II. either abfolutely, or under certain circumftances, CHA P. greatly exceeds what can easily be fufpected 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 fpecies of industry which enjoys it, and frequently turns towards that employment a greater share of both the labour and stock of the fociety than would otherwife have gone to it, cannot be doubted. But whether it tends either to increase the general industry of the fociety, or to give it the moft advantageous direction, is not, perhaps, altogether fo evident. THE general induftry of the fociety never can exceed what the capital of the fociety can employ. As the number of workmen that can be kept in employment by any particular perfon must bear a certain proportion to his capital, fo the number of those that can be continually employed by all the members of a great fociety, must bear a certain proportion to the whole capital of that fociety, and never can exceed that proportion. No regulation of commerce can increase the quantity of industry in any fociety 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 fociety than that into which it would have gone of its own accord. EVERY individual is continually exerting himfelf to find out the moft advantageous employVOL. II. N ment IV. BOOK ment for whatever capital he can command. It is his own advantage, indeed, and not that of the fociety, which he has in view. But the study of his own advantage naturally, or rather neceffarily leads him to prefer that employment which is most advantageous to the fociety. FIRST, every individual endeavours to employ his capital as near home as he can, and confequently as much as he can in the fupport of domestic industry; provided always that he can thereby obtain the ordinary, or not a great deal lefs than the ordinary profits of stock. THUS, upon equal or nearly equal profits, every wholesale merchant naturally prefers the home-trade to the foreign trade of confumption, and the foreign trade of confumption to the carrying trade. In the home-trade his capital is never so long out of his fight as it frequently is in the foreign trade of confumption. He can know better the character and fituation of the perfons whom he trufts, and if he fhould happen to be deceived, he knows better the laws of the country from which he must feek 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 neceffarily brought home, or placed under his own immediate view and command. The capital which an Amfterdam merchant employs in carrying corn from Konnigfberg to Lisbon, and fruit and wine from Lisbon to Konnigsberg, must generally be the one-half of it at Konnigfberg and the other half at Lifbon. No part of it need ever come II. come to Amfterdam. The natural refidence of c HA P. such a merchant should either be at Konnigfberg or Lisbon, and it can only be fome very particular circumstances which can make him prefer the refidence of Amfterdam. The uneafinefs, however, which he feels at being feparated fo far from his capital, generally determines him to bring part both of the Konnigsberg goods which he deftines for the market of Lifbon, and of the Lisbon goods which he deftines for that of Konnigsberg, to Amfterdam: and though this neceffarily fubjects him to a double charge of loading and unloading, as well as to the payment of fome duties and cuftoms, yet for the fake of having fome part of his capital always under his own view and command, he willingly fubmits to this extraordinary charge; and it is in this manner that every country which has any confiderable fhare of the carrying trade, becomes always the emporium, or general market, for the goods of all the different countries whofe trade it carries on. The merchant, in order to fave a second loading and unloading, endeavours always to fell in the home-market as much of the goods of all those different countries as he can, and thus, fo far as he can, to convert his carrying trade into a foreign trade of consumption. A merchant, in the fame manner, who is engaged in the foreign trade of confumption, when he collects goods for foreign markets, will always be glad, upon equal or nearly equal profits, to fell as great a part of them at home as he can. He faves himself the rifk and trouble of exportation, N 2 when, BOOK when, fo far as he can, he thus converts his fo IV. reign trade of confumption into a home-trade. Home is in this manner the center, if I may say fo, round which the capitals of the inhabitants of every country are continually circulating, and towards which they are always tending, though by particular caufes they may fometimes be driven off and repelled from it towards more diftant employments. But a capital employed in the home-trade, it has already been fhown, neceffarily 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 confumption has the fame 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 fupport to domeftic industry, and to give revenue and employment to the greatest number of people of his own country. SECONDLY, every individual who employs his capital in the fupport of domestic industry, neceffarily endeavours so to direct that industry, that its produce may be of the greatest possible value. THE produce of industry is what it adds to the fubject or materials upon which it is employed. In proportion as the value of this produce is great or fmall, fo will likewife be the profits of the employer. But it is only for the fake of profit that 11. that any man employs a capital in the fupport of CHA P. 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. BUT the annual revenue of every fociety is always precifely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the fame thing with that exchangeable value. As every individual, therefore, endeavours as much as he can both to employ his capital in the fupport of domeftic industry, and fo to direct that induftry that its produce may be of the greatest value; every individual neceffarily labours to render the annual revenue of the fociety as great as he can. He generally, indeed, neither intends to promote the public intereft, nor knows how much he is promoting it. By preferring the fupport of domestic to that of foreign industry, he intends only his own fecurity; and by directing that industry in fuch 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 cafes, led by an invifible hand to promote an end which was no part of his intention. Nor is it always the worse for the fociety that it was no part of it. By pursuing his own intereft he frequently promotes that of the fociety 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, N 3 |