Restrictions on Imports of Goods Produced at Home

By restraining, either by high duties, or by absolute prohibitions, the importation of such goods from foreign countries as can be produced at home, the monopoly of the home market is more or less secured to the domestic industry employed in producing them. Thus the prohibition of importing either live cattle or salt provisions from foreign countries, secures to the graziers of Great Britain the monopoly of the home market for butcher’s meat. The high duties upon the importation of corn, which, in times of moderate plenty, amount to a prohibition, give a like advantage to the growers of that commodity. The prohibition of the importation of foreign woollen is equally favourable to the woollen manufacturers. The silk manufacture, though altogether employed upon foreign materials, has lately obtained the same advantage. The linen manufacture has not yet obtained it, but is making great strides towards it. Many other sorts of manufactures have, in the same manner obtained in Great Britain, either altogether, or very nearly, a monopoly against their countrymen. The variety of goods, of which the importation into Great Britain is prohibited, either absolutely, or under certain circumstances, greatly exceeds what can easily be suspected by those who are not well acquainted with the laws of the customs.

When a country restricts imports of goods it can produce at home, domestic producers gain a greater or lesser monopoly over the home market. These restrictions can take the form of high duties or outright bans. For example, the ban on imports of live cattle and salted meat gives Great Britain’s livestock farmers a monopoly over the home market for meat. High duties on imported grain give grain growers a similar advantage. When supplies are moderately plentiful, these duties amount to a ban. The ban on imported woollen goods is equally favorable to woollen manufacturers. The silk industry has recently gained the same advantage, although it works entirely with foreign materials. The linen industry has not yet gained it, but is making great strides toward it. Many other industries in Great Britain have likewise gained a complete or nearly complete monopoly over sales to their fellow countrymen. Great Britain bans the import of a wide variety of goods, either outright or under certain circumstances. The variety is much greater than those unfamiliar with customs laws might easily suspect.

That this monopoly of the home market frequently gives great encouragement to that particular species of industry which enjoys it, and frequently turns towards that employment a greater share of both the labour and stock of the society than would otherwise have gone to it, cannot be doubted. But whether it tends either to increase the general industry of the society, or to give it the most advantageous direction, is not, perhaps, altogether so evident.

There is no doubt that this monopoly of the home market often greatly encourages the particular industry that enjoys it. It often draws more of society’s labor and capital into that industry than would otherwise go there. But it is perhaps less clear whether the monopoly increases society’s overall industry or directs it to the most advantageous uses.

The general industry of the society can never exceed what the capital of the society can employ. As the number of workmen that can be kept in employment by any particular person must bear a certain proportion to his capital, so the number of those that can be continually employed by all the members of a great society must bear a certain proportion to the whole capital of the society, and never can exceed that proportion. No regulation of commerce can increase the quantity of industry in any society beyond what its capital can maintain. It can only divert a part of it into a direction into which it might not otherwise have gone; and it is by no means certain that this artificial direction is likely to be more advantageous to the society, than that into which it would have gone of its own accord.

A society’s total productive activity can never exceed what its capital can support. The number of workers a person can employ must bear a certain proportion to that person’s capital. In the same way, the number of workers all members of a large society can continually employ must bear a certain proportion to the society’s total capital. That number can never exceed this proportion. No regulation of trade can increase a society’s productive activity beyond what its capital can maintain. Such regulations can only divert part of that activity into a direction it might not otherwise have taken. And there is no certainty that this artificial direction will benefit society more than the direction it would have taken naturally.

Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to the society.

Everyone is constantly trying to find the most profitable use for whatever capital they control. They are looking out for their own advantage, not society’s. But pursuing their own advantage naturally, or rather necessarily, leads them to prefer the use that benefits society most.

First, every individual endeavours to employ his capital as near home as he can, and consequently as much as he can in the support of domestic industry, provided always that he can thereby obtain the ordinary, or not a great deal less than the ordinary profits of stock.

First, everyone tries to invest their capital as close to home as possible. As a result, they try to support domestic industry as much as they can. They do so, however, only if they can earn the usual profit, or not much less.

Thus, upon equal, or nearly equal profits, every wholesale merchant naturally prefers the home trade to the foreign trade of consumption, and the foreign trade of consumption to the carrying trade. In the home trade, his capital is never so long out of his sight as it frequently is in the foreign trade of consumption. He can know better the character and situation of the persons whom he trusts; and if he should happen to be deceived, he knows better the laws of the country from which he must seek redress. In the carrying trade, the capital of the merchant is, as it were, divided between two foreign countries, and no part of it is ever necessarily brought home, or placed under his own immediate view and command. The capital which an Amsterdam merchant employs in carrying corn from Koningsberg to Lisbon, and fruit and wine from Lisbon to Koningsberg, must generally be the one half of it at Koningsberg, and the other half at Lisbon. No part of it need ever come to Amsterdam. The natural residence of such a merchant should either be at Koningsberg or Lisbon; and it can only be some very particular circumstances which can make him prefer the residence of Amsterdam. The uneasiness, however, which he feels at being separated so far from his capital, generally determines him to bring part both of the Koningsberg goods which he destines for the market of Lisbon, and of the Lisbon goods which he destines for that of Koningsberg, to Amsterdam; and though this necessarily subjects him to a double charge of loading and unloading as well as to the payment of some duties and customs, yet, for the sake of having some part of his capital always under his own view and command, he willingly submits to this extraordinary charge; and it is in this manner that every country which has any considerable share of the carrying trade, becomes always the emporium, or general market, for the goods of all the different countries whose trade it carries on. The merchant, in order to save a second loading and unloading, endeavours always to sell in the home market, as much of the goods of all those different countries as he can; and thus, so far as he can, to convert his carrying trade into a foreign trade of consumption. A merchant, in the same manner, who is engaged in the foreign trade of consumption, when he collects goods for foreign markets, will always be glad, upon equal or nearly equal profits, to sell as great a part of them at home as he can. He saves himself the risk and trouble of exportation, when, so far as he can, he thus converts his foreign trade of consumption into a home trade. Home is in this manner the centre, if I may say so, round which the capitals of the inhabitants of every country are continually circulating, and towards which they are always tending, though, by particular causes, they may sometimes be driven off and repelled from it towards more distant employments. But a capital employed in the home trade, it has already been shown, necessarily puts into motion a greater quantity of domestic industry, and gives revenue and employment to a greater number of the inhabitants of the country, than an equal capital employed in the foreign trade of consumption; and one employed in the foreign trade of consumption has the same advantage over an equal capital employed in the carrying trade. Upon equal, or only nearly equal profits, therefore, every individual naturally inclines to employ his capital in the manner in which it is likely to afford the greatest support to domestic industry, and to give revenue and employment to the greatest number of people of his own country.

Thus, when profits are equal or nearly equal, every wholesale merchant naturally prefers domestic trade to foreign trade for consumption. He also prefers foreign trade for consumption to the carrying trade between foreign countries. In domestic trade, his capital is never out of his sight for as long as it often is in foreign trade for consumption. He can better judge the character and circumstances of the people he trusts. If he is deceived, he knows more about the laws of the country where he must seek a remedy. In the carrying trade, a merchant’s capital is divided, so to speak, between two foreign countries. No part of it ever needs to be brought home, where he can see and control it directly. Consider an Amsterdam merchant who carries grain from Koningsberg to Lisbon, and fruit and wine from Lisbon to Koningsberg. Generally, half the capital he uses for this trade must be in Koningsberg and the other half in Lisbon. None of it need ever come to Amsterdam. Such a merchant would naturally live in either Koningsberg or Lisbon. Only very particular circumstances could make him prefer to live in Amsterdam. Yet he is uneasy about being so far from his capital. This usually leads him to bring some of the Koningsberg goods intended for Lisbon to Amsterdam. He also brings some of the Lisbon goods intended for Koningsberg there. This necessarily means paying to load and unload the goods twice, as well as paying some duties and customs charges. Still, he willingly accepts this extra cost to keep some of his capital always under his own view and control. In this way, every country with a considerable share of the carrying trade becomes a trading center. It becomes a general market for the goods of all the countries whose trade it carries on. To avoid loading and unloading goods a second time, the merchant always tries to sell as much as he can at home. He does this with goods from all those different countries. In this way, he converts as much of his carrying trade as he can into foreign trade for consumption. In the same way, a merchant engaged in foreign trade for consumption collects goods for foreign markets. When profits are equal or nearly equal, he will always be glad to sell as much of those goods at home as he can. By converting as much of his foreign trade for consumption as he can into domestic trade, he saves himself the risk and trouble of exporting. Home is therefore the center, if I may say so, around which the capital of every country’s inhabitants continually circulates. Their capital always tends toward home, although particular causes may sometimes drive it away toward more distant uses. But, as has already been shown, capital used in domestic trade necessarily puts more domestic industry to work. It also provides income and employment to more of the country’s inhabitants than an equal amount used in foreign trade for consumption. Capital used in foreign trade for consumption has the same advantage over an equal amount used in the carrying trade. Therefore, when profits are equal or nearly equal, every individual naturally tends to use his capital in a particular way. He tends to use it where it is likely to give the greatest support to domestic industry. This use is also likely to provide income and employment to the greatest number of people in his own country.

