Introductory Lectures on Political Economy
There is, as we have seen, a certain stage of civilization, though it may be difficult to determine precisely where it lies, which is necessary to the commencement of a course of improvement. A community placed in a condition short of this, and not aided from without, must, as experience has fully shewn, either remain stationary, or even sink deeper into barbarism. And when this point is once passed, the progress towards a higher state of civilization, will, as far as it is not prevented by accidental obstacles, begin, and gradually continue. Society may be compared to those combustible substances which will never take fire spontaneously, but when once ignited will generate heat sufficient not only to keep up the combustion, but to burn with still increasing force. A human community requires, as it were, to be kindled, and requires no more.
Let a Nation, though still in a rude state, possess the knowledge of some of the simplest and most essential arts—a certain degree of division of labour—and above all a recognition, and tolerable security, of property; and it will not fail, unless very grievously harassed by wars, inundations, or some such calamities, to increase its wealth, and to advance, more or less, in civilization. I have spoken of security of property as the most essential point, because, though no progress can be made without a division of labour, this could neither exist without security of property, nor could fail to arise with it. No man, it is plain, could subsist by devoting himself either wholly or partially to the production of one kind of commodity, trusting to the supply of his other wants by exchanging part of that commodity with his neighbours, unless he were allowed to keep it, and to dispose of it, as his own. On the other hand, let property be but established and secured, and the division of labour would be the infallible result; because the advantages of it to each individual, in each particular instance, would catch the attention of every one who possessed but a moderate degree of forethought.
A. Smith, in treating of the advantages of the division of labour, has entirely omitted one, which is, in all respects, one of the most important, and, in giving rise to the practice, clearly the most important of all. He dwells chiefly on the superior skill which a man acquires, in an occupation to which he has confined himself. This is undoubtedly a very great advantage; but it is evidently such an effect of the division of labour, as could hardly be known but by experience; and indeed could not exist till some time had elapsed for the increased expertness to be acquired: it could not consequently, in any instance, lead to the division of labour, till the practice had been in several instances established, and the improvement in skill thence resulting become matter of common observation. But the advantage I am alluding to (and which is in itself as important as any) is one which would readily be anticipated, and would be obtained immediately, previous to any advancement in skill. The advantage I mean is, that in a great variety of cases, nearly the same time and labour are required to perform the same operation on a larger or on a smaller scale—to produce many things, or one, of the same kind.
The most familiar instance of this, and the one most frequently adduced, is the carriage of letters. It makes very little difference of trouble, and none, of time, to carry one letter, or a whole parcel of letters, from one town to another; and accordingly, though there is no particular skill requisite in this business, there is perhaps no one instance that more strikingly displays the benefit of the division of labour than the establishment of the Post-office; but for which, each person would have to dispatch a special messenger whenever he wanted to communicate with his friend at a distance.
But the circumstance to which I am now particularly calling your attention, is, that this kind of advantage is one which would be immediate, and readily anticipated. In fact, a division of labour, with a view to it, is almost immediately adopted for the present occasion, on any emergency that arises, even when there is no peculiar fitness in each person for his own departments and no thought of making the arrangement permanent. For instance, suppose a number of travellers proceeding through some nearly desert country, such as many parts of America, and journeying together in a kind of cafila or caravan for the sake of mutual security: when they came to a halting-place for the night, they would not fail to make some kind of extemporaneous arrangement, that some should unlade and fodder the cattle, while others should fetch fire-wood from the nearest thicket, and others, water from the spring: some in the mean time would be occupied in pitching the tents, or erecting sheds of boughs; others in preparing food for the whole party; while some again, with their arms in readiness, would be posted as sentinels in suitable spots, to watch that the rest might not be surprised by bands of robbers. It would be evident to them that but for such an arrangement, each man would have to go both to the spring for water, and to the wood for fuel—would have to prepare his own meal with almost as much trouble as it costs to dress food for the whole—and would have to perform all these tasks encumbered with his arms, and on the watch against a hostile attack. Of course, if some of our supposed party chanced to be by nature or by practice peculiarly qualified for some particular task, and others for another, these would be respectively allotted to them in preference; but if there were no such inequality, the division would still take place, and the chief advantage of it would still be felt.
Such a case as this exhibits an instance of what may be called a temporary Community, containing a distribution of labourers into several departments, which have a considerable correspondence with the different trades and occupations that are permanently established. One portion of the members of a community are employed to protect the rest from violence; another, to provide them with food; another, to construct their habitations; and so of the rest.
