In every country there are a number of persons who can afford to

—- {118} Till within these twelve or fourteen years, England always was able to export some grain; but now the demand for importation is great and regular. It has had a vast influence on the balance of trade, which, though it has been great some years, has not, upon the whole, been equal to what it was previous to the American war, when the whole amount of foreign commerce was not one-half of what it has been for these last ten years.

{119} If it could be done, it would bring on poverty; but, as the excess of crops over the consumption is not, in any nation, equal to one-tenth of its whole revenue; and, as the expense of eatables amount to nearly one-half, the wealth of a nation would soon be destroyed, if it were possible to produce from other nations a supply. The calculation would be nearly as under for England, putting the population at nine millions.

In ordinary times, nine millions of people living on bread, potatoes, &c. would require about four millions of acres; but nine millions, living on animal food, will require thirty-six millions of acres. -=-

[end of page #145]

live in a more expensive way than the rest; perhaps, this may be reckoned at one-fourth, but, in countries that are poor, even that fourth cannot afford to eat animal food. If, however, a country becomes sufficiently rich for one-sixth to live chiefly on animal food, and the other five-sixths to live one day in the week on that food, the effect will be as if one-third lived on it constantly, which would require two- thirds more territory than when the whole lived on bread.

Those who think that such matters find their own level, and regulate themselves, may be right in the long run, for so they indeed do. But how? When poverty and want came, no doubt the consumption of flesh-meat would be diminished; when the country had no means of supplying itself as it did when it was rich, famine would play its part in becoming one of the regulators; but, before this regulation could be effected, the evil we wish to prevent would have taken place. The country would be depopulated and ruined. We must, therefore, in trying to avert the decline of a nation, not set any thing down for the counteracting and adjusting power, which is known sometimes to interfere so very advantageously in the affairs of men. Though it is true that it does interfere, it is in all cases of this sort too late, it is an effect of the cause which we wish to avoid; we can only look to it here for stopping the career in process of time, but, never for preventing it. We know that the extravagance of an individual impairs his fortune, and, that the diminution of means will, at length, counteract the extravagance; but, then it will do so when it is too late, and after he is ruined. Wastefulness may be stopped, but it cannot possibly stop itself, as the diminution of means is the cause of the extravagance ceasing, and itself is an effect of the prior existence of the extravagance.

Regarding men merely then as producing and consuming, (the proportion between which regulates the wealth of a nation,) we find that, in their own persons, there is a rooted tendency to bring on the decline. But we shall farther find that not only do people in wealthy and luxurious nations produce less and consume more than in nations less advanced, but they increase the number of unproductive labourers, all of whom consume without producing. They also main- [end of page #146] tain animals who consume, but do nothing towards production. {120} No country, in which the people live much upon animal food, can be well peopled. Two hundred persons to a square mile of country is nearly the highest population of any nation in Europe, that is, as near as may be, three acres and a quarter to each person; but, on an average, even in France, there are more than four acres to each.

Supposing that one-half of the land is cultivated, then that gives about two acres to each person.

Supposing, again, that one-third of this is consumed by horses or other animals who labour; or, supposing that they do not serve for the food of man, then there will be nearly about one acre and a quarter for the maintenance of each person.

It will, however, only require half an acre to one person, if they all lived on field vegetables; {121} and, if they all lived on fresh meat, it would require four acres; the natural conclusion is, that one-fourth live on animal food, and the other three-fourths on vegetables, or what is the same thing, that the proportions of the two sorts of food are as one to three.

According to the proportion of the prices in France, of four to one, it would certainly cost double the price to live on animal food that sic it does on vegetables; that is to say, if the only vegetable was bread, supposing which is the case, that one pound of meat supplies the place of two pounds of bread, as it certainly does. In England, where beef is only twice the price of bread, {122} it is almost a matter of indifference as to price, whether a working man lives on vegetables or animal food. To the taste and the stomach, however, it is no matter of indifference, the animal food, therefore, is preferred; but if it were a matter of some importance, in point of economy, that would not prevent the people of a country, flourishing by manufactures, from

—- {120} One good horse well kept, whether for pleasure or labour (it has already been said) will consume nearly as much as a moderate family.

{121} Vegetables raised in the kitchen-garden would go vastly further, but this is a rough average, the subject neither admitting of, nor requiring accurate investigation.

{122} That is about the usual proportion, though about a year ago it was four times as much in France. -=-

[end of page #147]

eating it, and thereby at length sinking to a lower degree of population than a poor country living on vegetable food.

In all nations getting wealthy this is a consideration, but most so when the wealth is acquired by manufactures, when the lower and numerous class have an opportunity of gratifying themselves by indulging in the species of food which they find the most agreeable.

This, like the other changes of manners, of which it is only a part, is a natural consequence of a propensity inherent in human nature; it cannot, therefore, be prevented or done away, though it may, to a certain degree, be counteracted. The manner of counteracting it not being a general manner, but depending on circumstances, shall be treated of when investigating the increasing danger, arising from this cause, in the English nation.

It remains at present for us to examine another evil attendant on the inadequacy of the soil to supply the consumption of a country.

One of the most alarming circumstances attendant on this situation of things is, that provisions become an object of monopoly, and the most dangerous and destructive of all objects. The law has interfered in regulating the interest of money, but not in the rent of houses or of other use of property. Circumstances may occur, in which the necessity of procuring a loan of money is so great, as to induce the borrower to engage to pay an interest that would be ruinous to himself, and that would grant the lender the means of extortion, or of obtaining exorbitant profit. The same interference would be just as reasonable, wherever the same sort of necessity, by existing, puts one man in the power of another. This is the case with every necessary article of provision, which, indeed, may be considered as all one article, for the price of one is connected with the prices of all the others.

Provisions, indeed, are, in general, articles that cannot be preserved for any very great length of time; but then, again, they are articles of a nature that the consumers must have within a limited time also, and for which they are inclined to give an exorbitant price rather than not to have. The interference of the law between a man and the use of his property, ought to be as seldom as possible; but it has never been maintained as a general principle, that it ought never to interfere. [end of page #148] If it is at any time, or in any case, right to interfere legally, the question of when it is to be done becomes merely one of expediency, one of circumstance, but not one that admits of a general decision.

A writer of great (and deservedly great) reputation has said so much on this subject, and treated it in a way that both reason and experience prove to be wrong, that it is become indispensably necessary to argue the point. {123} Monopoly, regrating, and forestalling, which two last are only particular modes of monopolizing, have been considered as chimeras, as imaginary practices that have never existed, and that cannot possibly exist. They have been likewise assimilated to witchcraft, an ideal belief, arising in the times of ignorance. It is now become the creed of legislators and ministers, that trade should be left to regulate itself, that monopoly cannot exist.

With all the respect justly due to the learned writer who advanced so bold an opinion, it may be asked, since many instances occur, both in sacred and profane history, in ancient times, and in our own days, of provisions, on particular occasions, selling at one hundred times their natural price, (and, every price above the natural one, is called a monopoly price,) how can it be asserted that they may not become an object of monopoly in a more general way, though not at so exorbitant a price?

How, it may be asked, can this thing, that has so often occurred in an extreme degree, a thing that is allowed to be possible, be compared with the miraculous effect of witchcraft, of the existence of which there does not appear to be one authentic record? The one, at all events, a natural, and the other, a supernatural effect. How are those to be admitted in fair comparison?

If we know that, at the siege of Mantua, the provisions rose to one hundred times their usual price, we may believe the same thing possible, at the siege of Jerusalem, two thousand years ago, and at the siege of Leyden, or at that of Paris. If we know that a guinea is given for a

—- {123} Dr. Smith, in his Inquiry into the Nature and Causes of the Wealth of Nations. The author of the notes, and continuation, has, indeed, answered his arguments; but that does not render it less necessary to do so here. -=-

[end of page #149]

bad dinner at an inn, which is not worth a shilling, merely because some particular circumstance has drawn more people together than can be provided for; and, because hunger admits not patiently of delay, can we dispute the inclination to extortion on the one hand, and the disposition to submit to it on the other?

