Exportations and Importations Considered as a Game
Exportations and Importations considered as a Game. Such a Game is as rational as any other, to whosoever will not content himself with playing at Cards, or with his own Thoughts.
A world of unanswerable arguments start up at once, tending to demonstrate the superiority of civilization over the wild state of nature. Yet, methinks, a savage may overturn them all by these few words: I know nothing of what you say, and I am not inquisitive.—I readily confess at least, that I do not see what reply can be made to such an answer, more than I did with regard to the four questions put in the Upper House to the manufacturer of whom I have spoken; yet this manufacturer was not stronger in argument on all that was foreign to the essential point of the four questions, than I might be to convince my savage of that delight, which a man fully persuaded of the excellence of his own conceits, and of the happiness there is in making them known to all the world, feels, without allay, without interruption, in staining some reams of paper, scribbling sometimes an hypothesis, sometimes a comedy, a romance, a ballad, &c.; for it is very true, that the work I now lay before the public, has, in the space of 12 or 15 years, undergone all those metamorphoses in my hands, and that during that time my heart rankled with the ambition of being read in antichambers, given for premiums in colleges, tolerated in nunneries, mentioned in the boudoirs of the fair, noticed in the memory of Ministers, revolved in the hearts of Sovereigns, and every day sung about the streets and in cottages, through which all princes must sometimes pass, if they wish to discover some decisive difference between the interesting illusions of humanity and the deep speculations of politics. Yet with all that stock of words, if not of reasons, that I must have acquired beforehand, to justify, in some measure, the extravagance of such an ambition, I own that I should be confounded by the answer of my savage.—But this could not be the case, if a civilised man, after having convinced me, that the advantage of commerce between man and man, as well as between nation and nation, consists in supplying each other’s wants, when it is possible to effect it by an exchange of surplusses, would next undertake to prove to me, that the advantage of a State, which is nothing else but a nation, an aggregation of men, consists in keeping as much as possible of that money which they have in too great abundance, though the inevitable consequence would be, that they would procure to themselves so much less of some article in which they might be deficient, but which it would at the same time be very convenient to them to possess.—It is hard that the compendium of prohibitions, restrictions, &c. so much commended, and which have kept so many great men so long on the watch, dwindles finally into the assertion of the two contradictory propositions which I have just now dated.
Two articles are necessary and sufficient to man—bread and water; let not meat be called in as a third; it is too well known, that three fourths of Europe seldom eat any, and doubtless no one will contend that three fourths of a whole are less valuable than the fourth remaining, in the eyes of Him who created that whole, and who probably takes some concern in its preservation. Exchanges of any other articles besides bread and water, are therefore, strictly speaking, exchanges of mere superfluities. Now, what inconvenience can there be in bartering one superfluity against another?
I shall first of all, display in their full force, the most solid reasonings that can possibly be adduced, in order to demonstrate, that the choice and price of all superfluities must be left to the discretion of one set of men only. The chymist is not to blame if he can extract nothing but a fetid oil from the matter which he undertakes to decompound.
That set of men, as estimable, as worthy as any in the world, will perhaps wonder when they see the analysis of those ideas, which, probably, they never submitted but to a superficial examination.
Prohibitory Laws Against Exportation
Query. Why do you solicit a prohibitory law against the exporting of such an article of national product?
Answer. That I may get it cheaper.
Q. Can you buy it cheaper, without wronging the man who might sell it dearer?
A. No.
Q. As it is impossible to prove that such a conduct is equitable, how will you be able to prove it to be advantageous to the State?
A. It is advantageous to the State, that all its internal productions should receive at home, all such forms and preparations as may increase their value.
Q. Is the quantity of productions useful to the State?
A. The question is almost ridiculous.
Q. If the productor be discouraged by the low price set upon his productions, and take proper measures to produce less, in order to save the expence attending a greater production, and in the mean time to gain by producing less as much as he could gain by producing more, will you not then be guilty of having wronged the State of all the productions which you crush in the very bud, by the prohibition you sue for?
A. No; Smuggling will give to the parties injured by the prohibitory law, a fully sufficient means of extricating themselves.
Q. Your hopes then are, that Smuggling will make up for the injuries you propose to do to the productors; but how will you compensate to the State for the loss it sustains by a clandestine exportation?
A. Our only business is to mind our own interest; besides, the State may easily procure, by means of a land-tax, what it may lose by the clandestine exportation: and we are so far from expecting that Smuggling should turn out to our advantage, that we petition it may be made a capital offence, and prohibited under pain of mutilation, the galleys, or at least the entire ruin of the smuggler.
Q. But the law will either succeed, or fail in its effect. If the law succeed, will you not be the author of that diminution of the products, which the low price you intend to set upon those products must unavoidably occasion? And if the law fail in its effect, do you not uselessly deprive the State, 1st, of the produce of the smuggler’s labour, whom you hope to see hanged, or at best, mutilated; and, 2dly, of the produce of that labour which would have been performed by that army, partly composed of rogues, partly of idle fellows, now to be set upon the watch to detect and apprehend the smuggler, keep him in close confinement, and lead him finally to the gallows, or to the galleys?—Who is to pay those rogues and idle fellows?
