The agricultural systems of political economy will not require
so long an explanation as that which I have thought it necessary
to bestow upon the
mercantile or commercial system.
That system which represents the produce of land as the sole
source of the revenue and wealth of every country has, so far
as I know, never been adopted by any nation, and it at present
exists only in the speculations of a few men of great learning
and ingenuity in France. It would not, surely, be worth while
to examine at great length the errors of a system which never
has done, and probably never will do, any harm in any part
of the world. I shall endeavour to explain, however, as distinctly
as I can, the great outlines of this very ingenious system.
Mr. Colbert, the famous minister of Louis XIV, was a man of
probity, of great industry and knowledge of detail, of great
experience and acuteness in the examination of public accounts,
and of abilities, in short, every way fitted for introducing
method and good order into the collection and expenditure of
the public revenue. That minister had unfortunately embraced
all the prejudices of the mercantile system, in its nature
and essence a system of restraint and regulation, and such
as could scarce fail to be agreeable to a laborious and plodding
man of business, who had been accustomed to regulate the different
departments of public offices, and to establish the necessary
checks and controls for confining each to its proper sphere.
The industry and commerce of a great country he endeavoured
to regulate upon the same model as the departments of a public
office; and instead of allowing every man to pursue his own
interest in his own way, upon the liberal plan of equality,
liberty, and justice, he bestowed upon certain branches of
industry extraordinary privileges, while he laid others under
as extraordinary restraints. He was not only disposed, like
other European ministers, to encourage more the industry of
the towns than that of the country; but, in order to support
the industry of the towns, he was willing even to depress and
keep down that of the country. In order to render provisions
cheap to the inhabitants of the towns, and thereby to encourage
manufactures and foreign commerce, he prohibited altogether
the exportation of corn, and thus excluded the inhabitants
of the country from every foreign market for by far the most
important part of the produce of their industry. This prohibition,
joined to the restraints imposed by the ancient provincial
laws of France upon the transportation of corn from one province
to another, and to the arbitrary and degrading taxes which
are levied upon the cultivators in almost all the provinces,
discouraged and kept down the agriculture of that country very
much below the state to which it would naturally have risen
in so very fertile a soil and so very happy a climate. This
state of discouragement and depression was felt more or less
in every different part of the country, and many different
inquiries were set on foot concerning the causes of it. One
of those causes appeared to be the preference given, by the
institutions of Mr. Colbert, to the industry of the towns above
that of the country.
If the rod be bent too much one way, says the proverb, in
order to make it straight you must bend it as much the other.
The French philosophers, who have proposed the system which
represents agriculture as the sole source of the revenue and
wealth of every country, seem to have adopted this proverbial
maxim; and as in the plan of Mr. Colbert the industry of the
towns was certainly overvalued in comparison with that of the
country; so in their system it seems to be as certainly undervalued.
The different orders of people who have ever been supposed
to contribute in any respect towards the annual produce of
the land and labour of the country, they divide into three
classes. The first is the class of the proprietors of land.
The second is the class of the cultivators, of farmers and
country labourers, whom they honour with the peculiar appellation
of the productive class. The third is the class of artificers,
manufacturers, and merchants, whom they endeavour to degrade
by the humiliating appellation of the barren or unproductive
class.
The class of proprietors contributes to the annual produce
by the expense which they may occasionally lay out upon the
improvement of the land, upon the buildings, drains, enclosures,
and other ameliorations, which they may either make or maintain
upon it, and by means of which the cultivators are enabled,
with the same capital, to raise a greater produce, and consequently
to pay a greater rent. This advanced rent may be considered
as the interest or profit due to the proprietor upon the expense
or capital which he thus employs in the improvement of his
land. Such expenses are in this system called ground expenses
(depenses foncieres.)
The cultivators or farmers contribute to the annual produce
by what are in this system called the original and annual expenses
(depenses primitives et depenses annuelles) which they lay
out upon the cultivation of the land. The original expenses
consist in the instruments of husbandry, in the stock of cattle,
in the seed, and in the maintenance of the farmer's family,
servants, and cattle during at least a great part of the first
year of his occupancy, or till he can receive some return from
the land. The annual expenses consist in the seed, in the wear
and tear of the instruments of husbandry, and in the annual
maintenance of the farmer's servants and cattle, and of his
family too, so far as any part of them can be considered as
servants employed in cultivation. That part of the produce
of the land which remains to him after paying the rent ought
to be sufficient, first, to replace to him within a reasonable
time, at least during the term of his occupancy, the whole
of his original expenses, together with the ordinary profits
of stock; and, secondly, to replace to him annually the whole
of his annual expenses, together likewise with the ordering
profits of stock. Those two sorts of expenses are two capitals
which the farmer employs in cultivation; and unless they are
regularly restored to him, together with a reasonable profit,
he cannot carry on his employment upon a level with other employments;
but, from a regard to his own interest, must desert it as soon
as possible and seek some other. That part of the produce of
the land which is thus necessary for enabling the farmer to
continue his business ought to be considered as a fund sacred
to cultivation, which, if the landlord violates, he necessarily
reduces the produce of his own land, and in a few years not
only disables the farmer from paying this racked rent, but
from paying the reasonable rent which he might otherwise have
got for his land. The rent which properly belongs to the landlord
is no more than the net produce which remains after paying
in the completest manner all the necessary expenses which must
be previously laid out in order to raise the gross or the whole
produce. It is because the labour of the cultivators, over
and above paying completely all those necessary expenses, affords
a net produce of this kind that this class of people are in
this system peculiarly distinguished by the honourable appellation
of the productive class. Their original and annual expenses
are for the same reason called, in this system, productive
expenses, because, over and above replacing their own value,
they occasion the annual reproduction of this net produce.
The ground expenses, as they are called, or what the landlord
lays out upon the improvement of his land, are in this system,
too, honoured with the appellation of productive expenses.
