An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith [e book reader pdf TXT] 📗
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- Author: Adam Smith
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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,
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