A. The State, to be sure.
Q. What are the essential parts of the State?
A. Industry that goes in search of money, and Agriculture in as much as she feeds Industry at the cheapest rate.
Agriculture, impoverished by your prohibitory law, will then lose, not only what she should get by being at liberty to export, but also what she must find to assist you in procuring her impoverishment, by paying the land-tax necessary to pay those very rogues and idle fellows, whose business it is to destroy her only remaining resource against your cupidity—smuggling.
Prohibitory Laws Against, or Excessive Duties Imposed Upon Importation
Q. Why do you petition against the liberty of importing such or such another article?
A. Because we manufacture it, and wish to sell it dearer to the national consumers.
Q. Of how many orders of men is the class of national consumers composed?
A. Of two, the land proprietor, and all persons not wholly destitute of money.
Q. That is to say, in all cases, of the whole kingdom, against the small number of individuals who humbly petition for the prohibition of an article;—be it so. Have you devised any means to increase in the consumer the ability of purchasing, whilst you advance the price of your goods?
A. Not we;—on the contrary, it is our intention to have as much as we can of his commodities and money, for as little of our goods as possible.
Q. How can men of probity and knowledge be blind to the iniquity of such a scheme?—Will not at least its execution be somewhat impeded by the greatest part of those who follow the same trade?
A. No—that is impossible: our corporations have already provided against the inconvenience you allude to: not one of their members would dare to sell his merchandise below the price fixed by his corporation: and we have made, as it were, the impossibility of any such measure, doubly so, by the difficulties we have devised to prevent a ready admittance into our corporations; all our bye-laws tend to reduce our associates to the smallest number possible. But one single expedient is now wanted to put the finishing hand to that grand work; it is the absolute prohibition of importing all those commodities which foreign nations might offer at a cheaper rate, than we are determined to sell them at.
Q. So then, if you succeed in your plan—if by means of the solicited prohibition, the legislature enable you to extort, with your 16 in merchandise, the goods and money, which, in the case of a foreign competition, you could not have procured with less than 20, what do you intend to do with the remaining part of what you shall have extorted?
A. We shall send it abroad.
Q. With what view?
A. Of increasing the balance in money.
Q. Have you hitherto acted confidently with that idea?
A. We have—and it is known to all the world that it is the dearest idea of an Englishman—an idea which the nation holds (if properly attended to) as the only bulwark against a national bankruptcy.
Q. What have you got by that idea, if it be probable that there is not above 25 or 30 millions in specie within the kingdom, and if it be proved evidently that it is impossible you should have more than 35?
A. The reason is, no doubt, that foreign importation has been too freely permitted; a criminal, a traiterous indulgence which we are incessantly at work to remove: and it is on that account, that besides the absolute prohibition we now pray for in regard to such and such articles, we also petition that the duties be laid double and treble on all other foreign articles which are not yet totally prohibited.
Q. Do you not fear that foreigners, whose merchandise you would cause to be prohibited, should play the same trick with yours? Do you not fear that those on whose goods you mean to increase the duties, should in their turn overload those which they will receive from you?—For this is all the conjuration requisite to counteract and balance the effect of those sublime regulations which you petition for.
A. We shall carry on a smuggling trade in their country, and they will pay dearer for our goods; they cannot do without them.
Q. They will, no doubt, follow your example: therefore new recruits will be wanted for that army of rogues and idlers, designed to lay hold of, and ruin whoever should dare to oppose your ransoming the owners of lands, and proprietors of some money; but be it so:—you will besides be equally successful in obliging the poor ransomed individuals, to pay for the additional and necessary reinforcement of your standing army of rogues and idlers, and for those light troops of informers so well fitted for the noble purpose you are carrying on;—be it so again.—But, after all, what are you to do with that immense balance in money?—Shall you bury it under ground?
A. Aye—and with all our hearts and souls, if, when thus buried, it could bring to us the same benefit as when it is rendered useful to some one else; but alas! that secret is not yet found out: it might be possible, however, to pray for an Act of Parliament, compelling the nation to pay the interest of all the sums thus interred by us; and the wisdom of such an Act would be the more conspicuous, as it would keep within the reach, under the very hand of the nation, all the money she might have occasion for, whenever she should think it expedient to declare war against France, our natural enemy. Till such an Act is framed, we shall follow the example of Holland; we shall keep on the carrying trade, by which the Dutch have gained so much money notwithstanding our Navigation Act, which we fondly hoped was calculated to effect their ruin: we shall carry from Russia to Sicily, from Constantinople to Poland, from Stockholm to Cadiz, from Lisbon to Venice, whatever may be carried from one place to the other, and this we shall do at the lowest prices, in order to get the preference of the Dutch. It is a great pity that this cannot be effected without benefiting the land-owners, and the proprietors of some money, in all the countries where we may stand in competition for that carrying trade, not only with the Dutch, but with all the national monopolists who shall not have as yet been dexterous enough to force from their legislature, laws as favourable to commerce as those we have obtained; but in fact, what matters it to us whom we serve, provided we get a good profit from the service?
