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

therefore, to proportion, with any tolerable

exactness, the tax of every foreign, to the enhancement of the

price of every home commodity.

 

Secondly, Taxes upon the necessaries of life have nearly the same

effect upon the circumstances of the people as a poor soil and a

bad climate. Provisions are thereby rendered dearer, in the same

manner as if it required extraordinary labour and expense to

raise them. As, in the natural scarcity arising from soil and

climate, it would be absurd to direct the people in what manner

they ought to employ their capitals and industry, so is it

likewise in the artificial scarcity arising from such taxes. To

be left to accommodate, as well as they could, their industry to

their situation, and to find out those employments in which,

notwithstanding their unfavourable circumstances, they might have

some advantage either in the home or in the foreign market, is

what, in both cases, would evidently be most for their advantage.

To lay a new-tax upon them, because they are already overburdened

with taxes, and because they already pay too dear for the

necessaries of life, to make them likewise pay too dear for the

greater part of other commodities, is certainly a most absurd way

of making amends.

 

Such taxes, when they have grown up to a certain height, are a

curse equal to the barrenness of the earth, and the inclemency of

the heavens, and yet it is in the richest and most industrious

countries that they have been most generally imposed. No other

countries could support so great a disorder. As the strongest

bodies only can live and enjoy health under an unwholesome

regimen, so the nations only, that in every sort of industry have

the greatest natural and acquired advantages, can subsist and

prosper under such taxes. Holland is the country in Europe in

which they abound most, and which, from peculiar circumstances,

continues to prosper, not by means of them, as has been most

absurdly supposed, but in spite of them.

 

As there are two cases in which it will generally be advantageous

to lay some burden upon foreign for the encouragement of domestic

industry, so there are two others in which it may sometimes be a

matter of deliberation, in the one, how far it is proper to

continue the free importation of certain foreign goods; and, in

the other, how far, or in what manner, it may be proper to

restore that free importation, after it has been for some time

interrupted.

 

The case in which it may sometimes be a matter of deliberation

how far it is proper to continue the free importation of certain

foreign goods, is when some foreign nation restrains, by high

duties or prohibitions, the importation of some of our

manufactures into their country. Revenge, in this case, naturally

dictates retaliation, and that we should impose the like duties

and prohibitions upon the importation of some or all of their

manufactures into ours. Nations, accordingly, seldom fail to

retaliate in this manner. The French have been particularly

forward to favour their own manufactures, by restraining the

importation of such foreign goods as could come into competition

with them. In this consisted a great part of the policy of Mr

Colbert, who, notwithstanding his great abilities, seems in this

case to have been imposed upon by the sophistry of merchants and

manufacturers, who are always demanding a monopoly against their

countrymen. It is at present the opinion of the most intelligent

men in France, that his operations of this kind have not been

beneficial to his country. That minister, by the tariff of 1667,

imposed very high duties upon a great number of foreign

manufactures. Upon his refusing to moderate them in favour of the

Dutch, they, in 1671, prohibited the importation of the wines,

brandies, and manufactures of France. The war of 1672 seems to

have been in part occasioned by this commercial dispute. The

peace of Nimeguen put an end to it in 1678, by moderating some of

those duties in favour of the Dutch, who in consequence took off

their prohibition. It was about the same time that the French and

English began mutually to oppress each other’s industry, by the

like duties and prohibitions, of which the French, however, seem

to have set the first example, The spirit of hostility which has

subsisted between the two nations ever since, has hitherto

hindered them from being moderated on either side. In 1697, the

Ehglish prohibited the importation of bone lace, the manufacture

of Flanders. The government of that country, at that time under

the dominion of Spain, prohibited, in return, the importation of

English woollens. In 1700, the prohibition of importing bone lace

into England was taken oft; upon condition that the importation

of English woollens into Flanders should be put on the same

footing as before.

 

There may be good policy in retaliations of this kind, when there

is a probability that they will procure the repeal of the high

duties or prohibitions complained of. The recovery of a great

foreign market will generally more than compensate the transitory

inconveniency of paying dearer during a short time for some sorts

of goods. To judge whether such retaliations are likely to

produce such an effect, does not, perhaps, belong so much to the

science of a legislator, whose deliberations ought to be governed

by general principles, which are always the same, as to the skill

of that insidious and crafty animal vulgarly called a statesman

or politician, whose councils are directed by the momentary

fluctuations of affairs. When there is no probability that any

such repeal can be procured, it seems a bad method of

compensating the injury done to certain classes of our people, to

do another injury ourselves, not only to those classes, but to

almost all the other classes of them. When our neighbours

prohibit some manufacture of ours, we generally prohibit, not

only the same, for that alone would seldom affect them

considerably, but some other manufacture of theirs. This may, no

doubt, give encouragement to some particular class of workmen

among ourselves, and, by excluding some of their rivals, may

enable them to raise their price in the home market. Those

workmen however, who suffered by our neighbours prohibition, will

not be benefited by ours. On the contrary, they, and almost all

the other classes of our citizens, will thereby be obliged to pay

dearer than before for certain goods. Every such law, therefore,

imposes a real tax upon the whole country, not in favour of that

particular class of workmen who were injured by our neighbours

prohibitions, but of some other class.

