Chap。VIII
OfwhatiscalledExpence，Profit，andLossAswehavebeenemployedinexplainingofterms，itwillnotbeamisstosayawordconcerningthosewhichstandinthetitleofthischapter。
Thetermexpence，whensimplyexpressed，withoutanyparticularrelation，isalwaysunderstoodtoberelativetomoney。ThiskindIdistinguishunderthethreeheads，ofprivate，public，andnational。
1。Privateexpenceis，whataprivateperson，orprivatesociety，laysout，eithertoprovidearticlesofconsumption，orsomethingmorepermanent，whichmaybeconducivetotheirease，convenience，oradvantage。Thuswesay，alargedomesticexpence，relativelytoonewhospendsagreatincome。Wesay，amerchanthasbeenatgreatexpenceformagazines，forliving，forclerks，&c。butneverthathehasbeenatanyinbuyinggoods。Inthesamewayamanufacturermayexpendforbuilding，machines，horses，andcarriages，butneverforthematterhemanufactures。
Whenathingisbought，inordertobesoldagain，thesumemployediscalledmoneyadvanced；whenitisboughtnottobesold，itmaybesaidtobeexpended。
2。Publicexpenceis，theemploymentofthatmoney，whichhasbeencontributedbyindividuals，forthecurrentserviceofthestate。Thecontribution，orgatheringittogether，representstheeffectsofmanyarticlesofprivateexpence；thelayingitoutwhencollected，ispublicexpence。
3。Nationalexpence，iswhatisexpendedoutofthecountry:
thisiswhatdiminishesnationalwealth。Theprincipaldistinctiontobehereattendedto，isbetweenpublicexpence，orthelayingoutofpublicmoney，andnationalexpence，whichisthealienatingthenation’swealthinfavourofstrangers。Thusthegreatestpublicexpenceimaginable，maybenonationalexpence；becausethemoneymayremainathome。Ontheotherhand，thesmallestpublic，orevenprivateexpence，maybeanationalexpence，becausethemoneymaygoabroad。
Profit，andloss，Idivideintopositive，relative，andcompound。Positiveprofit，impliesnolosstoanybody；itresultsfromanaugmentationoflabour，industry，oringenuity，andhastheeffectofswellingoraugmentingthepublicgood。
Positiveloss，impliesnoprofittoanybody；itiswhatresultsfromthecessationoftheformer，oroftheeffectsresultingfromit，andmaybesaidtodiminishthepublicgood。
Relativeprofit，iswhatimpliesalosstosomebody，itmarksavibrationofthebalanceofwealthbetweenparties，butimpliesnoadditiontothegeneralstock。
Relativeloss，iswhat，onthecontrary，impliesaprofittosomebody；italsomarksavibrationofthebalance，buttakesnothingfromthegeneralstock。
Thecompoundiseasilyunderstood；itisthatspeciesofprofitandlosswhichispartlyrelative，andpartlypositive。I
callitcompound，becausebothkindsmaysubsistinseparablyinthesametransaction。
Chap。IX
ThegeneralConsequencesresultingtoatradingNation，upontheopeningofanactiveforeignCommerceDidInotintendtogivemyselftoverygeneraltopicsinthischapterImightinamannerexhaustthewholesubjectofmodernoeconomyunderthistitle；forIapprehendthatthewholesystemofmodernpoliticsisfoundeduponthebasisofanactiveforeigntrade。
Anationwhichremainspassiveinhercommerce，isatthemercyofthosewhoareactive，andmustbegreatlyfavoured，indeed，bynaturaladvantages，orbyaconstantfluxofgoldandsilverfromhermines，tobeabletosupportacorrespondence，notentirelyhurtfultotheaugmentationofherwealth。
Thesethingsshallbemoreenlargeduponaswegoalong:thepointinhand，istoconsidertheconsequencesofthistrade，relativelytothosewhoareactorsintheoperation。
WhenIlookuponthewidefieldwhichhereopenstomyview，Iamperplexedwithtoogreatavarietyofobjects。Inonepart，Iseeadecentandcomelybeginningofindustry，wealthflowinggentlyin，torecompenceingenuity；numbersaugmenting，andeveryonebecomingdailymoreusefultoanother；agricultureproportionallyextendingitself；noviolentrevolutions；noexorbitantprofits；noinsolenceamongtherich；noexcessivemiseryamongthepoor；multitudesemployedinproducing；greatoeconomyuponconsumption；andalltheinstrumentsofluxury，dailyproducedbythehandsofthediligent，goingoutofthecountryfortheserviceofstrangers；notremainingathomeforthegratificationofsensuality。Atlastaugmentationscomeinsensiblytoastop。Thentheseriversofwealth，whichwereinbriskcirculationthroughthewholeworld，andwhichreturnedtothistradingnationasbloodreturnstotheheart，tobethrownoutagainonlybynewpulsations，begintobeobstructedintheircourse；andflowingabroadmoreslowlythanbefore，cometoformstagnationsathome。These，impatientofrestraint，soonburstoutintodomesticcirculation。Uponthiscitiesswellinmagnificenceofbuildings；thefaceofthecountryisadornedwithpalaces，andbecomescoveredwithgroves；luxuryshinestriumphantineverypart；inequalitybecomesmorestrikingtotheeye；andwantandmiseryappearmoredeformed，fromthecontrast；
evenfortunegrowsmorewhimsicalinherinconstancy。thebeggaroftheotherday，nowridesinhiscoach；andhewhowasborninabedofstate，isseentodieinanalms-house。Sucharetheeffectsofgreatdomesticcirculation。
Thestatesmanlooksaboutwithamazement；he，whowaswonttoconsiderhimselfasthefirstmaninthesocietyineveryrespect，perceiveshimselfeclipsedbythelustreofprivatewealth，whichavoidshisgraspwhenheattemptstoseizeit。Thismakeshisgovernmentmorecomplexandmoredifficulttobecarriedon；hemustnowavailhimselfofartandaddressaswellasofpowerandauthority。Bythehelpofcajolingandintrigues，hegetsalittleintodebt；thislaysafoundationforpubliccredit，which，growingbydegrees，andinitsprogressassumingmanynewforms，becomes，fromthemosttenderbeginnings，amostformidablemonster，strikingterrorintothosewhocherisheditinitsinfancy。Uponthis，asuponatriumphantwar-horse，thestatesmangetsa-stride，hethenappearsformidableanew；hisheadturnsgiddy；heischoakedwiththedusthehasraised；andatthemomentheisreadytofall，hefinds，tohisutterastonishmentandsurprise，astrongmoniedinterest，ofhisowncreating，which，insteadofswallowinghimupasheapprehended，fliestohissupport。Throughthishegetsthebetterofallopposition，heestablishestaxes，multipliesthem，mortgageshisfundofsubsistence，eitherbecomesabankrupt，andrisesagainfromhisashes；orifhebelessaudacious，hestandstremblingandtotteringforawhileonthebrinkofthepoliticalprecipice。Fromoneortheotheroftheseperiloussituations，hebeginstodiscoveranendlesspathwhich，afteramultitudeofwindings，stillreturnsintoitself，andcontinuesanequalcoursethroughthisvastlabyrinth:butofthislastpart，moreinthefourthbook。
Itisnowfulltimetoleaveoffrhapsody，andreturntoreasoningandcoolinquiry，concerningthemoreimmediateandmoregeneraleffectsandrevolutionsproducedbytheopeningofaforeigntradeinanationofindustry。
Thefirstandmostsensiblealterationwillbeanincreaseofdemandformanufacturers，becausebysupplyingthewantsofstrangers，thenumberofconsumerswillnowbeconsiderablyaugmented。Whatagainwillfollowuponthis，mustdependuponcircumstances。
Ifthisrevolutioninthestateofdemandshouldprovetooviolent，theconsequenceofitwillbetoraisedemand；ifitshouldprovegradual，itwillincreaseit。Ihopethisdistinctioniswellunderstood，andthattheconsequenceappearsjust:for，ifthesupplydonotincreaseinproportiontothedemand，acompetitionwillensueamongthedemanders；whichisthecommoneffectofsuchsuddenrevolutions。If，ontheotherhand，agentleincreaseofdemandshouldbeaccompaniedwithaproportionalsupply，thewholeindustrioussocietywillgrowinvigour，andinwholesomestature，withoutbeingsensibleofanygreatadvantageorinconvenience；thechangeoftheircircumstanceswillevenbeimperceptible。
Theimmediateeffectsoftheviolentrevolutionwill，inthisexample，beflatteringtosome，anddisagreeabletoothers。
