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barbarians。　Europe；　however；　has　hitherto　derived　much　less

advantage　from　its　commerce　with　the　East　Indies　than　from　that

with　America。　The　Portuguese　monopolized　the　East　India　trade　to

themselves　for　about　a　century；　and　it　was　only　indirectly　and

through　them　that　the　other　nations　of　Europe　could　either　send

out　or　receive　any　goods　from　that　country。　When　the　Dutch；　in

the　beginning　of　the　last　century；　began　to　encroach　upon　them；

they　vested　their　whole　East　India　commerce　in　an　exclusive

company。　The　English；　French；　Swedes；　and　Danes　have　all　followed

their　example；　so　that　no　great　nation　in　Europe　has　ever　yet　had

the　benefit　of　a　free　commerce　to　the　East　Indies。　No　other

reason　need　be　assigned　why　it　has　never　been　so　advantageous　as

the　trade　to　America；　which；　between　almost　every　nation　of

Europe　and　its　own　colonies；　is　free　to　all　its　subjects。　The

exclusive　privileges　of　those　East　India　companies；　their　great

riches；　the　great　favour　and　protection　which　these　have　procured

them　from　their　respective　governments；　have　excited　much　envy

against　them。　This　envy　has　frequently　represented　their　trade　as

altogether　pernicious；　on　account　of　the　great　quantities　of

silver　which　it　every　year　exports　from　the　countries　from　which

it　is　carried　on。　The　parties　concerned　have　replied　that　their

trade；　by　this　continual　exportation　of　silver；　might　indeed　tend

to　impoverish　Europe　in　general；　but　not　the　particular　country

from　which　it　was　carried　on；　because；　by　the　exportation　of　a

part　of　the　returns　to　other　European　countries；　it　annually

brought　home　a　much　greater　quantity　of　that　metal　than　it

carried　out。　Both　the　objection　and　the　reply　are　founded　in　the

popular　notion　which　I　have　been　just　now　examining。　It　is

therefore　unnecessary　to　say　anything　further　about　either。　By

the　annual　exportation　of　silver　to　the　East　Indies；　plate　is

probably　somewhat　dearer　in　Europe　than　it　otherwise　might　have

been；　and　coined　silver　probably　purchases　a　larger　quantity　both

of　labour　and　commodities。　The　former　of　these　two　effects　is　a

very　small　loss；　the　latter　a　very　small　advantage；　both　too

insignificant　to　deserve　any　part　of　the　public　attention。　The

trade　to　the　East　Indies；　by　opening　a　market　to　the　commodities

of　Europe；　or；　what　comes　nearly　to　the　same　thing；　to　the　gold

and　silver　which　is　purchased　with　those　commodities；　must

necessarily　tend　to　increase　the　annual　production　of　European

commodities；　and　consequently　the　real　wealth　and　revenue　of

Europe。　That　it　has　hitherto　increased　them　so　little　is　probably

owing　to　the　restraints　which　it　everywhere　labours　under。

　　　　　I　thought　it　necessary；　though　at　the　hazard　of　being

tedious；　to　examine　at　full　length　this　popular　notion　that

wealth　consists　in　money；　or　in　gold　and　silver。　Money　in　common

language；　as　I　have　already　observed；　frequently　signifies

wealth；　and　this　ambiguity　of　expression　has　rendered　this

popular　notion　so　familiar　to　us　that　even　they　who　are　convinced

of　its　absurdity　are　very　apt　to　forget　their　own　principles；　and

in　the　course　of　their　reasonings　to　take　it　for　granted　as　a

certain　and　undeniable　truth。　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　reasonings；　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。

　　　　　The　restraints　upon　importation　were　of　two　kinds。

　　　　　First；　restraints　upon　the　importation　of　such　foreign　goods

for　home　consumption　as　could　be　produced　at　home；　from　whatever

country　they　were　imported。

　　　　　Secondly；　restraints　upon　the　importation　of　goods　of　almost

all　kinds　from　those　particular　countries　with　which　the　balance

of　trade　was　supposed　to　be　disadvantageous。

　　　　　Those　different　restraints　consisted　sometimes　in　high

duties；　and　sometimes　in　absolute　prohibitions。

　　　　　Exportation　was　encouraged　sometimes　by　drawbacks；　sometimes

by　bounties；　sometimes　by　advantageous　treaties　of　commerce　with

foreign　states；　and　sometimes　by　the　establishment　of　colonies　in

distant　countries。

　　　　　Drawbacks　were　given　upon　two　different　occasions。　When　the

home　manufactures　were　subject　to　any　duty　or　excise；　either　the

whole　or　a　part　of　it　was　frequently　drawn　back　upon　their

exportation；　and　when　foreign　goods　liable　to　a　duty　were

imported　in　order　to　be　exported　again；　either　the　whole　or　a

part　of　this　duty　was　sometimes　given　back　upon　such　exportation。

　　　　　Bounties　were　given　for　the　encouragement　either　of　some

beginning　manufactures；　or　of　such　sorts　of　industry　of　other

kinds　as　supposed　to　deserve　particular　favour。

　　　　　By　advantageous　treaties　of　commerce；　particular　privileges

were　procured　in　some　foreign　state　for　the　goods　and　merchants

of　the　country；　beyond　what　were　granted　to　those　other

countries。

　　　　　By　established　establishment　of　colonies　in　distant

countries；　not　only　particular　privileges；　but　a　monopoly　was

frequently　procured　for　the　goods　and　merchants　of　the　country

which　established　them。

　　　　　The　two　sorts　of　restraints　upon　importation

above…mentioned；　together　with　these　four　encouragements　to

exportation；　constitute　the　six　principal　means　by　which　the

commercial　system　proposes　to　increase　the　quantity　of　gold　and

silver　in　any　country　by　turning　the　balance　of　trade　in　its

favour。　I　shall　consider　each　of　them　in　a　particular　chapter；

and　without　taking　much　further　notice　of　their　supposed　tendency

to　bring　money　into　the　country；　I　shall　examine　chiefly　what　are

likely　to　be　the　effects　of　each　of　them　upon　the　annual　produce

of　its　industry。　According　as　they　tend　either　to　increase　or

diminish　the　value　of　this　annual　produce；　they　must　evidently

tend　either　to　increase　or　diminish　the　real　wealth　and　revenue

of　the　country。



　　　　　　　　　　　　　　　　　　　　　　　　　　　　　CHAPTER　II



Of　Restraints　upon　the　Importation　from　Foreign　Countries　of　such

Goods　as　can　be　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　woollens　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

manufacturers　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。

　　　　　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。

　　　　　The　general　industry　of　the　society　never　can　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　that

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。

　　　　　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。

　　　　　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