Chap。XVI
IllustrationofsomePrincipleslaiddownintheformerChapter，relativetotheAdvancementandSupportofforeignTradeIamnowtogiveanillustrationofsomethingsrelatingtothatspeciesoftradewhichiscarriedonwithothernations，laiddown，Ithink，intoogeneraltermsintheformerchapter。
Ihaveconstantlyinviewtoseparateanddistinguishtheprinciplesofforeigntrade，fromthosewhichinfluencetheadvancementofaninlandcommerce，andabriskcirculationonly；
operationswhichproduceverydifferenteffects，equallymeritingtheattentionofastatesman。
Theveryexistenceofforeigntrade，impliesaseparateinterestbetweenthosenationswhoarefoundontheoppositesidesofthemercantilecontract，namelythebuyersandthesellers，asbothendeavourtomakethehestbargainpossibleforthemselves。Thesetransactionsimplyamutualdependenceupononeanother，whichmayeitherbenecessaryorcontingent。Itisnecessary，whenoneofthenationscannotsubsistwithouttheassistanceoftheother，asisthecasebetweentheprovinceofHolland，andthosecountrieswhichsupplyitwithgrain；orcontingent，whenthewantsofaparticularnationcannotbesuppliedbytheirowninhabitants，fromawantofskillanddexterity，only。
Wherever，therefore，onenationfindsanothernecessarilydependinguponherforparticularbranchesoftraffic，thereisacertainfoundationforforeigntrade；wherethedependenceiscontingent，thereisoccasionformanagement，andforthehandofanablestatesman。
Thebestwaytopreserveeveryadvantageis，toexaminehowfartheyarenecessary，andhowfartheyareonlycontingent，toconsiderinwhatrespectthenationmaybemosteasilyrivalledbyherneighbours，andinwhatrespectshehasnaturaladvantageswhichcannotbetakenfromher。
Thenaturaladvantagesarechieflytobedependedon:France，forexample，nevercanberivalledinherwines。Othercountriesmayenjoygreatadvantagesfromtheirsituation，mines，rivers，sea-ports，fishing，timber，andcertainproductionspropertothesoil。Ifyouabstractfromthesenaturaladvantages，allnationsareuponanequalfootingastotrade。Industryandlabourarenopropertiesattachedtoplace，anymorethanoeconomyandsobriety。
Thispropositionmaybecalledinquestion，upontheprinciplesofM。deMontesquieu，whodeducestheoriginofmanylaws，customs，andevenreligions，fromtheinfluenceofclimate。
Thisgreatmanreasonedfromfactandfromexperience，andfromthepowerandtendencyofnaturalcauses，toproducecertaineffects，whentheyarenotcheckedbyothercircumstances；butinmymethodoftreatingthissubject，Idonotsupposethatthesecausesareevertobeallowedtoproducetheirnaturalandimmediateeffects，whensucheffectswouldbefollowedbyapoliticalinconvenience:butIconstantlysupposeastatesmanattheheadofgovernment，whomakeseverycircumstanceconcurinpromotingtheexecutionoftheplanhehaslaiddown。
First，Ifanationthenhasformedaschemeofbeinglonggreatandpowerfulbytrade，shemustfirstapplycloselytothemanufacturingeverynaturalproduceofthecountry。Forthispurposeasufficientnumberofhandsmustbeemployed:forifhandsbefoundwanting，thenaturalproducewillbeexportedwithoutreceivinganyadditionalvaluefromlabour；andtheconsequencesofthisnaturaladvantagewillbelost。
Thepriceoffood，andallnecessariesformanufacturers，mustbefoundataneasyrate。
And，inthelastplace，ifoeconomyandsobrietyintheworkmen，andgoodregulationsonthepartofthestatesman，arenotkeptup，theendwillnotbeobtained:forifthemanufacture，whenbroughttomarket，donotretaintheadvantageswhichthemanufacturerhadinthebeginning，byemployingthenaturalproduceofthecountry；itisthesamethingasiftheadvantagehadnotexisted。Ishallillustratethisbyanexample。
Ishallsupposewooltobebetter，moreplentiful，andcheaper，inonecountrythaninanother，andbothtoberivalsinthewoollentrade。Itisnaturalthatthelastshoulddesiretobuywoolofthefirst，andthattheothershoulddesiretokeepitathome，inordertomanufactureit。Herethenisanaturaladvantagewhichthefirstcountryhasoverthelatter，andwhichcannotbetakenfromher。Ishallsupposethatsubsistenceisascheapinonecountryasintheother；thatistosay，thatbreadandeveryothernecessaryoflifeisatthesameprice。Iftheworkmenofthefirstcountrybyhavingbeenthefoundersoftheclothmanufacture，andbyhavinghad，foralongtractofyears，sogreatasuperiorityoverothernations，astomakethem，inamanner，absolutelydependentuponthemforclothsshallhaveraisedtheirpricesfromtimetotime；andif，inconsequenceoflargeprofits，longenjoyedwithoutrivalship，theseprofitsshallhavebeenconsolidatedwiththerealvalue，inconsequenceofanhabituallygreaterexpenceinliving，whichimpliesanaugmentationofwages；thiscountrymaytherebylosealltheadvantagesithadfromthelowpriceandsuperiorqualityofitswool。Butif，ontheotherhand，theworkmeninthelastcountryworkless，belessdextrous，payextravagantpricesforwoolatprimecost，andbeatgreatexpenceincarriage；ifmanufacturescannotbecarriedonsuccessfully，butbypublicauthority，andifprivateworkmenbecrushedwithexcessivetaxesupontheirindustry；alltheaccidentaladvantageswhichthelastcountryhadoverthefirst，maycometobemorethanbalanced，andthefirstmayregainthosewhichnaturefirsthadgivenher。Butthisshouldbynomeansmakethefirstcountryrestsecure。Theseaccidentalinconveniencesfoundintherivalnationmaycometocease；andthereforeheronlyrealsecurityforthisbranch，willbethecheapnessoftheworkmanship。
Secondly，Inspeakingofastandardprice，forgoodsinthelastchapter，Iestablishedadistinctionbetweenoneregulatedbytheheightofforeigndemand，andanotherkeptaslowasthepossibilityofsupplyingthemanufacturecanadmit。Thisrequiresalittleexplanation。
Itmustnotherebesupposedthatapeople，fromaprincipleofpublicspirit，willeverbeengagedtorelinquishtheprofitofariseinforeigndemand；andasthisrisemayproceedfromcircumstancesandeventswhichareentirelyhidfromthemanufacturers，suchrevolutionsareunavoidable。Wemustthereforerestrainthegeneralityofourformerproposition，andobserve，thattheindispensiblevibrationsofthisforeigndemanddonoharm；butthatthestatesmanshouldbeconstantlyonhisguardtopreventthesubversionofthebalance，orthesmallestconsolidationofextraordinaryprofitswiththerealvalue。Thishemayaccomplish，ashasbeenobserved，bymultiplyinghandsinthosebranchesofexportation，uponwhichprofitshaverisen。
Thiswillincreasethehomesupply，andfrustratehisownpeopleofextraordinarygains，whichwouldotherwiseterminateinaprejudicetoforeigntrade。
Astatesmanmaysometimes，outofaprincipleofbenevolence，perhapsofnaturalequitytowardstheclassesoftheindustrious，aswellasfromsoundpolicy，permitextraordinaryprofits，asanencouragementtosomeofthemoreelegantarts，whichserveasanornamenttoacountry；whichestablishareputationfortasteandrefinementinfavourofapeople，andtherebymakestrangerspreferarticlesoftheirproduction，whichhavenosuperiormeritbutthenameofthecountrytheycomefrom:buteventhese，heneveroughttoallowtorisesohighinthepriceastoproveanencouragementtoothernationstoestablishasuccessfulrivalship。
Thirdly，Theencouragementrecommendedtobegiventothedomesticconsumptionofsuperfluities，asoftastheforeigndemandforthemhappenstofallsolowastobefollowedwiththedistressoftheworkmen，requiresalittlefartherexplanation。
IfwhatIlaiddowninthelastchapterwithrespecttothisencouragementbetakenliterally，Iownitappearsanabsurdsupposition，becauseitbothimpliesadegreeofpublicspiritinthosewhoareinacapacitytopurchasethesuperfluities，nowheretobemetwith，andatthesametimeaself-denial，indiscontinuingthedemand，sosoonasanotherbranchofforeigntradeisopenedfortheemploymentoftheindustrious；oneandtheotherbeingequallycontrarytotheprinciplesuponwhichwehavefoundedthewholeschemeofourpoliticaloeconomy。