 

The case in which it may sometimes be a matter of deliberation,

how far, or in what manner, it is proper to restore the free

importation of foreign goods, after it has been for some time

interrupted, is when particular manufactures, by means of high

duties or prohibitions upon all foreign goods which can come into

competition with them, have been so far extended as to employ a

great multitude of hands. Humanity may in this case require that

the freedom of trade should be restored only by slow gradations,

and with a good deal of reserve and circumspection. Were those

high duties and prohibitions taken away all at once, cheaper

foreign goods of the same kind might be poured so fast into the

home market, as to deprive all at once many thousands of our

people of their ordinary employment and means of subsistence. The

disorder which this would occasion might no doubt be very

considerable. It would in all probability, however, be much less

than is commonly imagined, for the two following reasons.

 

First, All those manufactures of which any part is commonly

exported to other European countries without a bounty, could be

very little affected by the freest importation of foreign goods.

Such manufactures must be sold as cheap abroad as any other

foreign goods of the same quality and kind, and consequently must

be sold cheaper at home. They would still, therefore, keep

possession of the home market; and though a capricious man of

fashion might sometimes prefer foreign wares, merely because they

were foreign, to cheaper and better goods of the same kind that

were made at home, this folly could, from the nature of things,

extend to so few, that it could make no sensible impression upon

the general employment of the people. But a great part of all the

different branches of our woollen manufacture, of our tanned

leather, and of our hardware, are annually exported to other

European countries without any bounty, and these are the

manufactures which employ the greatest number of hands. The silk,

perhaps, is the manufacture which would suffer the most by this

freedom of trade, and after it the linen, though the latter much

less than the former.

 

Secondly, Though a great number of people should, by thus

restoring the freedom of trade, be thrown all at once out of

their ordinary employment and common method of subsistence, it

would by no means follow that they would thereby be deprived

either of employment or subsistence. By the reduction of the army

and navy at the end of the late war, more than 100,000 soldiers

and seamen, a number equal to what is employed in the greatest

manufactures, were all at once thrown out of their ordinary

employment : but though they no doubt suffered some

inconveniency, they were not thereby deprived of all employment

and subsistence. The greater part of the seamen, it is probable,

gradually betook themselves to the merchant service as they could

find occasion, and in the mean time both they and the soldiers

were absorbed in the great mass of the people, and employed in a

great variety of occupations. Not only no great convulsion, but

no sensible disorder, arose from so great a change in the

situation of more than 100,000 men, all accustomed to the use of

arms, and many of them to rapine and plunder. The number of

vagrants was scarce anywhere sensibly increased by it ; even the

wages of labour were not reduced by it in any occupation, so far

as I have been able to learn, except in that of seamen in the

merchant service. But if we compare together the habits of a

soldier and of any sort of manufacturer, we shall find that those

of the latter do not tend so much to disqualify him from being

employed in a new trade, as those of the former from being

employed in any. The manufacturer has always been accustomed to

look for his subsistence from his labour only ; the soldier to

expect it from his pay. Application and industry have been

familiar to the one; idleness and dissipation to the other. But

it is surely much easier to change the direction of industry from

one sort of labour to another, than to turn idleness and

dissipation to any. To the greater part of manufactures, besides,

it has already been observed, there are other collateral

manufactures of so similar a nature, that a workman can easily

transfer his industry from one of them to another. The greater

part of such workmen, too, are occasionally employed in country

labour. The stock which employed them in a particular manufacture

before, will still remain in the country, to employ an equal

number of people in some other way. The capital of the country

remaining the same, the demand for labour will likewise be the

same, or very nearly the same, though it may be exerted in

different places, and for different occupations. Soldiers and

seamen, indeed, when discharged from the king’s service, are at

liberty to exercise any trade within any town or place of Great

Britain or Ireland. Let the same natural liberty of exercising

what species of industry they please, be restored to all his

Majesty’s