Chapter 4: Of Commercial Wealth

    By labour man drew his first wealth from the earth, but
scarcely had he satisfied his primitive wants, when desire made
him conceive other enjoyments, not to be obtained without the aid
of his fellows. Exchanges began. They extended to whatever had
any value, to whatever could produce any; they comprised mutual
services and labour, no less than the fruit of labour; and gave
room to the formation and increase of a new kind of wealth, which
was no longer measured by the wants of him who produced it, but
by the wants of all those with whom he might transact exchanges,
- with whom he might carry on commerce; and hence we have named
it commercial wealth.
    The solitary man was used to labour for his own wants, and
his consumption was the measure of his production; he fitted out
a place to produce him provisions for a year, for two years
perhaps; but afterwards he did not indefinitely augment it. It
was enough to renew the process, so as to maintain himself in the
same condition; and, if he had time to spare, he laboured at
acquiring some new enjoyment, at satisfying some other fancy.
Society has never done any thing by commerce, except sharing
among all its members what the isolated man would have prepared
solely for himself. Each labours, in like manner, to provide for
all, during a year, two years, or more; each labours, afterwards,
to keep up this provision, according as consumption destroys a
part of it; and since the division of labour and the improvement
of arts allow more and more work to be done, each, perceiving
that he has already provided for the reproduction of what has
been consumed, studies to awaken new tastes and new fancies which
he may satisfy.
    But when a man laboured for himself alone, he never dreamt of
those fancies, till he had provided for his wants; his time was
his revenue; his time formed also his whole means of production.
There was no room to fear, that the one would not be exactly
proportioned to the other; that he would ever work to satisfy an
inclination that he did not feel, or which he valued less than a
want. But when trade was introduced, and each no longer laboured
for himself, but for an unknown person, the different proportions
subsisting between the desire and what could satisfy it, between
the labour and the revenue, between production and consumption,
were no longer equally certain; they were independent of each
other, and every workman was obliged to regulate his conduct by
guessing on a subject, concerning which the most skilful had
nothing but conjectural information.
    The isolated man's knowledge of his own means and his own
wants, required to be replaced by a knowledge of the market, for
which the social man was labouring; of its demands and its
extent.
    The number of consumers, their tastes, the extent of their
consumption, and their income, regulate the market for which
every producer labours. Each of these four elements is variable,
independently of the rest, and each of their variations
accelerates or retards the sale. The number of consumers may
decrease, not only by sickness or war, but also by obstacles
which policy may place in the way of their communication, or by
the avarice of new sellers. Their tastes may be changed by
fashion: an extraordinary consumption of one kind of merchandize,
brought about by some public calamity, may have reduced them to
be frugal in all the rest; and finally, their income may diminish
without a diminution of their number, and with the same wants,
the same means of satisfying them may no longer exist. Such
revolutions in the market are difficult to know with precision,
difficult to calculate; and their obscurity is greater for each
individual producer, because he but imperfectly knows the number
and means of his rivals, the merchants, who are to sell in
competition with him. But one single observation serves him,
instead of all them: he compares his price with that of the
buyer, and this comparison, according to the profit or loss which
it offers him, is a warning to increase or diminish his
production, for the following year.
    The producer establishes his price according to what the
merchandise has cost, including his profit, which ought to be
proportional to what might be obtained in any other kind of
industry. The price must be sufficient to repay the workmen's
wages, the rent of the land, or the interest on the fixed
capitals employed in production, the raw materials wrought by
him, with all the expenses of transport, and all the advances of
money. When all these reimbursements, calculated at the mean rate
of the country, are themselves repaid by the last purchaser, the
production may continue on the same footing. If the profits rise
above the mean rate, the producer will extend his enterprizes; he
will employ new hands and fresh capital, and, striving to benefit
by this extraordinary profit, he will soon reduce it to the
common level. If the buyer, on the other hand, pays a price too
low for compensating all the producer's reimbursements, the
latter will, of course, seek to reduce his production, but this
change will not be so easy as the other. The workmen employed by
him, rather than abandon what gains their bread, consent to work
at a lower price; for less even than the necessaries of life.
Fixed capitals, moreover, cannot be put to another use; he will
content himself with a smaller profit, and continue to work with
them till they produce next to nothing. Lastly, the manufacturer
himself must live by his industry, and never willingly abandons
it: he is ever disposed to attribute the decline of his last
year's trade to accidental causes; and the less he has gained,
the less is he willing to retire from business. Thus production
continues almost always longer than demand, unless the
manufacturer has, of his own accord, renounced his business to
attempt a new one.