Ihaveelsewhereobserved，thatwererevolutionstohappenassuddenlyasIamobligedtorepresentthem，allwouldgointoconfusion。
What，therefore，isrecommendeduponsuchanexigencecomestothis。Thatwhenastatesmanfinds，thatthenaturaltasteofhispeopledoesnotleadthemtoprofitofthesurplusofcommoditieswhichlieuponhand，andwhichusedtobeexported，heshouldinterposehisauthorityandmanagementinsuchawayastopreventthedistressoftheworkmen，andwhen，byasuddenfallinaforeigndemand，thisdistressbecomesunavoidable，withoutamorepowerfulinterposition，heshouldthenhimselfbecomethepurchaser，ifotherswillnot；or，bypremiumsorbountiesontheexportationofthesurpluswhichliesuponhand，promotethesaleofitatanyrate，untilthesupernumeraryhandscanbeotherwiseprovidedfor。AndalthoughIallowthattherichpeopleofastatearenotcommonlyled，fromaprincipleeitherofpublicspiritorself-denial，toconcurinsuchpoliticaloperations；yetwecannotdeny，thatitisinthepowerofagoodgovernor，byexposingthepoliticalstateofcertainclassesofthepeople，toprevailwithmenofsubstancetojoininschemesfortheirrelief；andthisisallIintendtorecommendinpractice。Mypointofviewistolaydowntheprinciples，andI
neverrecommendthemfartherthantheymayberenderedpossibleinexecution，bypreparatorysteps，andbyproperlyworkingonthespiritofthepeople。
Chap。XVII
SymptomsofDecayinforeignTradeIfmanufacturersbefoundwithoutemployment，wearenotimmediatelytoaccusethestatesman，norconcludethatitproceedsfromadecayoftrade，untilthecauseofitbeinquiredinto。Ifuponexaminationitbefound，thatforsomeyearspastfoodhasbeenatahigherratethaninneighbouringcountries，thestatesmanmaybetoblame:foritiscertain，thatatradingnation，byturningpartofhercommerceintoaproperchannel，mayalwaysbeabletoestablishajustbalanceinthisparticular。Andthoughitbenotexpedientinyearsofscarcitytobringthepriceofgrainverylow，yetitisgenerallypossibletokeepitattherateitsellsforinallrivalnations，which，withregardtothepresentpoint，isthesamething。
Ifthiswantofemploymentformanufacturersdonotproceedfromthehighpricesofliving，butforwantofcommissionsfromthemerchants，thecausesofthisdiminutionofdemandmustbeexaminedinto。Itmaybeaccidental，andhappenfromcauseswhichmayceaseinalittletime，andtrademayreturntoflourishasbefore。Itmayalsohappenupontheestablishmentofnewundertakingsindifferentplacesofthecountry，fromwhich，byreasonofsomenaturaladvantage，oramorefrugaldispositionintheworkmen，orfromtheproximityofplace；certainmarketsmaybesupplied，whichformerlywerefurnishedbythoseindustriouspeoplewhoarenowfoundtobewithoutemployment。Intheselastsuppositions，thedistressofthemanufacturersisnoproofofanydecayoftradeingeneral，but，onthecontrary，itmaycontributetodestroythebadeffectsofconsolidatedprofits，byobligingthosewhoformerlysharedthem，toabandontheeaseoftheircircumstances，andtosubmita-newtoapainfulindustry，barelysufficienttoprocuresubsistence。Whensuchrevolutionsaresudden，theyprovehardtobear，andthrowpeopleintogreatdistress。Itispartlytopreventsuchinconveniences，thatwehaverecommendedtheloweststandardpossibleinthepriceofarticlesofexportation。
Twocausesthereare，whichverycommonlymarkadeclineoftrade，towit；1。Whenforeignmarkets，usuallysuppliedbythetradingnation，begintobefurnished，letitbeinthemosttriflingarticle，byothers，notusedtosupplythem。Or，2。Whenthecountryitselfisfurnishedfromabroadwithsuchmanufacturesaswereformerlymadeathome。
Thesecircumstancesproveoneoftwothings，eitherthatthereareworkmeninothercountries，who，fromadvantageswhichtheyhaveacquiredbynature，orbyindustryandfrugality，findingademandfortheirwork，takethebreadoutofthemouthsofthoseformerlyemployed，anddeprivethemofcertainbranchesoftheirforeigntrade:or，thattheseforeignworkmen，havingprofitedoftheincreasedluxuryanddissipationoftheformertraders，havebeguntosupplythemarketswithcertainarticlesofconsumption，theprofitsuponwhichbeingsmall，are，withoutmuchrivalship，insensiblyyieldeduptothembytheworkmenoftheothertradingnation，whofindbetterbreadinservingtheirownwealthycountrymen。
Againstthefirstcauseofdecline，Iseenobetterremedythanpatience，asIhavesaidalready，andaperseveranceinfrugalityandoeconomy，untiltheunwarybeginnersshallfallintotheinconveniencesgenerallyattendinguponwealthandease。
Thesecondcauseofdeclineitisfarmoredifficulttoremove。Therootofitliesdeep，andisingraftedwiththespiritandmannersofthewholepeople，highandlow。Thelowerclasseshavecontractedatasteforsuperfluityandexpencewhichtheyareenabledtogratify，byworkingfortheirowncountrymen；
whiletheydespisethebranchesofforeigntradeaslowandunprofitable。Thehigherclassesagaindependuponthelowerclasses，forthegratificationofathousandlittletriflingdesires，formedbythetastefordissipation，andsupportedbyhabit，fashion，andaloveofexpence。
Herethenisasystemsetonfoot，wherebythepooraremaderich，andthericharemadehappy，intheenjoymentofaperpetualvarietyofeverything，whichcanremovetheinconveniencestowhichhumannatureisexposed。Thusbothpartiesbecomeinterestedtosupportit，andviewithoneanotherintheingenuityofcontrivingnewwants；theonefromtheimmediatesatisfactionofremovingthem；theotherfromtheprofitoffurnishingthemeans，andfromthehopesofonedaysharinginthem。
Butevenforthisgreatevil，theverynatureofmanpointsoutaremedy。Itisthebusinessofastatesmantolayholdofit。Theremedyflowsfromtheinstabilityofeverytastenotfoundeduponrationaldesires。
Ineverycountryofluxury，weconstantlyfindcertainclassesofworkmenindistress，fromthechangeofmodes。Wereastatesmanuponhisguardtoemploysuchasareforcedtobeidle，beforetheybetakethemselvestonewinventions，forthesupportoftheoldplan，orbeforetheycontractanabandonedandvicioushabit，hewouldgetthemcheap，andmightturntheirlabourbothtotheadvantageofthestateandtothediscouragementofluxury。
Iconfess，however，thatwhilealuxurioustasteintherichsubsists，industriouspeoplewillalwaysbereadytosupplytheinstrumentsofittotheutmostextent；andIalsoallow，thatsuchatastehasinfiniteallurements，especiallywhileyouthandhealthenablearichmantoinit。Those，however，whoaresystematicallyluxurious，thatis，fromaformedtasteandconfirmedhabit，arebutfew，incomparisonofthosewhobecomesofromlevity，vanity，andtheimitationofothers。Thelastarethosewhoprincipallysupportandextendthesystem；buttheyarenotthemostincorrigible。Wereitnotforimitation，everyagewouldseekafter，andbesatisfiedwiththegratificationofnaturaldesires。Twenty-fivemightthinkofdress，horses，hunting，dogs，andgenerouswines:forty，ofaplentifultable，andthepleasuresofsociety:sixty，ofcoaches，elbow-chairs，softcarpets，andinstrumentsofease。Butthetasteforimitationblendsallagestogether。Theoldfellowdelightsinhorsesandfineclothes；theyouthridesinhischariotonsprings，andlollsinaneasychair，largeenoughtoservehimforabed。Allthisproceedsfromthesuperfluityofrichesandtasteforimitation，notfromtherealallurementsofeaseandtasteforluxury，aseveryonemustfeel，whohasconversedatallwiththegreatandrich。Fashion，whichIunderstandheretobeasynonimoustermforimitation，leadsmostpeopleintosuperfluousexpence，whichissofarfrombeinganarticleofluxury，thatitisfrequentlyaloaduponthepersonwhocomplieswithit。Allsuchbranchesofexpence，itisinthepowerofastatesmantocutoff，bysettinghisownexample，andthatofhisfavouritesandservants，againstthecapriceoffashion。
