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

the market this part of the surplus produce of

the other, and which had been distributed among, and given

revenue and maintenance to, a certain number of its inhabitants.

Some part of the inhabitants of each, therefore, will directly

derive their revenue and maintenance from the other. As the

commodities exchanged, too, are supposed to be of equal value, so

the two capitals employed in the trade will, upon most occasions,

be equal, or very nearly equal ; and both being employed in

raising the native commodities of the two countries, the revenue

and maintenance which their distribution will afford to the

inhabitants of each will be equal, or very nearly equal. This

revenue and maintenance, thus mutually afforded, will be greater

or smaller, in proportion to the extent of their dealings. If

these should annually amount to �100,000, for example, or to

�1,000,000, on each side, each of them will afford an annual

revenue, in the one case, of �100,000, and, in the other, of

�1,000,000, to the inhabitants of the other.

 

If their trade should be of such a nature, that one of them

exported to the other nothing but native commodities, while the

returns of that other consisted altogether in foreign goods; the

balance, in this case, would still be supposed even, commodities

being paid for with commodities. They would, in this case too,

both gain, but they would not gain equally; and the inhabitants

of the country which exported nothing but native commodities,

would derive the greatest revenue from the trade. If England, for

example, should import from France nothing but the native

commodities of that country, and not having such commodities of

its own as were in demand there, should annually repay them by

sending thither a large quantity of foreign goods, tobacco, we

shall suppose, and East India goods ; this trade, though it would

give some revenue to the inhabitants of both countries, would

give more to those of France than to those of England. The whole

French capital annually employed in it would annually be

distributed among the people of France; but that part of the

English capital only, which was employed in producing the English

commodities with which those foreign goods were purchased, would

be annually distributed among the people of England. The greater

part of it would replace the capitals which had been employed in

Virginia, Indostan, and China, and which had given revenue and

maintenance to the inhabitants of those distant countries. If the

capitals were equal, or nearly equal, therefore, this employment

of the French capital would augment much more the revenue of the

people of France, than that of the English capital would the

revenue of the people of England. France would, in this case,

carry on a direct foreign trade of consumption with England;

whereas England would carry on a round-about trade of the same

kind with France. The different effects of a capital employed in

the direct, and of one employed in the round-about foreign trade

of consumption, have already been fully explained.

 

There is not, probably, between any two countries, a trade which

consists altogether in the exchange, either of native commodities

on both sides, or of native commodities on one side, and of

foreign goods on the other. Almost all countries exchange with

one another, partly native and partly foreign goods That country,

however, in whose cargoes there is the greatest proportion of

native, and the least of foreign goods, will always be the

principal gainer.

 

If it was not with tobacco and East India goods, but with gold

and silver, that England paid for the commodities annually

imported from France, the balance, in this case, would be

supposed uneven, commodities not being paid for with commodities,

but with gold and silver. The trade, however, would in this case,

as in the foregoing, give some revenue to the inhabitants of both

countries, but more to those of France than to those of England.

It would give some revenue to those of England. The capital which

had been employed in producing the English goods that purchased

this gold and silver, the capital which had been distributed

among, and given revenue to, certain inhabitants of England,

would thereby be replaced, and enabled to continue that

employment. The whole capital of England would no more be

diminished by this exportation of gold and silver, than by the

exportation of an equal value of any other goods. On the

contrary, it would, in most cases, be augmented. No goods are

sent abroad but those for which the demand is supposed to be

greater abroad than at home, and of which the returns,

consequently, it is expected, will be of more value at home than

the commodities exported. If the tobacco which in England is

worth only �100,000, when sent to France, will purchase wine

which is in England worth �110,000, the exchange will augment the

capital of England by �10,000. If �100,000 of English gold, in

the same manner, purchase French wine, which in England is worth

�110,000, this exchange will equally augment the capital of

England by �10,000. As a merchant, who has �110,000 worth of wine

in his cellar, is a richer man than he who has only �100,000

worth of tobacco in his warehouse, so is he likewise a richer man

than he who has only �100,000 worth of gold in his coffers. He

can put into motion a greater quantity of industry, and give

revenue, maintenance, and employment, to a greater number of

people, than either of the other two. But the capital of the

country is equal to the capital of all its different inhabitants;

and the quantity of industry which can be annually maintained in

it is equal to what all those different capitals can maintain.

