Indies by the Cape of
Good
Hope, which happened much about the same time, opened perhaps a still
more extensive range to foreign commerce, than even that of America,
notwithstanding the greater distance. There were but two nations in
America, in any respect, superior to the savages, and these were
destroyed almost as soon as discovered. The rest were mere savages.
But the empires of China, Indostan, Japan, as well as several others
in the East Indies, without having richer mines of gold or silver,
were, in every other respect, much richer, better cultivated, and more
advanced in all arts and manufactures, than either Mexico or Peru,
even though we should credit, what plainly deserves no credit, the
exaggerated accounts of the Spanish writers concerning the ancient
state of those empires. But rich and civilized nations can always
exchange to a much greater value with one another, than with savages
and barbarians. Europe, however, has hitherto derived much less
advantage from its commerce with the East Indies, than from that with
America. The Portuguese monopolized the East India trade to themselves
for about a century; and it was only indirectly, and through them,
that the other nations of Europe could either send out or receive any
goods from that country. When the Dutch, in the beginning of the last
century, began to encroach upon them, they vested their whole East
India commerce in an exclusive company. The English, French, Swedes,
and Danes, have all followed their example; so that no great nation of
Europe has ever yet had the benefit of a free commerce to the East
Indies. No other reason need be assigned why it has never been so
advantageous as the trade to America, which, between almost every
nation of Europe and its own colonies, is free to all its subjects.
The exclusive privileges of those East India companies, their great
riches, the great favour and protection which these have procured them
from their respective governments, have excited much envy against
them. This envy has frequently represented their trade as altogether
pernicious, on account of the great quantities of silver which it
every year exports from the countries from which it is carried on. The
parties concerned have replied, that their trade by this continual
exportation of silver, might indeed tend to impoverish Europe in
general, but not the particular country from which it was carried on;
because, by the exportation of a part of the returns to other European
countries, it annually brought home a much greater quantity of that
metal than it carried out. Both the objection and the reply are
founded in the popular notion which I have been just now examining. It
is therefore unnecessary to say any thing further about either. By the
annual exportation of silver to the East Indies, plate is probably
somewhat dearer in Europe than it otherwise might have been; and
coined silver probably purchases a larger quantity both of labour and
commodities. The former of these two effects is a very small loss, the
latter a very small advantage; both too insignificant to deserve any
part of the public attention. The trade to the East Indies, by opening
a market to the commodities of Europe, or, what comes nearly to the
same thing, to the gold and silver which is purchased with those
commodities, must necessarily tend to increase the annual production
of European commodities, and consequently the real wealth and revenue
of Europe. That it has hitherto increased them so little, is probably
owing to the restraints which it everywhere labours under.
I thought it necessary, though at the hazard of being tedious,
to
examine at full length this popular notion, that wealth consists in
money or in gold and silver. Money, in common language, as I have
already observed, frequently signifies wealth; and this ambiguity of
expression has rendered this popular notion so familiar to us, that
even they who are convinced of its absurdity, are very apt to forget
their own principles, and, in the course of their reasonings, to take
it for granted as a certain and undeniable truth. Some of the best
English writers upon commerce set out with observing, that the wealth
of a country consists, not in its gold and silver only, but in its
lands, houses, and consumable goods of all different kinds. In the
course of their reasonings, however, the lands, houses, and consumable
goods, seem to slip out of their memory; and the strain of their
argument frequently supposes that all wealth consists in gold and
silver, and that to multiply those metals is the great object of
national industry and commerce.
The two principles being established, however, that wealth consisted
in gold and silver, and that those metals could be brought into a
country which had no mines, only by the balance of trade, or by
exporting to a greater value than it imported; it necessarily became
the great object of political economy to diminish as much as possible
the importation of foreign goods for home consumption, and to increase
as much as possible the exportation of the produce of domestic
industry. Its two great engines for enriching the country, therefore,
were restraints upon importation, and encouragement to exportation.
The restraints upon importation were of two kinds.
First, restraints upon the importation of such foreign goods
for home
consumption as could be produced at home, from whatever country they
were imported.
Secondly, restraints upon the importation of goods of almost
all
kinds, from those particular countries with which the balance of trade
was supposed to be disadvantageous.
Those different restraints consisted sometimes in high duties,
and
sometimes in absolute prohibitions.
Exportation was encouraged sometimes by drawbacks, sometimes
by
bounties, sometimes by advantageous treaties of commerce with foreign
states, and sometimes by the establishment of colonies in distant
countries.
Drawbacks were given upon two different occasions. When the
home
manufactures were subject to any duty or excise, either the whole or a
part of it was frequently drawn back upon their exportation; and when
foreign goods liable to a duty were imported, in order to be exported
again, either the whole or a part of this duty was sometimes given
back upon such exportation.
Bounties were given for the encouragement, either of some beginning
manufactures, or of such sorts of industry of other kinds as were
supposed to deserve particular favour.
By advantageous treaties of commerce, particular privileges
were
procured in some foreign state for the goods and merchants of the
country, beyond what were granted to those of other countries.
By the establishment of colonies in distant countries, not only
particular privileges, but a monopoly was frequently procured for the
goods and merchants of the country which established them.
The two sorts of restraints upon importation above mentioned,
together
with these four encouragements to exportation, constitute the six
principal means by which the commercial system proposes to increase
the quantity of gold and silver in any country, by turning the balance
of trade in its favour. I shall consider each of them in a particular
chapter, and, without taking much farther notice of their supposed
tendency to bring money into the country, I shall examine chiefly what
are likely to be the effects of each of them upon the annual produce
of its industry. According as they tend either to increase or diminish
the value of this annual produce, they must evidently tend either to
increase or diminish the real wealth and revenue of the country.
CHAPTER II.
OF RESTRAINTS UPON IMPORTATION FROM FOREIGN COUNTRIES OF SUCH GOODS AS CAN BE PRODUCED AT HOME.
By restraining, either by high duties, or by absolute prohibitions,
the importation of such goods from foreign countries as can be
produced at home, the monopoly of the home market is more or less
secured to the domestic industry employed in producing them. Thus the
prohibition of importing either live cattle or salt provisions from
foreign countries, secures to the graziers of Great Britain the
monopoly of the home market for butcher's meat. The high duties upon
the importation of corn, which, in times of moderate plenty, amount to
a prohibition, give a like advantage to the growers of that commodity.
The prohibition of the importation of foreign woollen is equally
favourable to the woollen manufacturers. The silk manufacture, though
altogether employed upon foreign materials, has lately obtained the
same advantage. The linen manufacture has not yet obtained it, but is
making great strides towards it. Many other sorts of manufactures
have, in the same manner obtained in Great Britain, either altogether,
or very nearly, a monopoly against their countrymen. The variety of
goods, of which the importation into Great Britain is prohibited,
either absolutely, or under certain circumstances, greatly exceeds
what can easily be suspected by those who are not well acquainted with
the laws of the customs.