Q. Will you add further: And provided also that the service done, falls not on the land-owner, or on the proprietor of some money within your nation?—Yet thus far would you finally be led by that system of prohibitions and restrictions, almost equally extravagant, to which you are so devoutly attached.—But such a plan can succeed only to a certain degree: be pleased to observe, that hitherto you can boast of no other advantage but that of the first attack.—Sole and absolute arbiters as you are of your own prices by the monopoly you have obtained, if agriculture had not advanced those of her products in the same proportion, would not your land-owners be compelled to seek abroad for a country where monopoly should not be so obligingly countenanced? For you do not, I presume, flatter yourselves that you shall be able to induce your Parliament, in the age we live in, doubly to tax the property of those who might look abroad for a remedy against your extortions:—the many laws of that kind consigned to your annals, (and which you would not fail to quote as a precedent,) must seek in the ignorance and barbarity of the age that gave them birth, an apology for their establishment; but at this present time!—Such shades in the picture of the Land of Liberty, instead of setting off the beauties of its other parts, would annihilate the very idea of that liberty. It is by justice and freedom that we are attracted and retained; it is by injustice and restraint that we are expelled, and kept at a distance. Be pleased then, in fine, to observe that nothing can result from those plans, the iniquity of which you have no more searched into than you have thoroughly examined their consequences,—from those prohibitions and restrictions, the effects of which must be counterbalanced by contradictory regulations,—except the pitiful advantage of having perverted the nature of the prices on every article. What is necessary to counteract the effect of an injury done to the generality, will always mechanically be brought about by that very generality. Would it not be more advantageous for men, to agree amongst themselves, like intelligent beings, on some plans accounted equitable by all,—on plans the analysis of which the projector might bear without a blush?—Were a few points agreed upon, it would not perhaps be difficult to settle all the others.
Let the dead bodies be wrapped up in woollen instead of linen cloth; linen coming from abroad, wool being a staple commodity, and the dead caring little whether their winding-sheet be made of woollen or linen: it is a point of economy which it would be rather too severe to condemn, although it is probable enough that in the North they would exchange with pleasure, for your buried woollen, linen cloth in sufficient quantity to wrap up your dead; a circumstance which might prove very beneficial to some of the living, both in England and Silesia. But will you attempt to persuade, that it is advantageous to the State, under any aspect, to compel a man who calls himself free, to wear manufactured buttons, when his inclination would lead him to have them made of remnants of stuff? Will you attempt to persuade, that it is advantageous to the State, to make him pay a penalty of 3 or 4 pounds, besides cost, if he is surprised flagrante delicto? Will you attempt to persuade, that it is advantageous to the State, to encourage the infamous trade of informing, by a reward in favour of an informer, against a man guilty of such a crime? Will you attempt to persuade, that it is advantageous to the State, to withdraw from their useful occupations a swarm of fellows, become capable of any dirty work, by having turned informers on account of the stipulated recompense, and who, waiting for an opportunity of doing worse, leave their work-shops as soon as such a law is passed, in search of a prey the seisure of which will enable them to live in riot and intoxication for a whole week together, without being obliged to return to their work? This is not all; for, in fine, if all the branches of industry have the same right to the protection of Government, does not a law, the immediate effect of which is to enhance the price of buttons by occasioning a greater demand for that article, destroy all idea of that protection equally due to the other branches of industry, by infallibly depriving some of them, both of the amount of the cash they might have received from those who will now be forced, against their inclination, to purchase manufactured buttons, and of the amount of cash which the advanced price of manufactured buttons, will unjustly wrest from those who, by the effect of the law, are obliged to pay dearer for what they might have procured at a cheaper rate? Would not the least facility granted for the importation of some foreign merchandise, have occasioned abroad a greater consumption, either of buttons, or of some other English goods, than such a law can procure at home in the manufactory unjustly favoured? But, above all, will you attempt to persuade, that it is advantageous for the State, to acquire a thousand more button-makers, when that acquisition is obtained by the loss of a thousand artificers employed in manufacturing some other articles, the consumption of which would have been free, that is, analogous to the situation of those who boast of their being so?
Let us seek for such points, as it may be possible to agree upon.
The State is composed of three orders of men, all equally precious, and whose rights are equally sacred; viz. the landed capitalist, the capitalist of industry, and the proprietor of money, whether he be considered as a capitalist in this last respect, or only as a dependent on either of the two former capitalists. Each of these three orders has its interest.
First, It is the highest interest of the landed capitalist, that there be the greatest plenty and variety of the best products of industry, and the greatest consumption of the productions of the earth.
Secondly, It is the highest interest of the capitalist of industry, that there be the greatest plenty and variety of the best productions of the earth, and the greatest consumption of the products of industry.
