Friedrich List, 1789-1846.

Friedrich List was a nationalist/romantic critic of economic theory and one of the
forefathers of the German Historical School. His best-known work, The National
System of Political Economy (181! was written as a"ainst the free-trade
doctrines that #ermeated $lassical economics. Howe%er, his was not a #olemical
defense of #rotectionism& he ar"'ed it on the basis of his analysis of economics,
which stressed #olitical factors - notably, the (nation( - in economics. List ar"'ed
that it was the "o%ernment)s res#onsibility to foster the (#rod'cti%e #owers( of a
nation and, once these were in #lace, then free trade co'ld ens'e, b't not before.
*his is akin to the modern (infant ind'stry( ar"'ment for #rotection. +ore
rele%antly, he de%elo#ed a theory of economic (sta"es( which was to ser%e as a
bl'e#rint for the German Historical School.
List was a ,rofessor at *'bin"en and then a liberal member of the -.rttemb'r"
le"islat're. He was /ailed and then e0iled in 1812 for his #olitical %iews. He was
an enth'siastic s'##orter and one of the main architects of the German c'stoms
'nion (Zollverein! and an ad%ocate for the e0#ansion of railroads thro'"ho't in
Germany. He li%ed in the 3nited States as a /o'rnalist for many years, before
bein" sent back to Germany as an 4merican cons'l. He ne%er re"ained a
teachin" #ost.
Major works of Friedrich List
Outlines of American Political Economy, 1815.
The National System of Political Economy, 181.
Collected Works, 1615-78.
1
The National !ste" of #olitical $cono"! %1841& '! Friedrich List
The National !ste" of #olitical $cono"! %1841& '! Friedrich List
First (ook) The *istor!
$ha#ter 1 - *he 9talians
$ha#ter 1 - *he Hansards
$ha#ter 7 - *he :etherlanders
$ha#ter - *he ;n"lish
$ha#ter 2 - *he S#aniards and ,ort'"'ese
$ha#ter 8 - *he French
$ha#ter 5 - *he Germans
$ha#ter 8 - *he <'ssians
$ha#ter 6 - *he :orth 4mericans
$ha#ter 1= - *he *eachin"s of History
econd (ook) The Theor!
$ha#ter 11 - ,olitical and $osmo#olitical ;conomy
$ha#ter 11 - *he *heory of the ,owers of ,rod'ction and the *heory of >al'es
$ha#ter 17 - *he :ational ?i%ision of $ommercial @#erations and the
$onfederation of the :ational ,rod'cti%e Forces
$ha#ter 1 - ,ri%ate ;conomy and :ational ;conomy
$ha#ter 12 - :ationality and the ;conomy of the :ation
$ha#ter 18 - ,o#'lar and State Financial 4dministration, ,olitical and :ational
;conomy
$ha#ter 15 - *he +an'fact'rin" ,ower and the ,ersonal, Social, and ,olitical
,rod'cti%e ,owers of the :ation
$ha#ter 18 - *he +an'fact'rin" ,ower and the :at'ral ,rod'cti%e ,owers of
the :ation.
$ha#ter 16 - *he +an'fact'rin" ,ower and the 9nstr'mental ,owers (+aterial
$a#ital! @f the :ation
$ha#ter 1= - *he +an'fact'rin" ,ower and the 4"ric'lt'ral 9nterest
$ha#ter 11 - *he +an'fact'rin" ,ower and $ommerce
$ha#ter 11 - *he man'fact'rin" ,ower and :a%i"ation, :a%al ,ower and
$oloniAation
$ha#ter 17 - *he +an'fact'rin" ,ower and the 9nstr'ment of $irc'lation
$ha#ter 1 - *he +an'fact'rin" ,ower and the ,rinci#le of Stability and
$ontin'ity of -ork
$ha#ter 12 - *he +an'fact'rin" ,ower and the 9nd'cement to ,rod'ction and
$ons'm#tion
$ha#ter 18 - $'stoms ?'ties as a $hief +eans of ;stablishin" and ,rotectin"
the internal +an'fact'rin" ,ower
$ha#ter 15 - *he $'stoms System and the ,o#'lar School
Third (ook) The !ste"s
$ha#ter 18 - *he :ational ;conomists of 9taly
$ha#ter 16 - *he 9nd'strial System (Falsely *ermed by the School )*he
+ercantile System)!
$ha#ter 7= - *he ,hysiocratic or 4"ric'lt'ral System
$ha#ter 71 - *he System of >al'es of ;0chan"e (Falsely *ermed by the
School, *he )9nd'strial) System! -- 4dam Smith
$ha#ter 71 - *he System of >al'es of ;0chan"e ($ontin'ed! -- Bean Ca#tiste
Say and his School
Fo+rth (ook) The #olitics
2
$ha#ter 77 - *he 9ns'lar S'#remacy and the $ontinental ,owers -- :orth
4merica and France
$ha#ter 7 - *he 9ns'lar S'#remacy and the German $ommercial 3nion
$ha#ter 72 - $ontinental ,olitics
$ha#ter 78 - *he $ommercial ,olicy of the German Doll%erein
3
econd (ook
The Theor!
,ha-ter 11
#olitical and ,os"o-olitical $cono"!
Cefore E'esnay and the French economists there e0isted only a #ractice of #olitical economy
which was e0ercised by the State oFcials, administrators, and a'thors who wrote abo't
matters of administration, occ'#ied themsel%es e0cl'si%ely with the a"ric'lt're, man'fact'res,
commerce, and na%i"ation of those co'ntries to which they belon"ed, witho't analysin" the
ca'ses of wealth, or takin" at all into consideration the interests of the whole h'man race.
E'esnay (from whom the idea of 'ni%ersal free trade ori"inated! was the Grst who e0tended
his in%esti"ations to the whole h'man race, witho't takin" into consideration the idea of the
nation. He calls his work ),hysiocratie, o' d' Go'%ernement le #l's a%anta"e'0 a' Genre
H'main,) his demands bein" that we m'st ima"ine that the merchants of all nations formed
one commercial re#'blic. E'esnay 'ndo'btedly s#eaks of cosmo#olitical economy, i.e. of that
science which teaches how the entire h'man race may attain #ros#erityH in o##osition to
#olitical economy, or that science which limits its teachin" to the inI'iry how a "i%en nation
can obtain ('nder the e0istin" conditions of the world! #ros#erity, ci%ilisation, and #ower, by
means of a"ric'lt're, ind'stry, and commerce.
4dam Smith(1J! treats his doctrine in a similarly e0tended sense, by makin" it his task to
indicate the cosmo#olitical idea of the absol'te freedom of the commerce of the whole world in
s#ite of the "ross mistakes made by the #hysiocrates a"ainst the %ery nat're of thin"s and
a"ainst lo"ic. 4dam Smith concerned himself as little as E'esnay did with tr'e #olitical
economy, i.e. that #olicy which each se#arate nation had to obey in order to make #ro"ress in
its economical conditions. He entitles his work, )*he :at're and $a'ses of the -ealth of
:ations) (i.e. of all nations of the whole h'man race!. He s#eaks of the %ario's systems of
,olitical economy in a se#arate #art of his work solely for the #'r#ose of demonstratin" their
non-eFciency, and of #ro%in" that )#olitical) or national economy m'st be re#laced by
)cosmo#olitical or world-wide economy.) 4ltho'"h here and there he s#eaks of wars, this only
occ'rs incidentally. *he idea of a #er#et'al state of #eace forms the fo'ndation of all his
ar"'ments. +oreo%er, accordin" to the e0#licit remarks of his bio"ra#her, ?'"ald Stewart, his
in%esti"ations from the commencement are based '#on the #rinci#le that )most of the State
re"'lations for the #romotion of #'blic #ros#erity are 'nnecessary, and a nation in order to be
transformed from the lowest state of barbarism into a state of the hi"hest #ossible #ros#erity
needs nothin" b't bearable ta0ation, fair administration of /'stice, and #eace.) 4dam Smith
nat'rally 'nderstood 'nder the word )#eace) the )#er#et'al 'ni%ersal #eace) of the 4bbK St.
,ierre.
B. C. Say o#enly demands that we sho'ld ima"ine the e0istence of a 'ni%ersal re#'blic in order
to com#rehend the idea of "eneral free trade. *his writer, whose eLorts were mainly restricted
to the formation of a system o't of the materials which 4dam Smith had bro'"ht to li"ht, says
e0#licitly in the si0th %ol'me (#. 188! of his );conomie #olitiI'e #ratiI'e). )-e may take into o'r
consideration the economical interests of the family with the father at its headH the #rinci#les
and obser%ations referrin" thereto will constit'te #ri%ate economy. *hose #rinci#les, howe%er,
which ha%e reference to the interests of whole nations, whether in themsel%es or in relation to
other nations, form #'blic economy (l)Kconomie #'bliI'e!. ,olitical economy, lastly, relates to
the interests of all nations, to h'man society in "eneral.)
9t m'st be remarked here, that in the Grst #lace Say reco"nises the e0istence of a national
economy or #olitical economy, 'nder the name )Kconomie #'bliI'e,) b't that he nowhere treats
of the latter in his worksH secondly, that he attrib'tes the name #olitical economy to a doctrine
which is e%idently of cosmo#olitical nat'reH and that in this doctrine he in%ariably merely
s#eaks of an economy which has for its sole ob/ect the interests of the whole h'man society,
witho't re"ard to the se#arate interests of distinct nations.
*his s'bstit'tion of terms mi"ht be #assed o%er if Say, after ha%in" e0#lained what he calls
#olitical economy (which, howe%er, is nothin" else b't cosmo#olitical or world-wide economy,
or economy of the whole h'man race!, had acI'ainted 's with the #rinci#les of the doctrine
which he calls )Kconomie #'bliI'e,) which howe%er is, #ro#erly s#eakin", nothin" else b't the
economy of "i%en nations, or tr'e #olitical economy.
4
9n deGnin" and de%elo#in" this doctrine he co'ld scarcely forbear to #roceed from the idea and
the nat're of the nation, and to show what material modiGcations the )economy of the whole
h'man race) m'st 'nder"o by the fact that at #resent that race is still se#arated into distinct
nationalities each held to"ether by common #owers and interests, and distinct from other
societies of the same kind which in the e0ercise of their nat'ral liberty are o##osed to one
another. Howe%er, by "i%in" his cosmo#olitical economy the name #olitical, he dis#enses with
this e0#lanation, eLects by means of a trans#osition of terms also a trans#osition of meanin",
and thereby masks a series of the "ra%est theoretical errors.
4ll later writers ha%e #artici#ated in this error. Sismondi also calls #olitical economy e0#licitly
)La science I'i se char"e d' bonhe'r de l)es#Mce h'maine.) 4dam Smith and his followers teach
's from this mainly nothin" more than what E'esnay and his followers had ta'"ht 's already,
for the article of the )<e%'e +KthodiI'e) treatin" of the ,hysiocratic school states, in almost the
same words& )*he well-bein" of the indi%id'al is de#endent alto"ether on the well-bein" of the
whole h'man race.)
*he Grst of the :orth 4merican ad%ocates of free trade, as 'nderstood by 4dam Smith --
*homas $oo#er, ,resident of $ol'mbia $olle"e -- denies e%en the e0istence of nationalityH he
calls the nation )a "rammatical in%ention,) created only to sa%e #eri#hrases, a nonentity, which
has no act'al e0istence sa%e in the heads of #oliticians. $oo#er is moreo%er #erfectly
consistent with res#ect to this, in fact m'ch more consistent than his #redecessors and
instr'ctors, for it is e%ident that as soon as the e0istence of nations with their distinct nat're
and interests is reco"nised, it becomes necessary to modify the economy of h'man society in
accordance with these s#ecial interests, and that if $oo#er intended to re#resent these
modiGcations as errors, it was %ery wise on his #art from the be"innin" to disown the %ery
e0istence of nations.
For o'r own #art, we are far from re/ectin" the theory of cosmo#olitical economy, as it has
been #erfected by the #re%ailin" schoolH we are, howe%er, of o#inion that #olitical economy, or
as Say calls it )Kconomie #'bliI'e,) sho'ld also be de%elo#ed scientifically, and that it is always
better to call thin"s by their #ro#er names than to "i%e them si"niGcations which stand
o##osed to the tr'e im#ort of words.
9f we wish to remain tr'e to the laws of lo"ic and of the nat're of thin"s, we m'st set the
economy of indi%id'als a"ainst the economy of societies, and discriminate in res#ect to the
latter between tr'e #olitical or national economy (which, emanatin" from the idea and nat're of
the nation, teaches how a "i%en nation in the #resent state of the world and its own s#ecial
national relations can maintain and im#ro%e its economical conditions! and cosmo#olitical
economy, which ori"inates in the ass'm#tion that all nations of the earth form b't one society
li%in" in a #er#et'al state of #eace.
9f, as the #re%ailin" school reI'ites, we ass'me a 'ni%ersal 'nion or confederation of all
nations as the "'arantee for an e%erlastin" #eace, the #rinci#le of international free trade
seems to be #erfectly /'stiGed. *he less e%ery indi%id'al is restrained in #'rs'in" his own
indi%id'al #ros#erity, the "reater the n'mber and wealth of those with whom he has free
interco'rse, the "reater the area o%er which his indi%id'al acti%ity can e0ercise itself, the easier
it will be for him to 'tilise for the increase of his #ros#erity the #ro#erties "i%en him by nat're,
the knowled"e and talents which he has acI'ired, and the forces of nat're #laced at his
dis#osal. 4s with se#arate indi%id'als, so is it also the case with indi%id'al comm'nities,
#ro%inces, and co'ntries. 4 sim#leton only co'ld maintain that a 'nion for free commercial
interco'rse between themsel%es is not as ad%anta"eo's to the diLerent states incl'ded in the
3nited States of :orth 4merica, to the %ario's de#artments of France, and to the %ario's
German allied states, as wo'ld be their se#aration by internal #ro%incial c'stoms tariLs.
9n the 'nion of the three kin"doms of Great Critain and 9reland the world witnesses a "reat and
irrefra"able e0am#le of the immeas'rable eFcacy of free trade between 'nited nations. Let 's
only s'##ose all other nations of the earth to be 'nited in a similar manner, and the most %i%id
ima"ination will not be able to #ict're to itself the s'm of #ros#erity and "ood fort'ne which
the whole h'man race wo'ld thereby acI'ire.
3nI'estionably the idea of a 'ni%ersal confederation and a #er#et'al #eace is commended
both by common sense and reli"ion.(1J! 9f sin"le combat between indi%id'als is at #resent
considered to be contrary to reason, how m'ch more m'st combat between two nations be
similarly condemnedN *he #roofs which social economy can #rod'ce from the history of the
ci%ilisation of mankind of the reasonableness of brin"in" abo't the 'nion of all mankind 'nder
the law of ri"ht, are #erha#s those which are the clearest to so'nd h'man 'nderstandin".
5
History teaches that where%er indi%id'als are en"a"ed in wars, the #ros#erity of mankind is at
its lowest sta"e, and that it increases in the same #ro#ortion in which the concord of mankind
increases. 9n the #rimiti%e state of the h'man race, Grst 'nions of families took #lace, then
towns, then confederations of towns, then 'nion of whole co'ntries, Gnally 'nions of se%eral
states 'nder one and the same "o%ernment. 9f the nat're of thin"s has been #owerf'l eno'"h
to e0tend this 'nion (which commenced with the family! o%er h'ndreds of millions, we o'"ht to
consider that nat're to be #owerf'l eno'"h to accom#lish the 'nion of all nations. 9f the h'man
mind were ca#able of com#rehendin" the ad%anta"es of this "reat 'nion, so o'"ht we to
%ent're to deem it ca#able of 'nderstandin" the still "reater beneGts which wo'ld res'lt from a
'nion of the whole h'man race. +any instances indicate this tendency in the s#irit of the
#resent times. -e need only hint at the #ro"ress made in sciences, arts, and disco%eries, in
ind'stry and social order. 9t may be already foreseen with certainty, that after a la#se of a few
decades the ci%ilised nations of the earth will, by the #erfection of the means of con%eyance, be
'nited as res#ects both material and mental interchan"e in as close a manner as (or e%en
closer than! that in which a cent'ry a"o the %ario's co'nties of ;n"land were connected.
$ontinental "o%ernments #ossess already at the #resent moment in the tele"ra#h the means of
comm'nicatin" with one another, almost as if they were at one and the same #lace. ,owerf'l
forces #re%io'sly 'nknown ha%e already raised ind'stry to a de"ree of #erfection hitherto ne%er
antici#ated, and others still more #owerf'l ha%e already anno'nced their a##earance. C't the
more that ind'stry ad%ances, and #ro#ortionately e0tends o%er the co'ntries of the earth, the
smaller will be the #ossibility of wars. *wo nations eI'ally well de%elo#ed in ind'stry co'ld
m't'ally inOict on one another more in/'ry in one week than they wo'ld be able to make "ood
in a whole "eneration. C't hence it follows that the same new forces which ha%e hitherto
ser%ed #artic'larly for #rod'ction will not withhold their ser%ices from destr'ction, and will
#rinci#ally fa%o'r the side of defence, and es#ecially the ;'ro#ean $ontinental nations, while
they threaten the ins'lar State with the loss of those ad%anta"es which ha%e been "ained by
her ins'lar #osition for her defence. 9n the con"resses of the "reat ;'ro#ean #owers ;'ro#e
#ossesses already the embryo of a f't're con"ress of nations. *he endea%o'rs to settle
diLerences by #rotocol are clearly already #re%ailin" o%er those which obtain /'stice by force of
arms. 4 clearer insi"ht into the nat're of wealth and ind'stry has led the wiser heads of all
ci%ilised nations to the con%iction that both the ci%ilisation of barbaro's and semi-barbaro's
nations, and of those whose c'lt're is retro"radin", as well as the formation of colonies, oLer to
ci%ilised nations a Geld for the de%elo#ment of their #rod'cti%e #owers which #romises them
m'ch richer and safer fr'its than m't'al hostilities by wars or restrictions on trade. *he farther
we ad%ance in this #erce#tion, and the more the 'nci%ilised co'ntries come into contact with
the ci%ilised ones by the #ro"ress made in the means of trans#ort, so m'ch more will the
ci%ilised co'ntries com#rehend that the ci%ilisation of barbaro's nations, of those distracted by
internal anarchy, or which are o##ressed by bad "o%ernment, is a task which oLers to all eI'al
ad%anta"es -- a d'ty inc'mbent on them all alike, b't one which can only be accom#lished by
'nity.
*hat the ci%ilisation of all nations, the c'lt're of the whole "lobe, forms a task im#osed on the
whole h'man race, is e%ident from those 'nalterable laws of nat're by which ci%ilised nations
are dri%en on with irresistible #ower to e0tend or transfer their #owers of #rod'ction to less
c'lti%ated co'ntries. -e see e%erywhere, 'nder the inO'ence of ci%ilisation, #o#'lation, #owers
of mind, material ca#ital attainin" to s'ch dimensions that they m'st necessarily Oow o%er into
other less ci%ilised co'ntries. 9f the c'lti%able area of the co'ntry no lon"er s'Fces to s'stain
the #o#'lation and to em#loy the a"ric'lt'ral #o#'lation, the red'ndant #ortion of the latter
seeks territories s'itable for c'lti%ation in distant landsH if the talents and technical abilities of a
nation ha%e become so n'mero's as to Gnd no lon"er s'Fcient rewards within it, they
emi"rate to #laces where they are more in demandH if in conseI'ence of the acc'm'lation of
material ca#ital, the rates of interest fall so considerably that the smaller ca#italist can no
lon"er li%e on them, he tries to in%est his money more satisfactorily in less wealthy co'ntries.
4 tr'e #rinci#le, therefore, 'nderlies the system of the #o#'lar school, b't a #rinci#le which
m'st be reco"nised and a##lied by science if its desi"n to enli"hten #ractice is to be f'lGlled,
an idea which #ractice cannot i"nore witho't "ettin" astrayH only the school has omitted to take
into consideration the nat're of nationalities and their s#ecial interests and conditions, and to
brin" these into accord with the idea of 'ni%ersal 'nion and an e%erlastin" #eace.
*he #o#'lar school has ass'med as bein" act'ally in e0istence a state of thin"s which has yet
to come into e0istence. 9t ass'mes the e0istence of a 'ni%ersal 'nion and a state of #er#et'al
6
#eace, and ded'ces therefrom the "reat beneGts of free trade. 9n this manner it confo'nds
eLects with ca'ses. 4mon" the #ro%inces and states which are already #olitically 'nited, there
e0ists a state of #er#et'al #eaceH from this #olitical 'nion ori"inates their commercial 'nion,
and it is in conseI'ence of the #er#et'al #eace th's maintained that the commercial 'nion has
become so beneGcial to them. 4ll e0am#les which history can show are those in which the
#olitical 'nion has led the way, and the commercial 'nion has followed.(7J! :ot a sin"le
instance can be add'ced in which the latter has taken the lead, and the former has "rown '#
from it. *hat, howe%er, 'nder the e0istin" conditions of the world, the res'lt of "eneral free
trade wo'ld not be a 'ni%ersal re#'blic, b't, on the contrary, a 'ni%ersal s'b/ection of the less
ad%anced nations to the s'#remacy of the #redominant man'fact'rin", commercial, and na%al
#ower, is a concl'sion for which the reasons are %ery stron" and, accordin" to o'r %iews,
irrefra"able. 4 'ni%ersal re#'blic (in the sense of Henry 9> and of the 4bbK St. ,ierre!, i.e. a
'nion of the nations of the earth whereby they reco"niAe the same conditions of ri"ht amon"
themsel%es and reno'nce self-redress, can only be realised if a lar"e n'mber of nationalities
attain to as nearly the same de"ree as #ossible of ind'stry and ci%ilisation, #olitical c'lti%ation,
and #ower. @nly with the "rad'al formation of this 'nion can free trade be de%elo#ed, only as a
res'lt of this 'nion can it confer on all nations the same "reat ad%anta"es which are now
e0#erienced by those #ro%inces and states which are #olitically 'nited. *he system of
#rotection, inasm'ch as it forms the only means of #lacin" those nations which are far behind
in ci%ilisation on eI'al terms with the one #redominatin" nation (which, howe%er, ne%er
recei%ed at the hands of :at're a #er#et'al ri"ht to a mono#oly of man'fact're, b't which
merely "ained an ad%ance o%er others in #oint of time!, the system of #rotection re"arded from
this #oint of %iew a##ears to be the most eFcient means of f'rtherin" the Gnal 'nion of
nations, and hence also of #romotin" tr'e freedom of trade. 4nd national economy a##ears
from this #oint of %iew to be that science which, correctly a##reciatin" the e0istin" interests
and the indi%id'al circ'mstances of nations, teaches how e%ery se#arate nation can be raised
to that sta"e of ind'strial de%elo#ment in which 'nion with other nations eI'ally well
de%elo#ed, and conseI'ently freedom of trade, can become #ossible and 'sef'l to it.
*he #o#'lar school, howe%er, has mi0ed '# both doctrines with one anotherH it has fallen into
the "ra%e error of /'d"in" of the conditions of nations accordin" to #'rely cosmo#olitical
#rinci#les, and of i"norin" from merely #olitical reasons the cosmo#olitical tendency of the
#rod'cti%e #owers.
@nly by i"norin" the cosmo#olitical tendency of the #rod'cti%e #owers co'ld +alth's be led
into the error of desirin" to restrict the increase of #o#'lation, or $halmers and *orrens
maintain more recently the stran"e idea that a'"mentation of ca#ital and 'nrestricted
#rod'ction are e%ils the restriction of which the welfare of the comm'nity im#erati%ely
demands, or Sismondi declare that man'fact'res are thin"s in/'rio's to the comm'nity. *heir
theory in this case resembles Sat'rn, who de%o'rs his own children -- the same theory which
allows that from the increase of #o#'lation, of ca#ital and machinery di%ision of labo'r takes
#lace, and e0#lains from this the welfare of society, Gnally considers these forces as monsters
which threaten the #ros#erity of nations, beca'se it merely re"ards the #resent conditions of
indi%id'al nations, and does not take into consideration the conditions of the whole "lobe and
the f't're #ro"ress of mankind.
9t is not tr'e that #o#'lation increases in a lar"er #ro#ortion than #rod'ction of the means of
s'bsistenceH it is at least foolish to ass'me s'ch dis#ro#ortion, or to attem#t to #ro%e it by
artiGcial calc'lations or so#histical ar"'ments, so lon" as on the "lobe a mass of nat'ral forces
still lies inert by means of which ten times or #erha#s a h'ndred times more #eo#le than are
now li%in" can be s'stained. 9t is mere narrow-mindedness to consider the #resent e0tent of the
#rod'cti%e forces as the test of how many #ersons co'ld be s'##orted on a "i%en area of land.