Wealthwillbefounddailytoaugment，fromtherisingofprices，inmanybranchesofindustry。Thiswillencouragetheindustriousclasses，andtheidleconsumersathomewillcomplain。Ihavealreadydweltabundantlylongupontheeffectsresultingfromthistothelowerclassesofthepeople，inprovidingthemwithacertainmeansofsubsistence。Letmenowexamineinwhatrespectthehigherclasseswillbelikewisemadetofeelthegoodeffectsofthisgeneralchange，althoughatfirsttheymaysufferatemporaryinconveniencefromit。
Farmers，ashasbeenobserved，willhaveagreaterdifficultyinfindingservants，who，insteadoflabouringtheground，willchoosetoturnthemselvestomanufactures。Thiswehaveconsideredinthelightofpurgingthelandsofsuperfluousmouths；buteveryconsequenceinthisgreatchainofpoliticsdrawsotherconsequencesafterit，andastheyfollowoneanother，thingsputondifferentfaces，whichaffectclassesdifferently。Thepurgingofthelandisbutoneofthefirst；
herefollowsanother。
Thedesertionofthehandsemployedinatriflingagriculturewillatfirst，nodoubt，embarrassthefarmers，andraisethepriceofwages；butinalittletimeeverythingbecomesbalancedinatradingnation，becausehereeveryindustriousmanmustadvanceprosperity，inspiteofallcombinationsofcircumstances。
Inthecasebeforeus，therelativeprofitsuponfarmingmustsoonbecomegreaterthanformerly，becauseoftheadditionalexpenceofservantswhichmustaffectthewholeclassoffarmers；
consequently，thisadditionalexpence，insteadofturningouttobealosstoeitherlandlordorfarmer，will，aftersomelittletime，turnouttotheadvantageofboth:becausetheproduceoftheground，beingindispensablynecessarytoeverybody，mustineveryarticleincreaseinitsvalue，inproportiontotheexpenceofraisingit。Thusinashorttimeaccountswillbenearlybalancedonallhands；thatistosay，thesameproportionofwealthwill，caterisparibus，continuethesameamongtheindustrious。Isayamongtheindustrious；forthosewhoareeitheridle，ornegligent，willbegreatlosers。
Aproprietorofland，inattentivetothecausesofhisfarmer’sadditionalexpence，mayveryimprudentlysufferhisrentstofall，insteadofassistinghimonaproperoccasion，inordertomakethemafterwardsrisethehigher。
Thosewholiveuponadeterminateincomeinmoney，andwhoarenowiseemployedintraffic，norinanyschemeofindustry，will，bytheaugmentationofprices，befoundinworsecircumstancesthanbefore。
Inatradingnationeverymanmustturnhistalentstoaccount，orhewillundoubtedlybeleftbehindinthisuniversalemulation，inwhichthemostindustrious，themostingenious，andthemostfrugalwillconstantlycarryofftheprize。
Thisconsiderationoughttobeaspurtoeverybody。Therichestmeninatradingnationhavenosecurityagainstpoverty，Imeanproportionalpoverty；forthoughtheydiminishnothingoftheirincome，yetbynotincreasingitinproportiontoothers，theylosetheirrankinwealth，andfromthefirstclassinwhichtheystood，theywillslideinsensiblydowntoalower。
Thisisoneconsequenceofanadditionalbeneficialtrade，thatitraisesdemandandincreaseswealth；butifwesupposenoproportionalaugmentationofsupply，itwillproveatbestbutanairydreamwhichlastsforamoment，andwhenthegildedsceneispassedaway，numberlessaretheinconvenienceswhichareseentofollow。
Ishallnowpointoutthenaturalconsequencesofthisaugmentationofwealthdrawnfromforeignnations，when，inproportiontotheaugmentationofmouths，andofthedemandfortheproduceofindustry，thestatesmanremainsinattentivetoincreasethesupplybothoffoodandmanufactures。
Insuchasituationprofitswilldailyswell，andeveryschemeforreducingthemwithintheboundsofmoderation，willbelookeduponasahurtfulandunpopularmeasure:beitso；butletusexaminetheconsequences。
Wehavesaid，thattheriseofdemandformanufacturesnaturallyincreasesthevalueofwork:nowImustadd，thatundersuchcircumstances，theaugmentationofriches，inacountry，eithernotcapableofimprovementastothesoil，orwhereprecautionshavenotbeentakenforfacilitatingamultiplicationofinhabitants，bytheimportationofsubsistence，willbeproductiveofthemostcalamitousconsequences。
Ononeside，thiswealthwilleffectuallydiminishthemassofthefoodbeforeproduced；andontheother，willincreasethenumberofuselessconsumers。Thefirstofthesecircumstanceswillraisethedemandforfood；andthesecondwilldiminishthenumberofusefulfreehands，andconsequentlyraisethepriceofmanufactures:hereareshortlytheoutlinesofthisprogress。
Themorerichandluxuriousapeopleare，themoredelicatetheybecomeintheirmannerofliving；iftheyfedonbreadformerly，theywillnowfeedonmeat；iftheyfedonmeat，theywillnowfeedonfowl。Thesamegroundwhichfeedsahundredwithbread，andaproportionalquantityofanimalfood，willnotmaintainanequalnumberofdelicatelivers。Foodmustthenbecomemorescarce；demandforitrises；thericharealwaysthestrongestinthemarket；theyconsumethefood，andthepoorareforcedtostarve。Herethewidedoortomoderndistressopens，towit，ahurtfulcompetitionforsubsistence。Farther，whenapeoplebecomerich，theythinklessofoeconomy；anumberofuselessservantsarehired，tobecomeanadditionaldeadweightonconsumption；andwhentheirstarvingcountrymencannotsupplytheextravaganceoftherichsocheaplyasothernations，theyeitherimportinstrumentsofforeignluxury，orseektoenjoythemoutoftheirowncountry，andtherebymakerestitutionoftheirgains。
Isitnotthereforeevident，thatif，beforethingscometothispass，additionalsubsistencebenotprovidedbyonemethodorother，thenumberofinhabitantsmustdiminish；althoughrichesmaydailyincreasebyabalanceofadditionalmatter，supposedtobebroughtintothecountryinconsequenceofthehithertobeneficialforeigntrade。Thisisnotall。Isayfarther，thatthebeneficialtradewilllastforatimeonly。Fortheinfallibleconsequenceoftheriseofpricesathomewillbe，thatthosenationswhichatfirstconsumedyourmanufactures，perceivingthegradualincreaseoftheirprice，willbegintoworkforthemselves；orfindingoutyourrivalswhocansupplythemcheaper，willopentheirdoorstothem。Theseagain，perceivingthegreatadvantagesgainedbyyourtraders，willbegintosupplythemarket；andsinceeverythingmustbecheaperincountrieswherewedonotsupposetheconcurrenceofallthecircumstancesmentionedabove，thesenationswillsupplantyou，andbeenrichedintheirturn。
Herecomesanewrevolution。Tradeiscometoastop:whatthenbecomesofallthehandswhichwereformerlyemployedinsupplyingtheforeigndemands？
Wererevolutionsassuddenasweareobligedtorepresentthem，allwouldgotowreck；inproportionastheyhappenbyquickerorslowerdegrees，theinconveniencesaregreaterorsmaller。
Prices，wehavesaid，aremadetorisebycompetition。Ifthecompetitionofthestrangerswaswhatraisedthem，thedistressuponthemanufacturerswillbeinproportiontothesuddennessoftheirdesertingthemarket。Ifthecompetitionwasdividedbetweenthestrangersandthehomeconsumers，theinconvenienceswhichensuewillbeless；becausethedesertionofthestrangerswillbeinsomemeasuremadeupbyanincreaseofhomeconsumptionwhichwillfollowuponthefallofprices。Andif，inthethirdcase，thenativeshavebeensoimprudentasnotonlytosupportacompetitionwiththestrangers，andtherebydisgustthemfromcominganymoretomarket，buteventocontinuethecompetitionbetweenthemselves，thewholelosssustainedbytherevolutionwillbenational。Wealthwillceasetoaugment，buttheinconveniences，insteadofbeingfeltbythemanufacturers，willaffectthestateonly；thesemanufacturerswillcontinueinaffluence，extollingthegenerosityoftheircountrymen，anddespisingthepovertyofthestrangerswhohadenrichedthem。