    The buyer's price, an the other hand, is fixed by
competition. He does not inquire what the article costs, but what
are the terms on which he may obtain another to serve in its
stead; he addresses himself to various merchants, who offer him
the same commodity, and bargains with him who will sell the
cheapest; or else he considers which will suit him best, among
several articles of a different nature, but capable of being
substituted for each other. As each is occupied solely with his
own private interest, each tends to the same object: all the
buyers, on one hand, all the sellers on the other, act as if in
concert: the sums asked, and the sums offered, are brought to an
equilibrium, and the mean price is established.
    The seller's price should enable him to reproduce the article
sold, with a profit, under the same condition, in the same place.
His market, therefore, extends to every country where the mean
price established by commerce is no smaller than his. His
production is not limited by the consumption of neighbors or
countrymen; it is regulated by the whole number of those who,
whatever country they inhabit, find an advantage in purchasing
his goods, or for whom his producing price is not superior to the
buying price. It is this which properly constitutes the extent of market.
    As the division of labour incessantly augments its productive
powers, and the increase of capitals daily obliges the merchant
to seek new employment for industry, and try new manufactures,
the producer feels no interest more pressing than that of
extending his market. If he cannot find new places of sale, it
will neither suit him to enlarge his manufactory, when his
capital has been increased by saving, nor to improve his
fabrication by performing more work with the same machinery, or
the same number of hands. The whole progress of his fortune
depends on the progress of his sale.*
    Among the causes which augment this sale, the first is the
discovery of such an economy in labour as may enable the
manufacturer to sell cheaper than his brethren, and to get
possession of their custom: he will sell more, but they will sell
less. The consumers will make a light saving; yet, if both are
subjects of the same state, the difference in regard to the
national interest will not be great. The distress of those
producers, who have lost their custom, and who, probably, will
lose a considerable part of their capital by selling their wares
too cheap, and abandoning their former machinery, will perhaps
counterbalance the profit of purchasers.
    As policy is wont to comprise the obligation of social duties
within the circle of our countrymen, the mutual rivalship of
foreign producers has more openly displayed itself. They have
striven to exclude each other from the markets, where they came
in competition, by selling at a cheaper rate. Every national
discovery, which allows the producers of one country to sell
cheaper than those of other countries, inevitably increases the
former's production at the latter's expense; and the profit of
this saving is shared between producers who extend their market,
and consumers who provide for their wants at a smaller expense.
Yet if a single manufacturer has succeeded in making this saving,
which extends his market; or if the exclusive use of it is
secured to him by patent, his countrymen. also manufacturers,
against whom he has made this successful competition, must
support all the loss of it, whilst himself and the foreign
consumer share all the profit. In an age, when communication
among different counties is easy, when all the sciences are
applied to all the arts, discoveries are soon divined and copied,
and a nation cannot long retain an advantage in manufacturing
which it owes but to a secret; so that the market, extended for a
moment by a fall in the price, is very soon shut up; and if the
general consumption is not increased, the production is not so either.
    Sale is extended also, and in a more lasting manner, when the
cheapness of the thing produced brings it within the reach of a
new class of consumers; a very sensible diminution of the price
may often produce this effect. Thus glass windows were at one
time confined to palaces; they are found at the present time in
the meanest huts. Consumption is in that case truly increased;
each nation gains doubly by it; manufacturers have extended their
labour; the poor have acquired a new enjoyment.
    The increase of population, and of national wealth,
contributes to extend the market, in a manner still more
advantageous. Yet every conceivable increase of population and of
wealth, does not, of necessity, extend the market; it is only
such an increase as attends the increased comforts of the most
numerous class. When cultivation on the great scale has succeeded
cultivation on the small, more capital is perhaps absorbed by
land, and re-produced by it; more wealth than formerly may be
diffused among the whole mass of agriculturists, but the
consumption of one rich farmer's family, united to that of fifty
families of miserable hinds, is not so valuable for the nation,
as that of fifty families of peasants, no one of which was rich,
but none deprived of an honest competence. So also in towns, the
consumption of a manufacturer worth a million, under whose orders
are employed a thousand workmen, reduced to the bare necessaries
of life, is not so advantageous for the nation, as that of a
hundred manufacturers far less rich, who employ each but ten
workmen far less poor. It is very true, that ten thousand pounds
of income, whether they belong to a single man, or to a hundred,
are all equally destined for consumption, but this consumption is
not of the same nature. A man, however rich, cannot employ for
his use an infinitely greater number of articles than a poor man,
but he employs articles infinitely better; he requires work far
better finished, materials far more precious, and brought from a
far greater distance. It is he who especially encourages the
perfection of certain workmen, that finish a small number of
objects with extreme skill; it is he who pays them an exorbitant
wage. It is he also that especially rewards such workmen as we
have named unproductive, because they procure for him nothing but
fugitive enjoyments, which can never by accumulation form part of
the national wealth; and whilst the effect of increasing capital
is generally to concentrate labour in very large manufactories,
the effect of great opulence is almost entirely to exclude the
produce of those large manufactories from the consumption of the
opulent man. The diffusion of wealth, therefore, still more than
its accumulation, truly constitutes national prosperity, because
it keeps up the kind of consumption most favourable for national re-production.