Secondly, every individual who employs his capital in the support of domestic industry, necessarily endeavours so to direct that industry, that its produce may be of the greatest possible value.

Secondly, everyone who uses capital to support domestic industry necessarily tries to direct it so its output has the greatest possible value.

The produce of industry is what it adds to the subject or materials upon which it is employed. In proportion as the value of this produce is great or small, so will likewise be the profits of the employer. But it is only for the sake of profit that any man employs a capital in the support of industry; and he will always, therefore, endeavour to employ it in the support of that industry of which the produce is likely to be of the greatest value, or to exchange for the greatest quantity either of money or of other goods.

The produce of industry is the value it adds to the objects or materials it works on. The employer's profits rise or fall with the value of this produce. But people invest capital in industry only to make a profit. They will therefore always try to invest in the industry whose produce is likely to have the greatest value. That is, they will choose the industry whose produce will exchange for the most money or other goods.

But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

The annual revenue of every society is always exactly equal to the exchangeable value of everything its workers produce each year. In fact, the annual revenue is the same thing as that exchangeable value. Therefore, every individual tries as hard as possible to use capital to support domestic industry. Each also tries to direct that industry so that its output has the greatest value. In doing so, every individual necessarily works to make society’s annual revenue as great as possible. Generally, the individual neither intends to promote the public interest nor knows how much they are promoting it. By choosing to support domestic rather than foreign industry, the individual intends only to protect their own security. And by directing that industry to produce the greatest value, the individual intends only personal gain. In this, as in many other cases, an invisible hand leads the individual to promote an end they did not intend. Nor is it always worse for society that this end was unintended. By pursuing their own interest, people often promote society’s interest more effectively than when they actually intend to do so. I have never known much good done by those who pretended to trade for the public good. This pretense is not very common among merchants, and it takes very few words to discourage them from it.

What is the species of domestic industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can in his local situation judge much better than any statesman or lawgiver can do for him. The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.

Clearly, each person can judge their own local circumstances far better than any statesman or lawmaker can. They can better judge which domestic industry to invest their capital in and which is likely to produce the greatest value. A statesman who tried to direct how private individuals should invest their capital would take on an entirely unnecessary burden. He would also claim an authority that could safely be trusted to no individual, council, or senate. Nowhere would this authority be more dangerous than in the hands of a man foolish and arrogant enough to think himself fit to exercise it.

To give the monopoly of the home market to the produce of domestic industry, in any particular art or manufacture, is in some measure to direct private people in what manner they ought to employ their capitals, and must in almost all cases be either a useless or a hurtful regulation. If the produce of domestic can be brought there as cheap as that of foreign industry, the regulation is evidently useless. If it cannot, it must generally be hurtful. It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. The tailor does not attempt to make his own shoes, but buys them of the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a tailor. The farmer attempts to make neither the one nor the other, but employs those different artificers. All of them find it for their interest to employ their whole industry in a way in which they have some advantage over their neighbours, and to purchase with a part of its produce, or, what is the same thing, with the price of a part of it, whatever else they have occasion for.

Giving domestic producers a monopoly on the home market for any particular craft or manufacture partly directs how private individuals should invest their capital. In almost all cases, such a rule must be either useless or harmful. If domestic goods can be sold there as cheaply as foreign goods, the rule is clearly useless. If they cannot, it must generally be harmful. Every prudent head of a household follows this principle: never make at home what costs more to make than to buy. The tailor does not try to make his own shoes, but buys them from the shoemaker. The shoemaker does not try to make his own clothes, but hires a tailor. The farmer tries to make neither shoes nor clothes, but hires both of these craftspeople. All of them find it in their interest to devote all their work to something they do better than their neighbors. They use part of what they produce, or the money from selling part of it, to buy whatever else they need.

What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage. The general industry of the country being always in proportion to the capital which employs it, will not thereby be diminished, no more than that of the abovementioned artificers; but only left to find out the way in which it can be employed with the greatest advantage. It is certainly not employed to the greatest advantage, when it is thus directed towards an object which it can buy cheaper than it can make. The value of its annual produce is certainly more or less diminished, when it is thus turned away from producing commodities evidently of more value than the commodity which it is directed to produce. According to the supposition, that commodity could be purchased from foreign countries cheaper than it can be made at home; it could therefore have been purchased with a part only of the commodities, or, what is the same thing, with a part only of the price of the commodities, which the industry employed by an equal capital would have produced at home, had it been left to follow its natural course. The industry of the country, therefore, is thus turned away from a more to a less advantageous employment; and the exchangeable value of its annual produce, instead of being increased, according to the intention of the lawgiver, must necessarily be diminished by every such regulation.

What is wise for a private family can hardly be foolish for a great kingdom. If a foreign country can supply a product more cheaply than we can make it, we should buy it from them. We can pay for it with some of what our own industry produces in an area where we have an advantage. The country’s overall industry is always proportional to the capital that employs it. So buying from abroad will not reduce that industry, just as it would not reduce the industry of the craftsmen mentioned above. It will only leave the country’s industry free to find the most advantageous way to work. The country’s industry is certainly not employed to its greatest advantage when directed toward making a product it can buy more cheaply. In that case, industry is diverted from producing goods that are clearly worth more. The value of its annual output is therefore reduced to some extent. By assumption, the product could be bought more cheaply from abroad than it could be made at home. It could therefore be purchased with only part of the goods that the same amount of capital would have produced at home, had industry been left to follow its natural course. Or, to put it another way, it could be purchased with only part of the price of those goods. The country’s industry is thus diverted from a more advantageous use to a less advantageous one. Every such regulation must therefore reduce the exchangeable value of the country’s annual output, rather than increase it as the lawmaker intended.

By means of such regulations, indeed, a particular manufacture may sometimes be acquired sooner than it could have been otherwise, and after a certain time may be made at home as cheap, or cheaper, than in the foreign country. But though the industry of the society may be thus carried with advantage into a particular channel sooner than it could have been otherwise, it will by no means follow that the sum-total, either of its industry, or of its revenue, can ever be augmented by any such regulation. The industry of the society can augment only in proportion as its capital augments, and its capital can augment only in proportion to what can be gradually saved out of its revenue. But the immediate effect of every such regulation is to diminish its revenue; and what diminishes its revenue is certainly not very likely to augment its capital faster than it would have augmented of its own accord, had both capital and industry been left to find out their natural employments.

Such regulations can sometimes establish an industry sooner than would otherwise be possible. After a time, goods may be made at home as cheaply as, or more cheaply than, abroad. The regulations may therefore direct society’s industry into a particular field sooner, and to its advantage. But this does not mean that such regulations can ever increase its total industry or revenue. Society’s industry can grow only as its capital grows. Its capital can grow only as money is gradually saved from its revenue. But the immediate effect of every such regulation is to reduce revenue. And anything that reduces revenue is certainly unlikely to make capital grow faster than it would on its own. Capital would have grown on its own if capital and industry had been left to find their natural uses.

