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The Scott Library: Hume’s Pol­it­i­cal Dis­cours­es, by Da­vid Hume. Ed­i­ted, with an In­tro­duc­tion by Wil­liam Bell Rob­ert­son.

THE SCOTT LIBRARY.

HUME’S POLITICAL DISCOURSES.

⁂ FOR FULL LIST OF THE VOLUMES IN THIS SERIES, SEE CATALOGUE AT END OF BOOK.

Hume’s Po­lit­i­cal Dis­cours­es. With an In­tro­duc­tion by Wil­liam Bell Rob­ert­son, Auth­or of “Foun­da­tions of Pol­i­ti­cal Econ­o­my,” “Slav­ery of La­bour,” Etc.

THE WALTER SCOTT PUBLISHING CO., LTD.

LONDON AND FELLING-ON-TYNE.

NEW YORK: 3 EAST 14TH STREET.

CONTENTS.

INTRODUCTION.

Regretting the meagre records of the life of Adam Smith, the Right Hon. R. B. Haldane, M.P.,​[1] remarks:—“We think of him, in the main, and we think of him rightly, as the bosom friend of David Hume” (b. 1711, d. 1777). Naturally, incidents in the life of a philosopher are neither numerous nor stirring. It is unreasonable to expect them, and such stories as are handed down regarding great thinkers are best not to be accepted unreservedly. I leave Hume, therefore, to present his own picture as drawn in My own Life—the picture he wished posterity to have—which consequently follows this introduction, and is itself followed by Adam Smith’s celebrated letter to Mr. Strahan, Hume’s publisher, giving an account of Hume’s death.

It is chiefly as a political economist that Hume concerns us here, as it is in the Political Discourses, first published in 1752, his economic principles are set forth. What the reader may expect to find in these Discourses I prefer to let writers of renown tell. Thus Lord Brougham—

“Of the Political Discourses it would be difficult to speak in terms of too great commendation. They combine almost every {p-viii} excellence which can belong to such a performance. The reasoning is clear, and un­en­cum­bered with more words or more illus­tra­tions than are necessary for bringing out the doctrines. The learning is extensive, accurate, and profound, not only as to systems of philosophy, but as to history, whether modern or ancient. . . . The great merit, however, of these Discourses is their originality, and the new system of politics and political economy which they unfold. Mr. Hume is, beyond all doubt, the author of the modern doctrines which now rule the world of science, which are to a great extent the guide of practical statesmen, and are only prevented from being applied in their fullest extent to the affairs of nations by the clash­ing interests and the ignorant prejudices of certain powerful classes.”

Thus, again, J. Hill Burton,​[2] Hume’s biographer—

“These Discourses are in truth the cradle of political economy; and much as that science has been investigated and expounded in later times, these earliest, shortest, and simplest developments of its principles are still read with delight even by those who are masters of all the literature of this great subject. But they possess a quality which more elaborate economists have striven after in vain, in being a pleasing object of study not only to the initiated, but to the ordinary popular reader, and of being admitted as just and true by many who cannot or will not understand the views of later writers on political economy. They have thus the rarely conjoined merit that, as they were the first to direct the way to the true sources of this department of knowledge, those who have gone farther, instead of superseding them, have in the general case confirmed their accuracy.”

The Discourses, in Hume’s own words, was “the only work of mine that was successful on the first publication,” and its success was great. Translated into French immediately, “they conferred,” says Professor Huxley, “a European reputation upon their {p-ix} author; and, what was more to the purpose, influenced the later school of economists of the eighteenth century.” On the same head Burton says—“As no Frenchman had previously approached the subject of political economy with a philosophical pen, this little book was a main instrument, either by causing assent or provoking controversy, in producing the host of French works published between the time of its translation and the publication of Smith’s Wealth of Nations in 1776. The work of the elder Mirabeau in particular—L’ami des Hommes—was in a great measure a controversial examination of Hume’s opinions on population.”

Professor Knight of St. Andrews, again, echoes similar sentiments.

“The merit of the Discourses,” he remarks, “is not only great, but they are unrivalled to this day; and it is not too much to affirm that they prepared the way for all the subsequent economic literature of England, including the Wealth of Nations, in which Smith laid down the broad and durable foundations of the science. . . . The effect produced by these Discourses was great. Immediately translated into French, they passed through five editions in fourteen years. They were a distinctive addition to English literature, and were strictly scientific, though not technical. They at once floated Hume into fame, bringing him to the front, both as a thinker and as a man of letters; and posterity has ratified this judgment of the hour. . . . They contain many original germs of economic truth. The effect they had on practical statesmen, such as Pitt, must not be overlooked. It was perhaps an advantage that the economic doctrines, both of Hume and Smith, were published at that particular time, as they led naturally and easily to several reforms, without being developed to extremes, as was subsequently the case in France.”

All this testimony as to the merits of the {p-x} Discourses—testimony from men of widely divergent views—is sufficient justification for offering them in popular form to the public at a time like the present, when the foundations of political economy are, one might say, being re-laid.​[3]

We have already hinted at the friendship that existed between Hume and Adam Smith. Hume was Smith’s senior by twelve years, and seems to have had the latter brought under his notice by Hutcheson, Professor of Moral Philosophy at Glasgow University. In a letter to Hutcheson, dated March 4th, 1740, he says—“My bookseller has sent to Mr. Smith a copy of my book,​[4] which I hope he has received as well as your letter.” “The Smith here mentioned,” Burton says, “we may fairly conclude, notwithstanding the universality of the name, to be Adam Smith, who was then a student in the University of Glasgow, and not quite seventeen years old. It may be inferred that Hutcheson had mentioned Smith as a person on whom it would serve some good purpose to bestow a copy of the Treatise; and we have here evidently the first introduction to each other’s notice of two friends, of whom it can be said there was no third person writing the English language during the same period who has had so much influence upon the opinions of mankind as either of these two men.” {p-xi}

Hume’s influence upon Adam Smith was great. Even in the ring of the phraseology of the Wealth of Nations I sometimes fancy I can hear Hume. Anyway, the book referred to in the above letter as sent to Smith, Mr. Haldane considers as “in all probability” the determining factor in making Smith abandon his original intention of entering the Church. “Whether Hume could have been but for Smith we cannot now say; but we know that, but for Hume, Smith could never have been.”​[5] While agreeing that “but for Hume Smith could never have been,” I see no reason to question that Hume could have been without Smith. Hume had within him what may here be called the divine light, and it had to come out. That is why, “in poverty and riches, in health and sickness, in laborious obscurity and amidst the blaze of fame,” his ruling passion—a passion for literature—never abated. No man can strike out for himself an original line and stick to it like this, “through thick and thin,” unless he have assurance of the truth of that that is in him. Hume had this assurance. True, he sought fame—and he achieved fame; not for its own sake—that is inconceivable in so great a thinker, a thinker with such a true notion of the relation of things—but for the sake of the truths he had to promulgate; for the higher his eminence the wider and more attentive would be his audience. Of course, he sought fame, and he found gratification in it. It was not the gratification of vanity, however, that writers on Hume usually interpret it as; it was the gratification arising from the knowledge that one has hit the mark—that one has not laboured in vain. The petty vanity ascribed to Hume would not have {p-xii} suffered him as “the parent of the first elucidations of political economy to see his own offspring eclipsed, and to see it with pride”—his attitude, according to Burton, on the successful reception of The Wealth of Nations. Vanity, again, would have prevented between these two men that unalloyed friendship so charming to contemplate.

In 1776, the year before Hume’s death, The Wealth of Nations appeared, and here is how Hume writes to the author:—

“February 8, 1776.

“DEAR SMITH,—I am as lazy a correspondent as you, yet my anxiety about you makes me write. By all accounts your book has been printed long ago; yet it has never been so much as advertized. What is the reason? If you wait till the fate of America be decided, you may wait long.

“By all accounts you intend to settle with us this spring; yet we hear no more of it. What is the reason? Your chamber in my house is always unoccupied. I am always at home. I expect you to land here.

“I have been, am, and shall be probably in an indifferent state of health. I weighed myself t’other day, and find I have fallen five complete stones. If you delay much longer I shall probably disappear altogether.

“The Duke of Buccleuch tells me that you are very zealous in American affairs. My notion is that the matter is not so important as is commonly imagined. If I be mistaken, I shall probably correct my error when I see you or read you. Our navigation and general commerce may suffer more than our manufactures. Should London fall as much in its size as I have done, it will be the better. It is nothing but a hulk of bad and unclean humours.”

At last the book appears, and Hume writes his friend, April 1st, 1776:— {p-xiii}

“I am much pleased with your performance; and the perusal of it has taken me from a state of great anxiety. It was a work of so much ex­pec­ta­tion by your­self, by your friends, and by the pub­lic, that I trem­bled for its first ap­pearance, but am now much relieved. Not but that the reading of it neces­sarily requires so much attention, and the public is dis­posed to give so little, that I shall still doubt for some time of its being at first very popular. But it has depth and solidity and acuteness, and is so much illustrated by curious facts that it must at last take the public at­ten­tion. It is probably much improved by your last abode in London. If you were here at my fire­side, I should dispute some of your prin­ci­ples. I cannot think that the rent of farms makes any part of the price of pro­duce,​[6] but that the price is determined altogether by the quantity and the demand. . . . But these and a hundred other points are fit only to be discussed in con­ver­sa­tion.”

Hume, though he “took a particular pleasure in the company of modest women, and had no reason to be displeased with the reception he met with from them,” died unmarried. Adam Smith also died unmarried, “though he was for several years,” according to Dugald Stewart, “attached to a young lady of great beauty and accomplishment.” Hume, in the Essay “Of the Study of History,” speaks of being desired once by “a young beauty for whom I had some passion to send her some novels and romances for her amusement.” David was a “canny” man though. In these circumstances the following playful sally in a letter from Hume to Mrs. Dysart, of Eccles, a relative, may have interest:—“What arithmetic will serve to fix the proportion between good and bad wives, and rate the different classes of each? Sir Isaac Newton himself, {p-xiv} who could measure the course of the planets and weigh the earth as in a pair of scales—even he had not algebra enough to reduce that amiable part of our species to a just equation; and they are the only heavenly bodies whose orbits are as yet uncertain.”

The foregoing are mere glimpses of this truly great man, and are offered with a view to awakening and stimulating amongst general readers a desire for first-hand knowledge of David Hume.

W. B. R.

May 1906.

MY OWN LIFE.

It is difficult for a man to speak long of himself without vanity; therefore, I shall be short. It may be thought an instance of vanity that I pretend at all to write my life; but this narrative shall contain little more than the History of my Writings; as, indeed, almost all my life has been spent in literary pursuits and occupations. The first success of most of my writings was not such as to be an object of vanity.

I was born the 26th of April 1711, old style, at Edinburgh. I was of a good family, both by father and mother. My father’s family is a branch of the Earl of Home’s or Hume’s; and my ancestors had been proprietors of the estate, which my brother possesses, for several generations. My mother was daughter of Sir David Falconer, President of the College of Justice; the title of Halkerton came by succession to her brother.

My family, however, was not rich; and, being myself a younger brother, my patrimony, according to the mode of my country, was of course very slender. My father, who passed for a man of parts, died when I was an infant, leaving me, with an elder brother and a sister, under the care of our mother, a {p-xv} woman of singular merit, who, though young and handsome, devoted herself entirely to the rearing and educating of her children. I passed through the ordinary course of education with success, and was seized very early with a passion for literature, which has been the ruling passion of my life, and the great source of my enjoyments. My studious disposition, my sobriety, and my industry gave my family a notion that the law was a proper profession for me; but I found an insurmountable aversion to everything but the pursuits of philosophy and general learning; and while they fancied I was poring upon Voet and Vinnius, Cicero and Virgil were the authors which I was secretly devouring.

My very slender fortune, however, being unsuitable to this plan of life, and my health being a little broken by my ardent application, I was tempted, or rather forced, to make a very feeble trial for entering into a more active scene of life. In 1734 I went to Bristol, with some recommendations to eminent merchants, but in a few months found that scene totally unsuitable to me. I went over to France, with a view of prosecuting my studies in a country retreat, and I there laid that plan of life which I have steadily and successfully pursued. I resolved to make a very rigid frugality supply my deficiency of fortune, to maintain unimpaired my independency, and to regard every object as contemptible except the improvement of my talents in literature.

During my retreat in France, first at Rheims, but chiefly at La Fleche, in Anjou, I composed my Treatise of Human Nature. After passing three years very agreeably in that country, I came over to London in 1737. In the end of 1738 I published my Treatise, and immediately went down to my mother and my brother, who lived at his country-house, and was employing himself very judiciously and successfully in the improvement of his fortune.

Never literary attempt was more unfortunate than my Treatise of Human Nature. It fell dead-born from the press, without reaching such distinction as even to excite a murmur among the zealots. But being naturally of a cheerful and {p-xvi} sanguine temper, I very soon recovered the blow, and prosecuted with great ardour my studies in the country. In 1742 I printed at Edinburgh the first part of my Essays: the work was favourably received, and soon made me entirely forget my former disappointment. I continued with my mother and brother in the country, and in that time recovered the knowledge of the Greek language, which I had too much neglected in my early youth.

In 1745 I received a letter from the Marquis of Annandale, inviting me to come and live with him in England; I found also that the friends and family of that young nobleman were desirous of putting him under my care and direction, for the state of his mind and health required it. I lived with him a twelvemonth. My appointments during that time made a considerable accession to my small fortune. I then received an invitation from General St. Clair to attend him as a secretary to his expedition, which was at first meant against Canada, but ended in an incursion on the coast of France. Next year—to wit, 1747—I received an invitation from the General to attend him in the same station in his military embassy to the courts of Vienna and Turin. I then wore the uniform of an officer, and was introduced at these courts as aide-de-camp to the General, along with Sir Harry Erskine and Captain Grant, now General Grant. These two years were almost the only interruptions which my studies have received during the course of my life. I passed them agreeably, and in good company; and my appointments, with my frugality, had made me reach a fortune, which I called independent, though most of my friends were inclined to smile when I said so; in short, I was now master of near a thousand pounds.

I had always entertained a notion that my want of success in publishing the Treatise of Human Nature had proceeded more from the manner than the matter, and that I had been guilty of a very usual indiscretion in going to the press too early. I, therefore, cast the first part of that work anew in the Inquiry concerning Human Understanding, which was published while I was at Turin. But this piece was at first little more successful {p-xvii} than the Treatise of Human Nature. On my return from Italy, I had the mortification to find all England in a ferment on account of Dr. Middleton’s Free Inquiry, while my performance was entirely overlooked and neglected. A new edition, which had been published at London, of my Essays, Moral and Political, met not with a much better reception.

Such is the force of natural temper, that these disappointments made little or no impression on me. I went down in 1749 and lived two years with my brother at his country-house, for my mother was now dead. I there composed the second part of my Essays, which I called Political Discourses, and also my Inquiry concerning the Principles of Morals, which is another part of my Treatise that I cast anew. Meanwhile, my bookseller, A. Millar, informed me that my former publications (all but the unfortunate Treatise) were beginning to be the subject of conversation; that the sale of them was gradually increasing, and that new editions were demanded. Answers by Reverends and Right Reverends came out two or three in a year; and I found, by Dr. Warburton’s railing, that the books were beginning to be esteemed in good company. However, I had a fixed resolution, which I inflexibly maintained, never to reply to anybody; and not being very irascible in my temper, I have easily kept myself clear of all literary squabbles. These symptoms of a rising reputation gave me encouragement, as I was ever more disposed to see the favourable than unfavourable side of things; a turn of mind which it is more happy to possess than to be born to an estate of ten thousand a year.

In 1751 I removed from the country to the town, the true scene for a man of letters. In 1752 were published at Edinburgh, where I then lived, my Political Discourses, the only work of mine that was successful on the first publication. It was well received abroad and at home. In the same year was published at London my Inquiry concerning the Principles of Morals; which, in my own opinion (who ought not to judge on that subject), is of all my writings, historical, philosophical, or literary, incomparably the best. It came unnoticed and unobserved into the world. {p-xviii}

In 1752 the Faculty of Advocates chose me their Librarian, an office from which I received little or no emolument, but which gave me the command of a large library. I then formed the plan of writing the History of England; but being frightened with the notion of continuing a narrative through a period of seventeen hundred years, I commenced with the accession of the House of Stuart, an epoch when, I thought, the misrepresentations of faction began chiefly to take place. I was, I own, sanguine in my expectations of the success of this work. I thought that I was the only historian that had at once neglected present power, interest, and authority, and the cry of popular prejudices; and as the subject was suited to every capacity, I expected proportional applause. But miserable was my disappointment: I was assailed by one cry of reproach, disapprobation, and even detestation; English, Scotch, and Irish, Whig and Tory, Churchman and Sectary, Freethinker and Religionist, Patriot and Courtier, united in their rage against the man who had presumed to shed a generous tear for the fate of Charles I. and the Earl of Strafford; and after the first ebullitions of their fury were over, what was still more mortifying, the book seemed to sink into oblivion. Mr. Millar told me that in a twelvemonth, he sold only forty-five copies of it. I scarcely, indeed, heard of one man in the three kingdoms, considerable for rank or letters, that could endure the book. I must only except the Primate of England, Dr. Herring, and the Primate of Ireland, Dr. Stone, which seem two odd exceptions. These dignified prelates separately sent me messages not to be discouraged.

I was, however, I confess, discouraged; and had not the war been at that time breaking out between France and England, I had certainly retired to some provincial town of the former kingdom, have changed my name, and never more have returned to my native country. But as this scheme was not now practicable, and the subsequent volume was considerably advanced, I resolved to pick up courage, and to persevere.

In this interval I published at London my Natural History of Religion, along with some other small pieces. Its public entry was rather obscure, except only that Dr. Hurd wrote a {p-xix} pamphlet against it, with all the illiberal petulance, arrogance, and scurrility which distinguish the Warburtonian school. This pamphlet gave me some consolation for the otherwise indifferent reception of my performance.

In 1756, two years after the fall of the first volume, was published the second volume of my History, containing the period from the death of Charles I. till the Revolution. This performance happened to give less displeasure to the Whigs, and was better received. It not only rose itself, but helped to buoy up its unfortunate brother.

But though I had been taught, by experience, that the Whig party were in possession of bestowing all places, both in the State and in literature, I was so little inclined to yield to their senseless clamour, that in about a hundred alterations which further study, reading, or reflection engaged me to make in the reigns of the two first Stuarts, I have made all of them invariably to the Tory side. It is ridiculous to consider the English constitution before that period as a regular plan of liberty.

In 1759 I published my History of the House of Tudor. The clamour against this performance was almost equal to that against the history of the two first Stuarts. The reign of Elizabeth was particularly obnoxious. But I was now callous against the impressions of public folly, and continued very peaceably and contentedly in my retreat at Edinburgh, to finish, in two volumes, the more early part of the English History, which I gave to the public in 1761, with tolerable, and but tolerable success.

But notwithstanding this variety of winds and seasons, to which my writings had been exposed, they had still been making such advances that the copy-money given me by the booksellers much exceeded anything formerly known in England; I was become not only independent, but opulent. I retired to my native country of Scotland, determined never more to set my foot out of it; and retaining the satisfaction of never having preferred a request to one great man, or even making advances of friendship to any of them. As I was now turned of fifty, I thought of passing all the rest of my life in this {p-xx} philosophical manner, when I received, in 1763, an invitation from the Earl of Hertford, with whom I was not in the least acquainted, to attend him on his embassy to Paris, with a near prospect of being appointed Secretary to the embassy, and, in the meanwhile, of performing the functions of that office. This offer, however inviting, I at first declined, both because I was reluctant to begin connections with the great, and because I was afraid the civilities and gay company of Paris would prove disagreeable to a person of my age and humour; but on his lordship’s repeating the invitation, I accepted of it. I have every reason, both of pleasure and interest, to think myself happy in my connections with that nobleman, as well as afterwards with his brother, General Conway.

Those who have not seen the strange effects of Modes, will never imagine the reception I met with at Paris, from men and women of all ranks and stations. The more I resiled from their excessive civilities, the more I was loaded with them. There is, however, a real satisfaction in living in Paris, from the great number of sensible, knowing, and polite company with which that city abounds above all places in the universe. I thought once of settling there for life.

I was appointed Secretary to the embassy; and in summer 1765, Lord Hertford left me, being appointed Lord Lieutenant of Ireland. I was chargé d’affaires till the arrival of the Duke of Richmond, towards the end of the year. In the beginning of 1766 I left Paris, and next summer went to Edinburgh, with the same view as formerly, of burying myself in a philosophical retreat. I returned to that place, not richer, but with much more money, and a much larger income, by means of Lord Hertford’s friendship, than I left it; and I was desirous of trying what superfluity could produce, as I had formerly made an experiment of a competency. But in 1767 I received from Mr. Conway an invitation to be Under Secretary; and this invitation, both the character of the person and my connections with Lord Hertford prevented me from declining. I returned to Edinburgh in 1769, very opulent (for I possessed a revenue of £1000 a year), healthy, and, though somewhat stricken in years, with {p-xxi} the prospect of enjoying long my ease, and of seeing the increase of my reputation.

