home, against the introduction and competition of similar commodities from abroad, whereby the monopoly of the home market has been secured to the domestic capital and industry employed in producing these commodities. He then draws into instance several of the great staple productions of the country, both agricultural and manufacturing, as having this protection, these are corn, live-stock, and salt provisions, woollen manufactures, silk manufactures, and also many other kinds of manufactures; and proceeds to admit that the persons who are interested in these sources of production derive great advantage from the protection or monopoly thus afforded them. The passage is as follows: - By restraining either by high duties, or by absolute prohibition, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home market is more or less secured to the domestic industry employed in producing them. Thus the prohibition of importing either live cattle or salt provisions from foreign countries, secures to the graziers of Great Britain the monopoly of the home market for butcher's meat. The high duties upon the importation of corn, which in times of moderate plenty amount to a prohibition, give a like advantage to the growers of that commodity. The prohibition of the importation of foreign woollens is equally favourable to the woollen manufacturers. The silk manufacture, though altogether employed upon foreign materials, has lately obtained the same advantage. The linen manufacture has not yet obtained it, but is making great strides towards it. Many other sorts of manufactures have, in the same manner, obtained in Great Britain, either altogether or very nearly, a monopoly against their countrymen. The variety of goods of which the importation into Great Britain is prohibited, either absolutely or under certain circumstances, greatly exceeds what can easily be suspected by those who are not well acquainted with the laws of the customs." Now, upon the front of such an argument as is here advanced, it would appear, that, as advantage to all is the end desired and as advantage to some, by means of a defined line of action, is here admitted, so, by analogy of reasoning, if, by means of similar regulations, advantage were carried on or extended to all, the end required would be attained. The author, however, does not thus carry forward his course of reasoning, as the following passage, which immediately succeeds, will show: "That this monopoly of the home market frequently gives great encouragement to that particular species of industry which enjoys it, and frequently turns towards that employment a greater share of both the labour and stock of the society than would otherwise have gone to it, cannot be doubted. But whether it tends either to increase the general industry of the society, or to give the most advantageous direction, is not, PERHAPS, ALTOGETHER SO EVIDENT. "The general industry of the society never can exceed what the capital of the society can employ. As the number of workmen that can be kept in employment by any particular person must bear a certain proportion to his capital, so the number of those that can be continually employed by all the members of a great society, must bear a certain proportion to the whole capital of that society, and never can exceed that proportion; no regulation of commerce can increase the quantity of industry in any society beyond what its capital can maintain. It can only divert a part of it into a direction into which it might not otherwise have gone; and it is by no means certain, that this artificial direction is likely to be * The Wealth of Nations, by Adam Smith, book 4, ch. ii. p. 176. more advantageous to the society than that into which it would have gone of its own accord." Now, here occurs one of those great and important points of the science, upon treating which it was the duty of the author to have proceeded with the utmost circumspection, to have exerted the whole of his ability, that he might have brought into operation the strength of a GENERAL principle, in order either to establish or to annul that which was advanced as theory. But in the place of this, he has put in one of those weak admissions which are of such frequent occurrence in works on Political Economy, and which, by a few words, fixes the taint of falseness upon an entire course of argument. With respect to the truth of the theory, the utmost that he has been able to advance directly is, that "it is not, perhaps, altogether so evident." It will be seen, however, that the leaning of the passage is towards the truth of the theory of regulation, for by it there is proposed the adoption of a certain adjustment of production and consumption an adjustment, a proportioning, of supply and demandas should, in some degree, ward off the ill effects of that excessive competition which might be induced by trade being permitted to have a course entirely free; this excessive or destructive competition being that which the author of "The Wealth of Nations" has often, in the course of his work, assigned as the cause of the decline and destruction. of empires. Having thus brought together a mass of facts, and adverted to the laws which affect their relationship, and then finding his knowledge of the subject insufficient to reduce them to order, he was induced to get out of the difficulty in which he was placed, by adopting the following argument, which oc * The Wealth of Nations, by Adam Smith, book 4, ch. ii. p. 177. curs at the bottom of the same page from which the last quotation is made :- "Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society that he has in view - but the study of his own advantage, naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society."* Now, this argument contains a principle which, if it were true, would indeed meet and dissolve the difficulty, and dispose of the entire question. But it must be particularly noticed, that it is merely an assumed principle, not a proved one; and in order to see clearly the incongruity of the author's general course of argument, it will only be necessary to apply the principle here advanced to the proposition laid down by himself respecting the superior advantageousness of home over foreign trade. It will then become apparent, that either this principle must break down the proposition, or, that the proposition must recoil upon and annihilate the principle: they cannot be conjoined and coexist. Again when this important and comprehensive principle is attempted to be brought into connexion with the following arguments advanced by the same author, it will be evident that union cannot subsist between them. The passages occur in the second book. Treating of agricultural production, he says, "No equal quantity of productive labour employed in manufactures can ever occasion so great a reproduction. In them nature does nothing, man does all; and the reproduction must always be in proportion to the strength of the agents that occasion it. The capital employed in agriculture, * The Wealth of Nations, by Adam Smith, book 4, ch. ii. p. 177. therefore, not only puts into motion a greater quantity of productive labour than any equal capital employed in manufactures, but, in proportion, too, to the quantity of productive labour which it employs, it adds a much greater value to the annual produce of the land and labour of the country, to the real wealth and revenue of its inhabitants. Of all the ways in which a capital can be employed, it is by far the most advantageous to the society." And again, in the same chapter, and a few pages further on, when treating of the comparative benefits resulting from the three kinds of commerce, the agricultural, the manufacturing, and the foreign, there is as follows: "When the capital of any country is not sufficient for all these three purposes, in proportion as a greater share of it is employed in agriculture, the greater will be the quantity of productive labour which it puts into motion within the country, as will likewise be the value which its employment adds to the annual produce of the land and labour of the society. After agriculture, the capital employed in manufactures puts into motion the greatest quantity of productive labour, and adds the greatest value to the annual produce. That which is employed in the trade of exportation has the least effect of any of the three." Again :- "The returns of the foreign trade of consumption are seldom so quick as those of the home trade. The returns of the home trade generally come in before the end of the year, and sometimes three or four times in the year. The returns of the foreign trade of consumption seldom come in before the end of the year, and sometimes not till after two or three years. A capital, therefore, employed in the home trade, will sometimes make twelve operations, or be * The Wealth of Nations, by Adam Smith, book 2, ch. v. p. 53. |