But in order to the existence of such a state of things, it is necessary (as I have said) that property should be recognised, and should be tolerably well secured. "It is this main spring," (says Bp. Summer, in the second volume of the Records of the Creation,) "which keeps the arts and civilized industry in motion. 'The first, who having enclosed a spot of ground, has taken upon himself to assert, This is mine, and has remained undisturbed in the possession of it, gives a new aspect to the society,' and lays the foundation, not of crimes, and wars, and murders, as Rousseau proceeds to say, as if these were unknown to the savage; but of improvement and civilization.
"Man is easily brought and quickly reconciled to labour; but he does not undertake it gratuitously. If he is in possession of immediate ease, he can only be induced to relinquish that present advantage by the allurement of expected gain. Gratification, which in some degree or other forms the chief excitement of civilized life, is almost unknown to the savage. The only stimulus felt by him, is that of necessity. He is impelled by hunger to hunt for subsistence, and by cold to provide against the rigour of the seasons. When his stock of provision is laid in, his rude clothing prepared, and his cabin constructed, he relapses into indolence; for the wants of necessity are supplied, and the stimulus which urged him is removed. However experienced he may be in the preparation of skins for clothing or of reeds for building, beyond the wants of his own family he has no demand for ingenuity or skill; for the equality of property has confined each man's possessions to the bare necessaries of life; and though he were to employ his art in providing for his whole tribe, they have nothing to offer him in exchange. As long as this state of things continues, it is plain that we can expect neither improvement of art nor exertion of industry. Whatever is fabricated, will be fabricated with almost equal rudeness, whilst each individual supplies his own wants; and he will continue to supply them, as long as the wants of the society are limited to the demands of nature. An intelligent traveller who had an opportunity of observing this on the spot, remarks exactly to the point, that 'the Indians of Guiana have no interest in the accumulation of property, and, therefore, are not led to labour in order to attain wealth. Living under the most perfect equality, they are not impelled to industry by that spirit of emulation, which in society leads to great and unwearied toil.'
"But as soon as it has been agreed, by a compact of whatever kind, that the property before belonging to the community at large, shall be divided among the individuals who compose it, and that whatever each of them shall hereafter obtain, shall be considered as his exclusive possession; the effect of this division will shew that industry requires no other stimulus than a reward proportioned to its exertion.
"We have an instance in the natives of the Pelew Islands, who, deprived as they were of all external advantages, afford a most decisive contrast to the inactivity of the American tribes. Before their accidental discovery in 1783, they had enjoyed no intercourse with civilized nations, had no acquaintance with the use of iron, or the cultivation of corn, or regular manufacture. But they had been fortunate in the establishment of a division of ranks, ascending from the servant to the king; and a division of property, rendering not only 'every man's house, furniture, or canoe, his own, but also the land allotted to him as long as he occupied and cultivated it.' The effect of this is distinguishable in habits so different from those hitherto represented, that 'the portion of time each family could spare from providing for their natural wants, was passed in the exercise of such little arts, as, while they kept them active and industrious, administered to their convenience and comfort.' Here also were no traces of that want of curiosity, which all travellers remark as so extraordinary in America. Industry had sharpened their minds. The natives were constantly interested in obtaining every information respecting the English tools and workmanship."
I need not cite more from a book probably so well known to most of you; and will therefore only observe, that the whole chapter*22 is well worth a re-perusal, with a view to the point now before us.
When then this distribution of employments had been established, the benefits resulting from it would be so obvious, that it would tend towards a continual increase: the benefits, I mean, to each individual; who would discover, without any extraordinary sagacity, that he could much more amply supply his own wants, by directing his whole or his chief attention to one, or to a few, kinds of employment, and receiving from his neighbours in return the fruits of their industry, than by himself providing directly for all his own wants. As for the benefit to the community thence resulting, that, as I remarked in a former Lecture, is a provision of Divine Wisdom: it is not necessary, nor is it usually the case, that each who labours in his own department, should be stimulated to do so by public-spirit, or should even perceive and contemplate (as in the case of our supposed little party of travellers) the benefit he is conferring on the rest.
In proportion then as the division of labour was extended, exchanges would become more and more frequent. For, diversity of production is evidently the foundation of exchange; since, as long as each individual provides for all his own wants, and only for them, he will have nothing to part with, and nothing to receive. Barter then having become a customary transaction, would naturally be superseded, in the progress of society, by the employment of some kind of Money.