Thirdly, It is the highest interest of the money proprietor, that there be the largest quantity and variety of the best products both of industry and agriculture, in order that he may be able to support the value of his capital by the quantity of objects on which he will have it in his power to lay it out, and the value of his interest by the greatest possible consumption, not at the lowest price, which, supposed lasting, is as chimerical as the pretended balance, constantly favourable, but at the most equitable rate, that is to say, the highest the seller can hope for, and the lowest to which the purchaser can pretend.
But if it be true, that the combined interest of the three orders be centered within the three points I have stated, namely, the greatest possible quantity and variety of the best productions of the earth, the greatest quantity and variety of the best products of industry, and the greatest as well as most unconfined consumption of both at an equitable price; it is equally true, that it must be a matter of perfect indifference to agriculture, in what part of the world, and by whom her productions are consumed, provided they be paid to her in any products whatever, at her option equivalent to those she has parted with. It is no less true, that it is a matter of perfect indifference to industry, in what part of the world, and by whom, her products are consumed, provided she be paid for them in any products whatever, at her option, equivalent to those she gives. It is equally true, that the money-proprietor must view, with the same indifference, his property giving life to this or that branch of industry or agriculture, provided, that in the hour of need or fancy, he finds at hand, on the most equitable terms, the greatest quantity and variety of the best products of agriculture and industry, which the interest of his money, or the amount of the salaries he enjoys, gives him a right to expect.
There remains, it is true, a fourth interest, that of the Fisc, or public revenue; but if this revenue be nothing more than the produce of the taxes, this fourth interest consists of course, as the three former, in the largest quantity of products, and the greatest consumption. Now are there any other means to obtain those two objects, besides the freest and most extensive exchange, not of goods for money, but of goods for goods? Is it not perceivable, that all the four interests united, as well as each of them separately, require that no more be imported in bullion or money than the quantity necessary to facilitate those exchanges? Is not a surplus of money not only useless, but even detrimental, in diminishing our enjoyments, our possible profits, and that consumption which produces the public revenue?
The Navigation Act was, if you will have it so, the last effort of the human mind, at a time when every notion relative to commerce, was nearly confined to England alone; but I question much whether the Opposition the most warm in invoking that tutelary God, against the Minister who dares to offer the least encroachment upon its worship, would not be very much pleased to see it destroyed before they themselves should come into office: it is an old idol, to which incense is offered through mere policy, and for which a veneration is kept up in the minds of the people, for the sole purpose of making it subservient to the downfall of the man who might be courageous enough to attempt its destruction. I shall pass over in silence the obstacles which that famous Act daily opposes to regulations as well adapted to the present state of things, as those it contains were to the circumstances that gave it birth; but, to the intoxication produced by its success, I shall be bold enough to impute one of the most mistaken notions on the true aim of national commerce: it is a very fatal error, to imagine that money ought to be the object of those operations of which it is only the means. This chimera, it is true, has never been realised; the wisdom of private cupidities has always triumphed over the folly of general cupidity: nothing more clear than the exactness with which the treasures of America have been shared amongst all the nations of Europe, each in proportion to her agriculture and her industry, that is, according to her wants: at least it appears to me, that the two balances of England and France, which I have produced, are incontrovertible proofs of what I here advance, though they have been imagined and received as proofs of the very contrary; nevertheless, the prejudice concerning these two formidable balances still subsists, and it is this prejudice which daily gives life to new prohibitions, and new restrictions: there is not perhaps in all Europe, a single modern regulation of that kind which does not owe its establishment to this prejudice, and to the power it derives from the veneration paid to it in the place where it was first conceived. The nation who takes the lead in point of commercial knowledge, is every where carefully watched. On the least of her operations, other nations make use of the light she has held forth; her principles are studied, her maxims adopted, her examples followed; every where they are on their guard against her pretensions, pretensions openly avowed, prosecuted without mystery, and crowned, as it is supposed, with success; and when they see, that within the course of a twelvemonth, she has really received more gold and silver than she was wont to receive in three years; when they see the intoxication of her inhabitants on the arrival of those treasures which obey her call from all parts of Europe; when they hear the complaints of her news-paper writers against the untractableness of the Americans, in not suffering themselves to be entirely stripped of their specie; when they attend to her invectives on the combinations of the American merchants to prevent those of England from taking away that trifling sum in specie which the United States want, to give more consistency to their paper-money;—then, indeed, then it is possible to forget every thing else; it is possible not to remark, that, with the same excess of avowed cupidity, England, nevertheless, has not received, in the course of a whole century, (a period sufficient to determine an experiment) England, I say, during a whole century, has disdained to receive her dividend of the treasures imported into Europe; the paper-money circulating in England stands evidently in lieu of a great part of the sum it represents, and which it was at her own option to procure. It is also very pardonable not to reflect then, that it is impossible for England to keep long in her hands without hurting herself, more than any other nation, any money above what is necessary for her. No one takes the trouble of arguing long on causes, when the effect is instantaneously and powerfully felt: Not Europe alone, but the United States of America, are stript of their money by England; England therefore wants not any longer to import foreign goods, or when she advances the price of her own merchandise, she refuses paying dearer for that of other nations. The other nations do not hesitate—English goods are instantly prohibited.