*he sa%a"e, the h'nter, and the Gsherman, accordin" to his own calc'lation, wo'ld not Gnd
room eno'"h for one million #ersons, the she#herd not for ten millions, the raw a"ric'lt'rist not
for one h'ndred millions on the whole "lobeH and yet two h'ndred millions are li%in" at #resent
in ;'ro#e alone. *he c'lt're of the #otato and of food-yieldin" #lants, and the more recent
im#ro%ements made in a"ric'lt're "enerally, ha%e increased tenfold the #rod'cti%e #owers of
the h'man race for the creation of the means of s'bsistence. 9n the +iddle 4"es the yield of
wheat of an acre of land in ;n"land was fo'rfold, to-day it is ten to twenty fold, and in addition
to that G%e times more land is c'lti%ated. 9n many ;'ro#ean co'ntries (the soil of which
#ossesses the same nat'ral fertility as that of ;n"land! the yield at #resent does not e0ceed
fo'rfold. -ho will %ent're to set f'rther limits to the disco%eries, in%entions, and im#ro%ements
7
of the h'man raceN 4"ric'lt'ral chemistry is still in its infancyH who can tell that to-morrow, by
means of a new in%ention or disco%ery, the #rod'ce of the soil may not be increased G%e or ten
foldN -e already #ossess, in the artesian well, the means of con%ertin" 'nfertile wastes into
rich corn GeldsH and what 'nknown forces may not yet be hidden in the interior of the earthN Let
's merely s'##ose that thro'"h a new disco%ery we were enabled to #rod'ce heat e%erywhere
%ery chea#ly and witho't the aid of the f'els at #resent known& what s#aces of land co'ld th's
be 'tilised for c'lti%ation, and in what an incalc'lable de"ree wo'ld the yield of a "i%en area of
land be increasedN 9f +alth's) doctrine a##ears to 's in its tendency narrow-minded, it is also in
the methods by which it co'ld act an 'nnat'ral one, which destroys morality and #ower, and is
sim#ly horrible. 9t seeks to destroy a desire which nat're 'ses as the most acti%e means for
incitin" men to e0ert body and mind, and to awaken and s'##ort their nobler feelin"s -- a desire
to which h'manity for the "reater #art owes its #ro"ress. 9t wo'ld ele%ate the most heartless
e"otism to the #osition of a lawH it reI'ires 's to close o'r hearts a"ainst the star%in" man,
beca'se if we hand him food and drink, another mi"ht star%e in his #lace in thirty years) time. 9t
s'bstit'tes cold calc'lation for sym#athy. *his doctrine tends to con%ert the hearts of men into
stones. C't what co'ld be Gnally e0#ected of a nation whose citiAens sho'ld carry stones
instead of hearts in their bosomsN -hat else than the total destr'ction of all morality, and with
it of all #rod'cti%e forces, and therefore of all the wealth, ci%ilisation, and #ower of the nationN
9f in a nation the #o#'lation increases more than the #rod'ction of the means of s'bsistence, if
ca#ital acc'm'lates at len"th to s'ch an e0tent as no lon"er to Gnd in%estment, if machinery
throws a n'mber of o#erati%es o't of work and man'fact'red "oods acc'm'late to a lar"e
e0cess, this merely #ro%es, that nat're will not allow ind'stry, ci%ilisation, wealth, and #ower to
fall e0cl'si%ely to the lot of a sin"le nation, or that a lar"e #ortion of the "lobe s'itable for
c'lti%ation sho'ld be merely inhabited by wild animals, and that the lar"est #ortion of the
h'man race sho'ld remain s'nk in sa%a"ery, i"norance, and #o%erty.
-e ha%e shown into what errors the school has fallen by /'d"in" the #rod'cti%e forces of the
h'man race from a #olitical #oint of %iewH we ha%e now also to #oint o't the mistakes which it
has committed by re"ardin" the se#arate interests of nations from a cosmo#olitical #oint of
%iew.
9f a confederation of all nations e0isted in reality, as is the case with the se#arate states
constit'tin" the 3nion of :orth 4merica, the e0cess of #o#'lation, talents, skilled abilities, and
material ca#ital wo'ld Oow o%er from ;n"land to the $ontinental states, in a similar manner to
that in which it tra%els from the eastern states of the 4merican 3nion to the western, #ro%ided
that in the $ontinental states the same sec'rity for #ersons and #ro#erty, the same constit'tion
and "eneral laws #re%ailed, and that the ;n"lish Go%ernment was made s'b/ect to the 'nited
will of the 'ni%ersal confederation. 3nder these s'##ositions there wo'ld be no better way of
raisin" all these co'ntries to the same sta"e of wealth and c'lti%ation as ;n"land than free
trade. *his is the ar"'ment of the school. C't how wo'ld it tally with the act'al o#eration of
free trade 'nder the e0istin" conditions of the worldN
*he Critons as an inde#endent and se#arate nation wo'ld henceforth take their national
interest as the sole "'ide of their #olicy. *he ;n"lishman, from #redilection for his lan"'a"e, for
his laws, re"'lations, and habits, wo'ld whene%er it was #ossible de%ote his #owers and his
ca#ital to de%elo# his own nati%e ind'stry, for which the system of free trade, by e0tendin" the
market for ;n"lish man'fact'res o%er all co'ntries, wo'ld oLer him s'Fcient o##ort'nityH he
wo'ld not readily take a fancy to establish man'fact'res in France or Germany. 4ll e0cess of
ca#ital in ;n"land wo'ld be at once de%oted to tradin" with forei"n #arts of the world. 9f the
;n"lishman took it into his head to emi"rate, or to in%est his ca#ital elsewhere than in ;n"land,
he wo'ld as he now does #refer those more distant co'ntries where he wo'ld Gnd already
e0istin" his lan"'a"e, his laws, and re"'lations, rather than the beni"hted co'ntries of the
$ontinent. 4ll ;n"land wo'ld th's be de%elo#ed into one immense man'fact'rin" city. 4sia,
4frica, and 4'stralia wo'ld be ci%ilised by ;n"land, and co%ered with new states modelled after
the ;n"lish fashion. 9n time a world of ;n"lish states wo'ld be formed, 'nder the #residency of
the mother state, in which the ;'ro#ean $ontinental nations wo'ld be lost as 'nim#ortant,
'n#rod'cti%e races. Cy this arran"ement it wo'ld fall to the lot of France, to"ether with S#ain
and ,ort'"al, to s'##ly this ;n"lish world with the choicest wines, and to drink the bad ones
herself& at most France mi"ht retain the man'fact're of a little millinery. Germany wo'ld
scarcely ha%e more to s'##ly this ;n"lish world with than children)s toys, wooden clocks, and
#hilolo"ical writin"s, and sometimes also an a'0iliary cor#s, who mi"ht sacriGce themsel%es to
#ine away in the deserts of 4sia or 4frica, for the sake of e0tendin" the man'fact'rin" and
8
commercial s'#remacy, the literat're and lan"'a"e of ;n"land. 9t wo'ld not reI'ire many
cent'ries before #eo#le in this ;n"lish world wo'ld think and s#eak of the Germans and French
in the same tone as we s#eak at #resent of the 4siatic nations.
*r'e #olitical science, howe%er, re"ards s'ch a res'lt of 'ni%ersal free trade as a %ery
'nnat'ral oneH it will ar"'e that had 'ni%ersal free trade been introd'ced at the time of the
Hanseatic Lea"'e, the German nationality instead of the ;n"lish wo'ld ha%e sec'red an
ad%ance in commerce and man'fact're o%er all other co'ntries.
9t wo'ld be most 'n/'st, e%en on cosmo#olitical "ro'nds, now to resi"n to the ;n"lish all the
wealth and #ower of the earth, merely beca'se by them the #olitical system of commerce was
Grst established and the cosmo#olitical #rinci#le for the most #art i"nored. 9n order to allow
freedom of trade to o#erate nat'rally, the less ad%anced nations m'st Grst be raised by
artiGcial meas'res to that sta"e of c'lti%ation to which the ;n"lish nation has been artiGcially
ele%ated. 9n order that, thro'"h that cosmo#olitical tendency of the #owers of #rod'ction to
which we ha%e all'ded, the more distant #arts of the world may not be beneGted and enriched
before the nei"hbo'rin" ;'ro#ean co'ntries, those nations which feel themsel%es to be
ca#able, owin" to their moral, intellect'al, social, and #olitical circ'mstances, of de%elo#in" a
man'fact'rin" #ower of their own m'st ado#t the system of #rotection as the most eLect'al
means for this #'r#ose. *he eLects of this system for the #'r#ose in %iew are of two kinds& in
the Grst #lace, by "rad'ally e0cl'din" forei"n man'fact'red articles from o'r markets, a s'r#l's
wo'ld be occasioned in forei"n nations, of workmen, talents, and ca#ital, which m'st seek
em#loyment abroadH and secondly by the #remi'm which o'r system of #rotection wo'ld oLer
to the immi"ration into o'r co'ntry of workmen, talents, and ca#ital, that e0cess of #rod'cti%e
#ower wo'ld be ind'ced to Gnd em#loyment with 's, instead of emi"ratin" to distant #arts of
the world and to colonies. ,olitical science refers to history, and inI'ires whether ;n"land has
not in former times drawn from Germany, 9taly, Holland, France, S#ain, and ,ort'"al by these
means a mass of #rod'cti%e #ower. She asks& -hy does the cosmo#olitical school, when it
#retends to wei"h in the balance the ad%anta"es and the disad%anta"es of the system of
#rotection, 'tterly i"nore this "reat and remarkable instance of the res'lts of that systemN
:@*;S&
1. 9t is alle"ed that 4dam Smith intended to ha%e dedicated his "reat work to E'esnay. -- *<.
(See Life of Smith, #'blished by *. and B. 4llman. 1812.!
1. *he $hristian reli"ion inc'lcates #er#et'al #eace. C't 'ntil the #romise, )*here shall be one
fold and one she#herd,) has been f'lGlled, the #rinci#le of the E'akers, howe%er tr'e it be in
itself, can scarcely be acted '#on. *here is no better #roof for the ?i%ine ori"in of the $hristian
reli"ion than that its doctrines and #romises are in #erfect a"reement with the demands of both
the material and s#irit'al well-bein" of the h'man race.
7. *his statement was #robably acc'rate '# to the #eriod when List wrote, b't a notable
e0ce#tion to it may now be add'ced. *he commercial 'nion of the %ario's German states 'nder
the Doll%erein #receded by many years their #olitical 'nion 'nder the ;m#ire, and #owerf'lly
#romoted it. -- *<.
,ha-ter 1.
The Theor! of the #owers of #rod+ction and the Theor! of /al+es
4dam Smith)s celebrated work is entitled, )*he :at're and $a'ses of the -ealth of :ations.)
*he fo'nder of the #re%ailin" economical school has therein indicated the do'ble #oint of %iew
from which the economy of nations, like that of #ri%ate se#arate indi%id'als, sho'ld be
re"arded.
*he ca'ses of wealth are somethin" totally diLerent from wealth itself. 4 #erson may #ossess
wealth, i.e. e0chan"eable %al'eH if, howe%er, he does not #ossess the #ower of #rod'cin"
ob/ects of more %al'e than he cons'mes, he will become #oorer. 4 #erson may be #oorH if he,
howe%er, #ossesses the #ower of #rod'cin" a lar"er amo'nt of %al'able articles than he
cons'mes, he becomes rich.
*he #ower of #rod'cin" wealth is therefore inGnitely more im#ortant than wealth itselfH it
ins'res not only the #ossession and the increase of what has been "ained, b't also the
re#lacement of what has been lost. *his is still more the case with entire nations (who cannot
li%e o't of mere rentals! than with #ri%ate indi%id'als. Germany has been de%astated in e%ery
cent'ry by #estilence, by famine, or by ci%il or forei"n warsH she has, ne%ertheless, always
9
retained a "reat #ortion of her #owers of #rod'ction, and has th's I'ickly re-attained some
de"ree of #ros#erityH while rich and mi"hty b't des#ot- and #riest-ridden S#ain,
notwithstandin" her com#arati%e en/oyment of internal #eace,(1J! has s'nk dee#er into
#o%erty and misery. *he same s'n still shines on the S#aniards, they still #ossess the same
area of territory, their mines are still as rich, they are still the same #eo#le as before the
disco%ery of 4merica, and before the introd'ction of the 9nI'isitionH b't that nation has
"rad'ally lost her #owers of #rod'ction, and has therefore become #oor and miserable. *he -ar
of 9nde#endence of the 3nited States of 4merica cost that nation h'ndreds of millions, b't her
#owers of #rod'ction were immeas'rably stren"thened by "ainin" inde#endence, and it was for
this reason that in the co'rse of a few years after the #eace she obtained immeas'rably
"reater riches than she.had e%er #ossessed before. 9f we com#are the state of France in the
year 18=6 with that of the year 1876, what a diLerence in fa%o'r of the latterP :e%ertheless,
France has in the interim lost her so%erei"nty o%er a lar"e #ortion of the ;'ro#ean continentH
she has s'Lered two de%astatin" in%asions, and had to #ay milliards of money in war
contrib'tions and indemnities.
9t was im#ossible that so clear an intellect as 4dam Smith #ossessed co'ld alto"ether i"nore
the diLerence between wealth and its ca'ses and the o%erwhelmin" inO'ence of these ca'ses
on the condition of nations. 9n the introd'ction to his work, he says in clear words in eLect&
)Labo'r forms the f'nd from which e%ery nation deri%es its wealth, and the increase of wealth
de#ends Grst on the #rod'cti%e #ower of labo'r, namely, on the de"ree of skill, de0terity, and
/'d"ment with which the labo'r of the nation is "enerally a##lied, and secondly, on the
#ro#ortion between the n'mber of those em#loyed #rod'cti%ely and the n'mber of those who
are not so em#loyed.) From this we see how clearly Smith in "eneral #ercei%ed that the
condition of nations is #rinci#ally de#endent on the s'm of their #rod'cti%e #owers.
9t does not, howe%er, a##ear to be the #lan of nat're that com#lete sciences sho'ld s#rin"
already #erfected from the brain of indi%id'al thinkers. 9t is e%ident that Smith was too
e0cl'si%ely #ossessed by the cosmo#olitical idea of the #hysiocrats, )'ni%ersal freedom of
trade,) and by his own "reat disco%ery, )the di%ision of labo'r,) to follow '# the idea of the
im#ortance to a nation of its #owers of #rod'ction. Howe%er m'ch science may be indebted to
him in res#ect of the remainin" #arts of his work, the idea )di%ision of labo'r) seemed to him his
most brilliant tho'"ht. 9t was calc'lated to sec're for his book a name, and for himself
#osth'mo's fame.
He had too m'ch worldly wisdom not to #ercei%e that whoe%er wishes to sell a #recio's /ewel
does not brin" the treas're to market most #roGtably by b'ryin" it in a sack of wheat, howe%er
'sef'l the "rains of wheat may be, b't better by e0#osin" it at the forefront. He had too m'ch
e0#erience not to know that a deb'tant (and he was this as re"ards #olitical economy at the
time of the #'blication of his work! who in the Grst act creates a f'rore is easily e0c'sed if in
the followin" ones he only occasionally raises himself abo%e mediocrityH he had e%ery moti%e
for makin" the introd'ction to his book, the doctrine of di%ision of labo'r. Smith has not been
mistaken in his calc'lationsH his Grst cha#ter has made the fort'ne of his book, and fo'nded his
a'thority as an economist.
Howe%er, we on o'r #art belie%e o'rsel%es able to #ro%e that /'st this Aeal to #'t the im#ortant
disco%ery )di%ision of labo'r) in an ad%anta"eo's li"ht, has hindered 4dam Smith from followin"
'# the idea )#rod'cti%e #ower) (which has been e0#ressed by him in the introd'ction, and al so
freI'ently afterwards, altho'"h merely incidentally! and from e0hibitin" his doctrines in a m'ch
more #erfect form. Cy the "reat %al'e which he attached to his idea )di%ision of labo'r) he has
e%idently been misled into re#resentin" labo'r itself as the )f'nd) of all the wealth of nations,
altho'"h he himself clearly #ercei%es and also states that the #rod'cti%eness of labo'r
#rinci#ally de#ends on the de"ree of skill and /'d"ment with which the labo'r is #erformed. -e
ask, can it be deemed scientiGc reasonin" if we assi"n as the ca'se of a #henomenon that
which in itself is the res'lt of a n'mber of dee#er lyin" ca'sesN 9t cannot be do'bted that all
wealth is obtained by means of mental and bodily e0ertions (labo'r!, b't yet from that
circ'mstance no reason is indicated from which 'sef'l concl'sions may be drawnH for history
teaches that whole nations ha%e, in s#ite of the e0ertions and of the thrift of their citiAens,
fallen into #o%erty and misery. -hoe%er desires to know and in%esti"ate how one nation from a
state of #o%erty and barbarism has attained to one of wealth and #ros#erity, and how another
has fallen from a condition of wealth and well-bein" into one of #o%erty and misery, has always,
after recei%in" the information that labo'r is the ca'se of wealth and idleness the ca'se of
10
#o%erty (a remark which Qin" Solomon made lon" before 4dam Smith!, to #'t the f'rther
I'estion, what are the ca'ses of labo'r, and what the ca'ses of idlenessN
9t wo'ld be more correct to describe the limbs of men (the head, hands, and feet! as the
ca'ses of wealth (we sho'ld th's at least a##roach far nearer to the tr'th!, and the I'estion
then #resents itself, what is it that ind'ces these heads, arms, and hands to #rod'ce, and calls
into acti%ity these e0ertionsN -hat else can it be than the s#irit which animates the indi%id'als,
the social order which renders their ener"y fr'itf'l, and the #owers of nat're which they are in
a #osition to make 'se ofN *he more a man #ercei%es that he m'st #ro%ide for the f't're, the
more his intelli"ence and feelin"s incite him to sec're the f't're of his nearest connections,
and to #romote their well-bein"H the more he has been from his yo'th acc'stomed to
foretho'"ht and acti%ity, the more his nobler feelin"s ha%e been de%elo#ed, and body and mind
c'lti%ated, the Gner e0am#les that he has witnessed from his yo'th, the more o##ort'nities he
has had for 'tilisin" his mental and bodily #owers for the im#ro%ement of his condition, also the
less he has been restrained in his le"itimate acti%ity, the more s'ccessf'l his #ast endea%o'rs
ha%e been, and the more their fr'its ha%e been sec'red to him, the more he has been able to
obtain #'blic reco"nition and esteem by orderly cond'ct and acti%ity, and the less his mind
s'Lers from #re/'dices, s'#erstition, false notions, and i"norance, so m'ch the more will he
e0ert his mind and limbs for the ob/ect of #rod'ction, so m'ch the more will he be able to
accom#lish, and so m'ch the better will he make 'se of the fr'its of his labo'r. Howe%er, most
de#ends in all these res#ects on the conditions of the society in which the indi%id'al has been
bro'"ht '#, and t'rns '#on this, whether science and arts Oo'rish, and #'blic instit'tions and
laws tend to #romote reli"io's character, morality and intelli"ence, sec'rity for #erson and for
#ro#erty, freedom and /'sticeH whether in the nation all the factors of material #ros#erity,
a"ric'lt're, man'fact'res, and trade, ha%e been eI'ally and harmonio'sly c'lti%atedH whether
the #ower of the nation is stron" eno'"h to sec're to its indi%id'al citiAens #ro"ress in wealth
and ed'cation from "eneration to "eneration, and to enable them not merely to 'tilise the
nat'ral #owers of their own co'ntry to their f'llest e0tent, b't also, by forei"n trade and the
#ossession of colonies, to render the nat'ral #owers of forei"n co'ntries ser%iceable to their
own.
4dam Smith has on the whole reco"nised the nat're of these #owers so little, that he does not
e%en assi"n a #rod'cti%e character to the mental labo'rs of those who maintain laws and order,
and c'lti%ate and #romote instr'ction, reli"ion, science, and art. His in%esti"ations are limited
to that h'man acti%ity which creates material %al'es. -ith re"ard to this, he certainly
reco"nises that its #rod'cti%eness de#ends on the )skill and /'d"ment) with which it is
e0ercisedH b't in his in%esti"ations as to the ca'ses of this skill and /'d"ment, he does not "o
farther than the di%ision of labo'r, and that he ill'strates solely by e0chan"e, a'"mentation of
material ca#ital, and e0tension of markets. His doctrine at once sinks dee#er and dee#er into
materialism, #artic'larism, and indi%id'alism. 9f he had followed '# the idea )#rod'cti%e #ower)
witho't allowin" his mind to be dominated by the idea of )%al'e,) )e0chan"eable %al'e,) he
wo'ld ha%e been led to #ercei%e that an inde#endent theory of the )#rod'cti%e #ower,) m'st be
considered by the side of a )theory of %al'es) in order to e0#lain the economical #henomena.
C't he th's fell into the mistake of e0#lainin" mental forces from material circ'mstances and
conditions, and thereby laid the fo'ndation for all the abs'rdities and contradictions from which
his school (as we #ro#ose to #ro%e! s'Lers '# to the #resent day, and to which alone it m'st be
attrib'ted that the doctrines of #olitical economy are those which are the least accessible to
the most intelli"ent minds. *hat Smith)s school teaches nothin" else than the theory of %al'es,
is not only seen from the fact that it bases its doctrine e%erywhere on the conce#tion of )%al'e
of e0chan"e,) b't also from the deGnition which it "i%es of its doctrine. 9t is (says B. C. Say! that
science which teaches how riches, or e0chan"eable %al'es, are #rod'ced, distrib'ted, and
cons'med. *his is 'ndo'btedly not the science which teaches how the #rod'cti%e #owers are
awakened and de%elo#ed, and how they become de#ressed and destroyed. +)$'lloch calls it
e0#licitly )the science of %al'es,) and recent ;n"lish writers ) the science of e0chan"e.)
;0am#les from #ri%ate economy will best ill'strate the diLerence between the theory of
#rod'cti%e #owers and the theory of %al'es.
Let 's s'##ose the case of two fathers of families, both bein" landed #ro#rietors, each of
whom sa%es yearly 1,=== thalers and has G%e sons. *he one #'ts o't his sa%in"s at interest,
and kee#s his sons at common hard work, while the other em#loys his sa%in"s in ed'catin" two
of his sons as skilf'l and intelli"ent landowners, and in enablin" the other three to learn a trade
after their res#ecti%e tastesH the former acts accordin" to the theory of %al'es, the latter
11
accordin" to the theory of #rod'cti%e #owers. *he Grst at his death may #ro%e m'ch richer than
the second in mere e0chan"eable %al'e, b't it is I'ite otherwise as res#ects #rod'cti%e
#owers. *he estate of the latter is di%ided into two #arts, and e%ery #art will by the aid of
im#ro%ed mana"ement yield as m'ch total #rod'ce as the whole did beforeH while the
remainin" three sons ha%e by their talents obtained ab'ndant means of maintenance. *he
landed #ro#erty of the former will be di%ided into G%e #arts, and e%ery #art will be worked in as
bad a manner as the whole was heretofore. 9n the latter family a mass of diLerent mental
forces and talents is awakened and c'lti%ated, which will increase from "eneration to
"eneration, e%ery s'cceedin" "eneration #ossessin" more #ower of obtainin" material wealth
than the #recedin" one, while in the former family st'#idity and #o%erty m'st increase with the
dimin'tion of the shares in the landed #ro#erty. So the sla%eholder increases by sla%e-breedin"
the s'm of his %al'es of e0chan"e, b't he r'ins the #rod'cti%e forces of f't're "enerations. 4ll
e0#endit're in the instr'ction of yo'th, the #romotion of /'stice, defence of nations, Rc. is a
cons'm#tion of #resent %al'es for the behoof of the #rod'cti%e #owers. *he "reatest #ortion of
the cons'm#tion of a nation is 'sed for the ed'cation of the f't're "eneration, for #romotion
and no'rishment of the f't're national #rod'cti%e #owers.
*he $hristian reli"ion, mono"amy, abolition of sla%ery and of %assala"e, hereditability of the
throne, in%ention of #rintin", of the #ress, of the #ostal system, of money wei"hts and
meas'res, of the calendar, of watches, of #olice, )the introd'ction of the #rinci#le of freehold
#ro#erty, of means of trans#ort, are rich so'rces of #rod'cti%e #ower. *o be con%inced of this,
we need only com#are the condition of the ;'ro#ean states with that of the 4siatic ones. 9n
order d'ly to estimate the inO'ence which liberty of tho'"ht and conscience has on the
#rod'cti%e forces of nations, we need only read the history of ;n"land and then that of S#ain.
*he #'blicity of the administration of /'stice, trial by /'ry, #arliamentary le"islation, #'blic
control of State administration, self-administration of the commonalties and m'nici#alities,
liberty of the #ress, liberty of association for 'sef'l #'r#oses, im#art to the citiAens of
constit'tional states, as also to their #'blic f'nctionaries, a de"ree of ener"y and #ower which
can hardly be #rod'ced by other means. -e can scarcely concei%e of any law or any #'blic
le"al decision which wo'ld not e0ercise a "reater or smaller inO'ence on the increase or
decrease of the #rod'cti%e #ower of the nation.(1J! 9f we consider merely bodily labo'r as the
ca'se of wealth, how can we then e0#lain why modern nations are incom#arably richer, more
#o#'lo's, more #owerf'l, and #ros#ero's than the nations of ancient timesN *he ancient
nations em#loyed (in #ro#ortion to the whole #o#'lation! inGnitely more hands, the work was
m'ch harder, each indi%id'al #ossessed m'ch more land, and yet the masses were m'ch worse
fed and clothed than is the case in modern nations. 9n order to e0#lain these #henomena, we
m'st refer to the #ro"ress which has been made in the co'rse of the last tho'sand years in
sciences and arts, domestic and #'blic re"'lations, c'lti%ation of the mind and ca#abilities of
#rod'ction. *he #resent state of the nations is the res'lt of the acc'm'lation of all disco%eries,
in%entions, im#ro%ements, #erfections, and e0ertions of all "enerations which ha%e li%ed before
'sH they form the mental ca#ital of the #resent h'man race, and e%ery se#arate nation is
#rod'cti%e only in the #ro#ortion in which it has known how to a##ro#riate these attainments of
former "enerations and to increase them by its own acI'irements, in which the nat'ral
ca#abilities of its territory, its e0tent and "eo"ra#hical #osition, its #o#'lation and #olitical
#ower, ha%e been able to de%elo# as com#letely and symmetrically as #ossible all so'rces of
wealth within its bo'ndaries, and to e0tend its moral, intellect'al, commercial, and #olitical
inO'ence o%er less ad%anced nations and es#ecially o%er the aLairs of the world.
*he #o#'lar school of economists wo'ld ha%e 's belie%e that #olitics and #olitical #ower
cannot be taken into consideration in #olitical economy. So far as it makes only %al'es and
e0chan"e the s'b/ects of its in%esti"ations, this may be correctH we can deGne the ideas of
%al'e and ca#ital, #roGt, wa"es, and rentH we can resol%e them into their elements, and
s#ec'late on what may inO'ence their risin" or fallin", Rc. witho't thereby takin" into acco'nt
the #olitical circ'mstances of the nation. $learly, howe%er, these matters a##ertain as m'ch to
#ri%ate economy as to the economy of whole nations. -e ha%e merely to consider the history of
>enice, of the Hanseatic Lea"'e, of ,ort'"al, Holland, and ;n"land, in order to #ercei%e what
reci#rocal inO'ence material wealth and #olitical #ower e0ercise on each other.