In spring 1775, I was struck with a disorder in my bowels, which at first gave me no alarm, but has since, as I apprehend it, become mortal and incurable. I now reckon upon a speedy dissolution. I have suffered very little pain from my disorder; and what is more strange, have, notwithstanding the great decline of my person, never suffered a moment’s abatement of my spirits; insomuch, that were I to name the period of my life which I should most choose to pass over again, I might be tempted to point to this later period. I possess the same ardour as ever in study, and the same gaiety in company. I consider, besides, that a man of sixty-five, by dying, cuts off only a few years of infirmities; and though I see many symptoms of my literary reputation’s breaking out at last with additional lustre, I knew that I could have but few years to enjoy it. It is difficult to be more detached from life than I am at present.

To conclude historically with my own character. I am, or rather was (for that is the style I must now use in speaking of myself, which emboldens me the more to speak my sentiments)—I was, I say, a man of mild dispositions, of command of temper, of an open, social, and cheerful humour, capable of attachment, but little susceptible of enmity, and of great moderation in all my passions. Even my love of literary fame, my ruling passion, never soured my temper, notwithstanding my frequent disappointments. My company was not unacceptable to the young and careless, as well as to the studious and literary; and as I took a particular pleasure in the company of modest women, I had no reason to be displeased with the reception I met with from them. In a word, though most men anywise eminent have found reason to complain of calumny, I never was touched, or even attacked by her baleful tooth: and though I wantonly exposed myself to the rage of both civil and religious factions, they seemed to be disarmed in my behalf of their wonted fury. My friends never had occasion to vindicate any one circumstance of my character and conduct: not {p-xxii} but that the zealots, we may well suppose, would have been glad to invent and propagate any story to my disadvantage, but they never could find any which they thought would wear the face of probability. I cannot say there is no vanity in making this funeral oration of myself, but I hope it is not a misplaced one; and this is a matter of fact which is easily cleared and ascertained.

April 18, 1776.

ADAM SMITH’S CELEBRATED ACCOUNT OF HUME’S DEATH.

“KIRKCALDY, FIFESHIRE, Nov. 9, 1776.

“DEAR SIR,—It is with a real, though a very melancholy pleasure, that I sit down to give you some account of the behaviour of our excellent friend, Mr. Hume, during his last illness.

“Though, in his own judgment, his disease was mortal and incurable, yet he allowed himself to be prevailed upon, by the entreaty of his friends, to try what might be the effects of a long journey. A few days before he set out he wrote that account of his own life which, together with his other papers, he has left to your care. My account, therefore, shall begin where his ends.

“He set out for London towards the end of April, and at Morpeth met with Mr. John Home and myself, who had both come down from London to see him, expecting to have found him in Edinburgh. Mr. Home returned with him, and attended him during the whole of his stay in England, with that care and attention which might be expected from a temper so perfectly friendly and affectionate. As I had written to my mother that she might expect me in Scotland, I was under the necessity of continuing my journey. His disease seemed to yield to exercise and change of air, and when he arrived in London he was apparently in much better health than when he left Edinburgh. He was advised to go to Bath to drink the waters, which appeared for some time to have so good an effect upon {p-xxiii} him that even he himself began to entertain, what he was not apt to do, a better opinion of his own health. His symptoms, however, soon returned with their usual violence, and from that moment he gave up all thoughts of recovery, but submitted with the utmost cheerfulness, and the most perfect complacency and resignation. Upon his return to Edinburgh, though he found himself much weaker, yet his cheerfulness never abated, and he continued to divert himself as usual, with correcting his own works for a new edition, and reading books of amusement, with the conversation of his friends, and, sometimes in the evening, with a party at his favourite game of whist. His cheerfulness was so great, his conversation and amusements ran so much in their usual strain that, notwithstanding all bad symptoms, many people could not believe he was dying. ‘I shall tell your friend, Colonel Edmondstone,’ said Doctor Dundas to him one day, ‘that I left you much better, and in a fair way of recovery.’ ‘Doctor,’ said he, ‘as I believe you would not choose to tell anything but the truth, you had better tell him that I am dying as fast as my enemies, if I have any, could wish, and as easily and as cheerfully as my best friends could desire.’ Colonel Edmondstone soon afterwards came to see him, and took leave of him; and on his way home he could not forbear writing him a letter bidding him once more an eternal adieu, and applying to him, as a dying man, the beautiful French verses in which the Abbé Chaulieu, in expectation of his own death, laments his approaching separation from his friend, the Marquis de la Fare. Mr. Hume’s magnanimity and firmness were such, that his most affectionate friends knew that they hazarded nothing in talking or writing to him as to a dying man, and that, so far from being hurt by this frankness, he was rather pleased and flattered by it. I happened to come into his room while he was reading this letter, which he had just received, and which he immediately showed me. I told him that though I was sensible how very much he was weakened, and that appearances were in many respects very bad yet his cheerfulness was still so great, the spirit of life seemed still to be so very strong in him, that I could not help {p-xxiv} entertaining some faint hopes. He answered—‘Your hopes are groundless. An habitual diarrhœa of more than a year’s standing would be a very bad disease at any age: at my age it is a mortal one. When I lie down in the evening, I feel myself weaker than when I rose in the morning; and when I rise in the morning, weaker than when I lay down in the evening. I am sensible, besides, that some of my vital parts are affected, so that I must soon die.’ ‘Well,’ said I, ‘if it must be so, you have at least the satisfaction of leaving all your friends, your brother’s family in particular, in great prosperity.’ He said that he felt that satisfaction so sensibly, that when he was reading a few days before, Lucian’s Dialogues of the Dead, among all the excuses which are alleged to Charon for not entering readily into his boat, he could not find one that fitted him: he had no house to finish, he had no daughter to provide for, he had no enemies upon whom he wished to revenge himself. ‘I could not well imagine,’ said he, ‘what excuse I could make to Charon in order to obtain a little delay. I have done everything of consequence which I ever meant to do; and I could at no time expect to leave my relations and friends in a better situation than that in which I am now like to leave them; I therefore have all reason to die contented.’ He then diverted himself with inventing several jocular excuses, which he supposed he might make to Charon, and with imagining the very surly answers which it might suit the character of Charon to return to them. ‘Upon further consideration,’ said he, ‘I thought I might say to him, good Charon, I have been correcting my works for a new edition; allow me a little time that I may see how the public receives the alterations.’ But Charon would answer, ‘When you have seen the effect of these, you will be for making other alterations. There will be no end of such excuses; so, honest friend, please step into the boat.’ But I might still urge, ‘Have a little patience, good Charon; I have been endeavouring to open the eyes of the public. If I live a few years longer, I may have the satisfaction of seeing the downfall of some of the prevailing systems of superstition.’ But Charon would then lose all temper and decency. ‘You loitering {p-xxv} rogue; that will not happen these many hundred years. Do you fancy I will grant you a lease for so long a term? Get into the boat this instant, you lazy, loitering rogue.’

“But though Mr. Hume always talked of his approaching dissolution with great cheerfulness, he never affected to make any parade of his magnanimity. He never mentioned the subject but when the conversation naturally led to it, and never dwelt longer upon it than the course of the conversation happened to require; it was a subject, indeed, which occurred pretty frequently, in consequence of the inquiries which his friends who came to see him naturally made concerning the state of his health. The conversation which I mentioned above, and which passed on Thursday the 8th of August, was the last except one that I ever had with him. He had now become so very weak that the company of his most intimate friends fatigued him; for his cheerfulness was still so great, his complaisance and social disposition were still so entire, that when any friend was with him he could not help talking more, and with greater exertion than suited the weakness of his body. At his own desire, therefore, I agreed to leave Edinburgh, where I was staying partly upon his account, and returned to my mother’s house here, at Kirkcaldy, upon condition that he would send for me whenever he wished to see me; the physician who saw him most frequently, Dr. Black, undertaking in the meantime to write me occasionally an account of the state of his health.

“On the 22nd of August the doctor wrote me the following letter:—

“‘Since my last Mr. Hume has passed his time pretty easily, but is much weaker. He sits up, goes downstairs once a day, and amuses himself with reading, but seldom sees anybody. He finds that even the conversation of his most intimate friends fatigues and oppresses him; and it is happy that he does not need it, for he is quite free from anxiety, impatience, or low spirits, and passes his time very well with the assistance of amusing books.’ {p-xxvi}

“I received the day after a letter from Mr. Hume himself, of which the following is an extract:—

“‘EDINBURGH, August 23, 1776.

“‘MY DEAREST FRIEND,—I am obliged to make use of my nephew’s hand in writing to you, as I do not rise to-day.

· · · · · ·

“‘I go very fast to decline, and last night had a small fever, which I hoped might put a quicker period to this tedious illness; but unluckily it has, in a great measure, gone off. I cannot submit to your coming over here on my account, as it is possible for me to see you so small a part of the day, but Dr. Black can better inform you concerning the degree of strength which may from time to time remain with me. Adieu, etc.’

“Three days after I received the following letter from Dr. Black:—

“‘EDINBURGH, August 26th, 1776.

“‘DEAR SIR,—Yesterday, about four o’clock afternoon, Mr. Hume expired. The near approach of his death became evident in the night between Thursday and Friday, when his disease became excessive, and soon weakened him so much that he could no longer rise out of his bed. He continued to the last perfectly sensible, and free from much pain or feeling of distress. He never dropped the smallest expression of impatience, but when he had occasion to speak to the people about him always did it with affection and tenderness. I thought it improper to write to bring you over, especially as I heard that he had dictated a letter to you desiring you not to come. When he became very weak it cost him an effort to speak, and he died in such a happy composure of mind that nothing could exceed it!’

“Thus died our most excellent and never-to-be-forgotten friend, concerning whose philosophical opinions men will, no doubt, judge variously, every one approving or condemning them according as they happen to coincide or disagree with his {p-xxvii} own; but concerning whose character and conduct there can scarce be a difference of opinion. His temper, indeed, seemed to be more happily balanced—if I may be allowed such an expression—than that perhaps of any other man I have ever known. Even in the lowest state of his fortune his great and necessary frugality never hindered him from exercising, upon proper occasions, acts both of charity and generosity. It was a frugality founded not upon avarice but upon the love of independency. The extreme gentleness of his nature never weakened either the firmness of his mind or the steadiness of his resolutions. His constant pleasantry was the genuine effusion of good-nature and good-humour tempered with delicacy and modesty, and without even the slightest tincture of malignity—so frequently the disagreeable source of what is called wit in other men. It never was the meaning of his raillery to mortify, and therefore, far from offending, it seldom failed to please and delight even those who were the object of it. To his friends—who were frequently the object of it—there was not perhaps any one of all his great and amiable qualities which contributed more to endear his conversation. And that gaiety of temper, so agreeable in society, but which is so often accompanied with frivolous and superficial qualities, was in him certainly attended with the most severe application, the most extensive learning, the greatest depth of thought, and a capacity in every respect the most comprehensive. Upon the whole, I have always considered him, both in his lifetime and since his death, as approaching as nearly to the idea of a perfectly wise and virtuous man as perhaps the nature of human frailty will permit.

“I ever am, dear sir, most affectionately yours,

“ADAM SMITH.”

⁂ “It is a usual fallacy,” says Hume in “Of the Populousness of Ancient Nations,” “to consider all the ages of antiquity as one period.” The dates given in the Appendix may serve as a corrective in this regard.

NOTES, INTRODUCTION.

[1] Life of Adam Smith, “Great Writers” series.

[2] Life and Correspondence of David Hume, 1846.

[3] See Foundations of Political Economy, The Walter Scott Publishing Company, Limited.

[4] His Treatise of Human Nature, regarding the publication of which he wrote in 1751 to Sir Gilbert Elliot, of Minto—“I was carried away by the heat of youth and invention to publish too precipitately. So vast an undertaking, planned before I was one-and-twenty, and composed before I was twenty-five, must necessarily be very defective. I have repented my haste a hundred and a hundred times.”

[5] Haldane, Life of Adam Smith, “Great Writers” series.

[6] Hume’s view is the juster here.

HUME’S POLITICAL DISCOURSES

OF COMMERCE.

The greatest part of mankind may be divided into two classes: that of shallow thinkers, who fall short of the truth; and that of abstruse thinkers, who go beyond it. The latter class are by far the most uncommon; and I may add, by far the most useful and valuable. They suggest hints, at least, and start difficulties, which they want, perhaps, skill to pursue; but which may produce very fine discoveries, when handled by men who have a more just way of thinking. At worst, what they say is uncommon; and if it should cost some pains to comprehend it, one has, however, the pleasure of hearing something that is new. An author is little to be valued who tells us nothing but what we can learn from every coffee-house conversation.

All people of shallow thought are apt to decry even those of solid understanding, as abstruse thinkers, and metaphysicians, and refiners; and never will allow anything to be just which is beyond their own weak conceptions. There are some cases, I own, where an extraordinary refinement affords a strong presumption of falsehood, and where no reasoning is to be trusted but what is natural and easy. When a man deliberates concerning his conduct in any particular affair, and forms schemes in politics, trade, economy, or any business in life, he never ought to draw his arguments too fine, or connect too long a chain of consequences together. Something is sure to happen that will disconcert his reasoning, and produce an event different {p2} from what he expected. But when we reason upon general subjects, one may justly affirm that our speculations can scarce ever be too fine, provided they be just; and that the difference between a common man and a man of genius is chiefly seen in the shallowness or depth of the principles upon which they proceed. General reasonings seem intricate, merely because they are general; nor is it easy for the bulk of mankind to distinguish, in a great number of particulars, that common circumstance in which they all agree, or to extract it, pure and unmixed, from the other superfluous circumstances. Every judgment or conclusion, with them, is particular. They cannot enlarge their view to those universal propositions which comprehend under them an infinite number of individuals, and include a whole science in a single theorem. Their eye is confounded with such an extensive prospect; and the conclusions derived from it, even though clearly expressed, seem intricate and obscure. But however intricate they may seem, it is certain that general principles, if just and sound, must always prevail in the general course of things, though they may fail in particular cases; and it is the chief business of philosophers to regard the general course of things. I may add that it is also the chief business of politicians; especially in the domestic government of the state, where the public good, which is, or ought to be, their object, depends on the concurrence of a multitude of cases; not, as in foreign politics, on accidents and chances, and the caprices of a few persons. This therefore makes the difference between particular deliberations and general reasonings, and renders subtlety and refinement much more suitable to the latter than to the former.

I thought this introduction necessary before the following discourses on commerce, money, interest, balance of trade, etc., where, perhaps, there will occur some principles which are uncommon, and which may seem too refined and subtle for such vulgar subjects. If false, let them be rejected; but no one ought to entertain a prejudice against them merely because they are out of the common road. {p3}

The greatness of a state, and the happiness of its subjects, however independent they may be supposed in some respects, are commonly allowed to be inseparable with regard to commerce; and as private men receive greater security in the possession of their trade and riches from the power of the public, so the public becomes powerful in proportion to the riches and extensive commerce of private men. This maxim is true in general, though I cannot forbear thinking that it may possibly admit of some exceptions, and that we often establish it with too little reserve and limitation. There may be some circumstances where the commerce, and riches, and luxury of individuals, instead of adding strength to the public, will serve only to thin its armies, and diminish its authority among the neighbouring nations. Man is a very variable being, and susceptible of many different opinions, principles, and rules of conduct. What may be true while he adheres to one way of thinking will be found false when he has embraced an opposite set of manners and opinions.

The bulk of every state may be divided into husbandmen and manufacturers. The former are employed in the culture of the land; the latter work up the materials furnished by the former, into all the commodities which are necessary and ornamental to human life. As soon as men quit their savage state, where they live chiefly by hunting and fishing, they must fall into these two classes; though the arts of agriculture employ at first the most numerous part of the society.​[7] Time and experience improve so much these arts, that the land may easily maintain a much greater number of men than those who are immediately employed in its {p4} cultivation, or who furnish the more necessary manufactures to such as are so employed.

If these superfluous hands apply themselves to the finer arts, which are commonly denominated the arts of luxury, they add to the happiness of the state, since they afford to many the opportunity of receiving enjoyments with which they would otherwise have been unacquainted. But may not another scheme be proposed for the employment of these superfluous hands? May not the sovereign lay claim to them, and employ them in fleets and armies, to increase the dominions of the state abroad, and spread its fame over distant nations? It is certain that the fewer desires and wants are found in the proprietors and labourers of land, the fewer hands do they employ; and consequently the superfluities of the land, instead of maintaining tradesmen and manufacturers, may support fleets and armies to a much greater extent than where a great many arts are required to minister to the luxury of particular persons. Here therefore seems to be a kind of opposition between the greatness of the state and the happiness of the subjects. A state is never greater than when all its superfluous hands are employed in the service of the public. The ease and convenience of private persons require that these hands should be employed in their service. The one can never be satisfied but at the expense of the other. As the ambition of the sovereign must entrench on the luxury of individuals, so the luxury of individuals must diminish the force and check the ambition of the sovereign.

Nor is this reasoning merely chimerical, but is founded on history and experience. The republic of Sparta was certainly more powerful than any state now in the world, consisting of an equal number of people, and this was owing entirely to the want of commerce and luxury. The Helotes were the labourers: the Spartans were the soldiers or gentlemen. It is evident that the labour of the Helotes could not have maintained so great a number of Spartans, had these latter lived in ease and delicacy and given employment to a great variety of trades and manufactures. The like policy {p5} may be remarked in Rome. And indeed, through all ancient history, it is observable that the smallest republics raised and maintained greater armies than states consisting of triple the number of inhabitants are able to support at present. It is computed that in all European nations the proportion between soldiers and people does not exceed one to a hundred. But we read that the city of Rome alone, with its small territory, raised and maintained, in early times, ten legions against the Latins. Athens, whose whole dominions were not larger than Yorkshire, sent to the expedition against Sicily near forty thousand men. Dionysius the elder, it is said, maintained a standing army of a hundred thousand foot and ten thousand horse, besides a large fleet of four hundred sail,​[8] though his territories extended no farther than the city of Syracuse, about a third part of the island of Sicily, and some seaport towns or garrisons on the coast of Italy and Illyricum. It is true the ancient armies, in time of war, subsisted much upon plunder; but did not the enemy plunder in their turn? which was a more ruinous way of levying tax than any other that could be devised. In short, no probable reason can be assigned for the great power of the more ancient states above the modern but their want of commerce and luxury. Few artisans were maintained by the labour of the farmers, and therefore more soldiers might live upon it. Titus Livius says that Rome, in his time, would find it difficult to raise as large an army as that which, in her early days, she sent out against the Gauls and Latins. Instead of those soldiers who fought for liberty and empire in Camillus’s time, there were in Augustus’s days musicians, painters, cooks, players, and tailors; and if the land was equally cultivated at both periods, it is evident it could maintain equal numbers in the one profession as in the other. They added nothing to the mere necessaries of life in the latter period more than in the former. {p6}

It is natural on this occasion to ask whether sovereigns may not return to the maxims of ancient policy, and consult their own interest in this respect more than the happiness of their subjects. I answer that it appears to me almost impossible; and that because ancient policy was violent, and contrary to the more natural and usual course of things. It is well known with what peculiar laws Sparta was governed, and what a prodigy that republic is justly esteemed by every one who has considered human nature, as it has displayed itself in other nations and other ages. Were the testimony of history less positive and circumstantial, such a government would appear a mere philosophical whim or fiction, and impossible ever to be reduced to practice. And though the Roman and other ancient republics were supported on principles somewhat more natural, yet was there a very extraordinary concurrence of circumstances to make them submit to such grievous burdens. They were free states; they were small ones; and the age being martial, all the neighbouring states were continually in arms. Freedom naturally begets public spirit, especially in small states; and this public spirit, this amor patriæ, must increase when the public is almost in continual alarm, and men are obliged every moment to expose themselves to the greatest dangers for its defence. A continual succession of wars makes every citizen a soldier: he takes the field in his turn, and during his service is chiefly maintained by himself. And notwithstanding that his service is equivalent to a very severe tax, it is less felt by a people addicted to arms, who fight for honour and revenge more than pay, and are unacquainted with gain and industry as well as pleasure.​[9] Not to mention {p7} the great equality of fortunes amongst the inhabitants of the ancient republics, where every field belonging to a different proprietor was able to maintain a family, and rendered the numbers of citizens very considerable, even without trade and manufactures.