    The manufacturer's market may, in the last place, be
extended, by what forms the noblest wish of a statesman, the
progress of civilization, comfort, security, and happiness, among
barbarous nations. Europe has arrived at such a point, that, in
all its parts, there is to be found an industry, a quantity of
fabrication, superior to its wants; but if false policy did not
incessantly induce us to arrest the progress of civilization
among our neighbours; if Egypt had been left in the hands of a
people requiring the arts of Europe; if Turkey were extricated
from the oppression under which it groans; if our victories over
the inhabitants of Barbary had been profitably employed in giving
back the coasts of Africa to social life; if Spain had not again
been yielded to a despotism which destroys and ruins her
population; if the independents of America were protected, so
that they might be allowed to enjoy the advantages which nature
offers them; if the Hindoos, subject to Europe, were amalgamated
with Europeans; if Franks were encouraged to settle among them,
in place of being repelled, - consumption would increase in these
different counties, rapidly enough to employ all this
super-abundant labour, which Europe at present knows not how to
dispose of, and to terminate this distress in which the poor are plunged.
    The more superior the buyer's price is to the seller's, the
more profit does trade give to be shared among the trader, and
all those whom he employs in the transport and distribution of
his goods; the manufacturer, and all those whom he employs in the
production of them. Hence one of the great and constant objects
of governments has been, to increase this difference, that their
manufacturers might be enabled to produce cheap, and so find many
buyers, and to sell dear to such as could not buy elsewhere, and
so gain a large profit. The progress of society generally enables
nations to produce cheaper; the almost ever injudicious
protection of government often gives them means of selling
dearer.
    The low price of workmanship is the first cause of
manufacturing profit; but this low price is never a national
advantage, except when it is produced by superiority of climate,
greater fertility of soil, or abundance of provision. On the
contrary, when it arises from the difficulty of communication,
which prevents cultivators from reaping all the profit of their
wares, it can only be regarded as a private advantage, acquired
at the expense of the national advantage. When the low price of
workmanship arises from the poverty of day-labourers, forced by
competition to content themselves with what is necessary for
life; though commerce may profit by the circumstance, it is
nothing better than a national calamity.
    Abundance of capital, and the consequence of this, a low
price of interest, likewise doubly contribute to diminish the
price of production. With more capital, the manufacturer and
merchant transact their purchases and sales at a more favourable
moment; they are not pressed by either operation, or compelled to
provide for the print by a sacrifice of future advantage.
Executing all kinds of labour more on the great scale, they save
time, and all those incidental charges, which are the same for a
great and for a small sum. But as to the saving made by the
merchant on the interest of money, it is made at the expense of a
particular class, deriving their revenue from trade; it does not
enrich the nation any more than the diminution of wages enriched
it; it only gives to one what it takes from another.
    The increasing division of labour forms, as we have seen, the
chief cause of increase in its productive powers; each makes
better what he is constantly engaged in making, and when, at
length, his whole labour is reduced to the simplest operation, he
comes to perform it with such ease and rapidity, that the eye
cannot make us comprehend how the address of man should arrive at
such precision and promptitude. Often also this division leads to
the discovery, that as the workman is now worth nothing more than
a machine, a machine may in fact supply his place. Several
important inventions in mechanics applied to the arts, have thus
sprung from the division of labour; but, by the influence of this
division, man has lost in intelligence all that he has gained in
the power of producing wealth.
    It is by the variety of its operations that our soul is
unfolded; it is to procure citizens that a nation wishes to have
men, not to procure machines At for operations a little more
complicated than those performed by fire or water. The division
of labour has conferred a value on operations so simple, that
children, from the tenderest age, are capable of executing them;
and children, before having developed any of their faculties,
before having experienced any enjoyment of life, are accordingly
condemned to put a wheel in motion, to turn a spindle, to empty a
bobbin. More lace, more pins, more threads, and cloth of cotton
or silk, are the fruit of this great division of labour; but how
dearly have we purchased them, if it is by this moral sacrifice
of so many millions of human beings!