That this monopoly of the home market frequently gives great
encouragement to that particular species of industry which enjoys it,
and frequently turns towards that employment a greater share of both
the labour and stock of the society than would otherwise have gone to
it, cannot be doubted. But whether it tends either to increase the
general industry of the society, or to give it the most advantageous
direction, is not, perhaps, altogether so evident.
The general industry of the society can never exceed what the
capital
of the society can employ. As the number of workmen that can be kept
in employment by any particular person must bear a certain proportion
to his capital, so the number of those that can be continually
employed by all the members of a great society must bear a certain
proportion to the whole capital of the society, and never can exceed
that proportion. No regulation of commerce can increase the quantity
of industry in any society beyond what its capital can maintain. It
can only divert a part of it into a direction into which it might not
otherwise have gone; and it is by no means certain that this
artificial direction is likely to be more advantageous to the society,
than that into which it would have gone of its own accord.
Every individual is continually exerting himself to find out
the most
advantageous employment for whatever capital he can command. It is his
own advantage, indeed, and not that of the society, which he has in
view. But the study of his own advantage naturally, or rather
necessarily, leads him to prefer that employment which is most
advantageous to the society.
First, every individual endeavours to employ his capital as
near home
as he can, and consequently as much as he can in the support of
domestic industry, provided always that he can thereby obtain the
ordinary, or not a great deal less than the ordinary profits of stock.
Thus, upon equal, or nearly equal profits, every wholesale merchant
naturally prefers the home trade to the foreign trade of consumption,
and the foreign trade of consumption to the carrying trade. In the
home trade, his capital is never so long out of his sight as it
frequently is in the foreign trade of consumption. He can know better
the character and situation of the persons whom he trusts; and if he
should happen to be deceived, he knows better the laws of the country
from which he must seek redress. In the carrying trade, the capital of
the merchant is, as it were, divided between two foreign countries,
and no part of it is ever necessarily brought home, or placed under
his own immediate view and command. The capital which an Amsterdam
merchant employs in carrying corn from Koningsberg to Lisbon, and
fruit and wine from Lisbon to Koningsberg, must generally be the one
half of it at Koningsberg, and the other half at Lisbon. No part of it
need ever come to Amsterdam. The natural residence of such a merchant
should either be at Koningsberg or Lisbon; and it can only be some
very particular circumstances which can make him prefer the residence
of Amsterdam. The uneasiness, however, which he feels at being
separated so far from his capital, generally determines him to bring
part both of the Koningsberg goods which he destines for the market of
Lisbon, and of the Lisbon goods which he destines for that of
Koningsberg, to Amsterdam; and though this necessarily subjects him to
a double charge of loading and unloading as well as to the payment of
some duties and customs, yet, for the sake of having some part of his
capital always under his own view and command, he willingly submits to
this extraordinary charge; and it is in this manner that every country
which has any considerable share of the carrying trade, becomes always
the emporium, or general market, for the goods of all the different
countries whose trade it carries on. The merchant, in order to save a
second loading and unloading, endeavours always to sell in the home
market, as much of the goods of all those different countries as he
can; and thus, so far as he can, to convert his carrying trade into a
foreign trade of consumption. A merchant, in the same manner, who is
engaged in the foreign trade of consumption, when he collects goods
for foreign markets, will always be glad, upon equal or nearly equal
profits, to sell as great a part of them at home as he can. He saves
himself the risk and trouble of exportation, when, so far as he can,
he thus converts his foreign trade of consumption into a home trade.
Home is in this manner the centre, if I may say so, round which the
capitals of the inhabitants of every country are continually
circulating, and towards which they are always tending, though, by
particular causes, they may sometimes be driven off and repelled from
it towards more distant employments. But a capital employed in the
home trade, it has already been shown, necessarily puts into motion a
greater quantity of domestic industry, and gives revenue and
employment to a greater number of the inhabitants of the country, than
an equal capital employed in the foreign trade of consumption; and one
employed in the foreign trade of consumption has the same advantage
over an equal capital employed in the carrying trade. Upon equal, or
only nearly equal profits, therefore, every individual naturally
inclines to employ his capital in the manner in which it is likely to
afford the greatest support to domestic industry, and to give revenue
and employment to the greatest number of people of his own country.
Secondly, every individual who employs his capital in the support
of
domestic industry, necessarily endeavours so to direct that industry,
that its produce may be of the greatest possible value.
The produce of industry is what it adds to the subject or materials
upon which it is employed. In proportion as the value of this produce
is great or small, so will likewise be the profits of the employer.
But it is only for the sake of profit that any man employs a capital
in the support of industry; and he will always, therefore, endeavour
to employ it in the support of that industry of which the produce is
likely to be of the greatest value, or to exchange for the greatest
quantity either of money or of other goods.
But the annual revenue of every society is always precisely
equal to
the exchangeable value of the whole annual produce of its industry, or
rather is precisely the same thing with that exchangeable value. As
every individual, therefore, endeavours as much as he can, both to
employ his capital in the support of domestic industry, and so to
direct that industry that its produce maybe of the greatest value;
every individual necessarily labours to render the annual revenue of
the society as great as he can. He generally, indeed, neither intends
to promote the public interest, nor knows how much he is promoting it.
By preferring the support of domestic to that of foreign industry, he
intends only his own security; and by directing that industry in such
a manner as its produce may be of the greatest value, he intends only
his own gain; and he is in this, as in many other cases, led by an
invisible hand to promote an end which was no part of his intention.
Nor is it always the worse for the society that it was no part of it.
By pursuing his own interest, he frequently promotes that of the
society more effectually than when he really intends to promote it. I
have never known much good done by those who affected to trade for the
public good. It is an affectation, indeed, not very common among
merchants, and very few words need be employed in dissuading them from
it.
What is the species of domestic industry which his capital can
employ,
and of which the produce is likely to be of the greatest value, every
individual, it is evident, can in his local situation judge much
better than any statesman or lawgiver can do for him. The statesman,
who should attempt to direct private people in what manner they ought
to employ their capitals, would not only load himself with a most
unnecessary attention, but assume an authority which could safely be
trusted, not only to no single person, but to no council or senate
whatever, and which would nowhere be so dangerous as in the hands of a
man who had folly and presumption enough to fancy himself fit to
exercise it.
To give the monopoly of the home market to the produce of domestic
industry, in any particular art or manufacture, is in some measure to
direct private people in what manner they ought to employ their
capitals, and must in almost all cases be either a useless or a
hurtful regulation. If the produce of domestic can be brought there as
cheap as that of foreign industry, the regulation is evidently
useless. If it cannot, it must generally be hurtful. It is the maxim
of every prudent master of a family, never to attempt to make at home
what it will cost him more to make than to buy. The tailor does not
attempt to make his own shoes, but buys them of the shoemaker. The
shoemaker does not attempt to make his own clothes, but employs a
tailor. The farmer attempts to make neither the one nor the other, but
employs those different artificers. All of them find it for their
interest to employ their whole industry in a way in which they have
some advantage over their neighbours, and to purchase with a part of
its produce, or, what is the same thing, with the price of a part of
it, whatever else they have occasion for.