I do not design to enter at present on the multifarious and important inquiries which pertain to the subject of Money. It will suffice for our present purpose to state, that by Money, I mean, any commodity in general request, which is received in exchange for other commodities, not for the purpose of being directly used by the party receiving it, (for that is Barter,) but for the purpose of being again parted with in exchange for something else. It is not the very commodity which the party wants, or expects hereafter to want; but it is a security or pledge ( according to Aristotle) that he may obtain that commodity whenever he wants it, from those who have it to spare. The Herdsman who needed, or expected hereafter to need, a supply of corn, might, if he could not otherwise arrange an exchange, be willing to part with some of his cattle for cloth of which he had no need, in the expectation of being able to exchange that again for corn, with some one who either needed it, or would accept it in the same manner as he had done. The cloth would serve the purpose of money, till it should reach the hands of one who designed to keep it for his own use. And there are some parts of Africa it appears, where pieces of cloth of a certain definite size and quality constitute the current coin, if I may so speak, of the country. In other parts again of Africa, wedges of salt are said to be applied to the same purpose.
But the herdsman would probably prefer receiving in this manner, instead of any articles of food or clothing which he did not himself need, some ornamental article in general request, such as a bracelet or necklace, of gold, silver, or valued shells or stones; not only as less bulky and less perishable, but because these could be used by him in the only way they can be used, viz. for the purpose of display, till he should have occasion to part with them; and could then be parted with without any inconvenience. Accordingly the prevailing tendency has always been to adopt as a medium of exchange, in preference to all others, articles of an ornamental character, prized for their beauty and rarity; such as the silver and gold which have long been much the most extensively used for this purpose—the cowry-shells, admired for making necklaces, and very generally used as money throughout an extensive region in Africa—the porcellane shells employed in like manner in some parts of the East Indies, and the wampum of some of the native American Indians, which consists of a kind of bugles wrought out of shells, and used both as an ornament and as money.
Articles of this kind, as traffic increased, would come to be collected and stored up in much greater quantities than their original destination for purposes of ornament could have called for; but it is from that, no doubt, that they must originally have been in demand; since it is inconceivable that all the members of any one community, much less, various nations, should in the first instance have made a formal agreement arbitrarily to attach a value to something which had not been before at all regarded by them. It is said, that at this day among some half-civilized nations, the women adorn themselves with strings of gold coins. But silver plate, and gold or gilt ornaments, are I believe in use, and that, to a very large amount, among all nations who employ those metals as money. Some years ago I remember hearing an estimate of the gold consumed in gilding alone, in the one town of Birmingham, as amounting to one thousand pounds weight, or about £50,000 worth.
When then property was secured, and when exchanges were facilitated by the intervention of money, the use of this medium would react on the division of labour, and extend it; because, then, any one who could produce any commodity in general request, would be sure of employing himself beneficially in producing it, even though the particular persons who wanted that commodity, could not supply him in return with the precise articles he had need of. They would now be able to purchase it of him for that in exchange for which he might procure from others what he wanted.
As wealth increased, the continued stimulus of emulation would make each man strive to surpass, or at least not fall below, his neighbours, in this. I say "the continued stimulus of emulation," because it is important to keep in mind, that the selfishness—the envy—the injustice and baseness of every kind, which we so often see called forth in the competitions of worldly-minded men, are not to be attributed to the increase of national wealth. Among poor and barbarous nations, (as I formerly remarked,) we may find as much avarice, fraud, vanity, and envy, called forth, in reference perhaps to a string of beads, a hatchet, or a musket, as are to be found in wealthier communities.
The desire of wealth (which has no name, except those denoting its vicious excess, Avarice or Covetousness,) and Emulation,—the desire of equalling or surpassing others, are, neither of them, in themselves, either virtuous or vicious. A desire of gain, which is either excessive, or has only selfish gratification in view, is base and odious: when the object is to keep one's family from want and dependence, it is commendable; when wealth is sought as a means of doing extensive good, the pursuit is noble. Emulation, again, when it degenerates into Envy, is detestable;—when directed to trifling objects, contemptible;—when duly controlled, and directed to the best objects, though it does not of itself furnish the noblest and purest motive, it is a useful and honourable ally of virtue. And, in both cases, there are, between the highest and the basest motives, almost infinite gradations and intermixtures. But the point to which I wish to call your attention, as most pertinent to the present inquiry, is, that by the wise and benevolent arrangement of Providence, even those who are thinking only of their own credit and advantage, are, in the pursuit of these selfish objects, led, unconsciously, to benefit others. The public welfare is not left to depend merely on the operation of public-spirit. The husbandman and the weaver exert their utmost industry and ingenuity, to increase the produce of the earth and of the loom; each, that he may be enabled to command for himself a better share of other productions; but in so doing, they cause the community to be better fed, and better clothed. And the effort of each man, with a view to his own credit, to rise, or at least not to sink, in society, causes, when it becomes general, the whole Society to rise in wealth.