Thelevityandchangeablenessofmankind，asIhavesaid，willevenassisthim。Agenerationofoeconomistsissometimesfoundtosucceedagenerationofspendthrifts；andwenowsee，almostoverallEurope，asystemofsobrietysucceedinganhabitualsystemofdrunkenness。Drunkenness，andamultitudeofuselessservants，weretheluxuryofformertimes。
Everysuchrevolutionmaybeprofitedofbyanablestatesman，whomustsetagoodexampleontheonehand，while，ontheother，hemustprofitofeverychangeoftaste，inordertore-establishtheforeigntradeofhissubjects。Anexampleoffrugality，intheheadofaluxuriouspeople，woulddofiniteharm，wereitintendedtoreformthemoralsoftherichonly，withoutindemnifyingthepoorforthediminutionuponconsumption。
Atthesametime，therefore，thatluxurycomestolosegroundathome，adoormustbeopened，toserveasanout-letfortheworkofthosehandswhichmustbetherebymadeidle；andwhich，consequentlymustfallintodistress。
Thisisnomorethantheprinciplebeforelaiddown，inthefifteenthchapter，reversed:therewesaid，thatwhenforeigndemandbeginstodecline，domesticluxurymustbemadetoincrease，inordertosoftentheshockofthesuddenrevolutioninfavouroftheindustrious。Forthesamereasonherewesay，thatforeigntrademustbeopeneduponeverydiminutionofdomesticluxury。
HowfewPrincesdowefindeitherfrugalormagnificentfrompoliticalconsiderations！And，thisbeingthecase，isitnotnecessarytolaybeforethemthenaturalconsequencesoftheoneandtheother？Anditisstillmorenecessarytopointoutthemethodstobetakeninordertoavoidtheinconvenienceswhichmayproceedfromeither。
Underaprodigaladministration，thenumberofpeoplewillincrease。Thestatesmanthereforeshouldkeepawatchfuleyeuponthesupplyingofsubsistence。Underafrugalreign，numberswilldiminish，ifthestatesmandonotopeneverychannelwhichmaycarryoffthesuperfluousproductionsofindustry。Hereisthereason:adiminutionofexpenceathome，isadiminutionofemployment；andthisagainimpliesadiminutionofpeople；
becauseitinterruptsthecirculationofthesubsistencewhichmadethemlive；butifforeigntradehemadetofillupthevoid，thenationwillpreserveitspeople，andthesavingsofthePrincewillbecompensatedbythebalancecominginfromstrangers。
Thesetopicsaredeliveredashintsonly；andtheamplificationofthemmightnotimproperlyhaveaplacehere；didInotexpecttobringthemintogreateradvantage，afterexaminingtheprinciplesoftaxation，andpointingoutthosewhichdirecttheapplicationofpublicmoney。
Chap。XVIII
MethodsofloweringthePriceofManufactures，inordertomakethemvendibleinforeignMarketsThemultiplicityofrelationsbetweentheseveralpartsofpoliticaloeconomy，forcesmetoafrequentrepetitionofprinciples。Ihavenootherruletojudgewhethersuchrepetitionsbesuperfluous，ornecessary，butbythetendencytheyhavetogivemeamoredistinctviewofmysubject。Thisiscommonlythecasewhenthesameprinciplesareappliedtodifferentcombinationsofcircumstances。
Almosteverythingtobesaidontheheadmentionedinthetitleofthischapter，hasbeenalreadytakennoticeof；andmypresentintentionismerelytolaytogetherideaswhichappearscattered，becausetheyhavebeenoccasionallybroughtinbytheirrelationstoothermatters。
Themethodsofloweringthepriceofmanufactures，soastorenderthemexportable，areoftwokinds。
Thefirst，suchasproceedfromagoodadministration，andwhichbringdownpriceswithinthecountry，inconsequenceofnaturalcauses。
Thesecond，suchasoperateuponthatpartonlywhichcomestobeexportedinconsequenceofaproperapplicationofpublicmoney。
AsIhavenotyetinquiredintothemethodsofprovidingapublicfund，itwould，Ithink，becontrarytoordertoexamineinthisplacethedoctrineofpremiumsforbringingdownthepriceofmanufactures。Thisoperationwillcomeinmorenaturallyafterwards，andthegeneraldistinctionherementioned，isonlyintroducedbytheby，thatmyreadersmayretainitandapplyitaswegoalong。
Theendproposedistolowerthepriceofmanufactures，sothattheymaybeexported。Thefirstthingthereforetobeknown，isthecausefromwhenceithappens，thatcertainmanufacturescannotbefurnishedathomesocheapasinothercountries；thesecond，howtoapplytheproperremedyforloweringthepriceofthem。
Thecausesofhighprices，thatis，ofpricesrelativelyhigherthantheyarefoundtobeinothernations，arereducibletofourheads；whichIshalllaydownintheirorder，andthenpointoutthemethodsofremovingthemlikewise，intheirorder。
First，Theconsolidationofhighprofitswiththerealvalueofthemanufacture。Thiscauseoperatesincountrieswhereluxuryhasgainedground，andwheredomesticcompetitionhascalledofftoomanyofthehands，whichwereformerlycontenttoserveatalowerprice，andforsmallergains。
Secondly，Theriseinthepriceofarticlesofthefirstnecessity。Thiscauseoperateswhentheprogressofindustryhasbeenmorerapidthanthatofagriculture。Theprogressofindustry，aswehaveshewn，necessarilyimpliesanaugmentationofusefulinhabitants；andasthesehavecommonlywherewithaltopurchasesubsistence，themomenttheirnumbersswellabovetheproportionofthefoodproducedbyagriculture，orabovewhatisfoundinthemarketsofthecountry，orbroughtfromabroad，theyenterintocompetitionandraisethepriceofit。Herethenletitbeobserved，bytheby，thatwhatraisesthepriceofsubsistenceistheaugmentationofthenumberofusefulinhabitants，thatis，ofsuchasareeasyintheircircumstances。
Letthewretchedbeeversomany，letabusiveprocreationgooneversofar，suchinhabitantswillhavelittleeffectinraisingthepriceoffood，butaverygreatoneinincreasingthemiseryoftheirownclass。Aproofofthisistobemetwithinmanyprovinceswherethenumberofpoorisverygreat，andwhereatthesametimethepriceofnecessariesisverylow；whereasnoinstancecanbefoundwhereanumberoftheindustriousbeinggottogether，doesnotoccasionanimmediateriseonmostofthearticlesofsubsistence。
Thirdly，Thenaturaladvantagesofothercountries。Thisoperatesinspiteofalltheprecautionsofthemostfrugalandlaboriouspeople。Letthemdeprivethemselvesofeverysuperfluity；letthembeeversodiligentandingenious；leteverycircumstancebeimprovedtotheutmostbythestatesmanfortheestablishmentofforeigntrade；theadvantageofclimateandsituationmaygivesuchasuperioritytothepeopleofanothercountry，astorenderadirectcompetitionwiththemimpossible。
Fourthly，Thesuperiordexterityofothernationsinworkinguptheirmanufactures，theirknowledgeinthescienceoftrade，thepromptitudeoftheirpayments，theadvantagetheyhaveinturningtheirmoneytoaccountintheintervalsoftheirowndirectcirculation，thesuperiorabilitiesoftheirstatesman，theapplicationoftheirpublicmoney，inoneword，theperfectionoftheirpoliticaloeconomy。
BeforeIenteruponthemethodofremovingtheseseveralinconveniences，Imustobserve，thatasweareatpresenttreatingoftherelativeheightofthepriceofmanufactures，acompetitionbetweennationsisconstantlyimplied。Itisthiswhichobligesastatesmantobeprincipallyattentivetotheriseofprices。Thetermcompetitionisrelativeto，andconveystheideaofemulationbetweentwopartiesstrivingtocompassthesameend。Imustthereforedistinguishbetweentheendeavourswhichonenationmakestoretainasuperiorityalreadygot，andtheendeavourswhichanothernationmakesinordertoacquireit。
ThefirstIshallcallacompetitiontoretain；thesecond，acompetitiontoacquire。
Thefirstthreeheadsrepresenttheinconveniencestowhichthecompetitorstoretainareliable；andthefourthcomprehendsthosetowhichthecompetitorstoacquirearemostcommonlyexposed。
