Hume's Political Discourses

by David Hume

There are also, we may observe, in England and in all states which have both commerce and public debts, a set of men who are half merchants, half stock-holders, and may be supposed willing to trade for small profits; because commerce is not their principal or sole support, and their revenues in the funds are a sure resource for themselves and their families. Were there no funds great merchants would have no expedient for realizing or securing any part of their profit but by making purchases of land, and land has many disadvantages in comparison of funds. Requiring more care and inspection, it divides the time and attention of the merchant; upon any tempting offer or extraordinary accident in trade, it is not so easily converted into money; and as it {p88} attracts too much, both by the many natural pleasures it affords and the authority it gives, it soon converts the citizen into the country gentleman. More men, therefore, with large stocks and incomes, may naturally be supposed to continue in trade where there are public debts; and this, it must be owned, is of some advantage to commerce by diminishing its profits, promoting circulation, and encouraging industry.

But, in opposition to these two favourable circumstances, perhaps of no very great importance, weigh the many disadvantages which attend our public debts in the whole interior economy of the state; you will find no comparison between the ill and the good which result from them.

First, it is certain that national debts cause a mighty confluence of people and riches to the capital, by the great sums which are levied in the provinces to pay the interest of those debts; and perhaps, too, by the advantages in trade above mentioned, which they give the merchants in the capital above the rest of the kingdom. The question is, whether, in our case, it be for the public interest that so many privileges should be conferred on London, which has already arrived at such an enormous size and seems still increasing? Some men are apprehensive of the consequences. For my part, I cannot forbear thinking that though the head is undoubtedly too big for the body, yet that great city is so happily situated that its excessive bulk causes less inconvenience than even a smaller capital to a greater kingdom. There is more difference between the prices of all provisions in Paris and Languedoc than between those in London and Yorkshire.

Secondly, public stocks, being a kind of paper-credit, have all the disadvantages attending that species of money. They banish gold and silver from the most considerable commerce of the state, reduce them to common circulation, and by that means render all provisions and labour dearer than otherwise they would be.

Thirdly, the taxes which are levied to pay the interests of these debts are apt to be a check upon industry, to {p89} heighten the price of labour, and to be an oppression on the poorer sort.

Fourthly, as foreigners possess a share of our national funds, they render the public in a manner tributary to them, and may in time occasion the transport of our people and our industry.

Fifthly, the greatest part of public stock being always in the hands of idle people, who live on their revenue, our funds give great encouragement to a useless and inactive life.

But though the injury which arises to commerce and industry from our public funds will appear, upon balancing the whole, very considerable, it is trivial in comparison of the prejudice which results to the state considered as a body politic, which must support itself in the society of nations, and have various transactions with other states, in wars and negotiations. The ill there is pure and unmixed, without any favourable circumstance to atone for it, and it is an ill too of a nature the highest and most important.

We have, indeed, been told that the public is no weaker upon account of its debts, since they are mostly due among ourselves, and bring as much property to one as they take from another. It is like transferring money from the right hand to the left, which leaves the person neither richer nor poorer than before. Such loose reasonings and specious comparisons will always pass where we judge not upon principles. I ask, is it possible, in the nature of things, to overburden a nation with taxes, even where the sovereign resides among them? The very doubt seems extravagant, since it is requisite in every commonwealth that there be a certain proportion observed between the laborious and the idle part of it. But if all our present taxes be mortgaged, must we not invent new ones? and may not this matter be carried to a length that is ruinous and destructive?

In every nation there are always some methods of levying money more easy than others, agreeable to the way of living of the people and the commodities they make use of. In Britain the excises upon malt and beer afford a very large {p90} revenue, because the operations of malting and brewing are very tedious, and are impossible to be concealed; and at the same time, these commodities are not so absolutely necessary to life as that the raising their price would very much affect the poorer sort. These taxes being all mortgaged, what difficulty to find new ones! what vexation and ruin of the poor!