The following principles are such as, I think, can never mislead.
There is not a single nation that cannot boast some palpable advantage over another; nay, there is not a nation, a single province, that has not received some peculiar favour from nature, which the same soil to all appearance, the same temperature, the same exposure, refuse to yield any where else but with double the labour, and double the expence, and which, even with such additional aids, they yield at last only in a state of degradation. Now, that portion of such peculiar favours, which the proprietor of the land does not chuse to consume, belongs only to the greatest quantity of other favours that it is possible to procure in exchange. The more the proprietor procures of such other favours in exchange, the more is he encouraged to increase the quantity of articles which have enabled him to procure those favours; on the contrary, the more he is restrained with regard to those exchanges which he might procure, the more he is circumscribed, even in his means of production. Every restriction therefore tending to diminish either the production or the price of any article whatever, is a theft committed upon the proprietor of the land, upon the province blessed with that favour which is peculiar to it, upon the nation whose general revenue is decreased by the whole amount of the productions stifled in the very bud, upon the exchequer of that nation which would receive a duty on those productions; and finally upon every one capable of presenting the nation with another exchangeable commodity, or waiting only to see those productions, in order to create an equivalent to pay for them.—Does it signify in what part of the world? Must it not, at last, reach the original proprietor, if he be not paid?
What is said of the productions of agriculture, may be applied to those of industry. It is a gross mistake to imagine, that all things can be equally well manufactured every where: how many fabrics, the perfection of which depends on the quality of the water, and other local causes for which it is impossible to account! How many more derive their perfection from the bent of national genius, from the general dispositions, the natural qualities of the inhabitants! Can we expect from the vivacity of the Frenchman, who desires only to consume, what we may expect from the patience of the Englishman, who labours only to enjoy? This latter will always, and in spite of himself, give to his work a solidity which will increase its price as well as its value; the other, in spite of himself, will be busy about the forms best calculated to procure a quick sale: objects of real comfort will always belong to the former, the latter will ever lead the fashions. To hope that the one will produce, without difficulty, what costs little or nothing to the other, would be attempting to give to the wines of hot countries the pleasing acidity proper to the wines of Germany; to these, the restorative and balsamic qualities of the Spanish and Italian wines in the places where they understand how to make them; to the wines of Italy and Germany, that native generosity proper to the wine of Bordeaux; to all of them, the flavour of Burgundy and the sprightliness of Champaign. It is possible, say they, to imitate every thing;—say rather, to adulterate, to corrupt, nay even to poison every thing, if Art can find no other way to counterfeit Nature: and these are the blessed effects of restrictions and prohibitions. It is a strange idea, to think of doing without others; as if that did not lead them to think of doing without us; as if the savage, of whom I have spoken, had not the same reason to prefer his state to that of civilisation.
Nor would it be less strange to persist in setting the interest of the people in opposition to that of the Exchequer, if it were possible to reconcile them together, instead of rendering, almost on every object at present, the infamous trade of informers more lucrative than labour.
Smuggling is hurtful to the State; it deprives government of the duties on the articles smuggled into or out of the kingdom; but is it so very advantageous to succeed in the measures adopted to prevent it, if by bartering a great number of honest smugglers against a great number of informers and a great number of custom-house imps, you make so many thieves of the first, so many much more contemptible wretches of the second, a rabble almost equally vile as the third; and succeed, at the same time, in debasing in the hands of several manufacturers and landed proprietors, the value of all those articles, which were before taken from them by the smugglers to their mutual benefit?
England, it is true, suffered no damage, when a prodigious quantity of English goods, which are not comprehended in the modest balance with France, as stated by Sir Charles Whitworth, because they were introduced into France by smugglers, were sold nevertheless, without much ado, all over that kingdom, and particularly in Paris, publicly advertised on the shop-boards, in large gold letters;—but had not France some reason to think herself ill used, when an equal quantity of French goods, introduced also by smugglers into England, without any information given to Sir Charles, ceased to pay the value of the goods smuggled from England, and sold publicly all over France, and when, instead of a small balance, sometimes given, sometimes received, France found herself obliged to remit to London an enormous sum in hard cash, for payments which she had hitherto discharged in merchandise?
It is a pitiful policy on the part of France, (as remarked very justly in all the English papers after the first of August, 1785) to deprive herself of a thousand English luxuries which she is so fond of, and which she is so able to procure;—but is English policy much better, in rejecting thousands of French luxuries, which she finds so pleasing, and which she is so able to pay for?