    The employment of machinery in place of men, has contributed
generally to lessen the price of production. At the renovation of
arts and civilization, there was so much work to be done, and so
few hands to do it; oppression had so far reduced the poor class;
there remained so much uncultivated land in the country; so many
ill-supplied trades in towns; and sovereigns required so many
soldiers for war, that it seemed workmanship could never be
economized enough, since an artisan, sent away from one trade,
would always find ten others ready to receive him. Circumstances
are not now the same; our labour is scarcely sufficient for the
labourers. We shall endeavour, in another place, to explain the
cause of this fact; in the mean time, surely none will maintain
that it can be advantageous to substitute a machine for a man, if
this man cannot find work elsewhere; or that it is not better to
have the population composed of citizens than of steam-engines,
even though the cotton cloth of the first should be a little
dearer than that of the second.
    The application of science to art is not limited to the
invention of machinery; its result is the discovery of raw
materials, dyeing ingredients, preservative methods more sure and
economical. It has produced better work at a cheaper rate; it has
protected the health of labourers, as well as their produce; and
its effect in augmenting wealth has almost always been beneficial
to humanity.
    Finally, the different quarters of the globe possess
advantages of climate, soil, exposure, which not only render the
subsistence of man more easy or cheaper, but also place within
his reach certain raw materials, which other nations cannot
procure at the same price. Hence results in their favour a kind
of monopoly, which they exercise over others, and of which it is
rare that they do not take advantage. There is also, in some
degree, a natural advantage in the superiority of the people
itself, in certain climates; the bounty of nature seems to have
reserved for those who inhabit them a superiority of industry,
intelligence, strength of body, or constancy in labour, which do
not even require to be developed by education.
    But other qualities, other virtues, which appear to
contribute more effectually still to the increase of riches, as
well as to the happiness of society - the love of order, economy,
sobriety, justice - are almost always the work of public
institutions. Religion, education, government, and principles of
honour, change the nature of men; and as they make good or bad
citizens of them, they advance or retard their approach to the
object proposed by political economy.
    But governments have rarely been satisfied with such
advantages as the trade of their states might owe to nature, or
to the progress of society. They have attempted to favour the
increase of commercial wealth; and their different expedients
have most frequently tended to assist the merchant in selling
dear, rather than producing cheap. With the latter object,
however, we have seen the exportation of raw materials
prohibited, the rate of interest fixed, and laws enacted to lower
the wages of labour.
    These three expedients had a common fault, that of
sacrificing one class to another, and founding the profit of
trade, not on the advantage of consumers, but on the loss of
cultivators, capitalists, or workmen; so that its profits, far
from being an increase of the national wealth, were a
displacement of it. The raw materials on which the arts operate,
are all, or nearly all, produced by agriculture or at least drawn
from the ground; hence they form part of the proprietor's or the
cultivator's wealth. If some advantage did not arise from
exporting them, nobody would think of forbidding them to be
exported. This prohibition indicates sufficiently, that the
persons who produced them were better paid, or gained more by
selling them to strangers; and the law restricts their market, in
opposition to the principle which we have pointed out above, as
the foundation of commercial interest; the principle of obtaining
for each article of produce the highest possible price. From such
prohibitions to export, there must result, first, a diminution in
the price of the raw material, for its price is no longer kept up
by free trade; secondly, a diminution in the quantity produced,
because it is regulated by the interior demand; and lastly, a
deterioration of its quality, for a calling which is ill
rewarded, is likewise ill attended to. This, therefore, is one of
the most injudicious means of favouring trade; and at the same
time, it sacrifices the income of all those who contribute to
produce the raw material. Whatever trade gains from them, cannot
be considered as adding aught to the national revenue.
    To fix the interest of money, or to suppress it altogether,
as some legislators have attempted, has, generally been the
consequence of religious prejudices, and of mad attempts to adapt
the Jewish legislation to modern Europe. The effect of these
laws, so opposite to the general interest, has always been either
to force contractors to envelop themselves in a secrecy which
they must require payment for, and may use as a snare for the
unsuspiciousness of others; or else to force capitalists to
employ, in other counties, that capital which they could not lend
in their own neighborhood, with the same safety and advantage.
But the very end which legislators proposed was bad; a diminution
in the rent of the national capital, is a national evil; it is a
loss of part of the revenue. Most frequently, indeed, this evil
is the sign of an advantage greatly superior to it, namely, the
increase of capitals themselves; but, in forcibly producing the
sign, we cannot at all forcibly produce the thing, any more than
by turning round the pointers of a watch we can alter the flight
of time.
