petition with them, have been so far extended as to employ a great multitude of hands." But he is careful to point out that these exceptions are rather hypothetical than real, and subsequent economists have shown, on the lines of Adam Smith himself, that the Navigation Laws were injurious; that retaliation, as far as this country is concerned, is impracticable; and that the increase in the mobility of capital and labour diminishes every day the danger of abolishing established duties, although the changes should be introduced as gradually as possible. The last case indeed is now only of importance to this country when the principle on which it rests is advanced in support of countervailing duties.

The part of the mercantile system to which Adam Smith devotes the greatest attention is its colonial policy, which is only natural, seeing that he wrote on the eve of the Declaration of Independence by the American colonies. The idea on which the monopoly of the colonial trade rested was that the colonies should provide us with raw material and form markets for our manufactures. The argument adopted by Adam Smith in attacking this monopoly is confused in arrangement and disfigured by wearisome reiterations. It depends upon the deductions (already noticed) from his favourite principle that it is more advantageous to employ capital at home than abroad; and he argues that the high rate of profit in the colonial trade, consequent on the monopoly, “has in all cases forced some part of it from a foreign trade of consumption carried on with a neighbouring to one carried on with a more distant country, and in many cases from a direct foreign trade of consumption to a roundabout one......and has forced some part of the capital of Great Britain from all foreign trade of consumption to a carrying trade, and consequently from supporting more or less the industry of Great Britain to be employed altogether in supporting partly that of the colonies and partly that of some other countries." As an additional argument, he asserts also that in this manner "the industry of Great Britain, instead of being accommodated to a great number of small markets, has been principally suited to one great market;" and that "the expectation of a rupture with the colonies has accordingly struck the people of Great Britain with more terror than they ever felt for a Spanish

armada or a French invasion." It has been doubted by eminent writers whether the high rate of profit in the colonial trade had, as Adam Smith asserts, raised the rate of profits generally; but such a result might be expected on theoretical grounds, and he was very rarely at fault in his facts where trustworthy evidence was to be obtained, and in this case he was describing a phenomenon of his own times. At any rate, the point is not of much practical importance now, as the enormous accumulation of capital renders his reasoning inapplicable to our own times. But the surprising thing is to find the father of political economy contending that a high rate of profit may be an evil, and that as a matter of fact in this particular case it was injurious to landlord, capitalist, labourer, and society in general. One sentence compels quotation: 'Our merchants frequently complain of the high wages of British labour as the cause of their manufactures being undersold in foreign markets, but they are silent about the high profits of stock. They complain of the extravagant gain of other people, but they say nothing of their own. The high profits of British stock, however, may contribute towards raising the price of British manufactures in many cases as much, and in some perhaps more, than the high wages of British labour."

It is doubtful if the complete reversal our colonial policy has undergone would have obtained the approval of Adam Smith. It is one thing to impose no restraints on the trade of the colonies, and quite another to allow them to impose differential duties on the products of the home country. The dream of Adam Smith was the establishment of perfect Free Trade within the bounds of the British Empire at least, if it was too much to expect other nations to follow our example. But he did not propose to establish this ideal empire by a complicated system of checks on the commerce of other nations. He sought to carry out his scheme by binding together into an organic whole the scattered members of our possessions. He proposed to make the colonies contribute to the imperial revenue, and in return to allow them to send representatives to the British Parliament or States-General of the empire. Looking to the vast resources of the American colonies, he even contemplated the possibility, "in the course of little more than a century," of the centre of gravity of political power being trans

ferred to the other side of the Atlantic. The federation of the colonies and the uniformity in the custom-house laws advocated by Adam Smith is often regarded as the utopian dream of a speculative philosopher; but it should be remembered that in trade, finance, education, and religious toleration, the "Wealth of Nations" has been the great armoury of practical politicians, and it is possible that the colonial policy of Adam Smith may yet find its Cobden.

AN INQUIRY INTO THE NATURE AND CAUSES

OF

THE WEALTH OF NATIONS.

INTRODUCTION AND PLAN OF THE WORK.

THE annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes, and which consist always either in the immediate produce of that labour, or in what is purchased with that produce from other nations.

go a-hunting and fishing. Such nations, how ever, are so miserably poor, that, from mere want, they are frequently reduced, or at least think themselves reduced, to the necessity sometimes of directly destroying, and sometimes of abandoning their infants, their old people, and those afflicted with lingering disAccording, therefore, as this produce, or eases, to perish with hunger, or to be devourwhat is purchased with it, bears a greater ored by wild beasts. Among civilized and thrivsmaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniencies for which it has occasion. But this proportion must in every nation be regulated by two different circumstances: first, by the skill, dexterity, and judgment with which its labour is generally applied; and, secondly, by the proportion between the number of those who are employed in useful labour, and that of those who are not so employed. Whatever be the soil, climate, or extent of territory of any particular nation, the The causes of this improvement in the proabundance or scantiness of its annual supply ductive powers of labour, and the order acmust, in that particular situation, depend up-cording to which its produce is naturally dison those two circumstances.