Domesticluxurywillhereproveanexpedientforpreservingfromruintheindustriouspartofapeople，who，insubsistingthemselves，hadenrichedtheircountry。Nochangewillfollowintheircondition；theywillgoonwithapainfulassiduitytolabour，andiftheconsequencesofitbecomenowhurtfultoonepartofthestate，theymust，atleast，beallowedtobeessentiallynecessaryforthesupportoftheother。
Butthatluxuryisnonecessaryconcomitantofforeigntrade，inanationwherethetrueprinciplesofitareunderstood，willappearveryplain，fromacontrastIamnowgoingtopointout，intheexampleofamodernstate，renownedforitscommerceandfrugality。ThecountryImean，isHolland。
Asetofindustriousandfrugalpeoplewereassembledinacountry，bynaturesubjecttomanyinconveniences，theremovingofwhichnecessarilyemployedabundanceofhands。Theirsituationuponthecontinent，thepoweroftheirformermasters，andtheambitionoftheirneighbours，obligedthemtokeepgreatbodiesoftroops。Thesetroopsaddedtothenumbersofthecommunity，withouteitherenrichingthestatebytheirlabourexported，orproducingfoodforthemselvesorcountrymen。
Theschemeofacommonwealthwascalculatedtodrawtogethertheindustrious；butithasbeenstillmoreusefulinsubsistingthem:therepublicanformofgovernment，beingtheregreatlysubdivided，vestsauthoritysufficientineverypartofit，tomakesuitableprovisionfortheirownsubsistence；andthetyewhichunitesthem，regardsmattersofpublicconcernonly。Hadthewholebeengovernedbyonesovereign，orbyonecouncil，thisimportantmatternevercouldhavebeeneffectuated。
Iimagineitwouldbeimpossibleforthemostableministerthateverlived，toprovidenourishmentforacountrysoextendedasFrance，orevenasEngland，supposingtheseasfullypeopledasHollandis:evenalthoughitshouldbeadmittedthatasufficientquantityoffoodmightbefoundinothercountriesfortheirsubsistence。Theenterprisewouldbetoogreat，abuseswouldmultiply；theconsequencewouldbe，thattheinhabitantswoulddieforwant。ButinHollandthecaseisdifferent，everylittletowntakescareofitsowninhabitants；andthiscare，beingtheobjectofapplicationandprofittosomanypersons，isaccomplishedwithsuccess。
Whenonceitislaiddownasamaximinacountry，thatfoodmustofnecessitybegotfromabroad，inordertofeedtheinhabitantsathome，thecorntradebecomesconsiderable，andatthesametimecertain，regular，andpermanent。ThiswasthecaseinHolland:astheinhabitantswereindustrious，thenecessaryconsequencehasbeen，averyextraordinarymultiplication；andatthesametimesuchanabundanceofgrain，thatinsteadofbeinginwantthemselves，theyoftensupplytheirneighbours。TherearemanyexamplesofEngland’sbeingsuppliedwithgrainfromthence，and，whichisstillmoreextraordinary，fromthere-exportationoftheveryproduceofitsownfruitfulsoil。
Itisthereforeevident，thattheonlywaytosupportindustry，istoprovideasupplyofsubsistence，constantlyproportionaltothedemandthatmaybemadeforit。Thisisaprecautionindispensablynecessaryforpreventinghurtfulcompetition。ThisistheparticularcareoftheDutch:solongasitcanbeeffectual，theirstatecanfearnodecline；butwhenevertheycometobedistressedinthemarkets，uponwhichtheydependforsubsistence，theywillsinkintoruin。Itisbymeredintoffrugality，cheapandparsimoniousliving，thatthenavigationofthisindustriouspeopleissupported。Constantemployment，andanaccumulationofalmostimperceptiblegains，fillstheircofferswithwealth，inspiteofthelargeoutgoingstowhichtheirownpropernourishmentyearlyforcesthem。Thelargeprofitsuponindustryinothercountries，whicharenoproofofthegenerosityoftheconsumers，butafataleffectoftheunsteadypriceofsubsistence，isfarfromdazzlingtheireyes。Theyseldomarefoundinthelistofcompetitorsatanyforeignport；iftheyhavetheircargotomake，theywaitwithpleasureintheirownvessels，consumingtheirownprovisions，andatlastacceptofwhatothershaveleft。Itmaybesaid，thatmanyothercircumstancesconcurinfavouroftheDutch，besidesthearticleofsubsistence。Ishallnotdisputethismatter；butonlyremindmyreaderofwhatwassaidinthefirstbook；towit，thatifacomputationbemadeofthehandsemployedinprovidingsubsistence，andofthosewhoareseverallytakenupinsupplyingeveryotherwant，theirnumberswillbefoundnearlytobalanceoneanotherinthemostluxuriouscountries。FromthisI
conclude，thatthearticleoffood，amongthelowerclasses，mustbearaveryhighproportiontoalltheotherarticlesoftheirconsumption；andthereforeadiminutionuponthepriceofsubsistence，itatalltimes，mustbeofandstillmoreanuniformityinthevalueofinfiniteconsequencetomanufacturers，whoareobligedtobuyit。Fromthisconsideration，letusjudgeoftheconsequenceofsuchsuddenaugmentationsuponthepriceofgrain，asarefamiliartous；30or40percentseemsnothing。
Nowthisaugmentationoperatesuponone-halfofthewholeexpenceofalabouringman:letanyonewholivesintolerableaffluencemaketheapplicationofthistohimself，andexaminehowhewouldmanagehisaffairsif，byaccidentsofrainsorwinds，one-halfofhisexpencesweretorise30percentwithoutapossibilityofrestrainingthem；forthisisunfortunatelythecasewithallthelowerclasses。FromwhenceIconclude，thatthekeepingfoodcheap，andstillmorethepreservingitatalltimesatanequalstandard，isthefountainofthewealthofHolland；andthatanyhurtfulcompetitioninthisarticlemustbegetadisorderwhichwillaffectthewholeofthemanufacturersofastate。
Chap。X
OftheBalanceofWorkandDemandItisquiteimpossibletogomethodicallythroughthesubjectofpoliticaloeconomy，withoutbeingledintoanticipations。Wehavefrequentlymentionedthisbalanceofworkanddemand，andshewedhowimportantamatteritisforastatesmantoattendtoit。Thething，therefore，ingeneraliswellunderstood；andallthatremainstobedone，istorenderourideasmoredeterminateconcerningit，andmoreadequate，ifpossible，totheprincipleswehavebeenlayingdown。
Wehavetreatedfullyofdemand，andlikewiseofcompetition。
Wehaveobservedhowdifferentcircumstancesinfluencetheseterms，soastomakethemrepresentideasentirelydifferent；andwehavesaidthatdoublecompetitionsupportsthebalancewearenowtospeakof，andthatsinglecompetitionoverturnsit。
Theworddemandinthischapteristakeninthemostsimpleacceptation；andwhenwesaythatthebalancebetweenworkanddemandistobesustainedinequilibrio，asfaraspossible，wemeanthatthequantitysuppliedshouldbeinproportiontothequantitydemanded，thatis，wanted。Whilethebalancestandsjustlypoised，pricesarefoundintheadequateproportionoftherealexpenceofmakingthegoods，withasmalladditionforprofittothemanufacturerandmerchant。
Ihave，inthefourthchapter，observedhownecessaryathingitistodistinguishthetwoconstituentpartsofeveryprice；
thevalue，andtheprofit。Letthenumberofpersonsbeeversogreat，who，uponthesaleofapieceofgoods，shareintheprofits；itisstillessential，insuchenquiriesasthese，tosupposethemdistinctlyseparatefromtherealvalueofthecommodity。andthebestwaypossibletodiscoverexactlytheproportionbetweentheoneandtheother，isbyascrupulouswatchfulnessoverthebalancewearenowtreatingof，asweshallpresentlysee。
Thevalueandprofits，combinedinthepriceofamanufactureproducedbyoneman，areeasilydistinguishedbymeansoftheanalysiswehavelaiddowninthefourthchapter。Aslongasanymarketisfullysuppliedwiththissortofwork，andnomore；
thosewhoareemployedinitlivebytheirtrade，andgainnounreasonableprofit:becausethereisthennoviolentcompetitionupononesideonly，neitherbetweentheworkmen，norbetweenthosewhobuyfromthem，andthebalancegentlyvibratesundertheinfluenceofadoublecompetition。Thisistherepresentationofaperfectbalance。