Though, for want of such regulations, the society should never acquire the proposed manufacture, it would not upon that account necessarily be the poorer in anyone period of its duration. In every period of its duration its whole capital and industry might still have been employed, though upon different objects, in the manner that was most advantageous at the time. In every period its revenue might have been the greatest which its capital could afford, and both capital and revenue might have been augmented with the greatest possible rapidity.

Even if a society never developed the proposed industry for lack of such regulations, it would not necessarily be poorer at any point in its history. At every point, it might still have used all its capital and labor in the most advantageous way available at the time, though for different purposes. At every point, its income might have been as great as its capital could produce. Both its capital and its income might have grown as rapidly as possible.

The natural advantages which one country has over another, in producing particular commodities, are sometimes so great, that it is acknowledged by all the world to be in vain to struggle with them. By means of glasses, hot-beds, and hot-walls, very good grapes can be raised in Scotland, and very good wine, too, can be made of them, at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and Burgundy in Scotland? But if there would be a manifest absurdity in turning towards any employment thirty times more of the capital and industry of the country than would be necessary to purchase from foreign countries an equal quantity of the commodities wanted, there must be an absurdity, though not altogether so glaring, yet exactly of the same kind, in turning towards any such employment a thirtieth, or even a three hundredth part more of either. Whether the advantages which one country has over another be natural or acquired, is in this respect of no consequence. As long as the one country has those advantages, and the other wants them, it will always be more advantageous for the latter rather to buy of the former than to make. It is an acquired advantage only, which one artificer has over his neighbour, who exercises another trade; and yet they both find it more advantageous to buy of one another, than to make what does not belong to their particular trades.

One country’s natural advantages over another in producing certain goods can be so great that everyone agrees it is pointless to compete. Using glasshouses, heated beds, and heated walls, Scotland can grow very good grapes and make very good wine from them. But this costs about thirty times as much as importing wine at least as good from abroad. Would it be reasonable to ban all foreign wine imports merely to encourage the making of claret and Burgundy in Scotland? It would clearly be absurd to devote thirty times more of the country’s capital and labor to producing goods than it would take to buy an equal quantity from abroad. But it would be equally absurd in kind, though not as obvious, to devote even a thirtieth or a three hundredth more capital or labor to producing them. It makes no difference here whether one country’s advantages over another are natural or acquired. As long as one country has those advantages and the other does not, the latter will always benefit more by buying from the former than by making the goods itself. One craftsperson’s advantage over a neighbor who practices another trade is only an acquired advantage. Yet both find it more beneficial to buy from each other than to make things outside their own trades.

Merchants and manufacturers are the people who derive the greatest advantage from this monopoly of the home market. The prohibition of the importation of foreign cattle and of salt provisions, together with the high duties upon foreign corn, which in times of moderate plenty amount to a prohibition, are not near so advantageous to the graziers and farmers of Great Britain, as other regulations of the same kind are to its merchants and manufacturers. Manufactures, those of the finer kind especially, are more easily transported from one country to another than corn or cattle. It is in the fetching and carrying manufactures, accordingly, that foreign trade is chiefly employed. In manufactures, a very small advantage will enable foreigners to undersell our own workmen, even in the home market. It will require a very great one to enable them to do so in the rude produce of the soil. If the free importation of foreign manufactures were permitted, several of the home manufactures would probably suffer, and some of them perhaps go to ruin altogether, and a considerable part of the stock and industry at present employed in them, would be forced to find out some other employment. But the freest importation of the rude produce of the soil could have no such effect upon the agriculture of the country.

Merchants and manufacturers benefit most from this monopoly of the domestic market. Imports of foreign cattle and salted provisions are banned. High duties on foreign grain also amount to a ban when supplies are moderately plentiful. But these measures benefit Great Britain's livestock farmers and grain growers far less than similar regulations benefit its merchants and manufacturers. Manufactured goods, especially finer ones, are easier to transport between countries than grain or cattle. Foreign trade therefore consists mainly of transporting manufactured goods. In manufacturing, even a very small advantage allows foreigners to sell more cheaply than our own workers, even in the domestic market. They would need a very great advantage to do the same with raw agricultural produce. If foreign manufactured goods could be imported freely, several domestic industries would probably suffer. Some might even be ruined altogether. A considerable part of the capital and labor now employed in them would have to find other uses. But even the freest importation of raw agricultural produce could have no such effect on the country's agriculture.

If the importation of foreign cattle, for example, were made ever so free, so few could be imported, that the grazing trade of Great Britain could be little affected by it. Live cattle are, perhaps, the only commodity of which the transportation is more expensive by sea than by land. By land they carry themselves to market. By sea, not only the cattle, but their food and their water too, must be carried at no small expense and inconveniency. The short sea between Ireland and Great Britain, indeed, renders the importation of Irish cattle more easy. But though the free importation of them, which was lately permitted only for a limited time, were rendered perpetual, it could have no considerable effect upon the interest of the graziers of Great Britain. Those parts of Great Britain which border upon the Irish sea are all grazing countries. Irish cattle could never be imported for their use, but must be drove through those very extensive countries, at no small expense and inconveniency, before they could arrive at their proper market. Fat cattle could not be drove so far. Lean cattle, therefore, could only be imported; and such importation could interfere not with the interest of the feeding or fattening countries, to which, by reducing the price of lean cattle it would rather be advantageous, but with that of the breeding countries only. The small number of Irish cattle imported since their importation was permitted, together with the good price at which lean cattle still continue to sell, seem to demonstrate, that even the breeding countries of Great Britain are never likely to be much affected by the free importation of Irish cattle. The common people of Ireland, indeed, are said to have sometimes opposed with violence the exportation of their cattle. But if the exporters had found any great advantage in continuing the trade, they could easily, when the law was on their side, have conquered this mobbish opposition.

Even if foreign cattle could be imported completely freely, so few could be brought in that Great Britain’s grazing trade would be little affected. Live cattle are perhaps the only commodity more expensive to transport by sea than by land. On land, they carry themselves to market. By sea, their food and water must be carried along with them, at considerable expense and inconvenience. The short sea crossing between Ireland and Great Britain does make Irish cattle easier to import. Free imports of Irish cattle were recently allowed, but only for a limited time. Even if they were allowed permanently, they could not greatly affect the interests of Great Britain’s graziers. All the parts of Great Britain bordering the Irish Sea are grazing regions. Irish cattle could never be imported for use in those regions. They would have to be driven through those very extensive regions before reaching their proper market, at considerable expense and inconvenience. Fattened cattle could not be driven so far. Only lean cattle could therefore be imported. Such imports could harm only the interests of cattle-breeding regions, not those of the regions that feed and fatten cattle. By reducing the price of lean cattle, imports would actually benefit the feeding and fattening regions. Few Irish cattle have been imported since imports were permitted, and lean cattle still sell at a good price. These facts seem to show that even Great Britain’s cattle-breeding regions are never likely to be greatly affected by free imports of Irish cattle. The common people of Ireland are indeed said to have sometimes violently opposed the export of their cattle. But the law was on the exporters’ side. If they had found it greatly profitable to continue the trade, they could easily have overcome this mob opposition.

Feeding and fattening countries, besides, must always be highly improved, whereas breeding countries are generally uncultivated. The high price of lean cattle, by augmenting the value of uncultivated land, is like a bounty against improvement. To any country which was highly improved throughout, it would be more advantageous to import its lean cattle than to breed them. The province of Holland, accordingly, is said to follow this maxim at present. The mountains of Scotland, Wales, and Northumberland, indeed, are countries not capable of much improvement, and seem destined by nature to be the breeding countries of Great Britain. The freest importation of foreign cattle could have no other effect than to hinder those breeding countries from taking advantage of the increasing population and improvement of the rest of the kingdom, from raising their price to an exorbitant height, and from laying a real tax upon all the more improved and cultivated parts of the country.

