Allthesethingsbearquiteadifferentcomplexion，owingto
theexistenceofaflourishingmanufacturingpowerintheAtlantic
states。Nowpopulation，capital，technicalskillandintellectual
power，flowintothemfromallEuropeancountries；nowthedemand
forthemanufacturedproductsoftheAtlanticstatesincreases
simultaneouslywiththeirconsumptionoftherawmaterialssupplied
bythewest。Nowthepopulationofthesestates，theirwealth，and
thenumberandextentoftheirtownsincreaseinequalproportion
withthecultivationofthewesternvirginlands；now，onaccount
ofthelargerpopulation，andtheconsequentlyincreaseddemandfor
meat，butter，cheese，milk，gardenproduce，oleaginousseeds，
fruit，&c。，theirownagricultureisincreasing；nowthesea
fisheriesareflourishinginconsequenceofthelargerdemandfor
saltedfishandtrainoil；nowquantitiesofprovisions，building
materials，coal，&c。arebeingconveyedalongthecoasttofurnish
thewantsofthemanufacturingpopulation；nowthemanufacturing
populationproducealargequantityofcommoditiesforexportto
allthenationsoftheearth，fromwhenceresultprofitablereturn
freights；nowthenation\'snavalpowerincreasesbymeansofthe
coastingtrade，thefisheries，andnavigationtodistantlands，and
withittheguaranteeofnationalindependenceandinfluenceover
othernations，particularlyoverthoseofSouthAmerica；now
scienceandart，civilisationandliterature，areimprovinginthe
easternstates，whencetheyarebeingdiffusedamongstthewestern
states。
ThesewerethecircumstanceswhichinducedtheUnitedStatesto
layrestrictionsupontheimportationofforeignmanufactured
goods，andtoprotecttheirnativemanufactures。Withwhatamount
ofsuccessthishasbeendone，wehaveshowninthepreceding
pages。Thatwithoutsuchapolicyamanufacturingpowercouldnever
havebeenmaintainedsuccessfullyintheAtlanticstates，wemay
learnfromtheirownexperienceandfromtheindustrialhistoryof
othernations。
ThefrequentlyrecurringcommercialcrisesinAmericahavebeen
veryoftenattributedtotheserestrictionsonimportationof
foreigngoods，butwithoutreasonablegrounds。Theearlieraswell
asthelaterexperienceofNorthAmericashows，onthecontrary，
thatsuchcriseshaveneverbeenmorefrequentanddestructivethan
whencommercialintercoursewithEnglandwasleastsubjectto
restrictions。Commercialcrisesamongstagriculturalnations，who
procuretheirsuppliesofmanufacturedgoodsfromforeignmarkets，
arisefromthedisproportionbetweenimportsandexports。
Manufacturingnationsricherincapitalthanagriculturalstates，
andeveranxioustoincreasethequantityoftheirexports，deliver
theirgoodsoncreditandencourageconsumption。Infact，theymake
advancesuponthecomingharvest。Butiftheharvestturnoutso
poorthatitsvaluefallsgreatlybelowthatofthegoods
previouslyconsumed；oriftheharvestprovesorichthatthe
supplyofproducemeetswithnoadequatedemandandfallsinprice；
whileatthesametimethemarketsstillcontinuetobeoverstocked
withforeigngoods——thenacommercialcrisiswilloccurbyreason
ofthedisproportionexistingbetweenthemeansofpaymentandthe
quantityofgoodspreviouslyconsumed，asalsobyreasonofthe
disproportionbetweensupplyanddemandinthemarketsforproduce
andmanufacturedgoods。Theoperationsofforeignandnativebanks
mayincreaseandpromotesuchacrisis，buttheycannotcreateit。
Inafuturechapterweshallendeavourmorecloselytoelucidatc
thissubject。
NOTES：
1。StatisticalTableofMassachusettsfortheYearendingApril1，
1837，byJ。P。Bigelow，SecretaryoftheCommonwealthBoston，
1838。NoAmericanstatebutMassachusettspossessessimilar
statisticalabstracts。Weowethoseherereferredto，toGovernor
Everett，distinguishedalikeasascholar，anauthor，anda
statesman。
2。TheAmericanpapersofJuly1839reportthatinthe
manufacturingtownofLowellalonethereareoverahundred
workwomenwhohaveeachoverathousanddollarsdepositedtotheir
creditinthesavingsbank。
Chapter10
TheTeachingsofHistory
Everywhereandatalltimeshasthewell-beingofthenation
beeninequalproportiontotheintelligence，morality，and
industryofitscitizens；accordingtothese，wealthhasaccruedor
beendiminished；butindustryandthrift，inventionandenterprise，
onthepartofindividuals，haveneverasyetaccomplishedaughtof
importancewheretheywerenotsustainedbymunicipalliberty，by
suitablepublicinstitutionsandlaws，bytheStateadministration
andforeignpolicy，butaboveallbytheunityandpower，ofthe
nation。
Historyeverywhereshowsusapowerfulprocessofreciprocal
actionbetweenthesocialandtheindividualpowersandconditions。
IntheItalianandtheHanseaticcities，inHollandandEngland，in
FranceandAmerica，wefindthepowersofproduction，and
consequentlythewealthofindividuals，growinginproportionto
thelibertiesenjoyed，tothedegreeofperfectionofpoliticaland
socialinstitutions，whilethese，ontheotherhand，derive
materialandstimulusfortheirfurtherimprovementfromthe
increaseofthematerialwealthandoftheproductivepowerof
individuals。
TherealriseoftheindustryandpowerofEnglanddatesonly
fromthedaysoftheactualfoundationofEngland\'snational
freedom，whiletheindustryandpowerofVenice，oftheHanse
Towns，oftheSpanishandPortuguese，decayedconcurrentlywith
theirlossoffreedom。Howeverindustrious，thrifty，inventive，and
intelligent，individualcitizensmightbe，theycouldnotmakeup
forthelackoffreeinstitutions。Historyalsoteachesthat
individualsderivethegreaterpartoftheirproductivepowersfrom
thesocialinstitutionsandconditionsunderwhichtheyareplaced。
Theinfluenceofliberty，intelligence，andenlightenmentover
thepower，andthereforeovertheproductivecapacityandwealthof
anation，isexemplifiedinnorespectsoclearlyasinnavigation。
Ofallindustrialpursuits，navigationmostdemandsenergy，
personalcourage，enterprise，andendurance；qualificationsthat
canonlyflourishinanatmosphereoffreedom。Innoothercalling
doignorance，superstition，andprejudice，indolence，cowardice，
effeminacy，andweaknessproducesuchdisastrousconsequences；
nowhereelseisasenseofself-reliancesoindispensable。Hence
historycannotpointtoasingleexampleofanenslavedpeople
takingaprominentpartinnavigation。TheHindoos，theChinese，
andtheJapanesehaveeverstrictlyconfinedtheireffortstocanal
andrivernavigationandthecoastingtrade。InancientEgypt
maritimenavigationwasheldinabhorrence，probablybecause
priestsandrulersdreadedlestbymeansofitthespiritof
freedomandindependenceshouldbeencouraged。Thefreestandmost
enlightenedstatesofancientGreecewerealsothemostpowerfulat
sea；theirnavalpowerceasedwiththeirfreedom，andhowevermuch