If that is admitted, the interference of the law is allowable on the same principle on which it regulates the interest of money, though not to the same extent; that is, it is allowable, in particular instances, where the effects are similar, but not in all instances, because, in all instances, they are not similar. {124}

The rate of provisions is then liable, on particular occasions, to rise to a monopoly price, such as that of those rare productions of nature, the quantity of which cannot be increased, whatever the demand may be. {125} It follows, as an evident consequence, that the price increases as the scarcity augments; but, if it only did so, the evil would not be so great as it really is. In the first place, the anxiety attendant on the risk of wanting so necessary an article creates a greater competition amongst buyers than the degree of scarcity would occasion in an article of less necessity and importance. In a wealthy nation, the evil is still farther increased, by two other causes.

The high price which one part of the society is able to afford, and the wealth of those who sell, enables them to keep back the provisions from the market; the first cause operates in all countries nearly alike, for, the anxiety to have food is nearly equal all the world over. But the last two operate more or less, according to the wealth of the buyers and of the sellers, as the eagerness and ability of the former to purchase, and the interest and ability of the latter to keep back from selling, are regulated by the degree of wealth in a country. {126}

—- {124} The law concerning money is a general law, because, at all times, there are some individuals in want of it, and would be liable to grant exorbitant interest. It is not so with provisions, for, it is only occasionally that they cannot be had at reasonable prices.

{125} Dr. Smith divides produce into three different sorts; the two first are such as can be only produced in a certain quantity, whatever the demand may be; and such as can be produced always in sufficient quantity.

{126} This was proved by what happened in Paris in 1789, and in England in 1790. The [end of page #150] want in Paris was so real that there often was not, in that great city, bread, and materials to make it, more than sufficient for twenty-four hours: yet it never rose to above double the usual price, or twopence English the pound, (that is, sixteen sols for the four-pound loaf,) although the people were obliged to wait from six in the morning till two or three in the afternoon, before they could get a loaf a piece, and more they were not permitted to purchase or carry away. In London, where bread could always be had in plenty, for money, it rose to more than three times the usual price, (one and tenpence the quartern loaf,) yet bread is a much more necessary article to the poor in Paris than in London. But the case was, in London, the people are richer, and, in each place, it rose as high as the people were found able to pay. -=-

When the necessaries of life become dear, and arrive at a monopoly- price, then all taxes and other burthens laid on the people become a matter comparatively of little importance. In England, where the taxes are higher than in any nation in the world, they do not come on the poor to above three pounds a head; {127} and, of those, at least one- half can be avoided by a little self-denial. But, when the provisions increase one-half in price, it amounts to at least four pounds a head to each person; so that the effect falls on the population of the country, with a most extraordinary degree of severity.

But, great as this evil is, it has, by the circumstances and nature of things, a tendency to increase the very cause in which it originates. Though the highness of price diminishes the consumption of victuals in general, it diminishes the consumption of vegetable food, or bread, more than it does that of animal food. Though all sorts of eatables rise in price, in times of scarcity, yet bread, being the article that excites the greatest anxiety, rises higher in proportion than the others. This affords an encouragement to gratify the propensity for eating animal food; and this propensity is encouraged by an absurd and mistaken policy, by which (or perhaps rather an affectation of policy) economy in bread is prescribed, and not in other food; so that when people devour animal food, and increase the evil, they think they are most patriotically and humanely diminishing it. {128}

—- {127} The whole taxes in this country do not amount to above four pounds a head, of which one-third is paid entirely by those wealthy, or at least affluent; it is, then, putting the share paid by the labouring body very high to put it at three pounds each person.

{128} Both in France and England, during the last scarcity, the use of every other sort of [end of page #151] food was recommended, to save the consumption of bread-corn. Potatoes are the only substitute that tended really to relieve the distress; all others, and, in particular, animal food, had an effect in augmenting it. -=-

The danger of wanting food, though very formidable, does not act so instantaneously as to serve as an excuse for want of reflection, like an alarm of fire, where the anxiety to escape sometimes prevents the possibility of doing so; yet the fact is, that all the measures that have generally been taken, in times of scarcity, have tended rather to increase than to diminish the evil.

In monopoly, a sort of combination is supposed to exist between the sellers of an article, when the article does not happen to be all in the hands of one person, or one body of persons. But combinations are of various sorts; there are express combinations entered into by people having the same interest for a particular purpose. Those are done by a sort of an agreement, when the interest of the individual and of the body are the same. Such combinations are generally effectual, {129} but unlawful. There are combinations not less effectual, that arise merely from circulating intelligence of prices, and certain circumstances on which prices are known to depend, amongst all those concerned, who immediately know how to act in unison.—This is not unlawful.

An elegant historian has said that there was a time when the sovereign pontiff, like the leader of a band of musicians, could regulate all the clergy in Europe, so that the same tones should proceed from all the pulpits on the same day. The list of prices, at a great corn-market, has the same effect on the minds of all the sellers within a certain distance. Intelligence now flies so swift that there is no interval of uncertainty; the whole of the dealers know how to act, according to circumstances, and they are all led to act nearly as if they were in one single body. Like gamesters, who have won a great deal, rather than hasten to sell, even when they fear that prices may fall, they keep back their stock, and risk to lose something of what they have gained, by continuing to speculate on the agreeable and winning chance by which they have already profited.

—- {129} There are sometimes combinations which it is the interest of a whole body to preserve, but of each individual to break, if he can with impunity; such generally soon fall to the ground. -=-

[end of page #152]

The dealers in an article of ready sale, or for which there is a certain demand, have never any difficulty, in a wealthy country, of procuring money to make purchases, or to enable them to keep their stock; and the gains are so immense that there is no speculation equally attractive.

As the rent of land, in England, is reckoned at twenty-five millions a year; and it is reckoned that, in a common year, the rent is worth one- third of the produce; it follows that, of all sorts of produce of land, the value is seventy-five millions. But, in the year 1799, when the prices were more than doubled, the value was one hundred and fifty millions, of which the landlord received (as usual) twenty-five to his share, leaving for the farmer, &c. one hundred and twenty-five, instead of fifty, the usual sum. As the wages of servants remained the same, and, in an ordinary year, would amount to one-third of the rent, eight millions went for that, leaving one-hundred and seventeen millions, in place of forty-two, the usual residue. Two-thirds of the value of rent, or sixteen millions, is, in an ordinary year, supposed to go for seed, the maintenance of cattle, and labourers; so that, in that year, the portion so consumed must be estimated at double value, or thirty-four millions, which, deducted from one hundred and seventeen, leaves eighty-three for the farmers, in place of twenty-five, in an ordinary year: so that, when the price doubles, the farmers sic profit does more than triple. In the year 1799, the farmers were known to have the profit of four ordinary years, supposing that they had been the actual sellers in the market. The fact was otherwise no doubt, with regard to those who pocketed the profit, which went in part only to farmers, and the rest went to the monopolists, dealers, regraters, forestallers, &c. who advanced money to keep up the price. To the public who paid, the matter is the same, and, to the business itself, there is little difference as to who profited, or who found capital; for, as they shared the profit amongst them, and as they received three times as much as in an ordinary year, they could, out of the sales of the first four or five months, make all the payments [end of page #153] for the whole year to the landlord; and, therefore, could have the means of keeping the remainder, just as long as they thought proper.

Thus, then, while there is any degree of scarcity, the provisions of a country are at a monopoly-price; and the dealers act, though individually, as if they enjoyed one general monopoly. {130}

Before leaving his important subject, it is necessary to observe, that, though dealers in provisions, in times of any degree of scarcity, that is, when there is not quite enough fully to supply the consumption of the country, act, in keeping up prices, as if they had an exclusive privilege for monopoly, yet that is the only cases sic in which they do so. A single monopolizer can diminish the quantity, and perhaps destroy a part of it with advantage to himself. Thus the Dutch East India company were said to have done with the spices. {131} But the individual dealer, though he is interested in a general high price and monopoly, is still more interested in selling as much as he can; and the higher the price, the more careful he is not to waste or consume more than he can help. In this respect, the monopoly of the many is not half so hurtful as the individual monopoly. This proves that all the vulgar errors, which occasion reports of farmers and dealers destroying their corn, are not only without foundation, but would produce an effect quite contrary to the avaricious principle, by which such men are considered as being governed. {132}

—- {130} There is one moment only when they do not, that is, when they find out, for certain, that prices are going to fall. There, for a moment, individual interest, and general interest are opposite, and they hasten to sell, and to reduce the price too much. But even this does not relieve the public; for, though it makes the reduction very rapid for a time, and may sometimes bring it below the level, it quickly rises again and finishes when the panic amongst the dealers is over, by remaining higher than it ought to be.