Thisbalanceisoverturnedinfourdifferentways。
Eitherthedemanddiminishes，andtheworkremainsthesame:
Ortheworkdiminishes，andthedemandremains:
Orthedemandincreases，andtheworkremains:
Ortheworkincreases，andthedemandremains。
Noweachofthesefourrelationsbetweendemandandworkmay，ormaynot，produceacompetitionupononesideofthecontractonly。
Thismustbeexplained。
Ifdemanddiminishes，andworkremainsthesame，whichisthefirstcase，eitherthosewhofurnishtheworkwillenterintocompetition，inwhichcasetheywillhurteachother，andpriceswillfallbelowthereasonablestandardoftheevenbalance；ortheywillnotenterintocompetition，andthenpricescontinuingasformerly，thewholedemandwillbesupplied，andtheremainderoftheworkwilllieuponhand。
Thisisasymptomofdecayingtrade。
Letusnow，ontheotherhand，supposedemandtoincrease，andworktoremainasbefore。
Thisexamplepointsoutnodiminutiononeitherside，aswasthecasebefore，butanaugmentationuponone；andiseitherasymptomofgrowingluxuryathome，orofanincreaseinforeigntrade。
Herethesamealternationofcircumstancesoccurs。Thedemanderswilleitherenterintocompetitionandraisethepriceofwork，ortheywillenterintonocompetition；butbeingdeterminednottoexceedtheordinarystandardoftheperfectbalance，willdefermakingtheirprovisiontillanothertime，orsupplythemselvesinanothermarket；thatistosay，thenewdemandwillceaseassoonasitismade，forwantofasupply。
Whenever，therefore，thisperfectbalanceofworkanddemandisoverturnedbytheforceofasimplecompetition，orbyoneofthescalepreponderating，oneoftwothingsmusthappen；eitherapartofthedemandisnotanswered，orapartofthegoodsisnotsold。
Thesearetheimmediateeffectsoftheoverturningofthebalance。
Letmenextpointouttheobjectofthestatesman’scare，relativelytosucheffects，andshewtheconsequencesoftheirbeingneglected。
Wemaynowsimplifyourideas，andinsteadoftheformer，makeuseofotherexpressionswhichmayconveythem。
Letusthereforesay，thatthefallorriseuponeithersideofthebalance，ispositive，orrelative。Positive，whenthesidewetalkofreallyaugmentsbeyond，ordiminishesbelowtheusualstandard。Relative，whenthereisnoalterationuponthesidewespeakof，andthatthesubversionofthebalanceisowingtoanalterationontheotherside。
Asforexample:
Insteadofsayingdemanddiminishes，andworkremainsthesame，letussay，demanddiminishespositively，orworkincreasesrelatively；accordingasthesubjectmayleadustospeakeitheroftheoneoroftheother。Thisbeingpremised。
Ifthescaleofworkshallpreponderatepositively，itshouldbeinquired，whetherthequantityfurnishedhasreallyswelled，inallrespects，beyondtheproportionoftheconsumption，inwhichcasethestatesmanshoulddiminishthenumberofhands，bythrowingapartofthemintoanewchannelorwhethertheimprudenceonlyoftheworkmenhasmadethemproducetheirworkunseasonably；inwhichcaseproperinformationandevenassistanceshouldbegiventhem，topreventmerchantsfromtakingadvantageoftheirwantofexperience:buttheselastprecautionsarenecessaryintheinfancyofindustryonly。
Ifastatesmanshouldbenegligentonthisoccasion；ifheshouldallownaturalconsequencestofollowupononeanother，justascircumstancesshalldetermine；thenitmayhappen，thatworkmenwillkeepuponhandthatpartoftheirgoodswhichexceedsthedemand，untilnecessityforcesthemtoenterintocompetitionwithoneanother，andsellforwhattheycanget。Nowthiscompetitionishurtful，becauseitisallononeside，andbecausewehavesupposedthepreponderingofthescaleofworktobeanoverturningofaperfectbalance，whichcanbynomeansbesetright，consistentlywithaschemeofthriving，butbythescaleofdemandbecomingheavier，andre-establishingadoublecompetition。Werethistohappenbeforetheworkmencometosellincompetition，thenthebalancewouldagainbeeven，afterwhatIcallashortvibration，whichisnosubversion；butwhenthescaleofworkremainstoolonginthesameposition，andoccasionsastrong，hurtful，andlastingcompetition，upononesideonly，then，Isay，thebalanceisoverturned；becausethisdiminishesthereasonableprofits，orperhaps，indeed，obligestheworkmentosellbelowprimecost。Theeffectofthisis，thattheworkmenfallintodistress，andthatindustrysuffersadiscouragement；andthiseffectiscertain。
Butitmaybeasked，Whether，bythisfallofprices，demandwillnotbeincreased？Thatistosay，willnotthewholeofthegoodsbesoldoff？
Ianswer，Thatthismay，ormaynot，betheeffectofthefall，accordingtocircumstances:itisacontingentconsequenceofthesimple，butnotthecertaineffectofthedoublecompetition:butthedistressoftheworkmenisacertainandunavoidableconsequenceofthesimplecompetition。
Butsupposingthiscontingentconsequencetohappen，willitnotsetthebalanceeven，byincreasingthedemand？Ianswer，thebalanceisthenmadeevenbyaviolentshockgiventoindustry，butitisnotsetevenfromanyprinciplewhichcansupportit，ormakeitflourish。Hereisthecriterionofaperfectbalance:
Apositivemoderateprofitmustbalanceapositivemoderateprofit；thebalancemustvibrate，andnolossmustbefoundoneitherside。Intheexamplebeforeus，thebalancestandseven，itistrue；theworkandthedemandareequallypoisedastoquantity；butitisarelativeprofit，whichhangsinthescale，oppositetoarelativeloss。Iwishthismaybewellunderstood；
fartherillustrationswillmakeitclear。
Next，letmesupposethescaleofdemandtopreponderatepositively。Inthiscase，thestatesmanshouldbestillmoreuponhisguard，toprovideaproportionalsupply；becausethedangerheremayatfirstputonashewofprofit，anddeceivehim。
Theconsequencesofthissubversionofthebalanceareeither，First，Thatacompetitionwilltakeplaceamongthedemandersonly，whichwillraiseprofits。Nowif，afterashortvibration，thesupplycomestobeincreasedbythestatesman’scare，noharmwillensue；competitionwillchangesides，andprofitswillcomedownagaintotheperfectstandard。Butifthescaleofdemandremainspreponderating，andsokeepsprofitshigh，theconsequencewillbe，that，inalittletime，notonlytheimmediatesellerofthegoods，butalsoeveryonewhohascontributedtothemanufacture，willinsistuponsharingthesenewprofits。Nowtheevilisnot，thateveryoneshouldshare，orthattheprofitsshouldswell，aslongastheyaresupportedbydemand，andaslongastheycantrulybeconsideredasprecarious；butthemischiefis，that，inconsequenceofthiswiderepartition，andbysuchprofitssubsistingforalongtime，theyinsensiblybecomeconsolidated，or，asitwere，transformedintotheintrinsicvalueofthegoods。This，Isay，isbroughtaboutbytime；becausethehabitualextraordinarygainsofeveryoneemployedinducethemoreluxuriousamongthemtochangetheirwayoflifeinsensibly，andfallintothehabitofmakinggreaterconsumptions，andengagethemoreslothfultoremainidle，tilltheyareexhausted。Whenthereforeithappens，thatlargeprofitshavebeenmadeforaconsiderabletime，andthattheyhavehadtheeffectofformingatasteforamoreexpensivewayoflivingamongtheindustrious，itwillnotbethecessationofthedemand，northeswellingofthesupply，whichwillengagethemtopartwiththeirgains。Nothingwillproducethiseffectbutsharpnecessity；andthebringingdownoftheirprofits，andthethrowingtheworkmenintodistress，arethensimultaneous；whichprovesthetruthofwhatIhavesaid，thattheseprofitsbecome，bylonghabit，virtuallyconsolidatedwiththerealvalueofthemerchandize。Thesearetheconsequencesofaneglectedsimplecompetition，whichraisestheprofitsuponindustry，andkeepsthebalanceoverturnedforaconsiderabletime。