historymaynarrateofthevictoriesofthekingsofMacedoniaon
land，sheissilentastotheirvictoriesatsea。
WhenweretheRomanspowerfulatsea，andwhenisnothingmore
heardoftheirfleets？WhendidItalylaydownthelawinthe
Mediterranean，andsincewhenhasherverycoastingtradefallen
intothehandsofforeigners？UpontheSpanishnavytheInquisition
hadpassedsentenceofdeathlongeretheEnglishandtheDutch
fleetshadexecutedthedecree。Withthecomingintopowerofthe
mercantileoligarchiesintheHanseTowns，powerandthespiritof
enterprisetookleaveoftheHanseaticLeague。
OftheSpanishNetherlandsonlythemaritimeprovincesachieved
theirfreedom，whereasthoseheldinsubjectionbytheInquisition
hadeventosubmittotheclosingoftheirrivers。TheEnglish
fleet，victoriousovertheDutchintheChannel，nowtook
possessionofthedominionoftheseas，whichthespiritoffreedom
hadassignedtoEnglandlongbefore；andyetHolland，downtoour
owndays，hasretainedalargeproportionofhermercantilemarine，
whereasthatoftheSpaniardsandthePortugueseisalmost
annihilated。Invainweretheeffortsofagreatindividual
ministernowandthenunderthedespotickingsofFrancetocreate
afleet，foritinvariablywentagaintoruin。
Buthowisitthatatthepresentdaywewitnessthegrowing
strengthofFrenchnavigationandnavalpower？Hardlyhadthe
independenceoftheUnitedStatesofNorthAmericacometolife，
whenwefindtheAmericanscontendingwithrenownagainstthegiant
fleetsofthemothercountry。Butwhatisthepositionofthe
CentralandSouthAmericannations？Solongastheirflagswavenot
overeverysea，butlittledependencecanbeplaceduponthe
effectivenessoftheirrepublicanformsofgovernment。Contrast
thesewithTexas，aterritorythathasscarcelyattainedto
politicallife，andyetalreadyclaimsitsshareintherealmof
Neptune。
Butnavigationismerelyonepartoftheindustrialpowerofa
nation——apartwhichcanflourishandattaintoimportanceonly
inconjunctionwithalltheothercomplementaryparts。Everywhere
andatalltimesweseenavigation，inlandandforeigntrade，and
evenagricultureitself，flourishonlywheremanufactureshave
reachedahighstateofprosperity。Butiffreedombean
indispensableconditionfortheprosperityofnavigation，howmuch
woremustitbesofortheprosperityofthemanufacturingpower，
forthegrowthoftheentireproducingpowerofanation？History
containsnorecordofarich，commercial，andindustrialcommunity
thatwasnotatthesametimeintheenjoymentoffreedom。
Manufactureseverywherefirstbroughtintooperationimproved
weansoftransport，improvedrivernavigation，improvedhighways，
steamnavigationandrailways，whichconstitutethefundamental
elementsofimprovedsystemsofagricultureandofcivilisation。
Historyteachesthatartsandtradesmigratedfromcityto
city，fromonecountrytoanother。Persecutedandoppressedat
home，theytookrefugeincitiesandincountrieswherefreedom，
protection，andsupportwereassuredtothem。Inthiswaythey
migratedfromGreeceandAsiatoItaly；fromItalytoGermany，
Flanders，andBrabant；andfromthencetoHollandandEngland。
Everywhereitwaswantofsenseanddespotismthatdrovethemaway，
andthespiritoffreedomthatattractedthem。Butforthefollyof
theContinentalgovernments，Englandwouldhavehaddifficultyin
attainingsupremacyinindustry。Butdoesitappearmoreconsistent
withwisdomforusinGermanytowaitpatientlyuntilothernations
areimpoliticenoughtodriveouttheirindustriesandthuscompel
themtoseekarefugewithus，orthatweshould，withoutwaiting
forsuchcontingencies，invitethembyprofferedadvantagesto
settledownamongstus？
Itistruethatexperienceteachesthatthewindbearstheseed
fromoneregiontoanother，andthatthuswastemoorlandshavebeen
transformedintodenseforests；butwoulditonthataccountbe
wisepolicyfortheforestertowaituntilthewindinthecourse
ofageseffectsthistransformation？
Isitunwiseonhispartifbysowingandplantingheseeksto
attainthesameobjectwithinafewdecades？Historytellsusthat
wholenationshavesuccessfullyaccomplishedthatwhichweseethe
foresterdo？Singlefreecities，orsmallrepublicsand
confederationsofsuchcitiesandstates，limitedinterritorial
possessions，ofsmallpopulationandinsignificantmilitarypower，
butfortifiedbytheenergyofyouthfulfreedomandfavouredby
geographicalpositionaswellasbyfortunatecircumstancesand
opportunities，flourishedbymeansofmanufacturesandcommerce
longbeforethegreatmonarchies；andbyfreecommercial
intercoursewiththelatter，bywhichtheyexportedtothem
manufacturedgoodsandimportedrawproduceinexchange，raised
themselvestoahighdegreeofwealthandpower。ThusdidVenice，
theHanseTownstheBelgiansandtheDutch。
Norwasthissystemoffreetradelessprofitableatfirstto
thegreatmonarchiesthemselves，withwhomthesesmaller
communitieshadcommercialintercourse。For，havingregardtothe
wealthoftheirnaturalresourcesandtotheirundevelopedsocial
conditionthefreeimportationofforeignmanufacturedgoodsand
theexportationofnativeproducepresentedthesurestandmost
effectualmeansofdevelopingtheirownpowersofproduction，of
instillinghabitsofindustryintotheirsubjectswhowereaddicted
toidlenessandturbulence，ofinducingtheirlandownersandnobles
tofeelaninterestinindustry，ofarousingthedormantspiritof
enterpriseamongsttheirmerchants，andespeciallyofraisingtheir
owncivilisation，industry，andpower。
TheseeffectswerelearnedgenerallybyGreatBritainfromthe
tradeandmanufacturingindustryoftheItalians，theHansards，the
Belgians，andtheDutch。Buthavingattainedtoacertaingradeof
developmentbymeansoffreetrade，thegreatmonarchiesperceived
thatthehighestdegreeofcivilisation，power，andwealthcanonly
beattainedbyacombinationofmanufacturesandcommercewith
agriculture。Theyperceivedthattheirnewlyestablishednative
manufacturescouldneverhopetosucceedinfreecompetitionwith
theoldandlongestablishedmanufacturesofforeigners；thattheir
nativefisheriesandnativemercantilemarine，thefoundationsof
theirnavalpower，couldnevermakesuccessfulprogresswithout
specialprivileges；andthatthespiritofenterpriseoftheir
nativemerchantswouldalwaysbekeptdownbytheoverwhelming
reservesofcapital，thegreaterexperienceandsagacityofthe
foreigners。Hencetheysought，byasystemofrestrictions，
privileges，andencouragements，totransplantontotheirnative
soilthewealth，thetalents，andthespiritofenterpriseofthe
foreigners。Thispolicywaspursuedwithgreaterorlesser，with
speedierormoretardysuccess，justinproportionasthemeasures
adoptedweremoreorlessjudiciouslyadaptedtotheobjectin
view，andappliedandpursuedwithmoreorlessenergyand