What is prudence in the conduct of every private family, can
scarce be
folly In that of a great kingdom. If a foreign country can supply us
with a commodity cheaper than we ourselves can make it, better buy it
of them with some part of the produce of our own industry, employed in
a way in which we have some advantage. The general industry of the
country being always in proportion to the capital which employs it,
will not thereby be diminished, no more than that of the
abovementioned artificers; but only left to find out the way in which
it can be employed with the greatest advantage. It is certainly not
employed to the greatest advantage, when it is thus directed towards
an object which it can buy cheaper than it can make. The value of its
annual produce is certainly more or less diminished, when it is thus
turned away from producing commodities evidently of more value than
the commodity which it is directed to produce. According to the
supposition, that commodity could be purchased from foreign countries
cheaper than it can be made at home; it could therefore have been
purchased with a part only of the commodities, or, what is the same
thing, with a part only of the price of the commodities, which the
industry employed by an equal capital would have produced at home, had
it been left to follow its natural course. The industry of the
country, therefore, is thus turned away from a more to a less
advantageous employment; and the exchangeable value of its annual
produce, instead of being increased, according to the intention of the
lawgiver, must necessarily be diminished by every such regulation.
By means of such regulations, indeed, a particular manufacture
may
sometimes be acquired sooner than it could have been otherwise, and
after a certain time may be made at home as cheap, or cheaper, than in
the foreign country. But though the industry of the society may be
thus carried with advantage into a particular channel sooner than it
could have been otherwise, it will by no means follow that the
sum-total, either of its industry, or of its revenue, can ever be
augmented by any such regulation. The industry of the society can
augment only in proportion as its capital augments, and its capital
can augment only in proportion to what can be gradually saved out of
its revenue. But the immediate effect of every such regulation is to
diminish its revenue; and what diminishes its revenue is certainly not
very likely to augment its capital faster than it would have augmented
of its own accord, had both capital and industry been left to find out
their natural employments.
Though, for want of such regulations, the society should never
acquire
the proposed manufacture, it would not upon that account necessarily
be the poorer in anyone period of its duration. In every period of its
duration its whole capital and industry might still have been
employed, though upon different objects, in the manner that was most
advantageous at the time. In every period its revenue might have been
the greatest which its capital could afford, and both capital and
revenue might have been augmented with the greatest possible rapidity.
The natural advantages which one country has over another, in
producing particular commodities, are sometimes so great, that it is
acknowledged by all the world to be in vain to struggle with them. By
means of glasses, hot-beds, and hot-walls, very good grapes can be
raised in Scotland, and very good wine, too, can be made of them, at
about thirty times the expense for which at least equally good can be
brought from foreign countries. Would it be a reasonable law to
prohibit the importation of all foreign wines, merely to encourage the
making of claret and Burgundy in Scotland? But if there would be a
manifest absurdity in turning towards any employment thirty times more
of the capital and industry of the country than would be necessary to
purchase from foreign countries an equal quantity of the commodities
wanted, there must be an absurdity, though not altogether so glaring,
yet exactly of the same kind, in turning towards any such employment a
thirtieth, or even a three hundredth part more of either. Whether the
advantages which one country has over another be natural or acquired,
is in this respect of no consequence. As long as the one country has
those advantages, and the other wants them, it will always be more
advantageous for the latter rather to buy of the former than to make.
It is an acquired advantage only, which one artificer has over his
neighbour, who exercises another trade; and yet they both find it more
advantageous to buy of one another, than to make what does not belong
to their particular trades.
Merchants and manufacturers are the people who derive the greatest
advantage from this monopoly of the home market The prohibition of the
importation of foreign cattle and of salt provisions, together with
the high duties upon foreign corn, which in times of moderate plenty
amount to a prohibition, are not near so advantageous to the graziers
and farmers of Great Britain, as other regulations of the same kind
are to its merchants and manufacturers. Manufactures, those of the
finer kind especially, are more easily transported from one country to
another than corn or cattle. It is in the fetching and carrying
manufactures, accordingly, that foreign trade is chiefly employed. In
manufactures, a very small advantage will enable foreigners to
undersell our own workmen, even in the home market. It will require a
very great one to enable them to do so in the rude produce of the
soil. If the free importation of foreign manufactures were permitted,
several of the home manufactures would probably suffer,and some of
them perhaps go to ruin altogether, and a considerable part of the
stock and industry at present employed in them, would be forced to
find out some other employment. But the freest importation of the rude
produce of the soil could have no such effect upon the agriculture of
the country.
If the importation of foreign cattle, for example, were made
ever so
free, so few could be imported, that the grazing trade of Great
Britain could be little affected by it. Live cattle are, perhaps, the
only commodity of which the transportation is more expensive by sea
than by land. By land they carry themselves to market. By sea, not
only the cattle, but their food and their water too, must be carried
at no small expense and inconveniency. The short sea between Ireland
and Great Britain, indeed, renders the importation of Irish cattle
more easy. But though the free importation of them, which was lately
permitted only for a limited time, were rendered perpetual, it could
have no considerable effect upon the interest of the graziers of Great
Britain. Those parts of Great Britain which border upon the Irish sea
are all grazing countries. Irish cattle could never be imported for
their use, but must be drove through those very extensive countries,
at no small expense and inconveniency, before they could arrive at
their proper market. Fat cattle could not be drove so far. Lean
cattle, therefore, could only be imported; and such importation could
interfere not with the interest of the feeding or fattening countries,
to which, by reducing the price of lean cattle it would rather be
advantageous, but with that of the breeding countries only. The small
number of Irish cattle imported since their importation was permitted,
together with the good price at which lean cattle still continue to
sell, seem to demonstrate, that even the breeding countries of Great
Britain are never likely to be much affected by the free importation
of Irish cattle. The common people of Ireland, indeed, are said to
have sometimes opposed with violence the exportation of their cattle.
But if the exporters had found any great advantage in continuing the
trade, they could easily, when the law was on their side, have
conquered this mobbish opposition.
Feeding and fattening countries, besides, must always be highly
improved, whereas breeding countries are generally uncultivated. The
high price of lean cattle, by augmenting the value of uncultivated
land, is like a bounty against improvement. To any country which was
highly improved throughout, it would be more advantageous to import
its lean cattle than to breed them. The province of Holland,
accordingly, is said to follow this maxim at present. The mountains of
Scotland, Wales, and Northumberland, indeed, are countries not capable
of much improvement, and seem destined by nature to be the breeding
countries of Great Britain. The freest importation of foreign cattle
could have no other effect than to hinder those breeding countries
from taking advantage of the increasing population and improvement of
the rest of the kingdom, from raising their price to an exorbitant
height, and from laying a real tax upon all the more improved and
cultivated parts of the country.
The freest importation of salt provisions, in the same manner,
could
have as little effect upon the interest of the graziers of Great
Britain as that of live cattle. Salt provisions are not only a very
bulky commodity, but when compared with fresh meat they are a
commodity both of worse quality, and, as they cost more labour and
expense, of higher price. They could never, therefore, come into
competition with the fresh meat, though they might with the salt
provisions of the country. They might be used for victualling ships
for distant voyages, and such like uses, but could never make any
considerable part of the food of the people. The small quantity of
salt provisions imported from Ireland since their importation was
rendered free, is an experimental proof that our graziers have nothing
to apprehend from it. It does not appear that the price of butcher's
meat has ever been sensibly affected by it.