Smuggling is but a very poor corrective, a partial corrective, of the iniquity ever attendant on Monopoly;—a feeble compensation for the restrictions and prohibitions obtained in its favour: Smuggling, duly considered in this light, is but too just; and it is shocking to be obliged to punish so barbarously the unhappy men who gain a living by it. But will not this necessity be removed, together with smuggling itself, at the very moment that to those absurd regulations which encourage that practice, shall be substituted a system of bartering, equally advantageous to the nations which now find a benefit in smuggling?—a system, which would mutually furnish to all parties interested, all the means of introducing and procuring, in the best condition, at the cheapest rate, with the least risk, and with the greatest advantage to the Treasury, every article which before was introduced and procured at a greater risk, almost always dearer, of the worst quality, and to the detriment of the public revenue.
Let me ask whether that mass of prohibitions and restrictions, which legally establishes monopoly in England, be any thing more than a mass of privileges granted to a chosen few, to the prejudice of the whole community? Were we to look at every particular regulation, and consider it distinctly, is there one which would not find the whole nation against it, except the humble Petitioners who share in the benefit? And must it not be very strange to imagine, very absurd to say, and above human power to effect, that a system of regulations, not one of which favours above one man against thousands, should, upon the whole, be serviceable to the State?
Independent of the advantages which would arise from a truly free and judicious system of commerce, viz. 1st, That of procuring what we have not, by means of some article which we have in abundance, and which our neighbours want;—2dly, The bartering of the superfluity of our best articles in one kind, for the superfluity of what is best in a different kind;—3dly, Not to barter what we can make cheaper than others, except for goods which would cost us more were we to manufacture them;—independent, I say, of these three, advantages, where would be the inconvenience, though our bartering should be confined merely to the innocent folly of exchanging one toy for another, or one rag for another? The great, the true, the only advantage, of an exchange of property, would not even in this case be lost to mankind; the man who is employed only in marking the game, while two persons are amusing themselves, whole days, in tossing a ball from one to the other in a tennis-court, is nevertheless supported at the expence of the players. And are not the owner of the court, his wife and children, maintained likewise at their cost? If, having considered the Exchequer metaphorically, under the type of the Keeper of the Tennis Court, we afterwards, without a metaphor, consider this Keeper as a poor man who chooses this way of subsistence, do not the players pay this tax (which they impose on themselves) in favour of the poor, with more pleasure, though the tax may be greater, than a certain other tax, which perhaps becomes necessary, only from the difficulties with which we embarrass both the game of passing from one parish to another, and the game of imports and exports, which is as innocent, and more lucrative than that of tennis?
The nominal Value of the generality of Exports, considered in different Periods, and with respect to its Effect on foreign Correspondence.
When a manufacturer is compelled, by the general augmentation of prices, arising from taxation, to pay his workmen and materials ten per cent. I suppose, dearer than usual, and he exports 1000 hats, upon each of which a draw-back of 6 shillings, I will suppose, is allowed him on exportation, he does not reflect on the difference of 10 per cent. diffused through the general run of prices, by the mechanical reaction of the total of the taxes on all that is not taxed; he remembers well the effect of this reaction in the account which he makes out for himself, to know at what rate he must in future sell his hats in foreign markets; he only considers the draw-back, the remittance of the 6 shillings duty, and concludes that it puts him in a situation to deal with foreigners on the same terms as he did previous to the taxes, which have increased every thing to the amount of 10 per cent. Nevertheless, the thousand hats, with which, previous to the taxes, he furnished his foreign friends for 1000l. I will suppose, are now raised to 1200l.—Point out this circumstance to him, he will tell you he cannot sell his hats cheaper, and that foreigners must pay 1200l. instead of 1000l. since the foreigner wants them. “Besides, (says he) what is the sum of two hundred pounds more, divided among a thousand persons, who will purchase the hats from the merchant abroad, to whom he sells them?” The manufacturer does not want to look further; and the writer who from the nature of his subject, or his manner of considering it, wants only to reflect a little more, will only add, Thus it is that foreigners pay our taxes, and never suspect that they do so. This is the truth, but not the whole truth. I shall endeavour to find it out.
The general trade of England with the rest of Europe is not confined to some thousands of pounds sterling, to be settled once for all; it is an immense sum, which must be renewed every year. Let us begin by being thoroughly convinced of this necessity, in order to submit to its consequences: we shall find moreover that these consequences are not destructive.
The annual exports of England amount to about a fifth of the products of her industry, and consequently represent about a fifth of the labour of her artificers.
If the taxes, after the war of 1755, had raised the price of every thing at the rate of 10 per cent. (I can err but by a little more or less) the total of her exports, which, before that war, amounted, on a medium of ten years, (see Sir Charles Whitworth) only to a sum of 12,776,614 pounds sterling, let us say 13 millions, amounted, after the peace, to 14 millions 300 thousand.