Havingdigestedoursubjectintoorder，Ishallrunthroughtheprincipleswhichseverallyinfluencetheremovingofeveryinconvenience，whetherincidenttoanationwhoseforeigntradeisalreadywellestablished，ortoanothernaturallycalculatedforenteringintoacompetitionfortheacquisitionofit。
Inproposingaremedyfortheparticularcausesoftheriseofpricesabovementioned，wemustsupposeeveryoneentirelysimple，anduncompoundedwiththeothers；athingwhichinfactseldomhappens。ThisIdoforthesakeofdistinctness；andtheprincipaldifficultyinpracticeistocombinetheremediesinproportiontothecomplicationofthedisease。Inowcometothefirstofthefourcausesofhighprices，towit，consolidatedprofits。
Thewholedoctrineofthesehasbeenabundantlysetforthinthe10thchapter。Wethereexplainedthenatureofthem，shewedhowthesubversionofthebalance，byalongpreponderancyofthescaleofdemand，hadtheeffectofconsolidatingprofitsinacountryofluxury；andobserved，thatthereducingthemtotheproperstandardcouldneverfailofbringingthosewhohadlongenjoyedthem，intodistress。
Thequestionnowbeforeusishowtoreducethem，whenforeigntradecannototherwiseberetained，lettheconsequencesbeeversohurtfultocertainindividuals。Whenthewellbeingofanationcomesincompetitionwithatemporaryinconveniencetosomeoftheinhabitants，thegeneralgoodmustbepreferredtoparticularconsiderations。
Ihaveobservedabove，thatdomesticluxury，byofferinghighpricesuponcertainspeciesofindustry，callsoffmanyhandsemployedtosupplythearticlesofexportation，uponwhichprofitsaregenerallyverymoderate。Thefirstnaturalandimmediateeffectofthis，is，todiminishthehandsemployedinfurnishingtheforeigndemand；consequently，todiminishthesupply；consequently，tooccasionasimplecompetitiononthesideofthestrangers，whoarethepurchasers；consequently，toaugmentprofitstothefurnishersuntilbytheriseandconsolidationofsuchprofitsthemarketisdeserted。
Theveryprogressherelaiddown，pointsouttheremedy。Thenumberofhandsemployedintheseparticularbranchesmustbemultiplied；andiftheluxurioustasteandwealthofthecountrypreventanyonewhocandobetter，frombetakinghimselftoaspeciesofindustrylucrativetothenation，butungratefultothosewhoexerciseit，thestatesmanmustcollectthechildrenofthewretchedintoworkhouses，andbreedthemtothisemployment，underthebestregulationspossibleforsavingeveryarticleofnecessaryexpence；herelikewisemaybeemployedoccasionallythoseabovementioned，whomthechangeofmodesmayhavecastoutofemployment，untiltheycanbebetterprovidedfor。Thisisalsoanoutletforfoundlings，sincemanyofthosewhoworkforforeignexportation，arejustlytoberankedinthelowestclassesofthepeople；andinthefirstbookweproposed，thateveryonebroughtupattheexpenceofpubliccharity，shouldbethrowninforrecruitingtheseclasses，whichcanwithgreatestdifficultysupporttheirownnumbersbypropagation。
Hereletmeobserve，thatalthoughitbetrueingeneral，thatthegreatestpartofexportablemanufacturesdoyieldbutverymiddlingprofits，fromtheextensionofindustryindifferentcountries，yetsundryexceptionsmaybefound；
especiallyinnationsrenownedfortheireleganceoftaste。Buthowquicklydoweseetheselucrativebranchesofforeigntradecutoff，inconsequenceoftheveryinconveniencewehereseekaremedyfor。Thereasonisplain。Whenstrangersdemandsuchmanufactures，theyshareonlyintheinstrumentsofforeignluxury，whichbringeverywhereconsiderableprofitstothemanufacturer。Thesehighprofitseasilyestablisharivalshipinfavourofthenationtowhomtheyaresupplied；becauseahintissufficienttoenablesuchasexerciseasimilarprofessionathome，tosupplytheirowninhabitants。Thisbeingthecase，anablestatesmanshouldbeconstantlyattentivetoeverygrowingtasteamongforeignnationsfortheinventionsofhispeople；andsosoonashisluxuriousworkmenhavesetanyoneonfoot，hemaythrowthisbranchintothehandsofthemostfrugal，inordertosupportit，andthengivethemsuchencouragementastopreventtherivalshipofthosestrangersatleast，whoareaccustomedtoworkforlargerprofits。Thisisonemethodofturningabranchofluxuryintoanarticleofforeigntrade。Letmeillustratethisbyanexample。
WhatgreatadvantagesdonottheFrenchreapfromtheexportationoftheirmodes？Buthowquicklydowefindtheirvarnishes，gauzes，ribbands，andcolifichets，imitatedbyothernations？Fornootherreasonbutbecauseofthelarge，orconsolidatedprofitsenjoyedbytheFrenchworkmenthemselves，who，fertileinnewinventions，andsupportedbytheirreputationfortheeleganceoftheirtasteinmattersofdress，havegotintopossessionoftherightofprescribingtoallEuropethestandardoftasteinarticlesofmeresuperfluity。Thishoweverisnopermanentprerogative；andthatelegantpeople，bylongsettingtheexample，anddeterminingthestandardofrefinementinsomeluxuriousarts，willatlastinspireasimilartasteintotheirscholars，whowilltherebybeenabledtosupplantthem。
Whereasweretheycarefultosupplyalltheirinventionsatthelowestpricespossible，theywouldevercontinuetobetheonlyfurnishers。
Themethodthereforeofreducingconsolidatedprofits，whetheruponarticlesofexportation，orhomeconsumption，istoincreasethenumberofhandsemployedinsupplyingthem；andthemoregraduallythischangeismadetotakeplace，thefewerinconvenienceswillresulttothosewhowilltherebybeforcedtorenouncethem。
Acountrywhichhasanextensiveterritory，andgreatopportunitiesofextendingheragriculturesuchasinaformerchapterIsupposedthepresentsituationofFrancetobemay，underagoodadministration，findtheprogressofluxuryverycompatiblewiththeprosperityofherforeigntrade；becauseinhabitantsmaybemultipliedatdiscretion。Butsosoonassubsistencebecomeshardtobeobtained，thisexpedientiscutoff。Astatesmanmustthenmakethebestoftheinhabitantshehas，luxurymustsufferacheck；andthosewhoareemployedinsupplyinghomeconsumptionathighprices，mustbemadetoreducetheirconsolidatedprofits，inordertobringthepriceoftheirmanufactureswithinsuchboundsastomakethemvendibleinforeignmarkets。
Ifmanufacturersbecomeluxuriousintheirwayofliving，itmustproceedfromtheirextraordinaryprofits。Thesetheymaystillcontinuetohave，aslongastheproduceoftheirworkisconsumedathome。Butnomerchantwillpretendtosellitoutofthecountry；because，inthiscase，hewillfindthelabourofotherpeoplewhoarelessluxurious，andconsequentlyworkcheaper，incompetitionwithhim。
Tore-establishthentheforeigntrade，theseconsolidatedprofitsmustbeputanendto，byattackingluxurywhencircumstancesrenderanaugmentationofpeopleinconvenient，andpriceswillfallofcourse。
Thiswilloccasiongreatcomplaintsamongallsortsoftradesmen。Thecrywillbe，thattradeisruined，manufacturersarestarving，andthestateisundone:butthetruthwillbe，thatmanufacturerswill，bytheirlabour，begintoenrichtheirownnation，attheexpenceofallthosewhotradewithher，insteadofbeingenrichedattheexpenceoftheirowncountrymen；
andbyarevolutiononlyinthebalanceofwealthathome。
Itwillproveverydiscouragingtoanystatesmantoattemptasuddenreformofthisabuseofconsolidatedprofits，andtoattacktheluxuryofhisownpeople。Thebestwaythereforeistopreventmattersfromcomingtosuchaspass，astodemandsodangerousanddifficultaremedy。
Thereishardlyapossibilityofchangingthemannersofapeople，butbyaproperattentiontotheeducationoftheyouth。
Allmethods，therefore，shouldbefallenupontosupplymanufactureswithnewhands；andlestthecontagionofexampleshouldgetthebetterofallprecautions，theseatofmanufacturesmightbechanged；especiallywhentheyarefoundingreatandpopulouscities，wherelivingisdear:inthiscase，othersshouldbeerectedintheprovinceswherelivingischeap。
