CHAPTER VIII.
HOW MAN Pa.s.sES FROM WEALTH AND FREEDOM TOWARD POVERTY AND SLAVERY.
The views that have thus been presented are entirely in harmony those of the ill.u.s.trious author of "The Wealth of Nations." "In seeking for employment to a capital," says Dr. Smith,
"Manufactures are, upon equal or nearly equal profits, naturally preferred to foreign commerce, for the same reason that agriculture is naturally preferred to manufactures. As the capital of the landlord or farmer is more secure than that of the manufacturer, so the capital of the manufacturer, being at all times more within his view and command, is more secure than that of the foreign merchant.
In every period, indeed, of every society, the surplus part both of the rude and manufactured produce, or that for which there is no demand at home, must be sent abroad, in order to be exchanged for something for which there is some demand at home. But whether the capital which carries this surplus produce abroad be a foreign or domestic one, is of little importance."
It is thus, in his estimation, of small importance whether the capital engaged in the work of transportation be foreign or domestic--the operations most essential to the comfort and improvement of man being, first, the production, and next, the conversion of the products of the land, by men occupying towns and cities placed among the producers.
The nearer the market the less must be, as he clearly saw, the loss of transportation, and the greater the value of the land. If the number or the capital of those markets were insufficient for the conversion of all the rude produce of the earth, there would then be "considerable advantage" to be derived from the export of the surplus by the aid of foreign capital, thus leaving "the whole stock of the society" to be employed at home "to more useful purpose." These views are certainly widely different from those of modern economists, who see in tables of imports and exports the only criterion of the condition of society. Commerce, by which is meant exchanges with distant people, is regarded as the sole measure of the prosperity of a nation; and yet every man is rejoiced when the market for his products is brought home to him, and he is thereby enabled to economize transportation and enrich his land by returning to it the elements of which-those products had been composed.
"According to the natural course of things," says Dr. Smith, "the greater part of the capital of every growing society is, first, directed to agriculture, afterward to manufactures, and, last of all, to foreign commerce."
This, says he, is in accordance with natural laws. As subsistence precedes luxuries, so must the production, of commodities precede their conversion or their exchange.
"Necessity imposes," he continues, "that order of things" which "is in every country promoted by the natural inclinations of man. If human inst.i.tutions had never thwarted those natural inclinations, the towns could nowhere have increased beyond what the improvement and cultivation of the territory in which they were situated could support; till such time, at least, as the whole of that territory was completely cultivated and improved. Upon equal, or nearly equal profits, most men will choose to employ their capitals rather in the improvement and cultivation of land, than either in manufactures or in foreign trade. The man who employs his capital in land, has it more under his view and command; and his fortune is much less liable to accidents than that of the trader, who is obliged frequently to commit it, not only to the winds and the waves, but to the more uncertain elements of human folly and injustice, by giving great credits, in distant countries, to men with whose character and situation he can seldom be thoroughly acquainted. The capital of the landlord, on the contrary, which is fixed in the improvement of his land, seems to be as well secured as the nature of human affairs can admit of. The beauty of the country, besides the pleasures of a country life, the tranquillity of mind which it promises, and, wherever the injustice of human laws does not disturb it, the independency which it really affords, have charms that, more or less, attract everybody; and as to cultivate the ground was the original destination of man, so, in every stage of his existence, he seems to retain a predilection for this primitive employment.
"Without the a.s.sistance of some artificers, indeed, the cultivation of land cannot be carried on, but with great inconveniency and continual interruption. Smiths, carpenters, wheelwrights and ploughwrights, masons and bricklayers, tanners, shoemakers, and tailors, are people whose service the farmer has frequent occasion for. Such artificers, too, stand occasionally in need of the a.s.sistance of one another; and as their residence is not, like that of the farmer, necessarily tied down to a precise spot, they naturally settle in the neighbourhood of one another, and thus form a small town or village. The butcher, the brewer, and the baker soon join them, together with many other artificers and retailers, necessary or useful for supplying their occasional wants, and who contribute still further to augment the town. The inhabitants of the town and those of the country are mutually the servants of one another. The town is a continual fair or market, to which the inhabitants of the country resort, in order to exchange their rude for manufactured produce. It is this commerce which supplies the inhabitants of the town, both with the materials of their work and the means of their subsistence. The quant.i.ty of the finished work which they sell to the inhabitants of the country, necessarily regulates the quant.i.ty of the materials and provisions which they buy. Neither their employment nor subsistence, therefore, can augment, but in proportion to the augmentation of the demand from the country for finished work; and this demand can augment only in proportion to the extension of improvement and cultivation. Had human inst.i.tutions, therefore, never disturbed the natural course of things, the progressive wealth and increase of the towns would, in every political society, be consequential, and in proportion to the improvement and cultivation of the territory or country."