Regions where cattle are fed and fattened must also always be highly developed. Regions where cattle are bred, however, are generally uncultivated. A high price for lean cattle raises the value of uncultivated land. It therefore acts like a reward for leaving land undeveloped. A country that was highly developed throughout would benefit more from importing lean cattle than from breeding them. The province of Holland is said to follow this rule today. The mountains of Scotland, Wales, and Northumberland, however, cannot be developed much. They seem destined by nature to be Great Britain’s cattle-breeding regions. Allowing completely free imports of foreign cattle could only prevent those breeding regions from exploiting the growing population and development of the rest of the kingdom. It would prevent them from raising their prices to excessive levels and imposing a real tax on all the more developed and cultivated parts of the country.

The freest importation of salt provisions, in the same manner, could have as little effect upon the interest of the graziers of Great Britain as that of live cattle. Salt provisions are not only a very bulky commodity, but when compared with fresh meat they are a commodity both of worse quality, and, as they cost more labour and expense, of higher price. They could never, therefore, come into competition with the fresh meat, though they might with the salt provisions of the country. They might be used for victualling ships for distant voyages, and such like uses, but could never make any considerable part of the food of the people. The small quantity of salt provisions imported from Ireland since their importation was rendered free, is an experimental proof that our graziers have nothing to apprehend from it. It does not appear that the price of butcher’s meat has ever been sensibly affected by it.

In the same way, allowing completely free imports of salted meat would have as little effect on British graziers as importing live cattle. Salted meat is bulky. It is also lower in quality than fresh meat and costs more because it takes more labor and expense to produce. It could therefore never compete with fresh meat, though it might compete with salted meat produced in Great Britain. Imported salted meat might be used to supply ships on long voyages and for similar purposes. But it could never make up a significant part of the people’s diet. Since imports of salted meat from Ireland were made free, the small quantity imported has shown that British graziers have nothing to fear from them. These imports do not appear ever to have noticeably affected the price of fresh meat.

Even the free importation of foreign corn could very little affect the interest of the farmers of Great Britain. Corn is a much more bulky commodity than butcher’s meat. A pound of wheat at a penny is as dear as a pound of butcher’s meat at fourpence. The small quantity of foreign corn imported even in times of the greatest scarcity, may satisfy our farmers that they can have nothing to fear from the freest importation. The average quantity imported, one year with another, amounts only, according to the very well informed author of the Tracts upon the Corn Trade, to 23,728 quarters of all sorts of grain, and does not exceed the five hundredth and seventy-one part of the annual consumption. But as the bounty upon corn occasions a greater exportation in years of plenty, so it must, of consequence, occasion a greater importation in years of scarcity, than in the actual state of tillage would otherwise take place. By means of it, the plenty of one year does not compensate the scarcity of another; and as the average quantity exported is necessarily augmented by it, so must likewise, in the actual state of tillage, the average quantity imported. If there were no bounty, as less corn would be exported, so it is probable that, one year with another, less would be imported than at present. The corn-merchants, the fetchers and carriers of corn between Great Britain and foreign countries, would have much less employment, and might suffer considerably; but the country gentlemen and farmers could suffer very little. It is in the corn-merchants, accordingly, rather than the country gentlemen and farmers, that I have observed the greatest anxiety for the renewal and continuation of the bounty.

Even unrestricted imports of foreign grain could have very little effect on the interests of Great Britain’s farmers. Grain is much bulkier than meat. A pound of wheat at a penny is as expensive as a pound of meat at fourpence. Very little foreign grain is imported, even in times of the greatest scarcity. This should reassure farmers that they have nothing to fear from completely free imports. The well-informed author of the Tracts upon the Corn Trade gives an average annual import of only 23,728 quarters of grain of all kinds. This is no more than one five hundred and seventy-first of annual consumption. But the bounty on grain causes more grain to be exported in plentiful years. As a result, given the current state of cultivation, it must also cause more imports in scarce years. Because of the bounty, the abundance of one year does not make up for the scarcity of another. The bounty necessarily increases average exports. So, given the current state of cultivation, it must also increase average imports. Without the bounty, less grain would be exported. Probably less would also be imported, on average, than at present. Grain merchants, who transport grain between Great Britain and foreign countries, would have much less work and might suffer considerably. But country gentlemen and farmers could suffer very little. I have accordingly observed the greatest anxiety about renewing and continuing the bounty among grain merchants, rather than country gentlemen and farmers.

Country gentlemen and farmers are, to their great honour, of all people, the least subject to the wretched spirit of monopoly. The undertaker of a great manufactory is sometimes alarmed if another work of the same kind is established within twenty miles of him; the Dutch undertaker of the woollen manufacture at Abbeville, stipulated that no work of the same kind should be established within thirty leagues of that city. Farmers and country gentlemen, on the contrary, are generally disposed rather to promote, than to obstruct, the cultivation and improvement of their neighbours farms and estates. They have no secrets, such as those of the greater part of manufacturers, but are generally rather fond of communicating to their neighbours, and of extending as far as possible any new practice which they may have found to be advantageous. “Pius quaestus”, says old Cato, “stabilissimusque, minimeque invidiosus; minimeque male cogitantes sunt, qui in eo studio occupati sunt.” Country gentlemen and farmers, dispersed in different parts of the country, cannot so easily combine as merchants and manufacturers, who being collected into towns, and accustomed to that exclusive corporation spirit which prevails in them, naturally endeavour to obtain, against all their countrymen, the same exclusive privilege which they generally possess against the inhabitants of their respective towns. They accordingly seem to have been the original inventors of those restraints upon the importation of foreign goods, which secure to them the monopoly of the home market. It was probably in imitation of them, and to put themselves upon a level with those who, they found, were disposed to oppress them, that the country gentlemen and farmers of Great Britain so far forgot the generosity which is natural to their station, as to demand the exclusive privilege of supplying their countrymen with corn and butcher’s meat. They did not, perhaps, take time to consider how much less their interest could be affected by the freedom of trade, than that of the people whose example they followed.

Country gentlemen and farmers are, to their great credit, less prone than anyone else to the wretched spirit of monopoly. The owner of a large factory is sometimes alarmed if another factory of the same kind opens within twenty miles. The Dutch owner of the woollen factory at Abbeville required that no similar factory be established within thirty leagues of the city. Farmers and country gentlemen, by contrast, are generally inclined to encourage rather than hinder the cultivation and improvement of their neighbours’ farms and estates. Unlike most manufacturers, they have no secrets. They generally like to share any useful new practice with their neighbours and spread it as widely as possible. As old Cato says, “It is an honourable gain, the most secure and the least resented. Those who pursue it are least inclined to evil thoughts.” Country gentlemen and farmers are scattered across the country, so they cannot unite as easily as merchants and manufacturers. Merchants and manufacturers are concentrated in towns and accustomed to the exclusive spirit of the corporations that prevails there. They naturally try to gain the same exclusive privilege against all their countrymen that they generally hold against the inhabitants of their own towns. They therefore seem to have been the first to devise restrictions on foreign imports that give them a monopoly of the home market. Country gentlemen and farmers in Great Britain probably followed their example to put themselves on equal terms with people they found were ready to oppress them. In doing so, they forgot the generosity natural to their station and demanded the exclusive right to supply their countrymen with grain and meat. Perhaps they did not stop to consider how much less free trade could affect their interests than those of the people whose example they followed.

To prohibit, by a perpetual law, the importation of foreign corn and cattle, is in reality to enact, that the population and industry of the country shall, at no time, exceed what the rude produce of its own soil can maintain.

A permanent ban on imported grain and cattle effectively sets a limit on the country's population and industry. They can never exceed what the raw produce of its own soil can support.

There seem, however, to be two cases, in which it will generally be advantageous to lay some burden upon foreign, for the encouragement of domestic industry.

However, there seem to be two cases in which placing some burden on foreign industry generally benefits domestic industry.

