nels, and are employed with greater advantage. — (For some further remarks on this subject, see Ricardo's 'Principles of Political Economy.")" The passage just quoted is the only matter which this author has put together for the purpose of meeting the all-important proposition which is now under examination. It cannot fail to be remarked, even on a superficial consideration of it, that its meaning is obscure, and almost unintelligible; a continued scrutiny enables us to perceive that it is not sense. It is obvious that, when the author of it arrived at this part of the extensive and important subject on which his mind was occupied, and found a proposition laid down by two of the leading authorities, differing so widely from that which he expected to find, and differing also from that which would be necessary to enable him to carry onwards his own arguments on the subject, he felt convinced the impediment to his progress would be insurmountable, if the truth of this proposition should be conceded. He therefore approaches it distrustfully, and before mooting an adverse argument, declares that such a proposition does not admit of solution; and, such a declaration being made, it will not create surprise that the passage quoted above does not solve it. I should dwell much longer on this passage, and should deem it my duty not to quit it until I had unravelled all its intricacies, and shown clearly how incapable of reconciliation, and of being formed into unity of argument, all the matter is which has been forced into it, only, as it will be seen, at its conclusion, the author refers to the work of Mr. Ricardo for a further elucidation of his own views of the subject. A complete analysis of Mr. Ricardo's proposition will, in fact, comprehend the whole matter of argument contained in both. I have, in the next place, then, to invite attention to the arguments made use of by Mr. Ricardo, in order to meet and to overthrow the proposition under consideration. On ap proaching this argument, I cannot omit to lay most particular stress on its peculiarly interesting nature. In my opinion it forms the most important problem which is to be found amongst all that has been written upon the science of political economy. Its author has openly and boldly ventured out from beneath the obscuring power of language, and relinquishing that confusing instrumentality to which language is so often turned, has committed his arguments to the solid form of fact, worked by figure, from which, all are aware, there are no means of escape. By such a method, the right or the wrong must be established indisputably; and I beg leave to remark, in passing, that no writer on the subject we are now treating of, should be allowed to claim for his conclusions the character of truth, who cannot submit them to be tried by this ordeal. I now beg most particular attention to this problem. On referring to the writings of Mr. Ricardo, I find that, in his work entitled "Principles of Political Economy,”* he is writing under the head of "Bounties and Prohibitions," and he there notices and quotes the proposition of M. Say, declaring that he will examine the soundness of the opinion in another chapter. Subsequently, therefore †, the author quotes at full the proposition of Adam Smith, which, as I have before remarked, is identical with that of M. Say. He then proceeds in his attempt to exhibit its fallacy by means of the following proposition: "This argument appears to me to be fallacious: for though two capitals, one Portuguese, and one English, be employed, as Dr. Smith supposes, still a capital will be employed in the foreign trade double of what would be employed in the home trade. Suppose that Scotland employs a capital of a thousand Principles of Political Economy, by D. Ricardo, ch. xxii. pounds in making linen, which she exchanges for the produce of a similar capital employed in making silks in England. Two thousand pounds, and a proportional quantity of labour, will be employed in the two countries. Suppose now that England discovers that she can import more linen from Germany for the silks which she before exported to Scotland, and that Scotland discovers that she can obtain more silks from France in return for her linen, than she before obtained from England — will not England and Scotland immediately cease trading with each other, and will not the home trade of consumption be changed for a foreign trade of consumption? But, although two additional capitals will enter into this trade the capital of Germany and that of France - will not the same amount of Scotch and English capital continue to be employed, and will it not give motion to the same quantity of industry as when it was engaged in the home trade?" Now the foregoing argument contains two distinct propositions. The first is this: Scotland Linen 1000l. England 1000l. These, exchanged for each other, make a capital of 2000l. value, and employ, as the author states, a proportional quantity of labour. Now the question to be tried is,- What will be the effect of leaving off the exchanging or consuming these home productions, and converting the trade from a home into a foreign? This the author proposes to show will be followed by no ill effect, and, in order to prove his assertion, he changes the facts of his proposition thus: Now, in the factitious case which the author has here constructed, he has set out by declaring Scotland to be a bad market for linen, and England a bad one for silks; on which account they cease to trade with each other. Having thus, in his first proposition, made England reject the production of Scotland, and Scotland reject the production of England, he has then, in his second proposition, preserved both these rejected commodities, and made the Germans purchase the one, and the French the other; and by such an argument has attempted to show that neither the capital of England nor that of Scotland will sustain injury. But it is selfevident that the same reason which induced the people of Scotland to cease buying the silks of England, will also prevent the people of Germany from resorting to her market; and the same reason which induced the people of England to cease buying the linens of Scotland, will likewise operate in preventing the people of France from doing so. In the natural course of things, France and Germany will trade with each other for the two commodities adduced, and England and Scotland must cease to manufacture them: whereby these two sources of exchangeable production must be, in the first instance, injured, and, in the next, lost. Thus it is evident, that the second or altered proposition is an error, and that its author has endeavoured to sustain his argument by supposing an impossible example. The problem, therefore, framed by Mr. Ricardo, and relied on by Mr. McCulloch, instead of overthrowing the proposition of M. Say and Adam Smith, presents nothing better than a confused mass of jarring and conflicting matter which annihilates its own existence. The proposition involving and showing the precedency and superior importance of home trade, thus constructed by Adam Smith and M. Say, may be placed in a point of view still more clear by adducing the facts of which the case is composed, and applying them to the circumstances of the people of the United States of America. This particular case was, many years ago, anxiously discussed, though not without the introduction of that strong leaven of party spirit which has served, in so many similar instances, to throw confusion over and to mar the courses of true scientific investigation. The case furnished by the people of the United States of America was that of the maintenance or abandonment of the large manufacturing trade in cotton and other fabrics. These manufactures had been reared up within the nation, and a certain amount of capital had of course become invested in the trade and manufacture; a large number of capitalists deriving their profit or their incomes, and a larger number of labourers deriving their wages, by means of the capital so invested and distributed. Now, in accordance with the proposition of Adam Smith and M. Say, I will assume the amount of capital thus invested to be 100 millions of dollars. This, then, will be the value of the one kind of production that is sustained wit in the nation; and next, there will be an equal amount of other productions reared and maintained within the nation likewise. This second amount will be comprised of all those commodities which the manufacturing party, both capitalists and labourers, require and demand for their maintenance or consumption; and thus there will be constituted, and there will be exchanged or circulated, within the nation, the Two values, or 200 millions of national capital maintaining its proportion of capitalists and labourers. Now, if it be assumed that the people of America leave off buying the manufactured commodities thus wrought for them by their own countrymen, the first hundred millions' |