Till the whole of those expenses, together with the ordinary
profits of stock, have been completely repaid to him by the
advanced rent which he gets from his land, that advanced rent
ought to be regarded as sacred and inviolable, both by the
church and by the king; ought to be subject neither to tithe
nor to taxation. If it is otherwise, by discouraging the improvement
of land the church discourages the future increase of her own
tithes, and the king the future increase of his own taxes.
As in a well-ordered state of things, therefore, those ground
expenses, over and above reproducing in the completest manner
their own value, occasion likewise after a certain time a reproduction
of a net produce, they are in this system considered as productive
expenses.
The ground expenses of the landlord, however, together with
the original and the annual expenses of the farmer, are the
only three sorts of expenses which in this system are considered
as productive. All other expenses and all other orders of people,
even those who in the common apprehensions of men are regarded
as the most productive, are in this account of things represented
as altogether barren and unproductive.
Artificers and manufacturers in particular, whose industry,
in the common apprehensions of men, increases so much the value
of the rude produce of land, are in this system represented
as a class of people altogether barren and unproductive. Their
labour, it is said, replaces only the stock which employs them,
together with its ordinary profits. That stock consists in
the materials, tools, and wages advanced to them by their employer;
and is the fund destined for their employment and maintenance.
Its profits are the fund destined for the maintenance of their
employer. Their employer, as he advances to them the stock
of materials, tools, and wages necessary for their employment,
so he advances to himself what is necessary for his own maintenance,
and this maintenance he generally proportions to the profit
which he expects to make by the price of their work. Unless
its price repays to him the maintenance which he advances to
himself, as well as the materials, tools, and wages which he
advances to his workmen, it evidently does not repay to him
the whole expense which he lays out upon it. The profits of
manufacturing stock therefore are not, like the rent of land,
a net produce which remains after completely repaying the whole
expense which must be laid out in order to obtain them. The
stock of the farmer yields him a profit as well as that of
the master manufacturer; and it yields a rent likewise to another
person, which that of the master manufacturer does not. The
expense, therefore, laid out in employing and maintaining artificers
and manufacturers does no more than continue, if one may say
so, the existence of its own value, and does not produce any
new value. It is therefore altogether a barren and unproductive
expense. The expense, on the contrary, laid out in employing
farmers and country labourers, over and above continuing the
existence of its own value, produces a new value, the rent
of the landlord. It is therefore a productive expense.
Mercantile stock is equally barren and unproductive with manufacturing
stock. It only continues the existence of its own value, without
producing any new value. Its profits are only the repayment
of the maintenance which its employer advances to himself during
the time that he employs it, or till he receives the returns
of it. They are only the repayment of a part of the expense
which must be laid out in employing it.
The labour of artificers and manufacturers never adds anything
to the value of the whole annual amount of the rude produce
of the land. It adds, indeed, greatly to the value of some
particular parts of it. But the consumption which in the meantime
it occasions of other parts is precisely equal to the value
which it adds to those parts; so that the value of the whole
amount is not, at any one moment of time, in the least augmented
by it. The person who works the lace of a pair of fine ruffles,
for example, will sometimes raise the value of perhaps a pennyworth
of flax to thirty pounds sterling. But though at first sight
he appears thereby to multiply the value of a part of the rude
produce about seven thousand and two hundred times, he in reality
adds nothing to the value of the whole annual amount of the
rude produce. The working of that lace costs him perhaps two
years' labour. The thirty pounds which he gets for it when
it is finished is no more than the repayment of the subsistence
which he advances to himself during the two years that he is
employed about it. The value which, by every day's, month's,
or year's labour, he adds to the flax does no more than replace
the value of his own consumption during that day, month, or
year. At no moment of time, therefore, does he add anything
to the value of the whole annual amount of the rude produce
of the land: the portion of that produce which he is continually
consuming being always equal to the value which he is continually
producing. The extreme poverty of the greater part of the persons
employed in this expensive though trifling manufacture may
satisfy us that the price of their work does not in ordinary
cases exceed the value of their subsistence. It is otherwise
with the work of farmers and country labourers. The rent of
the landlord is a value which, in ordinary cases, it is continually
producing, over and above replacing, in the most complete manner,
the whole consumption, the whole expense laid out upon the
employment and maintenance both of the workmen and of their
employer.
Artificers, manufacturers, and merchants can augment the revenue
and wealth of their society by parsimony only; or, as it in
this system, by privation, that is, by depriving themselves
a part of the funds destined for their own subsistence. They
annually reproduce nothing but those funds. Unless, therefore,
they annually save some part of them, unless they annually
deprive themselves of the enjoyment of some part of them, the
revenue and wealth of their society can never be in the smallest
degree augmented by means of their industry. Farmers and country
labourers, on the contrary, may enjoy completely the whole
funds destined for their own subsistence, and yet augment at
the same time the revenue and wealth of their society. Over
and above what is destined for their own subsistence, their
industry annually affords a net produce, of which the augmentation
necessarily augments the revenue and wealth of their society.
Nations therefore which, like France or England, consist in
a great measure of proprietors and cultivators can be enriched
by industry and enjoyment. Nations, on the contrary, which,
like Holland and Hamburg, are composed chiefly of merchants,
artificers, and manufacturers can grow rich only through parsimony
and privation. As the interest of nations so differently circumstanced
is very different, so is likewise the common character of the
people: in those of the former kind, liberality, frankness
and good fellowship naturally make a part of that common character:
in the latter, narrowness, meanness, and a selfish disposition,
averse to all social pleasure and enjoyment.
The unproductive class, that of merchants, artificers, and
manufacturers, is maintained and employed altogether at the
expense of the two other classes, of that of proprietors, and
of that of cultivators. They furnish it both with the materials
of its work and with the fund of its subsistence, with the
corn and cattle which it consumes while it is employed about
that work. The proprietors and cultivators finally pay both
the wages of all the workmen of the unproductive class, and
of the profits of all their employers. Those workmen and their
employers are properly the servants of the proprietors and
cultivators. They are only servants who work without doors,
as menial servants work within. Both the one and the other,
however, are equally maintained at the expense of the same
masters. The labour of both is equally unproductive. It adds
nothing to the value of the sum total of the rude produce of
the land. Instead of increasing the value of that sum total,
it is a charge and expense which must be paid out of it.
