An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith (ebook reader with highlighter txt) 📖

prove, advantageous to any

one particular order of men. But besides all the bad effects

to the country in general, which have already been mentioned as

necessarily resulting from a higher rate of profit, there is one

more fatal, perhaps, than all these put together, but which, if

we may judge from experience, is inseparably connected with it.

The high rate of profit seems everywhere to destroy that

parsimony which, in other circumstances, is natural to the

character of the merchant. When profits are high, that sober

virtue seems to be superfluous, and expensive luxury to suit

better the affluence of his situation. But the owners of the

great mercantile capitals are necessarily the leaders and

conductors of the whole industry of every nation; and their

example has a much greater influence upon the manners of the

whole industrious part of it than that of any other order of men.

If his employer is attentive and parsimonious, the workman is

very likely to be so too; but if the master is dissolute and

disorderly, the servant, who shapes his work according to the

pattern which his master prescribes to him, will shape his life,

too, according to the example which he sets him. Accumulation is

thus prevented in the hands of all those who are naturally the

most disposed to accumulate; and the funds destined for the

maintenance of productive labour, receive no augmentation from

the revenue of those who ought naturally to augment them the

most. The capital of the country, instead of increasing,

gradually dwindles away, and the quantity of productive labour

maintained in it grows every day less and less. Have the

exorbitant profits of the merchants of Cadiz and Lisbon augmented

the capital of Spain and Portugal ? Have they alleviated the

poverty, have they promoted the industry, of those two beggarly

countries? Such has been the tone of mercantile expense in those

two trading cities, that those exorbitant profits, far from

augmenting the general capital of the country, seem scarce to

have been sufficient to keep up the capitals upon which they were

made. Foreign capitals are every day intruding themselves, if I

may say so, more and more into the trade of Cadiz and Lisbon. It

is to expel those foreign capitals from a trade which their own

grows every day more and more insufficient for carrying on, that

the Spaniards and Portuguese endeavour every day to straiten more

and more the galling bands of their absurd monopoly. Compare the

mercantile manners of Cadiz and Lisbon with those of Amsterdam,

and you will be sensible how differently the conduct and

character of merchants are affected by the high and by the low

profits of stock. The merchants of London, indeed, have not yet

generally become such magnificent lords as those of Cadiz and

Lisbon; but neither are they in general such attetitive and

parsimonious burghers as those of Amsterdam. They are supposed,

however, many of them, to be a good deal richer than the greater

part of the former, and not quire so rich as many of the latter:

but the rate of their profit is commonly much lower than that of

the former, and a good deal higher than that of the latter. Light

come, light go, says the proverb ; and the ordinary tone of

expense seems everywhere to be regulated, not so much according

to the real ability of spending, as to the supposed facility of

getting money to spend.

 

It is thus that the single advantage which the monopoly procures

to a single order of men, is in many different ways hurtful to

the general interest of the country.

 

To found a great empire for the sole purpose of raising up a

people of customers, may at first sight, appear a project fit

only for a nation of shopkeepers. It is, however, a project

altogether unfit for a nation of shopkeepers, but extremely fit

for a nation whose government is influenced by shopkeepers. Such

statesmen, and such statesmen only, are capable of fancying that

they will find some advantage in employing the blood and treasure

of their fellow-citizens, to found and maintain such an empire.

Say to a shopkeeper, Buy me a good estate, and I shall always buy

my clothes at your shop, even though I should pay somewhat dearer

than what I can have them for at other shops ; and you will not

find him very forward to embrace your proposal. But should

any other person buy you such an estate, the shopkeeper will be

much obliged to your benefactor if he would enjoin you to buy all

your clothes at his shop. England purchased for some of her

subjects, who found themselves uneasy at home, a great estate in

a distant country. The price, indeed, was very small, and instead

of thirty years purchase, the ordinary price of land in the

present times, it amounted to little more than the expense of the

different equipments which made the first discovery, reconoitered

the coast, and took a fictitious possession of the country. The

land was good, and of great extent; and the cultivators having

plenty of good ground to work upon, and being for some time at

liberty to sell their produce where they pleased, became, in the

course of little more than thirty or forty years (between 1620

and 1660), so numerous and thriving a people, that the

shopkeepers and other traders of England wished to secure to

themselves the monopoly of their custom. Without pretending,

therefore, that they had paid any part, either of the original

purchase money, or of the subsequent expense of improvement, they

petitioned the parliament, that the cultivators of America might

for the future be confined to their shop; first, for buying all

the goods which they wanted from Europe; and, secondly, for

selling all such parts of their own produce as those traders

might find it convenient to buy. For they did not find it

convenient to buy every part of it. Some parts of it imported

into England, might have interfered with some of the trades which

they themselves carried on at home. Those particular parts of it,

therefore, they were willing that the colonists should sell where

they could; the farther off the better; and upon that account

proposed that their market should be confined to the countries

south of Cape Finisterre. A clause in the famous act of

navigation established this truly shopkeeper proposal into a law.