*he school also always falls into the stran"est inconsistencies whene%er this reci#rocal
inO'ence forces itself on their consideration. Let 's here only call to mind the remarkable
dict'm of 4dam Smith on the ;n"lish :a%i"ation Laws.(7J!
12
*he #o#'lar school, inasm'ch as it does not d'ly consider the nat're of the #owers of
#rod'ction, and does not take into acco'nt the conditions of nations in their a""re"ate,
disre"ards es#ecially the im#ortance of de%elo#in" in an eI'al ratio a"ric'lt're, man'fact'res
and commerce, #olitical #ower and internal wealth, and disre"ards es#ecially the %al'e of a
man'fact'rin" #ower belon"in" s#ecially to the nation and f'lly de%elo#ed in all its branches. 9t
commits the error of #lacin" man'fact'rin" #ower in the same cate"ory with a"ric'lt'ral
#ower, and of s#eakin" of labo'r, nat'ral #ower, ca#ital, Rc. in "eneral terms witho't
considerin" the diLerences which e0ist between them. 9t does not #ercei%e that between a
State de%oted merely to a"ric'lt're and a State #ossessin" both a"ric'lt're and man'fact'res,
a m'ch "reater diLerence e0ists than between a #astoral State and an a"ric'lt'ral one. 9n a
condition of merely a"ric'lt'ral ind'stry, ca#rice and sla%ery, s'#erstition and i"norance, want
of means of c'lt're, of trade, and of trans#ort, #o%erty and #olitical weakness e0ist. 9n the
merely a"ric'lt'ral State only the least #ortion of the mental and bodily #owers e0istin" in the
nation is awakened and de%elo#ed, and only the least #art of the #owers and reso'rces #laced
by nat're at its dis#osal can be made 'se of, while little or no ca#ital can be acc'm'lated.
Let 's com#are ,oland with ;n"land& both nations at one time were in the same sta"e of
c'lt'reH and now what a diLerence. +an'factories and man'fact'res are the mothers and
children of m'nici#al liberty, of intelli"ence, of the arts and sciences, of internal and e0ternal
commerce, of na%i"ation and im#ro%ements in trans#ort, of ci%ilisation and #olitical #ower.
*hey are the chief means of liberatin" a"ric'lt're from its chains, and of ele%atin" it to a
commercial character and to a de"ree of art and science, by which the rents, farmin" #roGts,
and wa"es are increased, and "reater %al'e is "i%en to landed #ro#erty. *he #o#'lar school has
attrib'ted this ci%ilisin" #ower to forei"n trade, b't in that it has confo'nded the mere
e0chan"er with the ori"inator. Forei"n man'fact'res f'rnish the "oods for the forei"n trade,
which the latter con%eys to 's, and which occasion cons'm#tion of #rod'cts and raw materials
which we "i%e in e0chan"e for the "oods in lie' of money #ayments.
9f, howe%er, trade in the man'fact'res of far distant lands e0ercises admittedly so beneGcial an
inO'ence on o'r a"ric'lt'ral ind'stry, how m'ch more beneGcial m'st the inO'ence be of those
man'fact'res which are bo'nd '# with 's locally, commercially, and #olitically, which not only
take from 's a small #ortion, b't the lar"est #ortion of their reI'irements of food and of raw
materials, which are not made dearer to 's by "reat costs of trans#ort, o'r trade in which
cannot be interr'#ted by the chance of forei"n man'fact'rin" nations learnin" to s'##ly their
own wants themsel%es, or by wars and #rohibitory im#ort d'tiesN
-e now see into what e0traordinary mistakes and contradictions the #o#'lar school has fallen
in makin" material wealth or %al'e of e0chan"e the sole ob/ect of its in%esti"ations, and by
re"ardin" mere bodily labo'r as the sole #rod'cti%e #ower.
*he man who breeds #i"s is, accordin" to this school, a #rod'cti%e member of the comm'nity,
b't he who ed'cates men is a mere non-#rod'cti%e. *he maker of ba"#i#es or /ews-har#s for
sale is a #rod'cti%e, while the "reat com#osers and %irt'osos are non-#rod'cti%e sim#ly
beca'se that which they #lay cannot be bro'"ht into the market. *he #hysician who sa%es the
li%es of his #atients does not belon" to the #rod'cti%e class, b't on the contrary the chemist)s
boy does so, altho'"h the %al'es of e0chan"e (%iA. the #ills! which he #rod'ces may e0ist only
for a few min'tes before they #ass into a %al'eless condition. 4 :ewton, a -att, or a Qe#ler is
not so #rod'cti%e as a donkey, a horse, or a dra'"ht-o0 (a class of labo'rers who ha%e been
recently introd'ced by +)$'lloch into the series of the #rod'cti%e members of h'man society!.
-e m'st not belie%e that B. C. Say has remedied this defect in the doctrine of 4dam Smith by
his Gction of )immaterial "oods) or #rod'ctsH he has th's merely somewhat %arnished o%er the
folly of its res'lts, b't not raised it o't of its intrinsic abs'rdity. *he mental (immaterial!
#rod'cers are merely #rod'cti%e, accordin" to his %iews, beca'se they are rem'nerated with
%al'es of e0chan"e, and beca'se their attainments ha%e been obtained by sacriGcin" %al'es of
e0chan"e, and not beca'se they #rod'ce #rod'cti%e #owers.(J! *hey merely seem to him an
acc'm'lated ca#ital. +)$'lloch "oes still f'rtherH he says that man is as m'ch a #rod'ct of
labo'r as the machine which he #rod'ces, and it a##ears to him that in all economical
in%esti"ations he m'st be re"arded from this #oint of %iew. He thinks that Smith com#rehended
the correctness of this #rinci#le, only he did not ded'ce the correct concl'sion from it. 4mon"
other thin"s he draws the concl'sion that eatin" and drinkin" are #rod'cti%e occ'#ations.
*homas $oo#er %al'es a cle%er 4merican lawyer at 7,=== dollars, which is abo't three times as
m'ch as the %al'e of a stron" sla%e.
13
*he errors and contradictions of the #re%ailin" school to which we ha%e drawn attention, can
be easily corrected from the stand#oint of the theory of the #rod'cti%e #owers. $ertainly those
who fatten #i"s or #re#are #ills are #rod'cti%e, b't the instr'ctors of yo'ths and of ad'lts,
%irt'osos, m'sicians, #hysicians, /'d"es, and administrators, are #rod'cti%e in a m'ch hi"her
de"ree. *he former #rod'ce %al'es of e0chan"e, and the latter #rod'cti%e #owers, some by
enablin" the f't're "eneration to become #rod'cers, others by f'rtherin" the morality and
reli"io's character of the #resent "eneration, a third by ennoblin" and raisin" the #owers of the
h'man wind, a fo'rth by #reser%in" the #rod'cti%e #owers of his #atients, a Gfth by renderin"
h'man ri"hts and /'stice sec're, a si0th by constit'tin" and #rotectin" #'blic sec'rity, a
se%enth by his art and by the en/oyment which it occasions Gttin" men the better to #rod'ce
%al'es of e0chan"e. 9n the doctrine of mere %al'es, these #rod'cers of the #rod'cti%e #owers
can of co'rse only be taken into consideration so far as their ser%ices are rewarded by %al'es of
e0chan"eH and this manner of re"ardin" their ser%ices may in some instances ha%e its #ractical
'se, as e.". in the doctrine of #'blic ta0es, inasm'ch as these ha%e to be satisGed by %al'es of
e0chan"e. C't whene%er o'r consideration is "i%en to the nation (as a whole and in its
international relations! it is 'tterly ins'Fcient, and leads to a series of narrow-minded and false
%iews.
*he #ros#erity of a nation is not, as Say belie%es, "reater in the #ro#ortion in which it has
amassed more wealth (i.e. %al'es of e0chan"e!, b't in the #ro#ortion in which it has more
de%elo#ed its #owers of #rod'ction. 4ltho'"h laws and #'blic instit'tions do not #rod'ce
immediate %al'es, they ne%ertheless #rod'ce #rod'cti%e #owers, and Say is mistaken if he
maintains that nations ha%e been enabled to become wealthy 'nder all forms of "o%ernment,
and that by weans of laws no wealth can be created. *he forei"n trade of a nation m'st not be
estimated in the way in which indi%id'al merchants /'d"e it, solely and only accordin" to the
theory of %al'es (i.e. by re"ardin" merely the "ain at any #artic'lar moment of some material
ad%anta"e!H the nation is bo'nd to kee# steadily in %iew all these conditions on which its
#resent and f't're e0istence, #ros#erity, and #ower de#end.
*he nation m'st sacriGce and "i%e '# a meas're of material #ro#erty in order to "ain c'lt're,
skill, and #owers of 'nited #rod'ctionH it m'st sacriGce some #resent ad%anta"es in order to
ins're to itself f't're ones. 9f, therefore, a man'fact'rin" #ower de%elo#ed in all its branches
forms a f'ndamental condition of all hi"her ad%ances in ci%ilisation, material #ros#erity, and
#olitical #ower in e%ery nation (a fact which, we think, we ha%e #ro%ed from history!H if it be
tr'e (as we belie%e we can #ro%e! that in the #resent conditions of the world a new 'n#rotected
man'fact'rin" #ower cannot #ossibly be raised '# 'nder free com#etition with a #ower which
has lon" since "rown in stren"th and is #rotected on its own territoryH how can anyone #ossibly
'ndertake to #ro%e by ar"'ments only based on the mere theory of %al'es, that a nation o'"ht
to b'y its "oods like indi%id'al merchants, at #laces where they are to be had the chea#est --
that we act foolishly if we man'fact're anythin" at all which can be "ot chea#er from abroad --
that we o'"ht to #lace the ind'stry of the nation at the mercy of the self-interest of indi%id'als
-- that #rotecti%e d'ties constit'te mono#olies, which are "ranted to the indi%id'al home
man'fact'rers at the e0#ense of the nationN 9t is tr'e that #rotecti%e d'ties at Grst increase the
#rice of man'fact'red "oodsH b't it is /'st as tr'e, and moreo%er acknowled"ed by the
#re%ailin" economical school, that in the co'rse of time, by the nation bein" enabled to b'ild '#
a com#letely de%elo#ed man'fact'rin" #ower of its own, those "oods are #rod'ced more
chea#ly at home than the #rice at which they can be im#orted from forei"n #arts. 9f, therefore,
a sacriGce of %al'e is ca'sed by #rotecti%e d'ties, it is made "ood by the "ain of a #ower of
#rod'ction, which not only sec'res to the nation an inGnitely "reater amo'nt of material "oods,
b't also ind'strial inde#endence in case of war. *hro'"h ind'strial inde#endence and the
internal #ros#erity deri%ed from it the nation obtains the means for s'ccessf'lly carryin" on
forei"n trade and for e0tendin" its mercantile marineH it increases its ci%ilisation, #erfects its
instit'tions internally, and stren"thens its e0ternal #ower. 4 nation ca#able of de%elo#in" a
man'fact'rin" #ower, if it makes 'se of the system of #rotection, th's acts I'ite in the same
s#irit as that landed #ro#rietor did who by the sacriGce of some material wealth allowed some
of his children to learn a #rod'cti%e trade.
9nto what mistakes the #re%ailin" economical school has fallen by /'d"in" conditions accordin"
to the mere theory of %al'es which o'"ht #ro#erly to be /'d"ed accordin" to the theory of
#owers of #rod'ction, may be seen %ery clearly by the /'d"ment which B. C. Say #asses '#on
the bo'nties which forei"n co'ntries sometimes oLer in order to facilitate e0#ortationH he
maintains that )these are #resents made to o'r nation.) :ow if we s'##ose that France
14
considers a #rotecti%e d'ty of twenty-G%e #er cent s'Fcient for her not %et #erfectly de%elo#ed
man'fact'res, while ;n"land were to "rant a bo'nty on e0#ortation of thirty #er cent, what
wo'ld be the conseI'ence of the )#resent) which in this manner the ;n"lish wo'ld make to the
FrenchN *he French cons'mers wo'ld obtain for a few years the man'fact'red articles which
they needed m'ch chea#er than hitherto, b't the French man'factories wo'ld be r'ined, and
millions of men be red'ced to be""ary or obli"ed to emi"rate, or to de%ote themsel%es to
a"ric'lt're for em#loyment. 3nder the most fa%o'rable circ'mstances, the #resent cons'mers
and c'stomers of the French a"ric'lt'rists wo'ld be con%erted into com#etitors with the latter,
a"ric'lt'ral #rod'ction wo'ld be increased, and the cons'm#tion lowered. *he necessary
conseI'ence wo'ld be dimin'tion in %al'e of the #rod'cts, decline in the %al'e of #ro#erty,
national #o%erty and national weakness in France. *he ;n"lish )#resent) in mere %al'e wo'ld be
dearly #aid for in loss of #owerH it wo'ld seem like the #resent which the S'ltan is wont to make
to his #ashas by sendin" them %al'able silken cords.
Since the time when the *ro/ans were )#resented) by the Greeks with a wooden horse, the
acce#tance of )#resents) from other nations has become for the nation which recei%es them a
%ery I'estionable transaction. *he ;n"lish ha%e "i%en the $ontinent #resents of immense %al'e
in the form of s'bsidies, b't the $ontinental nations ha%e #aid for them dearly by the loss of
#ower. *hese s'bsidies acted like a bo'nty on e0#ortation in fa%o'r of the ;n"lish, and were
detrimental to the German man'factories. 9f ;n"land bo'nd herself to-day to s'##ly the
Germans "rat'ito'sly for years with all they reI'ired in man'fact'red articles, we co'ld not
recommend them to acce#t s'ch an oLer. 9f the ;n"lish are enabled thro'"h new in%entions to
#rod'ce linen forty #er cent. chea#er than the Germans can by 'sin" the old #rocess, and if in
the 'se of their new #rocess they merely obtain a start of a few years o%er the Germans, in
s'ch a case, were it not for #rotecti%e d'ties, one of the most im#ortant and oldest branches of
Germany)s ind'stry will be r'ined. 9t will be as if a limb of the body of the German nation had
been lost. 4nd who wo'ld be consoled for the loss of an arm by knowin" that he had
ne%ertheless bo'"ht his shirts forty #er cent chea#erN
9f the ;n"lish %ery often Gnd occasion to oLer #resents to forei"n nations, %ery diLerent are the
forms in which this is doneH it is not infreI'ently done a"ainst their willH always does it beho%e
forei"n nations well to consider whether or not the #resent sho'ld be acce#ted. *hro'"h their
#osition as the man'fact'rin" and commercial mono#olists of the world, their man'factories
from time to time fall into the state which they call )"l't,) and which arises from what they call
)o%ertradin".) 4t s'ch #eriods e%erybody throws his stock of "oods into the steamers. 4fter the
ela#se of ei"ht days the "oods are oLered for sale in Hamb'r", Cerlin, or Frankfort, and after
three weeks in :ew Sork, at Gfty #er cent 'nder their real %al'e. *he ;n"lish man'fact'rers
s'Ler for the moment, b't they are sa%ed, and they com#ensate themsel%es later on by better
#rices. *he German and 4merican man'fact'rers recei%e the blows which were deser%ed by the
;n"lish -- they are r'ined. *he ;n"lish nation merely sees the Gre and hears the re#ort of the
e0#losionH the fra"ments fall down in other co'ntries, and if their inhabitants com#lain of
bloody heads, the intermediate merchants and dealers say, )*he crisis has done it allP) 9f we
consider how often by s'ch crises the whole man'fact'rin" #ower, the system of credit, nay
the a"ric'lt're, and "enerally the whole economical system of the nations who are #laced in
free com#etition with ;n"land, are shaken to their fo'ndations, and that these nations ha%e
afterwards notwithstandin" richly to recom#ense the ;n"lish man'fact'rers by hi"her #rices,
o'"ht we not then to become %ery sce#tical as to the #ro#riety, of the commercial conditions of
nations bein" re"'lated accordin" to the mere theory of %al'es and accordin" to cosmo#olitical
#rinci#lesN *he #re%ailin" economical school has ne%er deemed it e0#edient to el'cidate the
ca'ses and eLects of s'ch commercial crises.
*he "reat statesmen of all modern nations, almost witho't e0ce#tion, ha%e com#rehended the
"reat inO'ence of man'fact'res and man'factories on the wealth, ci%ilisation, and #ower of
nations, and the necessity of #rotectin" them. ;dward 999 com#rehended this like ;liAabethH
Frederick the Great like Bose#h 99H -ashin"ton like :a#oleon. -itho't enterin" into the de#ths of
the ind'stry theory, their foreseein" minds com#rehended the nat're of in its entirety, and
a##reciated it correctly. 9t was reser%ed for the school of ,hysiocrats to re"ard this nat're from
another #oint of %iew in conseI'ence of a so#histical line of reasonin". *heir castle in the air
has disa##earedH the more modern economical school itself has destroyed itH b't e%en the
latter has also not disentan"led itself from the ori"inal errors, b't has merely ad%anced
somewhat farther from them. Since it did not reco"nise the diLerence between #rod'cti%e
#ower and mere %al'es of e0chan"e, and did not in%esti"ate the former inde#endently of the
15
latter, b't s'bordinated it to the theory of %al'es of e0chan"e, it was im#ossible for that school
to arri%e at the #erce#tion how "reatly the nat're of the a"ric'lt'ral #rod'cti%e #ower diLers
from the nat're of the man'fact'rin" #rod'cti%e #ower. 9t does not discern that thro'"h the
de%elo#ment of a man'fact'rin" ind'stry in an a"ric'lt'ral nation a mass of mental and bodily
#owers, of nat'ral #owers and nat'ral reso'rces, and of instr'mental #owers too (which latter
the #re%ailin" school terms )ca#ital)!, is bro'"ht to bear, and bro'"ht into 'se, which had not
#re%io'sly been acti%e, and wo'ld ne%er ha%e come into acti%ity b't for the formation and
de%elo#ment of an internal man'fact'rin" #owerH it ima"ines that by the establishment of
man'fact'rin" ind'stry these forces m'st be taken away from a"ric'lt're, and transferred to
man'fact're, whereas the latter to a "reat e0tent is a #erfectly new and additional #ower,
which, %ery far indeed from increasin" at the e0#ense of the a"ric'lt'ral interest, is often the
means of hel#in" that interest to attain a hi"her de"ree of #ros#erity and de%elo#ment.
:@*;S&
1. *his is tr'e res#ectin" S#ain '# to the #eriod of her in%asion by :a#oleon, b't not
s'bseI'ently. @'r a'thor)s concl'sions are, howe%er, scarcely in%alidated by that e0ce#tion. --
*<.
1. Say states in his ;conomie ,olitiI'e ,ratiI'e, %ol. iii. #. 11, )Les lois ne #e'%ent #as crKer
des richesses.) $ertainly they cannot do this, b't they create #rod'cti%e #ower, which is more
im#ortant than riches, i.e. than #ossession of %al'es of e0chan"e.
7. -ealth of :ations, Cook 9>. cha#. ii.
. From the "reat n'mber of #assa"es wherein B. C. Say e0#lains this %iew, we merely I'ote the
newest -- from the si0th %ol'me of ;conomie ,olitiI'e ,ratiI'e, #. 7=5& )Le talent d)'n a%ocat,
d)'n mKdecin, I'i a KtK acI'is a' #ri0 de I'elI'e sacriGce et I'i #rod'it 'n re%en', est 'ne
%ale'r ca#itale, non transmissible T la %KritK, mais I'i rKside nKanmoins dans 'n cor#s %isible,
cel'i de la #ersonne I'i le #ossMde.)
,ha-ter 10
The National 1i2ision of ,o""ercial 3-erations and the
,onfederation of the National #rod+cti2e Forces
*he school is indebted to its renowned fo'nder for the disco%ery of that nat'ral law which it
calls )di%ision of labo'r,) b't neither 4dam Smith nor any of his s'ccessors ha%e thoro'"hly
in%esti"ated its essential nat're and character, or followed it o't to its most im#ortant
conseI'ences.
*he e0#ression )di%ision of labo'r) is an indeGnite one, and m'st necessarily #rod'ce a false or
indeGnite idea.
9t is )di%ision of labo'r) if one sa%a"e on one and the same day "oes h'ntin" or Gshin", c'ts
down wood, re#airs his wi"wam, and #re#ares arrows, nets, and clothesH b't it is also )di%ision
of labo'r) if (as 4dam Smith mentions as an e0am#le! ten diLerent #ersons share in the
diLerent occ'#ations connected with the man'fact're of a #in& the former is an ob/ecti%e, and
the latter a s'b/ecti%e di%ision of labo'rH the former hinders, the latter f'rthers #rod'ction. *he
essential diLerence between both is, that in the former instance one #erson di%ides his work so
as to #rod'ce %ario's ob/ects, while in the latter se%eral #ersons share in the #rod'ction of a
sin"le ob/ect.
Coth o#erations, on the other hand, may be called with eI'al correctness a 'nion of labo'rH
the sa%a"e 'nites %ario's tasks in his #erson, while in the case of the #in man'fact're %ario's
#ersons are 'nited in one work of #rod'ction in common.
*he essential character of the nat'ral law from which the #o#'lar school e0#lains s'ch
im#ortant #henomena in social economy, is e%idently not merely a di%ision of labo'r, b't a
di%ision of diLerent commercial o#erations between se%eral indi%id'als, and at the same time a
confederation or 'nion of %ario's ener"ies, intelli"ences, and #owers on behalf of a common
#rod'ction. *he ca'se of the #rod'cti%eness of these o#erations is not merely that di%ision, b't
essentially this 'nion. 4dam Smith well #ercei%es this himself when he states, )*he necessaries
of life of the lowest members of society are a #rod'ct of /oint labo'r and of the co-o#eration of
a n'mber of indi%id'als.)(1J! -hat a #ity that he did not follow o't this idea (which he so clearly
e0#resses! of 'nited labo'r.
16
9f we contin'e to consider the e0am#le of the #in man'fact're add'ced by 4dam Smith in
ill'stration of the ad%anta"es of di%ision of labo'r, and seek for the ca'ses of the #henomenon
that ten #ersons 'nited in that man'fact're can #rod'ce an inGnitely lar"er n'mber of #ins
than if e%ery one carried on the entire #in man'fact're se#arately, we Gnd that the di%ision of
commercial o#erations witho't combination of the #rod'cti%e #owers towards one common
ob/ect co'ld b't little f'rther this #rod'ction.
9n order to create s'ch a res'lt, the diLerent indi%id'als m'st co-o#erate bodily as well as
mentally, and work to"ether. *he one who makes the heads of the #ins m'st be certain of the
co o#eration of the one who makes the #oints if he does not want to r'n the risk of #rod'cin"
#in heads in %ain. *he labo'r o#erations of all m'st be in the #ro#er #ro#ortion to one another,
the workmen m'st li%e as near to one another as #ossible, and their co-o#eration m'st be
ins'red. Let 's s'##ose e.". that e%ery one of these ten workmen li%es in a diLerent co'ntryH
how often mi"ht their co-o#eration be interr'#ted by wars, interr'#tions of trans#ort,
commercial crises, Rc.H how "reatly wo'ld the cost of the #rod'ct be increased, and
conseI'ently the ad%anta"e of the di%ision of o#eration diminishedH and wo'ld not the
se#aration or secession of a sin"le #erson from the 'nion, throw all the others o't of workN
*he #o#'lar school, beca'se it has re"arded the di%ision of o#eration alone as the essence of
this nat'ral law, has committed the error of a##lyin" it merely to the se#arate man'factory or
farmH it has not #ercei%ed that the same law e0tends its action es#ecially o%er the whole
man'fact'rin" and a"ric'lt'ral #ower, o%er the whole economy of the nation.
4s the #in man'factory only #ros#ers by the confederation of the #rod'cti%e force of the
indi%id'als, so does e%ery kind of man'fact're #ros#er only by the confederation of its
#rod'cti%e forces with those of all other kinds of man'fact're. For the s'ccess of a machine
man'factory, for instance, it is necessary that the mines and metal works sho'ld f'rnish it with
the necessary materials, and that all the h'ndred diLerent sorts of man'factories which reI'ire
machines, sho'ld b'y their #rod'cts from it. -itho't machine man'factories, a nation wo'ld in
time of war be e0#osed to the dan"er of losin" the "reater #ortion of its man'fact'rin" #ower.
9n like manner the entire man'fact'rin" ind'stry of a State in connection with its a"ric'lt'ral
interest, and the latter in connection with the former, will #ros#er the more the nearer they are
#laced to one another, and the less they are interr'#ted in their m't'al e0chan"es with one
another. *he ad%anta"es of their confederation 'nder one and the same #olitical ,ower in times
of war, of national diLerences, of commercial crises, fail're of cro#s, Rc., are not less
#erce#tible than are the ad%anta"es of the 'nion of the #ersons belon"in" to a #in man'factory
'nder one and the same roof.
Smith aFrms that the di%ision of labo'r is less a##licable to a"ric'lt're than to man'fact'res.
(1J! Smith had in %iew only the se#arate man'factory and the se#arate farm. He has, howe%er,
ne"lected to e0tend his #rinci#le o%er whole districts and #ro%inces. :owhere has the di%ision
of commercial o#erations and the confederation of the #rod'cti%e #owers "reater inO'ence
than where e%ery district and e%ery #ro%ince is in a #osition to de%ote itself e0cl'si%ely, or at
least chieOy, to those branches of a"ric'lt'ral #rod'ction for which they are mostly Gtted by
nat're. 9n one district corn and ho#s chieOy thri%e, in another %ines and fr'it, in a third timber
#rod'ction and cattle rearin", Rc. 9f e%ery district is de%oted to all these branches of
#rod'ction, it is clear that its labo'r and its land cannot be nearly so #rod'cti%e as if e%ery
se#arate district were de%oted mainly to those branches of #rod'ction for which it is s#ecially
ada#ted by nat're, and as if it e0chan"ed the s'r#l's of its own s#ecial #rod'cts for the s'r#l's
#rod'ce of those #ro%inces which in the #rod'ction of other necessaries of life and raw
materials #ossess a nat'ral ad%anta"e eI'ally #ec'liar to themsel%es. *his di%ision of
commercial o#erations, this confederation of the #rod'cti%e forces occ'#ied in a"ric'lt're, can
only take #lace in a co'ntry which has attained the "reatest de%elo#ment of all branches of
man'fact'rin" ind'stryH for in s'ch a co'ntry only can a "reat demand for the "reatest %ariety
of #rod'cts e0ist, or the demand for the s'r#l's of a"ric'lt'ral #rod'ctions be so certain and
considerable that the #rod'cer can feel certain of dis#osin" of any I'antity of his s'r#l's
#rod'ce d'rin" this or at least d'rin" ne0t year at s'itable #ricesH in s'ch a co'ntry only can
considerable ca#ital be de%oted to s#ec'lation in the #rod'ce of the co'ntry and holdin" stocks
of it, or "reat im#ro%ements in trans#ort, s'ch as canals and railway systems, lines of
steamers, im#ro%ed roads, be carried o't #roGtablyH and only by means of thoro'"hly "ood
means of trans#ort can e%ery district or #ro%ince con%ey the s'r#l's of its #ec'liar #rod'cts to
all other #ro%inces, e%en to the most distant ones, and #roc're in ret'rn s'##lies of the #ec'liar
17
#rod'cts of the latter. -here e%erybody s'##lies himself with what he reI'ires, there is b't
little o##ort'nity for e0chan"e, and therefore no need for costly facilities of trans#ort.