The unproductive class, however, is not only useful, but greatly
useful to the other two classes. By means of the industry of
merchants, artificers, and manufacturers, the proprietors and
cultivators can purchase both the foreign goods and the manufactured
produce of their own country which they have occasion for with
the produce of a much smaller quantity of their own labour
than what they would be obliged to employ if they were to attempt,
in an awkward and unskilful manner, either to import the one
or to make the other for their own use. By means of the unproductive
class, the cultivators are delivered from many cares which
would otherwise distract their attention from the cultivation
of land. The superiority of produce, which, in consequence
of this undivided attention, they are enabled to raise, is
fully sufficient to pay the whole expense which the maintenance
and employment of the unproductive class costs either the proprietors
or themselves. The industry of merchants, artificers, and manufacturers,
though in its own nature altogether unproductive, yet contributes
in this manner indirectly to increase the produce of the land.
It increases the productive powers of productive labour by
leaving it at liberty to confine itself to its proper employment,
the cultivation of land; and the plough goes frequently the
easier and the better by means of the labour of the man whose
business is most remote from the plough.
It can never be the interest of the proprietors and cultivators
to restrain or to discourage in any respect the industry of
merchants, artificers, and manufacturers. The greater the liberty
which this unproductive class enjoys, the greater will be the
competition in all the different trades which compose it, and
the cheaper will the other two classes be supplied, both with
foreign goods and with the manufactured produce of their own
country.
It can never be the interest of the unproductive class to
oppress the other two classes. It is the surplus produce of
the land, or what remains after deducting the maintenance,
first, of the cultivators, and afterwards of the proprietors,
that maintains and employs the unproductive class. The greater
this surplus the greater must likewise be the maintenance and
employment of that class. The establishment of perfect justice,
of perfect liberty, and of perfect equality is the very simple
secret which most effectually secures the highest degree of
prosperity to all the three classes.
The merchants, artificers, and manufacturers of those mercantile
states which, like Holland and Hamburg, consist chiefly of
this unproductive class, are in the same manner maintained
and employed altogether at the expense of the proprietors and
cultivators of land. The only difference is, that those proprietors
and cultivators are, the greater part of them, placed at a
most inconvenient distance from the merchants, artificers,
and manufacturers whom they supply with the materials of their
work and the fund of their subsistences- the inhabitants of
other countries and the subjects of other governments.
Such mercantile states, however, are not only useful, but
greatly useful to the inhabitants of those other countries.
They fill up, in some measure, a very important void, and supply
the place of the merchants, artificers, and manufacturers whom
the inhabitants of those countries ought to find at home, but
whom, from some defect in their policy, they do not find at
home.
It can never be the interest of those landed nations, if I
may call them so, to discourage or distress the industry of
such mercantile states by imposing high duties upon their trade
or upon the commodities which they furnish. Such duties, by
rendering those commodities dearer, could serve only to sink
the real value of the surplus produce of their own land, with
which, or, what comes to the same thing, with the price of
which those commodities are purchased. Such duties could serve
only to discourage the increase of that surplus produce, and
consequently the improvement and cultivation of their own land.
The most effectual expedient, on the contrary, for raising
the value of that surplus produce, for encouraging its increase,
and consequently the improvement and cultivation of their own
land would be to allow the most perfect freedom to the trade
of all such mercantile nations.
This perfect freedom of trade would even be the most effectual
expedient for supplying them, in due time, with all the artificers,
manufacturers, and merchants whom they wanted at home, and
for filling up in the properest and most advantageous manner
that very important void which they felt there.
The continual increase of the surplus produce of their land
would, in due time, create a greater capital than what could
be employed with the ordinary rate of profit in the improvement
and cultivation of land; and the surplus part of it would naturally
turn itself to the employment of artificers and manufacturers
at home. But those artificers and manufacturers, finding at
home both the materials of their work and the fund of their
subsistence, might immediately even with much less art and
skill be able to work as cheap as the like artificers and manufacturers
of such mercantile states who had both to bring from a great
distance. Even though, from want of art and skill, they might
not for some time be able to work as cheap, yet, finding a
market at home, they might be able to sell their work there
as cheap as that of the artificers and manufacturers of such
mercantile states, which could not be brought to that market
but from so great a distance; and as their art and skill improved,
they would soon be able to sell it cheaper. The artificers
and manufacturers of such mercantile states, therefore, would
immediately be rivalled in the market of those landed nations,
and soon after undersold and jostled out of it altogether.
The cheapness of the manufactures of those landed nations,
in consequence of the gradual improvements of art and skill,
would, in due time, extend their sale beyond the home market,
and carry them to many foreign markets, from which they would
in the same manner gradually jostle out many of the manufacturers
of such mercantile nations.
This continual increase both of the rude and manufactured
produce of those landed nations would in due time create a
greater capital than could, with the ordinary rate of profit,
be employed either in agriculture or in manufactures. The surplus
of this capital would naturally turn itself to foreign trade,
and be employed in exporting to foreign countries such parts
of the rude and manufactured produce of its own country as
exceeded the demand of the home market. In the exportation
of the produce of their own country, the merchants of a landed
nation would have an advantage of the same kind over those
of mercantile nations which its artificers and manufacturers
had over the artificers and manufacturers of such nations;
the advantage of finding at home that cargo and those stores
and provisions which the others were obliged to seek for at
a distance. With inferior art and skill in navigation, therefore,
they would be able to sell that cargo as cheap in foreign markets
as the merchants of such mercantile nations; and with equal
art and skill they would be able to sell it cheaper. They would
soon, therefore, rival those mercantile nations in this branch
of foreign trade, and in due time would jostle them out of
it altogether.