The demand on the artisan "can augment only in proportion to the extension of improvement and cultivation." Nothing can be more true.
The interests of the farmer and the mechanic are in perfect harmony with each other. The one needs a market for his products, and the nearer the market the greater must be the produce of his land, because of his increased power to carry back to it the manure. The other needs a market for his labour, and the richer the land around him the greater will be the quant.i.ty of products to be offered in exchange for labour, and the greater his freedom to determine for himself for whom he will work and what shall be his wages. The combination of effort between the labourer in the workshop and the labourer on the farm thus gives value to land, and the more rapid the growth of the value of land the greater has everywhere been the tendency to the freedom of man.
These views were opposed to those then universally prevalent.
"England"s treasure in foreign trade" had become
"A fundamental maxim in the political economy, not of England only, but of all other commercial countries. The inland or home trade, the most important of all, the trade in which an equal capital affords the greatest revenue, and creates the greatest employment to the people of the country, was considered as subsidiary only to foreign trade. It neither brought money into the country, it was said, nor carried any out of it. The country, therefore, could never become richer or poorer by means of it, except as far as its prosperity or decay might indirectly influence the state of foreign trade."
It was against this error chiefly that Dr. Smith cautioned his countrymen. He showed that it had led, and was leading, to measures tending to disturb the natural course of things in all the countries connected with England, and to produce among them a necessity, for trade while diminishing the power to maintain trade. "Whatever tends,"
says he, "to diminish in any country the number of artificers and manufacturers, tends to diminish the home market, the most important of all markets, for the rude produce of the land, and thereby still further to discourage agriculture," and consequently to diminish the power of producing things with which to trade. He nowhere refers to the fact that any system which looks to compelling a nation to export raw produce, tends necessarily to the impoverishment of the land and its owner, and to the diminution, of the freedom of the labourer, and yet that such was the case could scarcely have escaped his observation. The tendency of the then existing English policy was, as he showed, to produce in various countries a necessity for exporting every thing in its rudest form, thus increasing the cost of transportation, while impoverishing the land and exhausting the people. The legislature had been, he said, "prevailed upon" to prevent the establishment of manufactures in the colonies, "sometimes by high duties, and sometimes by absolute prohibitions." In Grenada, while a colony of France, every plantation had its own refinery of sugar, but on its cession to England they were all abandoned, and thus was the number of artisans diminished, to "the discouragement of agriculture."
The course of proceeding relative to these colonies is thus described:--
"While Great Britain encourages in America the manufacturing of pig and bar iron, by exempting them from duties to which the like commodities are subject when imported from any other country, she imposes an absolute prohibition upon the erection of steel furnaces and slit-mills in any of her American plantations: She will not suffer her colonies to work in those more refined manufactures, even for their own consumption; but insists upon their purchasing of her merchants and manufactures all goods of this kind which they have occasion for.
"She prohibits the exportation from one province to another by water, and even the carriage by land upon horseback, or in a cart, of hats, of wools, and woollen goods, of the produce of America; a regulation which effectually prevents the establishment of any manufacture of such commodities for distant sale, and confines the industry of her colonists in this way to such coa.r.s.e and household manufactures as a private family commonly makes for its own use, or for that of some of its neighbours in the same province."
His views, in regard to such measures, are thus given:--
"To prohibit a great people from making all they can of every part of their own produce, or from employing their stock and industry in a way that they judge most advantageous to themselves, is a manifest violation of the most sacred rights of mankind."
Further to carry out this view of compelling the people of the colonies to abstain from manufacturing for themselves, and to carry their products to distant markets, to the exhaustion of the land and to the diminution of the value of labour, bounties were paid on the importation into England of various articles of raw produce, while the export of various raw materials, of artisans, and of machinery, was prohibited. The whole object of the system was, he said, to "raise up colonies of customers, a project," he added, "fit only for a nation of shopkeepers." Indeed, he thought it "unfit even for a nation of shopkeepers," although "extremely fit for a nation whose government was influenced by shopkeepers." He was therefore entirely opposed to all such arrangements as the Methuen treaty, by which, in consideration of obtaining the control of the market of Portugal for the sale of her manufactures, Great Britain agreed to give to the wines of that country great advantage over those of France.