{131} If diminishing the quantity one-quarter rises sic the price one-half, then the monopolist gains, if he possesses the whole market; but the individual dealer, if he were to burn his whole stock, would not diminish the quantity in the country one-thousandth part, and therefore make no sensible difference.

{132} Both in London and Paris, the reports of this sort, and, (making a little allowance for the language and nature of the people,) exceedingly similar in nature and tendency, prevailed during the scarcity of 1789 and 1799. -=-

[end of page #154]

Monopoly of this sort, by raising the prices of the necessaries of life, in the end, augments the prices of labour, the rent of land, and the taxes of a country. We have already examined the tendency of all this; it is only necessary to observe that the rise in prices, or depreciation of money, which other causes bring on by degrees, this brings on violently and suddenly. {133} This cause will always exist in a country that cannot provide enough for its own subsistence.

How far this may go it is not easy to say; for if it is clear that the farmer, by double prices, gets eighty-three pounds in place of twenty- five, he can certainly afford to give his landlord something more. If he gave him double the usual rent, it would still leave more than double for himself. {134}

Of all the causes, then, that hasten the crisis of a country, none is equal to that of the produce becoming unequal to the maintenance of the inhabitants; for it is only in that case that the effects of monopoly are to be dreaded.

In the case of animal food becoming too much in request, there is a remedy which may be easily applied; of which it will be our purpose to speak, in treating of the application of the present inquiry to the advantage of the British dominions.

—- {133} The few years of dearth altered wages and rent more than had been known for half a century before. Wages rose more, from 1790 to 1802, than they had done from 1740 to 1790.

{134} As the usual rent was twenty-five, and the usual profit twenty- five, the landlord and tenant had fifty to divide, at ordinary prices; but, at double prices, they had eighty-three added to twenty-five, or one hundred and seven to divide: so that, if the farmer gave fifty, that is, double, he would still have fifty-seven to himself, which is more than double, by nearly one-third over and above.

No allowance has been made in this calculation for the diminution in quantity. The reason is, that was comparatively very small; increased consumption, rather than deficiency of produce, being the cause. Besides, we only stated the rise as being double the usual price, whereas, it was three times greater. [end of page #155] -=-



CHAP. VII.

Of the Increase of the Poor, as general Affluence becomes greater.— Of Children left unprovided for.—Of their Division into two Classes— Those that can labour more or less, and those that can do no Labour.

In the career of wealth, in its early state, when individual industry is almost without any aid from capital, men are as nearly on an equality as the nature of things can admit. But, in proportion as capital comes in to the aid of industry, that equality dies away, and men, who have nothing but industry, lose their means of exerting it with advantage, some become then incapable of maintaining their rank in society altogether.

At the same time that this is taking place, articles of every sort, that are necessary for the existence of men, are becoming dearer. As some ranks of society have been described as bringing up their children not to know the existence of necessity, others, who are depressed below the natural situation of men, are bringing them up to feel the extreme pressure of want.

There is no situation of things in which a man, with natural strength, and a very slender capacity, may not gain sufficient to maintain himself, if he will be industrious; but, in a wealthy country, numbers are so pressed upon by penury, in their younger years, that neither the powers of their body, nor of their mind, arrive at maturity.

Accustomed, from an early age, to depend rather upon chance, or charity, for existence, than upon industry, or energy of their own, they neither know the value of labour, nor are they accustomed to look to it for a supply to their wants.

Whilst the foundation of idleness and poverty is laid in, for one part of a nation, from the affluence of their parents, another portion seems as if it were chained down to misery, from the indigence in which they were born and brought up. [end of page #156]

The depressed and degraded populace of great and wealthy cities are not the accidental victims of misfortune; they are born to its hard inheritance, and their numbers contaminate more, who, were it not for their own misconduct and imprudence, might have shared a better lot.

When nations increase in wealth, the fate of individuals ceases to become an object of attention; and, of all the animals that exist, and are capable of labour, the least value is set upon the human species. {135} Like individuals who rise to wealth, and forget their origin, societies forget the first foundation of all wealth, happiness, and power. That individuals should do so is not to be wondered at. They never saw society in an infant state; nor is it the business of individual citizens to occupy themselves with public affairs; but those who are intrusted with their management, and whose business is to know the original sources of prosperity, ought to attend to and counteract this growing evil.

When the Romans were poor, the people depended on exertion, and they enjoyed plenty; but when Lucullus and other citizens were squandering millions, at a single banquet, the people were clamouring for bread. While the person of a Roman lady was ornamented with the wealth of a province, the multitude were covered with rags, and depressed with misery. It would have been no hard matter, then, to have foretold the fate of Rome. The natural order of things was deranged to too violent an extreme to be of long duration. The state was become like a wall that had declined from the perpendicular, while age was every day weakening the cement, by which it was held together, and though of the time and hour of destruction no man knew, the event was certain.

It would, at first sight, appear that great cities are the only places in which misery of this description arises; but that is not the case.

—- {135} It was never heard of, that a young horse, or any useful animal of the brute creation, was left to die with hunger in a land of plenty; but it happens to many of the human race, because there is no provision made, by which those who furnish them food may be repaid by their labour, which would be a very easy matter to adjust, if a little attention were paid to the subject. -=-

[end of page #157]

Great cities are the refuge of the miserable, who, perhaps, find it in some shapes augmented, by a residence in so friendless an asylum; but there they avoid shame, they see not the faces that have smiled upon them in better days; they are more at ease amongst strangers, and they are kept in countenance by companions in penury and want. {136}

In every wealthy nation, the rich shun the view of wretchedness, which is attended with a silent reproach. Those who have property, mistrust the honesty, and blame the conduct of those who have none. In this state of things, the country affords no retreat nor residence, and want and wretchedness find the evils of a crowded society, where they pass unnoticed, much more tolerable.

In most countries, the law has taken precautions to punish, or to stop the evil in the individual; but in no great and wealthy country has it been thought of sufficient importance to take effectual means to prevent it.

In small states, when society is new, and under some absolute sovereigns, (remarkable for their penetration, genius, and love of their people,) a momentary stop has been put to this career of misery; but, in the first place, there has been no such monarch in any wealthy country; and, in the second, as soon as power fell into other hands, the progress has begun again where it left off.

One great cause of the increase of mendicity is the increase of unproductive labourers, as a state becomes more wealthy, who, dying before their children are able to provide for themselves, increase the number of the indigent. Men living by active industry naturally marry at an early age; menial servants, revenue officers, and all those who administer to the gratifications of a wealthy and luxurious people, marry later in life; and besides their not having an industrious example to set before their children, are torn from them sooner, by the course of things.

—- {136} If one of the brute creation is in want, it will supply that where it is most easily to be had, physical difficulty is the only one it knows; bodily pain the only one it feels. But men are different, they often undergo great want amongst strangers, to avoid more insufferable feelings amongst friends. -=-

[end of page #158]

It has been noticed, that, in every society, as wealth increases hospitality dies away. And those good offices interchanged between man and man, to which life owes many of its comforts in a less advanced state of society, and which protect individuals from the frowns of fortune, gradually disappear. The social feelings become less active, and men turn selfish and interested, thinking for themselves, and careless for the community; while, on the other hand, the causes for poverty increase; on the other, the means of relief are misapplied, neglected, or squandered away. The funds that ought to be administered with disinteredness and integrity are committed to the hands of men who live on the general misfortune, and thus the wretched, who are relieved, are not fairly treated, while the public, that is burthened with their misfortunes, is loaded far beyond its proper degree.

The population of a country is diminished in a double ratio as the poor increases: they create nothing, but they consume; and if a country sees one-tenth of its population living on charity, it is equivalent at least to seeing one-seventh diminished in numbers altogether.

Most sorts of labour require those employed in it to have some capital, such as decent clothes, or tools, or money to live upon till wages are due. Little as that capital is, yet thousands are reduced to absolute beggary for want of it; their industry finding no means of exertion. A man becomes dependant sic on charity for existence; and, though able to work, eats the bread of idleness, and that without being in fault.

The number of persons absolutely unable to labour is nearly the same in every country, and is not much augmented by its wealth; so that if there were, as there easily might be, always employment for those who would otherwise be entitled to relief, and if they were allowed a fair price for their labour, they would then cease either to be a burthen to themselves or to the public.

Little coercion would, in this case, be necessary. A few proper regulations, to prevent theft and losses, would be all that could be wanted with those who could labour; and those who could not, being few in number, would be provided for in a better manner than when [end of page #159] they can be, where their portion is shared with those who are able to procure for themselves an existence.

