Some of the best English writers upon commerce set out with observing, that the wealth
of a country consists, not in its gold and silver only, but in its lands, houses, and
consumable goods of all different kinds. In the course of their reasoning, however, the
lands, houses, and consumable goods seem to slip out of their memory, and the strain of
their argument frequently supposes that all wealth consists in gold and silver, and that
to multiply those metals is the great object of national industry and commerce. The two
principles being established, however, that wealth consisted in gold and silver, and that
those metals could be brought into a country which had no mines only by the balance of
trade, or by exporting to a greater value than it imported; it necessarily became the
great object of political economy to diminish as much as possible the importation of
foreign goods for home consumption, and to increase as much as possible the exportation of
the produce of domestic industry. Its two great engines for enriching the country,
therefore, were restraints upon importation, and encouragements to exportation....
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 grazers of Great Britain the monopoly of the home market for butcher's
meat. The high duties upon the importation of grain, 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 woollens is equally favorable 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 manufacturers have, in the same
manner, obtained in Great Britain, either altogether, or very nearly a monopoly against
their countrymen....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 labor 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....
THOUGH the encouragement of exportation, and the discouragement of importation, are the
two great engines by which the mercantile system proposes to enrich every country, yet
with regard to some particular commodities, it seems to follow an opposite plan: to
discourage exportation and to encourage importation. Its ultimate object, however, it
pretends, is always the same, to enrich the country by an advantageous balance of trade.
It discourages the exportation of the materials of manufacture, and of the instruments of
trade, in order to give our own workmen an advantage, and to enable them to undersell
those of other nations in all foreign markets; and by restraining, in this manner, the
exportation of a few commodities, of no great price, it proposes to occasion a much
greater and more valuable exportation of others. It encourages the importation of the
materials of manufacture, in order that our own people may be enabled to work them up more
cheaply, and thereby prevent a greater and more valuable importation of the manufactured
commodities....
Consumption is the sole end and purpose of all production; and the interest of the
producer ought to be attended to, only so far as it may be necessary for promoting that of
the consumer. The maxim is so perfectly self-evident, that it would be absurd to attempt
to prove it. But in the mercantile system, the interest of the consumer is almost
constantly sacrificed to that of the producer; and it seems to consider production, and
not consumption, as the ultimate end and object of all industry and commerce....
In the system of laws which has been established for the management of our American and
West Indian colonies the interest of the home-consumer has been sacrificed to that of the
producer with a more extravagant profusion than in all our other commercial regulations. A
great empire has been established for the sole purpose of raising up a nation of customers
who should be obliged to buy from the shops of our different producers, all the goods with
which these could supply them. For the sake of that little enhancement of price which this
monopoly might afford our producers, the home-consumers have been burdened with the whole
expense of maintaining and defending that empire. For this purpose, and for this purpose
only, in the two last wars, more than two hundred millions have been spent, and a new debt
of more than a hundred and seventy millions has been contracted over and above all that
had been expended for the same purpose in former wars. The interest of this debt alone is
not only greater than the whole extraordinary profit, which, it ever could be pretended,
was made by the monopoly of the colony trade, but than the whole value of that trade, or
than the whole value of the goods, which at an average have been annually exported to the
colonies. It cannot be very difficult to determine who have been the contrivers of this
whole mercantile system; not the consumers, we may believe, whose interest has been
entirely neglected; but the producers, whose interest has been so carefully attended to;
and among this latter class our merchants and manufacturers have been by far the principal
architects.
The importation of gold and silver is not the principal much less the sole benefit
which a nation derives from its foreign trade. Between whatever places foreign trade is
carried on, they all of them derive two distinct benefits from it. It carries out that
surplus part of the produce of their land and labor for which there is no demand among
them, and brings back in return for it something else for which there is a demand. It
gives a value to their superfluities by exchanging them for something else, which may
satisfy a part of their wants, and increase their enjoyments. By means of it, the
narrowness of the home market does not hinder the division of labor in any particular
branch of art or manufacture from being carried to the highest perfection. By opening a
more extensive market for whatever part of the produce of their labor may exceed the home
consumption, it encourages them to improve its productive powers and to augment its annual
produce to the utmost, and thereby to increase the real revenue and wealth of the society.