Against all the errors of the system, Dr. Smith, however, raised in vain his warning voice. "England"s treasure" was, it was thought, to be found "in foreign trade," and every measure adopted by the government had in view the extension of that trade. With each new improvement of machinery there was a new law prohibiting its export.
The laws against the export of artisans were enforced, and a further one prohibited the emigration of colliers. The reader will readily see that a law prohibiting the export of cotton or woollen machinery was precisely equivalent to a law to compel all the producers of wool or cotton to seek the distant market of England if they desired to convert their products into cloth. The inventors of machinery, and the artisans who desired to work it, were thus deprived of freedom of action, in order that foreigners might be made the slaves of those who controlled the spinning-jenny, the loom, and the steam-engine, in whose hands it was desired to centralize the control of the farmers and planters of the world. England was to be made "the workshop of the world," although her people had been warned that the system was not only unnatural, but in the highest degree unjust, and even more impolitic than unjust, because while tending to expel capital and labour from the great and profitable home market, it tended greatly to the "discouragement of agriculture" in the colonies and nations subjected to the system, and to prevent the natural increase of the smaller and less profitable distant market upon which she was becoming more and more dependent.
By degrees the tendency of the system became obvious. Bounties on the import of wood, and wool, and flax, and other raw materials, tended to "the discouragement of agriculture" at home, and bounties on the export of manufactures tended to drive into the work of converting, and exchanging the products of other lands the labour and capital that would otherwise have been applied to the work of production at home.
The necessary consequence of this was, that the difficulty of obtaining these raw materials, instead of diminishing with the progress of population, tended to increase, and then it was, at the distance of a quarter of a century from the date of the publication of "_The Wealth of Nations_," that the foundation of the new school was laid by Mr. Malthus, who taught that all the distress existing in the world was the inevitable consequence of a great law of nature, which provided that food should increase only in arithmetical progression, while population might increase in geometrical progression. Next came Mr. Ricardo, who furnished a law of the occupation of the earth, showing, and conclusively, as he supposed, that the work of cultivation was always commenced on the rich soils, yielding a large return to labour, and that as population increased, men were compelled to resort to others, each in succession less fertile than its predecessor--the consequence of which was that labour became daily less productive, the power to obtain food diminished, and the power to demand rent increased, the poor becoming daily poorer, weaker, and more enslaved, as the rich became richer and more powerful. Next came the elder Mill, who showed that, in obedience to the law thus propounded by Mr. Ricardo, the return to capital and labour applied to the work of cultivation must be "continually decreasing," and the annual fund from which sayings are made, continually diminishing. "The difficulty of making savings is thus," he adds, "continually augmented, and at last they must totally cease." He regarded it therefore as certain that "wages would be reduced so low that a portion of the population would regularly die from the consequences of want." In such a state of things, men sell themselves, their wives, or their children, for mere food. We see, thus, that the modern British theory looks directly to the enslavement of man.
In this manner, step by step, did the British political economists pa.s.s from the school of Adam Smith, in which it was taught that agriculture preceded manufactures and commerce, the latter of which were useful to the extent that they aided the former,--to that new one in which was, and is, taught, that manufactures and commerce were the great and profitable pursuits of man, and that agriculture, because of the "constantly increasing sterility of the soil," was the least profitable of all. Hence it is that we see England to have been steadily pa.s.sing on in the same direction, and devoting all her energies to the prevention of the establishment, in any country of the world, of markets in which the raw produce of the land could be exchanged directly with the artisan for the products of his labour.
For a time this prospered, but at length the eyes of the world were opened to the fact that they and their land were being impoverished as she was being enriched; and that the effect of the system was that of const.i.tuting herself _sole buyer_ of the raw products of their labour and their land, and _sole seller_ of the manufactured commodities to be given in exchange for them, with power to fix the prices of both; and thus that she was really acting in the capacity of mistress of the world, with power to impose taxes at discretion. By degrees, machinery and artisans were smuggled abroad, and new machinery was made, and other nations turned their attention more and more to manufacturing; and now it became necessary to make new exertions for the purpose of securing to England the monopoly she had so long enjoyed. To enable her to do this we find her at length throwing open her ports for the free admission of corn and numerous other of the raw products of the earth, free from the payment of any duty whatever, and thus offering to the various nations of the world a bounty on the further exhaustion of their land. The adoption of this measure would, it was supposed, induce Prussia, Austria, Russia, and Denmark, and all America, to devote themselves exclusively to the cultivation of the earth, abandoning all attempts at the creation of nearer places of exchange; and thus that all the world outside of England would become producers of raw materials to be carried to that single and distant market, there to be consumed or converted, and the refuse thereof to be deposited on the land of England. That such was the object of this measure was admitted by all. It was announced as a boon to the agriculturists of the world. How far it was calculated to be so, the reader may judge, after satisfying himself of the truth of the following propositions:--
I. That if there is to be but one place of exchange or manufacture for the world, all the rest of the people of the world must limit themselves to agriculture.
