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