Even the free importation of foreign corn could very little
affect the
interest of the farmers of Great Britain. Corn is a much more bulky
commodity than butcher's meat. A pound of wheat at a penny is as dear
as a pound of butcher's meat at fourpence. The small quantity of
foreign corn imported even in times of the greatest scarcity, may
satisfy our farmers that they can have nothing to fear from the freest
importation. The average quantity imported, one year with another,
amounts only, according to the very well informed author of the Tracts
upon the Corn Trade, to 23,728 quarters of all sorts of grain, and
does not exceed the five hundredth and seventy-one part of the annual
consumption. But as the bounty upon corn occasions a greater
exportation in years of plenty, so it must, of consequence, occasion a
greater importation in years of scarcity, than in the actual state of
tillage would otherwise take place. By means of it, the plenty of one
year does not compensate the scarcity of another; and as the average
quantity exported is necessarily augmented by it, so must likewise, in
the actual state of tillage, the average quantity imported. If there
were no bounty, as less corn would be exported, suit is probable that,
one year with another, less would be imported than at present. The
corn-merchants, the fetchers and carriers of corn between Great
Britain and foreign countries, would have much less employment, and
might suffer considerably; but the country gentlemen and farmers could
suffer very little. It is in the corn-merchants, accordingly, rather
than the country gentlemen and farmers, that I have observed the
greatest anxiety for the renewal and continuation of the bounty.
Country gentlemen and farmers are, to their great honour, of
all
people, the least subject to the wretched spirit of monopoly. The
undertaker of a great manufactory is sometimes alarmed if another work
of the same kind is established within twenty miles of him; the Dutch
undertaker of the woollen manufacture at Abbeville, stipulated that no
work of the same kind should be established within thirty leagues of
that city. Farmers and country gentlemen, on the contrary, are
generally disposed rather to promote, than to obstruct, the
cultivation and improvement of their neighbours farms and estates.
They have no secrets, such as those of the greater part of
manufacturers, but are generally rather fond of communicating to their
neighbours, and of extending as far as possible any new practice which
they may have found to be advantageous. "Pius quaestus", says old
Cato, "stabilissimusque, minimeque invidiosus; minimeque male
cogitantes sunt, qui in eo studio occupati sunt." Country gentlemen
and farmers, dispersed in different parts of the country, cannot so
easily combine as merchants and manufacturers, who being collected
into towns, and accustomed to that exclusive corporation spirit which
prevails in them, naturally endeavour to obtain, against all their
countrymen, the same exclusive privilege which they generally possess
against the inhabitants of their respective towns. They accordingly
seem to have been the original inventors of those restraints upon the
importation of foreign goods, which secure to them the monopoly of the
home market. It was probably in imitation of them, and to put
themselves upon a level with those who, they found, were disposed to
oppress them, that the country gentlemen and farmers of Great Britain
so far forgot the generosity which is natural to their station, as to
demand the exclusive privilege of supplying their countrymen with corn
and butcher's meat. They did not, perhaps, take time to consider how
much less their interest could be affected by the freedom of trade,
than that of the people whose example they followed.
To prohibit, by a perpetual law, the importation of foreign
corn and
cattle, is in reality to enact, that the population and industry of
the country shall, at no time, exceed what the rude produce of its own
soil can maintain.
There seem, however, to be two cases, in which it will generally
be
advantageous to lay some burden upon foreign, for the encouragement of
domestic industry.
The first is, when some particular sort of industry is necessary
for
the defence of the country. The defence of Great Britain, for example,
depends very much upon the number of its sailors and shipping. The act
of navigation, therefore, very properly endeavours to give the sailors
and shipping of Great Britain the monopoly of the trade of their own
country, in some cases, by absolute prohibitions, and in others, by
heavy burdens upon the shipping of foreign countries. The following
are the principal dispositions of this act.
First, All ships, of which the owners, masters, and three-fourths
of
the mariners, are not British subjects, are prohibited, upon pain of
forfeiting ship and cargo, from trading to the British settlements and
plantations, or from being employed in the coasting trade of Great
Britain.
Secondly, A great variety of the most bulky articles of importation
can be brought into Great Britain only, either in such ships as are
above described, or in ships of the country where those goods are
produced, and of which the owners, masters, and three-fourths of the
mariners, are of that particular country; and when imported even in
ships of this latter kind, they are subject to double aliens duty. If
imported in ships of any other country, the penalty is forfeiture of
ship and goods. When this act was made, the Dutch were, what they
still are, the great carriers of Europe; and by this regulation they
were entirely excluded from being the carriers to Great Britain, or
from importing to us the goods of any other European country.
Thirdly, A great variety of the most bulky articles of importation
are
prohibited from being imported, even in British ships, from any
country but that in which they are produced, under pain of forfeiting
ship and cargo. This regulation, too, was probably intended against
the Dutch. Holland was then, as now, the great emporium for all
European goods; and by this regulation, British ships were hindered
from loading in Holland the goods of any other European country.
Fourthly, Salt fish of all kinds, whale fins, whalebone, oil,
and
blubber, not caught by and cured on board British vessels, when
imported into Great Britain, are subject to double aliens duty. The
Dutch, as they are still the principal, were then the only fishers in
Europe that attempted to supply foreign nations with fish. By this
regulation, a very heavy burden was laid upon their supplying Great
Britain.
When the act of navigation was made, though England and Holland
were
not actually at war, the most violent animosity subsisted between the
two nations. It had begun during the government of the long
parliament, which first framed this act, and it broke out soon after
in the Dutch wars, during that of the Protector and of Charles II. It
is not impossible, therefore, that some of the regulations of this
famous act may have proceeded from national animosity. They are as
wise, however, as if they had all been dictated by the most deliberate
wisdom. National animosity, at that particular time, aimed at the very
same object which the most deliberate wisdom would have recommended,
the diminution of the naval power of Holland, the only naval power
which could endanger the security of England.
The act of navigation is not favourable to foreign commerce,
or to the
growth of that opulence which can arise from it. The interest of a
nation, in its commercial relations to foreign nations, is, like that
of a merchant with regard to the different people with whom he deals,
to buy as cheap, and to sell as dear as possible. But it will be most
likely to buy cheap, when, by the most perfect freedom of trade, it
encourages all nations to bring to it the goods which it has occasion
to purchase; and, for the same reason, it will be most likely to sell
dear, when its markets are thus filled with the greatest number of
buyers. The act of navigation, it is true, lays no burden upon foreign
ships that come to export the produce of British industry. Even the
ancient aliens duty, which used to be paid upon all goods, exported as
well as imported, has, by several subsequent acts, been taken off from
the greater part of the articles of exportation. But if foreigners,
either by prohibitions or high duties, are hindered from coming to
sell, they cannot always afford to come to buy; because, coming
without a cargo, they must lose the freight from their own country to
Great Britain. By diminishing the number of sellers, therefore, we
necessarily diminish that of buyers, and are thus likely not only to
buy foreign goods dearer, but to sell our own cheaper, than if there
was a more perfect freedom of trade. As defence, however, is of much
more importance than opulence, the act of navigation is, perhaps, the
wisest of all the commercial regulations of England.