The abundance or scantiness of this supply, too, seems to depend more upon the former of those two circumstances than upon the latter. Among the savage nations of hunters and fishers, every individual who is able to work is more or less employed in useful labour, and endeavours to provide, as well as he can, the necessaries and conveniencies of life, for himself, and such of his family or tribe as are either too old, or too young, or too infirm, to

ing nations, on the contrary, though a great number of people do not labour at all, many of whom consume the produce of ten times, frequently of a hundred times, more labou than the greater part of those who work; yet the produce of the whole labour of the society is so great, that all are often abundantly supplied; and a workman, even of the lowest and poorest order, if he is frugal and industrious, may enjoy a greater share of the necessaries and conveniencies of life than it is possible for any savage to acquire.

tributed among the different ranks and conditions of men in the society, make the subject of the first book of this Inquiry.

Whatever be the actual state of the skill, dexterity, and judgment, with which labour is applied in any nation, the abundance or scan tiness of its annual supply must depend, dur ing the continuance of that state, upon the proportion between the number of those who are annually employed in useful labour, and that of those who are not so employed. The

number of useful and productive labourers, it will hereafter appear, is everywhere in proportion to the quantity of capital stock which is employed in setting them to work, and to the particular way in which it is so employed. The second book, therefore, treats of the nature of capital stock, of the manner in which it is gradually accumulated, and of the different quantities of labour which it puts into motion, according to the different ways in which it is employed.

industry which is carried on in towns, others of that which is carried on in the country. Those theories have had a considerable influence, not only upon the opinions of men of learning, but upon the public conduct o princes and sovereign states. I have endea voured, in the fourth book, to explain as fully and distinctly as I can those different theories, and the principal effects which they have produced in different ages and nations.

To explain in what has consisted the reve Nations tolerably well advanced as to skill, nue of the great body of the people, or what dexterity, and judgment, in the application of has been the nature of those funds, which, in labour, have followed very different plans in different ages and nations, have supplied their the general conduct or direction of it; and annual consumption, is the object of these those plans have not all been equally favour- four first books. The fifth and last book able to the greatness of its produce. The po- treats of the revenue of the sovereign, or comlicy of some nations has given extraordinary monwealth. In this book I have endeavoured encouragement to the industry of the country; to shew, first, what are the necessary expenses that of others to the industry of towns. Scarce of the sovereign, or commonwealth; which of any nation has dealt equally and impartially with every sort of industry. Since the downfall of the Roman empire, the policy of Europe has been more favourable to arts, manufactures, and commerce, the industry of towns, than to agriculture, the industry of the country. The circumstances which seem to have introduced and established this policy are ex-bent on the whole society, and what are the plained in the third book.

Though those different plans were, perhaps, first introduced by the private interests and prejudices of particular orders of men, without any regard to, or foresight of, their consequences upon the general welfare of the society; yet they have given occasion to very different theories of political economy; of which some magnify the importance of that

those expenses ought to be defrayed by the general contribution of the whole society, and which of them, by that of some particular part only, or of some particular members of it: secondly, what are the different methods in which the whole society may be made to con tribute towards defraying the expenses incam

principal advantages and inconveniencies of each of those methods; and, thirdly and lastly, what are the reasons and causes which have induced almost all modern governments to mortgage some part of this revenue, or to contract debts; and what have been the ef fects of those debts upon the real wealth, the annual produce of the land and labour of the society. Note 1.

BOOK I.

OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE POWERS OF LABOUR, AND OF THE ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY DISTRIBUTED AMONG THE DIFFERENT RANKS OF THE PEOPLE.

CHAP. I.

OF THE DIVISION OF LABOUR.

THE greatest improvements in the productive
powers of labour, and the greater part of the
skill, dexterity, and judgment, with which it
is anywhere directed, or applied, seem to have
been the effects of the division of labour.

The effects of the division of labour, in
the general business of society, will be more

not

easily understood, by considering in what manner it operates in some particular manufac tures. It is commonly supposed to be car ried furthest in some very trifling ones; perhaps that it really is carried further in them than in others of more importance: but in those trifling manufactures which are destined to supply the small wants of but a small number of people, the whole number of workmen must necessarily be small; and those employed in every different branch of the work can of