According to this liberal and generous system, therefore,
the most advantageous method in which a landed nation can raise
up artificers, manufacturers, and merchants of its own is to
grant the most perfect freedom of trade to the artificers,
manufacturers, and merchants of all other nations. It thereby
raises the value of the surplus produce of its own land, of
which the continual increase gradually establishes a fund,
which in due time necessarily raises up all the artificers,
manufacturers, and merchants whom it has occasion for.
When a landed nation, on the contrary, oppresses either by
high duties or by prohibitions the trade of foreign nations,
it necessarily hurts its own interest in two different ways.
First, by raising the price of all foreign goods and of all
sorts of manufactures, it necessarily sinks the real value
of the surplus produce of its own land, with which, or, what
comes to the same thing, with the price of which it purchases
those foreign goods and manufactures. Secondly, by giving a
sort of monopoly of the home market to its own merchants, artificers,
and manufacturers, it raises the rate of mercantile and manufacturing
profit in proportion to that of agricultural profit, and consequently
either draws from agriculture a part of the capital which had
before been employed in it, or hinders from going to it a part
of what would otherwise have gone to it. This policy, therefore,
discourages agriculture in two different ways; first, by sinking
the real value of its produce, and thereby lowering the rate
of its profit; and, secondly, by raising the rate of profit
in all other employments. Agriculture is rendered less advantageous,
and trade and manufactures more advantageous than they otherwise
would be; and every man is tempted by his own interest to turn,
as much as he can, both his capital and his industry from the
former to the latter employments.
Though, by this oppressive policy, a landed nation should
be able to raise up artificers, manufacturers, and merchants
of its own somewhat sooner than it could do by the freedom
of trade a matter, however, which is not a little doubtful-
yet it would raise them up, if one may say so, prematurely,
and before it was perfectly ripe for them. By raising up too
hastily one species of industry, it would depress another more
valuable species of industry. By raising up too hastily a species
of industry which only replaces the stock which employs it,
together with the ordinary profit, it would depress a species
of industry which, over and above replacing that stock with
its profit, affords likewise a net produce, a free rent to
the landlord. It would depress productive labour, by encouraging
too hastily that labour which is altogether barren and unproductive.
In what manner, according to this system, the sum total of
the annual produce of the land is distributed among the three
classes above mentioned, and in what manner the labour of the
unproductive class does no more than replace the value of its
own consumption, without increasing in any respect the value
of that sum total, is represented by Mr. Quesnai, the very
ingenious and profound author of this system, in some arithmetical
formularies. The first of these formularies, which by way of
eminence he peculiarly distinguishes by the name of the Economical
Table, represents the manner in which he supposes the distribution
takes place in a state of the most perfect liberty and therefore
of the highest prosperity- in a state where the annual produce
is such as to afford the greatest possible net produce, and
where each class enjoys its proper share of the whole annual
produce. Some subsequent formularies represent the manner in
which he supposes this distribution is made in different states
of restraint and regulation; in which either the class of proprietors
or the barren and unproductive class is more favoured than
the class of cultivators, and in which either the one or the
other encroaches more or less upon the share which ought properly
to belong to this productive class. Every such encroachment,
every violation of that natural distribution, which the most
perfect liberty would establish, must, according to this system,
necessarily degrade more or less, from one year to another,
the value and sum total of the annual produce, and must necessarily
occasion a gradual declension in the real wealth and revenue
of the society; a declension of which the progress must be
quicker or slower, according to the degree of this encroachment,
according as that natural distribution which the most perfect
liberty would establish is more or less violated. Those subsequent
formularies represent the different degrees of declension which,
according to this system, correspond to the different degrees
in which this natural distribution is violated.
Some speculative physicians seem to have imagined that the
health of the human body could be preserved only by a certain
precise regimen of diet and exercise, of which every, the smallest,
violation necessarily occasioned some degree of disease or
disorder proportioned to the degree of the violation. Experience,
however, would seem to show that the human body frequently
preserves, to all appearances at least, the most perfect state
of health under a vast variety of different regimens; even
under some which are generally believed to be very far from
being perfectly wholesome. But the healthful state of the human
body, it would seem, contains in itself some unknown principle
of preservation, capable either of preventing or of correcting,
in many respects, the bad effects even of a very faulty regimen.
Mr. Quesnai, who was himself a physician, and a very speculative
physician, seems to have entertained a notion of the same kind
concerning the political body, and to have imagined that it
would thrive and prosper only under a certain precise regimen,
the exact regimen of perfect liberty and perfect justice. He
seems not to have considered that, in the political body, the
natural effort which every man is continually making to better
his own condition is a principle of preservation capable of
preventing and correcting, in many respects, the bad effects
of a political economy, in some degree, both partial and oppressive.
Such a political economy, though it no doubt retards more or
less, is not always capable of stopping altogether the natural
progress of a nation towards wealth and prosperity, and still
less of making it go backwards. If a nation could not prosper
without the enjoyment of perfect liberty and perfect justice,
there is not in the world a nation which could ever have prospered.
In the political body, however, the wisdom of nature has fortunately
made ample provision for remedying many of the bad effects
of the folly and injustice of man, in the same manner as it
has done in the natural body for remedying those of his sloth
and intemperance.
The capital error of this system, however, seems to lie in
its representing the class of artificers, manufacturers, and
merchants as altogether barren and unproductive. The following
observations may serve to show the impropriety of this representation.
First, this class, it is acknowledged, reproduces annually
the value of its own annual consumption, and continues, at
least, the existence of the stock or capital which maintains
and employs it. But upon this account alone the denomination
of barren or unproductive should seem to be very improperly
applied to it. We should not call a marriage barren or unproductive
though it produced only a son and a daughter, to replace the
father and mother, and though it did not increase the number
of the human species, but only continued it as it was before.
Farmers and country labourers, indeed, over and above the stock
which maintains and employs them, reproduce annually a net
produce, a free rent to the landlord. As a marriage which affords
three children is certainly more productive than one which
affords only two; so the labour of farmers and country labourers
is certainly more productive than that of merchants, artificers,
and manufacturers. The superior produce of the one class, however,
does not render the other barren or unproductive.