    Attempts on the part of government to fix the rate of wages,
to make workmen labour at a lower price, are ever the most
impolitic and the most unjust of these partial laws. If
government should propose, as an object, the advantage of any one
class in the nation at the expense of the rest, this class ought
to be precisely the class of day-labourers. They are more
numerous than any other; and to secure their happiness is to make
the greatest portion of the nation happy. They have fewer
enjoyments than any other; they obtain less advantage than any
other from the constitution of society; they produce wealth, and
themselves obtain scarcely any share of it. Obliged to struggle
for subsistence with their employers, they are not a match for
them in strength. Masters and workmen are indeed mutually
necessary to each other; but the necessity weighs daily on the
workman; it allows respite to his master. The first must work
that he may live, the second may wait and live for a time without
employing workmen. Hence in the riots and combinations of workmen
for obtaining an increase of wages, their conduct is often
violent and tumultuous, and often merits the chastisement which
it never fails to receive; but scarcely an instance exists, where
justice has not been upon their side.
    The expedients invented by governments to assist their
merchants in selling dear, are numerous. Some tend to diminish
the number of producers in a market of given extent, and
therefore to force buyers to raise their price; such are
apprenticeships, corporations, monopolies granted to companies,
prohibitions to import, exclusive governments of colonies, and
favours obtained by treaties of commerce; others, such as
bounties and drawbacks, are destined really to extend the market;
though, by securing to the manufacturer a profit at the
government's expense, not the consumer's.
    The regulations of apprenticeships and the statutes of
corporations, were destined, it is said, to hinder ignorant
workmen from following any trade which they did not yet
understand; they were forced to devote a determinate number of
years to learn it, and afterwards to gain admission into a body
which always made obstacles to the entrance of new comers, and
limited their number. The pretence of thus watching over the
training of artisans cannot be made good. It has often been
proved, that rivalship alone gives that training, whilst a long
apprenticeship blunts the mind and discourages industry; but the
true, though secret object, to diminish the number of those
exercising a trade, was attained. The corporate body exercised a
kind of monopoly against the consumer; it took care at all times
to keep the supply below the demand. The merchant doubtless
gained more; but he gained on a smaller production. There was
less work done, less increase of capital, less population
supported; and as to the merchant's extraordinary profit, it was
compensated by an equal loss to the consumer, who was obliged to
pay, not according to his own advantage or convenience, but
according to the arbitrary caprice of a corporation which gave
laws to him.
    In all trading counties, a more or less exclusive monopoly
has been granted, on certain occasions, to some associations of
merchants, under the name of Trading Companies. The avowed motive
for sacrificing the whole class to this privileged number was the
particular nature of the trade thus subjected to a monopoly,
which trade it was said could not be supported except by very
extensive funds; but governments had often a secret motive
besides; and this was, the sum of money for which the merchants
bought their privilege. A company's monopoly has never failed to
heighten the price for the consumer, to diminish production and
consumption, to give the national capital a false direction;
sometimes by attracting it prematurely to a branch of trade which
was not yet suitable, sometimes by repelling it when fruitlessly
seeking an employment. But although companies obtained the
desired privilege of buying cheap and selling dear, by nature
they are so ill suited for economy and trading speculations, that
although amazingly rich, and sometimes sovereigns of counties,
these companies, their administrators having no immediate
interest in the prosperity of their trust, have almost all been
robbed, and very few of them have not ended in bankruptcy.
    These different expedients for the protection of commerce,
are now generally decried, though almost all governments yet
agree in repelling from their states the produce of foreign
manufactories, or at least in loading it with heavy duties, to
give the national produce an advantage. The prohibitive system of
custom-house duties plainly gives to a growing manufactory an
advantage equivalent to the largest bounty. Perhaps this
manufactory scarcely produces the hundredth part of what the
nation consumes of such commodities; but the hundred purchasers
must compete with each other to obtain the one seller's
preference, and the ninety-nine rejected by him will be compelled
to obtain goods by smuggling. In this case, the nation's loss
will be as a hundred; its gain as one. Whatever advantage may
arise from giving a new manufacture to a nation, certainly there
are few which deserve such a sacrifice and even these might
always be set a-going by less expensive means. Besides, we must
also take into account the weighty inconveniences of establishing
the vexatious system of duties, of covering the frontiers with an
army of customhouse officers, and with another not less dangerous
army of smugglers, and thus of training the subjects to
disobedience. We must remember, above all, that it is not the
interest of a nation to produce every thing indifferently; that
it ought to confine its efforts to such goods or commodities as
it can manufacture at the cheapest rate; or to such as, whatever
price they cost, are essential to its safety. It ought to be
recollected that each merchant knows his own business better than
government can do; that the whole nation's productive power is
limited; that in a given time, it has but a given number of
hands, and a given quantity of capital; that by forcing it to
enter upon a kind of work which it did not previously execute, we
almost always at the same time force it to abandon a kind of work
which it did execute: whilst the most probable result of such a
change is the abandonment of a more lucrative manufacture for
another which is less so, and which personal interest had
designedly overlooked.