The first is, when some particular sort of industry is necessary for the defence of the country. The defence of Great Britain, for example, depends very much upon the number of its sailors and shipping. The act of navigation, therefore, very properly endeavours to give the sailors and shipping of Great Britain the monopoly of the trade of their own country, in some cases, by absolute prohibitions, and in others, by heavy burdens upon the shipping of foreign countries. The following are the principal dispositions of this act.

The first case is when a particular industry is necessary for the country's defense. Great Britain's defense, for example, depends heavily on the number of its sailors and ships. The Navigation Act therefore rightly aims to give British sailors and ships a monopoly over their own country's trade. In some cases, it does this through outright bans on foreign shipping. In others, it imposes heavy burdens on foreign ships. The main provisions of the act are as follows.

First, All ships, of which the owners, masters, and three-fourths of the mariners, are not British subjects, are prohibited, upon pain of forfeiting ship and cargo, from trading to the British settlements and plantations, or from being employed in the coasting trade of Great Britain.

First, a ship is prohibited from trading with British settlements and plantations or carrying goods along the coast of Great Britain unless its owners, captain, and three-fourths of its sailors are British subjects. The penalty is the loss of the ship and its cargo.

Secondly, A great variety of the most bulky articles of importation can be brought into Great Britain only, either in such ships as are above described, or in ships of the country where those goods are produced, and of which the owners, masters, and three-fourths of the mariners, are of that particular country; and when imported even in ships of this latter kind, they are subject to double aliens duty. If imported in ships of any other country, the penalty is forfeiture of ship and goods. When this act was made, the Dutch were, what they still are, the great carriers of Europe; and by this regulation they were entirely excluded from being the carriers to Great Britain, or from importing to us the goods of any other European country.

Secondly, many of the bulkiest imports can enter Great Britain only in the ships described above or in ships from the country where the goods are produced. In the latter ships, the owners, masters, and three-fourths of the sailors must be from that country. Even when goods are imported in these ships, they are subject to double the aliens duty. If goods are imported in ships from any other country, both the ship and the goods are forfeited. When this law was made, the Dutch were the main carriers of goods in Europe, as they still are. This regulation completely excluded them from carrying goods to Great Britain or importing goods from any other European country.

Thirdly, A great variety of the most bulky articles of importation are prohibited from being imported, even in British ships, from any country but that in which they are produced, under pain of forfeiting ship and cargo. This regulation, too, was probably intended against the Dutch. Holland was then, as now, the great emporium for all European goods; and by this regulation, British ships were hindered from loading in Holland the goods of any other European country.

Thirdly, many of the bulkiest imported goods may be imported only from the country where they are produced. This applies even to goods carried in British ships. Breaking this rule means forfeiting the ship and its cargo. This regulation, too, was probably intended against the Dutch. Holland was then, as it is now, the great trading center for all European goods. The regulation therefore prevented British ships from loading goods from any other European country in Holland.

Fourthly, Salt fish of all kinds, whale fins, whalebone, oil, and blubber, not caught by and cured on board British vessels, when imported into Great Britain, are subject to double aliens duty. The Dutch, as they are still the principal, were then the only fishers in Europe that attempted to supply foreign nations with fish. By this regulation, a very heavy burden was laid upon their supplying Great Britain.

Fourthly, all kinds of salt fish, whale fins, whalebone, oil, and blubber are subject to double aliens duty when imported into Great Britain, unless they were caught and cured on board British vessels. The Dutch are still the main fishers in Europe who try to supply foreign nations with fish. At the time, they were the only ones who did so. This regulation placed a very heavy burden on their supply of fish to Great Britain.

When the act of navigation was made, though England and Holland were not actually at war, the most violent animosity subsisted between the two nations. It had begun during the government of the long parliament, which first framed this act, and it broke out soon after in the Dutch wars, during that of the Protector and of Charles II. It is not impossible, therefore, that some of the regulations of this famous act may have proceeded from national animosity. They are as wise, however, as if they had all been dictated by the most deliberate wisdom. National animosity, at that particular time, aimed at the very same object which the most deliberate wisdom would have recommended, the diminution of the naval power of Holland, the only naval power which could endanger the security of England.

When the Navigation Act was passed, England and Holland were not actually at war. Yet there was intense hostility between the two nations. It had begun under the Long Parliament, which first drafted the act. Soon afterward, it erupted in the Dutch wars, during the rule of the Protector and Charles II. It is therefore possible that some regulations in this famous act arose from national hostility. Even so, they are as wise as if they had all been shaped by the most careful judgment. At that particular time, national hostility aimed at the very same goal that the most careful judgment would have recommended: reducing Holland’s naval power. Holland was the only naval power that could endanger England’s security.

The act of navigation is not favourable to foreign commerce, or to the growth of that opulence which can arise from it. The interest of a nation, in its commercial relations to foreign nations, is, like that of a merchant with regard to the different people with whom he deals, to buy as cheap, and to sell as dear as possible. But it will be most likely to buy cheap, when, by the most perfect freedom of trade, it encourages all nations to bring to it the goods which it has occasion to purchase; and, for the same reason, it will be most likely to sell dear, when its markets are thus filled with the greatest number of buyers. The act of navigation, it is true, lays no burden upon foreign ships that come to export the produce of British industry. Even the ancient aliens duty, which used to be paid upon all goods, exported as well as imported, has, by several subsequent acts, been taken off from the greater part of the articles of exportation. But if foreigners, either by prohibitions or high duties, are hindered from coming to sell, they cannot always afford to come to buy; because, coming without a cargo, they must lose the freight from their own country to Great Britain. By diminishing the number of sellers, therefore, we necessarily diminish that of buyers, and are thus likely not only to buy foreign goods dearer, but to sell our own cheaper, than if there was a more perfect freedom of trade. As defence, however, is of much more importance than opulence, the act of navigation is, perhaps, the wisest of all the commercial regulations of England.

The Navigation Act does not favor foreign trade or the growth of wealth that can come from it. In trade with foreign nations, a nation’s interest is like a merchant’s interest in dealing with different people. Both want to buy as cheaply and sell as dearly as possible. A nation is most likely to buy cheaply when complete freedom of trade encourages all nations to bring it the goods it needs. For the same reason, it is most likely to sell dearly when free trade fills its markets with the greatest number of buyers. The Navigation Act, it is true, places no burden on foreign ships that come to export the products of British industry. The old aliens duty once applied to all goods, both exported and imported. Several later acts have removed it from most exports. But foreigners may be prevented from coming to sell by prohibitions or high duties. If so, they cannot always afford to come to buy, because arriving without cargo means losing the freight earnings from their own country to Great Britain. By reducing the number of sellers, then, we necessarily reduce the number of buyers. As a result, we are likely not only to pay more for foreign goods but also to sell our own goods for less than we would with freer trade. Defence, however, is far more important than wealth. The Navigation Act is therefore perhaps the wisest of all England’s trade regulations.

The second case, in which it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry, is when some tax is imposed at home upon the produce of the latter. In this case, it seems reasonable that an equal tax should be imposed upon the like produce of the former. This would not give the monopoly of the home market to domestic industry, nor turn towards a particular employment a greater share of the stock and labour of the country, than what would naturally go to it. It would only hinder any part of what would naturally go to it from being turned away by the tax into a less natural direction, and would leave the competition between foreign and domestic industry, after the tax, as nearly as possible upon the same footing as before it. In Great Britain, when any such tax is laid upon the produce of domestic industry, it is usual, at the same time, in order to stop the clamorous complaints of our merchants and manufacturers, that they will be undersold at home, to lay a much heavier duty upon the importation of all foreign goods of the same kind.

The second case in which a burden on foreign goods will generally benefit domestic industry is when domestic goods are taxed. In this case, it seems reasonable to impose an equal tax on similar foreign goods. This would not give domestic producers a monopoly in the home market. Nor would it direct more of the country’s capital and labor into a particular industry than would naturally go there. It would only prevent the tax from diverting some of that capital and labor into a less natural direction. It would leave foreign and domestic producers competing on as nearly the same footing as before the tax. In Great Britain, a tax on domestic goods usually comes with a much heavier duty on all similar foreign imports. This is done to silence the loud complaints of merchants and manufacturers that foreign goods will be sold more cheaply at home.