But though the want of trade and manufactures, amongst a free and very martial people, may sometimes have no other effect than to render the public more powerful, it is certain that, in the common course of human affairs, it will have a quite contrary tendency. Sovereigns must take mankind as they find them, and cannot pretend to introduce any violent change in their principles and ways of thinking. A long course of time, with a variety of accidents and circumstances, is requisite to produce those great revolutions which so much diversify the face of human affairs. And the less natural any set of principles are which support a particular society, the more difficulty will a legislator meet with in raising and cultivating them. It is his best policy to comply with the common bent of mankind, and give it all the improvements of which it is susceptible. Now, according to the most natural course of things, industry, and arts, and trade increase the power of the sovereign as well as the happiness of the subjects; and that policy is violent which aggrandizes the public by the poverty of individuals. This will easily appear from a few considerations, which will present to us the consequences of sloth and barbarity.

Where manufactures and mechanic arts are not cultivated, the bulk of the people must apply themselves to agriculture; and if their skill and industry increase, there {p8} must arise a great superfluity from their labour beyond what suffices to maintain them. They have no temptation, therefore, to increase their skill and industry; since they cannot exchange that superfluity for any commodities which may serve either to their pleasure or vanity. A habit of indolence naturally prevails. The greater part of the land lies uncultivated. What is cultivated yields not its utmost, for want of skill or assiduity in the farmer. If at any time the public exigencies require that great numbers should be employed in the public service, the labour of the people furnishes now no superfluities by which these numbers can be maintained. The labourers cannot increase their skill and industry on a sudden. Lands uncultivated cannot be brought into tillage for some years. The armies, meanwhile, must either make sudden and violent conquests, or disband for want of subsistence. A regular attack or defence, therefore, is not to be expected from such a people, and their soldiers must be as ignorant and unskilful as their farmers and manufacturers.

Everything in the world is purchased by labour, and our passions are the only causes of labour. When a nation abounds in manufactures and mechanic arts, the proprietors of land, as well as the farmers, study agriculture as a science, and redouble their industry and attention. The superfluity which arises from their labour is not lost, but is exchanged with the manufacturers for those commodities which men’s luxury now makes them covet. By this means land furnishes a great deal more of the necessaries of life than what suffices for those who cultivate it. In times of peace and tranquillity this superfluity goes to the maintenance of manufacturers, and the improvers of liberal arts. But it is easy for the public to convert many of these manufacturers into soldiers, and maintain them by that superfluity which arises from the labour of the farmers. Accordingly we find that this is the case in all civilized governments. When the sovereign raises an army, what is the consequence? He imposes a tax. This tax obliges all the people to retrench what is least necessary to their {p9} subsistence. Those who labour in such commodities must either enlist in the troops or turn themselves to agriculture, and thereby oblige some labourers to enlist for want of business. And to consider the matter abstractly, manufactures increase the power of the state only as they store up so much labour, and that of a kind to which the public may lay claim, without depriving any one of the necessaries of life. The more labour, therefore, is employed beyond mere necessaries, the more powerful is any state; since the persons engaged in that labour may easily be converted to the public service. In a state without manufactures there may be the same number of hands; but there is not the same quantity of labour, nor of the same kind. All the labour is there bestowed upon necessaries, which can admit of little or no abatement.

Thus the greatness of the sovereign and the happiness of the state are, in a great measure, united with regard to trade and manufactures. It is a violent method, and in most cases impracticable, to oblige the labourer to toil in order to raise from the land more than what subsists himself and family. Furnish him with manufactures and commodities, and he will do it of himself. Afterwards you will find it easy to seize some part of his superfluous labour, and employ it in the public service, without giving him his wonted return. Being accustomed to industry, he will think this less grievous than if, at once, you obliged him to an augmentation of labour without any reward. The case is the same with regard to the other members of the state. The greater is the stock of labour of all kinds, the greater quantity may be taken from the heap without making any sensible alteration upon it.

A public granary of corn, a storehouse of cloth, a magazine of arms; all these must be allowed real riches and strength in any state. Trade and industry are really nothing but a stock of labour, which, in time of peace and tranquillity, is employed for the ease and satisfaction of individuals; but in the exigencies of state, may, in part, be turned to public advantage. Could we convert a city into a kind of fortified {p10} camp, and infuse into each breast so martial a genius, and such a passion for public good, as to make every one willing to undergo the greatest hardships for the sake of the public, these affections might now, as in ancient times, prove alone a sufficient spur to industry, and support the community. It would then be advantageous, as in camps, to banish all arts and luxury; and, by restrictions on equipage and tables, make the provisions and forage last longer than if the army were loaded with a number of superfluous retainers. But as these principles are too disinterested and too difficult to support, it is requisite to govern men by other passions, and animate them with a spirit of avarice and industry, art and luxury. The camp is, in this case, loaded with a superfluous retinue; but the provisions flow in proportionately larger. The harmony of the whole is still supported, and the natural bent of the mind being more complied with, individuals, as well as the public, find their account in the observance of those maxims.

The same method of reasoning will let us see the advantage of foreign commerce, in augmenting the power of the state, as well as the riches and happiness of the subjects. It increases the stock of labour in the nation, and the sovereign may convert what share of it he finds necessary to the service of the public. Foreign trade, by its imports, furnishes materials for new manufactures; and by its exports, it produces labour in particular commodities which could not be consumed at home. In short, a kingdom that has a large import and export must abound more with industry, and that employed upon delicacies and luxuries, than a kingdom which rests contented with its native commodities. It is, therefore, more powerful, as well as richer and happier. The individuals reap the benefit of these commodities, so far as they gratify the senses and appetites. And the public is also a gainer, while a greater stock of labour is, by this means, stored up against any public exigency; that is, a greater number of laborious men are maintained, who may be diverted to the public service {p11} without robbing any one of the necessaries or even the chief conveniences of life.

If we consult history, we shall find that in most nations foreign trade has preceded any refinement in home manufactures, and given birth to domestic luxury. The temptation is stronger to make use of foreign commodities, which are ready for use, and which are entirely new to us, than to make improvements on any domestic commodity, which always advance by slow degrees, and never affect us by their novelty. The profit is also very great in exporting what is superfluous at home, and what bears no price, to foreign nations, whose soil or climate is not favourable to that commodity. Thus men become acquainted with the pleasures of luxury and the profits of commerce; and their delicacy and industry, being once awakened, carry them to farther improvements in every branch of domestic as well as foreign trade. And this perhaps is the chief advantage which arises from a commerce with strangers. It rouses men from their indolence; and presenting the gayer and more opulent part of the nation with objects of luxury, which they never before dreamed of, raises in them a desire of a more splendid way of life than what their ancestors enjoyed; and at the same time the few merchants who possess the secret of this importation and exportation make exorbitant profits, and becoming rivals in wealth to the ancient nobility, tempt other adventurers to become their rivals in commerce. Imitation soon diffuses all those arts; while domestic manufacturers emulate the foreign in their improvements, and work up every home commodity to the utmost perfection of which it is susceptible. Their own steel and iron, in such laborious hands, becomes equal to the gold and rubies of the Indies.

When the affairs of the society are once brought to this situation, a nation may lose most of its foreign trade, and yet continue a great and powerful people. If strangers will not take any particular commodity of ours, we must cease to labour in it. The same hands will turn themselves towards some refinement in other commodities which may be {p12} wanted at home. And there must always be materials for them to work upon; till every person in the state, who possesses riches, enjoys as great plenty of home commodities, and those in as great perfection, as he desires; which can never possibly happen. China is represented as one of the most flourishing empires in the world, though it has very little commerce beyond its own territories.

It will not, I hope, be considered as a superfluous digression, if I here observe, that as the multitude of mechanical arts is advantageous, so is the great number of persons to whose share the productions of these arts fall. A too great disproportion among the citizens weakens any state. Every person, if possible, ought to enjoy the fruits of his labour, in a full possession of all the necessaries, and many of the conveniences of life. No one can doubt but such an equality is most suitable to human nature, and diminishes much less from the happiness of the rich than it adds to that of the poor. It also augments the power of the state, and makes any extraordinary taxes or impositions be paid with much more cheerfulness. Where the riches are engrossed by a few, these must contribute very largely to the supplying the public necessities. But when the riches are dispersed among multitudes, the burden feels light on every shoulder, and the taxes make not a very sensible difference on any one’s way of living.

Add to this, that where the riches are in few hands these must enjoy all the power, and will readily conspire to lay the whole burden on the poor, and oppress them still farther, to the discouragement of all industry.

In this circumstance consists the great advantage of England above any nation at present in the world, or that appears in the records of story. It is true, the English feel some disadvantages in foreign trade by the high price of labour, which is in part the effect of the riches of their artisans, as well as of the plenty of money; but as foreign trade is not the most material circumstance, it is not to be put in competition with the happiness of so many millions. And if there were no more to endear to them that free {p13} government under which they live, this alone were sufficient. The poverty of the common people is a natural, if not an infallible effect of absolute monarchy; though I doubt whether it be always true, on the other hand, that their riches are an infallible result of liberty. Liberty must be attended with particular accidents, and a certain turn of thinking, in order to produce that effect. Lord Bacon, accounting for the great advantages obtained by the English in their wars with France, ascribes them chiefly to the superior ease and plenty of the common people amongst the former; yet the governments of the two kingdoms were, at that time, pretty much alike. Where the labourers and artisans are accustomed to work for low wages, and to retain but a small part of the fruits of their labour, it is difficult for them, even in a free government, to better their condition, or conspire among themselves to heighten their wages. But even where they are accustomed to a more plentiful way of life, it is easy for the rich, in a despotic government, to conspire against them, and throw the whole burden of the taxes on their shoulders.

It may seem an odd position, that the poverty of the common people in France, Italy, and Spain is, in some measure, owing to the superior riches of the soil and happiness of the climate; and yet there want not many reasons to justify this paradox. In such a fine mould or soil as that of those more southern regions, agriculture is an easy art; and one man, with a couple of sorry horses, will be able, in a season, to cultivate as much land as will pay a pretty considerable rent to the proprietor. All the art, which the farmer knows, is to leave his ground fallow for a year, so soon as it is exhausted; and the warmth of the sun alone and temperature of the climate enrich it, and restore its fertility. Such poor peasants, therefore, require only a simple maintenance for their labour. They have no stock nor riches, which claim more; and at the same time, they are for ever dependent on their landlord, who gives no leases, nor fears that his land will be spoiled by the ill methods of cultivation. In England, the land is rich, but {p14} coarse; must be cultivated at a great expense; and produces slender crops, when not carefully managed, and by a method which gives not the full profit but in a course of several years. A farmer, therefore, in England must have a considerable stock and a long lease; which beget proportional profits. The fine vineyards of Champagne and Burgundy, that oft yield to the landlord above five pounds per acre, are cultivated by peasants who have scarce bread; and the reason is, that such peasants need no stock but their own limbs, with instruments of husbandry which they can buy for twenty shillings. The farmers are commonly in some better circumstances in those countries; but the graziers are most at their ease of all those who cultivate the land. The reason is still the same. Men must have profits proportionable to their expense and hazard. Where so considerable a number of labouring poor as the peasants and farmers are in very low circumstances, all the rest must partake of their poverty whether the government of that nation be monarchical or republican.

We may form a similar remark with regard to the general history of mankind. What is the reason why no people living between the tropics could ever yet attain to any art or civility, or reach even any police in their government, and any military discipline; while few nations in the temperate climates have been altogether deprived of these advantages? It is probable that one cause of this phenomenon is the warmth and equality of weather in the torrid zone, which render clothes and houses less requisite for the inhabitants, and thereby remove, in part, that necessity which is the great spur to industry and invention. Curis acuens mortalia corda. Not to mention that the fewer goods or possessions of this kind any people enjoy, the fewer quarrels are likely to arise amongst them, and the less necessity will there be for a settled police or regular authority to protect and defend them from foreign enemies, or from each other.

NOTES, OF COMMERCE.

[7] Monsieur Melon, in his political essay on commerce, asserts that even at present, if you divide France into twenty parts, sixteen are labourers or peasants, two only artisans, one belonging to the law, church, and military, and one merchants, financiers, and bourgeois. This calculation is certainly very erroneous. In France, England, and indeed most parts of Europe, half of the inhabitants live in cities; and even of those who live in the country, a very great number are artisans, perhaps above a third.

[8] Diod. Sic., lib. 2. This account, I own, is somewhat suspicious, not to say worse, chiefly because this army was not composed of citizens, but of mercenary forces.

[9] The more ancient Romans lived in perpetual war with all their neighbours; and in old Latin the term “hostis” expressed both a stranger and an enemy. This is remarked by Cicero; but by him is ascribed to the humanity of his ancestors, who softened, as much as possible, the denomination of an enemy by calling him by the same appellation which signified a stranger. (De Off., lib. 2.) It is, however, much more probable, from the manners of the times, that the ferocity of those people was so great as to make them regard all strangers as enemies, and call them by the same name. It is not, besides, consistent with the most common maxims of policy or of nature that any state should regard its public enemies with a friendly eye, or preserve any such sentiments for them as the Roman orator would ascribe to his ancestors. Not to mention that the early Romans really exercised piracy, as we learn from their first treaties with Carthage, preserved by Polybius, lib. 3, and consequently, like the Sallee and Algerine rovers, were actually at war with most nations, and a stranger and an enemy were with them almost synonymous.

OF REFINEMENT IN THE ARTS.

Luxury is a word of a very uncertain signification, and may be taken in a good as well as in a bad sense. In general, it means great refinement in the gratification of the senses, and any degree of it may be innocent or blameable, according to the age, or country, or condition of the person. The bounds between the virtue and the vice cannot here be fixed exactly, more than in other moral subjects. To imagine that the gratifying any of the senses, or the indulging any delicacy in meats, drinks, or apparel, is in itself a vice, can never enter into a head that is not disordered by the frenzies of enthusiasm. I have, indeed, heard of a monk abroad who, because the windows of his cell opened upon a very noble prospect, made a covenant with his eyes never to turn that way, or receive so sensual a gratification. And such is the crime of drinking champagne or burgundy, preferably to small beer or porter. These indulgences are only vices when they are pursued at the expense of some virtue, as liberality or charity; in like manner as they are follies when for them a man ruins his fortune, and reduces himself to want and beggary. Where they entrench upon no virtue, but leave ample subject whence to provide for friends, family, and every proper object of generosity or compassion, they are entirely innocent, and have in every age been acknowledged such by almost all moralists. To be entirely occupied with the luxury of the table, for instance, without any relish for the pleasures of ambition, study, or conversation, is a mark of gross stupidity, and is incompatible with any vigour of temper or genius. To confine one’s expense entirely to such a gratification, without regard to friends or family, is an indication of a heart entirely devoid of humanity or benevolence. But if a man reserve time sufficient for all laudable pursuits, and money sufficient for all generous {p16} purposes, he is free from every shadow of blame or reproach.

Since luxury may be considered either as innocent or blameable, one may be surprised at those preposterous opinions which have been entertained concerning it; while men of libertine principles bestow praises even on vicious luxury, and represent it as highly advantageous to society; and on the other hand, men of severe morals blame even the most innocent luxury, and regard it as the source of all the corruptions, disorders, and factions incident to civil government. We shall here endeavour to correct both these extremes, by proving, first, that the ages of refinement are both the happiest and most virtuous; secondly, that wherever luxury ceases to be innocent, it also ceases to be beneficial; and when carried a degree too far, is a quality pernicious, though perhaps not the most pernicious, to political society.

To prove the first point, we need but consider the effects of refinement both on private and on public life. Human happiness, according to the most received notions, seems to consist in three ingredients: action, pleasure, and indolence; and though these ingredients ought to be mixed in different proportions, according to the particular dispositions of the person, yet no one ingredient can be entirely wanting without destroying, in some measure, the relish of the whole composition. Indolence or repose, indeed, seems not of itself to contribute much to our enjoyment; but, like sleep, is requisite as an indulgence to the weakness of human nature, which cannot support an uninterrupted course of business or pleasure. That quick march of the spirits which takes a man from himself, and chiefly gives satisfaction, does in the end exhaust the mind, and requires some intervals of repose, which, though agreeable for a moment, yet, if prolonged, beget a languor and lethargy that destroy all enjoyment. Education, custom, and example have a mighty influence in turning the mind to any of these pursuits; and it must be owned, that where they promote a relish for action and pleasure, they are so far favourable {p17} to human happiness. In times when industry and arts flourish, men are kept in perpetual occupation, and enjoy, as their reward, the occupation itself, as well as those pleasures which are the fruits of their labour. The mind acquires new vigour; enlarges its powers and faculties; and by an assiduity in honest industry, both satisfies its natural appetites and prevents the growth of unnatural ones, which commonly spring up when nourished with ease and idleness. Banish those arts from society, you deprive men both of action and of pleasure; and leaving nothing but indolence in their place, you even destroy the relish of indolence, which never is agreeable but when it succeeds to labour, and recruits the spirits, exhausted by too much application and fatigue.

Another advantage of industry and of refinements in the mechanical arts is that they commonly produce some refinements in the liberal; nor can the one be carried to perfection without being accompanied, in some degree, with the other. The same age which produces great philosophers and politicians, renowned generals and poets, usually abounds with skilful weavers and ship-carpenters. We cannot reasonably expect that a piece of woollen cloth will be wrought to perfection in a nation which is ignorant of astronomy, or where ethics are neglected. The spirit of the age affects all the arts; and the minds of men, being once roused from their lethargy and put into a fermentation, turn themselves on all sides, and carry improvements into every art and science. Profound ignorance is totally banished, and men enjoy the privilege of rational creatures, to think as well as to act, to cultivate the pleasures of the mind as well as those of the body.

The more these refined arts advance, the more sociable do men become; nor is it possible that, when enriched with science and possessed of a fund of conversation, they should be contented to remain in solitude, or live with their fellow-citizens in that distant manner which is peculiar to ignorant and barbarous nations. They flock into cities; love to receive and communicate knowledge; to show their {p18} wit or their breeding; their taste in conversation or living, in clothes or furniture. Curiosity allures the wise; vanity the foolish; and pleasure both. Particular clubs and societies are everywhere formed, both sexes meet in an easy and sociable manner, and the tempers of men, as well as their behaviour, refine apace. So that, besides the improvements which they receive from knowledge and the liberal arts, it is impossible but they must feel an increase of humanity from the very habit of conversing together and contributing to each other’s pleasure and entertainment. Thus industry, knowledge, and humanity are linked together by an indissoluble chain, and are found, from experience as well as reason, to be peculiar to the more polished, and, what are commonly denominated, the more luxurious ages.

Nor are these advantages attended with disadvantages which bear any proportion to them. The more men refine upon pleasure the less will they indulge in excesses of any kind, because nothing is more destructive to true pleasure than such excesses. One may safely affirm that the Tartars are oftener guilty of beastly gluttony when they feast on their dead horses than European courtiers with all their refinements of cookery. And if libertine love, or even infidelity to the marriage-bed, be more frequent in polite ages, when it is often regarded only as a piece of gallantry, drunkenness, on the other hand, is much less common—a vice more odious and more pernicious both to mind and body. And in this matter I would appeal not only to an Ovid or a Petronius, but to a Seneca or a Cato. We know that Cæsar, during Catiline’s conspiracy, being necessitated to put into Cato’s hands a billet-doux which discovered an intrigue with Servilia, Cato’s own sister, that stern philosopher threw it back to him with indignation, and, in the bitterness of his wrath, gave him the appellation of drunkard, as a term more opprobrious than that with which he could more justly have reproached him.

But industry, knowledge, and humanity are not advantageous in private life alone; they diffuse their beneficial {p19} influence on the public, and render the government as great and flourishing as they make individuals happy and prosperous. The increase and consumption of all the commodities which serve to the ornament and pleasure of life are advantageous to society, because at the same time that they multiply those innocent gratifications to individuals, they are a kind of storehouse of labour, which, in the exigencies of state, may be turned to the public service. In a nation where there is no demand for such superfluities men sink into indolence, lose all the enjoyment of life, and are useless to the public, which cannot maintain nor support its fleets and armies from the industries of such slothful members.

The bounds of all the European kingdoms are at present pretty near the same they were two hundred years ago; but what a difference is there in the power and grandeur of those kingdoms! Which can be ascribed to nothing but the increase of art and industry. When Charles VIII. of France invaded Italy, he carried with him about 20,000 men; and yet this armament so exhausted the nation, as we learn from Guicciardin, that for some years it was not able to make so great an effort. The late King of France, in time of war, kept in pay above 400,000 men,​[10] though from Mazarin’s death to his own he was engaged in a course of wars that lasted near thirty years.

