An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith (ebook reader macos .TXT) 📕

23,728 quarters of all sorts of grain, and does not exceed the

five hundredth and seventy-one part of the annual consumption.

But as the bounty upon corn occasions a greater exportation in

years of plenty, so it must, of consequence, occasion a greater

importation in years of scarcity, than in the actual state of

tillage would otherwise take place. By means of it, the plenty of

one year does not compensate the scarcity of another; and as the

average quantity exported is necessarily augmented by it, so must

likewise, in the actual state of tillage, the average quantity

imported. If there were no bounty, as less corn would be

exported, suit is probable that, one year with another, less

would be imported than at present. The corn-merchants, the

fetchers and carriers of corn between Great Britain and foreign

countries, would have much less employment, and might suffer

considerably ; but the country gentlemen and farmers could suffer

very little. It is in the corn-merchants, accordingly, rather

than the country gentlemen and farmers, that I have observed the

greatest anxiety for the renewal and continuation of the bounty.

Country gentlemen and farmers are, to their great honour, of all

people, the least subject to the wretched spirit of monopoly. The

undertaker of a great manufactory is sometimes alarmed if another

work of the same kind is established within twenty miles of him;

the Dutch undertaker of the woollen manufacture at Abbeville,

stipulated that no work of the same kind should be established

within thirty leagues of that city. Farmers and country

gentlemen, on the contrary, are generally disposed rather to

promote, than to obstruct, the cultivation and improvement of

their neighbours farms and estates. They have no secrets, such as

those of the greater part of manufacturers, but are generally

rather fond of communicating to their neighbours, and of

extending as far as possible any new practice which they may have

found to be advantageous. “Pius quaestus”, says old Cato,

“stabilissimusque, minimeque invidiosus; minimeque male

cogitantes sunt, qui in eo studio occupati sunt.” Country

gentlemen and farmers, dispersed in different parts of the

country, cannot so easily combine as merchants and manufacturers,

who being collected into towns, and accustomed to that exclusive

corporation spirit which prevails in them, naturally endeavour to

obtain, against all their countrymen, the same exclusive

privilege which they generally possess against the inhabitants of

their respective towns. They accordingly seem to have been the

original inventors of those restraints upon the importation of

foreign goods, which secure to them the monopoly of the home

market. It was probably in imitation of them, and to put

themselves upon a level with those who, they found, were disposed

to oppress them, that the country gentlemen and farmers of Great

Britain so far forgot the generosity which is natural to their

station, as to demand the exclusive privilege of supplying their

countrymen with corn and butcher’s meat. They did not, perhaps,

take time to consider how much less their interest could be

affected by the freedom of trade, than that of the people whose

example they followed.

To prohibit, by a perpetual law, the importation of foreign corn

and cattle, is in reality to enact, that the population and

industry of the country shall, at no time, exceed what the rude

produce of its own soil can maintain.

There seem, however, to be two cases, in which it will generally

be advantageous to lay some burden upon foreign, for the

encouragement of domestic industry.

The first is, when some particular sort of industry is necessary

for the defence of the country. The defence of Great Britain, for

example, depends very much upon the number of its sailors and

shipping. The act of navigation, therefore, very properly

endeavours to give the sailors and shipping of Great Britain the

monopoly of the trade of their own country, in some cases, by

absolute prohibitions, and in others, by heavy burdens upon the

shipping of foreign countries. The following are the principal

dispositions of this act.

First, All ships, of which the owners, masters, and three-fourths

of the mariners, are not British subjects, are prohibited, upon

pain of forfeiting ship and cargo, from trading to the British

settlements and plantations, or from being employed in the

coasting trade of Great Britain.

Secondly, A great variety of the most bulky articles of

importation can be brought into Great Britain only, either in

such ships as are above described, or in ships of the country

where those goods are produced, and of which the owners, masters,

and three-fourths of the mariners, are of that particular country

; and when imported even in ships of this latter kind, they are

subject to double aliens duty. If imported in ships of any other

country, the penalty is forfeiture of ship and goods. When this

act was made, the Dutch were, what they still are, the great

carriers of Europe; and by this regulation they were entirely

excluded from being the carriers to Great Britain, or from

importing to us the goods of any other European country.

Thirdly, A great variety of the most bulky articles of

importation are prohibited from being imported, even in British

ships, from any country but that in which they are produced,

under pain of forfeiting ship and cargo. This regulation, too,

was probably intended against the Dutch. Holland was then, as

now, the great emporium for all European goods ; and by this

regulation, British ships were hindered from loading in Holland

the goods of any other European country.

Fourthly, Salt fish of all kinds, whale fins, whalebone, oil, and

blubber, not caught by and cured on board British vessels, when

imported into Great Britain, are subject to double aliens duty.