perseverance。
England，aboveallothernations，hasadoptedthispolicy。
Ofteninterruptedinitsexecutionfromthewantofintelligence
andself-restraintonthepartofherrulers，orowingtointernal
commotionsandforeignwars，itfirstassumedthecharacterofa
settledandpracticallyefficientpolicyunderEdwardVI，
Elizabeth，andtherevolutionaryperiod。Forhowcouldthemeasures
ofEdwardIIIworksatisfactorilywhenitwasnottillunderHenry
VIthatthelawpermittedthecarriageofcornfromoneEnglish
countytoanother，ortheshipmentofittoforeignparts；when
stillunderHenryVIIandHenryVIIIallinterestonmoney，even
discountonbills，washeldtobeusury，andwhenitwasstill
thoughtatthetimethattrademightbeencouragedbyfixingbylaw
atalowfigurethepriceofwoollengoodsandtherateofwages，
andthattheproductionofcorncouldbeincreasedbyprohibiting
sheepfarmingonalargescale？
AndhowmuchsoonerwouldEngland\'swoollenmanufacturesand
maritimetradehavereachedahighstandardofprosperityhadnot
HenryVIIIregardedariseinthepricesofcornasanevil；had
he，insteadofdrivingforeignworkmenbywholesalefromthe
kingdom，soughtlikehispredecessorstoaugmenttheirnumberby
encouragingtheirimmigration；andhadnotHenryVIIrefusedhis
sanctiontotheActofNavigationasproposedbyParliament？
InFranceweseenativemanufactures，freeinternal
intercourse，foreigntrade，fisheries，navigation，andnavalpower——
inaword，alltheattributesofagreat，mighty，andrich
nationwhichithadcostEnglandtheperseveringeffortsof
centuriestoacquire——calledintoexistencebyagreatgenius
withinthespaceofafewyears，asitwerebyamagician\'swand；
andafterwardsallofthemyetmorespeedilyannihilatedbythe
ironhandoffanaticismanddespotism。
Weseetheprincipleoffreetradecontendinginvainunder
unfavourableconditionsagainstrestrictionpowerfullyenforced；
theHanseaticLeagueisruined，whileHollandsinksundertheblows
ofEnglandandFrance。
Thatarestrictivecommercialpolicycanbeoperativeforgood
onlysofarasitissupportedbytheprogressivecivilisationand
freeinstitutionsofanation，welearnfromthedecayofVenice，
Spain，andPortugal，fromtherelapseofFranceinconsequenceof
therevocationoftheEdictofNantes，andfromthehistoryof
England，inwhichcountrylibertykeptpaceatalltimeswiththe
advanceofindustry，trade，andnationalwealth。
That，onthecontrary，ahighlyadvancedstateofcivilisation，
withorwithoutfreeinstitutions，unlesssupportedbyasuitable
systemofcommercialpolicy，willprovebutapoorguaranteefora
nation\'seconomicprogress，maybelearntontheonehandfromthe
historyoftheNorthAmericanfreestates，andontheotherfrom
theexperienceofGermany。
ModernGermany，lackingasystemofvigorousandunited
commercialpolicy，exposedinherhomemarketstocompetitionwith
aforeignmanufacturingpowerineverywaysuperiortoherown，
whileexcludedatthesametimefromforeignmarketsbyarbitrary
andoftencapriciousrestrictions，andveryfarindeedfrommaking
thatprogressinindustrytowhichherdegreeofcultureentitles
her，cannotevenmaintainherpreviouslyacquiredposition，andis
madeaconvenienceoflikeacolonybythatverynationwhich
centuriesagowasworkeduponinlikemannerbythemerchantsof
Germany，untilatlasttheGermanstateshaveresolvedtosecure
theirhomemarketsfortheirownindustry，bytheadoptionofa
unitedvigoroussystemofcommercialpolicy。
TheNorthAmericanfreestates，who，morethananyothernation
beforethem，areinapositiontobenefitbyfreedomoftrade，and
influencedevenfromtheverycradleoftheirindependencebythe
doctrinesofthecosmopolitanschool，arestrivingmorethanany
othernationtoactonthatprinciple。ButowingtowarswithGreat
Britain，wefindthatnationtwicecompelledtomanufactureathome
thegoodswhichitpreviouslypurchasedunderfreetradefromother
countries，andtwice，aftertheconclusionofpeace，broughttothe
brinkofruinbyfreecompetitionwithforeigners，andthereby
admonishedofthefactthatunderthepresentconditionsofthe
worldeverygreatnationmustseektheguaranteesofitscontinued
prosperityandindependence，beforeallotherthings，inthe
independentanduniformdevelopmentofitsownpowersand
resources。
Thushistoryshowsthatrestrictionsarenotsomuchthe
inventionsofmerespeculativeminds，asthenaturalconsequences
ofthediversityofinterests，andofthestrivingsofnations
afterindependenceoroverpoweringascendency，andthusofnational
emulationandwars，andthereforethattheycannotbedispensed
withuntilthisconflictofnationalinterestsshallcease，in
otherwordsuntilallnationscanbeunitedunderoneandthesame
systemoflaw。Thusthequestionastowhether，andhow，the
variousnationscanbebroughtintooneunitedfederation，andhow
thedecisionsoflawcanbeinvokedintheplaceofmilitaryforce
todeterminethedifferenceswhicharisebetweenindependent
nations，hastobesolvedconcurrentlywiththequestionhow
universalfreetradecanbeestablishedintheplaceofseparate
nationalcommercialsystems。
Theattemptswhichhavebeenmadebysinglenationsto
introducefreedomoftradeinfaceofanationwhichispredominant
inindustry，wealth，andpower，nolessthandistinguishedforan
exclusivetariffsystem——asPortugaldidin1703，Francein1786，
NorthAmericain1786and1816，Russiafrom1815till1821，andas
Germanyhasdoneforcenturies——gotoshowusthatinthisway
theprosperityofindividualnationsissacrificed，withoutbenefit
tomankindingeneral，solelyfortheenrichmentofthepredominant
manufacturingandcommercialnation。Switzerlandaswehopeto
showinthesequelconstitutesanexception，whichprovesjustas
muchasitproveslittlefororagainstoneortheothersystem。
Colbertappearstousnottohavebeentheinventorofthat
systemwhichtheItalianshavenamedafterhim；for，aswehave
seen，itwasfullyelaboratedbytheEnglishlongbeforehistime。
ColbertonlyputinpracticewhatFrance，ifshewishedtofulfil
herdestinies，wasboundtocarryoutsoonerorlater。IfColbert
istobeblamedatall，itcanonlybechargedagainsthimthathe
attemptedtoputintoforceunderadespoticgovernmentasystem
whichcouldsubsistonlyafterafundamentalreformofthe
politicalconditions。ButagainstthisreproachtoColbert\'smemory
itmayverywellbearguedthat，hadhissystembeencontinuedby
wiseprincesandsagaciousministers，itwouldinallprobability
haveremovedbymeansofreformsallthosehindranceswhichstood
inthewayofprogressinmanufactures，agriculture，andtrade，as
wellasofnationalfreedom；andFrancewouldthenhaveundergone
norevolution，butrather，impelledalongthepathofdevelopment
bythereciprocatinginfluencesofindustryandfreedom，shemight
forthelastcenturyandahalfhavebeensuccessfullycompeting