Both the capital of the country, therefore, and the quantity of

industry which can be annually maintained in it, must generally

be augmented by this exchange. It would, indeed, be more

advantageous for England that it could purchase the wines of

France with its own hardware and broad cloth, than with either

the tobacco of Virginia, or the gold and silver of Brazil and

Peru. A direct foreign trade of consumption is always more

advantageous than a round-about one. But a round-about foreign

trade of consumption, which is carried on with gold and silver,

does not seem to be less advantageous than any other equally

round-about one. Neither is a country which has no mines, more

likely to be exhausted of gold and silver by this annual

exportation of those metals, than one which does not grow tobacco

by the like annual exportation of that plant. As a country which

has wherewithal to buy tobacco will never be long in want of it,

so neither will one be long in want of gold and silver which has

wherewithal to purchase those metals.

 

It is a losing trade, it is said, which a workman carries on with

the alehouse; and the trade which a manufacturing nation would

naturally carry on with a wine country, may be considered as a

trade of the same nature. I answer, that the trade with the

alehouse is not necessarily a losing trade. In its own nature it

is just as advantageous as any other, though, perhaps, somewhat

more liable to be abused. The employment of a brewer, and even

that of a retailer of fermented liquors, are as necessary

division’s of labour as any other. It will generally be more

advantageous for a workman to buy of the brewer the quantity he

has occasion for, than to brew it himself ; and if he is a poor

workman, it will generally be more advantageous for him to buy it

by little and little of the retailer, than a large quantity of

the brewer. He may no doubt buy too much of either, as he may of

any other dealers in his neighbourhood; of the butcher, if he is

a glutton ; or of the draper, if he affects to be a beau among

his companions. It is advantageous to the great body of workmen,

notwithstanding, that all these trades should be free, though

this freedom may be abused in all of them, and is more likely to

be so, perhaps, in some than in others. Though individuals,

besides, may sometimes ruin their fortunes by an excessive

consumption of fermented liquors, there seems to be no risk that

a nation should do so. Though in every country there are many

people who spend upon such liquors more than they can afford,

there are always many more who spend less. It deserves to be

remarked, too, that if we consult experience, the cheapness of

wine seems to be a cause, not of drunkenness, but of sobriety.

The inhabitants of the wine countries are in general the soberest

people of Europe; witness the Spaniards, the Italians, and the

inhabitants of the southern provinces of France. People are

seldom guilty of excess in what is their daily fare. Nobody

affects the character of liberality and good fellowship, by being

profuse of a liquor which is as cheap as small beer. On the

contrary, in the countries which, either from excessive heat or

cold, produce no grapes, and where wine consequently is dear and

a rarity, drunkenness is a common vice, as among the northern

nations, and all those who live between the tropics, the negroes,

for example on the coast of Guinea. When a French regiment comes

from some of the northern provinces of France, where wine is

somewhat dear, to be quartered in the southern, where it is very

cheap, the soldiers, I have frequently heard it observed, are at

first debauched by the cheapness and novelty of good wine ; but

after a few months residence, the greater part of them become as

sober as the rest of the inhabitants. Were the duties upon

foreign wines, and the excises upon malt, beer, and ale, to be

taken away all at once, it might, in the same manner, occasion in

Great Britain a pretty general and temporary drunkenness among

the middling and inferior ranks of people, which would probably

be soon followed by a permanent and almost universal sobriety. At

present, drunkenness is by no means the vice of people of

fashion, or of those who can easily afford the most expensive

liquors. A gentleman drunk with ale has scarce ever been seen

among us. The restraints upon the wine trade in Great Britain,

besides, do not so much seem calculated to hinder the people from

going, if I may say so, to the alehouse, as from going where they

can buy the best and cheapest liquor. They favour the wine trade

of Portugal, and discourage that of France. The Portuguese, it is

said, indeed, are better customers for our manufactures than the

French, and should therefore be encouraged in preference to them.

As they give us their custom, it is pretended we should give them

ours. The sneaking arts of underling tradesmen are thus erected

into political maxims for the conduct of a great empire ; for it

is the most underling tradesmen only who make it a rule to employ

chiefly their own customers. A great trader purchases his goods

always where they are cheapest and best, without regard to any

little interest of this kind.

 

By such maxims as these, however, nations have been taught that

their interest consisted in beggaring all their neighbours. Each

nation has been made to look with an invidious eye upon the

prosperity of all the nations with which it trades, and to

consider their gain as its own loss. Commerce, which ought

naturally to be, among nations as among individuals, a bond of

union and friendship, has become the most fertile source of

discord and animosity. The capricious ambition of kings and

ministers has not, during the present and the preceding century,

been more fatal to the repose of