This industry is much promoted by the knowledge inseparable from the ages of art and refinement; as, on the other hand, this knowledge enables the public to make the best advantage of the industry of its subjects. Laws, order, police, discipline—these can never be carried to any degree of perfection before human reason has refined itself by exercise, and by an application to the more vulgar arts, at least, of commerce and manufactures. Can we expect that a government will be well modelled by a people who know not how to make a spinning-wheel, or to employ a loom to advantage? Not to mention that all ignorant ages {p20} are infested with superstition, which throws the government off its bias, and disturbs men in the pursuit of their interest and happiness.

Knowledge in the arts of government naturally begets mildness and moderation, by instructing men in the advantages of humane maxims above rigour and severity, which drive subjects into rebellion, and render the return to submission impracticable, by cutting off all hopes of pardon. When the tempers of men are softened as well as their knowledge improved, this humanity appears still more conspicuous, and is the chief characteristic which distinguishes a civilized age from times of barbarity and ignorance. Factions are then less inveterate, revolutions less tragical, authority less severe, and seditions less frequent. Even foreign wars abate of their cruelty; and after the field of battle, where honour and interest steel men against compassion as well as fear, the combatants divest themselves of the brute, and resume the man.

Nor need we fear that men, by losing their ferocity, will lose their martial spirit, or become less undaunted and vigorous in defence of their country or their liberty. The arts have no such effect in enervating either the mind or body. On the contrary, industry, their inseparable attendant, adds new force to both. And if anger, which is said to be the whetstone of courage, loses somewhat of its asperity by politeness and refinement, a sense of honour, which is a stronger, more constant, and more governable principle, acquires fresh vigour by that elevation of genius which arises from knowledge and a good education. Add to this that courage can neither have any duration nor be of any use when not accompanied with discipline and martial skill, which are seldom found among a barbarous people. The ancients remarked that Datames was the only barbarian that ever knew the art of war. And Pyrrhus, seeing the Romans marshal their army with some art and skill, said with surprise, “These barbarians have nothing barbarous in their discipline!” It is observable that as the old Romans, by applying themselves solely to war, were the {p21} only uncivilized people that ever possessed military discipline, so the Italians are the only civilized people among Europeans that ever wanted courage and a martial spirit. Those who would ascribe this effeminacy of the Italians to their luxury or politeness, or application to the arts, need but consider the French and English, whose bravery is as incontestable as their love for luxury and their assiduity in commerce. The Italian historians give us a more satisfactory reason for this degeneracy of their countrymen. They show us how the sword was dropped at once by all the Italian sovereigns; while the Venetian aristocracy was jealous of its subjects, the Florentine democracy applied itself entirely to commerce; Rome was governed by priests, and Naples by women. War then became the business of soldiers of fortune, who spared one another, and, to the astonishment of the world, could engage a whole day in what they called a battle, and return at night to their camp without the least bloodshed.

What has chiefly induced severe moralists to declaim against refinement in the arts is the example of ancient Rome, which, joining to its poverty and rusticity, virtue and public spirit, rose to such a surprising height of grandeur and liberty; but having learned from its conquered provinces the Asiatic luxury, fell into every kind of corruption, whence arose sedition and civil wars, attended at last with the total loss of liberty. All the Latin classics, whom we peruse in our infancy, are full of these sentiments, and universally ascribe the ruin of their state to the arts and riches imported from the East: insomuch that Sallust represents a taste for painting as a vice no less than lewdness and drinking. And so popular were these sentiments during the latter ages of the republic, that this author abounds in praises of the old rigid Roman virtue, though himself the most egregious instance of modern luxury and corruption; speaks contemptuously of the Grecian eloquence, though the most eloquent writer in the world; nay, employs preposterous digressions and declamations to this purpose, though a model of taste and correctness. {p22}

But it would be easy to prove that these writers mistook the cause of the disorders in the Roman state, and ascribed to luxury and the arts what really proceeded from an ill-modelled government and the unlimited extent of conquests. Refinement on the pleasures and conveniences of life has no natural tendency to beget venality and corruption. The value which all men put upon any particular pleasure depends on comparison and experience; nor is a porter less greedy of money, which he spends on bacon and brandy, than a courtier, who purchases champagne and ortolans. Riches are valuable at all times, and to all men, because they always purchase pleasures such as men are accustomed to and desire; nor can anything restrain or regulate the love of money but a sense of honour and virtue, which, if it be not nearly equal at all times, will naturally abound most in ages of knowledge and refinement.

Of all European kingdoms, Poland seems the most defective in the arts of war, as well as peace, mechanical as well as liberal; and yet it is there that venality and corruption do most prevail. The nobles seem to have preserved their crown elective for no other purpose but regularly to sell it to the highest bidder; this is almost the only species of commerce with which that people are acquainted.

The liberties of England, so far from decaying since the improvements in the arts, have never flourished so much as during that period. And though corruption may seem to increase of late years, this is chiefly to be ascribed to our established liberty, when our princes have found the impossibility of governing without parliaments, or of terrifying parliaments by the phantom of prerogative. Not to mention that this corruption or venality prevails infinitely more among the electors than the elected, and therefore cannot justly be ascribed to any refinements in luxury.

If we consider the matter in a proper light, we shall find that improvements in the arts are rather favourable to liberty, and have a natural tendency to preserve, if not {p23} produce a free government. In rude, unpolished nations, where the arts are neglected, all the labour is bestowed on the cultivation of the ground; and the whole society is divided into two classes—proprietors of land and their vassals or tenants. The latter are necessarily dependent, and fitted for slavery and subjection; especially where they possess no riches, and are not valued for their knowledge in agriculture, as must always be the case where the arts are neglected. The former naturally erect themselves into petty tyrants, and must either submit to an absolute master for the sake of peace and order, or if they will preserve their independency, like the ancient barons, they must fall into feuds and contests among themselves, and throw the whole society into such confusion as is perhaps worse than the most despotic government. But where luxury nourishes commerce and industry, the peasants, by a proper cultivation of the land, become rich and independent; while the tradesmen and merchants acquire a share of the property, and draw authority and consideration to that middling rank of men, who are the best and firmest basis of public liberty. These submit not to slavery, like the poor peasants, from poverty and meanness of spirit; and having no hopes of tyrannizing over others, like the barons, they are not tempted, for the sake of that gratification, to submit to the tyranny of their sovereign. They covet equal laws, which may secure their property, and preserve them from monarchical as well as aristocratical tyranny.

The House of Commons is the support of our popular government, and all the world acknowledges that it owed its chief influence and consideration to the increase of commerce, which threw such a balance of property into the hands of the commons. How inconsistent then is it to blame so violently a refinement in the arts, and to represent it as the bane of liberty and public spirit!

To declaim against present times, and magnify the virtue of remote ancestors, is a propensity almost inherent in human nature: and as the sentiments and opinions of civilized ages alone are transmitted to posterity, hence it is {p24} that we meet with so many severe judgments pronounced against luxury, and even science; and hence it is that at present we give so ready an assent to them. But the fallacy is easily perceived from comparing different nations that are contemporaries, where we both judge more impartially and can better set in opposition those manners with which we are sufficiently acquainted. Treachery and cruelty, the most pernicious and most odious of all vices, seem peculiar to uncivilized ages; and by the refined Greeks and Romans were ascribed to all the barbarous nations which surrounded them. They might justly, therefore, have presumed that their own ancestors, so highly celebrated, possessed no greater virtue, and were as much inferior to their posterity in honour and humanity as in taste and science. An ancient Frank or Saxon may be highly extolled; but I believe every man would think his life or fortune much less secure in the hands of a Moor or Tartar than in those of a French or English gentleman, the rank of men the most civilized in the most civilized nations.

We come now to the second position which we proposed to illustrate—viz., that as innocent luxury, or a refinement in the arts and conveniences of life, is advantageous to the public, so, wherever luxury ceases to be innocent, it also ceases to be beneficial; and when carried a degree farther, begins to be a quality pernicious, though perhaps not the most pernicious, to political society.

Let us consider what we call vicious luxury. No gratification, however sensual, can of itself be esteemed vicious. A gratification is only vicious when it engrosses all a man’s expense, and leaves no ability for such acts of duty and generosity as are required by his situation and fortune. Suppose that he correct the vice, and employ part of his expense in the education of his children, in the support of his friends, and in relieving the poor, would any prejudice result to society? On the contrary, the same consumption would arise, and that labour which at present is employed only in producing a slender gratification to one man, would relieve the necessitous, and bestow satisfaction on hundreds. {p25} The same care and toil which raise a dish of peas at Christmas would give bread to a whole family during six months. To say that, without a vicious luxury, the labour would not have been employed at all, is only to say that there is some other defect in human nature, such as indolence, selfishness, inattention to others, for which luxury in some measure provides a remedy, as one poison may be an antidote to another. But virtue, like wholesome food, is better than poisons, however corrected.

Suppose the same number of men that are at present in Britain, with the same soil and climate: I ask, is it not possible for them to be happier, by the most perfect way of life which can be imagined, and by the greatest reformation which Omnipotence itself could work in their temper and disposition? To assert that they cannot appears evidently ridiculous. As the land is able to maintain more than all its inhabitants, they could never, in such a Utopian state, feel any other ills than those which arise from bodily sickness; and these are not the half of human miseries. All other ills spring from some vice, either in ourselves or others; and even many of our diseases proceed from the same origin. Remove the vices, and the ills follow. You must only take care to remove all the vices. If you remove part, you may render the matter worse. By banishing vicious luxury, without curing sloth and an indifference to others, you only diminish industry in the state, and add nothing to men’s charity or their generosity. Let us, therefore, rest contented with asserting that two opposite vices in a state may be more advantageous than either of them alone; but let us never pronounce vice in itself advantageous. Is it not very inconsistent for an author to assert in one page that moral distinctions are inventions of politicians for public interest, and in the next page maintain that vice is advantageous to the public?​[11] And indeed it seems, upon any system of morality, little less than a contradiction in terms to talk of a vice which is in general beneficial to society. {p26}

Prodigality is not to be confounded with a refinement in the arts. It even appears that that vice is much less frequent in the cultivated ages. Industry and gain beget frugality, among the lower and middle ranks of men, and in all the busy professions. Men of high rank, indeed, it may be pretended, are more allured by the pleasures, which become more frequent. But idleness is the great source of prodigality at all times, and there are pleasures and vanities in every age, which allure men equally when they are unacquainted with better enjoyments. Not to mention that the high interest paid in rude times quickly consumes the fortunes of the landed gentry, and multiplies their necessities.

I thought this reasoning necessary in order to give some light to a philosophical question which has been much disputed in Britain. I call it a philosophical question, not a political one; for whatever may be the consequence of such a miraculous transformation of mankind as would endow them with every species of virtue and free them from every species of vice, this concerns not the magistrate, who aims only at possibilities. He cannot cure every vice by substituting a virtue in its place. Very often he can only cure one vice by another, and in that case he ought to prefer what is least pernicious to society. Luxury, when excessive, is the source of many ills; but it is in general preferable to sloth and idleness, which would commonly succeed in its place, and are more pernicious both to private persons and to the public. When sloth reigns, a mean, uncultivated way of life prevails amongst individuals, without society, without enjoyment. And if the sovereign, in such a situation, demands the service of his subjects, the labour of the state suffices only to furnish the necessaries of life to the labourers, and can afford nothing to those who are employed in the public service.

NOTES, OF REFINEMENT IN THE ARTS.

[10] The inscription on the Place de Vendôme says 440,000.

[11] Fable of the Bees.

OF MONEY.

Money is not, properly speaking, one of the subjects of commerce, but only the instrument which men have agreed upon to facilitate the exchange of one commodity for another. It is none of the wheels of trade; it is the oil which renders the motion of the wheels more smooth and easy. If we consider any one kingdom by itself, it is evident that the greater or less plenty of money is of no consequence, since the prices of commodities are always proportioned to the plenty of money, and a crown in Henry VII.’s time served the same purpose as a pound does at present. It is only the public which draws any advantage from the greater plenty of money, and that only in its wars and negotiations with foreign states. And this is the reason why all rich and trading countries, from Carthage to Britain and Holland, have employed mercenary troops, which they hired from their poorer neighbours. Were they to make use of their native subjects, they would find less advantage from their superior riches, and from their great plenty of gold and silver, since the pay of all their servants must rise in proportion to the public opulence. Our small army in Britain of 20,000 men is maintained at as great expense as a French army thrice as numerous. The English fleet, during the late war, required as much money to support it as all the Roman legions which kept the whole world in subjection during the time of the emperors.​[12] {p28}

The greater number of people and their greater industry are serviceable in all cases—at home and abroad, in private and in public. But the greater plenty of money is very limited in its use, and may even sometimes be a loss to a nation in its commerce with foreigners.

There seems to be a happy concurrence of causes in human affairs which checks the growth of trade and riches, and hinders them from being confined entirely to one people, as might naturally at first be dreaded from the advantages of an established commerce. Where one nation has got the start of another in trade it is very difficult for the latter to regain the ground it has lost, because of the superior industry and skill of the former, and the greater stocks of which its merchants are possessed, and which enable them to trade for so much smaller profits. But these advantages are compensated, in some measure, by the low price of labour in every nation which has not an extensive commerce, and does not very much abound in gold and silver. Manufactures, therefore, gradually shift their places, leaving those countries and provinces which they have already enriched, and flying to others, whither they are allured by the cheapness of provisions and labour, till they have enriched these also and are again banished by the same causes. And, in general, we may observe that the dearness of everything, from plenty of money, is a disadvantage which attends an established commerce, and sets bounds to it in every country by enabling the poorer states to under-sell the richer in all foreign markets. {p29}

This has made me entertain a great doubt concerning the benefit of banks and paper-credit, which are so generally esteemed advantageous to every nation. That provisions and labour should become dear by the increase of trade and money is, in many respects, an inconvenience; but an inconvenience that is unavoidable, and the effect of that public wealth and prosperity which are the end of all our wishes. It is compensated by the advantages which we reap from the possession of these precious metals, and the weight which they give the nation in all foreign wars and negotiations. But there appears no reason for increasing that inconvenience by a counterfeit money, which foreigners will not accept in any payment, and which any great disorder in the state will reduce to nothing. There are, it is true, many people in every rich state who, having large sums of money, would prefer paper with good security, as being of more easy transport and more safe custody. If the public provide not a bank, private bankers will take advantage of this circumstance; as the goldsmiths formerly did in London, or as the bankers do at present in Dublin; and therefore it is better, it may be thought, that a public company should enjoy the benefit of the paper-credit which always will have place in every opulent kingdom. But to endeavour artificially to increase such a credit can never be the interest of any trading nation; but must lay them under disadvantages, by increasing money beyond its natural proportion to labour and commodities, and thereby heightening their price to the merchant and manufacturer. And in this view, it must be allowed that no bank could be more advantageous than such a one as locked up all the money it received,​[13] and never augmented the circulating coin, as is usual, by returning part of its treasure into commerce. A public bank by this expedient might cut off much of the dealings of private bankers and money-jobbers; and though the state bore the charge of salaries to the directors and tellers of this bank (for, according to the preceding {p30} supposition, it would have no profit from its dealings), the national advantage, resulting from the low price of labour and the destruction of paper-credit, would be a sufficient compensation. Not to mention that so large a sum, lying ready at command, would be a great convenience in times of public danger and distress; and what part of it was used might be replaced at leisure, when peace and tranquillity were restored to the nation.

But of this subject of paper-credit we shall treat more largely hereafter, and I shall finish this essay on money by proposing and explaining two observations, which may perhaps serve to employ the thoughts of our speculative politicians, for to these only I all along address myself. It is enough that I submit to the ridicule sometimes in this age attached to the character of a philosopher, without adding to it that which belongs to a projector.

It was a shrewd observation of Anacharsis the Scythian, who had never seen money in his own country, that gold and silver seemed to him of no use to the Greeks but to assist them in numeration and arithmetic. It is indeed evident that money is nothing but the representation of labour and commodities, and serves only as a method of rating or estimating them. Where coin is in greater plenty, as a greater quantity of it is required to represent the same quantity of goods, it can have no effect, either good or bad, taking a nation within itself; no more than it would make any alteration on a merchant’s books if, instead of the Arabian method of notation, which requires few characters, he should make use of the Roman, which requires a great many. Nay, the greater quantity of money, like the Roman characters, is rather inconvenient, and requires greater trouble both to keep and transport it. But notwithstanding this conclusion, which must be allowed just, it is certain that since the discovery of mines in America industry has increased in all the nations of Europe, except in the possessors of those mines; and this may justly be ascribed, amongst other reasons, to the increase of gold and silver. Accordingly, we find that in every kingdom into which {p31} money begins to flow in greater abundance than formerly everything takes a new face; labour and industry gain life, the merchant becomes more enterprising, the manufacturer more diligent and skilful, and even the farmer follows his plough with greater alacrity and attention. This is not easily to be accounted for, if we consider only the influence which a greater abundance of coin has in the kingdom itself, by heightening the price of commodities, and obliging every one to pay a greater number of these little yellow or white pieces for everything he purchases. And as to foreign trade, it appears that great plenty of money is rather disadvantageous, by raising the price of every kind of labour.

To account, then, for this phenomenon, we must consider that though the high price of commodities be a necessary consequence of the increase of gold and silver, yet it follows not immediately upon that increase; but some time is required before the money circulates through the whole state, and makes its effects be felt on all ranks of people. At first, no alteration is perceived; by degrees the price rises, first of one commodity then of another, till the whole at last reaches a just proportion with the new quantity of specie which is in the kingdom. In my opinion, it is only in this interval or intermediate situation, between the acquisition of money and rise of prices, that the increasing quantity of gold and silver is favourable to industry. When any quantity of money is imported into a nation, it is not at first dispersed into many hands, but is confined to the coffers of a few persons, who immediately seek to employ it to the best advantage. Here are a set of manufacturers or merchants, we shall suppose, who have received returns of gold and silver for goods which they sent to Cadiz. They are thereby enabled to employ more workmen than formerly, who never dream of demanding higher wages, but are glad of employment from such good paymasters. If workmen become scarce, the manufacturer gives higher wages, but at first requires an increase of labour; and this is willingly submitted to by the artisan, {p32} who can now eat and drink better, to compensate his additional toil and fatigue. He carries his money to market, where he finds everything at the same price as formerly, but returns with greater quantity and of better kinds, for the use of his family. The farmer and gardener, finding that all commodities are taken off, apply themselves with alacrity to the raising more; and at the same time can afford to take better and more clothes from their tradesmen, whose price is the same as formerly, and their industry only whetted by so much new gain. It is easy to trace the money in its progress through the whole commonwealth; where we shall find that it must first quicken the diligence of every individual, before it increase the price of labour.

And that the specie may increase to a considerable pitch before it have this latter effect appears, amongst other instances, from the frequent operations of the French king on the money; where it was always found that the augmenting the numerary value did not produce a proportional rise of the prices, at least for some time. In the last year of Louis XIV. money was raised three-sevenths, but prices augmented only one. Corn in France is now sold at the same price, or for the same number of livres it was in 1683; though silver was then at thirty livres the mark, and is now at fifty;​[14] not to mention the great addition of gold and {p33} silver which may have come into that kingdom since the former period.

From the whole of this reasoning we may conclude that it is of no manner of consequence, with regard to the domestic happiness of a state, whether money be in a greater or less quantity. The good policy of the magistrate consists only in keeping it, if possible, still increasing; because, by that means, he keeps alive a spirit of industry in the nation, and increases the stock of labour, in which consists all real power and riches. A nation whose money decreases is actually, at that time, much weaker and more miserable than another nation which possesses no more money but is on the increasing hand. This will be easily accounted for if we consider that the alterations in the quantity of money, either on the one side or the other, are not immediately attended with proportionable alterations in the prices of commodities. There is always an interval before matters be adjusted to their new situation, and this interval is as pernicious to industry when gold and silver are diminishing as it is advantageous when these metals are increasing. The workman has not the same employment from the manufacturer and merchant, though he pays the same price for everything in the market; the farmer cannot dispose of his corn and cattle, though he must pay the same rent to his landlord. The poverty, and beggary, and sloth which must ensue are easily foreseen.

The second observation which I proposed to make with regard to money may be explained after the following manner. There are some kingdoms, and many provinces in Europe (and all of them were once in the same condition), where money is so scarce that the landlord can get {p34} none at all from his tenants, but is obliged to take his rent in kind, and either to consume it himself, or transport it to places where he may find a market. In those countries the prince can levy few or no taxes but in the same manner; and as he will receive very small benefit from impositions so paid, it is evident that such a kingdom has very little force even at home, and cannot maintain fleets and armies to the same extent as if every part of it abounded in gold and silver.​[15] There is surely a greater disproportion betwixt the force of Germany at present and what it was three centuries ago, than there is in its industry, people, and manufactures. The Austrian dominions in the empire are in general well peopled and well cultivated, and are of great extent, but have not a proportionable weight in the balance of Europe; proceeding, as is commonly supposed, from the scarcity of money. How do all these facts agree with that principle of reason, that the quantity of gold and silver is in itself altogether indifferent? According to that principle, wherever a sovereign has numbers of subjects, and these have plenty of commodities, he should of course be great and powerful, and they rich and happy, independent of the greater or lesser abundance of the precious metals. These admit of divisions and subdivisions to a great extent; and where they would become so small as to be in danger of being lost, it is easy to mix them with a baser metal, as is practised in some countries of Europe, and by that means raise them to a bulk more sensible and convenient. They still serve the same purposes of exchange, whatever their number may be, or whatever colour they may be supposed to have.