Secondly，Letmeexaminetheconsequencesofthisoverturnintheactualpreponderancyofdemand，whenitdoesnotoccasionacompetitionamongthedemanders，andconsequently，whenitdoesnotincreasetheprofitsuponindustry。
Thiscasecanonlyhappen，whenthecommodityisnotamatterofgreatnecessity，orevenofgreatuse；sincethedesireofprocuringitisnotsufficienttoengagethebuyerstoraisetheirprice；unless，indeed，thisdifferenceshouldproceedfromtheeaseofprovidingthesame，inothermarkets，ascheapasformerly。Thislastisadangerouscircumstance，andloudlycallsfortheattentionofthestatesman。Hemustpreventthedesertionofthemarket，byaspeedysupplyforallthedemand，andmustevenperhapsgiveencouragementtomanufacturers，toenablethemtodiminishthepricesfixedbytheregularstandard。Thisisthesituationofanationwhichisinthewayoflosingbranchesofherforeigntrade；ofwhichafterwards。
Whateverthereforebetheconsequencesoftheactualpreponderancyofthescaleofdemand；thatis，whetherittendtoraiseprofits，ortodiscreditthemarket；thestatesman’scareshouldbedirectedimmediatelytowardsmakingthebalancecomeevenofitself，withoutanyshock，andthatassoonaspossible，byincreasingthesupply。Forifitbeallowedtostandlonginthisoverturnedstate，naturalconsequenceswilloperateaforcedrestitution；thatis，theriseintheprice，orthecallofaforeignmarket，willeffectuallycutoffaproportionalpartofthedemand，andleavethebalanceinanequilibrium，disadvantageoustotradeandindustry。
Intheformercase，themanufacturerswereforcedtostarve，byannaturalrestitution，whentherelativeprofitsandlossofindividualsbalancedoneanother。Herethemanufacturersareenrichedforalittletime，byariseofprofits，relativetothelossthenationsustains，bynotsupplyingthewholedemand。Thisresultsfromthecompetitionoftheircustomers；butsosoonastheseprofitsbecomeconsolidatedwiththeintrinsicvalue，theywillceasetohavetheadvantageofprofits，and，becominginamannernecessarytotheexistenceofthegoods，willceasetobeconsideredasadvantageous。Theseforcedrestitutionsthen，broughtabout，aswehavesaid，bysellinggoodsbelowtheirvalue，bycuttingoffapartofthedemand，orbysendingittoanothermarket，resemblestheoperationofacarrier，whosetshisass’sburdeneven，bylayingastoneuponthelightestendofit。Hehoweverlosesnoneofhismerchandise；buttheabsurdityofthestatesmanisstillgreater，forheappearswillinglytoopentheheavyendoftheload，andtothrowpartofhismerchandiseintothehighway。
Ihope，bythistime，Ihavesufficientlyshewnthedifferenceineffectbetweenthesimpleandthedoublecompetition；betweenthevibrationsofthisbalanceofworkanddemand，andtheoverturningofit。Whenitvibratesinmoderation，andbyshortalternaterisingsandsinkings，thenindustryandtradegoonprosperously，andareinharmonywitheachother；becausebothpartiesgain。Theindustriousmanisrecompencedinproportiontohisingenuity；theintrinsicvalueofgoodsdoesnotvary，nordeceivethemerchant；profitsonbothsidesfluctuateaccordingtodemand，butnevergettimetoconsolidatewith，andswelltherealvalue，andneveraltogetherdisappear，andstarvetheworkman。
Thishappystatecannotbesupportedbutbythecareofthestatesman；andwhenheisfoundnegligentinthedischargeofthispartofhisduty，theconsequenceis，thateitherthespiritofindustry，which，itissupposed，hascosthimmuchpainstocultivate，isextinguished，ortheproduceofitrisestosohighavalue，astobeoutofthereachofamultitudeofpurchasers。
Theprogresstowardstheoneortheotheroftheseextremesiseasilyperceived，byattendingtothesuccessiveoverturningsofthebalance。Whentheseareoftenrepeatedonthesameside，andthebalancesetright，byasuccessionofforcedrestitutionsonly，thesamescalepreponderatinga-new，thenisthelastperiodsoonaccomplished。When，onthecontrary，theoverturningsarealternate，sometimesthescaleofdemandoverturningthebalance，sometimesthescaleofwork，thelastperiodismoredistant。Tradeandindustrysubsistlonger，buttheyremaininastateofperpetualconvulsion。Ontheotherhand，whenthebalancegentlyvibrates，thenworkanddemand，thatis，tradeandindustry，likeagricultureandpopulation，provemutuallyassistingtoeachother，inpromotingtheirreciprocalaugmentation。
Inorderthereforetopreserveatradingstatefromdecline，thegreatestcaremustbetaken，tosupportaperfectbalancebetweenthehandsemployedinworkandthedemandfortheirlabour。Thatistosay，accordingtoformerdefinitions，topreventdemandfromeverstandinglongatanimmoderateheight，byprovidingatalltimesasupply，sufficienttoanswerthegreatestthatevercanbemade:or，inotherwords，still，inordertoaccustommyreaderstocertainexpressions，toencouragethegreat，andtodiscouragethehighdemand。Inthiscase，competitionwillneverbefoundtoostrongoneithersideofthecontract，andprofitswillbemoderate，butsure，onboth。
If，onthecontrary，therebefoundtoomanyhandsforthedemand，workwillfalltoolowforworkmentobeabletolive；
or，iftherebetoofew，workwillrise，andmanufactureswillnotbeexported。
Forwantofthisjustbalance，notradingstatehaseverbeenoflongduration，afterarrivingatacertainheightofprosperity。Weperceiveinhistorytherise，progress，grandeur，anddeclineofSydon，Tyre，Carthage，Alexandria，andVenice，nottocomenearerhome。Whilethesestateswereonthegrowinghand，theywerepowerful；whenoncetheycametotheirheight，theyimmediatelyfoundthemselveslabouringundertheirowngreatness。
Thereasonofthisappearsfromwhathasbeensaid。
Whilethereisademandforthetradeofanycountry，inhabitantsarealwaysontheincreasinghand。Thisisevidentfromwhathasbeensooftenrepeatedinthefirstbook，andconfirmedbythousandsofexamples。Thereneverwasanybranchoftradeestablishedinanykingdom，province，city，orevenvillage；butsuchkingdoms，province，&c。increasedininhabitants。Whilethisgradualincreaseofpeopleisinproportiontothegrowingdemandforhands，thebalancebetweenworkanddemandisexactlykeptup:butasallaugmentationsmustatlastcometoastop，whenthishappens，inconveniencesmustensue，greaterorless，accordingtothenegligenceorattentionofthestatesman，andtheviolenceorsuddennessoftherevolution。
Chap。XI
WhyinTimethisBalanceisdestroyedLetusnowexaminewhatmaybethereasonwhy，inatradingandindustriousnation，timenecessarilydestroystheperfectbalancebetweenworkanddemand。
Wehavealreadypointedoutonegeneralcause，towit，thenaturalstopwhichmustatlastbeputtoaugmentationsofeverykind。
Letusnowapplythistocircumstances，inordertodiscoverinwhatmannernaturalcausesoperatethisstop，eitherbypreventingtheincreaseofwork，ononesideofthebalance，ortheincreaseofdemand，ontheother。Whenoncewediscoverhowthestopisputtoaugmentations，wemaysafelyconclude，thatthecontinuationofthesame，orsimilarcauses，willsoonproduceadiminution，andoperateadecline。
Wehavetracedtheprogressofindustry，andshewnhowitgoeshandinhandwiththeaugmentationofsubsistence，whichistheprincipalallurementtolabour。Nowtheaugmentationoffoodisrelativetothesoil，andaslongasthiscanbebroughttoproduce，atanexpenceproportionedtothevalueofthereturns，agriculture，withoutanydoubt，willgoforwardineverycountryofindustry。Butsosoonastheprogressofagriculturedemandsanadditionalexpence，whichthenaturalreturn，atthestatedpricesofsubsistence，willnotdefray，agriculturecomestoastop，andsowouldnumbers，didnottheconsequencesofindustrypushthemforward，inspiteofsmalldifficulties。Theindustriousthen，Isay，continuetomultiply，andtheconsequenceis，thatfoodbecomesscarce，andthattheinhabitantsenterintocompetitionforit。
Thisisnocontingentconsequence，itisaninfallibleone；