Secondly, it seems, upon this account, altogether improper
to consider artificers, manufacturers, and merchants in the
same light as menial servants. The labour of menial servants
does not continue the existence of the fund which maintains
and employs them. Their maintenance and employment is altogether
at the expense of their masters, and the work which they perform
is not of a nature to repay that expense. That work consists
in services which perish generally in the very instant of their
performance, and does not fix or realize itself in any vendible
commodity which can replace the value of their wages and maintenance.
The labour, on the contrary, of artificers, manufacturers,
and merchants naturally does fix and realize itself in some
such vendible commodity. It is upon this account that, in the
chapter in which I treat of productive and unproductive labour,
I have classed artificers, manufacturers, and merchants among
the productive labourers, and menial servants among the barren
or unproductive.
Thirdly, it seems upon every supposition improper to say that
the labour of artificers, manufacturers, and merchants does
not increase the real revenue of the society. Though we should
suppose, for example, as it seems to be supposed in this system,
that the value of the daily, monthly, and yearly consumption
of this class was exactly equal to that of its daily, monthly,
and yearly production, yet it would not from thence follow
that its labour added nothing to the real revenue, to the real
value of the annual produce of the land and labour of the society.
An artificer, for example, who, in the first six months after
harvest, executes ten pounds' worth of work, though he should
in the same time consume ten pounds' worth of corn and other
necessaries, yet really adds the value of ten pounds to the
annual produce of the land and labour of the society. While
he has been consuming a half-yearly revenue of ten pounds'
worth of corn and other necessaries, he has produced an equal
value of work capable of purchasing, either to himself or some
other person, an equal half-yearly revenue. The value, therefore,
of what has been consumed and produced during these six months
is equal, not to ten, but to twenty pounds. It is possible,
indeed, that no more than ten pounds' worth of this value may
ever have existed at any one moment of time. But if the ten
pounds' worth of corn and other necessaties, which were consumed
by the artificer, had been consumed by a soldier or by a menial
servant, the value of that part of the annual produce which
existed at the end of the six months would have been ten pounds
less than it actually is in consequence of the labour of the
artificer. Though the value of what the artificer produces,
therefore, should not at any one moment of time be supposed
greater than the value he consumes, yet at every moment of
time the actually existing value of goods in the market is,
in consequence of what he produces, greater than it otherwise
would be.
When the patrons of this system assert that the consumption
of artificers, manufacturers, and merchants is equal to the
value of what they produce, they probably mean no more than
that their revenue, or the fund destined for their consumption,
is equal to it. But if they had expressed themselves more accurately,
and only asserted that the revenue of this class was equal
to the value of what they produced, it might readily have occurred
to the reader that what would naturally be saved out of this
revenue must necessarily increase more or less the real wealth
of the society. In order, therefore, to make out something
like an argument, it was necessary that they should express
themselves as they have done; and this argument, even supposing
things actually were as it seems to presume them to be, turns
out to be a very inconclusive one.
Fourthly, farmers and country labourers can no more augment,
without parsimony, the real revenue, the annual produce of
the land and labour of their society, than artificers, manufacturers,
and merchants. The annual produce of the land and labour of
any society can be augmented only in two ways; either, first,
by some improvement in the productive powers of the useful
labour actually maintained within it; or, secondly, by some
increase in the quantity of that labour.
The improvement in the productive powers of useful labour
depend, first, upon the improvement in the ability of the workman;
and, secondly, upon that of the machinery with which he works.
But the labour of artificers and manufacturers, as it is capable
of being more subdivided, and the labour of each workman reduced
to a greater simplicity of operation than that of farmers and
country labourers, so it is likewise capable of both these
sorts of improvements in a much higher degree. In this respect,
therefore, the class of cultivators can have no sort of advantage
over that of artificers and manufacturers.
The increase in the quantity of useful labour actually employed
within any society must depend altogether upon the increase
of the capital which employs it; and the increase of that capital
again must be exactly equal to the amount of the savings from
the revenue, either of the particular persons who manage and
direct the employment of that capital, or of some other persons
who lend it to them. If merchants, artificers, and manufacturers
are, as this system seems to suppose, naturally more inclined
to parsimony and saving than proprietors and cultivators, they
are, so far, more likely to augment the quantity of useful
labour employed within their society, and consequently to increase
its real revenue, the annual produce of its land and labour.
Fifthly and lastly, though the revenue of the inhabitants
of every country was supposed to consist altogether, as this
system seems to suppose, in the quantity of subsistence which
their industry could procure to them; yet, even upon this supposition,
the revenue of a trading and manufacturing country must, other
things being equal, always be much greater than that of one
without trade or manufactures. By means of trade and manufactures,
a greater quantity of subsistence can be annually imported
into a particular country than what its own lands, in the actual
state of their cultivation, could afford. The inhabitants of
a town, though they frequently possess no lands of their own,
yet draw to themselves by their industry such a quantity of
the rude produce of the lands of other people as supplies them,
not only with the materials of their work, but with the fund
of their subsistence. What a town always is with regard to
the country in its neighbourhood, one independent state or
country may frequently be with regard to other independent
states or countries. It is thus that Holland draws a great
part of its subsistence from other countries; live cattle from
Holstein and Jutland, and corn from almost all the different
countries of Europe. A small quantity of manufactured produce
purchases a great quantity of rude produce. A trading and manufacturing
country, therefore, naturally purchases with a small part of
its manufactured produce a great part of the rude produce of
other countries; while, on the contrary, a country without
trade and manufactures is generally obliged to purchase, at
the expense of a great part of its rude produce, a very small
part of the manufactured produce of other countries. The one
exports what can subsist and accommodate but a very few, and
imports the subsistence and accommodation of a great number.
The other exports the accommodation and subsistence of a great
number, and imports that of a very few only. The inhabitants
of the one must always enjoy a much greater quantity of subsistence
than what their own lands, in the actual state of their cultivation,
could afford. The inhabitants of the other must always enjoy
a much smaller quantity.