And the progress thus occasioned by emulation, is indefinite; because the object aimed at by each of a great number, viz. superiority to the rest, can never be attained by all of them. If men's desires were limited to a supply of the necessaries and commonest comforts of life, their efforts to attain this would indeed bring the society up to a certain point, but would not necessarily tend to advance it any further; because it is conceivable that this object might be attained by all; and if it were, the society might thenceforward continue stationary; but when a great proportion of its members are striving, each, to attain, not merely an absolute, but a comparative, degree of wealth, there must always be many, who, though they do advance, will yet remain in the same position relative to their neighbours, who are equally advancing; and thus the same stimulus will continue to operate from generation to generation. The race never comes to an end, while the competitors are striving, not to reach a certain fixed goal, but, each, either permanently to keep a-head of the rest, or at least, not to be among the hindmost.*23
All this, it may be said, is but a melancholy though true description, of the mean and silly ambition of mankind.
It would be more suitable to an Ethical treatise, than to these Lectures, to discuss the question as to the degrees of attention to worldly objects which maybe allowable, or, more or less, foolish, or sinful. Nor is a decision of these questions at all necessary with a view to the particular point now more immediately before us. For that, it is sufficient if we keep in mind, what has been already observed, that a devotedness to temporal objects is no characteristic of a more wealthy and civilized, as distinguished from a more barbarous, state of society. Emulation, though directed to different objects, is found among savages, except when they are indulging in apathetic indolence or gross sensuality. But there is this important difference; that in civilized life it is frequently directed (however seldom in comparison of what it should be) to many nobler objects, of which the savage can not even form any conception; and again, that even when merely selfish, it tends (without design on the part of the individual) to produce many beneficial results to the Society, which it does not produce, or in a far less degree, among savages.
The same may be said of the desire of gain. The savage is commonly found to be covetous, frequently rapacious, when his present inclination impels him to seek any object which he needs, or which his fancy is set on. He is not indeed not so steady or so provident, in his pursuit of gain, as the civilized man; but this is from the general unsteadiness and improvidence of his character; not from his being engrossed by higher pursuits. What keeps him poor, in addition to want of skill and insecurity of property, is, not a philosophical contempt of riches, but a love of sluggish torpor and of present gratification. The same may be said of such persons as constitute the dregs of a civilized community; they are idle, thoughtless, improvident; but thievish. Melancholy as it is to see, as we may, for instance, in our own country, multitudes of Beings of such high qualifications and such high destination as Man, absorbed in the pursuit of merely external and merely temporal objects—occupied in schemes for attaining wealth and worldly aggrandizement, without any higher views in pursuing them, we must remember that the savage is not above such a life, but below it. It is not from preferring virtue to wealth—the goods of the mind to those of fortune—the next world to the present—that he takes so little thought for the morrow; but, from want of forethought and of habitual self-command. The civilized man, too often, directs these qualities to an unworthy object; the savage, universally, is deficient in the qualities themselves. The one is a stream flowing, too often, in a wrong channel, and which needs to have its course altered; the other is a stagnant pool.*24
But I am so far from attributing to Man, as a merit, the benefits which, in an advanced stage of society, he confers on the community, that, on the contrary, the very point I am especially dwelling on is, the bountiful wisdom of Providence, in directing towards the public good the conduct of those, who, even when not basely selfish, are yet not impelled to the course they pursue by patriotic motives.
