I. It may be said, that as common prudence prevents a private person from spending to his last shilling; so the like prudence commonly engages a people to put a stop to trade, before it has had time totally to drain them. Although most people drink wine, there is no reason why every body should be drunk.
II. Nothing is so complicated as the balance of trade, considered among many nations. The general wealth circulates from one to another, as the money which the farmer gives the landlord circulates back to the farmer. In the number of hands through which the money passes, some are of the class of the luxurious, some of the frugal; the first represents those nations who lose by the balance, the latter those who gain. But the most industrious nations of all, and those who, considered abstractedly from extraordinary accidents, appear in the way to swallow up the wealth of the rest, are, by the means of such accidents, made liable to terrible restitutions. How many millions, for example, has England restored to the continent, in consequence of her wars and subsidies? She then lays a foundation for many more years of favourable balance, and accordingly we see it return to her, as the money which the state spends within the nation, returns into the exchequer at the end of the year.
III. It may be asked, how it happens that no nation has ever spent to its last farthing, as many an individual has done? I answer, that I am far from believing that this has never happened; nay, I believe there is nothing more frequent or familiar than this very case, providing the riches of a country be here supposed to mean no more than the specie absolutely belonging to herself, not borrowed from other nations.
I have said above, that the acquisition of money by industry, increased the real value of a country, as much as the addition of a portion of territory: now what should hinder a people from spending their ready money, and, at the same time, preserving their land? Because a young gentleman, whose father has left him a fine estate in land, and ten thousand pounds in ready money, has spent the ten thousand pounds, does it follow, that he is without a shilling? Upon this view of the question, it will, I believe, be granted, that Dr. Swift’s idea that all the specie of Ireland would in a short time be exported, in consequence of an unfavourable balance of trade, is very far from being chimerical, and might be exactly true; although at this time there be six times more in circulation than ever; just as a person who is running through his fortune, has commonly more money in his hands than his father used to have, when he was acquiring it. Let Ireland pay her debts to England, and then count her specie. Let England pay her’s to all the world, and then weigh her gold and silver. Suppose that on summing up the accounts, there is not found one shilling in either country, is this any proof of their being undone? By no means: coin is one article of our wealth, but never can be the measure of it.
I know little of the state of Ireland; but if it be true, that paper money is increasing daily in that country, it is, I suppose, because the specie is daily exported to England, as the returns of estates belonging to people who reside there, and that the Irish, instead of buying it back again for their own use in circulation, augment their paper, in proportion to the progress of their industry; and only buy such quantities of specie as are necessary for paying the balance of their trade. Now by buying specie, I do not suppose, that they bring any over to Ireland, in order to send it back to England; but that they send over goods to the value, which the English merchants pay in specie, or in English paper, to those who are creditors upon Ireland, for the value of their rents, &c.
Suppose then, for a farther illustration of some principles, that all the lands of Ireland belonged to Englishmen residing in their own country, and annually drawing from Ireland the income belonging to them, what would the consequence be? As long as this portion of the produce of lands, which goes for rent, (and which, as we have said, is the fund provided for the subsistence of the free hands who purchase their own necessaries) could be bought and consumed by the Irish themselves, that is, in other words, while in Ireland there was a demand for this portion of the fruits, it would be paid for, either in coin, to the diminution of their specie, or in something which might be converted into money; that is, by the produce of their industry, and thus, by the means of trade, would come into the hands of the English proprietors, either in specie, or in any other form they judged proper.
That so soon as the demand for this portion of fruits came to fail, for want of money, or industry, in Ireland to purchase it, what remained on hand would be sent over to England in kind; or by the way of trade, be made to circulate with other nations (in beef, butter, tallow, &c.) who would give silver and gold for it, to the proprietors of the Irish lands. By such a diminution of demand in the country, for the fruits of the earth, the depopulation of Ireland would be implied; because they who consumed them formerly, consume them no more; that is to say, they either died, or left the country.
To conclude, a great part of the value of a country is its produce and manufactures; but it does not follow, as Mr. Belloni asserts, that these should as necessarily draw a proportional sum of the gold and silver of Europe into that country, as a shoal of small fishes draws water fowl, or as charity draws the poor, or as beauty draws admiration.
Quest. 2. Can no rule be found to judge of the balance of trade from the state of specie, or at least to perceive the effects of that balance in augmenting or diminishing the mass of riches?
Could it be supposed that specie never circulated between nations, but in the way of trade, and in exchange for exportable commodities, this would be a rule.