This
system, however, with all its imperfections is, perhaps,
the nearest approximation to the truth that has yet been published
upon the subject of political economy, and is upon that account
well worth the consideration of every man who wishes to examine
with attention the principles of that very important science.
Though in representing the labour which is employed upon land
as the only productive labour, the notions which it inculcates
are perhaps too narrow and confined; yet in representing the
wealth of nations as consisting, not in the unconsumable riches
of money, but in the consumable goods annually reproduced by
the labour of the society, and in representing perfect liberty
as the only effectual expedient for rendering this annual reproduction
the greatest possible, its doctrine seems to be in every respect
as just as it is generous and liberal. Its followers are very
numerous; and as men are fond of paradoxes, and of appearing
to understand what surpasses the comprehension of ordinary
people, the paradox which it maintains, concerning the unproductive
nature of manufacturing labour, has not perhaps contributed
a little to increase the number of its admirers. They have
for some years past made a pretty considerable sect, distinguished
in the French republic of letters by the name of The Economists.
Their works have certainly been of some service to their country;
not only by bringing into general discussion many subjects
which had never been well examined before, but by influencing
in some measure the public administration in favour of agriculture.
It has been in consequence of their representations, accordingly,
that the agriculture of France has been delivered from several
of the oppressions which it before laboured under. The term
during which such a lease can be granted, as will be valid
against every future purchaser or proprietor of the land, has
been prolonged from nine to twenty-seven years. The ancient
provincial restraints upon the transportation of corn from
one province of the kingdom to another have been entirely taken
away, and the liberty of exporting it to all foreign countries
has been established as the common law of the kingdom in all
ordinary cases. This sect, in their works, which are very numerous,
and which treat not only of what is properly called Political
Economy, or of the nature and causes of the wealth of nations,
but of every other branch of the system of civil government,
all follow implicitly and without any sensible variation, the
doctrine of Mr. Quesnai. There is upon this account little
variety in the greater part of their works. The most distinct
and best connected account of this doctrine is to be found
in a little book written by Mr. Mercier de la Riviere, some
time intendant of Martinico, entitled, The Natural and Essential
Order of Political Societies. The admiration of this whole
sect for their master, who was himself a man of the greatest
modesty and simplicity, is not inferior to that of any of the
ancient philosophers for the founders of their respective systems. "There
have been, since the world began," says a very diligent and
respectable author, the Marquis de Mirabeau, "three great inventions
which have principally given stability to political societies,
independent of many other inventions which have enriched and
adorned them. The first is the invention of writing, which
alone gives human nature the power of transmitting, without
alteration, its laws, its contracts, its annals, and its discoveries.
The second is the invention of money, which binds together
all the relations between civilised societies. The third is
the Economical Table, the result of the other two, which completes
them both by perfecting their object; the great discovery of
our age, but of which our posterity will reap the benefit."
As the political economy of the nations of modern Europe has
been more favourable to manufactures and foreign trade, the
industry of the towns, than to agriculture, the industry of
the country; so that of other nations has followed a different
plan, and has been more favourable to agriculture than to manufactures
and foreign trade.
The policy of China favours agriculture more than all other
employments. In China the condition of a labourer is said to
be as much superior to that of an artificer as in most parts
of Europe that of an artificer is to that of a labourer. In
China, the great ambition of every man is to get possession
of some little bit of land, either in property or in lease;
and leases are there said to be granted upon very moderate
terms, and to be sufficiently secured to the lessees. The Chinese
have little respect for foreign trade. Your beggarly commerce!
was the language in which the Mandarins of Pekin used to talk
to Mr. de Lange, the Russian envoy, concerning it. Except with
Japan, the Chinese carry on, themselves, and in their own bottoms,
little or no foreign trade; and it is only into one or two
ports of their kingdom that they even admit the ships of foreign
nations. Foreign trade therefore is, in China, every way confined
within a much narrower circle than that to which it would naturally
extend itself, if more freedom was allowed to it, either in
their own ships, or in those of foreign nations.
Manufactures, as in a small bulk they frequently contain a
great value, and can upon that account be transported at less
expense from one country to another than most parts of rude
produce, are, in almost all countries, the principal support
of foreign trade. In countries, besides, less extensive and
less favourably circumstanced for inferior commerce than China,
they generally require the support of foreign trade. Without
an extensive foreign market they could not well flourish, either
in countries so moderately extensive as to afford but a narrow
home market or in countries where the communication between
one province and another was so difficult as to render it impossible
for the goods of any particular place to enjoy the whole of
that home market which the country could afford. The perfection
of manufacturing industry, it must be remembered, depends altogether
upon the division of labour; and the degree to which the division
of labour can be introduced into any manufacture is necessarily
regulated, it has already been shown, by the extent of the
market. But the great extent of the empire of China, the vast
multitude of its inhabitants, the variety of climate, and consequently
of productions in its different provinces, and the easy communication
by means of water carriage between the greater part of them,
render the home market of that country of so great extent as
to be alone sufficient to support very great manufactures,
and to admit of very considerable subdivisions of labour. The
home market of China is, perhaps, in extent, not much inferior
to the market of all the different countries of Europe put
together. A more extensive foreign trade, however, which to
this great home market added the foreign market of all the
rest of the world- especially if any considerable part of this
trade was carried on in Chinese ships- could scarce fail to
increase very much the manufactures of China, and to improve
very much the productive powers of its manufacturing industry.
By a more extensive navigation, the Chinese would naturally
learn the art of using and constructing themselves all the
different machines made use of in other countries, as well
as the other improvements of art and industry which are practised
in all the different parts of the world. Upon their present
plan they have little opportunity except that of the Japanese.
The policy of ancient Egypt too, and that of the Gentoo government
of Indostan, seem to have favoured agriculture more than all
other employments.
Both in ancient Egypt and Indostan the whole body of the people
was divided into different castes or tribes, each of which
was confined, from father to son, to a particular employment
or class of employments. The son of a priest was necessarily
a priest; the son of a soldier, a soldier; the son of a labourer,
a labourer; the son of a weaver, a weaver; the son of a tailor,
a tailor, etc. In both countries, the caste of the priests
held the highest rank, and that of the soldiers the next; and
in both countries, the caste of the farmers and labourers was
superior to the castes of merchants and manufacturers.
