Part 10

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

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

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

NOTES, OF THE BALANCE OF TRADE.

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

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

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

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

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

OF THE JEALOUSY OF TRADE.

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

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

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

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

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

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

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

OF THE BALANCE OF POWER.

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

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

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

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

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

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

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

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

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

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