We have already mentioned a complaint that Smith failed to realise the utter misery of France or to foresee the Revolution. The second half of the complaint seems to be an impertinence. He was not called upon to write out the past, or present, much less the future of France. The first part of the complaint is more plausible. The Wealth of Nations abounds in illustrations drawn from the French tour, and from these we certainly get a less melancholy picture than from the pages of Arthur Young, or from the correspondence of Voltaire, D’Alembert, Turgot and the rest. But then, Young’s tour was twenty years later, and the French reformers were thinking exclusively of the stagnant condition of France in a moving and progressive age. They felt bitterly the dreadful difference between their France and the France that should have been but for the impoverishing wars and oppressive misgovernment of Louis XIV. and his successors. Smith took France as she was, and found her still one of the richest and most powerful countries of the world. In the ninth chapter of his first book he compares Holland, England, France, and Scotland. The first, “in proportion to the extent of its territory and the number of its people, is a richer country than England.” Its government can borrow at two per cent.; wages of labour are said to be higher than in England, and the Dutch trade upon lower profits than any people in Europe. They have large investments in foreign countries, and “during the late war the Dutch gained the whole carrying-trade of France, of which they still retain a very large share.” England comes next. “France is perhaps in the present times not so rich a country as England.” Its market rate of interest is generally higher, and so are the profits of trade; “and it is no doubt upon this account that many British subjects chuse rather to employ their capitals in a country where trade is in disgrace than in one where it is highly respected.” Then he shows that, though France was still richer than Scotland, Scotland was making far more rapid progress:—
“The wages of labour are lower in France than in England. When you go from Scotland to England, the difference which you may remark between the dress and countenance of the common people in the one country and in the other, sufficiently indicates the difference in their condition. The contrast is still greater when you return from France. France, though no doubt a richer country than Scotland, seems not to be going forward so fast. It is a common and even a popular opinion in the country, that it is going backwards; an opinion which, I apprehend, is ill-founded even with regard to France, but which nobody can possibly entertain with regard to Scotland, who sees the country now, and who saw it twenty or thirty years ago.”
Misgovernment, it is true, had done its worst in pre-revolutionary France, but it could not ruin fertile territory and a thrifty population. At that time the cities of Bordeaux, Lyons, and Marseilles surpassed in wealth and in the number of their inhabitants Copenhagen, Stockholm, St. Petersburg, and Berlin. Several of the provincial parliaments offered as fair a field for legal talent as the Courts of Dublin and Edinburgh. After the landed nobility, the Church, the King, his ministers, intendants, and a host of minor officials had taken their rents and revenues and stipends, fortunes were still left for rapacious financiers and rascally farmers-general. Smith saw all this and explained it with his usual lucidity. But he never mistook wealth for welfare. He applied his favourite test of the condition of the labouring poor. Though France was a much richer country, with a better soil and climate than Scotland, and “better stocked with all those things which it requires a long time to raise up and accumulate, such as great towns and convenient and well-built houses, both in town and country,” yet the poor were worse off. In England the common people all [sic] wore leather shoes, in Scotland the men only; in France both men and women went about sometimes in wooden shoes and sometimes barefooted. He finds the reason for these things in unfair and ill-judged taxation, and he devotes many pages to a severe scrutiny of the French system.
Considering that France had some twenty-four millions of people, thrice the number of Great Britain, that it was naturally richer and had been “much longer in a state of improvement and cultivation,” it might have been expected that the French Government could have raised a revenue of thirty millions with as little inconvenience as a revenue of ten millions was raised in Great Britain. In 1765 and 1766 the revenue actually paid into the French Treasury did not amount to fifteen millions sterling. Yet the taxes were so devised and collected that the French people, it was generally acknowledged, were much more oppressed by taxes than the people of Great Britain. “France, however, is certainly the great Empire in Europe which, after that of Great Britain, enjoys the mildest and most indulgent government!” Smith had not only diagnosed the disease; his French studies and his friendship with enlightened men like Turgot, Quesnai, and Morellet had enabled him to propose remedies. “The finances of France,” he observes in the second chapter of his fifth book, “seem in their present state to admit of three very obvious reformations.” First, he would abolish the taille and the capitation, balancing the loss by increasing the number of vingtièmes or land-tax. Second, “by rendering the gabelle, the aides, the traites, the taxes upon tobacco, and all the different customs and excises, uniform in all the different parts of the kingdom, those taxes might be levied at much less expense, and the interior commerce of the kingdom might be rendered as free as that of England.” Thirdly, by subjecting all taxes to the immediate inspection and direction of government, the exorbitant profits of the farmers-general might be added to the revenue of the State. But, he adds, with the same scepticism that colours his view of the prospects of Free Trade in England, the opposition arising from the private interests of individuals would probably be effectual in preventing all three parts of the scheme of reformation. Yet half a century after the appearance of the Wealth of Nations one of its annotators was able to write: “Taxes in France are now placed almost on the footing suggested by Dr. Smith. The taille and capitation have been abolished, and replaced by the contribution foncière; the different taxes have been rendered equal in all the provinces of the kingdom, and they are chiefly collected by officers appointed by the Government.” Nor is the connection between the book and the reforms either fanciful or remote. “It was, I avow—to the shame of my first instructors,” wrote “le bon Mollien,” Napoleon’s favourite minister of finance, “this book of Adam Smith, then so little known, that taught me better to appreciate the multitude of points at which public finance touches every family, and raises judges of it in every household.”