becausefoodisanarticleofthefirstnecessity，andheretheprovisionissupposedtofallshortofdemand。Thisraisestheprofitsofthosewhohavefoodreadytosell；andasthebalanceuponthisarticlemustremainoverturnedforsometime，withouttheinterpositionofthestatesman，theseprofitswillbeconsolidatedwiththeprice，andgiveencouragementtoamoreexpensiveimprovementofthesoil。Ishallhereinterrupttheexaminationoftheconsequencesofthisrevolutionastoagriculture，untilIhaveexaminedtheeffectswhichtheriseofthepriceoffoodproducesonindustry，andonthedemandforit。
Thisaugmentationonthevalueofsubsistencemustnecessarilyraisethepriceofallwork，becauseweareherespeakingofanindustriouspeoplefullyemployed，andbecausesubsistenceisoneofthethreearticleswhichcomposetheintrinsicvalueoftheirwork，ashasbeensaid。
Therisetherefore，uponthepriceofwork，notbeinganyaugmentationofthatpartofthepricewhichwecallprofits，ashappenstobethecasewhenariseindemandhasproducedacompetitionamongthebuyers，cannotbebroughtdownbutbyincreasingthesupplyofsubsistence；andwereastatesmantomistaketherealcauseoftherise，andapplytheremedyofincreasingthequantityofwork，inordertobringdownthemarket，insteadofaugmentingthesubsistence，hewouldoccasionagreatdisorder；hewouldintroducethehurtfulsimplecompetitionbetweenpeoplewholabourformoderateprofits，mentionedinthelastchapter，andwouldthrowsuchadiscouragementupontheirindustry，aswouldquicklyextinguishitaltogether。Ontheotherhand，didheimprudentlyaugmentthesubsistence，bylargeimportations，hewouldputanendtotheexpensiveimprovementsofthesoil，andthiswholeenterprisewouldfalltonothing。Herethenisadilemma，outofwhichhecanextricatehimselfbyarightapplicationofpublicmoney，only。
Suchanecessaryriseinthepriceoflabourmayeitheraffectforeignexportation，oritmaynot，accordingtocircumstances。Ifitdoes，thepriceofsubsistence，atanyrate，mustbebroughtdownatleasttothosewhosupplytheforeigndemand；ifitdoesnotaffectforeignexportation，mattersmaybeallowedtogoon；butstilltheremedymustbereadyathand，tobeappliedthemomentitbecomesexpedient。
Thereisonenecessaryaugmentationuponthepricesofindustry，broughtaboutbyaverynaturalcause，viz。theincreaseofpopulation，whichmayimplyamoreexpensiveimprovementofthesoil；thatis，anextensionofagriculture。
Thisaugmentationmayveryprobablyputastoptotheaugmentationofdemandformanybranchesofmanufactures，consequentlymaystoptheprogressofindustry；andifthesamecausescontinuetooperateinagreaterdegree，itmayalsocutoffapartoftheformerdemand，maydiscreditthemarket，openadoortoforeignconsumption，andproducetheinconveniencesofpovertyanddistress，inproportiontothedegreeofnegligenceinthestatesman。
Ishallnowgiveanotherexample，ofaverynaturalaugmentationupontheintrinsicvalueofwork，whichdoesnotproceedfromtheincreaseofpopulation，butfromtheprogressofindustryitself；whichimpliesnointernalviceinastate，butwhichisthenecessaryconsequenceofthereformationofaverygreatone。Thisaugmentationmustbefeltlessormoreineverycountry，inproportionasindustrybecomesextended。
Wehavesaid，thattheintroductionofmanufacturesnaturallytends。topurgethelandsofsuperfluousmouths:nowthisisaveryslowandgradualoperation。AconsequenceofitwassaidtobeBookI。Chap。xx。anaugmentationofthepriceoflabour，becausethosewhohavebeenpurgedoff，mustbegintogaintheirwholesubsistenceattheexpenceofthosewhoemploythem。
Iftherefore，intheinfancyofindustry，anybranchofitshallfinditselfassistedinaparticularprovince，bythecheaplabourofthosemouthssuperfluouslyfedbytheland，examplesofwhichareveryfrequent，thisadvantagemustdiminish，inproportionasthecauseofitceases；thatis，inproportionasindustryisextended，andasthesuperfluousmouthsareofconsequencepurgedoff。
Thiscircumstanceisofthelastimportancetobeattendedtobyastatesman。Perhapsitwasentirelyowingtoit，thatindustrywasenabledtosetupitsheadinthiscorner。HowmanyexamplescouldIgive，ofthisassistancegiventomanufacturesindifferentprovinces，whereIhavefoundthevalueofaday’swork，ofspinning，forexample，notequaltohalfthenourishmentoftheperson。Thisisagreatencouragementtothemakingofcloths；andaccordinglyweseesomeinfantmanufacturesdisputethemarketwiththeproduceofthegreatestdexterity；thedistaffdisputepriceswiththewheel。Butwhentheseprovincescometobepurgedoftheirsuperfluousmouths，spinningbecomesatrade，andthespinnersmustlivebyit。Mustnotthenpricesnaturallyrise？Andifthesearenotsupportedbythestatesman，orifassistanceisnotgiventothesepoormanufacturers，toenablethemtoincreasetheirdexterity，inordertocompensatewhattheyarelosingincheapness，willnottheirindustryfail？
Willnotthepoorspinnersbeextinguished？Foritisnottobeexpected，thatthelandlordwillreceivethembackagainfromaprincipleofcharity，afterhehasdiscoveredtheirformeruselessness。
Athirdcauseofanecessaryaugmentationupontheintrinsicvalueofgoodsproceedsfromtaxes。Astatesmanmustbeverynegligentindeed，ifhedoesnotattendtotheimmediateconsequencesofhisownproperoperations。Ishallnotenlargeonthisatpresent，asitwouldbeannecessaryanticipation；butI
shallreturn，toresumethepartofmyreasoningwhichIbrokeoffabruptly。
Ihaveobserved，howthesamecausewhichstopstheprogressofindustry，givesanencouragementtoagriculture:howtheriseinthepriceofsubsistencenecessarilyincreasesthepriceofworktoanindustriousandwell-employedpeople:howthiscutsoffapartofthedemandforwork，orsendsittoaforeignmarket。
Nowalltheseconsequencesareentirelyjust，andyettheyseemContradictorytoanotherpartofmyreasoning，BookI，Chap。xvi。whereIsetforththeadvantagesofaprodigalconsumptionoftheearth’sproduceasadvantageoustoagriculture，byincreasingthepriceofsubsistence，withouttakingnotice，ontheotherhand，ofthehurttherebydonetoindustry，whichsupportstheconsumptionofthatproduce。
Theoneandtheotherchainofconsequencesisequallyjust，andtheyappearcontradictoryuponthesuppositiononly，thatthereisnostatesmanatthehelm。Thesecontradictionsrepresentthealternateoverturnofthebalance。Thedutyofthestatesmanis，tosupportthedoublecompetitioneverywhere，andtopermitthegentlealternatevibrationsonlyofthetwoscales。
Whentheprogressofindustryhasaugmentednumbers，andmadesubsistencescarce，hemustestimatetowhatheightitisexpedientthatthepriceofsubsistenceshouldrise。Ifhefinds，that，inordertoencouragethebreakingupofnewlands，thepriceofitmustrisetoohighandstandhightoolong，topreservetheintrinsicvalueofgoodsatthesamestandardasformerly；thenhemustassistagriculturewithhispurse，inorderthatexportationmaynotbediscouraged。Thiswillhavetheeffectofincreasingsubsistence，accordingtothetrueproportionoftheaugmentationrequired，withoutraisingthepriceofittoohigh。Andifthisoperationbetheworkoftime，andthedemandfortheaugmentationbepressing，hemustcontinuetoassisthisagricultureandhavesubsistenceimported，orbroughtfromabroad，duringthatinterval。Thissupplyhemaycutoffwheneverhepleases，thatis，wheneveritceasestobenecessary。
Ifthesupplycomesfromasistercountry，itmustbesotaken，astooccasionnoviolentrevolutionwhenitcomestobeinterrupteda-new。Asforexample:Oneprovincedemandsasupplyofgrainfromanother，forafewyearsonly，untiltheirownsoilcanbeimproved，soastoprovidethemsufficiently。Thestatesmanshouldencourageagriculture，nodoubt，intheprovincefurnishing，andletthefarmersknowtheextentofthedemand，andthetimeitmayprobablylast，asnearaspossible；buthemustdiscouragethepluckingupofvineyards，andevenperhapsthebreakingupofgreatquantitiesofoldpasture；because，upontheceasingofthedemand，suchchangesupontheagricultureoftheprovincefurnishing，mayoccasionahurtfulrevolution。