Thestatemustencouragethesenewundertakings；numbersofchildrenmustbetakenin，inordertobebredearlytoindustryandfrugality；thisagainwillencouragepeopletomarryandpropagate，asitwillcontributetowardsdischargingthemoftheloadofanumerousfamily。Ifsuchaplanasthisbefollowed，howinconsiderablewillthenumberofpoorpeoplebecomeinalittletime；andasitwillinsensiblymultiplytheusefulinhabitants，outofthatyouthwhichrecruitedandsupportedthenumbersofthepoor，sothetaxesappropriatedforthereliefofpovertymaybethenwhollyapplied，inordertopreventit。
Lawsofnaturalizationhavebeenoftenproposedinanation，whereconsolidatedprofitshaveoccasionedtheinconveniencesforwhichwehaveherebeenproposingaremedy。Bythisexpedientmanyflatterthemselvestodrawindustriousstrangersintothecountry，whobeingaccustomedtolivemorefrugally，anduponlessprofits，may，bytheirexampleandcompetition，beatdownthepriceofworkamongtheinhabitants。
Severalcircumstancesconcurtodefeatthesuccessofthisscheme。Thefirstis，thatconsolidatedprofitsarenottheonlyinconveniencetoberemoved:thereisalsoacomplicationofhighpricesuponmanynecessaries。Secondly，asnorealchangehasbeenproposedasaconcomitantofsuchnaturalization-lawssuchasaregulationforaugmentingthesupplyofsubsistence，andfixingthepriceofitwithinproperboundsthesestrangers，who，assuch，mustbeexposedtoextraordinaryexpence，arenotabletosubsist，norconsequentlytoworksocheapastheydidathome。Besides，whatcanbesupposedtobetheirmotiveofcoming，ifitbenottohavehigherwages，andtolivebetter？
Herethenisanationsendingforstrangers，inorderthattheymayworkcheaper；andstrangersflockingintothecountryinhopesofsellingtheirworkdearer。Thisisjustthecasewithtwofriendswhoareaboutmakingabargain；thesellerimaginesthathisfriendwillnotgrudgeagoodprice。Thebuyer，ontheotherhand，flattershimselfthathisfriendwillselltohimcheaperthantoanother。Thisseldomfailstoproducediscontentonbothsides。
Besides，unlessthequantityoffoodbeincreased，ifstrangersareimportedtoeatpartofit，nativesmustinsomedegreestarveandifyouaugmentthequantityoffood，andkeepitatalittlelowerpricethaninneighbouringnations，yourowninhabitantswillmultiply；thestatemaytakegreatnumbersofthemintotheirservicewhenyoung；theysooncometobeabletodosomethinginthemanufacturingway；theymaybeboundforanumberofyears，sufficienttoindemnifythepublicforthefirstexpence；andtheencouragementaloneofhavingbreadcheaperthanelsewhere，willbringyouasmanystrangersasyouinclinetoreceive，providedacontinualsupplyoffoodcanbeprocuredinproportiontotheincreaseofthepeople。
ButIimaginethatitisalwaysbetterforastatetomultiplybymeansofitsowninhabitants，thanbythatofstrangers；formanyreasonswhichtomeappearobvious。
Wecomenowtothesecondcauseofhighprices，towit，ariseinthevalueofthearticlesofthefirstnecessity，whichwehavesaidproceedsfromtheprogressofindustryhavingoutstrippedtheprogressofagriculture。Letmesetthisideainaclearerlight；forhereitisexpressedintoogeneraltermstoberightlyviewedonallsides。
Theideaofinhabitantsbeingmultipliedbeyondtheproportionofsubsistence，seemstoimplythattherearetoomanyalready；andthedemandfortheirindustryhavingbeenthecauseoftheirmultiplication，provesthatformerlythereweretoofew。
Addtothis，thatif，notwithstandingtheriseuponthepriceofworkproceedingfromthescarcityofsubsistence，thescaleofhomedemandbefoundtopreponderate，attheexpenceofforeigntrade，thiscircumstanceprovesfarther，thathowevertheinhabitantsmaybealreadymultipliedabovetheproportionofsubsistence，theirnumbersarestilltoofewforwhatisdemandedofthemathome；andforwhatisrequiredofthemtowardspromotingtheprosperityoftheircountry，insupportingtheirtradeabroad。
Fromthisexpositionofthematter，theremedyappearsevident:bothinhabitantsandsubsistencemustbeaugmented。Thequestioncomestobe，inwhatmanner，andwithwhatprecautions，musttheseoperationsbeperformed？
Inhabitantsaremultipliedbyreducingthepriceofsubsistencetothevalue，whichdemandhasfixedupontheworkofthosewhoaretoconsumeit。Thiscaninnootherwaybeaccomplishedthanbyaugmentingthequantity，byimportationfromforeignparts，whenthecountrycannotbemadetoproducemoreofitself。
Heretheinterpositionofastatesmanisabsolutelynecessary；sincegreatlossmayoftenbeincurredbybringingdownthepriceofgraininayearofscarcity。Premiums，therefore，mustbegivenuponimportation，untilaplancanbeexecutedfortheextendingofagriculture；ofwhichinanotherplace。Thismustbegoneaboutwiththegreatestcircumspection；
forifgrainbetherebymadetofalltoolow，youruinthelandedinterest，andalthoughaswehavesaidaboveallthingssoonbecomebalancedinatradingnation，yetsuddenandviolentrevolutions，suchasthismustbe，arealwaystobeapprehended。
Theyareeverdangerous；andthespiritofeveryclassofinhabitantsmustbekeptup。
Byadiscreditcastuponanybranchofindustry，thehandsemployedinitmaybemadetoabandonit，tothegreatdetrimentofthewhole。Thiswillinfalliblyhappen，whenviolenttransitionsdonotproceedfromnaturalcauses，asintheexampleherebeforeus，namely，whenthepriceofgrainissupposedtobebroughtdown，fromtheincreaseofitsquantitybyimportation，andnotbyplenty。Becauseuponthefallingofthemarketbyimportation，thepoorfarmerhasnothingtomakeupforthelowpricehegetsforhisgrain；whereaswhenthefallproceedsfromplenty，hehasanadditionalquantity。
Inyears，therefore，ofgeneralscarcity，astatesmanshouldnot，bypremiumsgiven，reducethepriceofgrain，butinareciprocalproportiontothequantitywanted:thatistosay，themoregrainiswanted，thelessthepriceshouldbediminished。
Itmayappearaveryextensiveprojectforanygovernmenttoundertaketokeepdownthepricesofgrain，inyearsofgeneralscarcity。Iallowittobepoliticallyimpossibletokeeppriceslow，becauseifallEuropebetakentogether，theproduceofthewholeisonewithanotherconsumedbytheinhabitants；andinayearwhenthereisageneralscarcity，itwouldbeveryhard，ifnotimpossible，withouthavingpreviouslyestablishedaplanforthispurposetomakeanynationliveinplentywhileothersarestarving。Allthereforethatisproposed，istokeepthepricesofgraininasjustaproportionaspossibletotheplentyoftheyear。
Nowifagovernmentdonotinterpose，thisnevercanbethecase。Ishallsupposetheinhabitantsofacountrytoconsume，inayearofmoderateplenty，sixmillionsofquartersofgrain；ifinayearofscarcityitshallbefound，thatonemillionofquarters，orindeedafarlessquantity，bewanting，thefivemillionsofquartersproduced，willriseintheirpricetoperhapsdoubletheordinaryvalue，insteadofbeingincreasedbyonefifthonly。Butifyouexaminethecaseincountrieswheretradeisnotwellestablished，asinsomeinlandprovincesonthecontinent，itisnoextraordinarythingtoseegrainbearingthreetimesthepriceitisworthinordinaryyearsofplenty，andyetifinsuchayeartherewerewantingsixmonths’
provisionsfortheinhabitantsofagreatkingdom，alltherestofEuropewouldperhapshardlybeabletokeepthemfromstarving。
Itisthefearofwantandnotrealwant，whichmakesgrainrisetoimmoderateprices。Nowasthisextraordinaryrevolutionintheriseofit，doesnotproceedfromanaturalcause，towit，thedegreeofscarcity，butfromtheavariceandevildesignsofmenwhohoarditup，itproducesasbadconsequencestothatpartoftheinhabitantsofacountryemployedinmanufactures，asthefallofgrainwouldproducetothefarmers，incasethepricesshouldbe，byimportation，broughtbelowthejustproportionofthequantityproducedinthenation。