CHAPTER VIII
POLITICS AND STUDY, 1766-76
Adam Smith, as we have seen, had begun to write his immortal book at Toulouse in the summer of 1764 “in order to pass away the time.” But even after his return to London, in November 1766, more than nine years were still to pass before the Wealth of Nations could be placed in the publisher’s hands. All this time the book was his chief occupation, and but for the light which an occasional letter throws upon his studies, the story of Smith’s life during these nine years might almost be written in as many lines. For about six months he remained in London, where he mingled with men, collected books and material for his treatise, and saw the third edition of his Theory of Moral Sentiments through the press.
In an undated letter to Strahan, who was now a partner in Millar’s publishing firm, about the title-page to this volume, the author desired to be called “simply Adam Smith, without any addition either before or behind.” He had received the honorary degree of LL.D. before leaving Glasgow, but he did not like to be called Dr. Smith, and seldom used the title. But politics, which had just taken a strange turn, soon commanded his attention; and a curious letter from Smith to Shelburne (February 12, 1767) raises for a moment the curtain that divides the spectator from the actors, and allows us to survey the scene behind which the most enlightened member of the Government was working to introduce common sense into the colonial policy of Great Britain. It was a scene, too, in the greatest political drama of Adam Smith’s lifetime, which left deep, decipherable marks on the pages of the Wealth of Nations.
While Smith was discussing the new principles with the philosophers of Paris, an active spirit of dissatisfaction had been spreading in distant communities of men. The spirit of liberty seemed to have walked forth over the face of the earth and to threaten revolutions in every part. The Georgians under the valiant Heraclius had revolted against their ignominious tribute to the Turkish seraglios. The tyrannies of a French governor had provoked insurrections in St. Domingo. The first tramp of a revolutionary march was heard in the Spanish dominions of South America; above all, the long and smouldering discontent in our own American colonies had suddenly been fanned into a blaze. But Europe, whose policy had been the source of all these woes, was for once in a peaceful mood. The Empress of Russia was busy entertaining her savants. The Swede was occupied at home, and the tall Pomeranian was content to drill. A financial crisis in France and England made the two Governments friendly; and though there were bloody feuds and insurrections in Turkey, Poland, and Spain, the historian of Europe, surveying the year 1766 and comparing it with its predecessors, marked it with a white chalk and fancied he could at last spell a drift towards peace in the hollow states and bankrupt empires of the old world. Ambition indeed seldom stoops to calculations, but the most acquisitive imperialist seeing multitudes of unemployed, food at famine prices, and manufactures at a standstill, began to wonder whether after all the conquests of the war had been worth such a price. For once the governing classes were sobered and were ready to make some grudging atonement for one of their worst blunders. The same commercial stress which constrained the French King to pacify his parliaments inclined the parliament of Great Britain to appease the colonial assemblies.
The session of 1766 was one of the longest, most momentous, and stirring within living memory. It had begun, as we have said, with sharp distress at home, and that distress had been aggravated by the disturbances in America; for the colonists, incensed by the Stamp Act, refused to pay for English goods (to the value of several millions) with which their shops and warehouses were stocked. No wonder, then, that in all parts of the realm traders and manufacturers did their best to persuade the Rockingham ministry to adopt conciliatory measures. Parliament was besieged by petitions from the merchants of London, Bristol, Lancaster, Liverpool, Hull, Glasgow, and most of the trading and manufacturing towns in the kingdom, setting forth the great damage done to their trade by the new laws and regulations made for America. They pointed out that the Stamp Act and other harassing legislation had not only sown a crop of discontent in the colonies, but had already produced many bankruptcies at home and were rapidly leading to widespread distress.
A contemporary writer of great power tells us that no matter of debate was ever more ably or learnedly handled in both Houses than the colonial policy which Lord Rockingham and his colleagues laid before Parliament. Those who denied the right of taxing the colonies cited Locke and Selden, Harrington and Puffendorf, to show that the very foundation and ultimate point in view of all government is the good of the society. They inferred from the Magna Charta and Bill of Rights, and from the whole history of our constitution, that no British subject can be taxed save by himself or his own representative; and they further quoted in support of their argument the constitutions of the Tyrian colonies in Africa, and of the Greek colonies in Asia. On this last head the supporters of the Stamp Act (Charles Townshend’s fatal measure) observed, sensibly enough, that arguments about the British colonies drawn from the colonies of antiquity were a mere useless display of learning, for the Tyrian and Greek colonies were planned on a totally different system. Besides, they said, the Romans were the first to form a regular colonial system, and Rome’s jurisdiction over her colonies was “boundless and uncontrollable.” As for Locke, Selden, and Puffendorf, they were only natural lawyers, and their refinements were little to the purpose in arguing the law and practice of a particular constitution.