To these difficulties, I answer that the effect here supposed to flow from scarcity of money really arises from the manners and customs of the inhabitants, and that we mistake, as is too usual, a collateral effect for a cause. The {p35} contradiction is only apparent, but it requires some thought and reflection to discover the principles by which we can reconcile reason to experience.

It seems a maxim almost self-evident that the prices of everything depend on the proportion between commodities and money, and that any considerable alteration on either of these has the same effect, either of heightening or lowering the prices. Increase the commodities, they become cheaper; increase the money, they rise in their value. As, on the other hand, a diminution of the former and that of the latter have contrary tendencies.

It is also evident that the prices do not so much depend on the absolute quantity of commodities and that of money which are in a nation, as in that of the commodities which come or may come to market, and of the money which circulates. If the coin be locked up in chests, it is the same thing with regard to prices as if it were annihilated; if the commodities be hoarded in granaries, a like effect follows. As the money and commodities, in these cases, never meet, they cannot affect each other. Were we, at any time, to form conjectures concerning the price of provisions, the corn which the farmer must reserve for the maintenance of himself and family ought never to enter into the estimation. It is only the overplus, compared to the demand, that determines the value.

To apply these principles, we must consider that in the first and more uncultivated ages of any state, ere fancy has confounded her wants with those of nature, men, contented with the productions of their own fields, or with those rude preparations which they themselves can work upon them, have little occasion for exchange, or at least for money, which, by agreement, is the common measure of exchange. The wool of the farmer’s own flock, spun in his own family, and wrought by a neighbouring weaver, who receives his payment in corn or wool, suffices for furniture or clothing. The carpenter, the smith, the mason, the tailor are retained by wages of a like nature; and the landlord himself, dwelling in the neighbourhood, is contented to receive his rent in {p36} the commodities raised by the farmer. The greatest part of these he consumes at home, in rustic hospitality; the rest, perhaps, he disposes of for money to the neighbouring town, whence he draws the few materials of his expense and luxury.

But after men begin to refine on all these enjoyments, and live not always at home, nor are contented with what can be raised in their neighbourhood, there is more exchange and commerce of all kinds, and more money enters into that exchange. The tradesmen will not be paid in corn, because they want something more than barley to eat. The farmer goes beyond his own parish for the commodities he purchases, and cannot always carry his commodities to the merchant who supplies him. The landlord lives in the capital, or in a foreign country, and demands his rent in gold and silver, which can easily be transported to him. Great undertakers, and manufacturers, and merchants arise in every commodity; and these can conveniently deal in nothing but in specie. And consequently, in this situation of society, the coin enters into many more contracts, and by that means is much more employed than in the former.

The necessary effect is, that, provided the money does not increase in the nation, everything must become much cheaper in times of industry and refinement than in rude, uncultivated ages. It is the proportion between the circulating money and the commodities in the market which determines the prices. Goods that are consumed at home, or exchanged with other goods in the neighbourhood, never come to market; they affect not in the least the current specie; with regard to it they are as if totally annihilated; and consequently this method of using them sinks the proportion on the side of the commodities and increases the prices. But after money enters into all contracts and sales, and is everywhere the measure of exchange, the same national cash has a much greater task to perform: all commodities are then in the market; the sphere of circulation is enlarged; it is the same case as if that individual sum were to serve a larger kingdom; and therefore, the {p37} proportion being here lessened on the side of the money, everything must become cheaper, and the prices gradually fall.

By the most exact computations that have been formed all over Europe, after making allowance for the alteration in the numerary value or the denomination, it is found that the prices of all things have only risen three, or at most, four times, since the discovery of the West Indies. But will any one assert that there is not much more than four times the coin in Europe that was in the fifteenth century and the centuries preceding it? The Spaniards and Portuguese from their mines, the English, French, and Dutch by their African trade, and by their interlopers in the West Indies, bring home six millions a year, of which not above a third part goes to the East Indies. This sum alone in ten years would probably double the ancient stock of money in Europe. And no other satisfactory reason can be given why all prices have not risen to a much more exorbitant height, except that derived from a change of customs and manners. Besides that more commodities are produced by additional industry, the same commodities come more to market after men depart from their ancient simplicity of manners; and though this increase has not been equal to that of money, it has, however, been considerable, and has preserved the proportion between coin and commodities nearer the ancient standard.

Were the question proposed, Which of these methods of living in the people, the simple or refined, is most advantageous to the state or public? I should, without much scruple, prefer the latter, in a view to politics at least; and should produce this as an additional reason for the encouragement of trade and manufactures.

When men live in the ancient simple manner, and supply all their necessaries from domestic industry or from the neighbourhood, the sovereign can levy no taxes in money from a considerable part of his subjects; and if he will impose on them any burdens, he must take his payment in commodities, with which alone they abound—a method {p38} attended with such great and obvious inconveniences, that they need not here be insisted on. All the money he can pretend to raise must be from his principal cities, where alone it circulates; and these, it is evident, cannot afford him so much as the whole state could, did gold and silver circulate through the whole. But besides this obvious diminution of the revenue, there is also another cause of the poverty of the public in such a situation. Not only the sovereign receives less money, but the same money goes not so far as in times of industry and general commerce. Everything is dearer where the gold and silver are supposed equal, and that because fewer commodities come to market, and the whole coin bears a higher proportion to what is to be purchased by it, whence alone the prices of everything are fixed and determined.

Here then we may learn the fallacy of the remark, often to be met with in historians, and even in common conversation, that any particular state is weak, though fertile, populous, and well cultivated, merely because it wants money. It appears that the want of money can never injure any state within itself: for men and commodities are the real strength of any community. It is the simple manner of living which here hurts the public, by confining the gold and silver to few hands and preventing its universal diffusion and circulation. On the contrary, industry and refinements of all kinds incorporate it with the whole state, however small its quantity may be; they digest it into every vein, so to speak, and make it enter into every transaction and contract. No hand is entirely empty of it. And as the prices of everything fall by that means, the sovereign has a double advantage: he may draw money by his taxes from every part of the state, and what he receives goes farther in every purchase and payment.

We may infer, from a comparison of prices, that money is not more plentiful in China than it was in Europe three centuries ago; but what immense power is that empire possessed of, if we may judge by the civil and military list maintained by it! Polybius tells us that provisions were so {p39} cheap in Italy during his time that in some places the stated club​[16] at the inns was a semis a head, little more than a farthing! Yet the Roman power had even then subdued the whole known world. About a century before that period the Carthaginian ambassador said, by way of raillery, that no people lived more sociably amongst themselves than the Romans, for that in every entertainment which, as foreign ministers, they received they still observed the same plate at every table. The absolute quantity of the precious metals is a matter of great indifference. There are only two circumstances of any importance—viz., their gradual increase and their thorough concoction and circulation through the state; and the influence of both these circumstances has been here explained.

In the following essay we shall see an instance of a like fallacy as that above mentioned, where a collateral effect is taken for a cause, and where a consequence is ascribed to the plenty of money; though it be really owing to a change in the manners and customs of the people.

NOTES, OF MONEY.

[12] A private soldier in the Roman infantry had a denarius a day, somewhat less than eightpence. The Roman emperors had commonly 25 legions in pay, which, allowing 5000 men to a legion, makes 125,000. (Tacitus, Ann. lib. 4.) It is true there were also auxiliaries to the legions, but their numbers are uncertain as well as their pay. To consider only the legionaries, the pay of the private men could not exceed £1,600,000. Now, the Parliament in the last war commonly allowed for the fleet £2,500,000. We have therefore £900,000 over for the officers and other expenses of the Roman legions. There seem to have been but few officers in the Roman armies in comparison of what are employed in all our modern troops, except some Swiss corps. And these officers had very small pay: a centurion, for instance, only double a common soldier. And as the soldiers from their pay (Tacitus, Ann. lib. 1) bought their own clothes, arms, tents, and baggage, this must also diminish considerably the other charges of the army. So little expensive was that mighty Government, and so easy was its yoke over the world. And, indeed, this is the more natural conclusion from the foregoing calculations; for money, after the conquest of Egypt, seems to have been nearly in as great plenty at Rome as it is at present in the richest of the European kingdoms.

[13] This is the case with the bank of Amsterdam.

[14] These facts I give upon the authority of Monsieur du Tot in his Reflexions politiques, an author of reputation; though I must confess that the facts which he advances on other occasions are often so suspicious as to make his authority less in this matter. However, the general observation that the augmenting the money in France does not at first proportionably augment the prices is certainly just.

By the by, this seems to be one of the best reasons which can be given for a gradual and universal augmentation of the money, though it has been entirely overlooked in all those volumes which have been written on that question by Melon, Du Tot, and Paris de Verney. Were all our money, for instance, recoined, and a penny’s worth of silver taken from every shilling, the new shilling would probably purchase everything that could have been bought by the old; the prices of everything would thereby be insensibly diminished; foreign trade enlivened; and domestic industry, by the circulation of a greater number of pounds and shillings, would receive some increase and encouragement. In executing such a project, it would be better to make the new shilling pass for twenty-four half-pence, in order to preserve the illusion, and make it be taken for the same. And as a recoinage of our silver begins to be requisite, by the continual wearing of our shillings and six-pences, it may be doubtful whether we ought to imitate the example in King William’s reign, when the clipped money was raised to the old standard.

[15] The Italians gave to the Emperor Maximilian the nickname of Pochi-Danari. None of the enterprises of that prince ever succeeded, for want of money.

OF INTEREST.

Nothing is esteemed a more certain sign of the flourishing condition of any nation than the lowness of interest; and with reason, though I believe the cause is somewhat different from what is commonly apprehended. The lowness of interest is generally ascribed to the plenty of money; but money, however plentiful, has no other effect, if fixed, than to raise the price of labour. Silver is more common than gold, and therefore you receive a great quantity of it for the same commodities. But do you pay less interest for it? Interest in Batavia and Jamaica is at 10 per cent., in Portugal at 6; though these places, as we may learn from {p40} the prices of everything, abound much more in gold and silver than either London or Amsterdam.

Were all the gold in England annihilated at once, and one-and-twenty shillings substituted in the place of every guinea, would money be more plentiful and interest lower? No surely; we should only use silver instead of gold. Were gold rendered as common as silver, and silver as common as copper, would money be more plentiful and interest lower? We may assuredly give the same answer. Our shillings would then be yellow, and our halfpence white; and we should have no guineas. No other difference would ever be observed; no alteration on commerce, manufactures, navigation, or interest; unless we imagine that the colour of the metal is of any consequence.

Now, what is so visible in these greater variations of scarcity or abundance of the precious metals must hold in all inferior changes. If the multiplying gold and silver fifteen times makes no difference, much less can the doubling or tripling them. All augmentation has no other effect than to heighten the price of labour and commodities; and even this variation is little more than that of a name. In the progress towards these changes the augmentation may have some influence by exciting industry; but after the prices are settled, suitable to the new abundance of gold and silver, it has no manner of influence.

An effect always holds proportion with its cause. Prices have risen about four times since the discovery of the Indies, and it is probable that gold and silver have multiplied much more; but interest has not fallen much above a half. The rate of interest, therefore, is not derived from the quantity of the precious metals.

Money having merely a fictitious value, arising from the agreement and convention of men, the greater or less plenty of it is of no consequence, if we consider a nation within itself; and the quantity of specie, when once fixed, though never so large, has no other effect than to oblige every one to tell out a greater number of those shining bits of metal for clothes, furniture, or equipage, without increasing any one {p41} convenience of life. If a man borrows money to build a house, he then carries home a greater load; because the stone, timber, lead, glass, etc., with the labour of the masons and carpenters, are represented by a greater quantity of gold and silver. But as these metals are considered merely as representations, there can no alteration arise from their bulk or quantity, their weight or colour, either upon their real value or their interest. The same interest, in all cases, bears the same proportion to the sum. And if you lent me so much labour and so many commodities, by receiving 5 per cent. you receive always proportional labour and commodities, however represented, whether by yellow or white coin, whether by a pound or an ounce. It is in vain, therefore, to look for the cause of the fall or rise of interest in the greater or less quantity of gold and silver which is fixed in any nation.

High interest arises from three circumstances: A great demand for borrowing; little riches to supply that demand; and great profits arising from commerce. And these circumstances are a clear proof of the small advance of commerce and industry, not of the scarcity of gold and silver. Low interest, on the other hand, proceeds from the three opposite circumstances: A small demand for borrowing; great riches to supply that demand; and small profits arising from commerce. And these circumstances are all connected together, and proceed from the increase of industry and commerce, not of gold and silver. We shall endeavour to prove these points as fully and distinctly as possible, and shall begin with the causes and the effects of a great or small demand for borrowing.

When the people have emerged ever so little from a savage state, and their numbers have increased beyond the original multitude, there must immediately arise an inequality of property; and while some possess large tracts of land, others are confined within narrow limits, and some are entirely without any landed property. Those who possess more land than they can labour employ those who possess none, and agree to receive a determinate part of the {p42} product. Thus the landed interest is immediately established; nor is there any settled government, however rude, in which affairs are not on this footing. Of these proprietors of land, some must presently discover themselves to be of different tempers from others; and while one would willingly store up the product of his land for futurity, another desires to consume at present what should suffice for many years. But as the spending a settled revenue is a way of life entirely without occupation, men have so much need of somewhat to fix and engage them, that pleasures, such as they are, will be the pursuit of the greatest part of the landholders, and the prodigals amongst them will always be more numerous than the misers. In a state, therefore, where there is nothing but a landed interest, as there is little frugality, the borrowers must be very numerous, and the rate of interest must hold proportion to it. The difference depends not on the quantity of money, but on the habits and manners which prevail. By this alone the demand for borrowing is increased or diminished. Were money so plentiful as to make an egg be sold for sixpence, so long as there are only landed gentry and peasants in the state, the borrowers must be numerous and interest high. The rent for the same farm would be heavier and more bulky, but the same idleness of the landlord, with the higher prices of commodities, would dissipate it in the same time, and produce the same necessity and demand for borrowing.

Nor is the case different with regard to the second circumstance which we proposed to consider—viz., the great or little riches to supply this demand. This effect also depends on the habits and ways of living of the people, not on the quantity of gold and silver. In order to have in any state a great number of lenders, it is not sufficient nor requisite that there be great abundance of the precious metals. It is only requisite that the property or command of that quantity which is in the state, whether great or small, should be collected in particular hands, so as to form considerable sums, or compose a great moneyed interest. This begets a number of lenders and sinks the rate of usury; and {p43} this, I shall venture to affirm, depends not on the quantity of specie, but on particular manners and customs, which make the specie gather into separate sums or masses of considerable value.

For suppose that, by miracle, every man in Britain should have five pounds slipped into his pocket in one night: this would much more than double the whole money that is at present in the kingdom; and yet there would not next day, nor for some time, be any more lenders, nor any variation on the interest. And were there nothing but landlords and peasants in the state, this money, however abundant, could never gather into sums; and would only serve to increase the prices of everything, without any further consequence. The prodigal landlord dissipates it as fast as he receives it; and the beggarly peasant has no means, nor view, nor ambition of obtaining above a bare livelihood. The overplus of borrowers above that of lenders continuing still the same, there will follow no reduction of interest. That depends upon another principle, and must proceed from an increase of industry and frugality, of arts and commerce.

Everything useful to the life of man arises from the ground; but few things arise in that condition which is requisite to render them useful. There must, therefore, besides the peasants and the proprietors of land, be another rank of men, who, receiving from the former the rude materials, work them into their proper form, and retain part for their own use and subsistence. In the infancy of society, these contracts betwixt the artisans and the peasants, and betwixt one species of artisans and another, are commonly entered into immediately by the persons themselves, who, being neighbours, are easily acquainted with each other’s necessities, and can lend their mutual assistance to supply them. But when men’s industry increases, and their views enlarge, it is found that the most remote parts of the state can assist each other as well as the more contiguous, and that this intercourse of good offices may be carried on to the greatest extent and intricacy. Hence the origin of merchants, the most useful race of men in the {p44} whole society, who serve as agents between those parts of the state that are wholly unacquainted and are ignorant of each other’s necessities. Here are in a city fifty workmen in silk and linen, and a thousand customers; and these two ranks of men, so necessary to each other, can never rightly meet till one man erects a shop, to which all the workmen and all the customers repair. In this province grass rises in abundance: the inhabitants abound in cheese, and butter, and cattle; but want bread and corn, which, in a neighbouring province, are in too great abundance for the use of the inhabitants. One man discovers this. He brings corn from the one province, and returns with cattle; and supplying the wants of both, he is, so far, a common benefactor. As the people increase in numbers and industry, the difficulty of their intercourse increases: the business of the agency or merchandise becomes more intricate, and divides, subdivides, compounds, and mixes to a greater variety. In all these transactions it is necessary, and reasonable, that a considerable part of the commodities and labour should belong to the merchant, to whom, in a great measure, they are owing. And these commodities he will sometimes preserve in kind, or more commonly convert into money, which is their common representation. If gold and silver have increased in the state together with the industry, it will require a great quantity of these metals to represent a great quantity of commodities and labour; if industry alone has increased, the prices of everything must sink, and a very small quantity of specie will serve as a representation.

There is no craving or demand of the human mind more constant and insatiable than that for exercise and employment, and this desire seems the foundation of most of our passions and pursuits. Deprive a man of all business and serious occupation, he runs restless from one amusement to another; and the weight and oppression which he feels from idleness is so great that he forgets the ruin which must follow from his immoderate expenses. Give him a more harmless way of employing his mind or body, he is satisfied, and feels no longer that insatiable thirst after pleasure. {p45} But if the employment you give him be profitable, especially if the profit be attached to every particular exertion of industry, he has gain so often in his eye that he acquires, by degrees, a passion for it, and knows no such pleasure as that of seeing the daily increase of his fortune. And this is the reason why trade increases frugality, and why, among merchants, there is the same overplus of misers above prodigals as, among the possessors of land, there is the contrary.

Commerce increases industry, by conveying it readily from one member of the state to another, and allowing none of it to perish or become useless. It increases frugality, by giving occupation to men, and employing them in the arts of gain, which soon engage their affection and remove all relish for pleasure and expense. It is an infallible consequence of all industrious professions to beget frugality, and make the love of gain prevail over the love of pleasure. Among lawyers and physicians who have any practice there are many more who live within their income than who exceed it, or even live up to it. But lawyers and physicians beget no industry, and it is even at the expense of others they acquire their riches; so that they are sure to diminish the possessions of some of their fellow-citizens as fast as they increase their own. Merchants, on the contrary, beget industry, by serving as canals to convey it through every corner of the state; and at the same time, by their frugality, they acquire great power over that industry, and collect a large property in the labour and commodities which they are the chief instruments in producing. There is no other profession, therefore, except merchandise, which can make the moneyed interest considerable, or, in other words, can increase industry, and, by also increasing frugality, give a great command of that industry to particular members of the society. Without commerce, the state must consist chiefly of landed gentry, whose prodigality and expense make a continual demand for borrowing, and of peasants, who have no sums to supply that demand. The money never gathers into large stocks or sums which can be lent at {p46} interest. It is dispersed into numberless hands, who either squander it in idle show and magnificence, or employ it in the purchase of the common necessaries of life. Commerce alone assembles it into considerable sums; and this effect it has merely from the industry which it begets and the frugality which it inspires, independent of that particular quantity of precious metal which may circulate in the state.

Thus an increase of commerce, by a necessary consequence, raises a great number of lenders, and by that means produces a lowness of interest. We must now consider how far this increase of commerce diminishes the profits arising from that profession, and gives rise to the third circumstance requisite to produce a lowness of interest.