-e may notice how the a'"mentation of the #owers of #rod'ction in conseI'ence of the
se#aration of occ'#ations and the co-o#eration of the #owers of indi%id'als be"ins in the
se#arate man'factory and e0tends to the 'nited nation. *he man'factory #ros#ers so m'ch the
more in #ro#ortion as the commercial o#erations are di%ided, the more closely the workmen are
'nited, and the more the co-o#eration of each #erson is ins'red for the whole. *he #rod'cti%e
#owers of e%ery se#arate man'factory are also increased in #ro#ortion as the whole
man'fact'rin" #ower of the co'ntry is de%elo#ed in all its branches, and the more intimately it
is 'nited with all other branches of ind'stry. *he a"ric'lt'ral #ower of #rod'ction is so m'ch
"reater the more intimately a man'fact'rin" #ower de%elo#ed in all its branches is 'nited
locally, commercially, and #olitically with a"ric'lt're. 9n #ro#ortion as the man'fact'rin" #ower
is th's de%elo#ed will the di%ision of the commercial o#erations and the co-o#eration of the
#rod'cti%e #owers in a"ric'lt're also de%elo# themsel%es and be raised to the hi"hest sta"e of
#erfection. *hat nation will therefore #ossess most #rod'cti%e #ower, and will conseI'ently be
the richest, which has c'lti%ated man'fact'rin" ind'stry in all branches within its territory to
the hi"hest #erfection, and whose territory and a"ric'lt'ral #rod'ction is lar"e eno'"h to
s'##ly its man'fact'rin" #o#'lation with the lar"est #art of the necessaries of life and raw
materials which they reI'ire.
Let 's now consider the o##osite side of this ar"'ment. 4 nation which #ossesses merely
a"ric'lt're, and merely the most indis#ensable ind'stries, is in want of the Grst and most
necessary di%ision of commercial o#erations amon" its inhabitants, and of the most im#ortant
half of its #rod'cti%e #owers, indeed it is in want of a 'sef'l di%ision of commercial o#erations
e%en in the se#arate branches of a"ric'lt're itself. 4 nation th's im#erfect will not only be
merely half as #rod'cti%e as a #erfect nation, b't with an eI'al or e%en with a m'ch lar"er
territory, with an eI'al or a m'ch lar"er #o#'lation, it will #erha#s scarcely obtain a Gfth,
#robably scarcely a tenth, #art of that material wealth which a #erfect nation is able to #roc'reH
and this for the same reason owin" to which in a %ery com#licated man'factory ten #ersons
#rod'ce not merely ten times more, b't #erha#s thirty times more, than one #erson, or a man
with one arm cannot merely work half as little, b't inGnitely less, than a man with two arms.
*his loss in #rod'cti%e #ower will be so m'ch "reater, the more that the man'fact'rin"
o#erations can be f'rthered by machinery, and the less that machinery can be a##lied in
a"ric'lt're. 4 #art of the #rod'cti%e #ower which the a"ric'lt'ral nation th's loses, will fall to
the lot of that nation which e0chan"es its man'fact'red "oods for a"ric'lt'ral #rod'cts. *his
will, howe%er, be a #ositi%e loss only in case the a"ric'lt'ral nation has already reached that
sta"e of ci%ilisation and #olitical de%elo#ment which is necessary for the establishment of a
man'fact'rin" #ower. 9f it has not yet attained that sta"e, and still remains in a barbaro's or
half-ci%ilised state, if its a"ric'lt'ral #ower of #rod'ction has not yet de%elo#ed itself e%en from
the most #rimiti%e condition, if by the im#ortation of forei"n fabrics and the e0#ortation of raw
#rod'cts its #ros#erity ne%ertheless increases considerably from year to year, and its mental
and social #owers contin'e to be awakened and increased, if s'ch commerce as it can th's
carry on is not interr'#ted by forei"n #rohibition of im#ortation of raw #rod'cts, or by wars, or if
the territory of the a"ric'lt'ral nation is sit'ated in a tro#ical climate, the "ain on both sides will
then be eI'al and in conformity with the laws of nat're, beca'se 'nder the inO'ence of s'ch an
e0chan"e of the nati%e #rod'cts for forei"n fabrics, a nation so sit'ated will attain to ci%ilisation
and de%elo#ment of its #rod'cti%e #owers more I'ickly and safely than when it has to de%elo#
them entirely o't of its reso'rces. 9f, howe%er, the a"ric'lt'ral nation has already reached the
c'lminatin" #oint of its a"ric'lt'ral de%elo#ment, as far as that can be attained by the
inO'ence of forei"n commerce, or if the man'fact'rin" nation ref'ses to take the #rod'cts of
the a"ric'lt'ral nation in e0chan"e for its man'fact'red "oods, and if ne%ertheless, owin" to
the s'ccessf'l com#etition of the man'fact'rin" nation in the markets of the a"ric'lt'ral
nation, no man'fact'res can s#rin" '# in the latter, in s'ch a case the a"ric'lt'ral #rod'cti%e
#ower of the a"ric'lt'ral nation is e0#osed to the dan"er of bein" cri##led.
Cy a cri##led state of a"ric'lt're we mean that state of thin"s in which, from want of a
#owerf'l and steadily de%elo#in" man'fact'rin" ind'stry, the entire increase of #o#'lation
tends to throw itself on a"ric'lt're for em#loyment, cons'mes all the s'r#l's a"ric'lt'ral
#rod'ction of the co'ntry, and as soon as it has considerably increased either has to emi"rate
or share with the a"ric'lt'rists already in e0istence the land immediately at hand, till the
landed #ro#erty of e%ery family has become so small that it #rod'ces only the most elementary
18
and necessary #ortion of that family)s reI'irements of food and raw materials, b't no
considerable s'r#l's which it mi"ht e0chan"e with the man'fact'rers for the man'fact'red
#rod'cts which it reI'ires. 3nder a normal de%elo#ment of the #rod'cti%e #owers of the State,
the "reater #art of the increase of #o#'lation of an a"ric'lt'ral nation (as soon as it has
attained a certain de"ree of c'lt're! sho'ld transfer itself to man'fact'rin" ind'stry, and the
e0cess of the a"ric'lt'ral #rod'cts sho'ld #artly ser%e for s'##lyin" the man'fact'rin"
#o#'lation with #ro%isions and raw materials, and #artly for #roc'rin" for the a"ric'lt'rists the
man'fact'red "oods, machines, and 'tensils which they reI'ire for their cons'm#tion, and for
the increase of their own #rod'ction.
9f this state of thin"s sets in at the #ro#er time, a"ric'lt'ral and ind'strial #rod'cti%e #ower will
increase reci#rocally, and indeed ad inGnit'm. *he demand for a"ric'lt'ral #rod'cts on the #art
of the ind'strial #o#'lation will be so "reat, that no "reater n'mber of labo'rers will be di%erted
to a"ric'lt're, nor any "reater di%ision of the e0istin" land be made, than is necessary to obtain
the "reatest #ossible s'r#l's #rod'ce from it. 9n #ro#ortion to this s'r#l's #rod'ce the
#o#'lation occ'#ied in a"ric'lt're will be enabled to cons'me the #rod'cts of the workmen
em#loyed in man'fact'rin". 4 contin'o's increase of the a"ric'lt'ral s'r#l's #rod'ce will
occasion a contin'o's increase of the demand for man'fact'rin" workmen. *he e0cess of the
a"ric'lt'ral #o#'lation will therefore contin'ally Gnd work in the man'factories, and the
man'fact'rin" #o#'lation will at len"th not only eI'al the a"ric'lt'ral #o#'lation in n'mbers,
b't will far e0ceed it. *his latter is the condition of ;n"landH that which we formerly described is
that of #art of France and Germany. ;n"land was #rinci#ally bro'"ht to this nat'ral di%ision of
ind'strial #'rs'its between the two "reat branches of ind'stry, by means of her Oocks of shee#
and woollen man'fact'res, which e0isted there on a lar"e scale m'ch sooner than in other
co'ntries. 9n other co'ntries a"ric'lt're was cri##led mainly by the inO'ence of fe'dalism and
arbitrary #ower. *he #ossession of land "a%e inO'ence and #ower, merely beca'se by it a
certain n'mber of retainers co'ld be maintained which the fe'dal #ro#rietor co'ld make 'se of
in his fe'ds. *he more %assals he #ossessed, so many more warriors he co'ld m'ster. 9t was
besides im#ossible, owin" to the r'deness of those times, for the landed #ro#rietor to cons'me
his income in any other manner than by kee#in" a lar"e n'mber of ser%ants, and he co'ld not
#ay these better and attach them to his own #erson more s'rely than by "i%in" them a bit of
land to c'lti%ate 'nder the condition of renderin" him #ersonal ser%ice and of #ayin" a smaller
ta0 in #rod'ce. *h's the fo'ndation for e0cessi%e di%ision of the soil was laid in an artiGcial
mannerH and if in the #resent day the Go%ernment seeks by artiGcial means to alter that
system, in so doin" it is merely restorin" the ori"inal state of thin"s.
9n order to restrain the contin'ed de#reciation of the a"ric'lt'ral #ower of a nation, and
"rad'ally to a##ly a remedy to that e%il in so far as it is the res'lt of #re%io's instit'tions, no
better means e0ists (a#art from the #romotion of emi"ration! than to establish an internal
man'fact'rin" #ower, by which the increase of #o#'lation may be "rad'ally drawn o%er to the
latter, and a "reater demand created for a"ric'lt'ral #rod'ce, by which conseI'ently the
c'lti%ation of lar"er estates may be rendered more #roGtable, and the c'lti%ator ind'ced and
enco'ra"ed to "ain from his land the "reatest #ossible amo'nt of s'r#l's #rod'ce.
*he #rod'cti%e #ower of the c'lti%ator and of the labo'rer in a"ric'lt're will always be "reater
or smaller accordin" to the de"ree in which the e0chan"e of a"ric'lt'ral #rod'ce for
man'fact'res and other #rod'cts of %ario's kinds can #roceed more or less readily. *hat in this
res#ect the forei"n trade of any nation which is b't little ad%anced can #ro%e in the hi"hest
de"ree beneGcial, we ha%e shown in another cha#ter by the e0am#le of ;n"land. C't a nation
which has already made considerable ad%ances in ci%ilisation, in #ossession of ca#ital, and in
#o#'lation, will Gnd the de%elo#ment of a man'fact'rin" #ower of its own inGnitely more
beneGcial to its a"ric'lt're than the most Oo'rishin" forei"n trade can be witho't s'ch
man'fact'res, beca'se it thereby sec'res itself a"ainst all O'ct'ations to which it may be
e0#osed by war, by forei"n restrictions on trade, and by commercial crises, beca'se it thereby
sa%es the "reatest #art of the costs of trans#ort and commercial char"es inc'rred in e0#ortin"
its own #rod'cts and in im#ortin" man'fact'red articles, beca'se it deri%es the "reatest
ad%anta"es from the im#ro%ements in trans#ort which are called into e0istence by its own
man'fact'rin" ind'stry, while from the same ca'se a mass of #ersonal and nat'ral #owers
hitherto 'nem#loyed will be de%elo#ed, and es#ecially beca'se the reci#rocal e0chan"e
between man'fact'rin" #ower and a"ric'lt'ral #ower is so m'ch "reater, the closer the
a"ric'lt'rist and man'fact'rer are #laced to one another, and the less they are liable to be
interr'#ted in the e0chan"e of their %ario's #rod'cts by accidents of all kinds.
19
9n my letters to +r. $harles B. 9n"ersoll, ,resident of the Society for ,romotin" 4rts and
9nd'stries in ,hiladel#hia, of the year 1818 (entitled, )@'tlines of a :ew System of ,olitical
;conomy)!, 9 tried to e0#lain the ad%anta"es of a 'nion of the man'fact'rin" #ower with
a"ric'lt're in one and the same co'ntry, and 'nder one and the same #olitical #ower, in the
followin" manner. S'##osin" yo' did not 'nderstand the art of "rindin" corn, which has
certainly been a "reat art in its timeH s'##osin" f'rther that the art of bakin" bread had
remained 'nknown to yo', as (accordin" to 4nderson! the real art of saltin" herrin"s was still
'nknown to the ;n"lish in the se%enteenth cent'ryH s'##osin", therefore, that yo' had to send
yo'r corn to ;n"land to be "ro'nd into Oo'r and baked into bread, how lar"e a I'antity of yo'r
corn wo'ld not the ;n"lish retain as #ay for the "rindin" and bakin"H how m'ch of it wo'ld the
carters, seamen, and merchants cons'me, who wo'ld ha%e to be em#loyed in e0#ortin" the
corn and im#ortin" the breadH and how m'ch wo'ld come back into the hands of those who
c'lti%ated the cornN *here is no do'bt that by s'ch a #rocess the forei"n trade wo'ld recei%e a
considerable im#et's, b't it is %ery do'btf'l whether this interco'rse wo'ld be es#ecially
ad%anta"eo's to the welfare and inde#endence of the nation. $onsider only in case of a war
breakin" o't between yo'r co'ntry (the 3nited States! and Great Critain, what wo'ld be the
sit'ation of those who #rod'ced corn for the ;n"lish mills and bakeho'ses, and on the other
hand the sit'ation of those who had become acc'stomed to the taste of the ;n"lish bread. B'st
as, howe%er, the economical #ros#erity of the corn-c'lti%atin" interest reI'ires that the corn
millers sho'ld li%e in its %icinity, so also does the #ros#erity of the farmer es#ecially reI'ire that
the man'fact'rer sho'ld li%e close to him, so also does the #ros#erity of a Oat and o#en
co'ntry reI'ire that a #ros#ero's and ind'strial town sho'ld e0ist in its centre, and so does the
#ros#erity of the whole a"ric'lt're of a co'ntry reI'ire that its own man'fact'rin" #ower
sho'ld be de%elo#ed in the hi"hest #ossible de"ree.
Let 's com#are the condition of a"ric'lt're in the %icinity of a #o#'lo's town with its condition
when carried on in distant #ro%inces. 9n the latter case the farmer can only c'lti%ate for sale
those #rod'cts which can bear a lon" trans#ort, and which cannot be s'##lied at chea#er
#rices and in better I'ality from districts lyin" nearer to those who #'rchase them. 4 lar"er
#ortion of his #roGts will be absorbed by the costs of trans#ort. He will Gnd it diFc'lt to #roc're
ca#ital which he may em#loy 'sef'lly on his farm. From want of better e0am#les and means of
ed'cation he will not readily be led to a%ail himself of new #rocesses, of better im#lements, and
of new methods of c'lti%ation. *he labo'rer himself, from want of "ood e0am#le, of stim'l's to
e0ertion, and to em'lation in the e0ercise of his #rod'cti%e #owers, will only de%elo# those
#owers ineFciently, and will ind'l"e himself in loiterin" abo't and in idleness.
@n the other hand, in the #ro0imity of the town, the farmer is in a #osition to 'se e%ery #atch
of land for those cro#s which best s'it the character of the soil. He will #rod'ce the "reatest
%ariety of thin"s to the best ad%anta"e. Garden #rod'ce, #o'ltry, e""s, milk, b'tter, fr'it, and
es#ecially articles which the farmer residin" at a distance considers insi"niGcant and secondary
thin"s, will brin" to the farmer near the town considerable #roGt. -hile the distant farmer has
to de#end mainly on the mere breedin" of cattle, the other will make m'ch better #roGts from
fattenin" them, and will thereby be led to #erfect his c'lti%ation of root cro#s and fodder. He
can 'tilise with m'ch #roGt a n'mber of thin"s which are of little or no 'se to the distant
farmerH e.". stone, sand, water #ower, Rc. *he most n'mero's and best machines and
im#lements as well as all means for his instr'ction, are close at hand. 9t will be easy for him to
acc'm'late the ca#ital necessary for the im#ro%ement of his farm. Landed #ro#rietors and
workmen, by the means of recreation which the town aLords, the em'lation which it e0cites
amon" them, and the facility of makin" #roGts, will be incited to e0ert all their mental and
bodily #owers for the im#ro%ement of their condition. 4nd #recisely the same diLerence e0ists
between a nation which 'nites a"ric'lt're and man'fact'res on its own territory, and a nation
which can only e0chan"e its own a"ric'lt'ral #rod'cts for forei"n man'fact'red "oods.
*he whole social state of a nation will be chieOy determined by the #rinci#le of the %ariety and
di%ision of occ'#ations and the coo#eration of its #rod'cti%e #owers. -hat the #in is in the #in
man'factory that the national well-bein" is to the lar"e society which we term )the nation.) *he
most im#ortant di%ision of occ'#ations in the nation is that between the mental and material
ones. Coth are m't'ally de#endent on one another. *he more the mental #rod'cers s'cceed in
#romotin" morality, reli"ion, enli"htenment, increase of knowled"e, e0tension of liberty and of
#erfection of #olitical instit'tions -- sec'rity of #ersons and #ro#erty within the State, and the
inde#endence and #ower of the nation e0ternally -- so m'ch "reater will be the #rod'ction of
20
material -ealth. @n the other hand, the more "oods that the material #rod'cers #rod'ce, the
more will mental #rod'ction be ca#able of bein" #romoted.
*he most im#ortant di%ision of occ'#ations, and the most im#ortant co-o#eration of #rod'cti%e
#owers in material #rod'ction, is that of a"ric'lt're and man'fact're. Coth de#end m't'ally
'#on one another, as we ha%e shown.
4s in the #in man'factory, so also in the nation does the #rod'cti%eness of e%ery indi%id'al --
of e%ery se#arate branch of #rod'ction -- and Gnally of the whole nation de#end on the
e0ertions of all indi%id'als standin" in #ro#er relation to one another. -e call this relation the
balance or the harmony of the #rod'cti%e #owers. 9t is #ossible for a nation to #ossess too
many #hiloso#hers, #hilolo"ers, and literati, and too few skilled artisans, merchants, and
seamen. *his is the conseI'ence of hi"hly ad%anced and learned c'lt're which is not s'##orted
by a hi"hly ad%anced man'fact'rin" #ower and by an e0tensi%e internal and e0ternal tradeH it
is as if in a #in man'factory far more #in heads were man'fact'red than #in #oints. *he s'r#l's
#in heads in s'ch a nation are& a mass of 'seless books, s'btle theoretical systems, and
learned contro%ersies, thro'"h which the mind of the nation is more obsc'red than c'lti%ated,
and is withdrawn from 'sef'l occ'#ationsH conseI'ently its #rod'cti%e #owers are retarded in
their #ro"ress almost as m'ch as if it #ossessed too many #riests and too few instr'ctors of
yo'th, too many soldiers and too few #oliticians, too many administrators and too few /'d"es
and defenders of /'stice and ri"ht.
4 nation which only carries on a"ric'lt're is an indi%id'al who in his material #rod'ction lacks
one arm. $ommerce is merely the medi'm of e0chan"e between the a"ric'lt'ral and the
man'fact'rin" #ower, and between their se#arate branches. 4 nation which e0chan"es
a"ric'lt'ral #rod'cts for forei"n man'fact'red "oods is an indi%id'al with one arm, which is
s'##orted by a forei"n arm. *his s'##ort may be 'sef'l to it, b't not so 'sef'l as if it #ossessed
two arms itself, and this beca'se its acti%ity is de#endent on the ca#rice of the forei"ner. 9n
#ossession of a man'fact'rin" #ower of its own, it can #rod'ce as m'ch #ro%isions and raw
materials as the home man'fact'rers can cons'meH b't if de#endent '#on forei"n
man'fact'rers, it can merely #rod'ce as m'ch s'r#l's as forei"n nations do not care to
#rod'ce for themsel%es, and which they are obli"ed to b'y from another co'ntry.
4s between the diLerent districts of one and the same co'ntry, so does the di%ision of labo'r
and the co-o#eration of the #rod'cti%e #owers o#erate between the %ario's nations of the
earth. *he former is cond'cted by internal or national, the latter by international commerce.
*he international co-o#eration of #rod'cti%e #owers is, howe%er, a %ery im#erfect one,
inasm'ch as it may be freI'ently interr'#ted by wars, #olitical re"'lations, commercial crises,
Rc. 4ltho'"h it is the most im#ortant in one sense, inasm'ch as by it the %ario's nations of the
earth are connected with one another, it is ne%ertheless the least im#ortant with re"ard to the
#ros#erity of any se#arate nation which is already far ad%anced in ci%ilisation. *his is admitted
by writers of the #o#'lar school, who declare that the home market of a nation is witho't
com#arison more im#ortant than its forei"n market. 9t follows from this, that it is the interest of
e%ery "reat nation to make the national confederation of its #rod'cti%e #owers the main ob/ect
of its e0ertions, and to consider their international confederation as second in im#ortance to it.
Coth international and national di%ision of labo'r are chieOy determined by climate and by
:at're herself. -e cannot #rod'ce in e%ery co'ntry tea as in $hina, s#ices as in Ba%a, cotton as
in Lo'isiana, or corn, wool, fr'it, and man'fact'red "oods as in the co'ntries of the tem#erate
Aone. 9t wo'ld be folly for a nation to attem#t to s'##ly itself by means of national di%ision of
labo'r (i.e. by home #rod'ction! with articles for the #rod'ction of which it is not fa%o'red by
nat're, and which it can #roc're better and chea#er by means of international di%ision of labo'r
(i.e. thro'"h forei"n commerce!. 4nd /'st as m'ch does it betoken a want of national
intelli"ence or national ind'stry if a nation does not em#loy all the nat'ral #owers which it
#ossesses in order to satisfy its own internal wants, and then by means of the s'r#l's of its own
#rod'ctions to #'rchase those necessary articles which nat're has forbidden it to #rod'ce on
its own territory.
*he co'ntries of the world most fa%o'red by nat're, with re"ard to both national and
international di%ision of labo'r, are e%idently those whose soil brin"s forth the most common
necessaries of life of the best I'ality and in the lar"est I'antity, and whose climate is most
cond'ci%e to bodily and mental e0ertion, and these are the co'ntries of the tem#erate AoneH for
in these co'ntries the man'fact'rin" #ower es#ecially #ros#ers, by means of which the nation
not merely attains to the hi"hest de"ree of mental and social de%elo#ment and of #olitical
#ower, b't is also enabled to make the co'ntries of tro#ical climates and of inferior ci%ilisation
21
trib'tary in a certain meas're to itself. *he co'ntries of the tem#erate Aone therefore are abo%e
all others called '#on to brin" their own national di%ision of labo'r to the hi"hest #erfection,
and to 'se the international di%ision of labo'r for their enrichment.
:@*;S&
1. -ealth of :ations, Cook 9. cha#. i.
1. -ealth of :ations, Cook 9. cha#. i.
,ha-ter 14
Nationalit! and the $cono"! of the Nation
*he system of the school s'Lers, as we ha%e already shown in the #recedin" cha#ters, from
three main defects& Grstly, from bo'ndless cosmo#olitanism, which neither reco"nises the
#rinci#le of nationality, nor takes into consideration the satisfaction of its interestsH secondly,
from a dead materialism, which e%erywhere re"ards chieOy the mere e0chan"eable %al'e of
thin"s witho't takin" into consideration the mental and #olitical, the #resent and the f't're
interests, and the #rod'cti%e #owers of the nationH thirdly, from a disor"anisin" #artic'larism
and indi%id'alism, which, i"norin" the nat're and character of social labo'r and the o#eration
of the 'nion of #owers in their hi"her conseI'ences, considers #ri%ate ind'stry only as it wo'ld
de%elo# itself 'nder a state of free interchan"e with society (i.e. with the whole h'man race!
were that race not di%ided into se#arate national societies.
Cetween each indi%id'al and entire h'manity, howe%er, stands *H; :4*9@:, with its s#ecial
lan"'a"e and literat're, with its #ec'liar ori"in and history, with its s#ecial manners and
c'stoms, laws and instit'tions, with the claims of all these for e0istence, inde#endence,
#erfection, and contin'ance for the f't're, and with its se#arate territoryH a society which,
'nited by a tho'sand ties of mind and of interests, combines itself into one inde#endent whole,
which reco"nises the law of ri"ht for and within itself, and in its 'nited character is still o##osed
to other societies of a similar kind in their national liberty, and conseI'ently can only 'nder the
e0istin" conditions of the world maintain self-e0istence and inde#endence by its own #ower and
reso'rces. 4s the indi%id'al chieOy obtains by means of the nation and in the nation mental
c'lt're, #ower of #rod'ction, sec'rity, and #ros#erity, so is the ci%ilisation of the h'man race
only concei%able and #ossible by means of the ci%ilisation and de%elo#ment of the indi%id'al
nations.
+eanwhile, howe%er, an inGnite diLerence e0ists in the condition and circ'mstances of the
%ario's nations& we obser%e amon" them "iants and dwarfs, well-formed bodies and cri##les,
ci%ilised, half-ci%ilised, and barbaro's nationsH b't in all of them, as in the indi%id'al h'man
bein", e0ists the im#'lse of self-#reser%ation, the stri%in" for im#ro%ement which is im#lanted
by nat're. 9t is the task of #olitics to ci%ilise the barbaro's nationalities, to make the small and
weak ones "reat and stron", b't, abo%e all, to sec're to them e0istence and contin'ance. 9t is
the task of national economy to accom#lish the economical de%elo#ment of the nation, and to
#re#are it for admission into the 'ni%ersal society of the f't're.