We must by no means look for relief, in cases of this sort, from difficult or intricate management and regulation. If we look at the nature of things, it points out the way.

Those that cannot labour are the only persons who ought to be a burthen on the public; and they are the only ones that would be so, if the matters were properly regulated and attended to. As it is in most countries, there are many who cannot get work to do, and those are provided for in different ways, but always at the expense of the public. Sometimes it is by a regular assessment, sometimes by theft and depredation, sometimes by individual charity, or those other means to which a man has recourse before he will absolutely starve for want.

Those who, from philanthropy, are for relieving all, soon find themselves deceived, and unable to proceed. Those who, disgusted with the vices of a few, consider them all as equally culpable are much to blame. Surely, the individual case of a fellow-creature in misfortune is worth attending to; and he must be ignorant indeed who cannot, in most instances, avoid deception. [end of page #160]



CHAP. VIII.

Of the Tendency of Capital and Industry to leave a wealthy Country, and of the Depreciation of Money in agricultural and commercial Countries.

As the increase of capital in every country is the consequence of former productive industry, so also is it the support of future exertion.

When the capital of a country has become sufficient for all the employment that can be procured for it, the first effect is the lowering of interest, which sinks down under the rate appointed by law, and under the rate at which it is lent out at in other countries.

When capital is not in sufficient quantity, those who want to borrow are more numerous than those who have money to lend; then the competition is amongst the borrowers to obtain the preference, and they all give as high an interest as the law allows, and would give more if they could avoid the penalty, which, in all countries, has been attached to accepting more than the regulated sum; a sum regulated merely to prevent the effect of competition, which might induce people to give more than in the end they would find they could afford to pay.

When capital becomes over abundant, the very reverse takes place; the lenders become rivals, and offer to lend at an under rate of interest.

The first effect of this is, that people who were but scantily supplied with capital before borrow, and carry on business more at ease, so that more capital is employed in business, and new employments are found out for capital.

The usual employments for a superabundant capital are improving lands, building houses, erecting machines, digging canals, &c. for the use of trade; and finally, giving longer credit to merchants in other countries, {137} as well as to those who are running in debt in their own. The stock on hand in manufactured goods increases something also. But when all these have taken place, to as great an extent as wanted, then the money begins to flow into other countries. By degrees, more money is sent away than should go, and the persons who are the proprietors of it frequently follow.

If the capital that leaves a country were only that which cannot find employment in it, the harm would not be great, though it would tend to enrich other countries, and bring them nearer a level. But that is not the case, the advantage of lending money abroad, if regularly paid at a higher interest than can be obtained at home, induces people to draw their money from trade, and vest it in the hands of foreigners. The Venetians, the Genoese, the Dutch, the Hanseatic Towns, and the cities of Flanders, did this; and the capital, which, when employed at home, formerly maintained perhaps one hundred people in affluence and industry, only supported one single family living in indolence and splendid penury. {138}

After being in possession of money for a considerable time, men prefer a certain employment at a low interest to one attended with risk, even where the interest is higher; and when great sums have been got by trade, those who have got them retire and live on the interest, which men, who have only gained a small capital cannot do.

There are many other circumstances, besides the abundance of capital, that tend to carry it away from a wealthy country. The depreciation of money that takes place, in every country that grows

—- {137} As the subject is here treated in the general way, applicable to all nations, the employment found by national debt, and the funds rising is not taken into account, as it will be noticed in the case of England. When money is plenty, all individuals in trade give longer credit; but this employs little more capital, when they give it to each other it employs no more, but when to consumers it does.

{138} The manner in which those families live is peculiar to themselves; great shew with great economy, and without the smallest spark of love, either for their fellow-citizens or their country. -=-

[end of page #162]

rich, falls nearly all on the lender at interest, {139} who, as he cannot bring back things to their former value, seeks enjoyment in another country, and obtains, by change of place, what he lost by lapse of time.

The weight of taxes is another cause that drives capital from wealthy to poorer countries; and last of all, in case of anxiety, or of mistrust, the capitalists are generally the first to emigrate. [{140}] Anxiety and mistrust are periodical amongst a wealthy people.

As the burthens sustained by a people in prosperity are generally great, in proportion to their capital and industry, it is clear, that when capital and industry diminish, the burthens, (which do not admit of being diminished in the same proportion,) fall more heavily on those who remain; this increased cause produces, naturally, an increased effect. Thus, like a falling column, the weight increases, and the momentum becomes irresistible.

It is then that necessity, the spur to industry in new and rising nations, (that spur which taxes and rent continue to excite, for the good of mankind, for a certain period,) begins to crush what it had raised, and to stab where it formerly stimulated. Then it is that the money-lenders, who, at first, sent off their capital, having ceased to be engaged in trade, withdraw, by degrees, and rather content themselves with a diminished income in another country, than struggle with the difficulties they find they have to encounter in their own.

—- {139} Money lent out at interest loses, money laid out in purchases gains, in a country that is advancing in riches.

If a man, who had 2000 L. thirty years ago, had laid out 1000 L. at interest, and, with the other bought land, he would, indeed, have got less rent for his land at first, but now it would be doubled, he would get 60 L. a year, and if he wished to sell he would get 2000 L. whereas, the other 1000 L. would only produce 50 L. and, if called in, the single thousand would be all he would receive.

{140} [Transcriber's note: footnote not assigned a place in the original text, intended location assumed to be as shown] This was seen at the beginning of the French revolution, though the assignats, by lowering the rate of exchange, frightened many from transferring their money, at an apparent loss of twelve or fifteen per cent. But those that overlooked this loss have rejoiced in it ever since, as the others have repented bitterly the avarice that made them risk all to save a little, and to become beggars. -=-

[end of page #163]

It is difficult to say at what point this would stop, if the effect produced did not affix the boundary.

The prices of land, of rent, of houses, and of provisions, sink low, and induce some people to remain; for, as those articles cannot be transported, or carried off, and are always worth possessing and enjoying, it is clear there must be a term set to the decay and emigration, by the nature of things. Unfortunately for countries that have been great, that term does not seem to arrive till it is reduced far below the level of other nations. {141}

There are, however, some peculiar causes that operate in some modern nations, in counteracting this effect, so far as it is occasioned by a superabundance of capital; but, as this is not general to all nations, the proper place for speaking of it will be when we come to treat of the tendency of capital to quit this country.

The effects, arising from that depreciation of money, which takes place in every wealthy country, are great and numerous, and have been always found where wealth abounded. The people in such countries can easily command the labour of others that are not so rich, but the others cannot afford to pay for theirs; this tends to remove industry. On the other hand, if a supply of the necessaries of life are wanted in a rich country, they may be obtained from countries where the value of money is less, without throwing prices out of their level; whereas, in the country where money is of great value, that is not the case.

The price of bread, for instance, is, at Paris, one penny the pound, and in London at eight-pence the quartern loaf, which weighs just four French pounds, the price is exactly double. If every thing was conducted in a fair way, corn, from all countries, where it is equally as cheap as in France, might be brought and sold in London, at the

—- {141} At Bruges, (in Flanders) at Antwerp, Cologne, Ghent, or any of those decayed towns, house-rent was fallen, before the French revolution, to little more than an acknowledgement for occupation, where the houses were large and retired. This induced people to live at those places, who would not otherwise have done so. Small houses, lately built, were more expensive than the large old ones, built in the time that commerce flourished. -=-

[end of page #164]

usual market price; but, before Paris could get a supply from London, the bread would cost three times its usual price. This circumstance, if properly managed, might be turned to advantage; why it is not, is difficult to say, and is a proof that there are either regulations, or practices without regulation, that counteract the true nature of things; for it would not cost a farthing a pound to bring the corn from Paris to the London market.

Paris is only mentioned here for the sake of comparison, and because the average prices have nearly the proportion of one to two. The reasons why corn is not brought from thence are no secret, but the same reasoning will apply to American corn, corn from Barbary, or the Baltic, and from other places, where the value of money is greater than in England. {142}

The principal of the other effects of the depreciation of money are to be found in the chapter on the exterior Causes of the Decline of Nations, as it is in its foreign transactions that the depreciation of money is the most felt.

In the interior, that depreciation only acts when there is a considerable lapse of time, during which the value has altered; it has, in general, no effect on transactions that are begun and finished within a short period, and in the interior of the country itself.