This second limitation of the freedom of trade, according to some people, should, upon most occasions, be extended much farther than to the precise foreign commodities which could come into competition with those which had been taxed at home. When the necessaries of life have been taxed in any country, it becomes proper, they pretend, to tax not only the like necessaries of life imported from other countries, but all sorts of foreign goods which can come into competition with any thing that is the produce of domestic industry. Subsistence, they say, becomes necessarily dearer in consequence of such taxes; and the price of labour must always rise with the price of the labourer’s subsistence. Every commodity, therefore, which is the produce of domestic industry, though not immediately taxed itself, becomes dearer in consequence of such taxes, because the labour which produces it becomes so. Such taxes, therefore, are really equivalent, they say, to a tax upon every particular commodity produced at home. In order to put domestic upon the same footing with foreign industry, therefore, it becomes necessary, they think, to lay some duty upon every foreign commodity, equal to this enhancement of the price of the home commodities with which it can come into competition.

Some people believe this second restriction on free trade should usually go much further. They say it should not apply only to foreign goods that compete with goods taxed at home. When a country taxes the necessities of life, they claim, it should also tax all competing foreign goods. This includes not only imported necessities, but all foreign goods that compete with anything produced by domestic industry. They say that such taxes necessarily make subsistence more expensive. The price of labor, they argue, must always rise with the cost of the worker’s subsistence. Therefore, every product of domestic industry becomes more expensive, even if it is not directly taxed. This is because the labor that produces it becomes more expensive. In their view, such taxes are really equivalent to a tax on every individual product made at home. To put domestic industry on the same footing as foreign industry, they therefore think a duty is needed on every foreign good. This duty should equal the increase in the price of the domestic goods with which it can compete.

Whether taxes upon the necessaries of life, such as those in Great Britain upon soap, salt, leather, candles, etc. necessarily raise the price of labour, and consequently that of all other commodities, I shall consider hereafter, when I come to treat of taxes. Supposing, however, in the mean time, that they have this effect, and they have it undoubtedly, this general enhancement of the price of all commodities, in consequence of that labour, is a case which differs in the two following respects from that of a particular commodity, of which the price was enhanced by a particular tax immediately imposed upon it.

Taxes on necessities in Great Britain include those on soap, salt, leather, candles, and so on. Do such taxes necessarily raise the price of labor, and therefore the price of all other goods? I will consider this question later, when I discuss taxes. For now, however, suppose they have this effect, as they undoubtedly do. The resulting rise in labor costs raises the price of all goods. This general increase differs in two respects from a rise in the price of a particular good caused by a specific tax imposed directly on it.

First, It might always be known with great exactness, how far the price of such a commodity could be enhanced by such a tax; but how far the general enhancement of the price of labour might affect that of every different commodity about which labour was employed, could never be known with any tolerable exactness. It would be impossible, therefore, to proportion, with any tolerable exactness, the tax of every foreign, to the enhancement of the price of every home commodity.

First, it would always be possible to know very precisely how much such a tax could raise the price of a commodity. But it would never be possible to know with reasonable precision how a general rise in labor costs might affect the price of each commodity that labor produces. It would therefore be impossible to set the tax on each foreign commodity in reasonable proportion to the price increase of each domestic commodity.

Secondly, Taxes upon the necessaries of life have nearly the same effect upon the circumstances of the people as a poor soil and a bad climate. Provisions are thereby rendered dearer, in the same manner as if it required extraordinary labour and expense to raise them. As, in the natural scarcity arising from soil and climate, it would be absurd to direct the people in what manner they ought to employ their capitals and industry, so is it likewise in the artificial scarcity arising from such taxes. To be left to accommodate, as well as they could, their industry to their situation, and to find out those employments in which, notwithstanding their unfavourable circumstances, they might have some advantage either in the home or in the foreign market, is what, in both cases, would evidently be most for their advantage. To lay a new-tax upon them, because they are already overburdened with taxes, and because they already pay too dear for the necessaries of life, to make them likewise pay too dear for the greater part of other commodities, is certainly a most absurd way of making amends.

Second, taxes on the necessities of life affect people's circumstances much like poor soil and a bad climate. They make food more expensive, just as if it took extraordinary labor and expense to produce it. When poor soil and climate cause natural scarcity, it would be absurd to direct how people use their capital and labor. The same is true when such taxes create artificial scarcity. In both cases, people would clearly benefit most from being left to adapt their work to their circumstances as best they could. They could then find work that gave them some advantage in the domestic or foreign market, despite their unfavorable circumstances. They are already burdened with too many taxes and pay too much for the necessities of life. To impose a new tax that makes them pay too much for most other goods as well is certainly a most absurd way to make amends.

Such taxes, when they have grown up to a certain height, are a curse equal to the barrenness of the earth, and the inclemency of the heavens, and yet it is in the richest and most industrious countries that they have been most generally imposed. No other countries could support so great a disorder. As the strongest bodies only can live and enjoy health under an unwholesome regimen, so the nations only, that in every sort of industry have the greatest natural and acquired advantages, can subsist and prosper under such taxes. Holland is the country in Europe in which they abound most, and which, from peculiar circumstances, continues to prosper, not by means of them, as has been most absurdly supposed, but in spite of them.

When such taxes rise to a certain level, they are a curse as great as barren soil and harsh weather. Yet they have been imposed most widely in the richest and most industrious countries. No other countries could bear such a great burden. Only the strongest bodies can live and enjoy health on an unhealthy diet. Likewise, only nations with the greatest natural and acquired advantages in every kind of industry can survive and prosper under such taxes. Holland has more of these taxes than any other country in Europe. Because of its particular circumstances, Holland continues to prosper. It prospers not because of these taxes, as some have most absurdly supposed, but in spite of them.

As there are two cases in which it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry, so there are two others in which it may sometimes be a matter of deliberation, in the one, how far it is proper to continue the free importation of certain foreign goods; and, in the other, how far, or in what manner, it may be proper to restore that free importation, after it has been for some time interrupted.

There are two cases in which it will generally be advantageous to place some burden on foreign goods to encourage domestic industry. Similarly, there are two other cases in which the right course may sometimes be open to debate. In one, the question is how far it is right to continue allowing certain foreign goods to be imported freely. In the other, it is how far or in what way to restore free imports after they have been interrupted for some time.

The case in which it may sometimes be a matter of deliberation how far it is proper to continue the free importation of certain foreign goods, is when some foreign nation restrains, by high duties or prohibitions, the importation of some of our manufactures into their country. Revenge, in this case, naturally dictates retaliation, and that we should impose the like duties and prohibitions upon the importation of some or all of their manufactures into ours. Nations, accordingly, seldom fail to retaliate in this manner. The French have been particularly forward to favour their own manufactures, by restraining the importation of such foreign goods as could come into competition with them. In this consisted a great part of the policy of Mr Colbert, who, notwithstanding his great abilities, seems in this case to have been imposed upon by the sophistry of merchants and manufacturers, who are always demanding a monopoly against their countrymen. It is at present the opinion of the most intelligent men in France, that his operations of this kind have not been beneficial to his country. That minister, by the tariff of 1667, imposed very high duties upon a great number of foreign manufactures. Upon his refusing to moderate them in favour of the Dutch, they, in 1671, prohibited the importation of the wines, brandies, and manufactures of France. The war of 1672 seems to have been in part occasioned by this commercial dispute. The peace of Nimeguen put an end to it in 1678, by moderating some of those duties in favour of the Dutch, who in consequence took off their prohibition. It was about the same time that the French and English began mutually to oppress each other’s industry, by the like duties and prohibitions, of which the French, however, seem to have set the first example, The spirit of hostility which has subsisted between the two nations ever since, has hitherto hindered them from being moderated on either side. In 1697, the English prohibited the importation of bone lace, the manufacture of Flanders. The government of that country, at that time under the dominion of Spain, prohibited, in return, the importation of English woollens. In 1700, the prohibition of importing bone lace into England was taken off upon condition that the importation of English woollens into Flanders should be put on the same footing as before.