A man, for instance, who has accumulated wealth, as in the progress of Society naturally takes place, more and more, may be so selfishly disposed, that he would willingly consume his whole revenue himself, without a thought of benefiting others. But though there are various modes of expenditure, some more and some less beneficial to the public, in which he may employ it, it is hardly possible for him to keep it entirely to himself. Directly or indirectly he will always be feeding labourers with it. He may employ them in producing something which will add to the stock of national wealth; in which case he will be enriching the community; but if he employ them in making lace, or diving for pearls, to add to the splendour of his dress, or in pulling down his house; and rebuilding it after some fancy of his own, or in waiting at his table, still he maintains them. And though it is a mistake (a very common one, by the way, and which hereafter it will be necessary to treat of) to suppose, that, in all this, he is a benefactor to the community, by furnishing employment, still he is at least no more consuming his revenue himself, than if he had thought fit to give it away to the same number of persons;—to bestow on those, who are now employed in labouring for him, the bread they eat, leaving them to sit idle. The only difference is, that they are at work instead of doing nothing, and that they feel that they earn their own bread, instead of being fed by charity. It is only when a rich man lays down in forest, like William the Conqueror, a quantity of fertile land, or in some such way diminishes human subsistence, that his wealth is detrimental to the community.
And this is one of the points connected with our present subject, which is at once so simple, as to be easily explained to the labouring classes, and of high importance for them to understand. For at the first glance, they are apt to imagine, when they see a rich man whose income is a hundred times as much as suffices to maintain a poor man's family, that if he were stripped of all, and his wealth divided, a hundred poor families additional might thus obtain subsistence; which, it is plain, would not be the case, even when the income was spent in such ostentatious and selfish vanity, as I have been alluding to.
But, in fact, a very large portion of the wealth that exists in a country, is employed in procuring a further increase of wealth; in other words, is employed as Capital.
It would be premature to enter at present on a discussion of the nature of Capital, and the various questions connected with it. But it is sufficiently evident for our present purpose, that wealth is employed, and is a most important agent, for the production of wealth: so important indeed, that the first beginnings of it must have been attained with extreme difficulty, since labour is comparatively inefficient without it. Corn is raised by labour; but corn is needed both to sow the land, and to support the labourer till the harvest is ripe: the tools with which he works are produced by other tools: the handle of the axe with which he fells the wood, came from the wood; and the iron of it was dug from the mine with iron implements. We hardly know how to estimate the impediments to the few first steps, when stakes and sharp stones were the tools, and the labourer's subsistence consisted in the spontaneous products of the earth, and the flesh of wild animals. But it is plain, that each succeeding step must have been easier, and at the same time more effective; till at length the various contrivances for abridging labour, that is, rendering labour incomparably more productive, at length enabled a large portion of the community to live exempt from all share in the labour of producing the necessaries of life; while yet the whole population, though immensely increased in numbers, were better fed, clothed, and lodged, than any had been, in that earlier stage, when every one without exception was compelled to labour for his daily food.
And it is remarkable, that the tendency which the conduct of individuals in pursuing their own private ends, even when these ends are purely selfish, has, towards promoting the interest of the community, is more and more developed, as society advances. Take, for example, the case of a Miser; one whose selfishness takes the turn of a love of hoarding. Such a person, though his individual character is of course every where the same, is yet, in respect of the effects of his conduct on others, very different in different stages of society. You will perceive, on a little reflection, that in a community where commercial transactions are yet in a rude state, the conduct of a miser is detrimental to the public; while in one that is in a more advanced stage, he is rather benefiting others by the sacrifice of his own comforts.
In former times, the Miser withdrew from use such articles as constituted the wealth of the community; such as corn, clothing, implements and furniture of various kinds, and above all, as the least perishable and least bulky, gold and silver and jewels. All these things, even if not kept till spoilt, or hidden so as to be permanently lost, were at least withdrawn during his life-time from the enjoyment of the community; which would supply the deficiency either directly by the labour of its own members, or by exchanging with other nations the produce of that labour.*25
Some few instances occur, even in such a state of society as ours, of this kind of boarding; but they are very rare, and generally on a very small scale, being chiefly found among the lowest orders.
On the other hand, in countries as far advanced in commercial transactions as almost the whole of Europe is, it may be said that, with hardly any exceptions, hoarding withdraws nothing from the public use. If the miser is engaged in any kind of business; he lives himself indeed (as in the other case) on a miserable pittance; but his desire of gain naturally prompts him to add continually his profits to his capital; which is a part of the capital of the country, viz. of the stock that is employed profitably, in producing more commodities; which are used by others, though the owner will not indulge himself with them. If he is not himself engaged in business, it comes to the same thing; for in that case he lends to others, for the sake of increasing his store; and continues to invest in like manner the interest they pay him. And it makes no difference whether he lends to individuals, or invests his money in government-securities; for since, in the latter case, the total amount of government-securities is not increased, (the national debt remaining the same,) every purchase he makes sets free an equal amount, which is sure to find its way into the hands of some private borrower; and, generally speaking, of one who will employ this borrowed capital productively, in trade, agriculture, and manufactures. Whereas if he had lived in what is called a liberal style, most of what he has thus laid by would have been expended unproductively, in sumptuous dinners, the services of menials, race-horses, hounds, and the like; all of which would have left behind no increase of the capital of the country.