Besidestheimportationofgrain，thereisanotherwayofincreasingthequantityofsubsistenceveryconsiderably，insomecountriesofEurope。Inayearofscarcity，couldnotthequantityoffoodbeconsiderablyaugmentedbyaprohibitiontomakemaltliquors，allowingtheimportationofwinesandbrandies；orindeedwithoutlayinganyrestraintuponthelibertyoftheinhabitantsastomaltliquors，Iampersuadedthatthelibertyofimportingwinesdutyfree，would，inyearsofscarcity，considerablyaugmentthequantityofsubsistence。
Thisisnotaproperplacetoexaminetheinconveniencewhichmightresulttotherevenuebysuchascheme:becauseweareheretalkingofthoseexpedientsonlywhichmightbefallenupontopreserveabalanceonforeigntrade。Anexchequerwhichisfilledattheexpenceofthis，willnotcontinuelonginaflourishingcondition。
Theseappeartobethemostrationaltemporaryexpedientstodiminishthepriceofgraininyearsofscarcity；weshallafterwardsexaminetheprinciplesuponwhichaplanmaybelaiddowntodestroyallprecariousnessinthepriceofsubsistence。
Precautionsofanotherkindmustbetakeninyearsofplenty；
forhighpricesoccasionedbyexportationareashurtfultothepoortradesmanasiftheywereoccasionedbyscarcity。Andlowpricesoccasionedbyimportationareashurtfultothepoorhusbandmanasifhiscrophadfailedhim。
Astatesmantherefore，shouldbeveryattentivetoputtheinlandtradeingrainuponthebestfootingpossible，topreventthefraudsofmerchants，andtopromoteanequaldistributionoffoodinallcornersofthecountry。andbythemeansofimportationandexportation，accordingtoplentyandscarcity，toregulateajustproportionbetweenthegeneralplentyoftheyearinEurope，andthepriceofsubsistence；alwaysobservingtokeepitsomewhatlowerathome，thanitcanbefoundinanynationrivalintrade。Ifthismethodbewellobserved，inhabitantswillmultiply；andthisisaprincipalsteptowardsreducingtheexpenceofmanufactures；becauseyouincreasethenumberofhands，andconsequentlydiminishthepriceoflabour。
Anotherexpedientfoundtooperatemostadmirableeffectsinreducingthepriceofmanufacturesinthosecountrieswherelivingisrendereddear，byahurtfulcompetitionamongtheinhabitantsforthesubsistenceproducedistheinventionandintroductionofmachines。Wehave，inaformerchapter，answeredtheprincipalobjectionswhichhavebeenmadeagainstthem，incountrieswherethenumbersoftheidle，ortriflinglyindustriousaresogreat，thateveryexpedientwhichcanabridgelabourislookeduponbysomeasaschemeforstarvingthepoor。
Thereisnosolidityinthisobjection；andiftherewere，wearenotatpresentinquestofplansforfeedingthepoor；butforaccumulatingthewealthofatradingnation，byenablingtheindustrioustofeedthemselvesattheexpenceofforeigners。Theintroductionofmachinesisfoundtoreducepricesinasurprisingmanner。Andiftheyhavetheeffectoftakingbreadfromhundreds，formerlyemployedinperformingtheirsimpleoperations，theyhavethatalsoofgivingbreadtothousands，byextendingnumberlessbranchesofingenuity，which，withoutthemachines，wouldhaveremainedcircumscribedwithinverynarrowlimits。Whatprogresshasnotbuildingmadewithinthesehundredyears？Whodoubtsthattheconvenienceofgreatironworks，andsawmills，promptsmanytobuild？Butthistastehasgreatlycontributedtoincrease，nottodiminish，thenumberbothofsmithsandcarpenters，aswellastoextendnavigation。Ishalladdonlyinfavourofsuchexpedients，thatexperienceshewstheadvantagegainedbycertainmachinestobemorethanenoughtocompensateeveryinconveniencearisingfromconsolidatedprofits，andexpensiveliving；andthatthefirstinventorsgaintherebyasuperioritywhichnothingbutadoptingthesameinventioncancounterbalance。
Thethirdcauseofhighpriceswehavesaidtobeowingtothenaturaladvantagewhichneighbouringnationsreapfromtheirclimate，soil，orsituation。
Herenoriseofpricesisimpliedinthecountryinquestion，theyareonlysupposedtohavebecomerelativelyhighbytheopportunityothernationshavehadtofurnishthesamearticlesatalowerrate，inconsequenceoftheirnaturaladvantages。
Twoexpedientsmaybeused，inordertodefeatthebadeffectsofacompetitionwhichcannotbegotthebetterofintheordinaryway。Thefirstis，toassistthebranchesindistresswiththepublicmoney。Theotherispatience，andperseveranceinfrugality，ashasbeenalreadyobserved。Ashortexampleofthefirstwillbesufficientinthisplacetomakethethingfullyunderstood。Ihavealreadysaid，thatIpurposelypostponeanampledissertationupontheprincipleswhichinfluencessuchoperations。
Letmesupposeanationwhichisaccustomedtoexporttothevalueofamillionsterlingoffisheveryyear，tobeundersoldinthisarticlebyanotherwhichhasfoundafisheryonitsowncoasts，soabundantastoenableittoundersellthefirstby20
percent。Inthiscase，letthestatesmanbuyupallthefishofhissubjects，andundersellhiscompetitorsateveryforeignmarket，atthelosstohimselfofperhaps250，000l。Whatistheconsequence？Thatthemillionhepaidforthefishremainsathome，andthat750，000l。comesinfromabroadforthepricesofthem。Howisthe250，000l。tobemadeup？Byageneralimpositionuponalltheinhabitants。Thisreturnsintothepubliccoffers，andallstandsasitwas。Ifthisexpedientbenotfollowed，whatwillbetheconsequence？Thatthoseemployedinthefisherywillstarve；thatthefishtakenwilleitherremainuponhand，orbesoldbytheproprietorsatagreatloss；theywillbeundone，andthenationforthefuturewilllosetheacquisitionof750，000l。
ayear。
Toabridgethisoperationpremiumsaregivenuponexportation，whichcomestothesamething，andthisisarefinementontheapplicationofthisveryprinciple:butpremiumsareoftenabused。Itbelongstothedepartmentofthecoercivepowerofgovernmenttoputastoptosuchabuse。AllI
shallsayuponthematteris，thatiftherebeacrimecalledhightreason，whichispunishedwithgreaterseveritythanhighwayrobbery，andassassination，IshouldbeaptwereIastatesmantoputattheheadofthisbloodylist，everyattempttodefeattheapplicationofpublicmoney，forthepurposesherementioned。Themultiplicityoffraudsalonediscouragesawisegovernmentfromproceedinguponthisprinciple，anddisappointsthescheme。Ifseverepunishmentcaninitsturnputastoptofrauds，Ibelieveitwillbethoughtverywellapplied。
Whileastatesmanisthusdefendingtheforeigntradeofhiscountrybyanextraordinaryoperationperformeduponthecirculationofitswealth，hemustatthesametimeemploythesecondexpedientwithequaladdress。Hemustbeattentivetosupportsobrietyathome，andwaitpatientlyuntilabusesamonghisneighboursshallproducesomeoftheinconvenienceswehavealreadymentioned。Sosoonasthiscomestobethecase，hehasgainedhispoint；thepremiumsthenmaycease；thepublicmoneymaybeturnedintoanotherchannel；orthetaxmaybesuppressedaltogether，accordingascircumstancesmayrequire。
Ineednotadd，thatthemoremanagementanddiscretionbeusedinsuchoperations，thelessjealousywillbeconceivedbyotherrivalnations。Andasweareproposingthisplanforastatealreadyinpossessionofabranchofforeigntrade，readytobedisputedbyothers，havingsuperiornaturaladvantages，itistobepresumedthattheweightofmoney，atleastisonherside。This，ifrightlyemployed，willproveanadvantage，morethanequaltoanythingwhichcanbebroughtagainstit；andifsuchanoperationcomestoraisetheindignationofherrival，itwillontheotherhand，reconcilethefavourofeveryneutralstate，whowillfindapalpablebenefitfromthecompetition，andwillneverfailtogivetheirmoneytothosewhosellthecheapest。Inaword，noprivatetradercanstandincompetitionwithanation’swealth。Premiumsareanengineincommerce，whichnothingcanresistbutasimilaroperation。