withEnglandinmanufactures，inthepromotionofherinternal
trade，inforeigncommerce，andincolonisation，aswellasinher
fisheries，hernavigation，andhernavalpower。
Finally，historyteachesushownationswhichhavebeenendowed
byNaturewithallresourceswhicharerequisitefortheattainment
ofthehighestgradeofwealthandpower，mayandmust——without
onthataccountforfeitingtheendinview——modifytheirsystems
accordingtothemeasureoftheirownprogress：inthefirststage，
adoptingfreetradewithmoreadvancednationsasameansof
raisingthemselvesfromastateofbarbarism，andofmaking
advancesinagriculture；inthesecondstage，promotingthegrowth
ofmanufactures，fisheries，navigation，andforeigntradebymeans
ofcommercialrestrictions；andinthelaststage，afterreaching
thehighestdegreeofwealthandpower，bygraduallyrevertingto
theprincipleoffreetradeandofunrestrictedcompetitioninthe
homeaswellasinforeignmarkets，thatsotheiragriculturists，
manufacturers，andmerchantsmaybepreservedfromindolence，and
stimulatedtoretainthesupremacywhichtheyhaveacquired。Inthe
firststage，weseeSpain，Portugal，andtheKingdomofNaples；in
thesecond，GermanyandtheUnitedStatesofNorthAmerica；France
apparentlystandscloseupontheboundarylineofthelaststage；
butGreatBritainaloneatthepresenttimehasactuallyreached
it。
EndSecondBook
TheTheory
Chapter11
PoliticalandCosmopoliticalEconomy
BeforeQuesnayandtheFrencheconomiststhereexistedonlya
practiceofpoliticaleconomywhichwasexercisedbytheState
officials，administrators，andauthorswhowroteaboutmattersof
administration，occupiedthemselvesexclusivelywiththe
agriculture，manufactures，commerce，andnavigationofthose
countriestowhichtheybelonged，withoutanalysingthecausesof
wealth，ortakingatallintoconsiderationtheinterestsofthe
wholehumanrace。
Quesnayfromwhomtheideaofuniversalfreetradeoriginated
wasthefirstwhoextendedhisinvestigationstothewholehuman
race，withouttakingintoconsiderationtheideaofthenation。He
callshiswork\'Physiocratie，ouduGouvernementleplusavantageux
auGenreHumain，\'hisdemandsbeingthatwemustimaginethatthe
merchantsofallnationsformedonecommercialrepublic。Quesnay
undoubtedlyspeaksofcosmopoliticaleconomy，i。e。ofthatscience
whichteacheshowtheentirehumanracemayattainprosperity；in
oppositiontopoliticaleconomy，orthatsciencewhichlimitsits
teachingtotheinquiryhowagivennationcanobtainunderthe
existingconditionsoftheworldprosperity，civilisation，and
power，bymeansofagriculture，industry，andcommerce。
AdamSmith1*treatshisdoctrineinasimilarlyextended
sense，bymakingithistasktoindicatethecosmopoliticalideaof
theabsolutefreedomofthecommerceofthewholeworldinspiteof
thegrossmistakesmadebythephysiocratesagainsttheverynature
ofthingsandagainstlogic。AdamSmithconcernedhimselfaslittle
asQuesnaydidwithtruepoliticaleconomy，i。e。thatpolicywhich
eachseparatenationhadtoobeyinordertomakeprogressinits
economicalconditions。Heentitleshiswork，\'TheNatureandCauses
oftheWealthofNations\'i。e。ofallnationsofthewholehuman
race。HespeaksofthevarioussystemsofPoliticaleconomyina
separatepartofhisworksolelyforthepurposeofdemonstrating
theirnon-efficiency，andofprovingthat\'political\'ornational
economymustbereplacedby\'cosmopoliticalorworld-wideeconomy。\'
Althoughhereandtherehespeaksofwars，thisonlyoccurs
incidentally。Theideaofaperpetualstateofpeaceformsthe
foundationofallhisarguments。Moreover，accordingtothe
explicitremarksofhisbiographer，DugaldStewart，his
investigationsfromthecommencementarebasedupontheprinciple
that\'mostoftheStateregulationsforthepromotionofpublic
prosperityareunnecessary，andanationinordertobetransformed
fromtheloweststateofbarbarismintoastateofthehighest
possibleprosperityneedsnothingbutbearabletaxation，fair
administrationofjustice，andpeace。\'AdamSmithnaturally
understoodundertheword\'peace\'the\'perpetualuniversalpeace\'
oftheAbb？St。Pierre。
J。B。Sayopenlydemandsthatweshouldimaginetheexistence
ofauniversalrepublicinordertocomprehendtheideaofgeneral
freetrade。Thiswriter，whoseeffortsweremainlyrestrictedto
theformationofasystemoutofthematerialswhichAdamSmithhad
broughttolight，saysexplicitlyinthesixthvolumep。288of
his\'Economiepolitiquepratique\'。\'Wemaytakeintoour
considerationtheeconomicalinterestsofthefamilywiththe
fatheratitshead；theprinciplesandobservationsreferring
theretowillconstituteprivateeconomy。Thoseprinciples，however，
whichhavereferencetotheinterestsofwholenations，whetherin
themselvesorinrelationtoothernations，formpubliceconomy
l\'閏onomiepublique。Politicaleconomy，lastly，relatestothe
interestsofallnations，tohumansocietyingeneral。\'
Itmustberemarkedhere，thatinthefirstplaceSay
recognisestheexistenceofanationaleconomyorpolitical
economy，underthename\'閏onomiepublique，\'butthathenowhere
treatsofthelatterinhisworks；secondly，thatheattributesthe
namepoliticaleconomytoadoctrinewhichisevidentlyof
cosmopoliticalnature；andthatinthisdoctrineheinvariably
merelyspeaksofaneconomywhichhasforitssoleobjectthe
interestsofthewholehumansociety，withoutregardtothe
separateinterestsofdistinctnations。
ThissubstitutionoftermsmightbepassedoverifSay，after
havingexplainedwhathecallspoliticaleconomywhich，however，
isnothingelsebutcosmopoliticalorworld-wideeconomy，or
economyofthewholehumanrace，hadacquainteduswiththe
principlesofthedoctrinewhichhecalls\'閏onomiepublique，\'
whichhoweveris，properlyspeaking，nothingelsebuttheeconomy
ofgivennations，ortruepoliticaleconomy。
Indefininganddevelopingthisdoctrinehecouldscarcely
forbeartoproceedfromtheideaandthenatureofthenation，and
toshowwhatmaterialmodificationsthe\'economyofthewholehuman
race\'mustundergobythefactthatatpresentthatraceisstill
separatedintodistinctnationalitieseachheldtogetherbycommon
powersandinterests，anddistinctfromothersocietiesofthesame
kindwhichintheexerciseoftheirnaturallibertyareopposedto
oneanother。However，bygivinghiscosmopoliticaleconomythename
political，hedispenseswiththisexplanation，effectsbymeansof
atranspositionoftermsalsoatranspositionofmeaning，and
therebymasksaseriesofthegravesttheoreticalerrors。
Alllaterwritershaveparticipatedinthiserror。Sismondi
alsocallspoliticaleconomyexplicitly\'Lasciencequisecharge
dubonheurdel\'esp鑓ehumaine。\'AdamSmithandhisfollowersteach
usfromthismainlynothingmorethanwhatQuesnayandhis