    If the prohibitive system gives a very powerful, though very
expensive encouragement to rising manufactures, it can offer, in
regard to such, no advantage to those which are already
prosperous; the sacrifice at least which it imposes on consumers,
is entirely useless. If the manufacture was destined for
exportation, government, by granting a monopoly of the interior
market, causes it to abandon its ancient habits to assume others
which probably are less advantageous. Every manufacture destined
for exportation gives proof of not fearing the competition of
foreigners. From the moment that it can support competition
abroad, notwithstanding the expense of transport, it has still
less reason to dread this competition in the very place of
production. Thus nothing is more common than to see goods
prohibited which never could have been imported with advantage,
and which gained credit solely by being so prohibited.
    By the prohibitive system, governments had proposed to
increase the number and productive powers of their manufactures.
It is doubtful if they rightly knew the price they paid for this
advantage, and the prodigious sacrifices they imposed on
consumers, their subjects, to bring into existence an unborn
class of producers; but they succeeded much more rapidly even
than speculators on political economy expected. For a time they
excited the bitterest complaints on the part of consumers; but
even these complaints ceased afterwards, because sacrifices in
fact had also ceased, and manufactures so powerfully encouraged,
had soon provided with profusion for the national wants. But this
emulation of all governments to establish manufactures every
where, has produced two strange and unexpected effects on the
commercial system of Europe; one is the disproportionate increase
of production without any relation to consumption; the other is
the effort of each nation to live isolated, to suffice for
itself, and refuse every kind of foreign trade.
    Before governments had been seized with this manufacturing
ardour, the establishment of a new manufacture had always to
struggle with a crowd of national habits and prejudices, which
form as it were the vis inertiae of the human mind. To overcome
this force, it was necessary to offer speculators a very manifest
advantage; hence a new species of industry could scarcely arise
without a distinct previous demand, and the market was always
found before the manufacture destined to occupy it. Governments,
in their zeal, have not proceeded upon this principle; they have
ordered stockings and hats beforehand, reckoning that legs and
heads would be found afterwards. They have seen their people well
and economically clothed by strangers, and yet have caused them
to produce clothes in the country itself. During war, this new
production was not capable of being too exactly appreciated; but
when peace came, it was found that all things had been made in
double quantity; and the readier the mutual communication of
states had become, the more embarrassed were they to dispose of
all their works executed without orders.
    Consumers who at the beginning had been satisfied, afterwards
found themselves called to unexpected gains, because merchants,
eager to recover their funds, were forced to sell a very great
quantity of goods with loss. Manufacturers gave the signal for
these sacrifices; resigning themselves to a cruel loss of their
capital, they induced extensive merchants to furnish themselves
with goods beyond their custom or ability, in order to profit by
what appeared a good opportunity. Several of the latter have been
forced to experience a similar loss, before their excessive
supply could be introduced to the shops of retail dealers; and
these again before they could make them be accepted by consumers.
A universal embarrassment was felt by manufacturers, merchants,
and retailers, and this was followed by the annihilation of the
capital destined to support industry. The fruit of long saving
and long labour was lost in a year. Consumers have gained
certainly, but their gain is scarcely perceptible even to
themselves. By laying up a stock of goods for several years to
profit by their cheapness, they have also included themselves in
the general embarrassment, and still farther retarded the period
when the balance can be re-established between consumption and production.
    According to the former organization of Europe, all states
did not make pretences to all kinds of industry. Some had
attached themselves to agriculture, others to navigation, others
to manufactures; and the condition of these latter, even in
prosperous times, could not have appeared so worthy of envy as to
demand prodigious efforts to attain it. A miserable and degraded
population almost always produced these rich stuffs; these
elegant ornaments, this furniture which it was never destined to
enjoy and if the men who directed these unhappy workmen sometimes
raised immense fortunes, those fortunes were as frequently
destroyed. The development of nations proceeds naturally in all
directions; it is scarcely ever prudent to obstruct it, but it is
no less dangerous to hasten it; and the governments of Europe, by
having of all hands attempted to force nations, are at the
present day loaded with a population, which they have created by
requiring superfluous labour, and which they know not how to save
from the horrors of famine.
    The existence of this manufacturing population, and the duty
of providing for its wants, have constrained governments to alter
the aim of their legislation. Formerly, in the real spirit of the
mercantile system, they encouraged manufactures, in order to sell
much to foreigners, and grow rich at their expense; now,
perceiving that a prohibitive system is every where adopted, or
like to be adopted, they cannot any longer count on the custom of
strangers, and therefore study to find, in their own kingdom,
consumers for their own workmen; in other words, to become
isolated and sufficient for themselves. The system of policy at
present, more or less strictly followed by all the nations of
Europe, destroys all the advantages of commerce; it hinders each
nation from profiting by the superiorities due to its climate, to
its soil, to its situation, to the peculiar character of its
people; it arms man against man, and breaks the tie which was
destined to sooth national prejudices, and accelerate the
civilization of the world.
