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

>prudently managed, has been fully explained in the second book of

this Inquiry. But a public bank, which is to support public

credit, and, upon particular emergencies, to advance to

government the whole produce of a tax, to the amount, perhaps, of

several millions, a year or two before it comes in, requires a

greater capital than can easily be collected into any private

copartnery.

 

The trade of insurance gives great security to the fortunes of

private people, and, by dividing among a great many that loss

which would ruin an individual, makes it fall light and easy upon

the whole society. In order to give this security, however, it is

necessary that the insurers should have a very large capital.

Before the establishment of the two joint-stock companies for

insurance in London, a list, it is said, was laid before the

attorney-general, of one hundred and fifty private iusurers, who

had failed in the course of a few years.

 

That navigable cuts and canals, and the works which are sometimes

necessary for supplying a great city with water, are of great and

general utility, while, at the same time, they frequently require

a greater expense than suits the fortunes of private people, is

sufficiently obvious.

 

Except the four trades above mentioned, I have not been able to

recollect any other, in which all the three circumstances

requisite for rendering reasonable the establislment of a

joint-stock company concur. The English copper company of

London, the lead-smelting company, the glass-grinding company,

have not even the pretext of any great or singular utility in the

object which they pursue ; nor does the pursuit of that object

seem to require any expense unsuitable to the fortunes of many

private men. Whether the trade which those companies carry on, is

reducible to such strict rule and method as to render it fit for

the management of a joint-stock company, or whether they have any

reason to boast of their extraordinary profits, I do not pretend

to know. The mine-adventurers company has been long ago bankrupt.

A share in the stock of the British Linen company of Edinburgh

sells, at present, very much below par, though less so than it

did some years ago. The joint-stock companies, which are

established for the public-spirited purpose of promoting some

particular manufacture, over and above managing their own affairs

ill, to the diminution of the general stock of the society, can,

in other respects, scarce ever fail to do more harm than good.

Notwithstanding the most upright intentions, the unavoidable

partiality of their directors to particular branches of the

manufacture, of which the undertakers mislead and impose upon

them, is a real discouragement to the rest, and necessarily

breaks, more or less, that natural proportion which would

otherwise establish itself between judicious industry and profit,

and which, to the general industry of the country, is of all

encouragements the greatest and the most effectual.

 

ART. II. � Of the Expense of the Institution for the Education of

Youth.

 

The institutions for the education of the youth may, in the same

manner, furnish a revenue sufficient for defraying their own

expense. The fee or honorary, which the scholar pays to the

master, naturally constitutes a revenue of this kind.

 

Even where the reward of the master does not arise altogether

from this natural revenue, it still is not necessary that it

should be derived from that general revenue of the society, of

which the collection and application are, in most countries,

assigned to the executive power. Through the greater part of

Europe, accordingly, the endowment of schools and colleges makes

either no charge upon that general revenue, or but a very small

one. It everywhere arises chiefly from some local or provincial

revenue, from the rent of some landed estate, or from the

interest of some sum of money, allotted and put under the

management of trustees for this particular purpose, sometimes by

the sovereign himself, and sometimes by some private donor.

 

Have those public endowments contributed in general, to promote

the end of their institution ? Have they contributed to encourage

the diligence, and to improve the abilities, of the teachers?

Have they directed the course of education towards objects more

useful, both to the individual and to the public, than those to

which it would naturally have gone of its own accord ? It should

not seem very difficult to give at least a probable answer to

each of those questions.

 

In every profession, the exertion of the greater part of those

who exercise it, is always in proportion to the necessity they

are under of making that exertion. This necessity is greatest

with those to whom the emoluments of their profession are the

only source from which they expect their fortune, or even their

ordinary revenue and subsistence. In order to acquire this

fortune, or even to get this subsistence, they must, in the

course of a year, execute a certain quantity of work of a known

value; and, where the competition is free, the rivalship of

competitors, who are all endeavouring to justle one another out

of employment, obliges every man to endeavour to execute his work

with a certain degree of exactness. The greatness of the objects

which are to be acquired by success in some particular

professions may, no doubt, sometimes animate the exertions of a

few men of extraordinary spirit and ambition. Great objects,

however, are evidently not necessary, in order to occasion the

greatest exertions. Rivalship and emulation render excellency,

even in mean professions, an object of ambition, and frequently

occasion the very greatest exertions. Great objects, on the

contrary, alone and unsupported by the necessity of application,

have seldom been sufficient to occasion any considerable

exertion. In England, success in the profession of the law leads

to some very great objects of ambition ; and yet how few men,

born to easy fortunes, have ever in this country been eminent in

that profession?