followershadtaughtusalready，forthearticleofthe\'Revue
M閠hodique\'treatingofthephysiocraticschoolstates，inalmost
thesamewords：\'Thewell-beingoftheindividualisdependent
altogetheronthewell-beingofthewholehumanrace。\'
ThefirstoftheNorthAmericanadvocatesoffreetrade，as
understoodbyAdamSmith——ThomasCooper，PresidentofColumbia
College——denieseventheexistenceofnationality；hecallsthe
nation\'agrammaticalinvention，\'createdonlytosaveperiphrases，
anonentity，whichhasnoactualexistencesaveintheheadsof
politicians。Cooperismoreoverperfectlyconsistentwithrespect
tothis，infactmuchmoreconsistentthanhispredecessorsand
instructors，foritisevidentthatassoonastheexistenceof
nationswiththeirdistinctnatureandinterestsisrecognised，it
becomesnecessarytomodifytheeconomyofhumansocietyin
accordancewiththesespecialinterests，andthatifCooper
intendedtorepresentthesemodificationsaserrors，itwasvery
wiseonhispartfromthebeginningtodisowntheveryexistenceof
nations。
Forourownpart，wearefarfromrejectingthetheoryof
cosmopoliticaleconomy，asithasbeenperfectedbytheprevailing
school；weare，however，ofopinionthatpoliticaleconomy，oras
Saycallsit\'閏onomiepublique，\'shouldalsobedeveloped
scientifically，andthatitisalwaysbettertocallthingsby
theirpropernamesthantogivethemsignificationswhichstand
opposedtothetrueimportofwords。
Ifwewishtoremaintruetothelawsoflogicandofthe
natureofthings，wemustsettheeconomyofindividualsagainst
theeconomyofsocieties，anddiscriminateinrespecttothelatter
betweentruepoliticalornationaleconomywhich，emanatingfrom
theideaandnatureofthenation，teacheshowagivennationin
thepresentstateoftheworldanditsownspecialnational
relationscanmaintainandimproveitseconomicalconditionsand
cosmopoliticaleconomy，whichoriginatesintheassumptionthatall
nationsoftheearthformbutonesocietylivinginaperpetual
stateofpeace。
If，astheprevailingschoolrequites，weassumeauniversal
unionorconfederationofallnationsastheguaranteeforan
everlastingpeace，theprincipleofinternationalfreetradeseems
tobeperfectlyjustified。Thelesseveryindividualisrestrained
inpursuinghisownindividualprosperity，thegreaterthenumber
andwealthofthosewithwhomhehasfreeintercourse，thegreater
theareaoverwhichhisindividualactivitycanexerciseitself，
theeasieritwillbeforhimtoutilisefortheincreaseofhis
prosperitythepropertiesgivenhimbynature，theknowledgeand
talentswhichhehasacquired，andtheforcesofnatureplacedat
hisdisposal。Aswithseparateindividuals，soisitalsothecase
withindividualcommunities，provinces，andcountries。Asimpleton
onlycouldmaintainthataunionforfreecommercialintercourse
betweenthemselvesisnotasadvantageoustothedifferentstates
includedintheUnitedStatesofNorthAmerica，tothevarious
departmentsofFrance，andtothevariousGermanalliedstates，as
wouldbetheirseparationbyinternalprovincialcustomstariffs。
IntheunionofthethreekingdomsofGreatBritainandIreland
theworldwitnessesagreatandirrefragableexampleofthe
immeasurableefficacyoffreetradebetweenunitednations。Letus
onlysupposeallothernationsoftheearthtobeunitedina
similarmanner，andthemostvividimaginationwillnotbeableto
picturetoitselfthesumofprosperityandgoodfortunewhichthe
wholehumanracewouldtherebyacquire。
Unquestionablytheideaofauniversalconfederationanda
perpetualpeaceiscommendedbothbycommonsenseandreligion。2*
Ifsinglecombatbetweenindividualsisatpresentconsideredtobe
contrarytoreason，howmuchmoremustcombatbetweentwonations
besimilarlycondemned？Theproofswhichsocialeconomycanproduce
fromthehistoryofthecivilisationofmankindofthe
reasonablenessofbringingabouttheunionofallmankindunderthe
lawofright，areperhapsthosewhicharetheclearesttosound
humanunderstanding。
Historyteachesthatwhereverindividualsareengagedinwars，
theprosperityofmankindisatitsloweststage，andthatit
increasesinthesameproportioninwhichtheconcordofmankind
increases。Intheprimitivestateofthehumanrace，firstunions
offamiliestookplace，thentowns，thenconfederationsoftowns，
thenunionofwholecountries，finallyunionsofseveralstates
underoneandthesamegovernment。Ifthenatureofthingshasbeen
powerfulenoughtoextendthisunionwhichcommencedwiththe
familyoverhundredsofmillions，weoughttoconsiderthatnature
tobepowerfulenoughtoaccomplishtheunionofallnations。If
thehumanmindwerecapableofcomprehendingtheadvantagesofthis
greatunion，sooughtwetoventuretodeemitcapableof
understandingthestillgreaterbenefitswhichwouldresultfroma
unionofthewholehumanrace。Manyinstancesindicatethis
tendencyinthespiritofthepresenttimes。Weneedonlyhintat
theprogressmadeinsciences，arts，anddiscoveries，inindustry
andsocialorder。Itmaybealreadyforeseenwithcertainty，that
afteralapseofafewdecadesthecivilisednationsoftheearth
will，bytheperfectionofthemeansofconveyance，beunitedas
respectsbothmaterialandmentalinterchangeinascloseamanner
asorevencloserthanthatinwhichacenturyagothevarious
countiesofEnglandwereconnected。Continentalgovernmentspossess
alreadyatthepresentmomentinthetelegraphthemeansof
communicatingwithoneanother，almostasiftheywereatoneand
thesameplace。Powerfulforcespreviouslyunknownhavealready
raisedindustrytoadegreeofperfectionhithertonever
anticipated，andothersstillmorepowerfulhavealreadyannounced
theirappearance。Butthemorethatindustryadvances，and
proportionatelyextendsoverthecountriesoftheearth，the
smallerwillbethepossibilityofwars。Twonationsequallywell
developedinindustrycouldmutuallyinflictononeanothermore
injuryinoneweekthantheywouldbeabletomakegoodinawhole
generation。Buthenceitfollowsthatthesamenewforceswhich
havehithertoservedparticularlyforproductionwillnotwithhold
theirservicesfromdestruction，andwillprincipallyfavourthe
sideofdefence，andespeciallytheEuropeanContinentalnations，
whiletheythreatentheinsularStatewiththelossofthose
advantageswhichhavebeengainedbyherinsularpositionforher
defence。InthecongressesofthegreatEuropeanpowersEurope
possessesalreadytheembryoofafuturecongressofnations。The
endeavourstosettledifferencesbyprotocolareclearlyalready
prevailingoverthosewhichobtainjusticebyforceofarms。A
clearerinsightintothenatureofwealthandindustryhasledthe
wiserheadsofallcivilisednationstotheconvictionthatboth
thecivilisationofbarbarousandsemi-barbarousnations，andof
thosewhosecultureisretrograding，aswellastheformationof