The individuals, however, who borrow the miser's money, not only owe him no thanks, as he had not their benefit in view, but are in most instances unable even to refer that benefit to him. We can no more trace the actual progress of each sum that is thus thrown into the general capital of the country, than of the drops of water of each shower that falls into the ocean; though it is demonstrable that the whole mass of waters must be increased by just so much.
Some points connected with the subject I have now briefly touched on, may, perhaps, present difficulties to such as have not been in the habit of pursuing such inquiries. I shall take occasion to advert to these points hereafter in their proper place. But this slight notice of the subject was introduced here, merely as affording a striking instance of the manner in which, by the wise arrangements of Providence, not only self-interest, but in some instances even the most sordid selfishness, are made, in an advanced stage of society, to conduce to public prosperity.
I am indeed far enough from holding with Mandeville, that on the whole, private vices conduce to public prosperity. The Spend-thrift diminishes it; and even the Miser, though his evil disposition is generally turned by an over-ruling Providence to a good end, yet might lay out his money much more beneficially still, if he were to receive the endowment of judicious public-spirit.
But the circumstance to which I wish to direct your attention, is, the general tendency—a tendency often interrupted and impeded indeed by human faults and follies—but not wholly or chiefly depending for its operation on human virtue and wisdom—towards the advancement of national wealth. The disturbing forces, as they may be called, of wars, and tumults, and misgovernment, I have not thought it necessary to dwell upon in the outset. The character and direction of the moving principle of a machine, should be first understood generally, before we attend to the impediments of friction and the resistance of the air. And that in spite of all impediments, the tendency I have been speaking of does exist, and produce immensely important results, every one must perceive, who contemplates, for instance, the present condition of this island, as compared with what it was when our Anglo-Saxon ancestors were first settled in it.
As to the connexion of what is usually called national prosperity, with the advancement of civilization, in the highest and most proper sense—and as to the question, how far Dr. Mandeville's doctrine, or its opposite, is true, that Virtue is unfavourable to national Wealth, and national Wealth to Virtue— although I have slightly adverted to the subject already, and shall from time to time recur to it as occasion may require—this, is the subject which will occupy the next Lecture.
Notes for this chapter
Chap. iii. part ii.
Hence Mandeville calls "Content, the bane of industry;" playing on the double meaning of the word "content." He who has attained the power of commanding with ease a supply of all that he wishes for, and is content, in the sense of desiring nothing further, is not likely to be industrious. But one who is exerting himself all his life in the pursuit of fresh and fresh advancement, whether in Wealth, Learning, Fame, Virtue, or any other object, is not necessarily discontented and unhappy. On the contrary, a pursuit seems a main ingredient in happiness.
Errors are often committed in the estimate either of national or of individual character, by those who confound together qualities that are in some respects similar; or at least suppose them to imply each other. They imagine, for instance, that one who is recklessly profuse must be free from sordid cupidity;—that credulity and incaution imply a frank, open, sincere character, incapable of falsehood, and of crafty and deliberate treachery; and that a liability to violent ebullitions of passion, must be accompanied with something of generosity, and is at least incompatible with insidious malice. All such expectations however are contradicted by the character of most savages, and of such persons as have in them something of the barbarian character.
This, by the way, suggests a sure method of obtaining, what was so long sought by legislators, a general "favourable balance of trade" in the country. If a quantity of gold and silver be annually buried, a constant importation will ensue, of these metals, in exchange for other commodities, to supply the demand for bullion thus created.
Such is supposed to have been the condition, till within these few years, of the Peninsula of India; which was constantly receiving and absorbing a vast amount of silver; the insecurity of property (till lately) leading to the practice of this kind of hoarding.
In this way, or again, by an immense annual consumption of gold and silver in gilding and plating, &c. (and in no other way,) it is possible for a country to maintain a permanently "favourable balance of trade" with all the world: i.e. to import every year, on the whole, a less amount of other articles than it exports, receiving the difference in gold and silver. See "Senior on the Transmission of the precious Metals."
End of Notes
Return to top