    According to the natural progress of increasing wealth, when
capitals are yet inconsiderable, it is certainly desirable to
direct them rather to some neighbouring branch of trade, than to
one which is very remote; and as the trade of exportation and
importation gives foreigners one half of its profit, and the
natives another, a country which has little capital may desire to
employ it entirely in the trade of its interior, or for its own
use; and the more so, because if the market is near the producer,
the same capital will be several times renewed in a given period,
whilst another capital, destined for a foreign market, will
scarcely accomplish a single renewal. But the capitalist's
interest will always direct him with certainty, in such cases to
do what suits the country best; because his profit is
proportioned to the need there is of it, and consequently to the
direction in which the public demand carries him.
    Besides, nations, on reckoning up their produce and their
wants, almost constantly forget that neighboring foreigners are
much more convenient and more advantageous producers and
consumers than distant countrymen. The relation of markets on the
two banks of the Rhine is much more important, both for the
German and the French merchant, than the relation of markets
between the Palatinate and Brandenburgh is for the former, or
between Alsace and Provence for the latter.
    The ardour, with which all governments have excited every
species of production, by means of their restrictive system, has
brought about such a disproportion between labour and demand,
that perhaps it has become necessary for every state to think
first, not of the comfort, but of the existence of its subjects,
and to maintain those barriers which have been so imprudently
erected. An important part of the population might, perhaps, be
cut off by penury, in the course of a few years; and it is
reasonable that each state should seek to preserve itself and
those depending on it from such a calamity. Yet, we cannot
without pain, behold the rivetting of this anti-social system,
and the abandonment of that ancient spirit of commerce, which
triumphed over barbarism, and taught hostile hordes to know and
esteem each other.
    Governments, after having attempted to give the national
producers a monopoly in their own country, have sometimes
endeavoured to procure them a similar advantage in foreign
countries, by treaties of commerce. Such actions, always
subordinate to policy, granted to a favoured nation an exemption
from some part of the duties required from others, on
consideration of some reciprocal advantage. It cannot be doubted
that such an exemption was advantageous to the nation in whose
favour it was granted; but, on the other hand, it was just as
disadvantageous to the nation granting it; and when a treaty of
commerce bore a concession of mutual exemption, each state should
have discovered, that a monopoly granted to its producers was too
dearly purchased by a monopoly granted to foreigners, against its
consumers: and the more so, as there existed no kind of relation
between the two favoured branches of trade. Some show of reason
may be discovered, why the consumers of cloth should be taxed for
the advantage of cloth manufacturers; but there is no shallow of
reason why the consumers of wine in England should experience a
loss, in compensation for an advantage to the sellers of goods in Portugal.
    No treaty of commerce can fully satisfy the greediness of
merchants desiring a monopoly; and therefore governments invented
the fanatic expedient of creating in a colony a nation expressly
to be purchasers from their merchants. The colonists were
prohibited from establishing any manufacture at home, that so
they might be more dependent on the mother country. They were
carefully prevented from following any species of foreign trade;
they were subjected to regulations the most vexatious, and
contrary to their own interests; not for the mother country's
good, but for the good of a small number of merchants. The
infinite advantages attached to a new country, where every kind
of labour is profitable, because every thing is yet to do,
enabled colonies to prosper, although they were continually
sacrificed. As their raw produce was fit for a distant trade,
they had it in their power to support a most unequal exchange, in
which nothing was taken from them that the buyer could procure at
home; but their rapid increase itself bears witness against the
system which has founded them; they have prospered by a system
diametrically opposite to that followed by the mother country.
The exportation of all raw produce, the importation of all
wrought produce, has been encouraged in colonies, and have
presented to such as believe in the existence, and calculate the
state, of a commercial balance, a result as disadvantageous for
themselves, as it was advantageous for the mother country.
Doubtless, their oppression gave the latter all the profits of a
monopoly; yet, in a very circumscribed market; whilst the free
trade of all Europe, with all its colonies, would have been more
advantageous for both, by infinitely extending the market of the
one, and accelerating the progress of the other. What justice and
policy should have taught, force will obtain, and the colonial
system cannot long continue.