The second case, in which it will generally be advantageous
to lay
some burden upon foreign for the encouragement of domestic industry,
is when some tax is imposed at home upon the produce of the latter. In
this case, it seems reasonable that an equal tax should be imposed
upon the like produce of the former. This would not give the monopoly
of the borne market to domestic industry, nor turn towards a
particular employment a greater share of the stock and labour of the
country, than what would naturally go to it. It would only hinder any
part of what would naturally go to it from being turned away by the
tax into a less natural direction, and would leave the competition
between foreign and domestic industry, after the tax, as nearly as
possible upon the same footing as before it. In Great Britain, when
any such tax is laid upon the produce of domestic industry, it is
usual, at the same time, in order to stop the clamorous complaints of
our merchants and manufacturers, that they will be undersold at home,
to lay a much heavier duty upon the importation of all foreign goods
of the same kind.
This second limitation of the freedom of trade, according to
some
people, should, upon most occasions, be extended much farther than to
the precise foreign commodities which could come into competition with
those which had been taxed at home. When the necessaries of life have
been taxed in any country, it becomes proper, they pretend, to tax not
only the like necessaries of life imported from other countries, but
all sorts of foreign goods which can come into competition with any
thing that is the produce of domestic industry. Subsistence, they say,
becomes necessarily dearer in consequence of such taxes; and the price
of labour must always rise with the price of the labourer's
subsistence. Every commodity, therefore, which is the produce of
domestic industry, though not immediately taxed itself, becomes dearer
in consequence of such taxes, because the labour which produces it
becomes so. Such taxes, therefore, are really equivalent, they say, to
a tax upon every particular commodity produced at home. In order to
put domestic upon the same footing with foreign industry, therefore,
it becomes necessary, they think, to lay some duty upon every foreign
commodity, equal to this enhancement of the price of the home
commodities with which it can come into competition.
Whether taxes upon the necessaries of life, such as those in
Great
Britain upon soap, salt, leather, candles, etc. necessarily raise the
price of labour, and consequently that of all other commodities, I
shall consider hereafter, when I come to treat of taxes. Supposing,
however, in the mean time, that they have this effect, and they have
it undoubtedly, this general enhancement of the price of all
commodities, in consequence of that labour, is a case which differs in
the two following respects from that of a particular commodity, of
which the price was enhanced by a particular tax immediately imposed
upon it.
First, It might always be known with great exactness, how far
the
price of such a commodity could be enhanced by such a tax; but how far
the general enhancement of the price of labour might affect that of
every different commodity about which labour was employed, could never
be known with any tolerable exactness. It would be impossible,
therefore, to proportion, with any tolerable exactness, the tax of
every foreign, to the enhancement of the price of every home
commodity.
Secondly, Taxes upon the necessaries of life have nearly the
same
effect upon the circumstances of the people as a poor soil and a bad
climate. Provisions are thereby rendered dearer, in the same manner as
if it required extraordinary labour and expense to raise them. As, in
the natural scarcity arising from soil and climate, it would be absurd
to direct the people in what manner they ought to employ their
capitals and industry, so is it likewise in the artificial scarcity
arising from such taxes. To be left to accommodate, as well as they
could, their industry to their situation, and to find out those
employments in which, notwithstanding their unfavourable
circumstances, they might have some advantage either in the home or in
the foreign market, is what, in both cases, would evidently be most
for their advantage. To lay a new-tax upon them, because they are
already overburdened with taxes, and because they already pay too dear
for the necessaries of life, to make them likewise pay too dear for
the greater part of other commodities, is certainly a most absurd way
of making amends.
Such taxes, when they have grown up to a certain height, are
a curse
equal to the barrenness of the earth, and the inclemency of the
heavens, and yet it is in the richest and most industrious countries
that they have been most generally imposed. No other countries could
support so great a disorder. As the strongest bodies only can live and
enjoy health under an unwholesome regimen, so the nations only, that
in every sort of industry have the greatest natural and acquired
advantages, can subsist and prosper under such taxes. Holland is the
country in Europe in which they abound most, and which, from peculiar
circumstances, continues to prosper, not by means of them, as has been
most absurdly supposed, but in spite of them.
As there are two cases in which it will generally be advantageous
to
lay some burden upon foreign for the encouragement of domestic
industry, so there are two others in which it may sometimes be a
matter of deliberation, in the one, how far it is proper to continue
the free importation of certain foreign goods; and, in the other, how
far, or in what manner, it may be proper to restore that free
importation, after it has been for some time interrupted.
The case in which it may sometimes be a matter of deliberation
how far
it is proper to continue the free importation of certain foreign
goods, is when some foreign nation restrains, by high duties or
prohibitions, the importation of some of our manufactures into their
country. Revenge, in this case, naturally dictates retaliation, and
that we should impose the like duties and prohibitions upon the
importation of some or all of their manufactures into ours. Nations,
accordingly, seldom fail to retaliate in this manner. The French have
been particularly forward to favour their own manufactures, by
restraining the importation of such foreign goods as could come into
competition with them. In this consisted a great part of the policy of
Mr Colbert, who, notwithstanding his great abilities, seems in this
case to have been imposed upon by the sophistry of merchants and
manufacturers, who are always demanding a monopoly against their
countrymen. It is at present the opinion of the most intelligent men
in France, that his operations of this kind have not been beneficial
to his country. That minister, by the tariff of 1667, imposed very
high duties upon a great number of foreign manufactures. Upon his
refusing to moderate them in favour of the Dutch, they, in 1671,
prohibited the importation of the wines, brandies, and manufactures of
France. The war of 1672 seems to have been in part occasioned by this
commercial dispute. The peace of Nimeguen put an end to it in 1678, by
moderating some of those duties in favour of the Dutch, who in
consequence took off their prohibition. It was about the same time
that the French and English began mutually to oppress each other's
industry, by the like duties and prohibitions, of which the French,
however, seem to have set the first example, The spirit of hostility
which has subsisted between the two nations ever since, has hitherto
hindered them from being moderated on either side. In 1697, the
Ehglish prohibited the importation of bone lace, the manufacture of
Flanders. The government of that country, at that time under the
dominion of Spain, prohibited, in return, the importation of English
woollens. In 1700, the prohibition of importing bone lace into England
was taken oft; upon condition that the importation of English woollens
into Flanders should be put on the same footing as before.