Whilethisforeignsupplyisallowedtocomein，thestatesmanshouldbecloselyemployedingivingsuchencouragementtoagricultureathome，accordingtotheprincipleshereaftertobededuced，asmaynearlybalancethediscouragementgiventoitbythisnewlypermittedimportation。Ifthisstepbeneglected，theconsequencemaybe，thattheforeignsupplywillgoonincreasingeveryyear，andwillextinguishtheagriculturealreadyestablishedinthecountry，insteadofsupplyingatemporaryexigency，whichiswithinthepowerofthecountryitselftofurnish。These，Isuppose，weretheprinciplesattendedtobythegovernmentofEngland，uponopeningtheirportsfortheimportationofprovisionsfromIreland。
Theprinciple，therefore，beingtosupportagentleincreaseoffood，inhabitants，work，anddemand，thestatesmanmustsuffersmallvibrationsinthebalance，which，byalternatecompetition，mayfavourbothsidesofthecontract；butwheneverthecompetitionstandstoolonguponeitherside，andthreatensasubversionofthebalance，then，withanartfulhand，hemustendeavourtoloadthelighterscale，andnever，butincasesofthegreatestnecessity，haverecoursetotheexpedientoftakinganythingfromtheheavier。
IntreatingofthepresentstateofFrance，weobserved，inthechapterabove-cited，howthevibrationofthebalanceofagricultureandpopulationmaycarryfoodandnumberstotheirheight；butasforeigntradewasnottherethedirectobjectofinquiry，Ididnotcaretointroducethissecondbalanceofworkanddemand，forfearofperplexingmysubject。IhopeIhavenowabundantlyshewntheforceofthedifferentprinciples，anditmustdependuponthejudgmentofthestatesmantocombinethemtogether，andadaptthemtohisplan:athingimpossibletobeevenchalkedoutbyanypersonwhoisnotimmediatelyattheheadoftheaffairsofanation。Myworkresemblestheformationofthepurecoloursforpainting，itistheartist’sbusinesstomixthem:allIcanpretendto，istoreasonconsequentiallyfromsuppositions。IfatanytimeIgofarther，Iexceedmyplan，andIconfessthefault。
Ishallnowconcludemychapterbyintroducinganewsubject。
Ihavebeenatpainstoshewhowthecontinuedneglectofastatesman，inwatchingoverthevibrationsofthebalanceofworkanddemand，naturallyproducesatotalsubversionofit；butthisisnot，ofitself，sufficienttoundoanindustriouspeople。
Othernationsmustbetaughttoprofitofthedisorder；andthisiswhatIcallthecompetitionbetweennations。
Chap。XII
OftheCompetitionbetweenNationsMankinddailyprofitbyexperience，andacquireknowledgeattheirowncost。
Wehavesaidthatwhatlaysthefoundationofforeigntrade，istheeaseandconveniencewhichstrangersfindinhavingtheirwantssuppliedbythosewhohavesetindustryonfoot。Thenaturalconsequenceofthisforeigndemandistobringinwealth，andtopromoteaugmentationsofeverykind。Aslongasthesegoon，itwillbeimpossibleforothernationstorivalthetraders，becausetheirsituationiseverydaygrowingbetter:dexterityincreasingdiminishesthepriceofwork；everycircumstance，inshort，becomesmorefavourable；thebalancenevervibrates，butbyoneofthescalesgrowingpositivelyheavier，anditisconstantlycomingevenbyanincreaseofweightontheotherside。Wehaveseenhowtheserevolutionsnevercanraisetheintrinsicvalueofgoods，andhaveobservedthatthisistheroadtogreatness。
Thesloweranymantravels，thelongerheisincomingtohisjourney’send；andwhenhishealthrequirestravelling，andthathecannotgofarfromhome，heridesoutinamorningandcomeshometodinner。
Thisrepresentsanotherkindofvibrationofthebalance，andwhenthingsarecometosuchaheightastorenderatrainofaugmentationsimpossible，thenextbestexpedientis，topermitalternatevibrationsofdiminutionandaugmentation。
Workaugments，Ishallsuppose，andnomoredemandcanbeprocured；itmaythenbeagoodexpedienttodiminishhands，bymakingsoldiersofthem；byemployingtheminpublicworks；orbysendingthemoutofthecountrytobecomeusefulinitscolonies。
Theseoperationsgivearelativeweighttothescaleofdemand，andreviveacompetitiononthatside。Thentheindustrioushandsmustbegentlyincreaseda-new，andthebalancekeptinvibrationaslongaspossible。Bythesealternateaugmentationsanddiminutions，hurtfulrevolutions，andthesubversionofthebalance，maybeprevented。Thisisanexpedientforstandingstillwithoutharm，whenonecannotgoforwardtoadvantage。
Ifsuchaplanbefollowed，anindustriousnationwillcontinueinasituationtoprofitofthesmallestadvantagefromrevolutionsinothercountries，occasionedbythesubversionoftheirbalance；whichmaypresentanopportunityofnewvibrationsbyalternateaugmentations。
Onsuchoccasions，theabilitiesofastatesmanarediscovered，indirectingandconductingwhatIcallthedelicacyofnationalcompetition。Weshallthenobservehimimitatingthemariners，whodonottakeintheirsailswhenthewindfallscalm，butkeepthemtrimmedandreadytoprofitoftheleastbreathofafavourablegale。Letmefollowmycomparison:ThetradingnationsofEuroperepresentafleetofships，everyonestrivingwhoshallgetfirsttoacertainport。Thestatesmanofeachisthemaster。Thesamewindblowsuponall；andthiswindistheprincipleofself-interest，whichengageseveryconsumertoseekthecheapestandthebestmarket。Notradewindcanbemoregeneral，ormoreconstantthanthis；thenaturaladvantagesofeachcountryrepresentthedegreeofgoodnessofeachvessel；
butthemasterwhosailshisshipwiththegreatestdexterity，andhewhocanlayhisrivalsundertheleeofhissails，will，caeterisparibus，undoubtedlygetbeforethem，andmaintainhisadvantage。
Whileatradingnation，whichhasgotanestablishedadvantageoverherrivals，canbekeptfromdeclining，itwillbeverydifficult，ifnotimpossible，foranyothertoenterintocompetitionwithher:butwhenthebalancebeginstovibratebyalternatediminutions；whenadecreaseofdemandoperatesafailureofsupply；whenthisagainiskeptlow，inordertoraisethecompetitionofconsumers；andwhen，insteadofrestoringthebalancebyagentleaugmentation，apeopleareengaged，fromtheallurementsofhighprofits，todiscourageeveryattempttobringdownthemarket；thenthescissorsofforeignrivalshipwillfairlytrimoffthesuperfluityofdemand；priceswillfall，andareturnofthesamecircumstanceswillpreparethewayforanothervibrationdownwards。
Suchoperationsasthese，arejustwhatisrequisiteforfacilitatingthecompetitionofrivalnations；andaretheonlymeanspossibletoengagethosewhodidnotformerlywork，tobeginandsupplythemselves。
Didmattersstandso，theevilwouldbesupportable；
strangerswouldsupplythesuperfluitiesonlyofdemand，andthebalancewouldstillbefoundinakindofequilibriumathome。
But，alas！eventhishappystatecanbeofshortdurationonly。
Thebeginningsoftradewiththestrangerswillprovejustasfavourabletothevibrationoftheirbalance，byaugmentations，asitwasformerlytothehome-traders；andnoweveryaugmentationtothose，mustimplyadiminutiontotheothers。
Whatwillthenbecomeofsuchhands，inthetradingnation，assubsistbysupplyingtheforeignmarketonly？Willnotthisrevolutionworkthesameeffect，astothese，asifanadditionalnumberofhandshadbeenemployedtosupplythesameconsumption？
Andwillnotthisutterlydestroythebalanceamongthetraders，bythrowinganunsurmountablecompetitiononthesideofthesupply？Itwillhoweverhaveadifferenteffectfromwhatmighthavehappened，ifthesamenumberofhandshadbeenthrownintothetradingnation；for，inthiscase，theymightdestroytheconsolidatedprofitsonlyuponlabour，andperhapsrestorethebalance:theinconveniencewouldbeequallyfeltbyeveryworkman，butprofitwouldresulttothepublic。Butintheothercase，theoldtraderswillfindnoforeignsalefortheirwork；