II. That this necessarily implies the absence of towns, or local places of exchange, and a necessity for resorting to a place of exchange far distant.
III. That the distance of the place of consumption from the place of production forbids the possibility of returning to the land any of the manure yielded by its products.
IV. That this in turn implies the exhaustion of the land and the impoverishment of its owner.
V. That the impoverishment of the land renders necessary a removal to new and more distant lands.
VI. That this renders necessary a larger amount of transportation, while the impoverishment of the farmer increases the difficulty of making roads.
VII. That the increased distance of the market produces a steadily increased necessity for limiting the work of cultivation to the production of those commodities which can be obtained from high and dry lands, and that the quant.i.ty of products tends therefore to diminish with the increased distance from market.
VIII. That with each step in the progress of exhausting the land, men are compelled to separate more widely from each other, and that there is therefore a steady diminution in the power of a.s.sociation for the making of roads, or the establishment of schools, and that the small towns, or near places of exchange, tend gradually toward depopulation and ruin.
IX. That the more men separate from each other the less is the power to procure machinery, and the greater the necessity for cultivating the poorest soils, even though surrounded by lead, iron, and copper ore, coal, lime, and all other of the elements of which machinery is composed.
X. That with the diminished power of a.s.sociation, children grow up uneducated, and men and women become rude and barbarous.
XI. That the power to apply labour productively tends steadily to diminish, and that women, in default of other employment, are forced to resort to the field, and to become slaves to their fathers, husbands, and brothers.
XII. That the power to acc.u.mulate capital tends likewise to diminish--that land becomes from day to day more consolidated--and that man sinks gradually into the condition of a slave to the landed or other capitalist.
XIII. That with this steady pa.s.sage of man from the state of a freeman to that of a slave, he has steadily less to sell, and can therefore purchase less; and that thus the only effect of a policy which compels the impoverishment of the land and its owner is to destroy the customer, who, under a different system of policy, might have become a larger purchaser from year to year.
That the object of the present English policy is that of converting all the nations of the world into purely agricultural communities will not be denied; but as it may be doubted if the effects would be such as are here described, it is proposed now to inquire into the movement of some of the non-manufacturing communities of the world, with a view to determine if the facts observed are in correspondence with those that, reasoning _a priori_, we should be led to expect. Before entering upon this examination, the reader is, however, requested to peruse the following extracts from "Gee on Trade," in which is described the former colonial system, and afterward the extract from a recent despatch of Lord Grey, late Colonial Secretary, with a view to satisfy himself how perfectly identical are the objects now sought to be attained with those desired by the statesmen of the last century, and denounced by Adam Smith.
JOSHUA GEE--1750.
First--"Manufactures in American colonies should be discouraged, prohibited."
"Great Britain with its dependencies is doubtless as well able to subsist within itself as any nation in Europe. We have an enterprising people, fit for all the arts of peace or war. We have provisions in abundance, and those of the best sort, and we are able to raise sufficient for double the number of inhabitants. We have the very best materials for clothing, and want nothing either for use or for luxury, but what we have at home, or might have from our colonies; so that we might make such an intercourse of trade among ourselves, or between us and them, as would maintain a vast navigation. But, we ought always to keep a watchful eye over our colonies, _to restrain them from setting up any of the manufactures which are carried on in Great Britain_; and any such attempts should be crushed in the beginning, for if they are suffered to grow up to maturity it will be difficult to suppress them."
"Our colonies are much in the same state as Ireland was in when they began the woollen manufactory, _and as their numbers increase, will fall upon manufactures for clothing themselves, if due care be not taken to find employment_ for them in raising such productions as may enable them to furnish themselves with all the necessaries from us."