colonies，offertocivilisednationsafieldforthedevelopmentof
theirproductivepowerswhichpromisesthemmuchricherandsafer
fruitsthanmutualhostilitiesbywarsorrestrictionsontrade。
Thefartherweadvanceinthisperception，andthemorethe
uncivilisedcountriescomeintocontactwiththecivilisedonesby
theprogressmadeinthemeansoftransport，somuchmorewillthe
civilisedcountriescomprehendthatthecivilisationofbarbarous
nations，ofthosedistractedbyinternalanarchy，orwhichare
oppressedbybadgovernment，isataskwhichofferstoallequal
advantages——adutyincumbentonthemallalike，butonewhichcan
onlybeaccomplishedbyunity。
Thatthecivilisationofallnations，thecultureofthewhole
globe，formsataskimposedonthewholehumanrace，isevident
fromthoseunalterablelawsofnaturebywhichcivilisednations
aredrivenonwithirresistiblepowertoextendortransfertheir
powersofproductiontolesscultivatedcountries。Wesee
everywhere，undertheinfluenceofcivilisation，population，powers
ofmind，materialcapitalattainingtosuchdimensionsthatthey
mustnecessarilyflowoverintootherlesscivilisedcountries。If
thecultivableareaofthecountrynolongersufficestosustain
thepopulationandtoemploytheagriculturalpopulation，the
redundantportionofthelatterseeksterritoriessuitablefor
cultivationindistantlands；ifthetalentsandtechnical
abilitiesofanationhavebecomesonumerousastofindnolonger
sufficientrewardswithinit，theyemigratetoplaceswherethey
aremoreindemand；ifinconsequenceoftheaccumulationof
materialcapital，theratesofinterestfallsoconsiderablythat
thesmallercapitalistcannolongerliveonthem，hetriesto
investhismoneymoresatisfactorilyinlesswealthycountries。
Atrueprinciple，therefore，underliesthesystemofthe
popularschool，butaprinciplewhichmustberecognisedand
appliedbyscienceifitsdesigntoenlightenpracticeistobe
fulfilled，anideawhichpracticecannotignorewithoutgetting
astray；onlytheschoolhasomittedtotakeintoconsiderationthe
natureofnationalitiesandtheirspecialinterestsandconditions，
andtobringtheseintoaccordwiththeideaofuniversalunionand
aneverlastingpeace。
Thepopularschoolhasassumedasbeingactuallyinexistence
astateofthingswhichhasyettocomeintoexistence。Itassumes
theexistenceofauniversalunionandastateofperpetualpeace，
anddeducestherefromthegreatbenefitsoffreetrade。Inthis
manneritconfoundseffectswithcauses。Amongtheprovincesand
stateswhicharealreadypoliticallyunited，thereexistsastate
ofperpetualpeace；fromthispoliticalunionoriginatestheir
commercialunion，anditisinconsequenceoftheperpetualpeace
thusmaintainedthatthecommercialunionhasbecomesobeneficial
tothem。Allexampleswhichhistorycanshowarethoseinwhichthe
politicalunionhasledtheway，andthecommercialunionhas
followed。3*Notasingleinstancecanbeadducedinwhichthe
latterhastakenthelead，andtheformerhasgrownupfromit。
That，however，undertheexistingconditionsoftheworld，the
resultofgeneralfreetradewouldnotbeauniversalrepublic，
but，onthecontrary，auniversalsubjectionofthelessadvanced
nationstothesupremacyofthepredominantmanufacturing，
commercial，andnavalpower，isaconclusionforwhichthereasons
areverystrongand，accordingtoourviews，irrefragable。A
universalrepublicinthesenseofHenryIVandoftheAbb？St。
Pierre，i。e。aunionofthenationsoftheearthwherebythey
recognizethesameconditionsofrightamongthemselvesand
renounceself-redress，canonlyberealisedifalargenumberof
nationalitiesattaintoasnearlythesamedegreeaspossibleof
industryandcivilisation，politicalcultivation，andpower。Only
withthegradualformationofthisunioncanfreetradebe
developed，onlyasaresultofthisunioncanitconferonall
nationsthesamegreatadvantageswhicharenowexperiencedby
thoseprovincesandstateswhicharepoliticallyunited。Thesystem
ofprotection，inasmuchasitformstheonlymeansofplacingthose
nationswhicharefarbehindincivilisationonequaltermswith
theonepredominatingnationwhich，however，neverreceivedatthe
handsofNatureaperpetualrighttoamonopolyofmanufacture，but
whichmerelygainedanadvanceoverothersinpointoftime，the
systemofprotectionregardedfromthispointofviewappearstobe
themostefficientmeansoffurtheringthefinalunionofnations，
andhencealsoofpromotingtruefreedomoftrade。Andnational
economyappearsfromthispointofviewtobethatsciencewhich，
correctlyappreciatingtheexistinginterestsandtheindividual
circumstancesofnations，teacheshoweveryseparatenationcanbe
raisedtothatstageofindustrialdevelopmentinwhichunionwith
othernationsequallywelldeveloped，andconsequentlyfreedomof
trade，canbecomepossibleandusefultoit。
Thepopularschool，however，hasmixedupbothdoctrineswith
oneanother；ithasfallenintothegraveerrorofjudgingofthe
conditionsofnationsaccordingtopurelycosmopolitical
principles，andofignoringfrommerelypoliticalreasonsthe
cosmopoliticaltendencyoftheproductivepowers。
Onlybyignoringthecosmopoliticaltendencyoftheproductive
powerscouldMalthusbeledintotheerrorofdesiringtorestrict
theincreaseofpopulation，orChalmersandTorrensmaintainmore
recentlythestrangeideathataugmentationofcapitaland
unrestrictedproductionareevilstherestrictionofwhichthe
welfareofthecommunityimperativelydemands，orSismondideclare
thatmanufacturesarethingsinjurioustothecommunity。Their
theoryinthiscaseresemblesSaturn，whodevourshisownchildren——
thesametheorywhichallowsthatfromtheincreaseof
population，ofcapitalandmachinerydivisionoflabourtakes
place，andexplainsfromthisthewelfareofsociety，finally
considerstheseforcesasmonsterswhichthreatentheprosperityof
nations，becauseitmerelyregardsthepresentconditionsof
individualnations，anddoesnottakeintoconsiderationthe
conditionsofthewholeglobeandthefutureprogressofmankind。
Itisnottruethatpopulationincreasesinalargerproportion
thanproductionofthemeansofsubsistence；itisatleastfoolish
toassumesuchdisproportion，ortoattempttoproveitby
artificialcalculationsorsophisticalarguments，solongasonthe
globeamassofnaturalforcesstillliesinertbymeansofwhich
tentimesorperhapsahundredtimesmorepeoplethanarenow
livingcanbesustained。Itismerenarrow-mindednesstoconsider
thepresentextentoftheproductiveforcesasthetestofhowmany
personscouldbesupportedonagivenareaofland。Thesavage，the
hunter，andthefisherman，accordingtohisowncalculation，would
notfindroomenoughforonemillionpersons，theshepherdnotfor
tenmillions，therawagriculturistnotforonehundredmillionson