    Governments, in the last place, to favour commerce, have
granted it bounties and drawbacks. A bounty is a reward which the
state decrees to the manufacturer, on account of his goods, which
comes to him in the shape of profit. A drawback is a restitution
of all the taxes, which a piece of goods had paid, granted to it
at the moment of its exportation. A drawback is perfectly just
and reasonable. It leaves the national producer, in the foreign
market, on a footing of equality with all his rivals, whilst, if
beforehand be had paid a tax in his own country, he could not
have sustained the competition. Bounties are the strangest
encouragements which a government can give. They may be justified
when granted for the fabrication of an article, the production of
which it is necessary to procure at any price: but when granted
on exported goods, as often happens, government pays merchants,
at the expense of its own subjects, that foreigners may buy
cheaper than them.
    Thus, nearly all the favours which governments confer on
trade and manufactures, are contrary even to sound policy or
justice; and, judging of them by the law of profit and loss, we
should infer, that all this attention, bestowed by government on
trade, had done more ill than good. But political economy is, in
great part, a moral science. After having calculated the
interests of men, it ought also to foresee what will act upon
their passions. Ruled, as they are, by self-interest, pointing
out their advantage will not be sufficient to determine their
pursuit of it. Nations have sometimes need of being shaken, as it
were, to be roused from their torpor. The small weight which
would suffice to incline the balance, with a calculating people,
is not sufficient when that balance is rusted by prejudice and
long continued habits. In such a case, a skilful administration
must occasionally submit to allow a real and calculable loss, in
order to destroy an old custom, or change a destructive
prepossession. When rooted prejudices have abandoned to
disrespect every useful and industrious profession, when a nation
thinks there can be no dignity except in noble indolence; when
even men of science themselves, carried away by public opinion,
blush at the useful applications made of their discoveries, and
in such applications see nothing but what they call the cookery
of their sciences; it perhaps becomes necessary to grant favours,
altogether extraordinary, to the industry which it is necessary
to create, to fix incessantly the thoughts of a too lively people
on the career of fortune which lies before them, intimately to
connect the discoveries of science with those of art, and to
excite the ambition of those who have always lived in idleness,
by fortunes so brilliant as, at length, to make them think of
what may be accomplished by their wealth and their activity.
    It is true, the mercantile capital of a nation is limited in
a given time, and those who dispose of it, always desiring to put
it out to the greatest advantage, have no need of any new
stimulant to augment it, or turn it into the channels where it
best produces profit. But all the capital of a nation is not
mercantile. Inclination to idleness, which public institutions
have fostered among certain nations, not only binds men, but also
fetters fortunes. The same indolence, which makes those people
lose their time, makes them also lose their money. The annual
revenue of territorial fortunes forms of itself an immense
capital, which may be added to or deducted from the sum devoted
to support industry. In southern counties, the whole revenue of
the nobility was annually dissipated in useless pomp; but to
recall the heads of noble families into activity has likewise
been found sufficient to give them habits of economy. The great
French or Italian proprietor, becoming manufacturer has, at once,
given a useful direction to the revenue of his land, by adding
his own activity to that of a nation becoming more industrious,
and added likewise all the power of his wealth, which formerly
lay unemployed.
    The torpor of a nation may sometimes be so great, that the
clearest demonstration of advantages, which it might derive from
a new species of industry, shall never induce it to make the
attempt. Example, alone, can then awake self-interest. French
industry has found, in the single little state of Lucca, more
than ten new branches, to employ itself upon, with great
advantage both for the country and those who engaged in them. The
most absolute liberty was not sufficient to direct attention to
these objects. The zeal and activity of the princess Eliza, who
called into her little sovereignty several head-manufacturers,
who furnished them with money and houses, who brought the produce
of their shops into fashion, has founded a more durable
prosperity in a decaying city, and restored to a beneficent
activity much capital and intellect, which, but for her, would
forever have remained unemployed.
    When government means to protect commerce, it often acts with
precipitation, in complete ignorance of its true interests;
almost always with despotic violence, which tramples under foot
the greater part of private arrangements; and almost always with
an absolute forgetfulness of the advantage of consumers, who, as
they form by far the most numerous class, have more right than
any other to confound their well-being with that of the nation.
Yet it must not be inferred, that government never does good to
trade. It is government which can give habits of dissipation or
economy; which can attach honour or discredit to industry and
activity; which can turn the attention of scientific men to apply
their discoveries to the arts: government is the richest of all
consumers; it encourages manufactures by the mere circumstance of
giving them its custom. If to this indirect influence it join the
care of rendering all communications easy; of preparing roads,
canals, bridges; of protecting property, of securing a fair
administration of justice; if it do not overload its subjects
with taxation in levying the taxes, it adopt no disastrous
system, - it will effectually have served commerce, and its
beneficial influence will counterbalance many false measures,
many prohibitory laws, in spite of which, and not by reason of
which, commerce will continue to increase under it.