Let us now suppose the trade of England exhibiting to its foreign correspondents, in the year 1762, this total in exports of 13 millions (at the old prices) under the name of 14 millions 300 thousand pounds, (a price rendered unavoidable by the advance in the prices of all commodities, on account of the taxes); and let us suppose these correspondents to have, really and annually, no more to pay them than 13 millions of their own manufactures, indicated by this modest number, because they had not the honour to support, during seven years, a war the most brilliant and successful in the memory of man, in Germany, America, and India. I think one of the three following consequences must be the result:
Either
That the total of English exports must have been reduced from 14 millions 300 thousand pounds to 13 millions, for want of means in our foreign buyers to pay the whole amount of English exports at their advanced price:
Or,
That England must have been complaisant enough to call 13 millions, in a foreign market, the amount of her exports, which the effects of her new taxes obliged her to call 14 millions 300 thousand pounds at home:
Or,
That England must have allowed her foreign connexions to call 14 millions 300 thousand pounds the same quantity and quality of their manufactures, which, before the effect of English taxation, they called only 13 millions, and which, till then, had made the balance of what they imported from England.
In the first case, the English manufactories, which furnish the exports, would have been necessarily reduced one tenth; upon which it is necessary to observe, that the tenth of the English exportation makes a fiftieth of the total value of the product of her industry, and that the inutility of the fiftieth of those products, occasioned by the impossibility of their being purchased by foreigners at the price occasioned by the English new taxes, must have deprived of subsistence, as well as of employment, a fiftieth of the English artisans, and rendered useless a fiftieth of the capitals appropriated to exportation.
In the second case, the prices of commodities would not be perceptibly increased any where else but in England; the prices of her correspondents would have been, ten years after the peace, almost as they were in 1754.
In the third case, the prices would have increased, among the foreign correspondents of the English, nearly in the same proportion as in England.
The first case is evidently false, since Sir Charles Whitworth’s Statements prove that the exports of England, which amounted, as we have before observed, upon a medium of 10 years before the war, only to 12 millions 776,614 pounds sterling, amounted, upon a medium of 10 years after the peace, to 14 millions 921,067 pounds sterling, and even to 15 millions 11,211 pounds sterling, if we take a medium of 12 years from the peace to 1773, at which period Sir Charles Whitworth’s Statements conclude; (which exhibits, independently of the nominal augmentation supposed to have been occasioned by the taxes, a real augmentation of about a 17th, notwithstanding the real vacuum owing to the loss of those men who would have increased this exportation, if they had not perished in Germany, India, America, and at sea.)
The second case is more universally acknowledged to be false, since there is not a single country in Europe where the price of every thing has not, upon a medium, increased at least 10 per cent. from 1754 to 1770;—which proves the truth of the third case:—thus it happens that foreigners have paid the old taxes of England, without suspecting it; as England does not, in the least, suspect that those taxes are no longer paid either in England or elsewhere, although their produce returns nevertheless to the public creditor.
Let us consider, however, whether this general increase of prices could finally prove prejudicial to England, or to her connexions abroad.
It could not prove so to England, because she was obliged to submit to this increase, or else to give up the manufacturing of a tenth of the commodities she exported to foreign countries (where she exports nothing of what she can sell at home), and because a deficiency of a 10th of her exports would have inevitably deprived a 50th of her artisans of sustenance, and rendered useless a 50th of the capitals devoted to exportation. Besides, considering this object in another light, what loss would England sustain by receiving, under the denomination of 14, I suppose, the same commodities which before were furnished for 13, while she gave for the purchase, only 13 (old prices) which the effect of taxation made her call 14?
It could not prejudice her foreign connexions, because this increase of prices, which abroad was not owing to taxation, was only an encouragement to labour, which must in general have increased its products, always entitled to a profit over and above the price paid for that labour.
A circumstance which was necessary for England, without doing her the least harm, has, then, proved useful to the rest of Europe.—
But let up remark two very essential points:
The first is, that it is impossible in the nature of things, to keep up foreign consumption, upon which depends the continuation of our exports, without giving foreigners leave to increase the price of theirs, by so much as the commodities carried to them must be increased by our taxes;—in the same manner as it is impossible in the nature of things, to keep up interior consumption, national consumption, upon which depends the payment of taxes, without a general interior increase in the price of labour, as well as in the price of its products, when the wants of the State require new contributions.
The second observation which I deem equally essential, is, that such a work, (a work of an utility which may be called universal) has been brought about, consummated, without the Ministers of any State whatsoever being entitled to any glory from the event, except that of having facilitated the operation, if they have favoured the general liberty of communication in all articles of trade; and without their having deserved any other blame but that of retarding it, if their zeal, their greediness for the favourable balance, has suggested to them any device to attract and overthrow it in the only country entrusted to their management. We must universally ruin Credit, Trade, Commerce, and the Banking business, if we pretend to prevent Wealth from extending itself universally, a little sooner or later. The owner of any kind of riches whatever, has it not in his power to do any thing else, but to choose the place, the object, and the time, of giving the first motion; all the rest is merely the effect of a stone cast into the water: observe how the undulations succeed one another, how they are renewed and extended;—can you fix the point where they shall stop?—We pretend to direct them!—Scilicet is superûm labor est?... Istæne animia cœlestibus curæ?—Indeed, indeed, too many cares occupy the minds of our Gods!
I return to the grand points.