thewholeglobe；andyettwohundredmillionsarelivingatpresent
inEuropealone。Thecultureofthepotatoandoffood-yielding
plants，andthemorerecentimprovementsmadeinagriculture
generally，haveincreasedtenfoldtheproductivepowersofthe
humanraceforthecreationofthemeansofsubsistence。Inthe
MiddleAgestheyieldofwheatofanacreoflandinEnglandwas
fourfold，to-dayitistentotwentyfold，andinadditiontothat
fivetimesmorelandiscultivated。InmanyEuropeancountriesthe
soilofwhichpossessesthesamenaturalfertilityasthatof
Englandtheyieldatpresentdoesnotexceedfourfold。Whowill
venturetosetfurtherlimitstothediscoveries，inventions，and
improvementsofthehumanrace？Agriculturalchemistryisstillin
itsinfancy；whocantellthatto-morrow，bymeansofanew
inventionordiscovery，theproduceofthesoilmaynotbe
increasedfiveortenfold？Wealreadypossess，intheartesian
well，themeansofconvertingunfertilewastesintorichcorn
fields；andwhatunknownforcesmaynotyetbehiddeninthe
interioroftheearth？Letusmerelysupposethatthroughanew
discoverywewereenabledtoproduceheateverywhereverycheaply
andwithouttheaidofthefuelsatpresentknown：whatspacesof
landcouldthusbeutilisedforcultivation，andinwhatan
incalculabledegreewouldtheyieldofagivenareaoflandbe
increased？IfMalthus\'doctrineappearstousinitstendency
narrow-minded，itisalsointhemethodsbywhichitcouldactan
unnaturalone，whichdestroysmoralityandpower，andissimply
horrible。Itseekstodestroyadesirewhichnatureusesasthe
mostactivemeansforincitingmentoexertbodyandmind，andto
awakenandsupporttheirnoblerfeelings——adesiretowhich
humanityforthegreaterpartowesitsprogress。Itwouldelevate
themostheartlessegotismtothepositionofalaw；itrequiresus
tocloseourheartsagainstthestarvingman，becauseifwehand
himfoodanddrink，anothermightstarveinhisplaceinthirty
years\'time。Itsubstitutescoldcalculationforsympathy。This
doctrinetendstoconverttheheartsofmenintostones。Butwhat
couldbefinallyexpectedofanationwhosecitizensshouldcarry
stonesinsteadofheartsintheirbosoms？Whatelsethanthetotal
destructionofallmorality，andwithitofallproductiveforces，
andthereforeofallthewealth，civilisation，andpowerofthe
nation？
Ifinanationthepopulationincreasesmorethanthe
productionofthemeansofsubsistence，ifcapitalaccumulatesat
lengthtosuchanextentasnolongertofindinvestment，if
machinerythrowsanumberofoperativesoutofworkand
manufacturedgoodsaccumulatetoalargeexcess，thismerely
proves，thatnaturewillnotallowindustry，civilisation，wealth，
andpowertofallexclusivelytothelotofasinglenation，or
thatalargeportionoftheglobesuitableforcultivationshould
bemerelyinhabitedbywildanimals，andthatthelargestportion
ofthehumanraceshouldremainsunkinsavagery，ignorance，and
poverty。
Wehaveshownintowhaterrorstheschoolhasfallenbyjudging
theproductiveforcesofthehumanracefromapoliticalpointof
view；wehavenowalsotopointoutthemistakeswhichithas
committedbyregardingtheseparateinterestsofnationsfroma
cosmopoliticalpointofview。
Ifaconfederationofallnationsexistedinreality，asisthe
casewiththeseparatestatesconstitutingtheUnionofNorth
America，theexcessofpopulation，talents，skilledabilities，and
materialcapitalwouldflowoverfromEnglandtotheContinental
states，inasimilarmannertothatinwhichittravelsfromthe
easternstatesoftheAmericanUniontothewestern，providedthat
intheContinentalstatesthesamesecurityforpersonsand
property，thesameconstitutionandgenerallawsprevailed，and
thattheEnglishGovernmentwasmadesubjecttotheunitedwillof
theuniversalconfederation。Underthesesuppositionstherewould
benobetterwayofraisingallthesecountriestothesamestage
ofwealthandcultivationasEnglandthanfreetrade。Thisisthe
argumentoftheschool。Buthowwouldittallywiththeactual
operationoffreetradeundertheexistingconditionsoftheworld？
TheBritonsasanindependentandseparatenationwould
henceforthtaketheirnationalinterestasthesoleguideoftheir
policy。TheEnglishman，frompredilectionforhislanguage，forhis
laws，regulations，andhabits，wouldwheneveritwaspossible
devotehispowersandhiscapitaltodevelophisownnative
industry，forwhichthesystemoffreetrade，byextendingthe
marketforEnglishmanufacturesoverallcountries，wouldofferhim
sufficientopportunity；hewouldnotreadilytakeafancyto
establishmanufacturesinFranceorGermany。Allexcessofcapital
inEnglandwouldbeatoncedevotedtotradingwithforeignparts
oftheworld。IftheEnglishmantookitintohisheadtoemigrate，
ortoinvesthiscapitalelsewherethaninEngland，hewouldashe
nowdoespreferthosemoredistantcountrieswherehewouldfind
alreadyexistinghislanguage，hislaws，andregulations，rather
thanthebenightedcountriesoftheContinent。AllEnglandwould
thusbedevelopedintooneimmensemanufacturingcity。Asia，
Africa，andAustraliawouldbecivilisedbyEngland，andcovered
withnewstatesmodelledaftertheEnglishfashion。Intimeaworld
ofEnglishstateswouldbeformed，underthepresidencyofthe
motherstate，inwhichtheEuropeanContinentalnationswouldbe
lostasunimportant，unproductiveraces。Bythisarrangementit
wouldfalltothelotofFrance，togetherwithSpainandPortugal，
tosupplythisEnglishworldwiththechoicestwines，andtodrink
thebadonesherself：atmostFrancemightretainthemanufacture
ofalittlemillinery。Germanywouldscarcelyhavemoretosupply
thisEnglishworldwiththanchildren\'stoys，woodenclocks，and
philologicalwritings，andsometimesalsoanauxiliarycorps，who
mightsacrificethemselvestopineawayinthedesertsofAsiaor
Africa，forthesakeofextendingthemanufacturingandcommercial
supremacy，theliteratureandlanguageofEngland。Itwouldnot
requiremanycenturiesbeforepeopleinthisEnglishworldwould
thinkandspeakoftheGermansandFrenchinthesametoneaswe
speakatpresentoftheAsiaticnations。
Truepoliticalscience，however，regardssucharesultof
universalfreetradeasaveryunnaturalone；itwillarguethat
haduniversalfreetradebeenintroducedatthetimeofthe
HanseaticLeague，theGermannationalityinsteadoftheEnglish
wouldhavesecuredanadvanceincommerceandmanufactureoverall
othercountries。
Itwouldbemostunjust，evenoncosmopoliticalgrounds，nowto
resigntotheEnglishallthewealthandpoweroftheearth，merely
becausebythemthepoliticalsystemofcommercewasfirst
establishedandthecosmopoliticalprincipleforthemostpart
ignored。Inordertoallowfreedomoftradetooperatenaturally，
thelessadvancednationsmustfirstberaisedbyartificial
measurestothatstageofcultivationtowhichtheEnglishnation
