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

or to make the other, for their own use. By

means of the unproductive class, the cuitivators 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 Hamburgh, 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 subsistence; are 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 only serve 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 would 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 these 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 little artificers and

manufacturers of such mercantile states, who had both to bring

from a greater 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 justled 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 justle 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 justle 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 profits; 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

duly 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 neat 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 this 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 neat 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 of things 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,