4 nation in its normal state #ossesses one common lan"'a"e and literat're, a territory
endowed with manifold nat'ral reso'rces, e0tensi%e, and with con%enient frontiers and a
n'mero's #o#'lation. 4"ric'lt're, man'fact'res, commerce, and na%i"ation m'st be all
de%elo#ed in it #ro#ortionately. arts and sciences, ed'cational establishments, and 'ni%ersal,
c'lti%ation m'st stand in it on an eI'al footin" with material #rod'ction. 9ts constit'tion, laws,
and instit'tions m'st aLord to those who belon" to it a hi"h de"ree of sec'rity and liberty, and
m'st #romote reli"ion, morality, and #ros#erityH in a word, m'st ha%e the well-bein" of its
citiAens as their ob/ect. 9t m'st #ossess s'Fcient #ower on land and at sea to defend its
inde#endence and to #rotect its forei"n commerce. 9t will #ossess the #ower of beneGcially
aLectin" the ci%ilisation of less ad%anced nations, and by means of its own s'r#l's #o#'lation
and of their mental and material ca#ital to fo'nd colonies and be"et new nations.
4 lar"e #o#'lation, and an e0tensi%e territory endowed with manifold national reso'rces, are
essential reI'irements of the normal nationalityH they are the f'ndamental conditions of mental
c'lti%ation as well as of material de%elo#ment and #olitical #ower. 4 nation restricted in the
n'mber of its #o#'lation and in territory, es#ecially if it has a se#arate lan"'a"e, can only
#ossess a cri##led literat're, cri##led instit'tions for #romotin" art and science. 4 small State
can ne%er brin" to com#lete #erfection within its territory the %ario's branches of #rod'ction. 9n
it all #rotection becomes mere #ri%ate mono#oly. @nly thro'"h alliances with more #owerf'l
22
nations, by #artly sacriGcin" the ad%anta"es of nationality, and by e0cessi%e ener"y, can it
maintain with diFc'lty its inde#endence.
4 nation which #ossesses no coasts, mercantile marine, or na%al #ower, or has not 'nder its
dominion and control the mo'ths of its ri%ers, is in its forei"n commerce de#endent on other
co'ntriesH it can neither establish colonies of its own nor form new nationsH all s'r#l's
#o#'lation, mental and material means, which Oows from s'ch a nation to 'nc'lti%ated
co'ntries, is lost to its own literat're, ci%ilisation and ind'stry, and "oes to the beneGt of other
nationalities.
4 nation not bo'nded by seas and chains of mo'ntains lies o#en to the attacks of forei"n
nations, and can only by "reat sacriGces, and in any case only %ery im#erfectly, establish and
maintain a se#arate tariL system of its own.
*erritorial deGciencies of the nation can be remedied either by means of hereditary s'ccession,
as in the case of ;n"land and ScotlandH or by #'rchase, as in the case of Florida and Lo'isianaH
or by conI'ests, as in the case of Great Critain and 9reland.
9n modern times a fo'rth means has been ado#ted, which leads to this ob/ect in a manner
m'ch more in accordance with /'stice and with the #ros#erity of nations than conI'est, and
which is not so de#endent on accidents as hereditary s'ccession, namely, the 'nion of the
interests of %ario's States by means of free con%entions.
Cy its Doll%erein, the German nation Grst obtained one of the most im#ortant attrib'tes of its
nationality. C't this meas're cannot be considered com#lete so lon" as it does not e0tend o%er
the whole coast, from the mo'th of the <hine to the frontier of ,oland, incl'din" Holland and
?enmark. 4 nat'ral conseI'ence of this 'nion m'st be the admission of both these co'ntries
into the German C'nd, and conseI'ently into the German nationality, whereby the latter will at
once obtain what it is now in need of, namely, Gsheries and na%al #ower, maritime commerce
and colonies. Cesides, both these nations belon", as res#ects their descent and whole
character, to the German nationality. *he b'rden of debt with which they are o##ressed is
merely a conseI'ence of their 'nnat'ral endea%o'rs to maintain themsel%es as inde#endent
nationalities, and it is in the nat're of thin"s that this e%il sho'ld rise to a #oint when it will
become intolerable to those two nations themsel%es, and when incor#oration with a lar"er
nationality m'st seem desirable and necessary to them.
Cel"i'm can only remedy by means of confederation with a nei"hbo'rin" lar"er nation her
needs which are inse#arable from her restricted territory and #o#'lation. *he 3nited States and
$anada, the more their #o#'lation increases, and the more the #rotecti%e system of the 3nited
States is de%elo#ed, so m'ch the more will they feel themsel%es drawn towards one another,
and the less will it be #ossible for ;n"land to #re%ent a 'nion between them.
4s res#ects their economy, nations ha%e to #ass thro'"h the followin" sta"es of de%elo#ment&
ori"inal barbarism, #astoral condition, a"ric'lt'ral condition, a"ric'lt'ral-man'fact'rin"
condition, and a"ric'lt'ral-man'fact'rin"-commercial condition.
*he ind'strial history of nations, and of none more clearly than that of ;n"land, #ro%es that the
transition from the sa%a"e state to the #astoral one, from the #astoral to the a"ric'lt'ral, and
from a"ric'lt're to the Grst be"innin"s in man'fact're and na%i"ation, is eLected most
s#eedily and ad%anta"eo'sly by means of free commerce with f'rther ad%anced towns and
co'ntries, b't that a #erfectly de%elo#ed man'fact'rin" ind'stry, an im#ortant mercantile
marine, and forei"n trade on a really lar"e scale, can only be attained by means of the
inter#osition of the #ower of the State.
*he less any nation)s a"ric'lt're has been #erfected, and the more its forei"n trade is in want
of o##ort'nities of e0chan"in" the e0cess of nati%e a"ric'lt'ral #rod'cts and raw materials for
forei"n man'fact'red "oods, the dee#er that the nation is still s'nk in barbarism and Gtted only
for an absol'te monarchical form of "o%ernment and le"islation, the more will free trade (i.e.
the e0#ortation of a"ric'lt'ral #rod'cts and the im#ortation of man'fact'red "oods! #romote
its #ros#erity and ci%ilisation.
@n the other hand, the more that the a"ric'lt're of a nation, its ind'stries, and its social,
#olitical, and m'nici#al conditions, are thoro'"hly de%elo#ed, the less ad%anta"e will it be able
to deri%e for the im#ro%ement of its social conditions, from the e0chan"e of nati%e a"ric'lt'ral
#rod'cts and raw materials for forei"n man'fact'red "oods, and the "reater disad%anta"es will
it e0#erience from the s'ccessf'l com#etition of a forei"n man'fact'rin" #ower s'#erior to its
own.
Solely in nations of the latter kind, namely, those which #ossess all the necessary mental and
material conditions and means for establishin" a man'fact'rin" #ower of their own, and of
23
thereby attainin" the hi"hest de"ree of ci%ilisation, and de%elo#ment of material #ros#erity and
#olitical #ower, b't which are retarded in their #ro"ress by the com#etition of a forei"n
man'fact'rin" #ower which is already farther ad%anced than their own -- only in s'ch nations
are commercial restrictions /'stiGable for the #'r#ose of establishin" and #rotectin" their own
man'fact'rin" #owerH and e%en in them it is /'stiGable only 'ntil that man'fact'rin" #ower is
stron" eno'"h no lon"er to ha%e any reason to fear forei"n com#etition, and thenceforth only
so far as may be necessary for #rotectin" the inland man'fact'rin" #ower in its %ery roots.
*he system of #rotection wo'ld not merely be contrary to the #rinci#les of cosmo#olitical
economy, b't also to the ri"htly 'nderstood ad%anta"e of the nation itself, were it to e0cl'de
forei"n com#etition at once and alto"ether, and th's isolate from other nations the nation
which is th's #rotected. 9f the man'fact'rin" #ower to be #rotected be still in the Grst #eriod of
its de%elo#ment, the #rotecti%e d'ties m'st be %ery moderate, they m'st only rise "rad'ally
with the increase of the mental and material ca#ital, of the technical abilities and s#irit of
enter#rise of the nation. :either is it at all necessary that all branches of ind'stry sho'ld be
#rotected in the same de"ree. @nly the most im#ortant branches reI'ire s#ecial #rotection, for
the workin" of which m'ch o'tlay of ca#ital in b'ildin" and mana"ement, m'ch machinery, and
therefore m'ch technical knowled"e, skill, and e0#erience, and many workmen are reI'ired,
and whose #rod'cts belon" to the cate"ory of the Grst necessaries of life, and conseI'ently are
of the "reatest im#ortance as re"ards their total %al'e as well as re"ards national
inde#endence (as, for e0am#le, cotton, woollen and linen man'factories, Rc.!. 9f these main
branches are s'itably #rotected and de%elo#ed, all other less im#ortant branches of
man'fact're will rise '# aro'nd them 'nder a less de"ree of #rotection. 9t will be to the
ad%anta"e of nations in which wa"es are hi"h, and whose #o#'lation is not yet "reat in
#ro#ortion to the e0tent of their territory, e.". in the 3nited States of :orth 4merica, to "i%e less
#rotection to man'fact'res in which machinery does not #lay an im#ortant #art, than to those
in which machinery does the "reater #art of the work, #ro%idin" that those nations which
s'##ly them with similar "oods allow in ret'rn free im#ortation to their a"ric'lt'ral #rod'cts.
*he #o#'lar school betrays an 'tter misconce#tion of the nat're of national economical
conditions if it belie%es that s'ch nations can #romote and f'rther their ci%ilisation, their
#ros#erity, and es#ecially their social #ro"ress, eI'ally well by the e0chan"e of a"ric'lt'ral
#rod'cts for man'fact'red "oods, as by establishin" a man'fact'rin" #ower of their own. 4
mere a"ric'lt'ral nation can ne%er de%elo# to any considerable e0tent its home and forei"n
commerce, its inland means of trans#ort, and its forei"n na%i"ation, increase its #o#'lation in
d'e #ro#ortion to their wellbein", or make notable #ro"ress in its moral, intellect'al, social, and
#olitical de%elo#ment& it will ne%er acI'ire im#ortant #olitical #ower, or be #laced in a #osition
to inO'ence the c'lti%ation and #ro"ress of less ad%anced nations and to form colonies of its
own. 4 mere a"ric'lt'ral State is an inGnitely less #erfect instit'tion than an a"ric'lt'ral
man'fact'rin" State. *he former is always more or less economically and #olitically de#endent
on those forei"n nations which take from it a"ric'lt'ral #rod'cts in e0chan"e for man'fact'red
"oods. 9t cannot determine for itself how m'ch it will #rod'ceH it m'st wait and see how m'ch
others will b'y from it. *hese latter, on the contrary (the a"ric'lt'ral-man'fact'rin" States!,
#rod'ce for themsel%es lar"e I'antities of raw materials and #ro%isions, and s'##ly merely the
deGciency by im#ortation from the #'rely a"ric'lt'ral nations. *he #'rely a"ric'lt'ral nations
are th's in the Grst #lace de#endent for their #ower of eLectin" sales on the chances of a more
or less #lentif'l har%est in the a"ric'lt'ral-man'fact'rin" nationsH in the ne0t #lace they ha%e
to com#ete in these sales with other #'rely a"ric'lt'ral nations, whereby their #ower of sale, in
itself %ery 'ncertain, th's becomes still more 'ncertain. Lastly, they are e0#osed to the dan"er
of bein" totally r'ined in their tradin" with forei"n man'fact'rin" nations by wars, or new
forei"n tariL re"'lations whereby they s'Ler the do'ble disad%anta"e of Gndin" no b'yers for
their s'r#l's a"ric'lt'ral #rod'cts, and of failin" to obtain s'##lies of the man'fact'red "oods
which they reI'ire. 4n a"ric'lt'ral nation is, as we ha%e already stated, an indi%id'al with one
arm, who makes 'se of a forei"n arm, b't who cannot make s're of the 'se of it in all casesH an
a"ric'lt'ral-man'fact'rin" nation is an indi%id'al who has two arms of his own always at his
dis#osal.
9t is a f'ndamental error of the school when it re#resents the system of #rotection as a mere
de%ice of s#ec'lati%e #oliticians which is contrary to nat're. History is there to #ro%e that
#rotecti%e re"'lations ori"inated either in the nat'ral eLorts of nations to attain to #ros#erity,
inde#endence, and #ower, or in conseI'ence of wars and of the hostile commercial le"islation
of #redominatin" man'fact'rin" nations.
24
*he idea of inde#endence and #ower ori"inates in the %ery idea of )the nation.) *he school
ne%er takes this into consideration, beca'se it does not make the economy of the se#arate
nation, b't the economy of society "enerally, i.e. of the whole h'man race, the ob/ect of its
in%esti"ations. 9f we ima"ine, for instance, that all nations were 'nited by means of a 'ni%ersal
confederation, their indi%id'al inde#endence and #ower wo'ld cease to be an ob/ect of re"ard.
*he sec'rity for the inde#endence of e%ery nation wo'ld in s'ch a case rest on the le"al
#ro%isions of the 'ni%ersal society, /'st as e.". the sec'rity of the inde#endence of the states of
<hode 9sland and ?elaware lies in the 'nion of all the free states constit'tin" the 4merican
3nion. Since the Grst fo'ndation of that 3nion it has ne%er yet occ'rred to any of these smaller
states to care for the enlar"ement of its own #olitical #ower, or to consider its inde#endence
less sec'red than is that of the lar"est states of the 3nion.
9n #ro#ortion, howe%er, as the #rinci#le of a 'ni%ersal confederation of nations is reasonable, in
/'st the same de"ree wo'ld a "i%en nation act contrary to reason if, in antici#ation of the "reat
ad%anta"es to be e0#ected from s'ch a 'nion, and from a state of 'ni%ersal and #er#et'al
#eace, it were to re"'late the #rinci#les of its national #olicy as tho'"h this 'ni%ersal
confederation of nations e0isted already. -e ask, wo'ld not e%ery sane #erson consider a
"o%ernment to be insane which, in consideration of the beneGts and the reasonableness of a
state of 'ni%ersal and #er#et'al #eace, #ro#osed to disband its armies, destroy its Oeet, and
demolish its fortressesN C't s'ch a "o%ernment wo'ld be doin" nothin" diLerent in #rinci#le
from what the #o#'lar school reI'ires from "o%ernments when, beca'se of the ad%anta"es
which wo'ld be deri%able from "eneral free trade, it 'r"es that they sho'ld abandon the
ad%anta"es deri%able from #rotection.
-ar has a r'ino's eLect on the reci#rocal commercial relations between nation and nation. *he
a"ric'lt'rist li%in" in one co'ntry is by it forcibly se#arated from the man'fact'rer li%in" in
another co'ntry. -hile, howe%er, the man'fact'rer (es#ecially if he belon"s to a nation
#owerf'l at sea, and carryin" on e0tensi%e commerce! readily Gnds com#ensation from the
a"ric'lt'rists of his own co'ntry, or from those of other accessible a"ric'lt'ral co'ntries, the
inhabitant of the #'rely a"ric'lt'ral co'ntry s'Lers do'bly thro'"h this interr'#tion of
interco'rse.
*he market for his a"ric'lt'ral #rod'cts will fail him entirely, and he will conseI'ently lose the
means of #ayin" for those man'fact'red "oods which ha%e become necessaries to him owin"
to #re%io'sly e0istin" tradeH his #ower both of #rod'ction and cons'm#tion will be diminished.
9f, howe%er, one a"ric'lt'ral nation whose #rod'ction and cons'm#tion are th's diminished by
war has already made considerable ad%ances in #o#'lation, ci%ilisation, and a"ric'lt're,
man'fact'res and factories will s#rin" '# in it in conseI'ence of the interr'#tion of
international commerce by war. -ar acts on it like a #rohibiti%e tariL system. 9t thereby
becomes acI'ainted with the "reat ad%anta"es of a man'fact'rin" #ower of its own, it
becomes con%inced by #ractical e0#erience that it has "ained more than it has lost by the
commercial interr'#tions which war has occasioned. *he con%iction "ains "ro'nd in it, that it is
called to #ass from the condition of a mere a"ric'lt'ral State to the condition of an a"ric'lt'ral-
man'fact'rin" State, and in conseI'ence of this transition, to attain to the hi"hest de"ree of
#ros#erity, $i%ilisation, and #ower. C't if after s'ch a nation has already made considerable
#ro"ress in the man'fact'rin" career which was o#ened to it by war, #eace is a"ain
established, and sho'ld both nations then contem#late the res'm#tion of their #re%io'sly
e0istin" commercial interco'rse, they will both Gnd that d'rin" the war new interests ha%e been
formed, which wo'ld be destroyed by re-establishin" the former commercial interchan"e.(1J!
*he former a"ric'lt'ral nation will feel, that in order to res'me the sale of its a"ric'lt'ral
#rod'cts to the forei"ner, it wo'ld ha%e to sacriGce its own man'fact'rin" ind'stry which has in
the meanwhile been createdH the man'fact'rin" nation will feel that a #ortion of its home
a"ric'lt'ral #rod'ction, which has been formed d'rin" the war, wo'ld a"ain be destroyed by
free im#ortation. Coth, therefore, try to #rotect these interests by means of im#osin" d'ties on
im#orts. *his is the history of commercial #olitics d'rin" the last Gfty years.
9t is war that has called into e0istence the more recent systems of #rotectionH and we do not
hesitate to assert, that it wo'ld ha%e been to the interest of the man'fact'rin" nations of the
second and third rank to retain a #rotecti%e #olicy and f'rther de%elo# it, e%en if ;n"land after
the concl'sion of #eace had not committed the monstro's mistake of im#osin" restrictions on
the im#ortation of necessaries of life and of raw materials, and conseI'ently of allowin" the
moti%es which had led to the system of #rotection in the time of the war, to contin'e d'rin"
#eace. 4s an 'nci%ilised nation, ha%in" a barbaro's system of a"ric'lt're, can make #ro"ress
25
only by commerce with ci%ilised man'fact'rin" nations, so after it has attained to a certain
de"ree of c'lt're, in no other way can it reach the hi"hest "rade of #ros#erity, ci%ilisation, and
#ower, than by #ossessin" a man'fact'rin" ind'stry of its own. 4 war which leads to the
chan"e of the #'rely a"ric'lt'ral State into an a"ric'lt'ral-man'fact'rin" State is therefore a
blessin" to a nation, /'st as the -ar of 9nde#endence of the 3nited States of :orth 4merica, in
s#ite of the enormo's sacriGces which it reI'ired, has become a blessin" to all f't're
"enerations. C't a #eace which throws back into a #'rely a"ric'lt'ral condition a nation which
is Gtted to de%elo# a man'fact'rin" #ower of its own, becomes a c'rse to it, and is
incom#arably more in/'rio's to it than a war.
9t is fort'nate for the man'fact'rin" #owers of the second and third rank, that ;n"land after
the restoration of the "eneral #eace has herself im#osed a limit to her main tendency (of
mono#olisin" the man'fact'rin" market of the whole earth!, by im#osin" restrictions on the
im#ortation of forei"n means of s'bsistence and raw materials. $ertainly the ;n"lish
a"ric'lt'rists, who had en/oyed a mono#oly of s'##lyin" the ;n"lish market with #rod'cts
d'rin" the war, wo'ld of co'rse ha%e #ainf'lly felt the forei"n com#etition, b't that only at GrstH
at a later #eriod (as we will show more #artic'larly elsewhere!, these losses wo'ld ha%e been
made '# to them tenfold by the fact that ;n"land had obtained a mono#oly of man'fact'rin"
for the whole world. C't it wo'ld ha%e been still more in/'dicio's if the man'fact'rin" nations
of the second and third rank, after their own man'fact'rin" #ower had /'st been called into
e0istence, in conseI'ence of wars lastin" for twenty-G%e years, and after (in conseI'ence of
twenty-G%e years) e0cl'sion of their a"ric'lt'ral #rod'cts from the ;n"lish market! that #ower
has been stren"thened so far that #ossibly it only reI'ired another ten or Gfteen years of strict
#rotection in order to s'stain s'ccessf'lly free com#etition with ;n"lish man'fact'res -- if (we
say! these nations, after ha%in" end'red the sacriGces of half a cent'ry, were to "i%e '# the
immense ad%anta"es of #ossessin" a man'fact'rin" #ower of their own, and were to descend
once more from the hi"h state of c'lt're, #ros#erity, and inde#endence, which is #ec'liar to
a"ric'lt'ral-man'fact'rin" co'ntries, to the low #osition of de#endent a"ric'lt'ral nations,
merely beca'se it now #leases the ;n"lish nation to #ercei%e its error and the closely
im#endin" ad%ances of the $ontinental nations which enter into com#etition with it.
S'##osin" also that the man'fact'rin" interest of ;n"land sho'ld obtain s'Fcient inO'ence to
force the Ho'se of Lords, which chieOy consists of lar"e landed #ro#rietors, and the Ho'se of
$ommons, com#osed mostly of co'ntry sI'ires, to make concessions in res#ect of the
im#ortation of a"ric'lt'ral #rod'cts, who wo'ld "'arantee that after a la#se of a few years a
new *ory ministry wo'ld not 'nder diLerent circ'mstances a"ain #ass a new $orn LawN -ho
can "'arantee that a new na%al war or a new $ontinental system may not se#arate the
a"ric'lt'rists of the $ontinent from the man'fact'rers of the island kin"dom, and com#el the
$ontinental nations to recommence their man'fact'rin" career, and to s#end their best
ener"ies in o%ercomin" its #rimary diFc'lties, merely in order, at a later #eriod to sacriGce
e%erythin" a"ain at the concl'sion of #eace.
9n this manner the school wo'ld condemn the $ontinental nations for e%er to be rollin" the
stone of Sisy#h's, for e%er to erect man'factories in time of war in order to allow them to fall to
r'in in time of #eace.
*o res'lts so abs'rd as these the school co'ld ne%er ha%e arri%ed had it not (in s#ite of the
name which it "i%es to the science which it #rofesses! com#letely e0cl'ded #olitics from that
science, had it not com#letely i"nored the %ery e0istence of nationality, and left entirely o't of
consideration the eLects of war on the commercial interco'rse between se#arate nations.
How 'tterly diLerent is the relation of the a"ric'lt'rist to the man'fact'rer if both li%e in one
and the same co'ntry, and are conseI'ently really connected with one another by #er#et'al
#eace. 3nder those circ'mstances, e%ery e0tension or im#ro%ement of an already e0istin"
man'factory increases the demand for a"ric'lt'ral #rod'cts. *his demand is no 'ncertain oneH
it is not de#endent on forei"n commercial re"'lations or forei"n commercial O'ct'ations, on
forei"n #olitical commotions or wars, on forei"n in%entions and im#ro%ements, or on forei"n
har%estsH the nati%e a"ric'lt'rist has not to share it with other nations, it is certain to him e%ery
year. Howe%er the cro#s of other nations may t'rn o't, whate%er mis'nderstandin"s may
s#rin" '# in the #olitical world, he can de#end on the sale of his own #rod'ce, and on obtainin"
the man'fact'red "oods which he needs at s'itable and re"'lar #rices. @n the other hand,
e%ery im#ro%ement of the nati%e a"ric'lt're, e%ery new method of c'lt're, acts as a stim'lant
on the nati%e man'fact're, beca'se e%ery a'"mentation of nati%e a"ric'lt'ral #rod'ction m'st
res'lt in a #ro#ortionate a'"mentation of nati%e man'fact'rin" #rod'ction. *h's, by means of
26
this reci#rocal action, #ro"ress is ins'red for all time to both these main so'rces of the nation)s
stren"th and s'##ort.
,olitical #ower not merely sec'res to the nation the increase of its #ros#erity by forei"n
commerce and by colonies abroad, it also sec'res to it the #ossession of internal #ros#erity,
and sec'res to it its own e0istence, which is far more im#ortant to it than mere material wealth.
;n"land has obtained #olitical #ower by means of her na%i"ation lawsH and by means of
#olitical #ower she has been #laced in a #osition to e0tend her man'fact'rin" #ower o%er other
nations. ,oland, howe%er, was str'ck o't of the list of nations beca'se she did not #ossess a
%i"oro's middle class, which co'ld only ha%e been called into e0istence by the establishment of
an internal man'fact'rin" #ower.
*he school cannot deny that the internal market of a nation is ten times more im#ortant to it
than its e0ternal one, e%en where the latter is in the most Oo'rishin" conditionH b't it has
omitted to draw from this the concl'sion, which is %ery ob%io's, that it is ten times more
im#ortant to c'lti%ate and sec're the home market, than to seek for wealth abroad, and that
only in those nations which ha%e de%elo#ed their internal ind'stry to a hi"h de"ree can forei"n
commerce attain im#ortance.
*he school has formed its estimate of the nat're and character of the market only from a
cosmo#olitical, b't not from a #olitical #oint of %iew. +ost of the maritime co'ntries of the
;'ro#ean continent are sit'ated in the nat'ral market district of the man'fact'rers of London,
Li%er#ool, or +anchesterH only %ery few of the inland man'fact'rers of other nations can, 'nder
free trade, maintain in their own sea#orts the same #rices as the ;n"lish man'fact'rers. *he
#ossession of lar"er ca#ital, a lar"er home market of their own, which enables them to
man'fact're on a lar"er scale and conseI'ently more chea#ly, "reater #ro"ress in man'fact're
itself, and Gnally chea#er sea trans#ort, "i%e at the #resent time to the ;n"lish man'fact'rers
ad%anta"es o%er the man'fact'rers of other co'ntries, which can only be "rad'ally di%erted to
the nati%e ind'stry of the latter by means of lon" and contin'o's #rotection of their home
market, and thro'"h #erfection of their inland means of trans#ort. *he market of the
inhabitants of its coasts is, howe%er, of "reat im#ortance to e%ery nation, both with reference to
the home market, and to forei"n commerceH and a nation the market of whose coasts belon"s
more to the forei"ner than to itself, is a di%ided nation not merely in economical res#ects, b't
also in #olitical ones. 9ndeed, there can be no more in/'rio's #osition for a nation, whether in its
economical or #olitical as#ect, than if its sea#orts sym#athise more with the forei"ner than with
itself.