One case in which we may need to consider limiting free imports is when a foreign nation restricts some of our manufactured goods with high duties or bans. In such a case, revenge naturally calls for retaliation. We are prompted to impose similar duties and bans on some or all of their manufactured goods. Nations accordingly seldom fail to retaliate in this way. The French have been particularly eager to favor their own manufacturers by restricting competing foreign goods. This was a large part of Mr Colbert’s policy. Despite his great abilities, he seems to have been misled in this case by the false reasoning of merchants and manufacturers. They are always demanding a monopoly against their fellow countrymen. The most intelligent men in France now believe that his actions of this kind did not benefit his country. In the tariff of 1667, Colbert imposed very high duties on many foreign manufactured goods. He refused to reduce them for the Dutch, who responded in 1671 by banning French wines, brandies, and manufactured goods. This trade dispute seems to have been partly responsible for the war of 1672. The peace of Nimeguen ended the dispute in 1678 by reducing some of the duties for the Dutch. The Dutch then lifted their ban. Around the same time, the French and English began to burden each other’s industry with similar duties and bans. The French, however, seem to have set the first example. The hostility between the two nations ever since has so far prevented either side from reducing these restrictions. In 1697, the English banned imports of bone lace made in Flanders. The government of Flanders, which was then under Spanish rule, responded by banning imports of English woollen goods. In 1700, England lifted its ban on bone lace, on the condition that imports of English woollens into Flanders would be treated as before.

There may be good policy in retaliations of this kind, when there is a probability that they will procure the repeal of the high duties or prohibitions complained of. The recovery of a great foreign market will generally more than compensate the transitory inconveniency of paying dearer during a short time for some sorts of goods. To judge whether such retaliations are likely to produce such an effect, does not, perhaps, belong so much to the science of a legislator, whose deliberations ought to be governed by general principles, which are always the same, as to the skill of that insidious and crafty animal vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuations of affairs. When there is no probability that any such repeal can be procured, it seems a bad method of compensating the injury done to certain classes of our people, to do another injury ourselves, not only to those classes, but to almost all the other classes of them. When our neighbours prohibit some manufacture of ours, we generally prohibit, not only the same, for that alone would seldom affect them considerably, but some other manufacture of theirs. This may, no doubt, give encouragement to some particular class of workmen among ourselves, and, by excluding some of their rivals, may enable them to raise their price in the home market. Those workmen however, who suffered by our neighbours prohibition, will not be benefited by ours. On the contrary, they, and almost all the other classes of our citizens, will thereby be obliged to pay dearer than before for certain goods. Every such law, therefore, imposes a real tax upon the whole country, not in favour of that particular class of workmen who were injured by our neighbours prohibitions, but of some other class.

Retaliation of this kind may be good policy when it is likely to secure the repeal of the high tariffs or bans in question. Regaining a large foreign market will generally more than make up for the temporary inconvenience of paying higher prices for some goods. But judging whether retaliation is likely to have that effect may not be a matter for the science of a legislator. A legislator’s decisions ought to be guided by general principles that are always the same. The judgment may instead belong to the skill of that sly and crafty animal commonly called a statesman or politician. His decisions are guided by the passing fluctuations of affairs. When there is no chance of securing such a repeal, retaliation seems a bad way to compensate the groups of our people who have been harmed. We do further harm ourselves, not only to those groups, but to almost all the others. When our neighbors ban one of our manufactured goods, we generally ban more than the same product. Banning that product alone would seldom affect them much. So we also ban some other manufactured product of theirs. This may, no doubt, encourage a particular group of our own workers. By excluding some of their rivals, it may also allow them to raise their prices in the home market. But the workers who suffered from our neighbors’ ban will not benefit from ours. On the contrary, they and almost all other groups of our citizens will have to pay more than before for certain goods. Every such law therefore imposes a real tax on the whole country. It benefits not the workers harmed by our neighbors’ bans, but some other group.

The case in which it may sometimes be a matter of deliberation, how far, or in what manner, it is proper to restore the free importation of foreign goods, after it has been for some time interrupted, is when particular manufactures, by means of high duties or prohibitions upon all foreign goods which can come into competition with them, have been so far extended as to employ a great multitude of hands. Humanity may in this case require that the freedom of trade should be restored only by slow gradations, and with a good deal of reserve and circumspection. Were those high duties and prohibitions taken away all at once, cheaper foreign goods of the same kind might be poured so fast into the home market, as to deprive all at once many thousands of our people of their ordinary employment and means of subsistence. The disorder which this would occasion might no doubt be very considerable. It would in all probability, however, be much less than is commonly imagined, for the two following reasons.

Sometimes, restoring free imports after a period of restrictions calls for careful thought about how far and how to proceed. This is the case when certain industries have grown large enough to employ many workers. They have grown because of high tariffs or bans on all foreign goods that could compete with them. In such cases, humanity may require that free trade be restored slowly, with considerable restraint and caution. If the high tariffs and bans were removed all at once, cheaper foreign goods of the same kind might flood the domestic market. This could suddenly deprive many thousands of our people of their usual jobs and means of supporting themselves. The disruption would no doubt be considerable. It would probably, however, be much less than is commonly imagined, for the following two reasons.

First, All those manufactures of which any part is commonly exported to other European countries without a bounty, could be very little affected by the freest importation of foreign goods. Such manufactures must be sold as cheap abroad as any other foreign goods of the same quality and kind, and consequently must be sold cheaper at home. They would still, therefore, keep possession of the home market; and though a capricious man of fashion might sometimes prefer foreign wares, merely because they were foreign, to cheaper and better goods of the same kind that were made at home, this folly could, from the nature of things, extend to so few, that it could make no sensible impression upon the general employment of the people. But a great part of all the different branches of our woollen manufacture, of our tanned leather, and of our hardware, are annually exported to other European countries without any bounty, and these are the manufactures which employ the greatest number of hands. The silk, perhaps, is the manufacture which would suffer the most by this freedom of trade, and after it the linen, though the latter much less than the former.

First, free imports of foreign goods could have very little effect on manufactures commonly exported to other European countries without subsidies. Such goods must sell abroad as cheaply as foreign goods of the same kind and quality. They must therefore sell for less at home. So they would still hold the domestic market. A fickle, fashionable person might sometimes prefer foreign goods simply because they were foreign, even when cheaper, better goods of the same kind were made at home. But by its nature, this folly could extend to so few people that it could make no noticeable difference to overall employment. But a large share of the goods produced by all the different branches of our woollen industry is exported annually to other European countries without subsidies. The same is true of our tanned leather and hardware. These industries employ the greatest number of workers. The silk industry would perhaps suffer most from this freedom of trade. The linen industry would suffer next, though much less than the silk industry.