It may be proper to observe on this head that low interest and low profits of merchandise are two events that mutually forward each other, and are both originally derived from that extensive commerce which produces opulent merchants and renders the moneyed interest considerable. Where merchants possess great stocks, whether represented by few or many pieces of metal, it must frequently happen that when they either become tired of business or have heirs unwilling or unfit to engage in commerce, a great deal of these riches will seek an annual and secure revenue. The plenty diminishes the price, and makes the lenders accept of a low interest. This consideration obliges many to keep their stocks in trade, and rather be content with low profits than dispose of their money at an under value. On the other hand, when commerce has become very extensive, and employs very large stocks, there must arise rivalships among the merchants, which diminish the profits of trade, at the same time that they increase the trade itself. The low profits of merchandise induce the merchants to accept more willingly of a low interest, when they leave off business and begin to indulge themselves in ease and indolence. It is needless, therefore, to inquire which of these circumstances—viz., low interest or low profits, is the cause, and which the effect. They both arise from an {p47} extensive commerce, and mutually forward each other. No man will accept of low profits where he can have high interest, and no man will accept of low interest where he can have high profits. An extensive commerce, by producing large stocks, diminishes both interest and profits; and is always assisted in its diminution of the one by the proportional sinking of the other. I may add, that as low profits arise from the increase of commerce and industry, they serve in their turn to the further increase of commerce, by rendering the commodities cheaper, encouraging the consumption, and heightening the industry. And thus, if we consider the whole connection of causes and effects, interest is the true barometer of the state, and its lowness is a sign almost infallible of the flourishing of a people. It proves the increase of industry, and its prompt circulation through the whole state, little inferior to a demonstration. And though, perhaps, it may not be impossible but a sudden and a great check to commerce may have a momentary effect of the same kind, by throwing so many stocks out of trade, it must be attended with such misery and want of employment in the poor that, besides its short duration, it will not be possible to mistake the one case for the other.

Those who have asserted that the plenty of money was the cause of low interest seem to have taken a collateral effect for a cause, since the same industry which sinks the interest does commonly acquire great abundance of the precious metals. A variety of fine manufactures, with vigilant, enterprising merchants, will soon draw money to a state if it be anywhere to be found in the world. The same cause, by multiplying the conveniences of life and increasing industry, collects great riches into the hands of persons who are not proprietors of land, and produces by that means a lowness of interest. But though both these effects—plenty of money and low interest—naturally arise from commerce and industry, they are altogether independent of each other. For suppose a nation removed into the Pacific Ocean, without any foreign commerce, or any knowledge of {p48} navigation: suppose that this nation possesses always the same stock of coin, but is continually increasing in its numbers and industry: it is evident that the price of every commodity must gradually diminish in that kingdom, since it is the proportion between money and any species of goods which fixes their mutual value; and, under the present supposition, the conveniences of life become every day more abundant, without any alteration on the current specie. A less quantity of money, therefore, amongst this people will make a rich man, during the times of industry, than would serve to that purpose in ignorant and slothful ages. Less money will build a house, portion a daughter, buy an estate, support a manufactory, or maintain a family and equipage. These are the uses for which men borrow money, and therefore the greater or less quantity of it in a state has no influence on the interest. But it is evident that the greater or less stock of labour and commodities must have a great influence, since we really and in effect borrow these when we take money upon interest. It is true, when commerce is extended all over the globe the most industrious nations always abound most with the precious metals; so that low interest and plenty of money are in fact almost inseparable. But still it is of consequence to know the principle whence any phenomenon arises, and to distinguish between a cause and a concomitant effect. Besides that the speculation is curious, it may frequently be of use in the conduct of public affairs. At least, it must be owned that nothing can be of more use than to improve, by practice, the method of reasoning on these subjects, which of all others are the most important; though they are commonly treated in the loosest and most careless manner.

Another reason of this popular mistake with regard to the cause of low interest seems to be the instance of some nations, where, after a sudden acquisition of money or the precious metals by means of foreign conquest, the interest has fallen not only among them but in all the neighbouring states as soon as that money was dispersed and had insinuated itself into every corner. Thus, interest {p49} in Spain fell nearly a half immediately after the discovery of the West Indies, as we are informed by Garcilasso de la Vega; and it has been ever since sinking in every kingdom of Europe. Interest in Rome, after the conquest of Egypt, fell from 6 to 4 per cent., as we learn from Dion.

The causes of the sinking of interest upon such an event seem different in the conquering country and in the neighbouring states, but in neither of them can we justly ascribe that effect merely to the increase of gold and silver.

In the conquering country it is natural to imagine that this new acquisition of money will fall into a few hands, and be gathered into large sums which seek a secure revenue, either by the purchase of land or by interest; and consequently the same effect follows, for a little time, as if there had been a great accession of industry and commerce. The increase of lenders above the borrowers sinks the interest, and so much the faster if those who have acquired those large sums find no industry or commerce in the state, and no method of employing their money but by lending it at interest. But after this new mass of gold and silver has been digested, and has circulated through the whole state, affairs will soon return to their former situation, while the landlords and new money-holders, living idly, squander above their income, and the former daily contract debt, and the latter encroach on their stock till its final extinction. The whole money may still be in the state, and make itself be felt by the increase of prices, but not being now collected into any large masses or stocks, the disproportion between the borrowers and lenders is the same as formerly, and consequently the high interest returns.

Accordingly, we find in Rome that so early as Tiberius’s time interest had again mounted to 6 per cent., though no accident had happened to drain the empire of money. In Trajan’s time money lent on mortgages in Italy bore 6 per cent.; on common securities in Bithynia, 12. And if interest in Spain has not risen to its old pitch, this can be ascribed to nothing but the continuance of the same {p50} cause that sunk it—viz., the large fortunes continually made in the Indies, which come over to Spain from time to time and supply the demand of the borrowers. By this accidental and extraneous cause more money is to be lent in Spain—that is, more money is collected into large sums than would otherwise be found in a state where there are so little commerce and industry.

As to the reduction of interest which has followed in England, France, and other kingdoms of Europe that have no mines, it has been gradual, and has not proceeded from the increase of money, considered merely in itself, but from the increase of industry, which is the natural effect of the former increase, in that interval, before it raises the price of labour and provisions. For to return to the foregoing supposition, if the industry of England had risen as much from other causes (and that rise might easily have happened though the stock of money had remained the same), must not all the same consequences have followed which we observe at present? The same people would, in that case, be found in the kingdom, the same commodities, the same industry, manufactures, and commerce, and consequently the same merchants with the same stocks—that is, with the same command over labour and commodities, only represented by a smaller number of white or yellow pieces, which, being a circumstance of no moment, would only affect the waggoner, porter, and trunk-maker. Luxury, therefore, manufactures, arts, industry, frugality flourishing equally as at present, it is evident that interest must also have been as low, since that is the necessary result of all these circumstances, so far as they determine the profits of commerce and the proportion between the borrowers and lenders in any state.

NOTE, OF INTEREST.

[16] Price for a meal.

OF THE BALANCE OF TRADE.

It is very usual in nations ignorant of the nature of commerce to prohibit the exportation of commodities, and to preserve among themselves whatever they think valuable and useful. They consider not that in this prohibition they act directly contrary to their intention, and that the more is exported of any commodity the more will be raised at home, of which they themselves will always have the first offer.

It is well known to the learned that the ancient laws of Athens rendered the exportation of figs criminal, that being supposed a species of fruit so excellent in Attica that the Athenians esteemed it too delicious for the palate of any foreigner; and in this ridiculous prohibition they were so much in earnest that informers were thence called “sycophants” among them, from two Greek words which signify figs and discoverer. There are proofs in many old Acts of Parliament of the same ignorance in the nature of commerce, particularly in the reign of Edward III.; and to this day in France the exportation of corn is almost always prohibited—in order, as they say, to prevent famines, though it is evident that nothing contributes more to the frequent famines which so much distress that fertile country.

The same jealous fear with regard to money has also prevailed among several nations, and it required both reason and experience to convince any people that these prohibitions serve to no other purpose than to raise the exchange against them and produce a still greater exportation.

These errors, one may say, are gross and palpable; but there still prevails, even in nations well acquainted with commerce, a strong jealousy with regard to the balance of trade, and a fear that all their gold and silver may be leaving them. This seems to me, almost in every case, a very groundless apprehension, and I should as soon {p52} dread that all our springs and rivers should be exhausted as that money should abandon a kingdom where there are people and industry. Let us carefully preserve these latter advantages, and we need never be apprehensive of losing the former.

It is easy to observe that all calculations concerning the balance of trade are founded on very uncertain facts and suppositions. The custom-house books are allowed to be an insufficient ground of reasoning; nor is the rate of exchange much better, unless we consider it with all nations, and know also the proportion of the several sums remitted, which one may safely pronounce impossible. Every man who has ever reasoned on this subject has always proved his theory, whatever it was, by facts and calculations, and by an enumeration of all the commodities sent to all foreign kingdoms.

The writings of Mr. Gee struck the nation with a universal panic when they saw it plainly demonstrated by a detail of particulars that the balance was against them for so considerable a sum as must leave them without a single shilling in five or six years. But luckily twenty years have since elapsed, with an expensive foreign war, and yet it is commonly supposed that money is still more plentiful among us than in any former period.

Nothing can be more entertaining on this head than Dr. Swift, an author so quick in discerning the mistakes and absurdities of others. He says, in his Short View of the State of Ireland, that the whole cash of that kingdom amounted but to £500,000; that out of this they remitted every year a neat million to England, and had scarce any other source from which they could compensate themselves, and little other foreign trade but the importation of French wines, for which they paid ready money. The consequence of this situation, which must be owned to be disadvantageous, was that in a course of three years the current money of Ireland from £500,000 was reduced to less than two; and at present, I suppose, in a course of thirty years, it is absolutely nothing. Yet I know not how {p53} that opinion of the advance of riches in Ireland, which gave the Doctor so much indignation, seems still to continue and gain ground with everybody.

In short, this apprehension of the wrong balance of trade appears of such a nature that it discovers itself wherever one is out of humour with the ministry, or is in low spirits; and as it can never be refuted by a particular detail of all the exports which counterbalance the imports, it may here be proper to form a general argument which may prove the impossibility of that event as long as we preserve our people and our industry.

Suppose four-fifths of all the money in Britain to be annihilated in one night, and the nation reduced to the same condition, with regard to specie, as in the reigns of the Harrys and Edwards, what would be the consequence? Must not the price of all labour and commodities sink in proportion, and everything be sold as cheap as they were in those ages? What nation could then dispute with us in any foreign market, or pretend to navigate or to sell manufactures at the same price which to us would afford sufficient profit? In how little time, therefore, must this bring back the money which we had lost, and raise us to the level of all the neighbouring nations? where, after we have arrived, we immediately lose the advantage of the cheapness of labour and commodities, and the further flowing in of money is stopped by our fulness and repletion.

Again, suppose that all the money of Britain were multiplied fivefold in a night, must not the contrary effect follow? Must not labour and commodities rise to such an exorbitant height that no neighbouring nations could afford to buy from us, while their commodities, on the other hand, became so cheap in comparison that, in spite of all the laws which could be formed, they would be run in upon us, and our money flow out till we come to a level with foreigners, and lose that great superiority of riches which had laid us under such disadvantages?

Now, it is evident that the same causes which would correct these exorbitant inequalities, were they to happen {p54} miraculously, must prevent their happening in the common course of nature, and must for ever, in all the neighbouring nations, preserve money nearly proportionable to the art and industry of each nation. All water, wherever it communicates, remains always at a level. Ask naturalists the reason: they tell you that were it to be raised in any one place, the superior gravity of that part not being balanced, must depress it till it meets a counterpoise; and that the same cause which redresses the inequality when it happens must for ever prevent it without some violent external operation.​[17]

Can one imagine that it had ever been possible, by any laws, or even by any art or industry, to have kept all the money in Spain which the galleons have brought from the Indies? or that all commodities could be sold in France for a tenth of the price which they would yield on the other side of the Pyrenees, without finding their way thither, and draining from that immense treasure? What other reason, indeed, is there why all nations at present gain in their trade with Spain and Portugal, but because it is impossible to heap up money, more than any fluid, beyond its proper level? The sovereigns of these countries have shown that they wanted not inclination to keep their gold and silver to themselves had it been in any degree practicable.

But as any body of water may be raised above the level of the surrounding element, if the former has no communication with the latter, so in money, if the communication be cut off by any material or physical impediment (for all laws alone are ineffectual), there may, in such a case, be a very great inequality of money. Thus the immense distance of China, together with the monopolies of our India {p55} companies, obstructing the communication, preserve in Europe the gold and silver, especially the latter, in much greater plenty than they are found in that kingdom. But, notwithstanding this great obstruction, the force of the causes above-mentioned is still evident. The skill and ingenuity of Europe in general surpasses perhaps that of China with regard to manual arts and manufactures, yet are we never able to trade thither without great disadvantage; and were it not for the continual recruits which we receive from America, money would very soon sink in Europe and rise in China, till it came nearly to a level in both places. Nor can any reasonable man doubt but that industrious nation, were they as near us as Poland or Barbary, would drain us of the overplus of our specie, and draw to themselves a larger share of the West Indian treasures. We need have no recourse to a physical attraction to explain the necessity of this operation; there is a moral attraction arising from the interests and passions of men which is full as potent and infallible.

How is the balance kept in the provinces of every kingdom among themselves but by the force of this principle, which makes it impossible for money to lose its level, and either to rise or sink beyond the proportion of the labour and commodities which is in each province? Did not long experience make people easy on this head, what a fund of gloomy reflections might calculations afford a melancholy Yorkshireman while he computed and magnified the sums drawn to London by taxes, absentees, commodities, and found on comparison the opposite articles so much inferior? And no doubt, had the Heptarchy subsisted in England, the legislature of each state had been continually alarmed by the fear of a wrong balance; and it is probable that the mutual hatred of these states would have been extremely violent on account of their close neighbourhood; they would have loaded and oppressed all commerce by a jealous and superfluous caution. Since the Union has removed the barriers between Scotland and England, which of these nations gains from the other by this free commerce? Or if {p56} the former kingdom has received any increase of riches, can it be reasonably accounted for by anything but the increase of its art and industry? It was a common apprehension in England before the Union, as we learn from L’Abbe du Bos, that Scotland would soon drain them of their treasure were an open trade allowed; and on the other side of the Tweed a contrary apprehension prevailed—with what justice in both time has shown.

What happens in small portions of mankind must take place in greater. The provinces of the Roman empire no doubt kept their balance with each other, and with Italy, independent of the legislature, as much as the several counties of Britain or the several parishes of each county. And any man who travels over Europe at this day may see by the prices of commodities that money, in spite of the absurd jealousy of princes and states, has brought itself nearly to a level, and that the difference between one kingdom and another is not greater in this respect than it is often between different provinces of the same kingdom. Men naturally flock to capital cities, seaports, and navigable rivers. There we find more men, more industry, more commodities, and consequently more money; but still the latter difference holds proportion with the former, and the level is preserved.​[18]

Our jealousy and our hatred of France are without bounds, and the former sentiment at least must be {p57} acknowledged very reasonable and well-grounded. These passions have occasioned innumerable barriers and obstructions upon commerce, where we are accused of being commonly the aggressors. But what have we gained by the bargain? We lost the French market for our woollen manufactures, and transferred the commerce of wine to Spain and Portugal, where we buy much worse liquor at a higher price. There are few Englishmen who would not think their country absolutely ruined were French wines sold in England so cheap and in such abundance as to supplant, in some measure, all ale and home-brewed liquors; but would we lay aside prejudice, it would not be difficult to prove that nothing could be more innocent, perhaps advantageous. Each new acre of vineyard planted in France, in order to supply England with wine, would make it requisite for the French to take the produce of an English acre, sown in wheat or barley, in order to subsist themselves; and it is evident that we have thereby got command of the better commodity.

There are many edicts of the French King prohibiting the planting of new vineyards, and ordering all those already planted to be grubbed up, so sensible are they in that country of the superior value of corn above every other product.

Mareschal Vauban complains often, and with reason, of the absurd duties which load the entry of those wines of Languedoc, Guienne, and other southern provinces that are imported into Brittany and Normandy. He entertained no doubt but these latter provinces could preserve their balance notwithstanding the open commerce which he recommends. And it is evident that a few leagues more navigation to England would make no difference; or if it did, that it must operate alike on the commodities of both kingdoms.

There is indeed one expedient by which it is possible to sink, and another by which we may raise, money beyond its natural level in any kingdom; but these cases, when examined, will be found to resolve into our general theory, and to bring additional authority to it. {p58}

I scarce know any method of sinking money below its level but those institutions of banks, funds, and paper-credit which are so much practised in this kingdom. These render paper equivalent to money, circulate it through the whole state, make it supply the place of gold and silver, raise proportionally the price of labour and commodities, and by that means either banish a great part of those precious metals, or prevent their further increase. What can be more short-sighted than our reasonings on this head? We fancy, because an individual would be much richer were his stock of money doubled, that the same good effect would follow were the money of every one increased, not considering that this would raise as much the price of every commodity, and reduce every man in time to the same condition as before. It is only in our public negotiations and transactions with foreigners that a greater stock of money is advantageous; and as our paper is there absolutely insignificant, we feel, by its means, all the ill effects arising from a great abundance of money without reaping any of the advantages.​[19]

Suppose that there are twelve millions of paper which circulate in the kingdom as money (for we are not to imagine that all our enormous funds are employed in that shape), and suppose the real cash of the kingdom to be eighteen millions: here is a state which is found by experience able to hold a stock of thirty millions. I say, if it be able to hold it, it must of necessity have acquired it in gold and silver had we not obstructed the entrance of these metals by this new invention of paper. Whence would it have acquired that sum? From all the kingdoms of the world. But why? Because, if you remove these twelve millions, money in this state is below its level compared with our {p59} neighbours; and we must immediately draw from all of them till we be full and saturate, so to speak, and can hold no more. By our present politics we are as careful to stuff the nation with this fine commodity of bank-bills and chequer notes as if we were afraid of being overburdened with the precious metals.

It is not to be doubted but the great plenty of bullion in France is, in a great measure, owing to the want of paper-credit. The French have no banks; merchants’ bills do not there circulate as with us; usury or lending on interest is not directly permitted, so that many have large sums in their coffers; great quantities of plate are used in private houses, and all the churches are full of it. By this means provision and labour still remain much cheaper among them than in nations that are not half so rich in gold and silver. The advantages of this situation in point of trade, as well as in great public emergencies, are too evident to be disputed.

The same fashion a few years ago prevailed in Genoa which still has place in England and Holland, of using services of china ware instead of plate; but the Senate, wisely foreseeing the consequence, prohibited the use of that brittle commodity beyond a certain extent, while the use of silver plate was left unlimited. And I suppose, in their late distresses, they felt the good effect of this ordinance. Our tax on plate is, perhaps, in this view, somewhat impolitic.

Before the introduction of paper-money into our colonies, they had gold and silver sufficient for their circulation. Since the introduction of that commodity, the least inconveniency that has followed is the total banishment of the precious metals. And after the abolition of paper, can it be doubted but money will return, while these colonies possess manufactures and commodities, the only thing valuable in commerce, and for whose sake alone all men desire money?

What pity Lycurgus did not think of paper-credit when he wanted to banish gold and silver from Sparta! It would {p60} have served his purpose better than the lumps of iron he made use of as money, and would also have prevented more effectually all commerce with strangers, as being of so much less real and intrinsic value.

It must, however, be confessed that, as all these questions of trade and money are extremely complicated, there are certain lights in which this subject may be placed so as to represent the advantages of paper-credit and banks to be superior to their disadvantages. That they banish specie and bullion from a state is undoubtedly true, and whoever looks no farther than this circumstance does well to condemn them; but specie and bullion are not of so great consequence as not to admit of a compensation, and even an overbalance from the increase of industry and of credit which may be promoted by the right use of paper-money. It is well known of what advantage it is to a merchant to be able to discount his bills upon occasion; and everything that facilitates this species of traffic is favourable to the general commerce of a state. But private bankers are enabled to give such credit by the credit they receive from the depositing of money in their shops; and the Bank of England in the same manner, from the liberty they have to issue their notes in all payments. There was an invention of this kind which was fallen upon some years ago by the banks of Edinburgh, and which, as it is one of the most ingenious ideas that has been executed in commerce, has also been found very advantageous to Scotland. It is there called a bank-credit, and is of this nature: A man goes to the bank and finds surety to the amount, we shall suppose, of five thousand pounds. This money, or any part of it, he has the liberty of drawing out whenever he pleases, and he pays only the ordinary interest for it while it is in his hands. He may, when he pleases, repay any sum so small as twenty pounds, and the interest is discounted from the very day of the repayment. The advantages resulting from this contrivance are manifold. As a man may find surety nearly to the amount of his substance, and his bank-credit is equivalent to ready money, {p61} a merchant does hereby in a manner coin his houses, his household furniture, the goods in his warehouse, the foreign debts due to him, his ships at sea; and can, upon occasion, employ them in all payments as if they were the current money of the country. If a man borrows five thousand pounds from a private hand, besides that it is not always to be found when required, he pays interest for it whether he be using it or not; his bank-credit costs him nothing except during the very moment in which it is of service to him, and this circumstance is of equal advantage as if he had borrowed money at much lower interest. Merchants likewise from this invention acquire a great facility in supporting each other’s credit, which is a considerable security against bankruptcies. A man, when his own bank-credit is exhausted, goes to any of his neighbours who is not in the same condition, and he gets the money, which he replaces at his convenience.