Science m'st not deny the nat're of s#ecial national circ'mstances, nor i"nore and
misre#resent it, in order to #romote cosmo#olitical ob/ects. *hose ob/ects can only be attained
by #ayin" re"ard to nat're, and by tryin" to lead the Se#arate nations in accordance with it to a
hi"her aim. -e may see what small s'ccess has hitherto attended the doctrines of the school in
#ractice. *his is not so m'ch the fa'lt of #ractical statesmen, by whom the character of the
national circ'mstances has been com#rehended tolerably correctly, as the fa'lt of the theories
themsel%es, the #ractice of which (inasm'ch as they are o##osed to all e0#erience! m'st
necessarily err. Ha%e those theories #re%ented nations (like those of So'th 4merica! from
introd'cin" the #rotectionist system, which is contrary to the reI'irements of their national
circ'mstancesN @r ha%e they #re%ented the e0tension of #rotectionism to the #rod'ction of
#ro%isions and raw materials, which, howe%er, needs no #rotection, and in which the restriction
of commercial interco'rse m'st be disad%anta"eo's 'nder all circ'mstances to both nations --
to that which im#oses, as well as to that which s'Lers from s'ch restrictionsN Has this theory
#re%ented the Gner man'fact'red "oods, which are essentially articles of l'0'ry, from bein"
com#rehended amon" ob/ects reI'irin" #rotection, while it is ne%ertheless clear that these can
be e0#osed to com#etition witho't the least dan"er to the #ros#erity of the nationN :oH the
theory has till now not eLected any thoro'"h reform, and f'rther will ne%er eLect any, so lon"
as it stands o##osed to the %ery nat're of thin"s. C't it can and m'st eLect "reat reforms as
soon as it consents to base itself on that nat're.
9t will Grst of all establish a beneGt e0tendin" to all nations, to the #ros#erity and #ro"ress of
the whole h'man race, if it shows that the #re%ention of free trade in nat'ral #rod'cts and raw
materials ca'ses to the nation itself which #re%ents it the "reatest disad%anta"e, and that the
system of #rotection can be /'stiGed solely and only for the #'r#ose of the ind'strial
de%elo#ment of the nation. 9t may then, by th's basin" the system of #rotection as re"ards
man'fact'res on correct #rinci#les, ind'ce nations which at #resent ado#t a ri"idly #rohibiti%e
system, as e.". the French, to "i%e '# the #rohibiti%e system by de"rees. *he man'fact'rers
27
will not o##ose s'ch a chan"e as soon as they become con%inced that the theorists, %ery far
from #lannin" the r'in of e0istin" man'fact'res, consider their #reser%ation and their f'rther
de%elo#ment as the basis of e%ery sensible commercial #olicy.
9f the theory will teach the Germans, that they can f'rther their man'fact'rin" #ower
ad%anta"eo'sly only by #rotecti%e d'ties #re%io'sly G0ed, and on a "rad'ally increasin" scale
at Grst, b't afterwards "rad'ally diminishin", and that 'nder all circ'mstances #artial b't
caref'lly limited forei"n com#etition is really beneGcial to their own man'fact'rin" #ro"ress, it
will render far better ser%ice in the end to the ca'se of free trade than if it sim#ly hel#s to
stran"le German ind'stry.
*he theory m'st not e0#ect from the 3nited States of :orth 4merica that they are to sacriGce
to free com#etition from the forei"ner, those man'fact'res in which they are #rotected by
chea# raw materials and #ro%isions, and by machine #ower. 9t will, howe%er, meet no
contradiction if it maintains that the 3nited States, as lon" as wa"es are dis#ro#ortionately
hi"her there than in the older ci%ilised States, can best #romote the de%elo#ment of their
#rod'cti%e #owers, their ci%ilisation and #olitical #ower, by allowin" the free im#ort as m'ch as
#ossible of those man'fact'red articles in the cost of which wa"es are a #rinci#al element,
#ro%ided that other co'ntries admit their a"ric'lt'ral #rod'cts and raw materials.
*he theory of free trade will then Gnd admission into S#ain, ,ort'"al, :a#les, *'rkey ;"y#t, and
all barbaro's and half-ci%ilised or hot co'ntries. 9n s'ch co'ntries as these the foolish idea will
not be held any lon"er, of wantin" to establish (in their #resent state of c'lt're! a
man'fact'rin" #ower of their own by means of the system of #rotection.
;n"land will then "i%e '# the idea that she is desi"ned to mono#olise the man'fact'rin" #ower
of the whole world. She will no lon"er reI'ire that France, Germany, and :orth 4merica sho'ld
sacriGce their own man'fact'res in consideration of the concession by ;n"land of #ermittin"
the im#ort, d'ty free, of a"ric'lt'ral #rod'cts and raw materials. She will reco"nise the
le"itimacy of #rotecti%e systems in those nations, altho'"h she will herself more and more
fa%o'r free tradeH the theory ha%in" ta'"ht her that a nation which has already attained
man'fact'rin" s'#remacy, can only #rotect its own man'fact'rers and merchants a"ainst
retro"ression and indolence, by the free im#ortation of means of s'bsistence and raw
materials, and by the com#etition of forei"n man'fact'red "oods.
;n"land will then follow a #ractice totally o##osed to her #resent commercial #olicy, instead of
lect'rin", as hitherto, other nations to ado#t free trade, whilst herself maintainin" the strictest
#rohibitory systemH she will herself #ermit com#etition witho't re"ard to the forei"n systems of
#rotection. She will defer her ho#es of the "eneral ado#tion of free trade, 'ntil other nations
ha%e no lon"er to fear that the r'in of their man'factories wo'ld res'lt from free com#etition.
+eanwhile, and 'ntil that #eriod has arri%ed, ;n"land will be able to com#ensate herself for
the losses which she s'Lers from forei"n systems of #rotection, in res#ect of her e0#ort trade in
man'fact'res of e%ery-day 'se, by a "reater e0#ort of "oods of Gner I'ality, and by o#enin",
establishin", and c'lti%atin" new markets for her man'fact'res.
She will endea%o'r to brin" abo't #eace in S#ain, in the ;ast, and in the states of $entral and
So'th 4merica, and will 'se her inO'ence in all the barbaro's and half-ci%ilised co'ntries of
$entral and So'th 4merica, of 4sia and 4frica, in order that #owerf'l and ci%ilised "o%ernments
may be formed in them, that sec'rity of #ersons and of #ro#erty may be introd'ced into them,
for the constr'ction in them of roads and canals, the #romotion of ed'cation and ci%ilisation,
morality and ind'stry, and for rootin" o't fanaticism, s'#erstition, and idleness. 9f conc'rrently
with these endea%o'rs she abolishes her restrictions on the im#ortation of #ro%isions and raw
materials, she will increase her e0#orts of man'fact'res immensely, and m'ch more
s'ccessf'lly than by contin'ally s#ec'latin" on the r'in of the $ontinental man'factories.
9f, howe%er, these o#erations of ci%ilisation on the #art of ;n"land are to be s'ccessf'l as
res#ects barbaro's and half-ci%ilised nations, she m'st not act in an e0cl'si%e manner, she
m'st not endea%o'r by s#ecial commercial #ri%ile"es, s'ch as, for instance, she has mana"ed
to #roc're in CraAil, to mono#olise these markets, and to sh't o't other nations from them.
S'ch a #olicy as the latter will always e0cite the /'st /ealo'sy of other nations, and "i%e them a
moti%e for o##osin" the e0ertions of ;n"land. 9t is e%ident that this selGsh #olicy is the ca'se
why the inO'ence of the ci%ilised #owers on the ci%ilisation of s'ch co'ntries as we ha%e
s#eciGed has been hitherto so 'nim#ortant. ;n"land o'"ht therefore to introd'ce into the law
of nations the ma0im& that in all s'ch co'ntries the commerce of all man'fact'rin" nations
sho'ld ha%e eI'al ri"hts. ;n"land wo'ld thereby not merely sec're the aid of all ci%ilised
#owers in her own work of ci%ilisation, b't also no disad%anta"e wo'ld res'lt to her own
28
commerce if similar e0#eriments of ci%ilisation were 'ndertaken by other man'fact'rin"
nations. @n acco'nt of their s'#eriority in all branches of man'fact're and commerce, the
;n"lish wo'ld e%erywhere always obtain the "reatest share of the e0#orts to s'ch markets.
*he stri%in" and ceaseless intri"'es of the ;n"lish a"ainst the man'fact'res of other nations
mi"ht still be /'stiGed, if a world-man'fact'rin" mono#oly were indis#ensable for the #ros#erity
of ;n"land, if it co'ld not be #ro%ed by e%idence that the nations which as#ire, after the
e0am#le of ;n"land, to attain to a lar"e man'fact'rin" #ower can %ery well attain their ob/ect
witho't the h'miliation of ;n"landH that ;n"land need not become #oorer than she is beca'se
others become richerH and that nat're oLers s'Fcient means for the creation in Germany,
France, and :orth 4merica (witho't detriment to the #ros#erity of ;n"land!, of a man'fact'rin"
#ower eI'al to that of the ;n"lish.
-ith re"ard to this, it m'st f'rther be remarked, that e%ery nation which "ains entire
#ossession of its own home market for man'fact'res, "ains in the co'rse of time, by its home
#rod'ction and cons'm#tion of man'fact'red "oods, inGnitely more than the nation which has
hitherto #ro%ided the former with man'fact'red "oods loses by bein" e0cl'dedH beca'se a
nation which man'fact'res for itself, and which is #erfectly de%elo#ed in its economical
conditions, becomes more than #ro#ortionately richer and more #o#'lo's, conseI'ently is
enabled to cons'me inGnitely more fabrics, than it co'ld im#ort while de#endin" on a forei"n
man'fact'rin" nation for its s'##ly.
4s res#ects the e0#ortation of man'fact'red "oods, howe%er, the co'ntries of the tem#erate
Aone (bein" s#ecially Gtted Cy nat're for man'fact'rin"! ha%e a s#ecial Geld for their eLorts in
s'##lyin" the cons'm#tion of the co'ntries of the torrid Aone, which latter #ro%ide the former
with colonial #rod'ce in e0chan"e for their man'fact'red "oods. *he cons'm#tion of
man'fact'red "oods by the co'ntries of the torrid Aone, howe%er, is #artly determined by their
ability to #rod'ce a s'r#l's of the articles #ec'liar to their climate, and #artly accordin" to the
#ro#ortion in which the co'ntries of the tem#erate Aone a'"ment their demand for the #rod'cts
of the torrid Aone.
9f it can now be #ro%ed, that in the co'rse of time the co'ntries of the torrid Aone can #rod'ce
s'"ar, rice, cotton, coLee, Rc. to an e0tent G%e or ten times "reater than hitherto, and that the
co'ntries of the tem#erate Aone can cons'me G%e or ten times more of these articles than
hitherto, it will be sim'ltaneo'sly #ro%ed that the co'ntries of the tem#erate Aone can increase
their e0#ortation of man'fact'red "oods to the co'ntries of the torrid Aone by from G%e to ten
times their #resent total I'antity.
*he ca#ability of the $ontinental nations to increase their cons'm#tion of colonial #rod'ce th's
considerably, is indicated by the increase of cons'm#tion in ;n"land for the last Gfty yearsH in
reference to which it m'st f'rther be borne in mind, that that increase wo'ld #robably ha%e
become %ery m'ch "reater still were it not for the e0cessi%e ta0es on cons'm#tion.
@f the #ossibility of a'"mentin" the #rod'ctions of the torrid Aone, Holland in S'matra and
Ba%a, and ;n"land in the ;ast 9ndies, ha%e "i%en 's d'rin" the last G%e years irrefra"able #roofs.
;n"land has I'adr'#led her im#ortation of s'"ar from the ;ast 9ndies from 1872 to 1876H her
im#ortation of coLee has increased e%en in a still lar"er #ro#ortion, while the im#ortation of
;ast 9ndia cotton is also "reatly increasin". 9n one word, the latest ;n"lish #a#ers (Febr'ary,
18=! anno'nced with "reat re/oicin" that the ca#ability of the ;ast 9ndies for the #rod'ction of
these articles is 'nlimited, and that the time is not far distant when ;n"land will make herself
inde#endent of the im#ortation of these articles from 4merica and the -est 9ndies. Holland on
her #art is already embarrassed for means of sale of her colonial #rod'cts, and seeks acti%ely
for new markets. Let 's f'rther remember that :orth 4merica contin'es to a'"ment her cotton
#rod'ction -- that in *e0as a State has risen '# which witho't do'bt will become #ossessed of
the whole of +e0ico, and will make o't of that fertile co'ntry a territory s'ch as the So'thern
States of the :orth 4merican 3nion now are. -e may well ima"ine that order and law, ind'stry
and intelli"ence, will e0tend themsel%es "rad'ally o%er the So'th 4merican States from
,anama to $a#e Horn, then o%er the whole of 4frica and 4sia, and a'"ment e%erywhere
#rod'ction and a s'r#l's of #rod'ctsH and we may then com#rehend witho't diFc'lty that here
there is room eno'"h for more than one nation for the sale of man'fact'red "oods.
Cy calc'latin" the area of the land which has '# to this time been act'ally 'sed for the
#rod'ction of colonial #rod'ce, and com#arin" it with the entire area which is Gtted Cy nat're
for s'ch #rod'ction, we shall Gnd that at #resent scarcely the Gftieth #art of the land Gtted for
this #rod'ction is act'ally 'sed.
29
How, then, co'ld ;n"land be able to mono#olise the man'fact'rin" markets of all co'ntries
which yield colonial #rod'ce, if she is able to s'##ly her own entire reI'irements of s'ch
#rod'ce by means of im#ortation from the ;ast 9ndies aloneN How can ;n"land ind'l"e the
ho#e of sellin" man'fact'red "oods to co'ntries whose colonial #rod'cts she cannot take in
e0chan"eN @r how can a "reat demand for colonial #rod'ce s#rin" '# in the continent of
;'ro#e, if the $ontinent is not enabled by its man'fact'rin" #rod'ction to #ay for, and th's to
cons'me, these "oodsN
9t is therefore e%ident, that kee#in" down the man'fact'rin" ind'stry of the $ontinent, tho'"h
it certainly hinders the #ro"ress of the $ontinental nations, does not in the least f'rther the
#ros#erity of ;n"land.
9t is f'rther clear, that, at #resent, as well as for some lon" time to come, the co'ntries of the
torrid Aone will oLer to all nations which are Gtted for man'fact'rin" #rod'ction ab'ndant
materials for e0chan"e.
Lastly, it is e%ident that a world-man'fact'rin" mono#oly s'ch as is at #resent established by
the free com#etition of ;n"lish man'fact'red "oods on the ;'ro#ean and 4merican continents
is not in the least more cond'ci%e to the welfare of the h'man race than the system of
#rotection, which aims at de%elo#in" the man'fact'rin" #ower of the whole tem#erate Aone,
for the beneGt of the a"ric'lt're of the whole torrid Aone.
*he ad%ance which ;n"land has made in man'fact'res, na%i"ation, and commerce, need
therefore not disco'ra"e any other nation which is Gtted for man'fact'rin" #rod'ction, by the
#ossession of s'itable territory, of national #ower and intelli"ence, from enterin" into the lists
with ;n"land)s man'fact'rin" s'#remacy. 4 f't're is a##roachin" for man'fact'res, commerce,
and na%i"ation which will s'r#ass the #resent as m'ch as the #resent s'r#asses the #ast. Let
's only ha%e the co'ra"e to belie%e in a "reat national f't're, and in that belief to march
onward. C't abo%e all thin"s we m'st ha%e eno'"h national s#irit at once to #lant and #rotect
the tree, which will yield its Grst richest fr'its only to f't're "enerations. -e m'st Grst "ain
#ossession of the home market of o'r own nation, at least as res#ects articles of "eneral
necessity, and try to #roc're the #rod'cts of tro#ical co'ntries direct from those co'ntries
which allow 's to #ay for them with o'r own man'fact'red "oods. *his is es#ecially the task
which the German commercial 'nion has to sol%e, if the German nation is not to remain far
behind the French and :orth 4mericans, nay, far behind e%en the <'ssians.
:@*;S&
1. >ide -ealth of :ations, Cook 9>. cha#. ii. (*<.!
Fo+rth (ook
The #olitics
,ha-ter 00
The 5ns+lar +-re"ac! and the ,ontinental #owers -- North
6"erica and France
9n all a"es there ha%e been cities or co'ntries which ha%e been #re-eminent abo%e all others in
ind'stry, commerce, and na%i"ationH b't a s'#remacy s'ch as that which e0ists in o'r days, the
world has ne%er before witnessed. 9n all a"es, nations and #owers ha%e stri%en to attain to the
dominion of the world, b't hitherto not one of them has erected its #ower on so broad a
fo'ndation. How %ain do the eLorts of those a##ear to 's who ha%e stri%en to fo'nd their
'ni%ersal dominion on military #ower, com#ared with the attem#t of ;n"land to raise her entire
territory into one immense man'fact'rin", commercial, and maritime city, and to become
amon" the co'ntries and kin"doms of the earth, that which a "reat city is in relation to its
s'rro'ndin" territory. to com#rise within herself all ind'stries, arts, and sciencesH all "reat
commerce and wealthH all na%i"ation and na%al #ower -- a world)s metro#olis which s'##lies all
nations with man'fact'red "oods, and s'##lies herself in e0chan"e from e%ery nation with
those raw materials and a"ric'lt'ral #rod'cts of a 'sef'l or acce#table kind, which each other
nation is Gtted by nat're to yield to her -- a treas're-ho'se of all "reat ca#ital -- a bankin"
establishment for all nations, which controls the circ'latin" medi'm of the whole world, and by
loans and the recei#t of interest on them makes all the #eo#les of the earth her trib'taries. Let
's, howe%er, do /'stice to this ,ower and to her eLorts. *he world has not been hindered in its
#ro"ress, b't immensely aided in it, by ;n"land. She has become an e0am#le and a #attern to
all nations -- in internal and in forei"n #olicy, as well as in "reat in%entions and enter#rises of
e%ery kindH in #erfectin" ind'strial #rocesses and means of trans#ort, as well as in the
30
disco%ery and brin"in" into c'lti%ation 'nc'lti%ated lands, es#ecially in the acI'isition of the
nat'ral riches of tro#ical co'ntries, and in the ci%ilisation of barbaro's races or of s'ch as ha%e
retro"raded into barbarism. -ho can tell how far behind the world mi"ht yet remain if no
;n"land had e%er e0istedN 4nd if she now ceased to e0ist, who can estimate how far the h'man
race mi"ht retro"radeN Let 's then con"rat'late o'rsel%es on the immense #ro"ress of that
nation, and wish her #ros#erity for all f't're time. C't o'"ht we on that acco'nt also to wish
that she may erect a 'ni%ersal dominion on the r'ins of the other nationalitiesN :othin" b't
'nfathomable cosmo#olitanism or sho#kee#ers) narrow-mindedness can "i%e an assentin"
answer to that I'estion. 9n o'r #re%io's cha#ters we ha%e #ointed o't the res'lts of s'ch
denationalisation, and shown that the c'lt're and ci%ilisation of the h'man race can only be
bro'"ht abo't by #lacin" many nations in similar #ositions of ci%ilisation, wealth, and #owerH
that /'st as ;n"land herself has raised herself from a condition of barbarism to her #resent hi"h
#osition, so the same #ath lies o#en for other nations to follow& and that at this time more than
one nation is I'aliGed to stri%e to attain the hi"hest de"ree of ci%ilisation, wealth, and #ower.
Let 's now state s'mmarily the ma0ims of State #olicy by means of which ;n"land has attained
her #resent "reatness. *hey may be brieOy stated th's&
4lways to fa%o'r the im#ortation of #rod'cti%e #ower,(1J! in #reference to the im#ortation of
"oods.
$aref'lly to cherish and to #rotect the de%elo#ment of the #rod'cti%e #ower.
*o im#ort only raw materials and a"ric'lt'ral #rod'cts, and to e0#ort nothin" b't
man'fact'red "oods.
*o direct any s'r#l's of #rod'cti%e #ower to colonisation, and to the s'b/ection of barbaro's
nations.
*o reser%e e0cl'si%ely to the mother co'ntry the s'##ly of the colonies and s'b/ect co'ntries
with man'fact'red "oods, b't in ret'rn to recei%e on #referential terms their raw materials and
es#ecially their colonial #rod'ce.
*o de%ote es#ecial care to the coast na%i"ationH to the trade. Cetween the mother co'ntry and
the coloniesH to enco'ra"e sea Gsheries by means of bo'ntiesH and to take as acti%e a #art as
#ossible in international na%i"ation.
Cy these means to fo'nd a na%al s'#remacy, and by means of it to e0tend forei"n commerce,
and contin'ally to increase her colonial #ossessions.
*o "rant freedom in trade with the colonies and in na%i"ation only so far as she can "ain more
by it than she loses.
*o "rant reci#rocal na%i"ation #ri%ile"es only if the ad%anta"e is on the side of ;n"land, or if
forei"n nations can by that means be restrained from introd'cin" restrictions on na%i"ation in
their own fa%o'r.
*o "rant concessions to forei"n inde#endent nations in res#ect of the im#ort of a"ric'lt'ral
#rod'cts, only in case concessions in res#ect of her own man'fact'red #rod'cts can be "ained
thereby.
9n cases where s'ch concessions cannot be obtained by treaty, to attain the ob/ect of them by
means of contraband trade.
*o make wars and to contract alliances with e0cl'si%e re"ard to her man'fact'rin",
commercial, maritime, and colonial interests. *o "ain by these alike from friends and foes& from
the latter by interr'#tin" their commerce at seaH from the former by r'inin" their man'fact'res
thro'"h s'bsidies which are #aid in the sha#e of ;n"lish man'fact'red "oods.
*hese ma0ims were in former times #lainly #rofessed by all ;n"lish ministers and
#arliamentary s#eakers. *he ministers of Geor"e 9 in 1511 o#enly declared, on the occasion of
the #rohibition of the im#ortation of the man'fact'res of 9ndia, that it was clear that a nation
co'ld only become wealthy and #owerf'l if she im#orted raw materials and e0#orted
man'fact'red "oods. ;%en in the times of Lords $hatham and :orth, they did not hesitate to
declare in o#en ,arliament that it o'"ht not to be #ermitted that e%en a sin"le horse-shoe nail
sho'ld be man'fact'red in :orth 4merica. 9n 4dam Smith)s time, a new ma0im was for the Grst
time added to those which we ha%e abo%e stated, namely, to conceal the tr'e #olicy of ;n"land
'nder the cosmo#olitical e0#ressions and ar"'ments which 4dam Smith had disco%ered, in
order to ind'ce forei"n nations not to imitate that #olicy.
9t is a %ery common cle%er de%ice that when anyone has attained the s'mmit of "reatness, he
kicks away the ladder by which he has climbed '#, in order to de#ri%e others of the means of
climbin" '# after him. 9n this lies the secret of the cosmo#olitical doctrine of 4dam Smith, and
31
of the cosmo#olitical tendencies of his "reat contem#orary -illiam ,itt, and of all his s'ccessors
in the Critish Go%ernment administrations.
4ny nation which by means of #rotecti%e d'ties and restrictions on na%i"ation has raised her
man'fact'rin" #ower and her na%i"ation to s'ch a de"ree of de%elo#ment that no other nation
can s'stain free com#etition with her, can do nothin" wiser than to throw away these ladders of
her "reatness, to #reach to other nations the beneGts of free trade, and to declare in #enitent
tones that she has hitherto wandered in the #aths of error, and has now for the Grst time
s'cceeded in disco%erin" the tr'th.
-illiam ,itt was the Grst ;n"lish statesman who clearly #ercei%ed in what way the
cosmo#olitical theory of 4dam Smith co'ld be #ro#erly made 'se of, and not in %ain did he
himself carry abo't a co#y of the work on the -ealth of :ations. His s#eech in 1588, which was
addressed neither to ,arliament nor to the nation, b't clearly to the ears of the statesmen of
France, who were destit'te of all e0#erience and #olitical insi"ht, and solely intended to
inO'ence the latter in fa%o'r of the ;den *reaty, is an e0cellent s#ecimen of Smith)s style of
reasonin". Cy nat're he said France was ada#ted for a"ric'lt're and the #rod'ction of wine, as
;n"land was th's ada#ted to man'fact'rin" #rod'ction. *hese nations o'"ht to act towards
one another /'st as two "reat merchants wo'ld do who carry on diLerent branches of trade and
who reci#rocally enrich one another by the e0chan"e of "oods.(1J! :ot a word here of the old
ma0im of ;n"land, that a nation can only attain to the hi"hest de"ree of wealth and #ower in
her forei"n trade by the e0chan"e of man'fact'red #rod'cts a"ainst a"ric'lt'ral #rod'cts and
raw materials. *his ma0im was then, and has remained since, an ;n"lish State secretH it was
ne%er a"ain o#enly #rofessed, b't was all the more #ersistently followed. 9f, howe%er, ;n"land
since -illiam ,itt)s time had really cast away the #rotecti%e system as a 'seless cr'tch, she
wo'ld now occ'#y a m'ch hi"her #osition than she does, and she wo'ld ha%e "ot m'ch nearer
to her ob/ect, which is to mono#olise the man'fact'rin" #ower of the whole world. *he
fa%o'rable moment for attainin" this ob/ect was clearly /'st after the restoration of the "eneral
#eace. Hatred of :a#oleon)s $ontinental system had sec'red a rece#tion amon" all nations of
the $ontinent of the doctrines of the cosmo#olitical theory. <'ssia, the entire :orth of ;'ro#e,
Germany, the S#anish #enins'la, and the 3nited States of :orth 4merica wo'ld ha%e
considered themsel%es fort'nate in e0chan"in" their a"ric'lt'ral #rod'ce and raw materials for
;n"lish man'fact'red "oods. France herself wo'ld #erha#s ha%e fo'nd it #ossible, in
consideration of some decided concessions in res#ect of her wine and silk man'fact'res, to
de#art from her #rohibiti%e system.