Hithertowehavebeenproposingmethodsforremovingtheinconvenienceswhichaccompanywealthandsuperiority，andforpreservingtheadvantageswhichresultfromforeigntradealreadyestablished:wemustnowchangesides，andadopttheinterestofthosenationswholabourundertheweightofaheavycompetitionwiththeirrichneighbours，versedincommerce，dextrousineveryartandmanufacture，andconductedbyastatesmanofsuperiorabilities，whosetsallenginestowork，inordertomakethemostofeveryfavourablecircumstance。
Itisnoeasymatterforastateunacquaintedwithtradeandindustry，eventoformadistantprospectofrivalshipwithsuchanation，aslongastheabusesattendingupontheirwealtharenotsupposedtohavecreptinamongthem。Consequently，itwouldbethehighestimprudencetoattempt，atfirstsettingout，anythingthatcouldexcitetheirjealousy。
Thefirstthingtobeinquiredintoisthestateofnaturaladvantages。Ifanybranchofnaturalproduce，suchasgrain，cattle，wines，fruits，timber，orthelike，areherefoundofsogreatimportancetotherivalnations，thattheywillpurchasethemwithmoney，notwithanexchangeoftheirmanufactures，suchbranchesoftrademaybekeptopenwiththem。Ifnonesuchcanbefound，thefirststepistocutoffallcommunicationoftradebyexchangewithsuchapeople；andtoapplycloselytothesupplyofeverywantathome，withouthavingrecoursetoforeigners。
Sosoonasthesewantsbegintobesupplied，andthatasurplusisfound，othernationsmustbesoughtfor，whoenjoylessadvantagesandtrademaybecarriedonwiththeminalowerway。Peopleheremustgleanbeforetheycanexpecttoreap。Butbygleaningeveryyeartheywilladdtotheirstockofwealth，andthemoreitismadesubservienttopublicuses，thefasteritwillincrease。
Thebeginnerswillhavecertainadvantagesinseparablefromtheirinfantstate；towit，aseriesofaugmentationofallkinds，ofwhichwehavesofrequentlymademention。Ifthesecanbepreservedinanequableprogression；ifthebalanceofworkanddemand，andthatofpopulationandagriculture，canbekeptinagentlevibration，byalternateaugmentations；andifaplanofoeconomy，equallygoodwiththatoftherivals，besetonfootandpursued；timewillbringeverynaturaladvantageofclimate，soil，situation，andextent，toworktheirfulleffects；andintheendtheywilldecidethesuperiority。
Ishallnowconcludemychapter，withsomeobservationsonthedifferencebetweentheoryandpractice，sofarasregardsthepresentsubject。
Intheory，wehaveconsideredeveryoneofthecauseswhichproducehighprices，andpreventexportation，assimpleanduncompounded:inpracticetheyareseldomeverso。Thiscircumstancemakestheremediesdifficult，andsometimesdangerous。Difficult，fromthecomplicationofthedisease；
dangerous，becausetheremedyagainstconsolidatedprofitswhichistoincreasethenumberofmanufacturers，willdoinfiniteharm，ifappliedtoremovethatwhichproceedsfromdearsubsistence，whichcallsforasupplyoffood，notofmouths，ashasbeensaid。
Anothergreatdifferencebetweentheoryandpracticeoccursinthefourthcase；wherewesupposeanationunacquaintedwithtrade，tosetoutuponacompetitionwiththosewhoareinpossessionofit。WhenIexaminethesituationofsomecountriesofEuropeSpainperhapstowhichtheapplicationoftheseprinciplesmaybemade，Ifindthatitispreciselyinsuchnations，wheretheotherdisadvantagesofconsolidatedprofits，andeventhehighpricesofliving，arecarriedtothegreatestheight；andthattheonlythingwhichkeepsoneshillingofspecieamongthem，istheinfiniteadvantagetheydrawfromtheirmines，andfromthesaleoftheirpureandunmanufacturednaturalproductions，addedtotheirsimplicityoflife，occasionedbythewretchednessofthelowerclasses，whichalonepreventsthesealsofromconsumingforeigncommodities。Weremoneyinthesecountriesasequallydistributedasinthoseoftradeandindustry，itwouldquicklybeexported。Everyonewouldextendhisconsumptionofforeigncommodities，andthewealthwoulddisappear。Butthisisnotthecase；therichkeeptheirmoneyintheircoffers；becauselendingatinterest，there，isverywiselylaidundernumberlessobstructions。Thevice，therefore，isnotsomuchthatthelendingofmoneyatinterestisforbid，asthatthepeoplearenotputinasituationtohaveanypressingoccasionforborrowingit，asameanofadvancingtheirindustry。
Weretheytaughttosupplytheirownwants，thestatemightencouragecirculationbyloan；butastheyruntostrangersforthissupply，theirmoneyisfarbetterlockedup。
Uponarightuseandapplicationofthesegeneralprinciples，accordingtothedifferentcombinationsofcircumstances，inanationwhoseprincipalobjectisanextensiveandprofitableforeigntrade，Iimagineastatesmanmaybothestablishandpreserve，foraverylongtime，agreatsuperiorityinpointofcommerce；providedpeacecanbepreserved:forintimeofwar，everypopulousnation，ifgreatandextended，willfindsuchdifficultiesinprocuringfood，andsuchnumbersofhandsgratuitouslytomaintain，thatwhatformerlymadeitsgreatnesswillhastenitsruin。
Chap。XIX
Ofinfant，foreign，andinlandTrade，withrespecttotheseveralPrincipleswhichinfluencethemIhavealwaysfounditeasiertoretainthegeographyofacountry，fromtheinspectionofmaps，aftertravellingovertheregionsthererepresented，thanbefore；asmostprefacesarebestunderstood，afterreadingthebookwhichtheyarecalculatedtointroduce。Letthisserveasanapologyforpresentingtomyreadersachapterofdistribution，inthemiddleofmysubject。
Iintendatpresenttotakeaviewofthewholeregionoftrade，dividedintoitsdifferentdistricts，inordertopointoutarulingprincipleineach，fromwhicheveryothermustnaturallyflow，ormaybededucedbyaneasyreasoning。TheseI
shalllaybeforemyreader，thatfromthemhemaydistributehisideasinthesameorderIhavedone。HencethetermsIshallbeobligedtousewillberenderedmoreadequate，inexpressingtheideasImayhaveoccasiontoconveybythem。
Idividetradeintoinfant，foreign，andinland。
First。Infanttrade，takeninageneralacceptation，maybeunderstoodtobethatspecies，whichhasforitsobjectthesupplyingthenecessitiesoftheinhabitantsofacountry；
becauseitiscommonlyantecedenttothesupplyingthewantsofstrangers。Thisspecieshasbeenknowninallages，andinallcountries，inalessoragreaterdegree，inproportiontothemultiplicationofthewantsofmankind，andinproportiontothenumberofthosewhodependontheiringenuityforprocuringsubsistence。
Thegeneralprincipleswhichdirectastatesmanintheproperencouragementofthiscommerce，relatetotwoobjects。
First，Topromotetheeaseandhappinessofthehigherclasses，inmakingtheirwealthsubservienttotheirwantsandinclinations。
Secondly，Topromotetheeaseandhappinessofthelowerclasses，byturningtheirnaturalfacultiestoaninfalliblemeansofrelievingtheirnecessities。
Thiscommunicatestheideaofafreesociety；becauseitimpliesthecirculationofarealequivalentforeverythingtransferred，andforeveryserviceperformed；toacquirewhich，mankindsubmitwithpleasuretothehardestlabour。
Inthefirstbook，Ihadlittleoccasiontoconsidertradeunderdifferentdenominations；orasinfluencedbyanyotherprinciplethanthatofpromotingthemultiplicationofmankind，andtheextensionofagriculture，bydrawingthewealthoftherichintothehandsoftheindustrious。Thisoperation，whencarriednofarther，isatruerepresentationofinfanttrade。
ButnowImustsetthismatterinanewlight:andconsiderthisinfanttradeasabasisforestablishingaforeigncommerce。
Initselfitisameanonlyofgratifyingthedesiresofthosewhohavetheequivalenttogive；andofprovidingitforthosewhohaveitnot。Wearenexttoexaminehowastatesmanmay，bypropercare，convertitintothemeansofprocuringtohispeopleagreatsuperiorityoveralltheneighbouringnations；bydiminishing，ononehand，thequantitytheyhaveofthisgeneralequivalentwealth；andbyincreasing，ontheother，theabsolutequantityofitathome；insuchamannerasnotonlytopromotethecirculationofthatpartofitwhichisnecessarytosupplythewantsofallthecitizens，butbyasurplusofit，torenderothernationsdependentuponthem，inmostoperationsoftheirpoliticaloeconomy。