The government of both countries was particularly attentive
to the interest of agriculture. The works constructed by the
ancient sovereigns of Egypt for the proper distribution of
the waters of the Nile were famous in antiquity; and the ruined
remains of some of them are still the admiration of travellers.
Those of the same kind which were constructed by the ancient
sovereigns of Indostan for the proper distribution of the waters
of the Ganges as well as of many other rivers, though they
have been less celebrated, seem to have been equally great.
Both countries, accordingly, though subject occasionally to
dearths, have been famous for their great fertility. Though
both were extremely populous, yet, in years of moderate plenty,
they were both able to export great quantities of grain to
their neighbours.
The ancient Egyptians had a superstitious aversion to the
sea; and as the Gentoo religion does not permit its followers
to light a fire, nor consequently to dress any victuals upon
the water, it in effect prohibits them from all distant sea
voyages. Both the Egyptians and Indians must have depended
almost altogether upon the navigation of other nations for
the exportation of their surplus produce; and this dependency,
as it must have confined the market, so it must have discouraged
the increase of this surplus produce. It must have discouraged,
too, the increase of the manufactured produce more than that
of the rude produce. Manufactures require a much more extensive
market than the most important parts of the rude produce of
the land. A single shoemaker will make more than three hundred
pairs of shoes in the year; and his own family will not, perhaps,
wear out six pairs. Unless therefore he has the custom of at
least fifty such families as his own, he cannot dispose of
the whole produce of his own labour. The most numerous class
of artificers will seldom, in a large country, make more than
one in fifty or one in a hundred of the whole number of families
contained in it. But in such large countries as France and
England, the number of people employed in agriculture has by
some authors been computed at a half, by others at a third,
and by no author that I know of, at less than a fifth of the
whole inhabitants of the country. But as the produce of the
agriculture of both France and England is, the far greater
part of it, consumed at home, each person employed in it must,
according to these computations, require little more than the
custom of one, two, or at most, of four such families as his
own in order to dispose of the whole produce of his own labour.
Agriculture, therefore, can support itself under the discouragement
of a confined market much better than manufactures. In both
ancient Egypt and Indostan, indeed, the confinement of the
foreign market was in some measure compensated by the conveniency
of many inland navigations, which opened, in the most advantageous
manner, the whole extent of the home market to every part of
the produce of every different district of those countries.
The great extent of Indostan, too, rendered the home market
of that country very great, and sufficient to support a great
variety of manufactures. But the small extent of ancient Egypt,
which was never equal to England, must at all times have rendered
the home market of that country too narrow for supporting any
great variety of manufactures. Bengal, accordingly, the province
of Indostan, which commonly exports the greatest quantity of
rice, has always been more remarkable for the exportation of
a great variety of manufactures than for that of its grain.
Ancient Egypt, on the contrary, though it exported some manufactures,
fine linen in particular, as well as some other goods, was
always most distinguished for its great exportation of grain.
It was long the granary of the Roman empire.
The sovereigns of China, of ancient Egypt, and of the different
kingdoms into which Indostan has at different times been divided,
have always derived the whole, or by far the most considerable
part, of their revenue from some sort of land tax or land rent.
This land tax or land rent, like the tithe in Europe, consisted
in a certain proportion, a fifth, it is said, of the produce
of the land, which was either delivered in kind, or paid in
money, according to a certain valuation, and which therefore
varied from year to year according to all the variations of
the produce. It was natural therefore that the sovereigns of
those countries should be particularly attentive to the interests
of agriculture, upon the prosperity or declension of which
immediately depended the yearly increase or diminution of their
own revenue.
The
policy of the ancient republics of Greece, and that of
Rome, though it honoured agriculture more than manufactures
or foreign trade, yet seems rather to have discouraged the
latter employments than to have given any direct or intentional
encouragement to the former. In several of the ancient states
of Greece, foreign trade was prohibited altogether; and in
several others the employments of artificers and manufacturers
were considered as hurtful to the strength and agility of the
human body, as rendering it incapable of those habits which
their military and gymnastic exercises endeavoured to form
in it, and as thereby disqualifying it more or less for undergoing
the fatigues and encountering the dangers of war. Such occupations
were considered as fit only for slaves, and the free citizens
of the state were prohibited from exercising them. Even in
those states where no such prohibition took place, as in Rome
and Athens, the great body of the people were in effect excluded
from all the trades which are, now commonly exercised by the
lower sort of the inhabitants of towns. Such trades were, at
Athens and Rome, all occupied by the slaves of the rich, who
exercised them for the benefit of their masters, whose wealth,
power, and protection made it almost impossible for a poor
freeman to find a market for his work, when it came into competition
with that of the slaves of the rich. Slaves, however, are very
seldom inventive; and all the most important improvements,
either in machinery, or in the arrangement and distribution
of work which facilitate and abridge labour, have been the
discoveries of freemen. Should a slave propose any improvement
of this kind, his master would be very apt to consider the
proposal as the suggestion of laziness, and a desire to save
his own labour at the master's expense. The poor slave, instead
of reward, would probably meet with much abuse, perhaps with
some punishment. In the manufactures carried on by slaves,
therefore, more labour must generally have been employed to
execute the same quantity of work than in those carried on
by freemen. The work of the former must, upon that account,
generally have been dearer than that of the latter. The Hungarian
mines, it is remarked by Mr. Montesquieu, though not richer,
have always been wrought with less expense, and therefore with
more profit, than the Turkish mines in their neighbourhood.
The Turkish mines are wrought by slaves; and the arms of those
slaves are the only machines which the Turks have ever thought
of employing. The Hungarian mines are wrought by freemen, who
employ a great deal of machinery, by which they facilitate
and abridge their own labour. From the very little that is
known about the price of manufactures in the times of the Greeks
and Romans, it would appear that those of the finer sort were
excessively dear. Silk sold for its weight in gold. It was
not, indeed, in those times a European manufacture; and as
it was all brought from the East Indies, the distance of the
carriage may in some measure account for the greatness of price.