*hen also the time had arri%ed when, as ,riestley said of the ;n"lish na%i"ation laws, it wo'ld
be /'st as wise to re#eal the ;n"lish #rotecti%e system as it had formerly been to introd'ce it.
*he res'lt of s'ch a #olicy wo'ld ha%e been that all the s'r#l's raw materials and a"ric'lt'ral
#rod'ce from the two hemis#heres wo'ld ha%e Oowed o%er to ;n"land, and all the world wo'ld
ha%e clothed themsel%es with ;n"lish fabrics. 4ll wo'ld ha%e tended to increase the wealth and
the #ower of ;n"land. 3nder s'ch circ'mstances the 4mericans or the <'ssians wo'ld hardly
ha%e taken it into their heads in the co'rse of the #resent cent'ry to introd'ce a #rotecti%e
system, or the Germans to establish a c'stoms 'nion. ,eo#le wo'ld ha%e come to the
determination with diFc'lty to sacriGce the ad%anta"es of the #resent moment to the ho#es of
a distant f't're.
C't ,ro%idence has taken care that trees sho'ld not "row I'ite '# to the sky. Lord $astlerea"h
"a%e o%er the commercial #olicy of ;n"land into the hands of the landed aristocracy, and these
killed the hen which had laid the "olden e""s. Had they #ermitted the ;n"lish man'fact'res to
mono#olise the markets of all nations, Great Critain wo'ld ha%e occ'#ied the #osition in res#ect
to the world which a man'fact'rin" town does in res#ect to the o#en co'ntryH the whole
territory of the island of ;n"land wo'ld ha%e been co%ered with ho'ses and man'factories, or
de%oted to #leas're "ardens, %e"etable "ardens, and orchardsH to the #rod'ction of milk and of
meat, or of the c'lti%ation of market #rod'ce, and "enerally to s'ch c'lti%ation as only can be
carried on in the nei"hbo'rhood of "reat cities. *he #rod'ction of these thin"s wo'ld ha%e
become m'ch more l'crati%e for ;n"lish a"ric'lt're than the #rod'ction of corn, and
conseI'ently after a time the ;n"lish landed aristocracy wo'ld ha%e obtained m'ch hi"her
rents than by the e0cl'sion of forei"n "rain from the home market. @nly, the landed aristocracy
ha%in" only their #resent interests in %iew, #referred by means of the corn laws to maintain
their rents at the hi"h rate to which they had been raised by the in%ol'ntary e0cl'sion of
forei"n raw materials and "rain from the ;n"lish market which had been occasioned by the
warH and th's they com#elled the nations of the $ontinent to seek to #romote their own welfare
32
by another method than by the free e0chan"e of a"ric'lt'ral #rod'ce for ;n"lish man'fact'res,
%iA. Cy the method of establishin" a man'fact'rin" #ower of their own. *he ;n"lish restricti%e
laws th's o#erated I'ite in the same way as :a#oleon)s $ontinental system had done, only
their o#eration was somewhat slower.
-hen $annin" and H'skisson came into oFce, the landed aristocracy had already tasted too
m'ch of the forbidden fr'it for it to be #ossible to ind'ce them by reasons of common sense to
reno'nce what they had en/oyed. *hese statesmen fo'nd themsel%es in the diFc'lt #osition of
sol%in" an im#ossible #roblem -- a #osition in which the ;n"lish ministry still Gnds itself. *hey
had at one and the same time to con%ince the $ontinental nations of the ad%anta"es of free
trade, and also maintain the restrictions on the im#ort of forei"n a"ric'lt'ral #rod'ce for the
beneGt of the ;n"lish landed aristocracy. Hence it was im#ossible that their system co'ld be
de%elo#ed in s'ch a manner that /'stice co'ld be done to the ho#es of the ad%ocates of free
trade on both continents. -ith all their liberality with #hilanthro#ical and cosmo#olitical #hrases
which they 'ttered in "eneral disc'ssions res#ectin" the commercial systems of ;n"land and
other co'ntries, they ne%ertheless did not think it inconsistent, whene%er the I'estion arose of
the alteration of any #artic'lar ;n"lish d'ties, to base their ar"'ments on the #rinci#le of
#rotection.
H'skisson certainly red'ced the d'ties on se%eral articles, b't he ne%er omitted to take care
that at that lower scale of d'ty the home man'factories were still s'Fciently #rotected. He
th's followed #retty m'ch the r'les of the ?'tch water administration. -here%er the water on
the o'tside rises hi"h, these wise a'thorities erect hi"h dykesH where%er it rises less, they only
b'ild lower dykes. 4fter s'ch a fashion the reform of the ;n"lish commercial #olicy which was
anno'nced with so m'ch #om# red'ced itself to a #iece of mere #olitico-economical /'""lery.
Some #ersons ha%e add'ced the lowerin" of the ;n"lish d'ty on silk "oods as a #iece of ;n"lish
liberality, witho't d'ly considerin" that ;n"land by that means only so'"ht to disco'ra"e
contraband trade in these articles to the beneGt of her Gnances and witho't in/'ry to her own
silk man'factories, which ob/ect it has also by that means #erfectly attained. C't if a #rotecti%e
d'ty of 2= to 5= #er cent (which at this day forei"n silk man'fact'rers ha%e to #ay in ;n"land,
incl'din" the e0tra d'ty(7J!! is to be acce#ted as a #roof of liberality most nations may claim
that they ha%e rather #receded the ;n"lish in that res#ect than followed them.
4s the demonstrations of $annin" and H'skisson were s#ecially intended to #rod'ce an eLect
in France and :orth 4merica, it will not be 'ninterestin" to call to mind in what way it was that
they s'Lered shi#wreck in both co'ntries. B'st as formerly in the year 1588, so also on this
occasion, the ;n"lish recei%ed "reat s'##ort from the theorists, and the liberal #arty in France,
carried away by the "rand idea of 'ni%ersal freedom of trade and by Say)s s'#erGcial
ar"'ments, and from feelin"s of o##osition towards a detested Go%ernment and s'##orted by
the maritime towns, the wine "rowers, and the silk man'fact'rers, the liberal #arty clamoro'sly
demanded, as they had done in the year 1588, e0tension of the trade with ;n"land as the one
tr'e method of #romotin" the national welfare.
For whate%er fa'lts #eo#le may lay to the char"e of the <estoration, it rendered an 'ndeniable
ser%ice to France, a ser%ice which #osterity will not dis#'teH it did not allow itself to be misled
into a false ste# as res#ects commercial #olicy either by the strata"ems of the ;n"lish or by the
o'tcry of the liberals. +r $annin" laid this b'siness so m'ch to heart that he himself made a
/o'rney to ,aris in order to con%ince +onsie'r >illMle of the e0cellence of his meas'res, and to
ind'ce him to imitate them. +. >illMle was, howe%er, m'ch too #ractical not to see com#letely
thro'"h this strata"emH he is said to ha%e re#lied to +r $annin", )9f ;n"land in the far ad%anced
#osition of her ind'stry #ermits "reater forei"n com#etition than formerly, that #olicy
corres#onds to ;n"land)s own well-'nderstood interests. C't at this time it is to the well-
'nderstood interests of France that she sho'ld sec're to her man'factories which ha%e not as
yet attained #erfect de%elo#ment, that #rotection which is at #resent indis#ensable to them for
that ob/ect. C't whene%er the moment shall ha%e arri%ed when French man'fact'rin" ind'stry
can be better #romoted by #ermittin" forei"n com#etition than by restrictin" it, then he (+.
>illMle! wo'ld not delay to deri%e ad%anta"e from followin" the e0am#le of +r $annin".)
4nnoyed by this concl'si%e answer, $annin" boasted in o#en ,arliament after his ret'rn, how
he had h'n" a millstone on the neck of the French Go%ernment by means of the S#anish
inter%ention, from which it follows that the cosmo#olitan sentiments and the ;'ro#ean
liberalism of +r $annin" were not s#oken I'ite so m'ch in earnest as the "ood liberals on the
$ontinent mi"ht ha%e chosen to belie%e. For how co'ld +r $annin", if the ca'se of liberalism on
the $ontinent had interested him in the least, ha%e sacriGced the liberal constit'tion of S#ain to
33
the French inter%ention owin" to the mere desire to han" a millstone ro'nd the neck of the
French Go%ernmentN *he tr'th is, that +r $annin" was e%ery inch an ;n"lishman, and he only
#ermitted himself to entertain #hilanthro#ical or cosmo#olitical sentiments, when they co'ld
#ro%e ser%iceable to him in stren"thenin" and still f'rther e0tendin" the ind'stry and
commercial s'#remacy of ;n"land, or in throwin" d'st into the eyes of ;n"land)s ri%als in
ind'stry and commerce.
9n fact, no "reat sa"acity was needed on the #art of +. >illMle to #ercei%e the snare which had
been laid for him by +r $annin". 9n the e0#erience of nei"hbo'rin" Germany, who after the
abolition of the $ontinental system had contin'ally retro"raded farther and farther in res#ect of
her ind'stry, +. >illMle #ossessed a strikin" #roof of the tr'e %al'e of the #rinci#le of
commercial freedom as it was 'nderstood in ;n"land. 4lso France was #ros#erin" too well
'nder the system which she had ado#ted since 1812, for her to be willin" to attem#t, like the
do" in the fable, to let "o the s'bstance and sna# at the shadow. +en of the dee#est insi"ht
into the condition of ind'stry, s'ch as $ha#tal and $harles ?'#in, had e0#ressed themsel%es on
the res'lts of this system in the most 'neI'i%ocal manner.
$ha#tal)s work on French ind'stry is nothin" less than a defence of the French commercial
#olicy, and an e0#osition of its res'lts as a whole and in e%ery #artic'lar. *he tendency of this
work is e0#ressed in the followin" I'otation from it. )9nstead of losin" o'rsel%es in the labyrinth
of meta#hysical abstractions, we maintain abo%e all that which e0ists, and seek abo%e all to
make it #erfect. Good c'stoms le"islation is the b'lwark of man'fact'rin" ind'stry. 9t increases
or lessens im#ort d'ties accordin" to circ'mstancesH it com#ensates the disad%anta"es of
hi"her wa"es of labo'r and of hi"her #rices of f'elH it #rotects arts and ind'stries in their cradle
'ntil they at len"th become stron" eno'"h to bear forei"n com#etitionH it creates the ind'strial
inde#endence of France and enriches the nation thro'"h labo'r, which, as 9 ha%e already often
remarked, is the chief so'rce of wealth.)(J!
$harles ?'#in had, in his work )@n the ,rod'cti%e ,owers of France, and on the ,ro"ress of
French 9nd'stry from 181 to 185,) thrown s'ch a clear li"ht on the res'lts of the commercial
#olicy which France had followed since the <estoration, that it was im#ossible that a French
minister co'ld think of sacriGcin" this work of half a cent'ry, which had cost s'ch sacriGces,
which was so rich in fr'its, and so f'll of #romise for the f't're, merely for the attractions of a
+eth'en *reaty.
*he 4merican tariL for the year 1818 was a nat'ral and necessary res'lt of the ;n"lish
commercial system, which sh't o't from the ;n"lish frontiers the :orth 4merican timber, "rain,
meal, and other a"ric'lt'ral #rod'cts, and only #ermitted raw cotton to be recei%ed by ;n"land
in e0chan"e for her man'fact'red "oods. @n this system the trade with ;n"land only tended to
#romote the a"ric'lt'ral labo'r of the 4merican sla%es, while on the other hand, the freest,
most enli"htened, and most #owerf'l States of the 3nion fo'nd themsel%es entirely arrested in
their economical #ro"ress, and th's red'ced to dis#ose of their ann'al s'r#l's of #o#'lation
and ca#ital by emi"ration to the waste lands of the -est. +r H'skisson 'nderstood this #osition
of aLairs %ery well. 9t was notorio's that the ;n"lish ambassador in -ashin"ton had more than
once correctly informed him of the ine%itable conseI'ence of the ;n"lish #olicy. 9f +r H'skisson
had really been the man that #eo#le in other co'ntries s'##osed him to be, he wo'ld ha%e
made 'se of the #'blication of the 4merican tariL as a %al'able o##ort'nity for makin" the
;n"lish aristocracy com#rehend the folly of their corn laws, and the necessity of abolishin"
them. C't what did +r H'skisson doN He fell into a #assion with the 4mericans (or at least
aLected to do so!, and in his e0citement he made alle"ations -- the incorrectness of which was
well known to e%ery 4merican #lanter -- and #ermitted himself to 'se threats which made him
ridic'lo's. +r H'skisson said the e0#orts of ;n"land to the 3nited States amo'nted to only
abo't the si0th #art of all the e0#orts of ;n"land, while the e0#orts of the 3nited States to
;n"land constit'ted more than half of all their e0#orts. From this he so'"ht to #ro%e that the
4mericans were more in the #ower of the ;n"lish than the latter were in that of the formerH and
that the ;n"lish had m'ch less reason to fear interr'#tions of trade thro'"h war, cessation of
interco'rse, and so forth, than the 4mericans had. 9f one looks merely at the totals of the %al'e
of the im#orts and e0#orts, H'skisson)s ar"'ment a##ears s'Fciently #la'sibleH b't if one
considers the nat're of the reci#rocal im#orts and e0#orts, it will then a##ear incom#rehensible
how +r H'skisson co'ld make 'se of an ar"'ment which #ro%es the e0act o##osite of that
which he desired to #ro%e. 4ll or by far the "reater #art of the e0#orts of the 3nited States to
;n"land consisted of raw materials, whose %al'e is increased tenfold by the ;n"lish, and which
they cannot dis#ense with, and also co'ld not at once obtain from other co'ntries, at any rate
34
not in s'Fcient I'antity, while on the other hand all the im#orts of the :orth 4mericans from
;n"land consisted of articles which they co'ld either man'fact're for themsel%es or #roc're
/'st as easily from other nations. 9f we now consider what wo'ld be the o#eration of an
interr'#tion of commerce between the two nations accordin" to the theory of %al'es, it will
a##ear as if it m'st o#erate to the disad%anta"e of the 4mericansH whereas if we /'d"e of it
accordin" to the theory of the #rod'cti%e #owers, it m'st occasion incalc'lable in/'ry to the
;n"lish. For by it two-thirds of all the ;n"lish cotton man'factories wo'ld come to a standstill
and fall into r'in. ;n"land wo'ld lose as by ma"ic a #rod'cti%e so'rce of wealth, the ann'al
%al'e of which far e0ceeds the %al'e of her entire e0#orts, and the res'lts of s'ch a loss on the
#eace, wealth, credit, commerce, and #ower of ;n"land wo'ld be incalc'lable. -hat, howe%er,
wo'ld be the conseI'ences of s'ch a state of thin"s for the :orth 4mericansN $om#elled to
man'fact're for themsel%es those "oods which they had hitherto obtained from ;n"land, they
wo'ld in the co'rse of a few years "ain what the ;n"lish had lost. :o do'bt s'ch a meas're
m'st occasion a conOict for life and death, as formerly the na%i"ation laws did between ;n"land
and Holland. C't #robably it wo'ld also end in the same way as formerly did the conOict in the
;n"lish $hannel. 9t is 'nnecessary here to follow o't the conseI'ences of a ri%alry which, as it
a##ears to 's, m'st sooner or later, from the %ery nat're of thin"s, come to a r'#t're. -hat we
ha%e said s'Fces to show clearly the f'tility and dan"er of H'skisson)s ar"'ment, and to
demonstrate how 'nwisely ;n"land acted in com#ellin" the :orth 4mericans (by means of her
corn laws! to man'fact're for themsel%es, and how wise it wo'ld ha%e been of +r H'skisson
had he, instead of triOin" with the I'estion by s'ch f'tile and haAardo's ar"'ments, labo'red
to remo%e o't of the way the ca'ses which led to the ado#tion of the 4merican tariL of 1818.
9n order to #ro%e to the :orth 4mericans how ad%anta"eo's to them the trade of ;n"land was,
+r H'skisson #ointed o't the e0traordinary increase in the ;n"lish im#ortations of cotton, b't
the 4mericans also knew how to estimate this ar"'ment at its tr'e %al'e. For the #rod'ction of
cotton in 4merica had for more than ten years #re%io'sly so "reatly e0ceeded the cons'm#tion
of, and the demand for, this article from year to year, that its #rices had fallen in almost the
same ratio in which the e0#ort had increasedH as may be seen from the fact that in the year
1818 the 4mericans had obtained for 8=,===,=== #o'nds of cotton 1,===,=== dollars, while in
the year 1818 for 1=,===,=== #o'nds of cotton they only obtained 12,===,=== dollars.
Finally, +r H'skisson threatened the :orth 4mericans with the or"anisation of a wholesale
contraband trade by way of $anada. 9t is tr'e that 'nder e0istin" circ'mstances an 4merican
#rotecti%e system can be endan"ered by nothin" so serio'sly as by the means indicated by +r
H'skisson. C't what follows from thatN 9s it that the 4mericans are to lay their system at the
feet of the ;n"lish ,arliament, and await in h'mility whate%er the latter may be #leased to
determine from year to year res#ectin" their national ind'stryN How abs'rdP *he only
conseI'ence wo'ld be that the 4mericans wo'ld anne0 $anada and incl'de it in their 3nion, or
else assist it to attain inde#endence as soon as e%er the $anadian sm'""lin" trade became
'nend'rable. +'st we not, howe%er, deem the de"ree of folly absol'tely e0cessi%e if a nation
which has already attained ind'strial and commercial s'#remacy, Grst of all com#els an
a"ric'lt'ral nation connected with her by the closest ties of race, of lan"'a"e, and of interest,
to become herself a man'fact'rin" nation, and then, in order to hinder her from followin" the
im#'lse th's forcibly "i%en to her, com#els her to assist that nation)s own colonies to attain
inde#endenceN
4fter H'skisson)s death, +r ,o'lett *hom#son 'ndertook the direction of the commercial aLairs
of ;n"landH this statesman followed his celebrated #redecessor in his #olicy as well as in his
oFce. 9n the meantime, so far as concerned :orth 4merica, there remained little for him to do,
for in that co'ntry, witho't s#ecial eLorts on the #art of the ;n"lish, by means of the inO'ence
of the cotton #lanters and the im#orters, and by the aid of the ?emocratic #arty, es#ecially by
means of the so-called $om#romise Cill in 1871, a modiGcation of the former tariL had taken
#lace, which, altho'"h it certainly amended the e0cesses and fa'lts of the former tariL, and
also still sec'red to the 4merican man'factories a tolerable de"ree of #rotection in res#ect of
the coarser fabrics of cotton and woollen, ne%ertheless "a%e the ;n"lish all the concessions
which they co'ld ha%e desired witho't ;n"land ha%in" been com#elled to make any co'nter
concessions.
Since the #assin" of that Cill, the e0#orts of the ;n"lish to 4merica ha%e enormo'sly increased.
4nd s'bseI'ently to this time they "reatly e0ceed the ;n"lish im#orts from :orth 4merica, so
that at any time it is in the #ower of ;n"land to draw to herself as m'ch as she #leases of the
#recio's metals circ'latin" in 4merica, and thereby to occasion commercial crises in the 3nited
35
States as often as she herself is in want of money. C't the most astonishin" thin" in this matter
is that that bill had for its a'thor Henry $lay, the most eminent and clear si"hted defender of
the 4merican man'fact'rin" interest. For it m'st be remembered that the #ros#erity of the
4merican man'fact'rers which res'lted from the tariL of 1818 e0cited so "reatly the /ealo'sy
of the cotton #lanters, that the So'thern States threatened to brin" abo't a dissol'tion of the
3nion in case the tariL of 1818 was not modiGed. *he Federal Go%ernment, which was
dominated by the ?emocratic #arty, had sided with the So'thern #lanters from #'rely #arty
and electioneerin" moti%es, and also mana"ed to "et the a"ric'lt'rists of the +iddle and
-estern States, who belon"ed to that #arty, to ado#t the same %iews.
*hese last had lost their former sym#athy with the man'fact'rin" interest in conseI'ence of
the hi"h #rices of #rod'ce which had #re%ailed, which, howe%er, were the res'lt for the most
#art of the #ros#erity of the home man'factories and of the n'mero's canals and railways
which were 'ndertaken. *hey may also ha%e act'ally feared that the So'thern States wo'ld
#ress their o##osition so far as to brin" abo't a real dissol'tion of the 3nion and e%en ci%il war.
Hence it became the #arty interests of the ?emocrats of the $entral and ;astern States not to
alienate the sym#athies of the ?emocrats of the So'thern States. 9n conseI'ence of these
#olitical circ'mstances, #'blic o#inion %eered ro'nd so m'ch in fa%o'r of free trade with
;n"land, that there was reason to fear that all the man'fact'rin" interests of the co'ntry mi"ht
be entirely sacriGced in fa%o'r of ;n"lish free com#etition. 3nder s'ch circ'mstances the
$om#romise Cill of Henry $lay a##eared to be the only means of at least #artially #reser%in"
the #rotecti%e system. Cy this bill #art of the 4merican man'fact'res, %iA. those of Gner and
more e0#ensi%e articles, was sacriGced to forei"n com#etition, in order to #reser%e another
class of them, %iA. the man'fact're of articles of a coarser and a less e0#ensi%e character. 9n
the meantime all a##earances seem to indicate that the #rotecti%e system in :orth 4merica in
the co'rse of the ne0t few years will a"ain raise its head and a"ain make new #ro"ress.
Howe%er m'ch the ;n"lish may desire to lessen and miti"ate the commercial crises in :orth
4merica, howe%er lar"e also may be the amo'nt of ca#ital which may #ass o%er from ;n"land
to :orth 4merica in the form of #'rchases of stock or of loans or by means of emi"ration, the
e0istin" and still increasin" dis#ro#ortion between the %al'e of the e0#orts and that of im#orts
cannot #ossibly in the lon" r'n be eI'alised by those means. 4larmin" commercial crises,
which contin'ally increase in their ma"nit'de, m'st occ'r, and the 4mericans m'st at len"th
be led to reco"nise the so'rces of the e%il and to determine to #'t a sto# to them.
9t th's lies in the %ery nat're of thin"s, that the n'mber of the ad%ocates of the #rotecti%e
system m'st a"ain increase, and those of free trade a"ain diminish. Hitherto, the #rices of
a"ric'lt'ral #rod'ce ha%e been maintained at an 'n's'ally hi"h le%el, owin" to the #re%io's
#ros#erity of the man'factories, thro'"h the carryin" o't of "reat #'blic 'ndertakin"s, thro'"h
the demand for necessaries of life arisin" from the "reat increase of the #rod'ction of cotton,
also #artially thro'"h bad har%ests. @ne may, howe%er, foresee with certainty, that these #rices
in the co'rse of the ne0t few years will fall as m'ch below the a%era"e as they ha%e hitherto
ran"ed abo%e it. *he "reater #art of the increase of 4merican ca#ital has since the #assin" of
the $om#romise Cill been de%oted to a"ric'lt're, and is only now be"innin" to become
#rod'cti%e. -hile th's a"ric'lt'ral #rod'ction has 'n's'ally increased, on the other hand the
demand for it m'st 'n's'ally diminish. Firstly, beca'se #'blic works are no more bein"
'ndertaken to the same e0tentH secondly, beca'se the man'fact'rin" #o#'lation in
conseI'ence of forei"n com#etition can no more increase to an im#ortant e0tentH and thirdly,
beca'se the #rod'ction of cotton so "reatly e0ceeds the cons'm#tion that the cotton #lanters
will be com#elled, owin" to the low #rices of cotton, to #rod'ce for themsel%es those
necessaries of life which they ha%e hitherto #roc'red from the +iddle and -estern States. 9f in
addition rich har%ests occ'r, then the +iddle and -estern States will a"ain s'Ler from an
e0cess of #rod'ce, as they did before the tariL of 1818. C't the same ca'ses m'st a"ain
#rod'ce the same res'ltsH %iA. the a"ric'lt'rists of the +iddle and -estern States m'st a"ain
arri%e at the con%iction, that the demand for a"ric'lt'ral #rod'ce can only be increased by the
increase of the man'fact'rin" #o#'lation of the co'ntry, and that that increase can only be
bro'"ht abo't by an e0tension of the #rotecti%e system. -hile in this manner the #artisans of
#rotection will daily increase in n'mber and inO'ence, the o##osite #arty will diminish in like
#ro#ortion 'ntil the cotton #lanters 'nder s'ch altered circ'mstances m'st necessarily come to
the con%iction that the increase of the man'fact'rin" #o#'lation of the co'ntry and the
increase of the demand for a"ric'lt'ral #rod'ce and raw materials both consist with their own
interests if ri"htly 'nderstood.
36
Ceca'se, as we ha%e shown, the cotton #lanters and the ?emocrats in :orth 4merica were
stri%in" most earnestly of their own accord to #lay into the hands of the commercial interests of
;n"land, no o##ort'nity was oLered at the moment on this side for +r ,o'lett *hom#son to
dis#lay his skill in commercial di#lomacy.
+atters were I'ite in another #osition in France. *here #eo#le still steadily cl'n" to the
#rohibiti%e system. *here were indeed many State oFcials who were disci#les of theory, and
also de#'ties who were in fa%o'r of an e0tension of commercial relations between ;n"land and
France, and the e0istin" alliance with ;n"land had also rendered this %iew to a certain e0tent
#o#'lar. C't how to attain that ob/ect, o#inions were less a"reed, and in no res#ect were they
I'ite clear. 9t seemed e%ident and also indis#'table that the hi"h d'ties on the forei"n
necessaries of life and raw materials, and the e0cl'sion of ;n"lish coal and #i"-iron, o#erated
%ery disad%anta"eo'sly to French ind'stry, and that an increase in the e0#orts of wines,
brandy, and silk fabrics wo'ld be e0tremely ad%anta"eo's to France.
9n "eneral, #eo#le conGned themsel%es to 'ni%ersal declamation a"ainst the disad%anta"es of
the #rohibiti%e system. C't to attack this in s#ecial cases did not a##ear at the time to be at all
ad%isable. For the Go%ernment of B'ly had their stron"est s'##orters amon" the rich
bo'r"eoisie, who for the most #art were interested in the "reat man'fact'rin" 'ndertakin"s.