After this practice had taken place during some years at Edinburgh, several companies of merchants at Glasgow carried the matter farther. They associated themselves into different banks and issued notes so low as ten shillings, which they used in all payments for goods, manufactures, tradesmen, labour of all kinds; and these notes, from the established credit of the companies, passed as money in all payments throughout the country. By this means a stock of five thousand pounds was able to perform the same operations as if it were ten, and merchants were thereby enabled to trade to a greater extent, and to require less profit in all their transactions. In Newcastle and Bristol, as well as other trading places, the merchants have since instituted banks of a like nature, in imitation of those in Glasgow. But whatever other advantages result from these inventions, it must still be allowed that they banish the precious metals; and nothing can be a more evident proof of it than a comparison of the past and present condition of Scotland in that particular. It was found, upon the recoinage made after the Union, that there was near a million of specie in that country; but notwithstanding the great increase of {p62} riches, commerce and manufactures of all kinds, it is thought that, even where there is no extraordinary drain made by England, the current specie will not now amount to a fifth of that sum.

But as our projects of paper-credit are almost the only expedient by which we can sink money below its level, so, in my opinion, the only expedient by which we can raise money above its level is a practice which we should all exclaim against as destructive—viz., the gathering large sums into a public treasure, locking them up, and absolutely preventing their circulation. The fluid not communicating with the neighbouring element may, by such an artifice, be raised to what height we please. To prove this we need only return to our first supposition of the annihilating the half or any part of our cash, where we found that the immediate consequence of such an event would be the attraction of an equal sum from all the neighbouring kingdoms. Nor does there seem to be any necessary bounds set by the nature of things to this practice of hoarding. A small city like Geneva, continuing this policy for ages, might engross nine-tenths of the money of Europe. There seems, indeed, in the nature of man an invincible obstacle to that immense growth of riches. A weak state with an enormous treasure will soon become a prey to some of its poorer but more powerful neighbours; a great state would dissipate its wealth in dangerous and ill-concerted projects, and probably destroy with it what is much more valuable—the industry, morals, and number of its people. The fluid in this case, raised to too great a height, bursts and destroys the vessel that contains it, and mixing itself with the surrounding element, soon falls to its proper level.

So little are we commonly acquainted with this principle that, though all historians agree in relating uniformly so recent an event as the immense treasure amassed by Harry VII. (which they make amount to £1,700,000), we rather reject their concurring testimony than admit of a fact which agrees so ill with our inveterate prejudices. It is indeed probable that that sum might be {p63} three-fourths of all the money in England; but where is the difficulty that such a sum might be amassed in twenty years by a cunning, rapacious, frugal, and almost absolute monarch? Nor is it probable that the diminution of circulating money was ever sensibly felt by the people, or ever did them any prejudice. The sinking of the prices of all commodities would immediately replace it, by giving England the advantage in its commerce with all the neighbouring kingdoms.

Have we not an instance in the small republic of Athens with its allies, who in about fifty years between the Median and Peloponnesian Wars amassed a sum greater than that of Harry VII.?​[20] for all the Greek historians and orators agree that the Athenians collected in the citadel more than 10,000 talents, which they afterwards dissipated, to their own ruin, in rash and imprudent enterprises. But when this money was set a-running, and began to communicate with the surrounding fluid, what was the consequence? Did it remain in the state? No; for we find by the memorable census mentioned by Demosthenes and Polybius that, in about fifty years afterwards, the whole value of the republic, comprehending lands, houses, commodities, slaves, and money was less than 6000 talents.

What an ambitious, high-spirited people was this, to collect and keep in their treasury, with a view to conquests, a sum which it was every day in the power of the citizens, by a single vote, to distribute among themselves, and which would go near to triple the riches of every individual; for we must observe that the numbers and private riches of the Athenians are said by ancient writers to have been no greater at the beginning of the Peloponnesian War than at the beginning of the Macedonian.

Money was little more plentiful in Greece during the age of Philip and Perseus than in England during that of Harry VII., yet these two monarchs in thirty years {p64} collected from the small kingdom of Macedon a much larger treasure than that of the English monarch. Paulus Æmilius brought to Rome about £1,700,000 sterling—Pliny says £2,400,000—and that was but a part of the Macedonian treasure; the rest was dissipated by the resistance and flight of Perseus.

We may learn from Stanyan that the Canton of Berne had £300,000 lent at interest, and had above six times as much in their treasury. Here, then, is a sum hoarded of £1,800,000 sterling, which is at least quadruple of what should naturally circulate in such a petty state; and yet no one who travels into the Pais de Vaux, or any part of that canton, observes any want of money more than could be supposed in a country of that extent, soil, and situation. On the contrary, there are scarce any inland provinces in the countries of France or Germany where the inhabitants are at this time so opulent, though that canton has vastly increased its treasure since 1714, the time when Stanyan wrote his judicious account of Switzerland.​[21]

The account given by Appian of the treasure of the Ptolemies is so prodigious that one cannot admit of it, and so much the less because the historian says the other successors of Alexander were all so frugal, and had many of them treasures not much inferior; for this saving humour of the neighbouring princes must necessarily have checked the frugality of the Egyptian monarchs, according to the foregoing theory. The sum he mentions is 740,000 talents, or £191,166,666 13s. 4d., according to Dr. Arbuthnot’s computation; and yet Appian says that he extracted his account from the public records, and he was himself a native of Alexandria.

From these principles we may learn what judgment we ought to form of those numberless bars, obstructions, and imposts which all nations of Europe, and none more than {p65} England, have put upon trade, from an exorbitant desire of amassing money, which never will heap up beyond its level while it circulates; or from an ill-grounded apprehension of losing their specie, which never will sink below it. Could anything scatter our riches, it would be such impolitic contrivances. But this general ill effect, however, results from them, that they deprive neighbouring nations of that free communication and exchange which the Author of the world has intended, by giving them soils, climates, and geniuses so different from each other.

Our modern politics embrace the only method of banishing money—the using paper-credit; they reject the only method of amassing it, the practice of hoarding; and they adopt a hundred contrivances which serve to no purpose but to check industry, and rob ourselves and our neighbours of the common benefits of art and nature.

All taxes, however, upon foreign commodities are not to be regarded as prejudicial or useless, but those only which are founded on the jealousy above mentioned. A tax on German linen encourages home manufactures, and thereby multiplies our people and industry; a tax on brandy increases the sale of rum, and supports our southern colonies. And as it is necessary imposts should be levied for the support of government, it may be thought more convenient to lay them on foreign commodities, which can easily be intercepted at the port and subjected to the impost. We ought, however, always to remember the maxim of Dr. Swift, that, in the arithmetic of the customs, two and two make not four, but often make only one. It can scarcely be doubted but if the duties on wine were lowered to a third, they would yield much more to the Government than at present; our people might thereby afford to drink commonly a better and more wholesome liquor, and no prejudice would ensue to the balance of trade, of which we are so jealous. The manufacture of ale beyond the agriculture is but inconsiderable, and gives employment to few hands. The transport of wine and corn would not be much inferior. {p66}

But are there not frequent instances, you will say, of states and kingdoms which were formerly rich and opulent, and are now poor and beggarly? Has not the money left them with which they formerly abounded? I answer, if they lose their trade, industry, and people, they cannot expect to keep their gold and silver, for these precious metals will hold proportion to the former advantages. When Lisbon and Amsterdam got the East India trade from Venice and Genoa, they also got the profits and money which arose from it. Where the seat of government is transferred, where expensive armies are maintained at a distance, where great funds are possessed by foreigners, there naturally follows from these causes a diminution of the specie. But these, we may observe, are violent and forcible methods of carrying away money, and are in time commonly attended with the transport of people and industry; but where these remain, and the drain is not continued, the money always finds its way back again, by a hundred canals of which we have no notion or suspicion. What immense treasures have been spent, by so many nations, in Flanders since the revolution, in the course of three long wars! More money perhaps than the half of what is at present in all Europe. But what has now become of it? Is it in the narrow compass of the Austrian provinces? No, surely; it has most of it returned to the several countries whence it came, and has followed that art and industry by which at first it was acquired. For above a thousand years the money of Europe has been flowing to Rome by an open and sensible current; but it has been emptied by many secret and insensible canals, and the want of industry and commerce renders at present the papal dominions the poorest territories in all Italy.

In short, a government has great reason to preserve with care its people and its manufactures. Its money it may safely trust to the course of human affairs, without fear or jealousy; or if it ever give attention to this latter circumstance, it ought only to be so far as it affects the former.

NOTES, OF THE BALANCE OF TRADE.

[17] There is another cause, though more limited in its operation, which checks the wrong balance of trade, to every particular nation to which the kingdom trades. When we import more goods than we export, the exchange turns against us, and this becomes a new encouragement to export, as much as the charge of carriage and insurance of the money which becomes due would amount to. For the exchange can never rise higher than that sum.

[18] It must carefully be remarked that throughout this discourse, wherever I speak of the level of money I mean always its proportional level to the commodities, labour, industry, and skill which is in the several states; and I assert that where these advantages are double, treble, quadruple to what they are in the neighbouring states, the money infallibly will also be double, treble, quadruple. The only circumstance that can obstruct the exactness of these proportions is the expense of transporting the commodities from one place to another, and this expense is sometimes unequal. Thus the corn, cattle, cheese, butter of Derbyshire cannot draw the money of London so much as the manufactures of London draw the money of Derbyshire. But this objection is only a seeming one, for so far as the transport of commodities is expensive, so far is the communication between the places obstructed and imperfect.

[19] We observed in essay Of Money, that money, when increasing, gives encouragement to industry during the interval between the increase of money and the rise of the prices. A good effect of this nature may follow too from paper-credit; but it is dangerous to precipitate matters at the risk of losing all by the failing of that credit, as must happen upon any violent shock in public affairs.

[20] There were about eight ounces of silver in a pound sterling in Harry VII.’s time.

[21] The poverty which Stanyan speaks of is only to be seen in the most mountainous cantons, where there is no commodity to bring money; and even there the people are not poorer than in the diocese of Saltsburg on the one hand, or Savoy on the other.

OF THE JEALOUSY OF TRADE.

Having endeavoured to remove one species of ill-founded jealousy which is so prevalent among commercial nations, it may not be amiss to mention another which seems equally groundless. Nothing is more usual, among states which have made some advances in commerce, than to look on the progress of their neighbours with a suspicious eye, to consider all trading states as their rivals, and to suppose that it is impossible for any of them to flourish but at their expense. In opposition to this narrow and malignant opinion, I will venture to assert that the increase of riches and commerce in any one nation, instead of hurting, commonly promotes the riches and commerce of all its neighbours; and that a state can scarcely carry its trade and industry very far where all the surrounding states are buried in ignorance, sloth, and barbarism.

It is obvious that the domestic industry of a people cannot be hurt by the greatest prosperity of their neighbours; and as this branch of commerce is undoubtedly the most important in any extensive kingdom, we are so far removed from all reason of jealousy. But I go farther, and observe that where an open communication is preserved among nations, it is impossible but the domestic industry of every one must receive an increase from the improvements of the others. Compare the situation of Great Britain at present with what it was two centuries ago. All the arts, both of agriculture and manufactures, were then extremely rude and imperfect. Every improvement which we have since made has arisen from our imitation of foreigners, and we ought so far to esteem it happy that they had previously made advances in arts and ingenuity. But this intercourse is still upheld to our great advantage. Notwithstanding the advanced state of our manufactures, we daily adopt in every art the inventions and improvements of our neighbours. The commodity is {p68} first imported from abroad, to our great discontent, while we imagine that it drains us of our money; afterwards the art itself is gradually imported, to our visible advantage. Yet we continue still to repine that our neighbours should possess any art, industry, and invention, forgetting that had they not first instructed us we should have been at present barbarians, and did they not still continue their instructions, the arts must fall into a state of languor, and lose that emulation and novelty which contribute so much to their advancement.

The increase of domestic industry lays the foundation of foreign commerce. Where a great number of commodities are raised and perfected for the home-market there will always be found some which can be exported with advantage. But if our neighbours have no art nor cultivation, they cannot take them, because they will have nothing to give in exchange. In this respect, states are in the same condition as individuals. A single man can scarce be industrious where all his fellow-citizens are idle. The riches of the several members of a community contribute to increase my riches, whatever profession I may follow. They consume the produce of my industry, and afford me the produce of theirs in return.

Nor need any state entertain apprehensions that their neighbours will improve to such a degree in every art and manufacture as to have no demand from them. Nature, by giving a diversity of geniuses, climates, and soils to different nations, has secured their mutual intercourse and commerce, as long as they all remain industrious and civilized. Nay, the more the arts increase in any state, the more will be its demands from its industrious neighbours. The inhabitants, having become opulent and skilful, desire to have every commodity in the utmost perfection; and as they have plenty of commodities to give in exchange, they make large importations from every foreign country. The industry of the nations from whom they import receives encouragement; their own is also increased by the sale of the commodities which they give in exchange. {p69}

But what if a nation has any staple commodity, such as the woollen manufacture is to England? Must not the interfering of their neighbours in that manufacture be a loss to them? I answer that when any commodity is denominated the staple of a kingdom, it is supposed that that kingdom has some peculiar and natural advantages for raising the commodity; and if, notwithstanding these advantages, they lose such a manufactory, they ought to blame their own idleness or bad government, not the industry of their neighbours. It ought also to be considered that by the increase of industry among the neighbouring nations the consumption of every particular species of commodity is also increased; and though foreign manufactures interfere with us in the market, the demand for our product may still continue, or even increase. And even should it diminish, ought the consequence to be esteemed so fatal? If the spirit of industry be preserved, it may easily be diverted from one branch to another, and the manufactures of wool, for instance, be employed in linen, silk, iron, or other commodities for which there appears to be a demand. We need not apprehend that all the objects of industry will be exhausted, or that our manufacturers, while they remain on an equal footing with those of our neighbours, will be in danger of wanting employment; the emulation among rival nations serves rather to keep industry alive in all of them. And any people is happier who possess a variety of manufactures, than if they enjoyed one single great manufacture, in which they are all employed. Their situation is less precarious, and they will feel less sensibly those revolutions and uncertainties to which every particular branch of commerce will always be exposed.

The only commercial state which ought to dread the improvements and industry of their neighbours is such a one as Holland, which enjoying no extent of land, nor possessing any native commodity, flourishes only by being the brokers, and factors, and carriers of others. Such a people may naturally apprehend that as soon as the {p70} neighbouring states come to know and pursue their interest, they will take into their own hands the management of their affairs, and deprive their brokers of that profit which they formerly reaped from it. But though this consequence may naturally be dreaded, it is very long before it takes place; and by art and industry it may be warded off for many generations, if not wholly eluded. The advantage of superior stocks and correspondence is so great that it is not easily overcome; and as all the transactions increase by the increase of industry in the neighbouring states, even a people whose commerce stands on this precarious basis may at first reap a considerable profit from the flourishing condition of their neighbours. The Dutch, having mortgaged all their revenues, make not such a figure in political transactions as formerly; but their commerce is surely equal to what it was in the middle of the last century, when they were reckoned among the great powers of Europe.

Were our narrow and malignant politics to meet with success, we should reduce all our neighbouring nations to the same state of sloth and ignorance that prevails in Morocco and the coast of Barbary. But what would be the consequence? They could send us no commodities, they could take none from us. Our domestic commerce itself would languish for want of emulation, example, and instruction; and we ourselves should soon fall into the same abject condition to which we had reduced them. I shall therefore venture to acknowledge that not only as a man, but as a British subject, I pray for the flourishing commerce of Germany, Spain, Italy, and even France itself. I am at least certain that Great Britain and all these nations would flourish more did their sovereigns and ministers adopt such enlarged and benevolent sentiments towards each other.

OF THE BALANCE OF POWER.

It is a question whether the idea of the balance of power be owing entirely to modern policy, or whether the phrase only has been invented in these latter ages. It is certain that Xenophon, in his institution of Cyrus, represents the combination of the Asiatic powers to have arisen from a jealousy of the increasing force of the Medes and Persians; and though that elegant composition should be supposed altogether a romance, this sentiment, ascribed by the author to the Eastern princes, is at least a proof of the prevailing notions of ancient times.

In all the politics of Greece the anxiety with regard to the balance of power is most apparent, and is expressly pointed out to us even by the ancient historians. Thucydides represents the league which was formed against Athens, and which produced the Peloponnesian war, as entirely owing to this principle. And after the decline of Athens, when the Thebans and Lacedemonians disputed for sovereignty, we find that the Athenians (as well as many other republics) threw themselves always into the lighter scale, and endeavoured to preserve the balance. They supported Thebes against Sparta, till the great victory gained by Epaminondas at Leuctra, after which they immediately went over to the conquered, from generosity as they pretended, but in reality from their jealousy of the conquerors.

Whoever will read Demosthenes’ oration for the Megalopolitans may see the utmost refinements on this principle which ever entered into the head of a Venetian or English speculatist; and upon the first rise of the Macedonian power, this orator immediately discovered the danger, sounded the alarm through all Greece, and at last assembled that confederacy under the banners of Athens which fought the great and decisive battle of Chæronea. {p72}

It is true the Grecian wars are regarded by historians as wars of emulation rather than of politics, and each state seems to have had more in view the honour of leading the rest than any well-grounded hopes of authority and dominion. If we consider, indeed, the small number of inhabitants in any one republic compared to the whole, the great difficulty of forming sieges in those times, and the extraordinary bravery and discipline of every freeman among that noble people, we shall conclude that the balance of power was of itself sufficiently secured in Greece, and needed not to be guarded with that caution which may be requisite in other ages. But whether we ascribe the shifting sides in all the Grecian republics to jealous emulation or cautious politics, the effects were alike, and every prevailing power was sure to meet with a confederacy against it, and that often composed of its former friends and allies.

The same principle—call it envy or prudence—which produced the ostracism of Athens and petalism of Syracuse, and expelled every citizen whose fame or power overtopped the rest—the same principle, I say, naturally discovered itself in foreign politics, and soon raised enemies to the leading state, however moderate in the exercise of its authority.

The Persian monarch was really, in his force, a petty prince compared to the Grecian republics, and therefore it behoved him, from views of safety more than from emulation, to interest himself in their quarrels, and to support the weaker side in every contest. This was the advice given by Alcibiades to Tissaphernes, and it prolonged near a century the date of the Persian empire; till the neglect of it for a moment, after the first appearance of the aspiring genius of Philip, brought that lofty and frail edifice to the ground with a rapidity of which there are few instances in the history of mankind.

The successors of Alexander showed an infinite jealousy of the balance of power, a jealousy founded on true politics and prudence, and which preserved distinct for several ages the partitions made after the death of that famous {p73} conqueror. The fortune and ambition of Antigonus threatened them anew with a universal monarchy, but their combination and their victory at Ipsus saved them; and in after times we find that as the Eastern princes considered the Greeks and Macedonians as the only real military force with whom they had any intercourse, they kept always a watchful eye over that part of the world. The Ptolemies, in particular, supported first Aratus and the Achæans, and then Cleomenes King of Sparta, from no other view than as a counterbalance to the Macedonian monarchs; for this is the account which Polybius gives of the Egyptian politics.

The reason why it is supposed that the ancients were entirely ignorant of the balance of power seems to be drawn from the Roman history more than the Grecian, and as the transactions of the former are generally the most familiar to us, we have thence formed all our conclusions. It must be owned that the Romans never met with any such general combination or confederacy against them as might naturally be expected from their rapid conquests and declared ambition, but were allowed peaceably to subdue their neighbours, one after another, till they extended their dominion over the whole known world. Not to mention the fabulous history of their Italic wars, there was, upon Hannibal’s invasion of the Roman state, a very remarkable crisis which ought to have called up the attention of all civilized nations. It appeared afterwards (nor was it difficult to be observed at the time​[22]) that this was a contest for universal empire, and yet no prince or state seems to have been in the least alarmed about the event or issue of the quarrel. Philip of Macedon remained neuter till he saw the victories of Hannibal, and then most imprudently formed an alliance with the conqueror, upon terms still more imprudent. He stipulated that he was to assist the Carthaginian state in their conquest of Italy, after which {p74} they engaged to send over forces into Greece, to assist him in subduing the Grecian commonwealths.

The Rhodean and Achæan republics are much celebrated by ancient historians for their wisdom and sound policy; yet both of them assisted the Romans in their wars against Philip and Antiochus. And what may be esteemed still a stronger proof that this maxim was not familiarly known in those ages, no ancient author has ever remarked the imprudence of these measures, nor has even blamed that absurd treaty above-mentioned made by Philip with the Carthaginians. Princes and statesmen may in all ages be blinded in their reasonings with regard to events beforehand, but it is somewhat extraordinary that historians afterwards should not form a sounder judgment of them.