 

The maintenance of this monopoly has hitherto been the principal,

or more properly, perhaps, the sole end and purpose of the

dominion which Great Britain assumes over her colonies. In the

exclusive trade, it is supposed, consists the great advantage of

provinces, which have never yet afforded either revenue or

military force for the support of the civil government, or the

defence of the mother country. The monopoly is the principal

badge of their dependency, and it is the sole fruit which has

hitherto been gathered from that dependency. Whatever expense

Great Britain has hitherto laid out in maintaining this

dependency, has really been laid out in order to support this

monopoly. The expense of the ordinary peace establishment of the

colonies amounted, before the commencement of the present

disturbances to the pay of twenty regiments of foot ; to the

expense of the artillery, stores, and extraordinary provisions,

with which it was necessary to supply them ; and to the expense

of a very considerable naval force, which was constantly kept up,

in order to guard from the smuggling vessels of other nations,

the immense coast of North America, and that of our West Indian

islands. The whole expense of this peace establishment was a

charge upon the revenue of Great Britain, and was, at the same

time, the smallest part of what the dominion of the colonies has

cost the mother country. If we would know the amount of the

whole, we must add to the annual expense of this peace

establishment, the interest of the sums which, in consequence of

their considering her colonies as provinces subject to her

dominion, Great Britain has, upon different occasions, laid out

upon their defence. We must add to it, in particular, the whole

expense of the late war, and a great part of that of the war

which preceded it. The late war was altogether a colony quarrel ;

and the whole expense of it, in whatever part of the world it

might have been laid out, whether in Germany or the East Indies,

ought justly to be stated to the account of the colonies. It

amounted to more than ninety millions sterling, including not

only the new debt which was contracted, but the two shillings in

the pound additional land tax, and the sums which were every year

borrowed from the sinking fund. The Spanish war which began in

1739 was principally a colony quarrel. Its principal object was

to prevent the search of the colony ships, which carried on a

contraband trade with the Spanish Main. This whole expense is, in

reality, a bounty which has been given in order to support a

monopoly. The pretended purpose of it was to encourage the

manufactures, and to increase the commerce of Great Britain. But

its real effect has been to raise the rate of mercantile profit,

and to enable our merchants to turn into a branch of trade, of

which the returns are more slow and distant than those of the

greater part of other trades, a greater proportion of their

capital than they otherwise would have done; two events which, if

a bounty could have prevented, it might perhaps have been very

well worth while to give such a bounty.

 

Under the present system of management, therefore, Great Britain

derives nothing but loss from the dominion which she assumes over

her colonies.

 

To propose that Great Britain should voluntarily give up all

authority over her colonies, and leave them to elect their own

magistrates, to enact their own laws, and to make peace and war,

as they might think proper, would be to propose such a measure as

never was, and never will be, adopted by any nation in the world.

No nation ever voluntarily gave up the dominion of any province,

how troublesome soever it might be to govern it, and how small

soever the revenue which it afforded might be in proportion to

the expense which it occasioned. Such sacrifices, though they

might frequently be agreeable to the interest, are always

mortifying to the pride of every nation; and, what is perhaps of

still greater consequence, they are always contrary to the

private interest of the governing part of it, who would thereby

be deprived of the disposal of many places of trust and profit,

of many opportunities of acquiring wealth and distinction, which

the possession of the most turbulent, and, to the great body of

the people, the most unprofitable province, seldom fails to

afford. The most visionary enthusiasts would scarce be capable of

proposing such a measure, with any serious hopes at least of its

ever being adopted. If it was adopted, however, Great Britain

would not only be immediately freed from the whole annual expense

of the peace establishment of the colonies, but might settle with

them such a treaty of commerce as would effectually secure to her

a free trade, more advantageous to the great body of the people,

though less so to the merchants, than the monopoly which she at

present enjoys. By thus parting good friends, the natural

affection of the colonies to the mother country, which, perhaps,

our late dissensions have well nigh extinguished, would quickly

revive. It might dispose them not only to respect, for whole

centuries together, that treaty of commerce which they had

concluded with us at parting, but to favour us in war as well as

in trade, and instead of turbulent and factious subjects, to

become our most faithful,