 

The endowments of schools and colleges have necessarily

diminished, more or less, the necessity of application in the

teachers. Their subsistence, so far as it arises from their

salaries, is evidently derived from a fund, altogether

independent of their success and reputation in their particular

professions.

 

In some universities, the salary makes but a part, and frequently

but a small part, of the emoluments of the teacher, of which the

greater part arises from the honoraries or fees of his pupils.

The necessity of application, though always more or less

diminished, is not, in this case, entirely taken away. Reputation

in his profession is still of some importance to him, and he

still has some dependency upon the affection, gratitude, and

favourable report of those who have attended upon his

instructions; and these favourable sentiments he is likely to

gain in no way so well as by deserving them, that is, by the

abilities and diligence with which he discharges every part of

his duty.

 

In other universities, the teacher is prohibited from receiving

any honorary or fee from his pupils, and his salary constitutes

the whole of the revenue which he derives from his office.

His interest is, in this case, set as directly in opposition to

his duty as it is possible to set it. It is the interest of

every man to live as much at his ease as he can; and if his

emoluments are to be precisely the same, whether he does or does

not perform some very laborious duty, it is certainly his

interest, at least as interest is vulgarly understood, either to

neglect it altogether, or, if he is subject to some authority

which will not suffer him to do this, to perform it in as

careless and slovenly a manner as that authority will permit.

If he is naturally active and a lover of labour, it is his

interest to employ that activity in any way from which he can

derive some advantage, rather than in the performarnce of his

duty, from which he can derive none.

 

If the authority to which he is subject resides in the body

corporate, the college, or university, of which he himself is a

member, and in which the greater part of the other members are,

like himself, persons who either are, or ought to be teachers,

they are likely to make a common cause, to be all very indulgent

to one another, and every man to consent that his neighbour may

neglect his duty, provided he himself is allowed to neglect his

own. In the university of Oxford, the greater part of the public

professors have, for these many years, given up altogether even

the pretence of teaching.

 

If the authority to which he is subject resides, not so much in

the body corporate, of which he is a member, as in some other

extraneous persons, in the bishop of the diocese, for example, in

the governor of the province, or, perhaps, in some minister of

state, it is not, indeed, in this case, very likely that he will

be suffered to neglect his duty altogether. All that such

superiors, however, can force him to do, is to attend upon his

pupils a certain number of hours, that is, to give a certain

number of lectures in the week, or in the year. What those

lectures shall be, must still depend upon the diligence of the

teacher ; and that diligence is likely to be proportioned to the

motives which he has for exerting it. An extraneous jurisdiction

of this kind, besides, is liable to be exercised both ignorantly

and capriciously. In its nature, it is arbitrary and

discretionary; and the persons who exercise it, neither attending

upon the lectures of the teacher themselves, nor perhaps

understanding the sciences which it is his business to teach, are

seldom capable of exercising it with judgment. From the insolence

of office, too, they are frequently indifferent how they exercise

it, and are very apt to censure or deprive him of his office

wantonly and without any just cause. The person subject to such

jurisdiction is necessarily degraded by it, and, instead of being

one of the most respectable, is rendered one of the meanest and

most contemptible persons in the society. It is by powerful

protection only, that he can effectually guard himself against

the bad usage to which he is at all times exposed; and this

protection he is most likely to gain, not by ability or diligence

in his profession, but by obsequiousness to the will of his

superiors, and by being ready, at all times, to sacrifice to that

will the rights, the interest, and the honour of the body

corporate, of which he is a member. Whoever has attended for any

considerable time to the administration of a French university,

must have had occasion to remark the effects which naturally

result from an arbitrary and extraneous jurisdiction of this

kind.

 

Whatever forces a certain number of students to any college or

university, independent of the merit or reputation of the

teachers, tends more or less to diminish the necessity of that

merit or reputation.

 

The privileges of graduates in arts, in law, physic, and

divinity, when they can be obtained only by residing a certain

number of years in certain universities, necessarily force a

certain number of students to such universities, independent of

the merit or reputation of the teachers. The privileges of

graduates are a sort of statutes of apprenticeship, which have

contributed to the improvement of education just as the other

statutes of apprenticeship have to that of arts and manufactures.

 

The charitable foundations of scholarships, exhibitions,

bursaries, etc. necessarily attach a certain number of students

to certain colleges, independent altogether of the merit of those

particular colleges. Were the students upon such charitable

foundations left free to choose what college they liked best,

such liberty might perhaps contribute to