The depreciation of money, wherever it takes place, would cause an increase of taxes, even if there were no other reason for it; but, in so far it counteracts itself, by making them to be more easily born. sic Whatever its particular effects may be, and however complicated they are, the general tendency of the depreciation of money is to depress industry in that country, and to encourage it in others, where the value is greater than in it.

—- {142} In America the value of money is less than in England, compared with wages; but the usual proportion, between the wages of labour and the price of corn, is different in that country from every other with which we have any connection. -=-

[end of page #165]



CHAP. IX.

Conclusion of the interior Causes.—Their Co-operation.—Their general Effect on the Government and on the People.—The Danger arising from them does not appear till the Progress in Decline is far advanced.

Though these causes enumerated have all one general tendency, yet their distinguishing characteristics deserve attention.

Some begin their operation from the moment the wealth of a country commences, others are only felt late in the progress of its decline. The effects of some may be diminished greatly, others may be prevented entirely; but, in all cases, the attention of government is necessary, and that before the operation of decline is actually commenced; for, prevention, and not remedy, is what ought to be aimed at, besides which, when decline has once begun, governments are too feeble to be capable of any effectual regulations.

To assist nature, in every case where her operations are favourable to the enjoyment and happiness of men, and to counteract those that are unfavourable, is the business of individuals and of states. What the individual is unable to do, should be done by those to whom the care of public affairs is given; by those who act for the benefit of all, and in the name of all.

From the first approaches of a state to wealth and greatness, we find that there are a combination of causes that begin to operate in promoting its decline. The first moving principle, necessity, is gradually done away, and with it flies industry; so that, from one generation to another, both the moral and physical man becomes changed, till he is unable to sustain the weight that he has raised; and, at last, he is crushed by the decent sic of the ponderous mass.

While a gradual progress destroys that industry, from which all wealth springs, other causes act to remove or misapply the labour [end of page #166] that is left, while others again are putting capital to flight, or leading to a misapplication of it.

Last of all come discord and war, the most universal cause of all those that tend to depopulate a country, and to diminish as well as degrade the inhabitants, thus giving durability to misfortune, and rendering hopeless the fate of a fallen nation.

Amongst all the causes of decline, one alone is found that has a double effect, and counteracts in one direction what it promotes in another.

This is taxation, a very certain cause of ruin if carried too far, and always dangerous; but, for a length of time, having a very powerful effect in repressing the progress of luxury, in continuing the action of necessity, the mother of industry, and in preventing that species of consumption that lays the foundation for the depopulation of a country.

From this it would seem to be almost as dangerous to take off the burthens that have been laid upon a people, as to lay them on with too heavy a hand. There is not any example worth noticing of such a case, therefore, it must stand on its own ground: history informs us nothing on the subject.

The supposed case would be thus. That a nation should rise to a high pitch of wealth by industry, and support a heavy load of taxes, still increasing in wealth, and superior to most other nations. We are to suppose the load of taxes greatly diminished, and then to investigate the consequences.

Perhaps this is an useless hyyothesis sic, the case never has been, and perhaps never will be; but, still it is, at least, a possible case; it is a matter of curiosity, at least, if it is not one of utility, and I have a great example to plead as my apology. Dr. Adam Smith amused himself in his inquiry into the causes of the wealth of nations sic in a similar manner, by a hypothesis concerning the taxation of the British colonies.

Supposing the pressure of necessity were to be suddenly taken away, those whose income is regulated by their efforts would relax in exertion; that is to say, the productive labourers of the country would relax, while those whose incomes are fixed, that is principally [end of page #167] the unproductive labourers, would become comparatively more opulent, and their luxury would increase.

This is an effect very different from what the public expects. The most useful class would gain little or nothing, while the drones of society would find their wealth greatly augmented, which would be one of the most unfortunate effects that could well be conceived, and might very soon bring about a very serious and disagreeable event.

In the course of investigating the national debt of England, in the Fourth Book sic—there is none., it will be necessary to examine this at length, but, there it will be attended with another circumstance, not one of general consideration; (as national debt is not any general or necessary appendage to a government) namely, the letting loose a great monied capital, which must either be employed here, or it will seek employment in another country, which may rise on the ruin of this.

In considering the reduction of taxes that have been long standing, and have risen to a great amount, there is certainly reason to fear evil consequences, though this is no argument in favour of taxation; on the contrary, it is a reason for avoiding it, for, it is in all cases dangerous to do what it will be attended with danger to undo.

Though the precise case of taxes being done away may never come before us, there is, at this time, an operation going on that is nearly similar, and the result of which will soon be known.

The French people were loaded with nearly twenty-five millions sterling annually to the church, and they do not now pay three. This, indeed, was partly in taxes, and part in church-lands; they have also got rid of a great deal of rent, by the sale of emigrant estates, the lands have got into the hands of men, who mostly cultivate them themselves, and have no rent to pay.

On the supposition that the new government is not more expensive than the old, (and it ought not to be so, the debts having been nearly all wiped off,) the burthens on industry will be much less than formerly, it will then be curious to observe if agriculture flourishes more, if prices are reduced, and if the taxes that still remain are better paid. There are, indeed, many concomitant circumstances that will tend to derange the experiment, or render the conclusion uncertain; but, still it is an in-[end of page #168] teresting and a great event, and will be worth attentive observation. {143}

We must, so far as this investigation goes, conclude, that, unless the natural tendency of things to decline is powerfully counteracted, every country that rises to wealth must have a fall; and that, therefore, it merits investigation, whether it is or is not possible to counteract the tendency to decline, without interrupting the progress towards greater prosperity, and, to manage matters so, that whether it is not possible, after having attained the summit of wealth, we may remain there instead of immediately descending, as most nations have hitherto done.

From individuals, the exertion necessary is not to be expected; but, it may be looked for from the government of a country, which, though composed of individuals, the succession of persons is differently carried on; it is not from age to age, and from an old father to a young son, but from men in the vigour of life, to men in the vigour of life, who, while they are occupied in public affairs, may be considered, with respect to whatever is to be done for the good of the nation, (for its prosperity, defence, or protection,) as animated with the same spirit, without any interruption.

With respect to the interior causes of decline, they may be counteracted always with more or less effect, by a proper system of govern-

—- {143} The burthens on the industry of old France, were,

Livres. Rent of land 700,000,000 Revenues of clergy 600,000,000 Taxes, including the expense of levying 800,000,000 2,100,000,000

In sterling money L. 87,500,000 Half land now occupied by the cultivators, } and the remainder let at lower rents } 350,000,000 Revenues of clergy, and the expenses 50,000,000 Taxes as before 800,000,000 ___ 1,200,000,000 Or in sterling money L. 50,400,000

This makes a diminution of L. 37,100,000; or something more than a third of the whole expense, and more than all the taxes to the state estimated at the highest rate. -=-

[end of page #169]

ment. In the latter portion of this work we shall endeavour to shew how that may be attempted with safety, if not accomplished with full success.

Before, however, we conclude this subject, and rely on government, it is necessary to mention that, in treating with other nations, a kind of overbearing haughty pride is natural to those who govern a powerful and wealthy people. In that case, they act as individuals, and are not to be trusted; and the less so, that a nation of proud pampered citizens is but too apt to applaud insolence in those who govern them.

This pride has been a very constant forerunner of the fall of wealthy and great nations, and, in Rome excepted, it has never failed. The emperors of Rome were much less haughty than the ambassadors of the republic; a love of false splendour had supplanted a ferocious affectation of dignity, yet, the former was the less humiliating of the two to other nations. {144}

While the rulers of wealthy nations are apt to act haughtily to others, they are liable to fall into another error, in mistaking the strength of their own people, and loading them too heavily, trusting too much both to their internal energy, and external force.

As the near observers of the inability of the people are generally afraid to carry unwelcome tidings to their superior; and, if they did, as he is seldom inclined to give credit to unwelcome news, the ruin of a nation has probably made a very considerable progress before he, whose business it is to put a stop to it, is aware of the danger.

The continual clamour that is made about every new burthen that is laid on, and the cry of ruin, which perpetually is sounded in the ears of a minister, and of those who execute his orders, are some ex-

—- {144} The appearance of virtue and self-command, which the republican Romans preserved, added to the bravery with which they maintained whatever claims they put in, overawed a great part of their enemies; and those, who were not absolutely overawed thought that defeat and submission were, at least, robbed of their shame, when such was the character of the conqueror; and the claim once allowed was no longer questioned. Very different was the case, when the emperor was a fidler, or a buffoon, the senators puppets, and the pro- consuls themselves robbers. -=-

[end of page #170]

cuses for their not attending to them; but the consequence is not the less fatal to the nation on that account.