thesebranchesofindustrywillfallbelowthepriceofsubsistence，andthenewbeginnerswillhavereasonableprofitsinsupplyingtheirownwants，Isayreasonable，becausethistransitionoftradefromonenationtoanother，nevercanbesuddenoreasy；andcantakeplaceinproportiononlytotheriseintheintrinsicvalueofgoodsinthatwhichisuponthedecline，notinproportiontotheriseintheirprofitsuponthesaleofthem:foraslongasthemostextravagantprofitsdonotbecomeconsolidated，aswehavesaid，withthevalueofthework，adiminutionofcompetitionamongtheconsumers，whichmaybeoccasionedbyabeginningofforeignindustry，willquicklymakethemdisappear；andthiswillproveafatalblowtothefirstundertakingsoftherivalnations。Butwhenoncetheyarefairlysoconsolidated，thatpricescannomorecomedownofthemselves，andthatthestatesmanwillnotlendhishelpinghand，thenthenewbeginnerspluckupcourage，andsetoutbymakingsmallprofits:becauseinallnewundertakingsthereismismanagementandconsiderableloss；andnothingdiscouragesmankindfromnewundertakingsmorethandifficultbeginnings。
Aslong，therefore，asatradingstateisupontherisinghand，orevennotuponthedecline，andwhilethebalanceiskeptrightwithouttheexpedientofalternatediminutions，workwillalwaysbesuppliedfromthisquarter，cheaperthanitpossiblycanbefurnishedfromanyother，wherethesamedexteritydoesnotprevail。Butwhenanationbeginstoloseground，thentheverycolumnswhichsupportedhergrandeur，begin，bytheirweight，toprecipitateherdecline。Thewealthofhercitizenswillsupportandaugmentthehomedemand，andencouragethatblindfondnessforhighprofits，whichitisimpossibletopreserve。Themomenttheseconsolidatetoacertaindegree，theyhavetheeffectofbanishingfromthemarketthedemandofstrangers，whoonlycanenrichher。Itisinvaintolookfortheirreturnafterthenationhasdiscoveredhermistake，althoughsheshouldbeabletocorrectit；because，beforethiscanhappen，herrivalswillhaveprofitedofthegoldenopportunity，andduringtheinfatuationofthetraders，will，evenbytheirassistance，havegotfairlyoverthepainfulstruggleagainsttheirsuperiordexterity。
Thusithappens，thatsosoonasmattersbegintogobackwardinatradingnation，andthatbytheincreaseoftheirriches，luxuryandextravagancetakeplaceofoeconomyandfrugalityamongtheindustrious；whentheinhabitantsthemselvesfoolishlyenterintocompetitionwithstrangersfortheirowncommodities；
andwhenastatesmanlookscoollyon，withhisarmsacross，ortakesitintohishead，thatitisnothisbusinesstointerpose，thepricesofthedextrousworkmanwillriseabovetheamountofthemismanagement，loss，andreasonableprofits，ofthenewbeginners；andwhenthiscomestobethecase，tradewilldecaywhereitflourishedmost，andtakerootinanewsoil。ThisI
callacompetitionbetweennations。
Chap。XIII
HowfartheFormofGovernmentofaparticularCountrymaybefavourableorunfavourabletoaCompetitionwithotherNations，inmattersofCommerceThequestionbeforeus，thoughrelativetoanotherscience，isnotaltogetherforeigntothis。Iintroduceitinthisplace，notsomuchforthesakeofconnexion，asbywayofanillustration，whichatthesametimethatitmayserveasanexerciseupongeneralprinciples，mayalsoprovearelaxationtothemind，aftersolongachainofclosereasoning。
Insettingout，IinformedmyreadersthatIintendedtotreatofthepoliticaloeconomyoffreenationsonly；anduponeveryoccasionwhereIhavementionedslavery，Ihavepointedouthowfarthenatureofitiscontrarytotheadvancementofprivateindustry，theinseparableconcomitantofforeignanddomestictrade。
Notermislessunderstoodthanthatofliberty，anditisnotmyintention，atpresent，toenterintoaparticularinquiryintoallthedifferentacceptationsofit。
Byapeople’sbeingfree，Iunderstandnomorethantheirbeinggovernedbygenerallaws，wellknown，notdependingupontheambulatorywillofanyman，oranysetofmen，andestablishedsoasnottobechanged，butinaregularanduniformway；forreasonswhichregardthebodyofthesociety，andnotthroughfavourorprejudicetoparticularpersons，orparticularclasses。Sofarasapowerofdispensingwith，restrainingorextendinggenerallaws，isleftinthehandsofanygovernor，sofarIconsiderpubliclibertyasprecarious。Idonotsayitisherebyhurt；thiswilldependupontheusemadeofsuchprerogatives。Accordingtothisdefinitionofliberty，apeoplemaybefoundtoenjoyfreedomunderthemostdespoticformsofgovernment；andperpetualserviceitself，wherethemaster’spowerislimitedaccordingtonaturalequity，isnotaltogetherincompatiblewithlibertyintheservant。
Herenewideaspresentthemselvesconcerningthegeneralprinciplesofsubordinationanddependenceamongmankind；whichI
shalllaybeforemyreaderbeforeIproceed，submittingthejustnessofthemtohisdecision。
Asthesetermsarebothrelative，itispropertoobserve，thatbysubordinationisimpliedanauthoritywhichsuperiorshaveoverinferiors；andbydependence，isimpliedcertainadvantageswhichtheinferiorsdrawfromtheirsubordination:aservantisundersubordinationtohismaster，anddependsuponhimforhissubsistence。
DependenceistheonlybondofsocietyandIhaveobserved，inthefourthchapterofthefirstbook，thatthedependenceofonemanuponanotherforfood，isaverynaturalintroductiontoslavery。Thiswasthefirstcontrivancemankindfellupon，inordertobecomeusefultooneanother。
Upontheabolishingofslavery，fromaprincipleofchristianity，thenextsteptakenwastheestablishmentofanextraordinarysubordinationbetweenthedifferentclassesofthepeople；thiswastheprincipleofthefeudalgovernment。
Thelastrefinement，andthatwhichhasbroughtlibertytobegenerallyextendedtothelowestdenominationsofapeople，withoutdestroyingthatdependencenecessarytoserveasabandofsociety，wastheintroductionofindustry……bythisisimplied，thecirculationofanadequateequivalentforeveryservice，whichprocurestothericheveryadvantagetheycouldexpecttoreap，eitherfromtheservitudeordependenceofthepoor’；andtotheseagain，everycomforttheycouldwishtoenjoyunderthemildestslavery，ormostgentlesubordination。
Fromthisexposition，Idividedependenceintothreekinds。
Thefirstnatural，betweenparentsandchildren；thesecondpoliticalbetweenmastersandservants，lordsandvassals，Princesandsubjects；thethirdcommercial，betweentherichandtheindustrious。
MayIbeallowedtotransgressthelimitsofmysubjectforafewlines，andtodipsofarintotheprinciplesofthelawofnature，astoenquire，howfarsubordinationamongmenistherebyauthorized？IthinkImaydecide，thatsofarasthesubordinationisinproportiontothedependence，sofaritisreasonableandjust。Thisrepresentsanevenbalance。Ifthescaleofsubordinationisfoundtooweighty，tyrannyensues；andlicentiousnessisimplied，inproportionasitrisesabovethelevel。Fromthisletmedrawsomeconclusions。
First，Hewhodependeduponanother，forthepreservationofalifejustlyforfeited，andatalltimesinthepowerofhimwhosparedit，was，bythecivillaw，calledaslave。Thissurelyisthehighestdegreeofdependence。
Secondly，Hewhodependsuponanotherforeverythingnecessaryforhissubsistence，seemstobeintheseconddegree；
thisisthedependenceofchildrenupontheirparents。
Thirdly，Hewhodependsuponanotherforthemeansofprocuringsubsistencetohimselfbyhisownlabour，standsinthethirddegree:thisItaketohavebeenthecasebetweenthefeudallords，andthelowestclassesoftheirvassals，thelabourersoftheground。
Fourthly，Hewhodependstotallyuponthesaleofhisownindustry，standsinthefourthdegree:thisisthecaseoftradesmenandmanufacturers，withrespecttothosewhoemploythem。