"I should, therefore, think it worthy the care of the government to endeavour by all possible means to encourage them in the raising of silk, hemp, flax, iron, (_only pig, to be hammered in England_,) potash, &c., by giving them competent bounties in the beginning, and sending over skilful and judicious persons, at the public charge, to a.s.sist and instruct them in the most proper methods of management, which in my apprehension would lay a foundation for establishing the most profitable trade of any we have. And considering the commanding situation of our colonies along the seacoast, the great convenience of navigable rivers in all of them, the cheapness of land, and the easiness of raising provisions, great numbers of people would transport themselves thither to settle upon such improvements. Now, as people have been filled with fears that the colonies, if encouraged to raise rough materials, would set up for themselves, a little regulation would be necessary; and as they will have the providing rough materials for themselves, a _little regulation_ would remove all those jealousies out of the way. They have never thrown or wove any silk, as yet, that we have heard of,--therefore, if a law was made prohibiting the use of any throwing mill, of doubling or throstling silk, with any machine whatever, they would then send it _to us raw_. And as they will have the providing rough materials to themselves, so shall we have the manufacturing of them. If encouragement be given for raising hemp, flax, &c., doubtless they will soon begin to manufacture, if not prevented. Therefore, to stop the progress of any such manufacture, it is proposed that no _weaver_ have _liberty_ to set up any looms, without first registering at an office kept for that purpose, and the name and place of abode of any journeyman that shall work for him. But if any _particular inhabitant_ shall be inclined to have any linen or woollen made of their own spinning, they should not be abridged of the same liberty that they now make use of, namely to have a weaver who shall be _licensed_ by the Governor, and have it wrought up for the use of the family, but not to be sold to any person in a private manner, nor exposed to any market or fair, upon pain of forfeiture." "That all slitting mills and engines for drawing wire, or weaving stockings, _be put down_." "That all negroes shall be prohibited from weaving either linen or woollen, or spinning or combing of wool, or working at any manufacture of iron, further than making it into pig or bar- iron. That they also be prohibited from manufacturing _hats, stockings, or leather of any kind_. This limitation will not abridge the planters of any liberty they now enjoy--on the contrary, it will then turn their industry to promoting and raising those rough materials."
Second--"The advantages to Great Britain from keeping the colonies dependent on her for their essential supplies."
"If we examine into the circ.u.mstances of the inhabitants of our plantations, and our own, it will appear that _not one-fourth part of their product redounds to their own profit, for out of all that comes here, they only carry back clothing and other accommodations for their families_, all of which is of the merchandise and manufacture of this kingdom." "All these advantages we receive by the plantations, _besides the mortgages on the planters" estates and the high interest they pay us, which is very considerable_, and, therefore, very great care ought to be taken, in regulating all the affairs of the colonists, that the planters are not put under too many difficulties, but encouraged to go on cheerfully." "New England and the northern colonies have not commodities and products enough to send us in return for purchasing their necessary clothing, but are under very great difficulties; and, therefore, any ordinary sort sell with them,--and when they have _grown out of fashion with us, they are new-fashioned enough for them_."
LORD GREY--1850.
"If, as has been alleged by the complainants, and as in some instances would appear to be the case, any of the duties comprised in the tariff have been imposed, not for the purpose of revenue, but with a view of protecting the interest of the Canadian manufacturer, her Majesty"s government are clearly of opinion that such a course is injurious alike to the interests of the mother country and to those of the colony. Canada possesses natural advantages for the production of articles which will always exchange in the markets of this country for those manufactured goods of which she stands in need. By such exchange she will obtain these goods much more cheaply than she could manufacture, them for herself, and she will secure an advantageous market for the _raw produce_ which she is best able to raise. On the other hand, by closing her markets against British manufactures, or _rendering their introduction more costly_, she enhances their price to the consumer, and by the imposition of protective duties, for the purpose of fostering an unnatural trade, she gives a wrong direction to capital, by withdrawing it from more profitable employment, and causing it to be invested in the manufacture of articles which might be imported at a cost below that of production in the colony, while at the same time she inflicts a blow on her export trade by rendering her markets less eligible to the British customer." "If the merchant finds that by exporting his goods to Canada, they produce him in return a _large quant.i.ty of corn_, and thus yield a greater profit than they would if exported to any other country, he will of course give the preference to Canada. But if by reason of increased import duties, those goods produce a diminished return the result will be either that the Canadian farmer must submit to a proportionate reduction in the price of his produce, or the British manufacturer must resort to another market. It is, therefore, obvious, that it is not less the interest of Canada herself than of Great Britain, that this tariff of import duties should undergo a careful revision."