A nation that is feeble has, at least, the advantage of knowing it, and is not insensible if she receives a wound; but the government of a powerful nation is like the pilot of a ship, who navigates in a sea, the depth of which he cannot sound, and who spreads all his sails: if he strikes upon a rock, his ship is dashed to pieces in a moment. The other, sailing amongst shallows and sands, proceeds with caution, avoids them if possible, and, if she touches, it is so gently, that even her feeble frame is scarcely injured.

The rulers of nations appear, in general, not to be aware of the evil that arises from the government they have to manage becoming too unwieldly sic, or too complicated; in either case, a check, though but of short duration, is irretrievable. This is a great oversight, and, at least, greatly augments the chances against the durability of a government. In proportion as the machine is unmanageable and complex, the embarrassment of those who have the conduct of it will be great, and the enemies will be proportionately bold and audacious. In all such conflicts, much depends on the spirit of the combatants, and more still on that of those who, at first, are lookers on, who act in consequence of the opinion they have of the force or feebleness of either party. {145}

The tendency that a nation has to decline is not, then, in general, counteracted, by the government; but, on the contrary, is pushed on by it, and precipitated into the gulf. No wonder, then, that the career is rapid, and the fall irretrievable.

It is, nevertheless, to the government, and to it alone, that we must look for that counteracting force that is to stay the general current. Individuals can only look to their own conduct, and they neither can

—- {145} Not only when the French revolution began, but a hundred times afterwards, did the party triumph that appeared the strongest, merely because it appeared so. All those who stand neutral at first, take a side the moment they have fixed their opinion as to the strength of the contending parties, and this decision is always in favour of the party they think the strongest. -=-

[end of page #171]

be expected to have time nor inclination to study the public welfare, and, even if they had, they would want the means.

Government can never be better employed than in counteracting this tendency to decay. It has the means, and is but performing its duty in doing so. The previous step to all this, however, is a knowledge of what is to be done, a full sense of the necessity of doing it, and a disposition to submit to the regimen necessary.

For this purpose, both the government and the people must give up something. The people must allow government to interfere in the education of children, and, in that, give up a little of their liberty; {146} and those who govern must attend to many things which are generally neglected. To do the routine business of the day is the occupation of most of the governments of Europe, whether in war or at peace; they therefore habitually become agents of necessity, and what can be procrastinated is never done; that is to say, what is good is very seldom done, and what is necessary to prevent immediate evil, is always the chief, and sometimes the only, occupation.

There are some men in the world who prosper merely because they look beforehand, and conduct their affairs. There are others who, with equal industry, and much more trouble and care, are always a little behind, and allow their affairs to conduct them; such men never succeed, and, if they can keep off the extreme of misfortune, it is all that is to be expected.

Most governments, in wealthy nations, are like those latter species of individuals,—they do not conduct their affairs, but are conducted by them, and think they succeed, when the necessary business of the day is done. This listlessness must be done away, and, though the

—- {146} From the impossibility of a nation, once immersed in sloth and luxury, returning to the tone and energy of a new people, we may judge of the impossibility of a nation going on progressively towards wealth, not suffering from the manner of educating children. The leading distinction between a rising and a fallen people is the disposition to industry and exertion, in the one, and to sloth and negligence, in the other. It is while a nation is increasing in wealth that this alteration gradually takes place; and, as this is the main point on which all depends, the nation is safe when it is well attended to, even if other things are, in some degree, neglected. -=-

[end of page #172]

governments of countries that are wealthy have no occasion, like Peter the Great, or the founders of new states, to create new institutions, and eternally try to ameliorate, they ought to be very carefully and constantly employed in preventing those good things that they enjoy from escaping their grasp, so far as it depends upon interior arrangement. Exterior causes are not within their power to regulate, therefore they should be the more attentive to those that are; and, though exterior causes are out of their dominion, yet, sometimes, by wise interior regulations, the evil effects of exterior ones may be prevented. Nothing of all this can be done, however, until the government rises above the routine business of the day, and until all the necessary and pressing business is got over. The first thing, then, for a government is to extricate itself from the situation of one who struggles with necessity, after which, but not before, it may study what is beneficial, and of permanent utility.

So far it would appear all nations are situated alike, with regard to the general tendency to decay; {147} and so far all of them may be guided by general rules, but as to the particular manner of applying those rules, it must depend on the peculiar circumstances of the nation to which they are meant to be applied.

In general, revenue has become the great object with modern nations: and, as their rulers have not ventured to tax the necessaries of the people to any high degree, but have laid their vices, rather than their wants, under contribution, the revenue-system, (as it may be called,) tends to make a government encourage expensive vice, by which it profits, and check innocent enjoyment, by which it has nothing to gain. This is a terrible, but it is a very prevalent system; it is immoral, inhuman, and impolitic.

So far as this goes, a government, instead of checking, accelerates the decline of a people; but, as this is not a natural cause of decline, as it is not universal or necessary, it is to be considered with due

—- {147} The Chinese, and, in general, the nations of Asia have not been considered as included in this inquiry. The Chinese, in particular, are a people in a permanent situation: they do not increase in riches, and they seem to have no tendency to decline. Their laws and mode of education and living remain the same. -=-

[end of page #173]

regard to particular circumstances. In general, we may say, that, in place of inviting the lower classes to pass their time in drinking, by the innumerable receptacles that there are for those who are addicted to that vice, every impediment should be put in the way. Drinking is a vice, the disposition to which grows with its gratification; most other avocations (for drinking in moderation is only such) have no tendency of the sort. Those enjoyments which have a tendency to degenerate into vice should be kept under some check; those which have no such tendency ought to be encouraged; for, where the main and general mass of the population of a country is corrupted, it is impossible to prevent its decline. If it remains uncorrupted, the matter is very easy, or, more properly, it may be said that prosperity is the natural consequence.

Manners will always be found of more consequence than laws, and they depend, in a great measure, on the wise regulations of government in every country.

Not only do most governments profit by laying the vices of the people under contribution; but, as revenue is, by a very false rule, taken as a criterion from which the prosperity of a nation may be estimated, the very evil that brings on decay serves to disguise its approach. A nation may be irretrievably undone, before it is perceived that it has any tendency to decline; it is, therefore, unwise for governments to wait till they see the effects of decay, and then to hope to counteract them; they must look before-hand, and prevent, otherwise all their exertions will prove ineffectual. [end of page #174]



CHAP. X.

Of the external Causes of Decline.—the Envy and Enmity of other Nations.—their Efforts, both in Peace and War, to bring Wealthy Nations down to their level.

The external causes of the decline of nations are much more simple in themselves than the internal ones, besides which, their action is more visible; the way of operation is such as to excite attention, and has made them thought more worthy of being recorded.

The origin of envy and enmity are the same. The possession of what is desirable, in a superior degree, is the cause of envy. That occasions injurious and unjust proceedings, and enmity is the consequence, though both originated in the same feeling at first, they assume distinct characteristics in the course of time.

The desire of possession, in order to enjoy, is the cause of enmity and envy; and all the crimes of nations, and of individuals, have the same common origin.

It follows, as a natural consequence, arising from this state of things, that those nations which enjoyed a superior degree of wealth, became the objects of the envy of others. If that wealth was accompanied by sufficient power for its protection, then the only way to endeavour to share it was by imitation; but if the wealth was found unprotected, then conquest or violence was always considered as the most ready way of obtaining possession.

The wandering Arabs, who are the only nations that profess robbery at the present day, (by land,) follow still the same maxim with regard to those whose wealth they mean to enjoy. If too powerful to be compelled by force to give up what they have got, they traffic and barter with the merchants of a caravan; but if they find themselves able to take, they never give themselves the trouble to adopt the legitimate but less expeditious method of plunder and robbery sic. [end of page #175]

As it has been found that wealth operates, by degrees, in destroying the bravery of a people, after a certain time, so it happens that, in the common course of things, a moment arrives when it is considered safe, by some one power or other, to attack the wealthy nation, and partake of its riches; thus it was that the cities of Tyre and of Babylon were attacked by Alexander; and thus it was that his successors, in their turn, were attacked and conquered by the Romans; and, again, the Romans themselves, by the barbarous nations of the north.