The Dutch, as they are still the principal, were then the only

fishers in Europe that attempted to supply foreign nations with

fish. By this regulation, a very heavy burden was laid upon their

supplying Great Britain.

When the act of navigation was made, though England and Holland

were not actually at war, the most violent animosity subsisted

between the two nations. It had begun during the government of

the long parliament, which first framed this act, and it broke

out soon after in the Dutch wars, during that of the Protector

and of Charles II. It is not impossible, therefore, that some of

the regulations of this famous act may have proceeded from

national animosity. They are as wise, however, as if they had all

been dictated by the most deliberate wisdom. National animosity,

at that particular time, aimed at the very same object which the

most deliberate wisdom would have recommended, the diminution of

the naval power of Holland, the only naval power which could

endanger the security of England.

The act of navigation is not favourable to foreign commerce, or

to the growth of that opulence which can arise from it. The

interest of a nation, in its commercial relations to foreign

nations, is, like that of a merchant with regard to the different

people with whom he deals, to buy as cheap, and to sell as dear

as possible. But it will be most likely to buy cheap, when, by

the most perfect freedom of trade, it encourages all nations to

bring to it the goods which it has occasion to purchase ; and,

for the same reason, it will be most likely to sell dear, when

its markets are thus filled with the greatest number of buyers.

The act of navigation, it is true, lays no burden upon foreign

ships that come to export the produce of British industry. Even

the ancient aliens duty, which used to be paid upon all goods,

exported as well as imported, has, by several subsequent acts,

been taken off from the greater part of the articles of

exportation. But if foreigners, either by prohibitions or high

duties, are hindered from coming to sell, they cannot always

afford to come to buy ; because, coming without a cargo, they

must lose the freight from their own country to Great Britain. By

diminishing the number of sellers, therefore, we necessarily

diminish that of buyers, and are thus likely not only to buy

foreign goods dearer, but to sell our own cheaper, than if there

was a more perfect freedom of trade. As defence, however, is of

much more importance than opulence, the act of navigation is,

perhaps, the wisest of all the commercial regulations of England.

The second case, in which it will generally be advantageous to

lay some burden upon foreign for the encouragement of domestic

industry, is when some tax is imposed at home upon the produce of

the latter. In this case, it seems reasonable that an equal tax

should be imposed upon the like produce of the former. This would

not give the monopoly of the borne market to domestic industry,

nor turn towards a particular employment a greater share of the

stock and labour of the country, than what would naturally go to

it. It would only hinder any part of what would naturally go to

it from being turned away by the tax into a less natural

direction, and would leave the competition between foreign and

domestic industry, after the tax, as nearly as possible upon the

same footing as before it. In Great Britain, when any such tax is

laid upon the produce of domestic industry, it is usual, at the

same time, in order to stop the clamorous complaints of our

merchants and manufacturers, that they will be undersold at home,

to lay a much heavier duty upon the importation of all foreign

goods of the same kind.

This second limitation of the freedom of trade, according to some

people, should, upon most occasions, be extended much farther

than to the precise foreign commodities which could come into

competition with those which had been taxed at home. When the

necessaries of life have been taxed in any country, it becomes

proper, they pretend, to tax not only the like necessaries of

life imported from other countries, but all sorts of foreign

goods which can come into competition with any thing that is the

produce of domestic industry. Subsistence, they say, becomes

necessarily dearer in consequence of such taxes ; and the price

of labour must always rise with the price of the labourer’s

subsistence. Every commodity, therefore, which is the produce of

domestic industry, though not immediately taxed itself, becomes

dearer in consequence of such taxes, because the labour which

produces it becomes so. Such taxes, therefore, are really

equivalent, they say, to a tax upon every particular commodity

produced at home. In order to put domestic upon the same footing

with foreign industry, therefore, it becomes necessary, they

think, to lay some duty upon every foreign commodity, equal to

this enhancement of the price of the home commodities with which

it can come into competition.

Whether taxes upon the necessaries of life, such as those in

Great Britain upon soap, salt, leather, candles, etc. necessarily

raise the price of labour, and consequently that of all other

commodities, I shall consider hereafter, when I come to treat of

taxes. Supposing, however, in the mean time, that they have this

effect, and they have it undoubtedly, this general enhancement of

the price of all commodities, in consequence of that labour, is a

case which differs in the two following respects from that of a

particular commodity, of which the price was enhanced by a

particular tax immediately imposed upon it.

First, It might always be known with great exactness, how far the

price of such a commodity could be enhanced by such a tax ; but

how far the general enhancement of the price of labour might

affect that of every different commodity about which labour was

employed, could never be known with any tolerable exactness. It

would be impossible,