Massinissa, Attalus, Prusias, in satisfying their private passions, were all of them the instruments of the Roman greatness, and never seem to have suspected that they were forging their own chains while they advanced the conquests of their ally. A simple treaty and agreement between Massinissa and the Carthaginians, so much required by mutual interest, barred the Romans from all entrance into Africa, and preserved liberty to mankind.

The only prince we meet with in the Roman history who seems to have understood the balance of power is Hiero, King of Syracuse. Though the ally of Rome, he sent assistance to the Carthaginians during the war of the auxiliaries: “Esteeming it requisite,” says Polybius, “both in order to retain his dominions in Sicily and to preserve the Roman friendship, that Carthage should be safe; lest by its fall the remaining power should be able, without contrast or opposition, to execute every purpose and undertaking. And here he acted with great wisdom and prudence; for that is never, on any account, to be overlooked, nor ought such a force ever to be thrown into one hand as to incapacitate the neighbouring states from defending their rights against it.” Here is the aim of modern politics pointed out in express terms.

In short, the maxim of preserving the balance of power is {p75} founded so much on common sense and obvious reasoning that it is impossible it could altogether have escaped antiquity, where we find, in other particulars, so many marks of deep penetration and discernment. If it was not so generally known and acknowledged as at present, it had at least an influence on all the wiser and more experienced princes and politicians; and indeed, even at present, however generally known and acknowledged among speculative reasoners, it has not, in practice, an authority much more extensive among those who govern the world.

After the fall of the Roman Empire the form of government established by the northern conquerors incapacitated them in a great measure from further conquests, and long maintained each state in its proper boundaries; but when vassalage and the feudal militia were abolished mankind were anew alarmed by the danger of universal monarchy, from the union of so many kingdoms and principalities in the person of the Emperor Charles. But the power of the house of Austria, founded on extensive but divided dominions, and their riches, derived chiefly from mines of gold and silver, were more likely to decay, of themselves, from internal defects, than to overthrow all the bulwarks raised against them. In less than a century the force of that violent and haughty race was shattered, their opulence dissipated, their splendour eclipsed. A new power succeeded, more formidable to the liberties of Europe, possessing all the advantages of the former and labouring under none of its defects, except a share of that spirit of bigotry and persecution with which the house of Austria were so long and still are so much infatuated.

Europe has now, for above a century, remained on the defensive against the greatest force that ever perhaps was formed by the civil or political combination of mankind. And such is the influence of the maxim here treated of, that though that ambitious nation in the five last general wars has been victorious in four,​[23] and unsuccessful only {p76} in one,​[24] they have not much enlarged their dominions, nor acquired a total ascendant over Europe. There remains rather room to hope that by maintaining the resistance some time the natural revolutions of human affairs, together with unforeseen events and accidents, may guard us against universal monarchy, and preserve the world from so great an evil.

In the three last of these general wars Britain has stood foremost in the glorious struggle, and she still maintains her station as guardian of the general liberties of Europe, and patron of mankind. Beside her advantages of riches and situation, her people are animated with such a national spirit, and are so fully sensible of the inestimable blessings of their government, that we may hope their vigour never will languish in so necessary and so just a cause. On the contrary, if we may judge by the past, their passionate ardour seems rather to require some moderation, and they have oftener erred from a laudable excess than from a blameable deficiency.

In the first place, we seem to have been more possessed with the ancient Greek spirit of jealous emulation than actuated with the prudent views of modern politics. Our wars with France have been begun with justice, and even, perhaps, from necessity; but have always been too far pushed from obstinacy and passion. The same peace which was afterwards made at Ryswick in 1697 was offered so early as the ninety-two; that concluded at Utrecht in 1712 might have been finished on as good conditions at Gertruytenberg in the eight; and we might have given at Frankfort in 1743 the same terms which we were glad to accept of at Aix-la-Chapelle in the forty-eight. Here then we see that above half of our wars with France, and all our public debts, are owing more to our own imprudent vehemence than to the ambition of our neighbours.

In the second place, we are so declared in our opposition to French power, and so alert in defence of our allies, that {p77} they always reckon upon our force as upon their own, and expecting to carry on war at our expense, refuse all reasonable terms of accommodation. Habent subjectos, tanquam suos; viles, ut alienos. All the world knows that the factious vote of the House of Commons in the beginning of the last Parliament, with the professed humour of the nation, made the Queen of Hungary inflexible in her terms, and prevented that agreement with Prussia which would immediately have restored the general tranquillity of Europe.

In the third place, we are such true combatants that, when once engaged, we lose all concern for ourselves and our posterity, and consider only how we may best annoy the enemy. To mortgage our revenues at so deep a rate in wars where we are only accessories was surely the most fatal delusion that a nation, who had any pretension to politics and prudence, has ever yet been guilty of. That remedy of funding—if it be a remedy and not rather a poison—ought, in all reason, to be reserved to the last extremity, and no evil but the greatest and most urgent should ever induce us to embrace so dangerous an expedient.

These excesses to which we have been carried are prejudicial, and may perhaps in time become still more prejudicial another way, by begetting, as is usual, the opposite extreme, and rendering us totally careless and supine with regard to the fate of Europe. The Athenians, from the most bustling, intriguing, warlike people of Greece, finding their error in thrusting themselves into every quarrel, abandoned all attention to foreign affairs, and in no contest ever took party on either side, except by their flatteries and complaisance to the victor.

Enormous monarchies are probably destructive to human nature—in their progress, in their continuance,​[25] and even in their downfall, which never can be very distant from their {p78} establishment. The military genius which aggrandized the monarchy soon leaves the court, the capital, and the centre of such a government; while the wars are carried on at a great distance, and interest so small a part of the state. The ancient nobility, whose affections attach them to their sovereign, live all at court; and never will accept of military employments which would carry them to remote and barbarous frontiers, where they are distant both from their pleasures and their fortune. The arms of the state must therefore be trusted to mercenary strangers, without zeal, without attachment, without honour, ready on every occasion to turn them against the prince, and join each desperate malcontent who offers pay and plunder. This is the necessary progress of human affairs; thus human nature checks itself in its airy elevations, thus ambition blindly labours for the destruction of the conqueror, of his family, and of everything near and dear to him. The Bourbons, trusting to the support of their brave, faithful, and affectionate nobility, would push their advantage without reserve or limitation. These, while fired with glory and emulation, can bear the fatigues and dangers of war; but never would submit to languish in the garrisons of Hungary or Lithuania, forgot at court, and sacrificed to the intrigues of every minion or mistress who approaches the prince. The troops are filled with Cravates and Tartars, Hussars and Cossacks, intermingled perhaps with a few soldiers of fortune from the better provinces; and the melancholy fate of the Roman emperors, from the same cause, is renewed over and over again till the final dissolution of the monarchy.

NOTES, OF THE BALANCE OF POWER.

[22] It was observed by some, as appears from the speech of Agelaus of Naupactum, in the general congress of Greece. See Polyb., lib. 5, cap. 104.

[23] Those concluded by the Peace of the Pyrenees, Nimeguen, Ryswick, and Aix-la-Chapelle.

[24] That concluded by the Peace of Utrecht.

[25] If the Roman Empire was of advantage, it could only proceed from this, that mankind were generally in a very disorderly, uncivilized condition before its establishment.

OF TAXES.

There is a maxim that prevails among those whom in this country we call “ways and means” men, and who are denominated financiers and maltotiers in France, that every new tax creates a new ability in the subject to bear it, and {p79} that each increase of public burdens increases proportionably the industry of the people. This maxim is of such a nature as is most likely to be extremely abused, and is so much the more dangerous, as its truth cannot be altogether denied; but it must be owned, when kept within certain bounds, to have some foundation in reason and experience.

When a tax is laid upon commodities which are consumed by the common people, the necessary consequence may seem to be that either the poor must retrench something from their way of living, or raise their wages so as to make the burden of the tax fall entirely upon the rich. But there is a third consequence which very often follows upon taxes—viz., that the poor increase their industry, perform more work, and live as well as before without demanding more for their labour. Where taxes are moderate, are laid on gradually, and affect not the necessaries of life, this consequence naturally follows; and it is certain that such difficulties often serve to excite the industry of a people, and render them more opulent and laborious than others who enjoy the greatest advantages. For we may observe, as a parallel instance, that the most commercial nations have not always possessed the greatest extent of fertile land; but, on the contrary, that they have laboured under many natural disadvantages. Tyre, Athens, Carthage, Rhodes, Genoa, Venice, Holland are strong examples to this purpose; and in all history we find only three instances of large and fertile countries which have possessed much trade—the Netherlands, England, and France. The two former seem to have been allured by the advantages of their maritime situation, and the necessity they lay under of frequenting foreign ports in order to procure what their own climate refused them; and as to France, trade has come very late into the kingdom, and seems to have been the effect of reflection and observation in an ingenious and enterprising people, who remarked the immense riches acquired by such of the neighbouring nations as cultivated navigation and commerce.

The places mentioned by Cicero as possessed of the {p80} greatest commerce of his time are Alexandria, Colchos, Tyre, Sidon, Andros, Cyprus, Pamphylia, Lycia, Rhodes, Chios, Byzantium, Lesbos, Smyrna, Miletum, Coos. All these, except Alexandria, were either small islands or narrow territories; and that city owed its trade entirely to the happiness of its situation.

Since, therefore, some natural necessities or disadvantages may be thought favourable to industries, why may not artificial burdens have the same effect? Sir William Temple,​[26] we may observe, ascribes the industry of the Dutch entirely to necessity, proceeding from their natural disadvantages; and illustrates his doctrine by a very striking comparison with Ireland, “where,” says he, “by the largeness and plenty of the soil, and scarcity of people, all things necessary to life are so cheap that an industrious man by two days’ labour may gain enough to feed him the rest of the week. Which I take to be a very plain ground of the laziness attributed to the people. For men naturally prefer ease before labour, and will not take pains if they can live idle; though when, by necessity, they have been inured to it, they cannot leave it, being grown a custom necessary to their health, and to their very entertainment. Nor perhaps is the change harder from constant ease to labour than from constant labour to ease.” After which the author proceeds to confirm his doctrine by enumerating as above the places where trade has most flourished in ancient and modern times, and which are commonly observed by such narrow, confined territories as beget a necessity for industry.

It is always observed in years of scarcity, if it be not extreme, that the poor labour more and really live better than in years of great plenty, when they indulge themselves in idleness and riot. I have been told by a considerable manufacturer that in the year 1740, when bread and provisions of all kinds were very dear, his workmen not only made a shift to live, but paid debts which they had {p81} contracted in former years that were much more favourable and abundant.

This doctrine, therefore, with regard to taxes may be admitted to some degree, but beware of the abuse. Exorbitant taxes, like extreme necessity, destroy industry by producing despair; and even before they reach this pitch they raise the wages of the labourer and manufacturer, and heighten the price of all commodities. An attentive, disinterested legislature will observe the point when the emolument ceases and the prejudice begins; but as the contrary character is much more common, it is to be feared that taxes all over Europe are multiplying to such a degree as will entirely crush all art and industry; though perhaps their first increase, together with circumstances, might have contributed to the growth of these advantages.

The best taxes are such as are levied upon consumptions, especially those of luxury, because such taxes are less felt by the people. They seem, in some measure, voluntary, since a man may choose how far he will use the commodity which is taxed: they are paid gradually and insensibly, and being confounded with the natural price of the commodity, they are scarcely perceived by the consumers. Their only disadvantage is that they are expensive in the levying.

Taxes upon possessions are levied without expense, but have every other disadvantage. Most states, however, are obliged to have recourse to them, in order to supply the deficiencies of the other.

But the most pernicious of all taxes are those which are arbitrary. They are commonly converted by their management into punishments on industry; and also by their unavoidable inequality are more grievous than by the real burden which they impose. It is surprising, therefore, to see them have place among any civilized people.

In general, all poll-taxes, even when not arbitrary—which they commonly are—may be esteemed dangerous; because it is so easy for the sovereign to add a little more and a little more to the sum demanded, that these taxes are apt to become altogether oppressive and intolerable. On the {p82} other hand, a duty upon commodities checks itself, and a prince will soon find that an increase of the impost is no increase of his revenue. It is not easy, therefore, for a people to be altogether ruined by such taxes.

Historians inform us that one of the chief causes of the destruction of the Roman state was the alteration which Constantine introduced into the finances, by substituting a universal poll-tax in lieu of almost all the tithes, customs, and excises which formerly composed the revenue of the empire. The people in all the provinces were so grinded and oppressed by the publicans that they were glad to take refuge under the conquering arms of the barbarians, whose dominion, as they had fewer necessities and less art, was found preferable to the refined tyranny of the Romans.

There is a prevailing opinion that all taxes, however levied, fall upon the land at last. Such an opinion may be useful in Britain, by checking the landed gentlemen, in whose hands our legislature is chiefly lodged, and making them preserve great regard for trade and industry; but I must confess that this principle, though first advanced by a celebrated writer, has so little appearance of reason that were it not for his authority it had never been received by anybody. Every man, to be sure, is desirous of pushing off from himself the burden of any tax which is imposed, and laying it upon others; but as every man has the same inclination, and is upon the defensive, no set of men can be supposed to prevail altogether in this contest. And why the landed gentleman should be the victim of the whole, and should not be able to defend himself as well as others are, I cannot readily imagine. All tradesmen, indeed, would willingly prey upon him and divide him among them if they could; but this inclination they always have, though no taxes were levied; and the same methods by which he guards against the imposition of tradesmen before taxes will serve him afterwards, and make them share the burden with him. No labour in any commodities that are exported can be very considerably raised in the price without losing the foreign market; and as some part of almost every {p83} manufactory is exported, this circumstance keeps the price of most species of labour nearly the same after the imposition of taxes. I may add that it has this effect upon the whole, for were any kind of labour paid beyond its proportion all hands would flock to it, and would soon sink it to a level with the rest.

I shall conclude this subject with observing that we have with regard to taxes an instance of what frequently happens in political institutions, that the consequence of things are diametrically opposite to what we should expect on the first appearance. It is regarded as a fundamental maxim of the Turkish Government that the Grand Seignior, though absolute master of the lives and fortunes of each individual, has no authority to impose a new tax; and every Ottoman prince who has made such an attempt either has been obliged to retract, or has found the fatal effects of his perseverance. One would imagine that this prejudice or established opinion were the firmest barrier in the world against oppression, yet it is certain that its effect is quite contrary. The emperor, having no regular method of increasing his revenue, must allow all the pashas and governors to oppress and abuse the subjects, and these he squeezes after their return from their government; whereas, if he could impose a new tax, like our European princes, his interest would so far be united with that of his people that he would immediately feel the bad effects of these disorderly levies of money, and would find that a pound raised by general imposition would have less pernicious effects than a shilling taken in so unequal and arbitrary a manner.

NOTE, OF TAXES.

[26] Account of the Netherlands, chap. vi.

OF PUBLIC CREDIT.

It appears to have been the common practice of antiquity to make provision in times of peace for the necessities of war, and to hoard up treasures beforehand as the instruments either of conquest or defence, without trusting to {p84} extraordinary imposts, much less to borrowing, in times of disorder and confusion. Besides the immense sums above mentioned​[27] which were amassed by Athens, and by the Ptolemies and other successors of Alexander, we learn from Plato that the frugal Lacedemonians had also collected a great treasure; and Arrian and Plutarch​[28] specify the riches which Alexander got possession of on the conquest of Susa and Ecbatana, and which were reserved, some of them, from the time of Cyrus. If I remember right, the Scripture also mentions the treasure of Hezekiah and the Jewish princes, as profane history does that of Philip and Perseus, kings of Macedon. The ancient republics of Gaul had commonly large sums in reserve. Every one knows the treasure seized in Rome by Julius Cæsar during the civil wars, and we find afterwards that the wiser emperors, Augustus, Tiberius, Vespasian, Severus, etc., always discovered the prudent foresight of saving great sums against any public exigency.

On the contrary, our modern expedient, which has become very general, is to mortgage the public revenues, and to trust that posterity during peace will pay off the encumbrances contracted during the preceding war; and they, having before their eyes so good an example of their wise fathers, have the same prudent reliance on their posterity, who at last, from necessity more than choice, are obliged to place the same confidence in a new posterity. But not to waste time in declaiming against a practice which appears ruinous beyond the evidence of a hundred demonstrations, it seems pretty apparent that the ancient maxims are in this respect much more prudent than the modern; even though the latter had been confined within some reasonable bounds, and had ever, in any one instance, been attended with such frugality in time of peace as to discharge the debts incurred by an expensive war. For why should the case be so very different between the public and an individual as to make {p85} us establish such different maxims of conduct for each? If the funds of the former be greater, its necessary expenses are proportionably larger; if its resources be more numerous, they are not infinite; and as its frame should be calculated for a much longer duration than the date of a single life, or even of a family, it should embrace maxims, large, durable, and generous, agreeable to the supposed extent of its existence. To trust to chances and temporary expedients is indeed what the necessity of human affairs frequently reduces it to, but whoever voluntarily depend on such resources have not necessity but their own folly to accuse for their misfortunes when any such befall them.

If the abuses of treasures be dangerous, either by engaging the state in rash enterprises or making it neglect military discipline in confidence of its riches, the abuses of mortgaging are more certain and inevitable—poverty, impotence, and subjection to foreign powers.

According to modern policy, war is attended with every destructive circumstance: loss of men, increase of taxes, decay of commerce, dissipation of money, devastation by sea and land. According to ancient maxims, the opening of the public treasure, as it produced an uncommon affluence of gold and silver, served as a temporary encouragement to industry, and atoned in some degree for the inevitable calamities of war.

What then shall we say to the new paradox, that public encumbrances are, of themselves, advantageous, independent of the necessity of contracting them; and that any state, even though it were not pressed by a foreign enemy, could not possibly have embraced a wiser expedient for promoting commerce and riches than to create funds, and debts, and taxes without limitation? Discourses such as these might naturally have passed for trials of wit among rhetoricians, like the panegyrics on folly and a fever, on Busiris and Nero, had we not seen such absurd maxims patronized by great ministers and by a whole party among us; and these puzzling arguments (for they deserve not the name of specious), though they could not be the foundation of Lord {p86} Orford’s conduct, for he had more sense, served at least to keep his partisans in countenance and perplex the understanding of the nation.

Let us examine the consequences of public debts, both in our domestic management by their influence on commerce and industry, and in our foreign transactions by their effect on wars and negotiations.

There is a word which is here in the mouth of everybody, and which I find has also got abroad and is much employed by foreign writers​[29] in imitation of the English—and this is “circulation.” This word serves as an account of everything, and though I confess that I have sought for its meaning in the present subject ever since I was a schoolboy, I have never yet been able to discover it. What possible advantage is there which the nation can reap by the easy transference of stock from hand to hand? Or is there any parallel to be drawn from the circulation of other commodities to that of chequer notes and India bonds? Where a manufacturer has a quick sale of his goods to the merchant, the merchant to the shopkeeper, the shopkeeper to his customers, this enlivens industry and gives new encouragement to the first dealer or the manufacturer and all his tradesmen, and makes them produce more and better commodities of the same species. A stagnation is here pernicious, wherever it happens, because it operates backwards, and stops or benumbs the industrious hand in its production of what is useful to human life. But what production we owe to Change-alley, or even what consumption, except that of coffee, and pen, ink, and paper, I have not yet learned; nor can one foresee the loss or decay of any one beneficial commerce or commodity, though that place and all its inhabitants were for ever buried in the ocean.

But though this term has never been explained by those who insist so much on the advantages that result from a circulation, there seems, however, to be some benefit of a similar kind arising from our encumbrances—as, indeed, {p87} what human evil is there which is not attended with some advantage? This we shall endeavour to explain, that we may estimate the weight which we ought to allow it.

Public securities are with us become a kind of money, and pass as readily at the current price as gold or silver. Wherever any profitable undertaking offers itself, however expensive, there are never wanting hands enough to embrace it; nor need a trader who has sums in the public stocks fear to launch out into the most extensive trade, since he is possessed of funds which will answer the most sudden demand that can be made upon him. No merchant thinks it necessary to keep by him any considerable cash. Bank-notes or India bonds, especially the latter, serve all the same purposes; because he can dispose of them or pledge them to a banker in a quarter of an hour; and at the same time they are not idle, even when in his escritoire, but bring him in a constant revenue. In short, our national debts furnish merchants with a species of money that is continually multiplying in their hands, and produces sure gain besides the profits of their commerce. This must enable them to trade upon less profit. The small profit of the merchant renders the commodity cheaper, causes a greater consumption, quickens the labour of the common people, and helps to spread arts and industry through the whole society.