There may be good policy in retaliations of this kind, when
there is a
probability that they will procure the repeal of the high duties or
prohibitions complained of. The recovery of a great foreign market
will generally more than compensate the transitory inconveniency of
paying dearer during a short time for some sorts of goods. To judge
whether such retaliations are likely to produce such an effect, does
not, perhaps, belong so much to the science of a legislator, whose
deliberations ought to be governed by general principles, which are
always the same, as to the skill of that insidious and crafty animal
vulgarly called a statesman or politician, whose councils are directed
by the momentary fluctuations of affairs. When there is no probability
that any such repeal can be procured, it seems a bad method of
compensating the injury done to certain classes of our people, to do
another injury ourselves, not only to those classes, but to almost all
the other classes of them. When our neighbours prohibit some
manufacture of ours, we generally prohibit, not only the same, for
that alone would seldom affect them considerably, but some other
manufacture of theirs. This may, no doubt, give encouragement to some
particular class of workmen among ourselves, and, by excluding some of
their rivals, may enable them to raise their price in the home market.
Those workmen however, who suffered by our neighbours prohibition,
will not be benefited by ours. On the contrary, they, and almost all
the other classes of our citizens, will thereby be obliged to pay
dearer than before for certain goods. Every such law, therefore,
imposes a real tax upon the whole country, not in favour of that
particular class of workmen who were injured by our neighbours
prohibitions, but of some other class.
The case in which it may sometimes be a matter of deliberation,
how
far, or in what manner, it is proper to restore the free importation
of foreign goods, after it has been for some time interrupted, is when
particular manufactures, by means of high duties or prohibitions upon
all foreign goods which can come into competition with them, have been
so far extended as to employ a great multitude of hands. Humanity may
in this case require that the freedom of trade should be restored only
by slow gradations, and with a good deal of reserve and
circumspection. Were those high duties and prohibitions taken away all
at once, cheaper foreign goods of the same kind might be poured so
fast into the home market, as to deprive all at once many thousands of
our people of their ordinary employment and means of subsistence. The
disorder which this would occasion might no doubt be very
considerable. It would in all probability, however, be much less than
is commonly imagined, for the two following reasons.
First, All those manufactures of which any part is commonly
exported
to other European countries without a bounty, could be very little
affected by the freest importation of foreign goods. Such manufactures
must be sold as cheap abroad as any other foreign goods of the same
quality and kind, and consequently must be sold cheaper at home. They
would still, therefore, keep possession of the home market; and though
a capricious man of fashion might sometimes prefer foreign wares,
merely because they were foreign, to cheaper and better goods of the
same kind that were made at home, this folly could, from the nature of
things, extend to so few, that it could make no sensible impression
upon the general employment of the people. But a great part of all the
different branches of our woollen manufacture, of our tanned leather,
and of our hardware, are annually exported to other European countries
without any bounty, and these are the manufactures which employ the
greatest number of hands. The silk, perhaps, is the manufacture which
would suffer the most by this freedom of trade, and after it the
linen, though the latter much less than the former.
Secondly, Though a great number of people should, by thus restoring
the freedom of trade, be thrown all at once out of their ordinary
employment and common method of subsistence, it would by no means
follow that they would thereby be deprived either of employment or
subsistence. By the reduction of the army and navy at the end of the
late war, more than 100,000 soldiers and seamen, a number equal to
what is employed in the greatest manufactures, were all at once thrown
out of their ordinary employment: but though they no doubt suffered
some inconveniency, they were not thereby deprived of all employment
and subsistence. The greater part of the seamen, it is probable,
gradually betook themselves to the merchant service as they could find
occasion, and in the mean time both they and the soldiers were
absorbed in the great mass of the people, and employed in a great
variety of occupations. Not only no great convulsion, but no sensible
disorder, arose from so great a change in the situation of more than
100,000 men, all accustomed to the use of arms, and many of them to
rapine and plunder. The number of vagrants was scarce anywhere
sensibly increased by it; even the wages of labour were not reduced by
it in any occupation, so far as I have been able to learn, except in
that of seamen in the merchant service. But if we compare together the
habits of a soldier and of any sort of manufacturer, we shall find
that those of the latter do not tend so much to disqualify him from
being employed in a new trade, as those of the former from being
employed in any. The manufacturer has always been accustomed to look
for his subsistence from his labour only; the soldier to expect it
from his pay. Application and industry have been familiar to the one;
idleness and dissipation to the other. But it is surely much easier to
change the direction of industry from one sort of labour to another,
than to turn idleness and dissipation to any. To the greater part of
manufactures, besides, it has already been observed, there are other
collateral manufactures of so similar a nature, that a workman can
easily transfer his industry from one of them to another. The greater
part of such workmen, too, are occasionally employed in country
labour. The stock which employed them in a particular manufacture
before, will still remain in the country, to employ an equal number of
people in some other way. The capital of the country remaining the
same, the demand for labour will likewise be the same, or very nearly
the same, though it may be exerted in different places, and for
different occupations. Soldiers and seamen, indeed, when discharged
from the king's service, are at liberty to exercise any trade within
any town or place of Great Britain or Ireland. Let the same natural
liberty of exercising what species of industry they please, be
restored to all his Majesty's subjects, in the same manner as to
soldiers and seamen; that is, break down the exclusive privileges of
corporations, and repeal the statute of apprenticeship, both which are
really encroachments upon natural Liberty, and add to those the repeal
of the law of settlements, so that a poor workman, when thrown out of
employment, either in one trade or in one place, may seek for it in
another trade or in another place, without the fear either of a
prosecution or of a removal; and neither the public nor the
individuals will suffer much more from the occasional disbanding some
particular classes of manufacturers, than from that of the soldiers.
Our manufacturers have no doubt great merit with their country, but
they cannot have more than those who defend it with their blood, nor
deserve to be treated with more delicacy.
To expect, indeed, that the freedom of trade should ever be
entirely
restored in Great Britain, is as absurd as to expect that an Oceana or
Utopia should ever be established in it. Not only the prejudices of
the public, but, what is much more unconquerable, the private
interests of many individuals, irresistibly oppose it. Were the
officers of the army to oppose, with the same zeal and unanimity, any
reduction in the number of forces, with which master manufacturers set
themselves against every law that is likely to increase the number of
their rivals in the home market; were the former to animate their
soldiers. In the same manner as the latter inflame their workmen, to
attack with violence and outrage the proposers of any such regulation;
to attempt to reduce the army would be as dangerous as it has now
become to attempt to diminish, in any respect, the monopoly which our
manufacturers have obtained against us. This monopoly has so much
increased the number of some particular tribes of them, that, like an
overgrown standing army, they have become formidable to the
government, and, upon many occasions, intimidate the legislature. The
member of parliament who supports every proposal for strengthening
this monopoly, is sure to acquire not only the reputation of
understanding trade, but great popularity and influence with an order
of men whose numbers and wealth render them of great importance. If he
opposes them, on the contrary, and still more, if he has authority
enough to be able to thwart them, neither the most acknowledged
probity, nor the highest rank, nor the greatest public services, can
protect him from the most infamous abuse and detraction, from personal
insults, nor sometimes from real danger, arising from the insolent
outrage of furious and disappointed monopolists.
