The restraints upon importation were of two kinds: first, restraints upon the importation of such foreign goods for home consumption as could be produced at home, from whatever country they were imported; and secondly, restraints upon the importation of goods of almost all kinds from those particular countries with which the balance of trade was supposed to be disadvantageous. These different restraints consisted sometimes in high duties, and sometimes in absolute prohibitions.
Exportation was encouraged sometimes by drawbacks, sometimes by bounties, sometimes by advantageous treaties of commerce with sovereign states, and sometimes by the establishment of colonies in distant countries. The above two restraints, and these four encouragements to exportation, constitute the six principal means by which the commercial or mercantile system proposes to increase the quantity of gold and silver in any country by turning the balance of trade in its favour.
The entire system, in all its developments, is a fallacious and an evil one. It is not difficult to determine who have been the contrivers of this whole mercantile system: not the consumers, whose interest has been entirely neglected; but the producers, and especially the merchants and manufacturers, whose interest has been so carefully attended to. It remains to be said, also, that the "agricultural system," which represents the produce of land as the sole source of the revenue and wealth of every country, and as therefore justifying a special protection of it, is as fallacious and as harmful as the other.
V.—The Revenue of the Sovereign or Commonwealth
The first duty of the sovereign, that of protecting the society from the violence and invasion of other independent societies, can be performed only by means of a military force. This may be effected either by obliging all the citizens of the military age, or a certain number of them, to join in some measure the trade of a soldier to whatever other trade or profession they may happen to carry on; or by maintaining a certain number of citizens in the constant practice of military exercises, thus rendering the trade of a soldier a particular trade, separate from all others. In the former case a militia is formed, in the latter a standing army; and of the two, the second is by far the more powerful, as it is also the more expensive.
The second duty of the sovereign, that of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice, requires an increasing expenditure corresponding to the advance and development of the society.
Public works and public institutions are a third cause of expenditure on the part of sovereign or commonwealth; and have two principal objects—that of facilitating the commerce of the society and that of promoting the instruction of the people. Roads, bridges, canals, are examples of the former; schools, universities, established Churches are examples of the latter. And among other expenses of the sovereign or commonwealth we must include the expenses of supporting the dignity of the sovereign.
The funds or sources of revenue which peculiarly belong to the sovereign or commonwealth consist either in stock or in land; but being quite insufficient to meet the public expenditure they are supplemented by taxation. Every tax is finally paid from rent, profit or wages, or from all of them indifferently; and the chief principle to be observed in taxation is, that the subjects of the State ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities—that is, in proportion to the revenue which they respectively enjoy under the protection of the State. The tax which each individual is bound to pay ought to be certain and not arbitrary; every tax ought to be levied at the time or in the manner in which it is most likely to be convenient for the contributor to pay it; and finally, every tax ought to be so contrived as to take out and to keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the State.
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