Thestatesmanwhoresolvestoimprovethisinfanttradeintoforeigncommerce，mustexaminethewantsofothernations，andconsidertheproductionsofhisowncountry。Hemustthendetermine，whatkindsofmanufacturesarebestadaptedforsupplyingthefirst，andforconsumingthelatter。Hemustintroducetheuseofsuchmanufacturesamonghissubjects；andendeavourtoextendhispopulationandhisagriculture，byencouragementsgiventothesenewbranchesofconsumption。Hemustprovidehispeoplewiththebestmasters；hemustsupplythemwitheveryusefulmachine；andaboveall，hemustrelievethemoftheirwork，whenhome-demandisnotsufficientfortheconsumptionofit。
Aconsiderabletimemustofnecessityberequiredtobringapeopletoadexterityinmanufactures。Thebranchesofthesearemany；andeveryonerequiresaparticularslightofhand，whichcannotbeacquiredbutundertheeyeofaskilfulmaster，abletopointouttherudimentsoftheart。Peopledonotperceivethisinconvenience，incountrieswheretheartsarealreadyintroduced；andmanyaprojectorhasbeenruinedforwantofattentiontoit。
Inthemoresimpleoperationsofmanufacturing，whereapprenticeshipsarenotinuse，everyoneteachesanother。Thenewbeginnersareputamonganumberwhoarealreadyperfect:alltheinstructionstheygetis，doasyouseeothersdobeforeyou。
Thisisanadvantagewhichanestablishedindustryhasoveranothernewlysetonfoot；andthisIapprehendtobethereasonwhyweseecertainmanufactures，afterremaininglonginastateofinfancy，makeinafewyearsamostastonishingprogress。Whatlossmustbeatfirstincurred！whatnumbersofaspiringgeniusesoverpoweredbyunsuccessfulbeginnings，whenastatesmandoesnotconcernhimselfintheoperation！Ifheassisthissubjects，bylayingaprohibitionuponforeignwork，thisexpedientwillbecomethemeansofencouragingthemostextravagantprofits，unless，atthesametime，heextendthemanufacture，bymultiplyingthehandsemployedinit。Iallow，indeed，thataslongasthegatesofakingdomarekeptshut，andthatnoforeigncommunicationispermitted，largeprofitsdolittleharm，andtendtopromotedexterityandrefinement。Thisisaverygoodmethodforlayingafoundationformanufactures:butsosoonasdexterityhasbeenthussufficientlyencouraged，andthatabundanceofexcellentmastershavebeenprovided；thenthestatesman，inordertocarrytheplanintoexecution，oughttomultiplythenumberofscholars；andanewgenerationmustbebroughtupinfrugality，andintheenjoymentofthemostmoderateprofits。
Therulingprinciple，therefore，whichoughttodirectastatesmaninpromotingandimprovingtheinfanttradeofhispeople，istoencouragethemanufacturingofeverybranchofnaturalproductions，byextendingthehome-consumptionofthem；
byexcludingallcompetitionwithstrangers；bypermittingtheriseofprofits，sofarastopromotedexterityandemulationininventionandimprovement；byrelievingtheindustriousoftheirwork，asoftenasdemandforitfallsshort；and，untilitcanbeexportedtoadvantage，itmaybeexportedwithloss，attheexpenceofthepublic。Hemustlikewisesparenoexpenceinprocuringtheablestmastersineverybranchofindustry，noranycostinmakingthefirstestablishments，inprovidingmachines，andeveryotherthingnecessaryorusefultomaketheundertakingsucceed。Hemustkeepconstantlyaneyeupontheprofitsmadeineverybranchofindustry，andsosoonashefindsthattherealvalueofthemanufacturecomessolowastorenderitexportable，hemustemploythehands，asabove，andputanendtotheseprofitshehadpermittedasthemeansonlyofbringingthemanufacturetoitsperfection。Inproportionasthepricesofeveryspeciesofindustryarebroughtdowntothestandardofexportation，insuchproportionwillthisspeciesoftradeloseitsoriginalcharacter，andadoptthesecond。
Secondly，Foreigntradehasbeenexplainedsufficiently:therulingprinciplesofwhicharetobanishluxury；toencouragefrugality；tofixtheloweststandardofpricespossible；andtowatch，withthegreatestattention，overthevibrationsofthebalancebetweenworkanddemand。Whilethisispreserved，nointernalvicecanaffecttheprosperityofit。Andwhenthenaturaladvantagesofothernationsconstitutearivalship，nototherwisetobeovercome，thestatesmanmustcounterbalancetheseadvantagesbytheweightandinfluenceofpublicmoney；andwhenthisexpedientbecomesalsoineffectual，foreigntradeisatanend；andoutofitsashesarisesthethirdspecies，whichIcallinlandcommerce。
Thirdly，Themoregeneralprinciplesofinlandcommercehavebeenoccasionallyconsideredinthefirstbook，andmoreparticularlyhintedatinthe15thchapterofthis；buttherearestillmanynewrelationstobeexamined，fromwhichnewprincipleswillarise:theseshallbeillustratedinthesubsequentchaptersofthisbook。Ishallherepointoutthegeneralheadsonly，whichwillservetoparticularizeanddistinguishthisthirdspeciesoftrade，fromthetwopreceding。
Inlandcommerce，inthepresentacceptationoftheterm，issupposedtotakeplaceuponthetotalextinctionofforeigntrade。Thestatesmanmust，insuchacase，asintheothertwospecies，attendtosupplyingthewantsoftherich，inrelievingthenecessitiesofthepoor，bythecirculationoftheequivalentasabove；butasformerlyhehaditinhiseyetowatchoverthebalanceofworkanddemand，sonowhemustprincipallyattendtothebalanceofwealth，asitvibratesbetweenconsumersandmanufacturers；thatis，betweentherichandtheindustrious。Theeffectsofthisvibrationhavebeenshortlypointedout，Chap。
xv。
Inconductingaforeigntrade，hisbusinesswastoestablishtheloweststandardpossibleastoprices；andtoconfineprofitswithinthenarrowestbounds:butasnowthereisnoquestionofexportation，thisobjectofhiscareinagreatmeasuredisappears；andhighprofitsmadebytheindustriouswillhavethennoothereffectthantodrawthebalanceofwealthmorespeedilytotheirside。Thehigherprofitsrise，themorequicklywilltheindustriousbeenriched，themorequicklywilltheconsumersbecomepoor，andthemorenecessarywillitbetocutoffeveryforeigncommunicationinthewayoftrade。
Fromthispoliticalsituationofanystate，arisesthefundamentalprincipleoftaxation；whichis，that，atthetimeofthevibrationofthebalancebetweentheconsumerandthemanufacturer，thestateshould，bytheimpositionofatax，advancethedissipationofthefirst，andshareintheprofitsofthelatter。ThisbranchofoursubjectIshallnothereanticipate；butIshall，intheremainingchaptersofthisbook，makeitsufficientlyevident，thatsosoonasthewealthofastatebecomesconsiderableenoughtointroduceluxury，andputanendtoforeigntrade；andwhen，fromtheexcessiveriseofprices，allhopesofrestoringitarelost，thentaxesbecomenecessary，bothforthesupportofgovernmentontheonehand，and，ontheother，toserveasanexpedientforrecallingforeigntradeinspiteofalltheperniciouseffectsofluxurytoextinguishit。
Ihopefromthisshortrecapitulationandexpositionofprinciples，IhavesufficientlycommunicatedtomyreaderthedistinctionsIwanttoestablish，betweenwhatIhavecalledinfant，foreign，andinlandtrade。Suchdistinctionsareverynecessarytoberetained，becauseitispropertheyshouldbeappliedinmanyplacesofthistreatise，inordertoqualifygeneralpropositions:thesecannotbeavoided，withoutaperpetualrepetitionofsuchrestrictions，whichwouldtirethereader，appearfrivoloustohim，anddiverthisattention。
Ishallonlyadd，thatwearenottosupposethecommerceofanynationconfinedtoanyoneofthethreespecies。Ihaveconsideredthemseparately，accordingtocustom，inordertopointouttheirdifferentprinciples。Itisthebusinessofstatesmentocompoundthemaccordingtocircumstances。