Besides those great revolutions, of which the consequences were permanent, there have been endless and innumerable struggles for the possession of wealth, amongst different nations; but the real and leading causes are so uniform, and so evident, that there is not a shadow of a doubt left on that subject.

Mr. Burke had good reason to say that the external causes were much easier traced, and more simple, than the internal ones; for, the Romans excepted, the instances of rich nations attacking and conquering poor ones are very rare indeed.

The Romans had erected their republic on a different plan from that of any other; they had neither arts, industry, nor territory of their own, and they conquered nations upon speculation, and for the sake of civilizing the people, and making them contribute revenue; how they were successful has been explained. But even the Romans would not have attacked poor nations, if they had been, at an earlier period, possessed of the means of attacking those that were wealthy.

Necessity obliged them to begin with Italy: their safety made them defend themselves against the Gauls, and, till they had a navy, it was impracticable to carry their conquests into Asia or Africa; but, after they had conquered Carthage, they lost very little time in attacking Egypt, and those countries occupied by the successors of Alexander.

The taking of Constantinople was the last decided victory of this sort, and in nothing but time and circumstance did it differ from the others; in all the great outlines it was exactly the same. [end of page #176]

The effeminacy and luxury of the rich, those interior causes, of which we have already spoken, always give facility to those efforts which envy and avarice excite.

The rivalship, in time of peace, is a contest confined to modern nations; or, at least, but little known to the ancients. Indeed, it is only amongst commercial nations that it can exist. There can be no competition in agriculture; and, indeed, it is only in war, or in commerce, that nations can interfere with each other.

The Phoenicians were the only commercial people of antiquity. Carthage was the colony, and received the Indian produce at second hand. It was in no way a rival.

When Solomon mounted on the throne of his father David, he applied himself to commerce; but the wisdom and power he possessed were such as bore down all opposition during his reign. Having married the daughter of the King of Egypt, who assisted him in several conquests, he founded the city of Palmyra, or Tadmore in the Wilderness, for the greater conveniency of the Eastern trade. The King of Tyre was his ally, but he was so, most probably, from necessity, for the alliance was very unnatural; and, soon after the death of Solomon, the Tyrians excited the King of Babylon to destroy Jerusalem: so, that if there had been, in ancient times, more people concerned in commerce, there is no doubt there would likewise have been more envy and rivality. sic

The cities of Italy, the Dutch, the Flemish, the English, and the French, have been incessantly struggling to supplant each other in manufactures and commerce; and the war of custom-house duties and drawbacks has become very active and formidable.

This modern species of warfare is not only less bloody, but the object is more legitimate, and the consequences neither so sudden nor so fatal as open force; to which is to be added, that if a nation will but determine to be industrious, it never can be greatly injured. If it enjoyed any peculiarly great advantages, those may, indeed, be wrested from it, but that is only taking away what it has no right to possess, and what it may always do without. [end of page #177]

The intention of this inquiry is not to discover a method by which a nation may engross the trade that ought to belong to others, it is only to enable it, by industry and other means, to guard against the approaches of adversity, which tend to sink it far below its level, thereby making way for the elevation of some other nation, on the ruins of its greatness.

As, in the interior causes of decline, we have traced the most part to the manners and habits of the people, so, in the exterior causes, it will be found that much depends upon the conduct of the government. [end of page #178]



CHAP. XI.

Why the Intercourse between Nations is ultimately in Favour of the poorer one, though not so at first.

In all commercial intercourse with each other, (or competition in selling to a third nation,) the poorer nation has the advantage in its gain; but this advantage is generally prevented by the length of credit which the wealthy nation is enabled to give, by which manufacturers are sometimes ruined in their own country by strangers, who can neither rival them in lowness of price nor goodness in quality.

In countries that are poor, those who have the selling, but not the manufacturing of goods, are so much greater gainers by selling goods purchased on credit, of which they can keep a good stock and assortment, than in selling from a shop or store scantily supplied with ready money, that there is not almost any question about either price or quality; there is not scarcely an alternative. In one line, a man can begin who has scarcely any capital, and do a great deal of business; he can even afford to sell the articles he purchases on credit with very little profit, because they procure him ready money; whereas, if he sells an article upon which he has no credit, he must replace it with another, by paying money immediately. The consequence is, that while those who sell to the public are poor, the nation or manufacturer that gives the longest credit will have the preference; but this is daily diminishing, for even with the capital of the rich nation itself, the manufactures of the poor one are encouraged; the manner is as follows:

A, at New York, purchases goods for one thousand pounds from B, at London, which he sells without any profit, and, perhaps, at a considerable loss; because B gives him twelve months credit. But A, who has, by this means, got hold of money, as if by a loan, will not lay that out with B, nor let him touch it till the year's end; and, having made no profit by the sale of B's goods, he must turn to advantage the money he obtained for them. According to the situation of mat-[end of page #179] ters in the country, and the nature of A's concerns, he will make more or less, but what he makes it is not the business to investigate; it is sufficient to know, that he will lay his ready money out with those who will sell cheap, in order to get by it; that is to say, he will lay it out with some person in his own country. {148} Thus, though the rich nation sells goods on credit at a price which cannot be obtained for them by the purchaser, yet its capital serves to give activity to the manufacturers in the poor country. It is true, that this operation is slow, but it produces an effect in time, and finishes by robbing the wealthy nation of its superiority, obtained by giving credit. It is thus that in all their intercourse, the first advantage is to the rich nation, but terminates in favour of the poor; for whenever equality of prices are the question, and both can give sufficient credit, the poorer nation has the advantage in point of price.

With regard to rivalling each other, in a third place, the poor nation has the advantage, if the merchants there have the means of paying with ready money, because the price is lower than that of the richer country. {149} If they have not that means, they cannot deal with them, but must wait till they have, by perseverance; and, in course of time, come to have the means when the poor nation is certain to enter into competition with advantage.

But this is not the only way in which the capital of a rich nation is employed in fostering a rivalship in a poorer nation. Were the manufacturers the only persons who sold goods, it would be confined to this; but that is not the case, for merchants, who are the sellers, study only where they can purchase the cheapest; thus English merchants purchase cloths in Silesia, watches in Switzerland, fire- arms at Liege,

—- {148} The Dutch used to give long credit, and buy with ready money, by which means they had great advantage for a long time; but, at last, the ready money they paid to some, and the credit they gave to others, set their industry at work, and they became rivals. Dutch capital was, at one period, of great service to the English, as that of England now is to the Americans.

{149} This is not meant to apply to any particular sort of manufacture. In some, a nation may have a permanent advantage over another; in others, only a temporary one, and in the greater portion no other advantage than what arises from superior capital. -=-

[end of page #180]

in preference to laying out the money in England or Ireland; and they will give credit, as before explained, to the nation that wants it.

In this manner it is, that the capital of a rich country supplies the want of it in poorer ones, and that, by degrees, a nation saps the foundation of its own wealth and greatness, and gives encouragement to them in others.

It is then that the weight of taxes, the high price of commodities, and the various causes which encumber those who live in wealthy nations, begin to produce a pernicious effect. The tendency of industry is to remove its abode, and the capital of the merchants, who know no country, but understand arithmetic, and the profits of trade, gives the industry the means of doing it with more ease and promptitude.

The Dutch, for the last century, employed their capital in this manner, and, at one time, were the chief carriers, for they secured custom by paying readily and giving credit largely. They ruined many of their own manufactures in this manner, but it is impossible to separate the calculation of gain from the mercantile system and mercantile practice in individuals; therefore it is no reproach to their patriotism, for patriotism cannot be the rule in purchasing goods from an individual. A merchant can have no other rule, but his own advantage, or, if he has, he will soon be ruined.

There are many manufactures in England that originally rose by means of Dutch capital, not lent capital, but by ready money paid for goods, which were carried to other nations, and sold here upon credit.

The English have, for a long time, been able to do this piece of business for themselves; and, of course, the Dutch did not find the same means of supporting their carrying trade; and as they had ruined many of their own manufactures, they sunk both as a commercial and manufacturing people.

If the time should ever come that capital should be so abundant in all nations, as that obtaining credit will not be an object, then it will be seen that no nation will have so very great a share of manufactures and commerce more than others, as has hitherto been the case.