The price, however, which a lady, it is said, would sometimes
pay for a piece of very fine linen, seems to have been equally
extravagant; and as linen was always either a European, or
at farthest, an Egyptian manufacture, this high price can be
accounted for only by the great expense of the labour which
must have been employed about it, and the expense of this labour
again could arise from nothing but the awkwardness of the machinery
which it made use of. The price of fine woollens too, though
not quite so extravagant, seems however to have been much above
that of the present times. Some cloths, we are told by Pliny,
dyed in a particular manner, cost a hundred denarii, or three
pounds six shillings and eightpence the pound weight. Others
dyed in another manner cost a thousand denarii the pound weight,
or thirty-three pounds six shillings and eightpence. The Roman
pound, it must be remembered, contained only twelve of our
avoirdupois ounces. This high price, indeed, seems to have
been principally owing to the dye. But had not the cloths themselves
been much dearer than any which are made in the present times,
so very expensive a dye would not probably have been bestowed
upon them. The disproportion would have been too great between
the value of the accessory and that of the principal. The price
mentioned by the same author of some Triclinaria, a sort of
woollen pillows or cushions made use of to lean upon as they
reclined upon their couches at table, passes all credibility;
some of them being said to have cost more than thirty thousand,
others more than three hundred thousand pounds. This high price,
too, is not said to have arisen from the dye. In the dress
of the people of fashion of both sexes there seems to have
been much less variety, it is observed by Doctor Arbuthnot,
in ancient than in modern times; and the very little variety
which we find in that of the ancient statues confirms his observation.
He infers from this that their dress must upon the whole have
been cheaper than ours; but the conclusion does not seem to
follow. When the expense of fashionable dress is very great,
the variety must be very small. But when, by the improvements
in the productive powers of manufacturing art and industry,
the expense of any one dress comes to be very moderate, the
variety will naturally be very great. The rich, not being able
to distinguish themselves by the expense of any one dress,
will naturally endeavour to do so by the multitude and variety
of their dresses.
The greatest and most important branch of the commerce of
every nation, it has already been observed, is that which is
carried on between the inhabitants of the town and those of
the country. The inhabitants of the town draw from the country
the rude produce which constitutes both the materials of their
work and the fund of their subsistence; and they pay for this
rude produce by sending back to the country a certain portion
of it manufactured and prepared for immediate use. The trade
which is carried on between these two different sets of people
consists ultimately in a certain quantity of rude produce exchanged
for a certain quantity of manufactured produce. The dearer
the latter, therefore, the cheaper the former; and whatever
tends in any country to raise the price of manufactured produce
tends to lower that of the rude produce of the land, and thereby
to discourage agriculture. The smaller the quantity of manufactured
produce which in any given quantity of rude produce, or, what
comes to the same thing, which the price of any given quantity
of rude produce is capable of purchasing, the smaller the exchangeable
value of that given quantity of rude produce, the smaller the
encouragement which either the landlord has to increase its
quantity by improving or the farmer by cultivating the land.
Whatever, besides, tends to diminish in any country the number
of artificers and manufacturers, tends to diminish the home
market, the most important of all markets for the rude produce
of the land, and thereby still further to discourage agriculture.
Those systems, therefore, which, preferring agriculture to
all other employments, in order to promote it, impose restraints
upon manufactures and foreign trade, act contrary to the very
end which they propose, and indirectly discourage that very
species of industry which they mean to promote. They are so
far, perhaps, more inconsistent than even the mercantile system.
That system, by encouraging manufactures and foreign trade
more than agriculture, turns a certain portion of the capital
of the society from supporting a more advantageous, to support
a less advantageous species of industry. But still it really
and in the end encourages that species of industry which it
means to promote. Those agricultural systems, on the contrary,
really and in the end discourage their own favourite species
of industry.
It is thus that every system which endeavours, either by extraordinary
encouragements to draw towards a particular species of industry
a greater share of the capital of the society than what would
naturally go to it, or, by extraordinary restraints, force
from a particular species of industry some share of the capital
which would otherwise be employed in it, is in reality subversive
of the great purpose which it means to promote. It retards,
instead of accelerating, the progress of the society towards
real wealth and greatness; and diminishes, instead of increasing,
the real value of the annual produce of its land and labour.
All systems either of preference or of restraint, therefore,
being thus completely taken away, the obvious and simple system
of natural liberty establishes itself of its own accord. Every
man, as long as he does not violate the laws of justice, is
left perfectly free to pursue his own interest his own way,
and to bring both his industry and capital into competition
with those of any other man, or order of men. The sovereign
is completely discharged from a duty, in the attempting to
perform which he must always be exposed to innumerable delusions,
and for the proper performance of which no human wisdom or
knowledge could ever be sufficient; the duty of superintending
the industry of private people, and of directing it towards
the employments most suitable to the interest of the society.
According to the system of natural liberty, the sovereign has
only three duties to attend to; three duties of great importance,
indeed, but plain and intelligible to common understandings:
first, the duty of protecting the society from violence and
invasion of other independent societies; secondly, the duty
of protecting, as far as possible, every member of the society
from the injustice or oppression of every other member of it,
or the duty of establishing an exact administration of justice;
and, thirdly, the duty of erecting and maintaining certain
public works and certain public institutions which it can never
be for the interest of any individual, or small number of individuals,
to erect and maintain; because the profit could never repay
the expense to any individual or small number of individuals,
though it may frequently do much more than repay it to a great
society.
The proper performance of those several duties of the sovereign
necessarily supposes a certain expense; and this expense again
necessarily requires a certain revenue to support it. In the
following book, therefore, I shall endeavour to explain, first,
what are the necessary expenses of the sovereign or commonwealth;
and 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 the society; 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 inconveniences of each of those methods;
and thirdly, 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. The following book, therefore,
will naturally be divided into three chapters.
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