The undertaker of a great manufacture, who, by the home markets
being
suddenly laid open to the competition of foreigners, should be obliged
to abandon his trade, would no doubt suffer very considerably. That
part of his capital which had usually been employed in purchasing
materials, and in paying his workmen, might, without much difficulty,
perhaps, find another employment; but that part of it which was fixed
in workhouses, and in the instruments of trade, could scarce be
disposed of without considerable loss. The equitable regard,
therefore, to his interest, requires that changes of this kind should
never be introduced suddenly, but slowly, gradually, and after a very
long warning. The legislature, were it possible that its deliberations
could be always directed, not by the clamorous importunity of partial
interests, but by an extensive view of the general good, ought, upon
this very account, perhaps, to be particularly careful, neither to
establish any new monopolies of this kind, nor to extend further those
which are already established. Every such regulation introduces some
degree of real disorder into the constitution of the state, which it
will be difficult afterwards to cure without occasioning another
disorder.
How far it may be proper to impose taxes upon the importation
of
foreign goods, in order not to prevent their importation, but to raise
a revenue for government, I shall consider hereafter when I come to
treat of taxes. Taxes imposed with a view to prevent, or even to
diminish importation, are evidently as destructive of the revenue of
the customs as of the freedom of trade.
BOOK V.
OF THE REVENUE OF THE SOVEREIGN OR COMMONWEALTH
CHAPTER I.
OF THE EXPENSES OF THE SOVEREIGN OR COMMONWEALTH.
PART I. Of the Expense of Defence.
The first duty of the sovereign, that of protecting the society
from
the violence and invasion of other independent societies, can be
performed only by means of a military force. But the expense both of
preparing this military force in time of peace, and of employing it in
time of war, is very different in the different states of society, in
the different periods of improvement.
Among nations of hunters, the lowest and rudest state of society,
such
as we find it among the native tribes of North America, every man is a
warrior, as well as a hunter. When he goes to war, either to defend
his society, or to revenge the injuries which have been done to it by
other societies, he maintains himself by his own labour, in the same
manner as when he lives at home. His society (for in this state of
things there is properly neither sovereign nor commonwealth) is at no
sort of expense, either to prepare him for the field, or to maintain
him while he is in it.
Among nations of shepherds, a more advanced state of society,
such as
we find it among the Tartars and Arabs, every man is, in the same
manner, a warrior. Such nations have commonly no fixed habitation, but
live either in tents, or in a sort of covered waggons, which are
easily transported from place to place. The whole tribe, or nation,
changes its situation according to the different seasons of the year,
as well as according to other accidents. When its herds and flocks
have consumed the forage of one part of the country, it removes to
another, and from that to a third. In the dry season, it comes down to
the banks of the rivers; in the wet season, it retires to the upper
country. When such a nation goes to war, the warriors will not trust
their herds and flocks to the feeble defence of their old men, their
women and children; and their old men, their women and children, will
not be left behind without defence, and without subsistence. The whole
nation, besides, being accustomed to a wandering life, even in time of
peace, easily takes the field in time of war. Whether it marches as an
army, or moves about as a company of herdsmen, the way of life is
nearly the same, though the object proposed by it be very different.
They all go to war together, therefore, and everyone does as well as
he can. Among the Tartars, even the women have been frequently known
to engage in battle. If they conquer, whatever belongs to the hostile
tribe is the recompence of the victory; but if they are vanquished,
all is lost; and not only their herds and flocks, but their women and
children become the booty of the conqueror. Even the greater part of
those who survive the action are obliged to submit to him for the sake
of immediate subsistence. The rest are commonly dissipated and
dispersed in the desert.
The ordinary life, the ordinary exercise of a Tartar or Arab,
prepares
him sufficiently for war. Running, wrestling, cudgel-playing, throwing
the javelin, drawing the bow, etc. are the common pastimes of those
who live in the open air, and are all of them the images of war. When
a Tartar or Arab actually goes to war, he is maintained by his own
herds and flocks, which he carries with him, in the same manner as in
peace. His chief or sovereign (for those nations have all chiefs or
sovereigns) is at no sort of expense in preparing him for the field;
and when he is in it, the chance of plunder is the only pay which he
either expects or requires.
An army of hunters can seldom exceed two or three hundred men.
The
precarious subsistence which the chace affords, could seldom allow a
greater number to keep together for any considerable time. An army of
shepherds, on the contrary, may sometimes amount to two or three
hundred thousand. As long as nothing stops their progress, as long as
they can go on from one district, of which they have consumed the
forage, to another, which is yet entire; there seems to be scarce any
limit to the number who can march on together. A nation of hunters can
never be formidable to the civilized nations in their neighbourhood; a
nation of shepherds may. Nothing can be more contemptible than an
Indian war in North America; nothing, on the contrary, can be more
dreadful than a Tartar invasion has frequently been in Asia. The
judgment of Thucydides, that both Europe and Asia could not resist the
Scythians united, has been verified by the experience of all ages. The
inhabitants of the extensive, but defenceless plains of Scythia or
Tartary, have been frequently united under the dominion of the chief
of some conquering horde or clan; and the havock and devastation of
Asia have always signalized their union. The inhabitants of the
inhospitable deserts of Arabia, the other great nation of shepherds,
have never been united but once, under Mahomet and his immediate
successors. Their union, which was more the effect of religious
enthusiasm than of conquest, was signalized in the same manner. If the
hunting nations of America should ever become shepherds, their
neighbourhood would be much more dangerous to the European colonies
than it is at present.
In a yet more advanced state of society, among those nations
of
husbandmen who have little foreign commerce, and no other manufactures
but those coarse and household ones, which almost every private family
prepares for its own use, every man, in the same manner, either is a
warrior, or easily becomes such. Those who live by agriculture
generally pass the whole day in the open air, exposed to all the
inclemencies of the seasons. The hardiness of their ordinary life
prepares them for the fatigues of war, to some of which their
necessary occupations bear a great analogy. The necessary occupation
of a ditcher prepares him to work in the trenches, and to fortify a
camp, as well as to inclose a field. The ordinary pastimes of such
husbandmen are the same as those of shepherds, and are in the same
manner the images of war. But as husbandmen have less leisure than
shepherds, they are not so frequently employed in those pastimes. They
are soldiers but soldiers not quite so much masters of their exercise.
Such as they are, however, it seldom costs the sovereign or
commonwealth any expense to prepare them for the field.
Agriculture, even in its rudest and lowest state, supposes a
settlement, some sort of fixed habitation, which cannot be abandoned
without great loss. When a nation of mere husbandmen, therefore, goes
to war, the whole people cannot take the field together. The old men,
the women and children, at least, must remain at home, to take care of
the habitation. All the men of the military age, however, may take the
field, and in small nations of this kind, have frequently done so. In
every nation, the men of the military age are supposed to amount to
about a fourth or a fifth part of the whole body of the people. If the
campaign, too, should begin after seedtime, and end before harvest,
both the husbandman and his principal labourers can be spared from the
farm without much loss. He trusts that the work which must be done in
the mean time, can be well enough executed by the old men, the women,
and the children. He is not unwilling, therefore, to serve without pay
during a short campaign; and it frequently costs the sovereign or
commonwealth as little to maintain him in the field as to prepare him
for it. The citizens of all the different states of ancient Greece
seem to have served in this manner till after the second Persian war;
and the people of Peloponnesus till after the Peloponnesian war. The
Peloponnesians, Thucydides observes, generally left the field in the
summer, and returned home to reap the harvest. The Roman people, under
their kings, and during the first ages of the republic, served in the
same manner. It was not till the seige of Veii, that they who staid at
home began to contribute something towards maintaining those who went
to war. In the European monarchies, which were founded upon the ruins
of the Roman empire, both before, and for some time after, the
establishment of what is properly called the feudal law, the great
lords, with all their immediate dependents, used to serve the crown at
their own expense. In the field, in the same manner as at home, they
maintained themselves by their own revenue, and not by any stipend or
pay which they received from the king upon that particular occasion.