Methinks upon viewing the picture I have drawn, it is easy now to conceive, why, as I have observed in page 62, a person, however strongly convinced of the cruel effect which ought naturally to arise from a debt of 64 millions sterling, contracted from 1754 to 1762, could not nevertheless cite in England, from 1763 to 1775, a single indication of a decay in agriculture or commerce, nor any falling-off in the enjoyment of luxury, public or private, nor less insolence in the bulk of the people. The reason is this: the two capitalists, who failed not to increase the price of every thing they were concerned in, according to the exigency of the taxes, determined also (after a few little formalities, always necessary with regard to the people, when nothing but luxury has been taxed) to augment the price of labour in proportion to that of its products; foreigners, on the other hand, raised the price of their goods in proportion as taxes had increased the goods of England exported to them; and the old equilibrium was restored every where, as soon as the general increase of prices had made the general power of consumption, equal to the need the State was in of an exterior as well as an interior, i. e. of a foreign as well as a national consumption, in order that all the taxes might be productive.
But if the debt of 64 millions, contracted from 1754 to 1762, had increased, by 10 per cent. the nominal value of all merchandise exported from England since that period, how shall we prevent the 60 millions of the last debt, from increasing, from 8 to 10 per cent. the nominal value of all commodities to be exported after this later period?
And if the general augmentation of prices, which has clearly followed the debt contracted in England from 1754 to 1762, has proved advantageous to all Europe, without hurting England, why should not the general increase of prices, which results, and will inevitably result from the last English debt, prove unprejudicial to England, although it will prove advantageous to all Europe?
But if this increase of 10 per cent. generally acknowledged, in the price of all merchandise in Europe, had extended only to the products of industry; if the price of the total of the produce of agriculture had not increased in the same proportion;—had not Nature always silently and successfully opposed all the dreams of speculation on this head, to what a degree of misery and wretchedness would not agriculture have been reduced in all parts of our so much enlightened Europe!—It was not so.10
The quantity of wheat sold at Berne at 69 batz, on a medium of five years taken from 1751 to 1755, was sold for 92⅗ batz from 1766 to 1770.
The quantity of wheat sold at Dijon at the lowest, 2l. 11s. 5d. on a medium of 5 years from 1753 to 1757, was sold at the lowest, 4l. 5s. 9d. on a medium of 5 years from 1766 to 1770.
The quantity of wheat sold at Bâle for 9l. 9s. on a medium of 5 years from 1754 to 1758, was sold for 13l. 14s. 2d. on a medium of 5 years from 1766 to 1770.
The quantity of wheat sold at Geneva for 27 florins, on a medium of 5 years from 1751 to 1755, was sold for 37 florins, on a medium of 5 years from 1766 to 1770, (see Arthur Young’s Political Arithmetic.)
We find upon the total, from 1755 to 1770, as I observed in my Reflexions on a singular revolution in France, about 40 per cent. increase in the price of wheat.—Ten per cent. was enough to discharge, without expence to any body, and without any attention being paid to it, the interest of the debt contracted in England, from 1755 to 1762; but 30 per cent. more was necessary, in order to come (without injuring England) nearly to an equality with the English price, a price advantageous to the agriculture of all Europe; an advantageous price, which the barriers and barricadoes set up in France, had till then prevented from extending to Switzerland.
The barriers having been removed, Switzerland and France must necessarily have been enriched, or England ruined:—France and Switzerland were better pleased to be enriched; and so it will necessarily happen after the removal of the barriers subsisting between England and Ireland, that the agriculture of the latter must be enriched;—unless she should choose to do herself a real prejudice by keeping to all her former low prices, in order to procure an imaginary advantage to Irish industry, in hopes of prejudicing the British manufacturer;—which would indeed be very strange.
But if this proportionate augmentation in the price of every thing,—as evident as it is necessary,—as general as it is useful,—as natural as it is little suspected,—in consequence of a national debt contracted by a country trading with all Europe,—getting rich by trading with all Europe,—and who cannot get rich without sharing her wealth with all Europe,—be also a complete demonstration of the burden being null, so soon as the little private interests have rendered it general, and no longer permit the supposition of its being productive of any other bad effects, but such as necessarily result from a bad system of taxation; does the point lie in rectifying the system, or in effecting a reimbursement?—At least, is a tax to be levied for the purpose of reimbursing, before we have searched deep into the question the most interesting to society that ever was propounded?
And in the supposition, that it should result from the examination, as it does from my ideas, that there neither is, nor can be any real and lasting harm in the taxes, but that which is the consequence of a bad system of taxation; as there is however so much more harm done, at least of a transient nature, as there are more taxes imposed, even in the best manner,—would it not be necessary to conclude, that loans bearing annuities, esteemed the most advantageous to the State, (although they always require an heavier, and sometimes a double taxation), might have proved the most pernicious and worst devised, in any other circumstance but that of a total discredit, if they did not now furnish the Sovereign with the means of redressing what is most oppressive in the old taxes, without imposing new ones?