hasbeenartificiallyelevated。Inorderthat，throughthat
cosmopoliticaltendencyofthepowersofproductiontowhichwe
havealluded，themoredistantpartsoftheworldmaynotbe
benefitedandenrichedbeforetheneighbouringEuropeancountries，
thosenationswhichfeelthemselvestobecapable，owingtotheir
moral，intellectual，social，andpoliticalcircumstances，of
developingamanufacturingpoweroftheirownmustadoptthesystem
ofprotectionasthemosteffectualmeansforthispurpose。The
effectsofthissystemforthepurposeinviewareoftwokinds：in
thefirstplace，bygraduallyexcludingforeignmanufactured
articlesfromourmarkets，asurpluswouldbeoccasionedinforeign
nations，ofworkmen，talents，andcapital，whichmustseek
employmentabroad；andsecondlybythepremiumwhichoursystemof
protectionwouldoffertotheimmigrationintoourcountryof
workmen，talents，andcapital，thatexcessofproductivepower
wouldbeinducedtofindemploymentwithus，insteadofemigrating
todistantpartsoftheworldandtocolonies。Politicalscience
referstohistory，andinquireswhetherEnglandhasnotinformer
timesdrawnfromGermany，Italy，Holland，France，Spain，and
PortugalbythesemeansamassofproDuctivepower。Sheasks：Why
doesthecosmopoliticalschool，whenitpretendstoweighinthe
balancetheadvantagesandthedisadvantagesofthesystemof
protection，utterlyignorethisgreatandremarkableinstanceof
theresultsofthatsystem？
NOTES：
1。ItisallegedthatAdamSmithintendedtohavededicatedhis
greatworktoQuesnay——TR。SeeLifeofSmith，publishedbyT。
andJ。Allman。1825。
2。TheChristianreligioninculcatesperpetualpeace。Butuntilthe
promise，\'Thereshallbeonefoldandoneshepherd，\'hasbeen
fulfilled，theprincipleoftheQuakers，howevertrueitbein
itself，canscarcelybeactedupon。Thereisnobetterprooffor
theDivineoriginoftheChristianreligionthanthatitsdoctrines
andpromisesareinperfectagreementwiththedemandsofboththe
materialandspiritualwell-beingofthehumanrace。
3。ThisstatementwasprobablyaccurateuptotheperiodwhenList
wrote，butanotableexceptiontoitmaynowbeadduced。The
commercialunionofthevariousGermanstatesundertheZollverein
precededbymanyyearstheirpoliticalunionundertheEmpire，and
powerfullypromotedit——TR。
Chapter12
TheTheoryofthePowersofProductionandtheTheoryofValues
AdamSmith\'scelebratedworkisentitled，\'TheNatureand
CausesoftheWealthofNations。\'Thefounderoftheprevailing
economicalschoolhasthereinindicatedthedoublepointofview
fromwhichtheeconomyofnations，likethatofprivateseparate
individuals，shouldberegarded。
Thecausesofwealtharesomethingtotallydifferentfrom
wealthitself。Apersonmaypossesswealth，i。e。exchangeable
value；if，however，hedoesnotpossessthepowerofproducing
objectsofmorevaluethanheconsumes，hewillbecomepoorer。A
personmaybepoor；ifhe，however，possessesthepowerof
producingalargeramountofvaluablearticlesthanheconsumes，he
becomesrich。
Thepowerofproducingwealthisthereforeinfinitelymore
importantthanwealthitself；itinsuresnotonlythepossession
andtheincreaseofwhathasbeengained，butalsothereplacement
ofwhathasbeenlost。Thisisstillmorethecasewithentire
nationswhocannotliveoutofmererentalsthanwithprivate
individuals。Germanyhasbeendevastatedineverycenturyby
pestilence，byfamine，orbycivilorforeignwars；shehas，
nevertheless，alwaysretainedagreatportionofherpowersof
production，andhasthusquicklyre-attainedsomedegreeof
prosperity；whilerichandmightybutdespot-andpriest-ridden
Spain，notwithstandinghercomparativeenjoymentofinternal
peace，1*hassunkdeeperintopovertyandmisery。Thesamesun
stillshinesontheSpaniards，theystillpossessthesameareaof
territory，theirminesarestillasrich，theyarestillthesame
peopleasbeforethediscoveryofAmerica，andbeforethe
introductionoftheInquisition；butthatnationhasgraduallylost
herpowersofproduction，andhasthereforebecomepoorand
miserable。TheWarofIndependenceoftheUnitedStatesofAmerica
costthatnationhundredsofmillions，butherpowersofproduction
wereimmeasurablystrengthenedbygainingindependence，anditwas
forthisreasonthatinthecourseofafewyearsafterthepeace
sheobtainedimmeasurablygreaterrichesthanshe。hadever
possessedbefore。IfwecomparethestateofFranceintheyear
1809withthatoftheyear1839，whatadifferenceinfavourofthe
latter！Nevertheless，Francehasintheinterimlosther
sovereigntyoveralargeportionoftheEuropeancontinent；shehas
sufferedtwodevastatinginvasions，andhadtopaymilliardsof
moneyinwarcontributionsandindemnities。
ItwasimpossiblethatsoclearanintellectasAdamSmith
possessedcouldaltogetherignorethedifferencebetweenwealthand
itscausesandtheoverwhelminginfluenceofthesecausesonthe
conditionofnations。Intheintroductiontohiswork，hesaysin
clearwordsineffect：\'Labourformsthefundfromwhichevery
nationderivesitswealth，andtheincreaseofwealthdependsfirst
ontheproductivepoweroflabour，namely，onthedegreeofskill，
dexterity，andjudgmentwithwhichthelabourofthenationis
generallyapplied，andsecondly，ontheproportionbetweenthe
numberofthoseemployedproductivelyandthenumberofthosewho
arenotsoemployed。\'FromthisweseehowclearlySmithingeneral
perceivedthattheconditionofnationsisprincipallydependenton
thesumoftheirproductivepowers。
Itdoesnot，however，appeartobetheplanofnaturethat
completesciencesshouldspringalreadyperfectedfromthebrainof
individualthinkers。ItisevidentthatSmithwastooexclusively
possessedbythecosmopoliticalideaofthephysiocrats，\'universal
freedomoftrade，\'andbyhisowngreatdiscovery，\'thedivisionof
labour，\'tofollowuptheideaoftheimportancetoanationofits
powersofproduction。Howevermuchsciencemaybeindebtedtohim
inrespectoftheremainingpartsofhiswork，theidea\'division
oflabour\'seemedtohimhismostbrilliantthought。Itwas
calculatedtosecureforhisbookaname，andforhimself
posthumousfame。
Hehadtoomuchworldlywisdomnottoperceivethatwhoever
wishestosellapreciousjeweldoesnotbringthetreasureto
marketmostprofitablybyburyingitinasackofwheat，however
usefulthegrainsofwheatmaybe，butbetterbyexposingitatthe
forefront。Hehadtoomuchexperiencenottoknowthatad閎utant
andhewasthisasregardspoliticaleconomyatthetimeofthe
publicationofhisworkwhointhefirstactcreatesafuroreis
easilyexcusedifinthefollowingonesheonlyoccasionallyraises
himselfabovemediocrity；hehadeverymotiveformakingthe
introductiontohisbook，thedoctrineofdivisionoflabour。Smith
hasnotbeenmistakeninhiscalculations；hisfirstchapterhas
madethefortuneofhisbook，andfoundedhisauthorityasan
economist。