In a more advanced state of society, two different causes contribute
to render it altogether impossible that they who take the field should
maintain themselves at their own expense. Those two causes are, the
progress of manufactures, and the improvement in the art of war.
Though a husbandman should be employed in an expedition, provided
it
begins after seedtime, and ends before harvest, the interruption of
his business will not always occasion any considerable diminution of
his revenue. Without the intervention of his labour, Nature does
herself the greater part of the work which remains to be done. But the
moment that an artificer, a smith, a carpenter, or a weaver, for
example, quits his workhouse, the sole source of his revenue is
completely dried up. Nature does nothing for him; he does all for
himself. When he takes the field, therefore, in defence of the public,
as he has no revenue to maintain himself, he must necessarily be
maintained by the public. But in a country, of which a great part of
the inhabitants are artificers and manufacturers, a great part of the
people who go to war must be drawn from those classes, and must,
therefore, be maintained by the public as long as they are employed in
its service,
When the art of war, too, has gradually grown up to be a very
intricate and complicated science; when the event of war ceases to be
determined, as in the first ages of society, by a single irregular
skirmish or battle; but when the contest is generally spun out through
several different campaigns, each of which lasts during the greater
part of the year; it becomes universally necessary that the public
should maintain those who serve the public in war, at least while they
are employed in that service. Whatever, in time of peace, might be the
ordinary occupation of those who go to war, so very tedious and
expensive a service would otherwise be by far too heavy a burden upon
them. After the second Persian war, accordingly, the armies of Athens
seem to have been generally composed of mercenary troops, consisting,
indeed, partly of citizens, but partly, too, of foreigners; and all of
them equally hired and paid at the expense of the state. From the time
of the siege of Veii, the armies of Rome received pay for their
service during the time which they remained in the field. Under the
feudal governments, the military service, both of the great lords, and
of their immediate dependents, was, after a certain period,
universally exchanged for a payment in money, which was employed to
maintain those who served in their stead.
The number of those who can go to war, in proportion to the
whole
number of the people, is necessarily much smaller in a civilized than
in a rude state of society. In a civilized society, as the soldiers
are maintained altogether by the labour of those who are not soldiers,
the number of the former can never exceed what the latter can
maintain, over and above maintaining, in a manner suitable to their
respective stations, both themselves and the other officers of
government and law, whom they are obliged to maintain. In the little
agrarian states of ancient Greece, a fourth or a fifth part of the
whole body of the people considered the themselves as soldiers, and
would sometimes, it is said, take the field. Among the civilized
nations of modern Europe, it is commonly computed, that not more than
the one hundredth part of the inhabitants of any country can be
employed as soldiers, without ruin to the country which pays the
expense of their service.
The expense of preparing the army for the field seems not to
have
become considerable in any nation, till long after that of maintaining
it in the field had devolved entirely upon the sovereign or
commonwealth. In all the different republics of ancient Greece, to
learn his military exercises, was a necessary part of education
imposed by the state upon every free citizen. In every city there
seems to have been a public field, in which, under the protection of
the public magistrate, the young people were taught their different
exercises by different masters. In this very simple institution
consisted the whole expense which any Grecian state seems ever to have
been at, in preparing its citizens for war. In ancient Rome, the
exercises of the Campus Martius answered the same purpose with those
of the Gymnasium in ancient Greece. Under the feudal governments, the
many public ordinances, that the citizens of every district should
practise archery, as well as several other military exercises, were
intended for promoting the same purpose, but do not seem to have
promoted it so well. Either from want of interest in the officers
entrusted with the execution of those ordinances, or from some other
cause, they appear to have been universally neglected; and in the
progress of all those governments, military exercises seem to have
gone gradually into disuse among the great body of the people.
In the republics of ancient Greece and Rome, during the whole
period
of their existence, and under the feudal governments, for a
considerable time after their first establishment, the trade of a
soldier was not a separate, distinct trade, which constituted the sole
or principal occupation of a particular class of citizens; every
subject of the state, whatever might be the ordinary trade or
occupation by which he gained his livelihood, considered himself, upon
all ordinary occasions, as fit likewise to exercise the trade of a
soldier, and, upon many extraordinary occasions, as bound to exercise
it.
The art of war, however, as it is certainly the noblest of all
arts,
so, in the progress of improvement, it necessarily becomes one of the
most complicated among them. The state of the mechanical, as well as
some other arts, with which it is necessarily connected, determines
the degree of perfection to which it is capable of being carried at
any particular time. But in order to carry it to this degree of
perfection, it is necessary that it should become the sole or
principal occupation of a particular class of citizens; and the
division of labour is as necessary for the improvement of this, as of
every other art. Into other arts, the division of labour is naturally
introduced by the prudence of individuals, who find that they promote
their private interest better by confining themselves to a particular
trade, than by exercising a great number. But it is the wisdom of the
state only, which can render the trade of a soldier a particular
trade, separate and distinct from all others. A private citizen, who,
in time of profound peace, and without any particular encouragement
from the public, should spend the greater part of his time in military
exercises, might, no doubt, both improve himself very much in them,
and amuse himself very well; but he certainly would not promote his
own interest. It is the wisdom of the state only, which can render it
for his interest to give up the greater part of his time to this
peculiar occupation; and states have not always had this wisdom, even
when their circumstances had become such, that the preservation of
their existence required that they should have it.
A shepherd has a great deal of leisure; a husbandman, in the
rude state
of husbandry, has some; an artificer or manufacturer has none at all.
The first may, without any loss, employ a great deal of his time in
martial exercises; the second may employ some part of it; but the last
cannot employ a single hour in them without some loss, and his
attention to his own interest naturally leads him to neglect them
altogether. Those improvements in husbandry, too, which the progress
of arts and manufactures necessarily introduces, leave the husbandman
as little leisure as the artificer. Military exercises come to be as
much neglected by the inhabitants of the country as by those of the
town, and the great body of the people becomes altogether unwarlike.
That wealth, at the same time, which always follows the improvements
of agriculture and manufactures, and which, in reality, is no more
than the accumulated produce of those improvements, provokes the
invasion of all their neighbours. An industrious, and, upon that
account, a wealthy nation, is of all nations the most likely to be
attacked; and unless the state takes some new measure for the public
defence, the natural habits of the people render them altogether
incapable of defending themselves.