Secondly, Though a great number of people should, by thus restoring the freedom of trade, be thrown all at once out of their ordinary employment and common method of subsistence, it would by no means follow that they would thereby be deprived either of employment or subsistence. By the reduction of the army and navy at the end of the late war, more than 100,000 soldiers and seamen, a number equal to what is employed in the greatest manufactures, were all at once thrown out of their ordinary employment: but though they no doubt suffered some inconveniency, they were not thereby deprived of all employment and subsistence. The greater part of the seamen, it is probable, gradually betook themselves to the merchant service as they could find occasion, and in the mean time both they and the soldiers were absorbed in the great mass of the people, and employed in a great variety of occupations. Not only no great convulsion, but no sensible disorder, arose from so great a change in the situation of more than 100,000 men, all accustomed to the use of arms, and many of them to rapine and plunder. The number of vagrants was scarce anywhere sensibly increased by it; even the wages of labour were not reduced by it in any occupation, so far as I have been able to learn, except in that of seamen in the merchant service. But if we compare together the habits of a soldier and of any sort of manufacturer, we shall find that those of the latter do not tend so much to disqualify him from being employed in a new trade, as those of the former from being employed in any. The manufacturer has always been accustomed to look for his subsistence from his labour only; the soldier to expect it from his pay. Application and industry have been familiar to the one; idleness and dissipation to the other. But it is surely much easier to change the direction of industry from one sort of labour to another, than to turn idleness and dissipation to any. To the greater part of manufactures, besides, it has already been observed, there are other collateral manufactures of so similar a nature, that a workman can easily transfer his industry from one of them to another. The greater part of such workmen, too, are occasionally employed in country labour. The stock which employed them in a particular manufacture before, will still remain in the country, to employ an equal number of people in some other way. The capital of the country remaining the same, the demand for labour will likewise be the same, or very nearly the same, though it may be exerted in different places, and for different occupations. Soldiers and seamen, indeed, when discharged from the king’s service, are at liberty to exercise any trade within any town or place of Great Britain or Ireland. Let the same natural liberty of exercising what species of industry they please, be restored to all his Majesty’s subjects, in the same manner as to soldiers and seamen; that is, break down the exclusive privileges of corporations, and repeal the statute of apprenticeship, both which are really encroachments upon natural Liberty, and add to those the repeal of the law of settlements, so that a poor workman, when thrown out of employment, either in one trade or in one place, may seek for it in another trade or in another place, without the fear either of a prosecution or of a removal; and neither the public nor the individuals will suffer much more from the occasional disbanding some particular classes of manufacturers, than from that of the soldiers. Our manufacturers have no doubt great merit with their country, but they cannot have more than those who defend it with their blood, nor deserve to be treated with more delicacy.

Secondly, restoring freedom of trade might suddenly put many people out of their usual work and means of support. But it would not follow that they could find no work or means of support. At the end of the recent war, the army and navy were reduced. More than 100,000 soldiers and sailors suddenly lost their usual employment. This was as many people as worked in the largest industries. They no doubt suffered some hardship, but they were not left without any work or means of support. Most sailors probably entered the merchant service gradually, as opportunities arose. Meanwhile, they and the soldiers were absorbed into the general population and took up many different occupations. This great change in the lives of more than 100,000 men caused no major upheaval or even noticeable disorder. All of them were accustomed to using weapons, and many were accustomed to robbery and plunder. The number of vagrants hardly increased noticeably anywhere as a result. As far as I have learned, wages did not fall in any occupation except that of sailors in the merchant service. But compare the habits of a soldier with those of a worker in any industry. The worker’s habits make him less unfit for a new trade than the soldier’s make him for any trade. The worker has always been used to earning his living through labor alone. The soldier has been used to expecting his living from his pay. Hard work and diligence have been familiar to the worker. Idleness and dissipation have been familiar to the soldier. Surely it is much easier to redirect hard work from one kind of labor to another than to turn idleness and dissipation to any kind of labor. Besides, as already noted, most industries have related industries of such a similar nature that a worker can easily move from one to another. Most such workers also do farm labor from time to time. The capital that previously employed them in a particular industry will remain in the country. It can employ an equal number of people in some other way. If the country’s capital remains the same, the demand for labor will also remain the same, or nearly so. But the demand may arise in different places and for different occupations. Soldiers and sailors discharged from the king’s service are free to practice any trade anywhere in Great Britain or Ireland. Let all his Majesty’s subjects have the same natural freedom as soldiers and sailors to pursue whatever work they choose. To do this, end the exclusive privileges of corporations and repeal the statute of apprenticeship. Both are real encroachments on natural liberty. Also repeal the law of settlements. Then a poor worker who loses his job in one trade or place could seek work in another without fear of prosecution or removal. With these changes, the occasional dispersal of particular groups of workers would cause little more hardship to the public or to individuals than the disbanding of soldiers. Our manufacturers undoubtedly deserve great credit from their country. But they cannot deserve more than those who defend it with their blood, or deserve more delicate treatment.

To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia should ever be established in it. Not only the prejudices of the public, but, what is much more unconquerable, the private interests of many individuals, irresistibly oppose it. Were the officers of the army to oppose, with the same zeal and unanimity, any reduction in the number of forces, with which master manufacturers set themselves against every law that is likely to increase the number of their rivals in the home market; were the former to animate their soldiers, in the same manner as the latter inflame their workmen, to attack with violence and outrage the proposers of any such regulation; to attempt to reduce the army would be as dangerous as it has now become to attempt to diminish, in any respect, the monopoly which our manufacturers have obtained against us. This monopoly has so much increased the number of some particular tribes of them, that, like an overgrown standing army, they have become formidable to the government, and, upon many occasions, intimidate the legislature. The member of parliament who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more, if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services, can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists.

To expect complete freedom of trade ever to be restored in Great Britain is as absurd as expecting an Oceana or Utopia to be established there. Public prejudices stand in its way. But the private interests of many individuals oppose it even more strongly, and those interests are much harder to overcome. Master manufacturers oppose every law likely to increase the number of their rivals in the home market. Suppose army officers opposed any reduction in the size of the army with the same zeal and unity. Suppose, too, that they stirred up their soldiers as the manufacturers stir up their workers. The soldiers would violently attack those who proposed any such reduction. Then trying to reduce the army would be as dangerous as trying to weaken the monopoly our manufacturers have gained against us, even in the slightest way. This monopoly has greatly increased the number of certain groups of manufacturers. Like an oversized standing army, they have become a threat to the government. On many occasions, they intimidate the legislature. A member of parliament who supports every proposal to strengthen this monopoly is sure to gain a reputation for understanding trade. He will also gain great popularity and influence among manufacturers, whose numbers and wealth make them very important. But if he opposes them, and especially if he has enough authority to thwart them, he faces the most disgraceful abuse and slander. He faces personal insults and sometimes even real danger from the arrogant violence of furious and disappointed monopolists. Neither the most widely recognized honesty, nor the highest rank, nor the greatest public service can protect him.

The undertaker of a great manufacture, who, by the home markets being suddenly laid open to the competition of foreigners, should be obliged to abandon his trade, would no doubt suffer very considerably. That part of his capital which had usually been employed in purchasing materials, and in paying his workmen, might, without much difficulty, perhaps, find another employment; but that part of it which was fixed in workhouses, and in the instruments of trade, could scarce be disposed of without considerable loss. The equitable regard, therefore, to his interest, requires that changes of this kind should never be introduced suddenly, but slowly, gradually, and after a very long warning. The legislature, were it possible that its deliberations could be always directed, not by the clamorous importunity of partial interests, but by an extensive view of the general good, ought, upon this very account, perhaps, to be particularly careful, neither to establish any new monopolies of this kind, nor to extend further those which are already established. Every such regulation introduces some degree of real disorder into the constitution of the state, which it will be difficult afterwards to cure without occasioning another disorder.

The owner of a large manufacturing business would undoubtedly suffer greatly if domestic markets were suddenly opened to foreign competition and he had to abandon his business. Perhaps he could find another use, without much difficulty, for the capital he usually spent on materials and wages. But he could hardly sell the part invested in workshops and equipment without a considerable loss. Fairness to him therefore requires that such changes never be introduced suddenly. They should be introduced slowly and gradually, after a very long warning. The legislature cannot always be expected to focus on the general good rather than the loud demands of special interests. But if it could, perhaps it should be particularly careful for this very reason. It should neither establish new monopolies of this kind nor extend those already established. Every such regulation introduces some real disorder into the structure of the state. It will be difficult to remedy that disorder later without causing another.

How far it may be proper to impose taxes upon the importation of foreign goods, in order not to prevent their importation, but to raise a revenue for government, I shall consider hereafter when I come to treat of taxes. Taxes imposed with a view to prevent, or even to diminish importation, are evidently as destructive of the revenue of the customs as of the freedom of trade.

Later, when I discuss taxes, I will consider how far taxes on imported goods may be appropriate. I mean taxes intended to raise revenue for the government, not to prevent imports. Taxes intended to prevent or even reduce imports clearly harm customs revenue as much as they harm free trade.