In countries where the common practice is to sell, chiefly, for [end of page #181] ready money, great fortunes are seldom gained. Even in wealthy countries, in branches of business where no credit is given, great fortunes are very seldom got, and for a very simple reason. The business is pretty equally divided. But in a country that gives long credits, or in a branch of trade on which long credits are given, we always see some individuals gaining immense fortunes, by means of doing a great deal more business than others, who, having less capital, are enabled to do less.

There is not any one thing in which a nation resembles an individual so much, as in mercantile transactions; the rule of one is the rule of all, and the rich individual acts like a rich nation, and the poor one like a poor nation. The consequences are the same in both cases. The rich carry on an extensive trade, by means of great capital; the poor, a limited one, dependant sic chiefly on industry; but wherever the poor persevere in good conduct, they finish by getting the command of the capital of the rich, and then becoming their rivals.

There is one thing peculiar to the intercourse of rich and poor nations, in which it differs from the intercourse between rich and poor individuals in the same country. Money, which is the common measure of value, has a different price in different countries, and, indeed, in different parts of the same country. If a man, from a poor country, carries a bushel of corn with him into a rich, he can live as long upon it as if he had remained where he was; but if he carry the money, that would have bought a bushel of corn at home, he perhaps may not be able to live upon it half so long. {150}

The effect that this produces, in the intercourse between two countries, is, that in proportion as the difference becomes greater, the rich country feels it can command more of the industry of the poor, and the poor feels it can command less of the industry of the rich; so that

—- {150} In common life, this difference, between carrying money and necessaries, is perfectly well understood, but it is experience that is the teacher; and the rough countryman, or woman, when they have the opportunity of judging from fact, understand the motives as well as the most profound and ingenius =sic= writer on political economy. -=-

[end of page #182]

when their industry can be both applied, with any degree of equality, to the same object, the poor supplies the rich, and therefore increases its own wealth.

It is thus that great numbers of the people in London are fed with butcher-meat from Scotland, and wear shoes from Yorkshire; but there would be a very limited sale in either of those places for meat from Smithfield, or shoes manufactured in London. {151}

This diminution of the value of money, that takes place in all rich countries, serves farther to increase the advantage of poorer ones in manufacturing, and accelerates the natural effect of competition, which is facilitated, as has been said, by the capital of the rich country giving activity to the industry of the poorer one.

This last neither can be called an exterior nor an interior cause, as it is derived entirely from the relative situations of the two countries, and belongs to both, or originates in both; but, as it raises the poor nation nearer the level of the rich one, its effect gradually becomes less powerful. Though there is no means of preventing the operation of two nations coming nearly to a level by this means, yet it does not appear to be a necessary consequence that the nation that was the richer should become the poorer. As this, however, has been a general case, we must conclude it to be a natural one, but there we stop, and make a distinction between what is natural only, and what is a necessary effect. Their coming to a level was a necessary effect; but, though the other may be natural, it cannot be necessary, and therefore may be counteracted; to find the means of doing this, is all that is proposed by the present inquiry.

—- {151} If it was not for taxes and rent, that are chiefly spent in large towns, as well as law-expenses, and the prices of luxuries, of dress, and furniture, the cities, like London, would soon be reduced. -=-

[end of page #183]



CHAP. XII.

Conclusion of exteror Causes.—Are seldom of much Importance, unless favoured by interior ones.—Rich Nations, with care, capable, in most Cases, of prolonging their Prosperity.—Digression on the Importance of Public Revenue, illustrated by a statistical Chart.

The exterior causes of the decline of any nation, that has risen above its level, though formidable, are nothing, in comparison to the interior causes, and are of no great effect without their co-operation.

As the government of a country has an influence over the interior causes, so its alliances, and the laws of nations, though not very well attended to, (yet seldom altogether forgot,) have a tendency to stop the progress of the exterior causes, before they advance too far; that is to say, before they absolutely depress a nation.

For several centuries, the stronger nations of Europe protected the weaker, and the matter was carried so far, that the weak powers generally gained the most. Prussia and Sardinia are two examples of nations rising by political connections; and though the system is lately changed, and Poland has been despoiled and divided amongst nations, to each of which it was superior in power only two centuries ago, and though Holland and Switzerland groan under the yoke of France, yet, it is to be hoped, the old system is not abandoned, otherwise there will be no end to the encroachments of the great powers on the smaller.

The means of communicating, between nations, are now easy; they have felt the advantage of preserving a sort of balance, {152} and the ad-

—- {152} The expression, balance of power, gives a false idea. It seems to imply, that alliances in Europe were so nicely arranged, as to make the force of nations, in opposite interests, equal; but this never was the case for half an hour, nor was it ever intended. The whole [end of page #184] that is meant, is to prevent the present order from being overturned, by one nation annihilating or subduing another; and then, by their united strength, swallowing up a third, as was the case with the Romans. -=-

vantages are so great, that they probably never will be entirely abandoned, though we have strong proofs, of late years, that they are not always held very sacred.

The chart subjoined to this, giving a statistical representation of the powers of Europe, shews nearly in what manner power is distributed at this time; the population and extent are there represented with accuracy: these are the foundation of power; and the amount of the revenue may be said to shew the means, which a nation has of exerting that power. (For the description and explanation see the page opposite the chart). [Transcriber's note: seemingly a reference to Chart No. 2; the explanation in fact appears on page 190.]

The balance of power, however well attended to, could not prevent the decline of a nation from interior causes. It may prevent the operation of exterior causes from pushing a nation to the extreme of humiliation, by taking advantage of its internal situation. But the decline of almost every nation has commenced within its own bosom, and has been completed by causes acting from without.

The common termination of the interior causes of decline is revolt, or a division into parties, when the party that has the disadvantage generally calls in some neighbour to its aid. This is the most miserable fate that can befal sic a country, and no punishment is sufficiently severe for the men, who have so far lost every sentiment of patriotism as to have recourse to such a step.

The exterior causes of decline, namely, rivalship in peace and the combined efforts of enemies in war may be considered as irresistible, if the government, which has the direction of a nation, does not act wisely; but, if it does, they may be put at defiance. If a nation preserves its interior sources of prosperity, and acts with moderation and firmness towards others, their envy and efforts will be without effect, and need never be a cause of much uneasiness.

In its relation to other nations, the government of a country acts like an individual. The first thing is to regulate its interior affairs, and, the next is, in treating with others, to consider circumstances, and take justice and moderation for a rule of conduct. [end of page #185]

The circuitous politics attributed to ambassadors, who represent states, is a common theme of invective: as custom has established it as a sort of rule, in all such transactions as they conduct, to conceal a part of what is meant, to demand more than is expected to be obtained, and offer less than is intended to be given, there is no immediate remedy; but this is only in the mode and manner of treating, and does not necessarily imply unfair intention. If it has become a custom to ask three by way of obtaining two, and of offering only two to prevent the necessity of giving four, (which would be expected if three, the number intended to be given, were offered at first) it is an abuse of language, in so far that what is expressed is neither meant by one, nor understood by the other to be meant; but, it is nothing more: neither is it a custom void of meaning; it is founded on the nature of man.

If men were perfect, and capable of seeing at one view what was fair, each might come prepared to ask exactly what he wanted, and determined not to yield any thing; and it would result from their being perfect, that each would just demand what was right, and the other was disposed to give; but, as men are not perfect, and as it is the inclination and even the duty of each to obtain the most favourable terms he can, (and as he does not see exactly what is right,) he naturally demands more than he has a right to expect, or than the other is disposed to give. If ambassadors met together with a determination to speak explicitly at first, and with a determination not to recede, the consequence would probably be, that they would not treat at all, so that the mode of receding a little does not absolutely imply that more is asked than is wished for, but that each party over-rates its own pretensions, in order to obtain what is right.

One thing is certain, that the treaties that have been the best observed have been those founded on equity, where the contracting parties were neither of them under the influence of fear or necessity.

The exterior dangers of a country are not only more simple in their nature than the interior ones, but, being less silent and gradual in their progress have been more noticed by historians.

Even the ambitious rapacity of the Romans was first directed [end of page #186] against Carthage, on account of its pride and injustice in attacking other states; and, in the history of the nations of the world, there is scarcely a single example of national prosperity being unattended with some degree of pride, arrogance, and injustice; nor can it easily be otherwise, for, notwithstanding all the boasted law of nations, power seems amongst them to be one of the principal claims on which right is founded, though, in the moral nature of things, power and right have not the most distant connection.