3nder these circ'mstances +r ,o'lett *hom#son formed a #lan of o#erations which does all
hono'r to his breadth of tho'"ht and di#lomatic adroitness. He sent to France a man thoro'"hly
%ersed in commerce and ind'stry and in the commercial #olicy of France, well known for his
)liberal sentiments) a learned man and a %ery accom#lished writer, ?r Cowrin", who tra%elled
thro'"h the whole of France, and s'bseI'ently thro'"h SwitAerland also, to "ather on the s#ot
materials for ar"'ments a"ainst the #rohibiti%e system and in fa%o'r of free trade. ?r Cowrin"
accom#lished this task with his acc'stomed ability and adroitness. ;s#ecially he clearly
indicated the before-mentioned ad%anta"es of a freer commercial interco'rse between the two
co'ntries in res#ect of coal, #i"-iron, wines, and brandies. 9n the re#ort which he #'blished, he
chieOy conGned his ar"'ments to these articlesH in reference to the other branches of ind'stry
he only "a%e statistics, witho't committin" himself to #roofs or #ro#ositions how these co'ld be
#romoted by means of free trade with ;n"land.
?r Cowrin" acted in #recise accordance with the instr'ctions "i%en to him by +r ,o'lett
*hom#son, which were framed with 'ncommon art and s'btlety, and which a##ear at the head
of his re#ort. 9n these +r *hom#son makes 'se of the most liberal e0#ressions. He e0#resses
himself, with m'ch consideration for the French man'fact'rin" interests, on the im#robability
that any im#ortant res'lt was to be e0#ected from the contem#lated ne"otiations with France.
*his instr'ction was #erfectly ada#ted for calmin" the a##rehensions res#ectin" the %iews of
;n"land entertained by the French woollen and cotton man'fact'rin" interests which had
become so #owerf'l. 4ccordin" to +r *hom#son, it wo'ld be folly to ask for im#ortant
concessions res#ectin" these.
@n the other hand, he "i%es a hint how the ob/ect mi"ht more easily be attained in res#ect of
)less im#ortant articles.) *hese less im#ortant articles are certainly not en'merated in the
instr'ction, b't the s'bseI'ent e0#erience of France has com#letely bro'"ht to li"ht what +r
*hom#son meant by it, for at the time of the writin" of this instr'ction the e0#orts of linen yarn
and linen fabrics of ;n"land to France were incl'ded in the term )less im#ortant.)
*he French Go%ernment, mo%ed by the re#resentations and e0#lanations of the ;n"lish
Go%ernment and its a"ents, and with the intention of makin" to ;n"land a com#arati%ely
'nim#ortant concession, which wo'ld 'ltimately #ro%e ad%anta"eo's to France herself, lowered
the d'ty on linen yarn and linen fabrics to s'ch an e0tent that they no lon"er "a%e any
#rotection to French ind'stry in face of the "reat im#ro%ements which the ;n"lish had made in
these branches of man'fact're, so that e%en in the ne0t few years the e0#ort of these articles
from ;n"land to France increased enormo'sly (1878, 71,===,=== francs!H and that France stood
in dan"er, owin" to the start which ;n"land had th's obtained, of losin" its entire linen
ind'stry, amo'ntin" to many h'ndred millions in %al'e, which was of the "reatest im#ortance
for her a"ric'lt're and for the welfare of her entire r'ral #o#'lation, 'nless means co'ld be
fo'nd to #'t a check on the ;n"lish com#etition by increasin" the d'ties.
*hat France was d'#ed by +r ,o'lett *hom#son was clear eno'"h. He had already clearly seen
in the year 187 what an im#'lse the linen man'fact're of ;n"land wo'ld recei%e in the ne0t
few years in conseI'ence of the new in%entions which had been made there, and in this
ne"otiation he had calc'lated on the i"norance of the French Go%ernment res#ectin" these
in%entions and their necessary conseI'ences. *he ad%ocates of this lowerin" of d'ties now
37
indeed endea%o'red to make the world belie%e that by it they only desired to make a
concession to the Cel"ian linen man'fact'res. C't did that make amends for their lack of
acI'aintance with the ad%ances made by the ;n"lish, and their lack of foresi"ht as to the
necessary conseI'encesN
Ce that as it may, this m'ch is clearly demonstrated, that it was necessary for France to
#rotect herself still more, 'nder #enalty of losin" the "reater #art of her linen man'fact'rin" for
the beneGt of ;n"landH and that the Grst and most recent e0#eriment of the increase of
freedom of trade between ;n"land and France remains as an indelible memorial of ;n"lish craft
and of French ine0#erience, as a new +eth'en *reaty, as a second ;den *reaty. C't what did +r
,o'lett *hom#son do when he #ercei%ed the com#laints of the French linen man'fact'rers and
the inclination of the French Go%ernment to re#air the mistake which had been madeN He did
what +r H'skisson had done before him, he ind'l"ed in threats, he threatened to e0cl'de
French wines and silk fabrics. *his is ;n"lish cosmo#olitanism. France m'st "i%e '# a
man'fact'rin" ind'stry of a tho'sand years) standin", bo'nd '# in the closest manner with the
entire economy of her lower classes and es#ecially with her a"ric'lt're, the #rod'cts of which
m'st be reckoned as chief necessaries of life for all classes, and of the entire amo'nt of
between three and fo'r h'ndred millions, in order thereby to #'rchase the #ri%ile"e of
e0#ortin" to ;n"land some few millions more in %al'e of wines and silk man'fact'res. E'ite
a#art from this dis#ro#ortion in %al'e, it m'st be considered in what a #osition France wo'ld be
#laced if the commercial relations between both nations became interr'#ted in conseI'ence of
a warH in case %iA. that France co'ld no more e0#ort to ;n"land her s'r#l's #rod'cts of silk
man'fact'res and wines, b't at the same time s'Lered from the want of s'ch an im#ortant
necessary of life as linen.
9f anyone reOects on this he will see that the linen I'estion is not sim#ly a I'estion of
economical well-bein", b't, as e%erythin" is which concerns the national man'fact'rin" #ower,
is still more a I'estion of the inde#endence and #ower of the nation.
9t seems indeed as if the s#irit of in%ention had set itself the task, in this #erfectin" of the linen
man'fact're, to make the nations com#rehend the nat're of the man'fact'rin" interest, its
relations with a"ric'lt're, and its inO'ence on the inde#endence and #ower of the State, and to
e0#ose the erroneo's ar"'ments of the #o#'lar theory. *he school maintains, as is well known,
that e%ery nation #ossesses s#ecial ad%anta"es in %ario's branches of #rod'ction, which she
has either deri%ed from nat're, or which she has #artly acI'ired in the co'rse of her career,
and which 'nder free trade com#ensate one another. -e ha%e in a #re%io's cha#ter add'ced
#roof that this ar"'ment is only tr'e in reference to a"ric'lt're, in which #rod'ction de#ends
for the most #art on climate and on the fertility of the soil, b't that it is not tr'e in res#ect to
man'fact'rin" ind'stry, for which all nations inhabitin" tem#erate climates ha%e eI'al
ca#ability #ro%ided that they #ossess the necessary material, mental, social, and #olitical
I'aliGcations. ;n"land at the #resent day oLers the most strikin" #roof of this. 9f any nations
whate%er are s#ecially ada#ted by their #ast e0#erience and e0ertions, and thro'"h their
nat'ral I'aliGcations, for the man'fact're of linen, those are the Germans, the Cel"ians, the
?'tch, and the inhabitants of the :orth of France for a tho'sand years #ast. *he ;n"lish, on the
other hand, '# to the middle of the last cent'ry, had notorio'sly made s'ch small #ro"ress in
that ind'stry, that they im#orted a "reat #ro#ortion of the linen which they reI'ired, from
abroad. 9t wo'ld ne%er ha%e been #ossible for them, witho't the d'ties by which they
contin'o'sly #rotected this man'fact'rin" ind'stry, e%en to s'##ly their own markets and
colonies with linen of their own man'fact're. 4nd it is well known how Lords $astlerea"h and
Li%er#ool add'ced #roof in ,arliament, that witho't #rotection it was im#ossible for the 9rish
linen man'fact'res to s'stain com#etition with those of Germany. 4t #resent, howe%er, we see
how the ;n"lish threaten to mono#olise the linen man'fact're of the whole of ;'ro#e, in
conseI'ence of their in%entions, notwithstandin" that they were for a h'ndred years the worst
man'fact'rers of linen in all ;'ro#e, /'st as they ha%e mono#olised for the last Gfty years the
cotton markets of the ;ast 9ndies, notwithstandin" that one h'ndred years #re%io'sly they
co'ld not e%en com#ete in their own market with the 9ndian cotton man'fact'rers. 4t this
moment it is a matter of dis#'te in France how it ha##ens that ;n"land has lately made s'ch
immense #ro"ress in the man'fact're of linen, altho'"h :a#oleon was the Grst who oLered
s'ch a "reat reward for the in%ention of a machine for s#innin" cotton, and that the French
machinists and man'fact'rers had been en"a"ed in this trade before the ;n"lish. *he inI'iry is
made whether the ;n"lish or the French #ossessed more mechanical talent. 4ll kinds of
e0#lanations are oLered e0ce#t the tr'e and the nat'ral one. 9t is abs'rd to attrib'te s#ecially
38
to the ;n"lish "reater mechanical talent, or "reater skill and #erse%erance in ind'stry, than to
the Germans or to the French. Cefore the time of ;dward 999 the ;n"lish were the "reatest
b'llies and "ood-for-nothin" characters in ;'ro#eH certainly it ne%er occ'rred to them to
com#are themsel%es with the 9talians and Cel"ians or with the Germans in res#ect to
mechanical talent or ind'strial skillH b't since then their Go%ernment has taken their ed'cation
in hand, and th's they ha%e by de"rees made s'ch #ro"ress that they can dis#'te the #alm of
ind'strial skill with their instr'ctors. 9f the ;n"lish in the last twenty years ha%e made more
ra#id #ro"ress in machinery for linen man'fact're than other nations, and es#ecially the
French, ha%e done, this has only occ'rred beca'se, Grstly, they had attained "reater eminence
in mechanical skillH secondly, that they were f'rther ad%anced in machinery for s#innin" and
wea%in" cotton, which is so similar to that for s#innin" and wea%in" linenH thirdly, that in
conseI'ence of their #re%io's commercial #olicy, they had become #ossessed of more ca#ital
than the FrenchH fo'rthly, that in conseI'ence of that commercial #olicy their home market for
linen "oods was far more e0tensi%e than that of the FrenchH and lastly that their #rotecti%e
d'ties, combined with the circ'mstances abo%e named, aLorded to the mechanical talent of
the nation "reater stim'l's and more means to de%ote itself to #erfectin" this branch of
ind'stry.
*he ;n"lish ha%e th's "i%en a strikin" conGrmation of the o#inions which we in another #lace
ha%e #ro#o'nded and e0#lained -- that all indi%id'al branches of ind'stry ha%e the closest
reci#rocal eLect on one anotherH that the #erfectin" of one branch #re#ares and #romotes the
#erfectin" of all othersH that no one of them can be ne"lected witho't the eLects of that
ne"lect bein" felt by allH that, in short, the whole man'fact'rin" #ower of a nation constit'tes
an inse#arable whole. @f these o#inions they ha%e by their latest achie%ements in the linen
ind'stry oLered a strikin" conGrmation.
:@*;S&
1. ;%en a #art of the #rod'ction of wool in ;n"land is d'e to the obser%ance of this ma0im.
;dward 9> im#orted 'nder s#ecial #ri%ile"es 7,=== head of shee# from S#ain (where the e0#ort
of shee# was #rohibited!, and distrib'ted them amon" %ario's #arishes, with a command that
for se%en years none were to be sla'"htered or castrated. (;ssai s'r le $ommerce d)4n"leterre,
tome i. #. 756.! 4s soon as the ob/ect of these meas'res had been attained, ;n"land rewarded
the S#anish Go%ernment for the s#ecial #ri%ile"es "ranted by the latter, by #rohibitin" the
im#ort of S#anish wool. *he eFcacy of this #rohibition (howe%er 'n/'st it may be deemed! can
as little be denied as that of the #rohibitions of the im#ort of wool by $harles 99 (1851 and
185!.
1. France, said ,itt, has ad%anta"es abo%e ;n"land in res#ect of climate and other nat'ral "ifts,
and therefore e0cels ;n"land in its raw #rod'ceH on the other hand, ;n"land has the ad%anta"e
o%er France in its artiGcial #rod'cts. *he wines, brandies, oils, and %ine"ars of France, es#ecially
the Grst two, articles of s'ch im#ortance and of s'ch %al'e, that the %al'e of o'r nat'ral
#rod'cts cannot be in the least com#ared with them. C't, on the other hand, it is eI'ally
certain that ;n"land is the e0cl'si%e #rod'cer of some kinds of man'fact'red "oods, and that
in res#ect of other kinds she #ossesses s'ch ad%anta"es that she can defy witho't do'bt all the
com#etition of France. *his is a reci#rocal condition and a basis on which an ad%anta"eo's
commercial treaty between both nations sho'ld be fo'nded. 4s each of them has its #ec'liar
sta#le commodities, and each #ossesses that which is lackin" to the other, so both sho'ld deal
with one another like two "reat merchants who are en"a"ed in diLerent branches of trade, and
by a reci#rocal e0chan"e of their "oods can at once become 'sef'l to one another. Let 's
f'rther only call to mind on this #oint the wealth of the co'nty with which we stand in the
#osition of nei"hbo'rs, its "reat #o#'lation, its %icinity to 's, and the conseI'ent I'ick and
re"'lar e0chan"e. -ho co'ld then hesitate a moment to "i%e his a##ro%al to the system of
freedom, and who wo'ld not earnestly and im#atiently wish for the 'tmost #ossible e0#edition
in establishin" itN *he #ossession of s'ch an e0tensi%e and certain market m'st "i%e I'ite an
e0traordinary im#'lse to o'r trade, and the c'stoms re%en'e which wo'ld then be di%erted
from the hands of the sm'""ler into the State re%en'e wo'ld beneGt o'r Gnances, and th's two
main s#rin"s of Critish wealth and of Critish #ower wo'ld be made more #rod'cti%e.
7. Since List wrote these lines, the d'ties which forei"n silk man'fact'rers had to #ay on the
im#ort of their "oods into ;n"land ha%e been totally abolished. *he res'lts of their abolition
may be learned from +r -ardle)s re#ort on the ;n"lish silk trade, as follows& London, in 1812,
contained 1,=== looms and 8=,=== o#erati%es en"a"ed in silk man'fact're. 4t the #resent
39
time these ha%e dwindled to 1,1== looms and less then ,=== o#erati%es. 9n $o%entry, in 1881,
the ribbon trade is stated to ha%e "i%en s'bsistence to =,8== #ersonsH while at the #resent
time #robably not more than 1=,=== #ersons are s'##orted by it, and the #ower-looms at work
in $o%entry ha%e decreased from 1,8== to 8==. 9n ?erby the n'mber of o#erati%es em#loyed in
silk man'fact're has decreased from 8,82= (in 182=! to 1,== at #resent. 9n the $on"leton
district they ha%e decreased from 2,188 (in 188=! to 1,27= (in 188!H while of the forty silk-
throwsters) works which that district contained (in 1826! only twel%e now remain, with )abo't
three-fo'rths of their machinery em#loyed.) 9n +anchester this trade has #ractically died o't,
while at +iddleton the ind'stry is )sim#ly r'ined.) *hese res'lts (stated by +r -ardle! may
acco'nt for the decrease in ;n"land)s im#orts of raw silk, from 8,===,=== #o'nds (in 1851! to
less than 7,===,=== #o'nds.
@n the other hand, since List wrote, the 3nited States of 4merica ha%e increased and
steadily maintained a considerable #rotecti%e d'ty on the im#ortation of forei"n silk
man'fact'res. *he res'lts of that #olicy were #'blicly stated by +r <obert ,. ,orter (member of
the 3nited States) *ariL $ommission!, in a s#eech in 1887, to ha%e been as follows&
Fi%e tho'sand #ersons were em#loyed in silk man'fact're in the 3nited States before the
+orill tariL (1881!. 9n 188= their n'mber had increased to 7=,===. *he %al'e of silk
man'fact'res #rod'ced in the States increased from 1,1==,=== l. in 188= to more than
8,===,=== l. in 188=. )Set the cost of the man'fact'red "oods to the cons'mer, estimated on a
"old basis, has steadily declined at a m'ch "reater rate than the cost of the raw material.) 4fter
reference to the earthenware and #late-"lass man'fact'res, +r ,orter adds& )*he testimony
before the *ariL $ommission showed 'nI'estionably that the com#etition in the 3nited States
had res'lted in a red'ction in the cost to the 4merican cons'mer. 9n this way, "entlemen, 9
contend, and am #re#ared to #ro%e statistically. that #rotection, so far as the 3nited States are
concerned, has in e%ery case 'ltimately beneGted the cons'merH and on this "ro'nd 9 defend it
and belie%e in it.) -- *<4:SL4*@<.
. $ha#tal, ?e l)9nd'strie FranUaise %ol. ii., #. 15.
,ha-ter 04
The 5ns+lar +-re"ac! and the 7er"an ,o""ercial 8nion
-hat a "reat nation is at the #resent day witho't a %i"oro's commercial #olicy, and what she
may become by the ado#tion of a %i"oro's commercial #olicy, Germany has learnt for herself
d'rin" the last twenty years. Germany was that which Franklin once said of the State of :ew
Bersey, )a cask which was ta##ed and drained by its nei"hbo'rs on e%ery side.) ;n"land, not
contented with ha%in" r'ined for the Germans the "reater #art of their own man'factories and
s'##lied them with enormo's I'antities of cotton and woollen fabrics, e0cl'ded from her #orts
German "rain and timber, nay from time to time also e%en German wool. *here was a time
when the e0#ort of man'fact'red "oods from ;n"land to Germany was ten times "reater than
that to her hi"hly e0tolled ;ast 9ndian ;m#ire. :e%ertheless the all-mono#olisin" islanders
wo'ld not e%en "rant to the #oor Germans what they conceded to the conI'ered Hindoos, %iA.
to #ay for the man'fact'red "oods which they reI'ired by a"ric'lt'ral #rod'ce. 9n %ain did the
Germans h'mble themsel%es to the #osition of hewers of wood and drawers of water for the
Critons. *he latter treated them worse than a s'b/ect #eo#le. :ations, like indi%id'als, if they at
Grst only #ermit themsel%es to be ill-treated by one, soon become scorned by all, and Gnally
become an ob/ect of derision to the %ery children. France, not contented with e0#ortin" to
Germany enormo's I'antities of wine, oil, silk, and millinery, "r'd"ed the Germans their
e0#orts of cattle, "rain, and Oa0H yes, e%en a small maritime #ro%ince formerly #ossessed by
Germany and inhabited by Germans, which ha%in" become wealthy and #owerf'l by means of
Germany, at all times was only able to maintain itself with and by means of Germany, barred
for half a "eneration Germany)s "reatest ri%er by means of contem#tible %erbal I'ibbles. *o Gll
'# the meas're of this contem#t, the doctrine was ta'"ht from a h'ndred #rofessorial chairs,
that nations co'ld only attain to wealth and #ower by means of 'ni%ersal free trade. *h's it
wasH b't how is it nowN Germany has ad%anced in #ros#erity and ind'stry, in national self-
res#ect and in national #ower, in the co'rse of ten years as m'ch as in a cent'ry. 4nd how has
this res'lt been achie%edN 9t was certainly "ood and beneGcial that the internal tariLs were
abolished which se#arated Germans from GermansH b't the nation wo'ld ha%e deri%ed small
comfort from that if her home ind'stry had thenceforth remained freely e0#osed to forei"n
com#etition. 9t was es#ecially the #rotection which the tariL of the Doll%erein sec'red to
man'fact'red articles of common 'se, which has wro'"ht this miracle. Let 's freely confess it,
40
for ?r Cowrin"(1J! has incontro%ertibly shown it, that the Doll%erein tariL has not, as was before
asserted, im#osed merely d'ties for re%en'e -- that it has not conGned itself to d'ties of ten to
Gfteen #er cent as H'skisson belie%ed -- let 's freely admit that it has im#osed #rotecti%e
d'ties of from twenty to si0ty #er cent as res#ects the man'fact'red articles of common 'se.
C't what has been the o#eration of these #rotecti%e d'tiesN 4re the cons'mers #ayin" for their
German man'fact'red "oods twenty to si0ty #er cent more than they formerly #aid for forei"n
ones (as m'st be the case if the #o#'lar theory is correct!, or are these "oods at all worse than
the forei"n onesN :othin" of the sort. ?r Cowrin" himself add'ces testimony that the
man'fact'red "oods #rod'ced 'nder the hi"h c'stoms tariL are both better and chea#er than
the forei"n ones.(1J! *he internal com#etition and the sec'rity from destr'cti%e com#etition by
the forei"ner has wro'"ht this miracle, of which the #o#'lar school knows nothin" and is
determined to know nothin". *h's, that is not tr'e, which the #o#'lar school maintains, that a
#rotecti%e d'ty increases the #rice of the "oods of home #rod'ction by the amo'nt of the
#rotecti%e d'ty. For a short time the d'ty may increase the #rice, b't in e%ery nation which is
I'aliGed to carry on man'fact'rin" ind'stry the conseI'ence of the #rotection will be, that the
internal com#etition will soon red'ce the #rices lower than they had stood at when the
im#ortation was free.
C't has a"ric'lt're at all s'Lered 'nder these hi"h d'tiesN :ot in the leastH it has "ained-
"ained tenfold d'rin" the last ten years. *he demand for a"ric'lt'ral #rod'ce has increased.
*he #rices of it e%erywhere are hi"her. 9t is notorio's that solely in conseI'ence of the "rowth
of the home man'factories the %al'e of land has e%erywhere risen from Gfty to a h'ndred #er
cent, that e%erywhere hi"her wa"es are bein" #aid, and that in all directions im#ro%ements in
the means of trans#ort are either bein" eLected or #ro/ected.
S'ch brilliant res'lts as these m'st necessarily enco'ra"e 's to #roceed farther on the system
which we ha%e commenced to follow. @ther States of the 3nion ha%e also #ro#osed to take
similar ste#s, b't ha%e not yet carried them into eLectH while, as it wo'ld a##ear, some other
States of the 3nion only e0#ect to attain #ros#erity solely by the abolition of the ;n"lish d'ties
on "rain and timber, and while (as it is alle"ed! there are still to be fo'nd inO'ential men who
belie%e in the cosmo#olitical system and distr'st their own e0#erience. ?r Cowrin")s re#ort
"i%es 's most im#ortant e0#lanations on these #oints as well as on the circ'mstances of the
German $ommercial 3nion and the tactics of the ;n"lish Go%ernment. Let 's endea%o'r to
throw a little li"ht on this re#ort.
First of all, we ha%e to consider the #oint of %iew from which it was written. +r Labo'chere,
,resident of the board of *rade 'nder the +elbo'rne +inistry, had sent ?r Cowrin" to Germany
for the same #'r#ose as that for which +r ,o'lett *hom#son had sent him to France in the year
187. B'st as it was intended to mislead the French by concessions in res#ect of wines and
brandies to o#en their home market to ;n"lish man'fact'red "oods, so it was intended to
mislead the Germans to do the same by concessions in res#ect of "rain and timberH only there
was a "reat diLerence between the two missions in this res#ect, that the concession which was
to be oLered to the French had to fear no o##osition in ;n"land, while that which had to be
oLered to the Germans had Grst to be fo'"ht for in ;n"land herself.
Hence the tendency of these two re#orts was of necessity of I'ite a diLerent character. *he
re#ort on the commercial relations between France and ;n"land was written e0cl'si%ely for the
FrenchH to them it was necessary to re#resent that $olbert had accom#lished nothin"
satisfactory thro'"h his #rotecti%e re"'lationsH it was necessary to make #eo#le belie%e that
the ;den *reaty was beneGcial to France, and that :a#oleon)s $ontinental system, as well as
the then e0istin" French #rohibiti%e system, had been e0tremely in/'rio's to her. 9n short, in this
case it was necessary to stick closely to the theory of 4dam SmithH and the "ood res'lts of the
#rotecti%e system m'st be com#letely and 'neI'i%ocally denied. *he task was not I'ite so
sim#le with the other re#ort, for in this, one had to address the ;n"lish land-owners and the
German Go%ernments at one and the same time. *o the former it was necessary to say& See,
there is a nation which has already in conseI'ence of #rotecti%e re"'lations made enormo's
ad%ances in her ind'stry, and which, in #ossession of all necessary means for doin" so, is
makin" ra#id ste#s to mono#olise her own home market and to com#ete with ;n"land in
forei"n markets. *his, yo' *ories in the Ho'se of Lords -- this, yo' co'ntry sI'ires in the Ho'se
of $ommons, is yo'r wicked doin". *his has been bro'"ht abo't by yo'r 'nwise corn lawsH for
by them the #rices of #ro%isions and raw materials and the wa"es of labo'r ha%e been ke#t low
in Germany. Cy them the German man'factories ha%e been #laced in an ad%anta"eo's #osition
com#ared to the ;n"lish ones. +ake haste, therefore, yo' fools, to abolish these corn laws. Cy
41
that means yo' will do'bly and trebly dama"e the German man'factories & Grstly, beca'se the
#rices of #ro%isions and raw materials and the wa"es of labo'r will be raised in Germany and
lowered in ;n"landH secondly, beca'se by the e0#ort of German "rain to ;n"land the e0#ort of
;n"lish man'fact'red "oods to Germany will be #romotedH thirdly, beca'se the German
$ommercial 3nion has declared that it is dis#osed to red'ce their d'ties on common cotton and
woollen "oods in the same #ro#ortion in which ;n"land facilitates the im#ort of German "rain
and timber. *h's we Critons cannot fail once more to cr'sh the German man'factories. C't the
I'estion cannot wait. ;%ery year the man'fact'rin" interests are "ainin" "reater inO'ence in
the German 3nionH and if yo' delay, then yo'r corn-law abolition will come too late. 9t will not
be lon" before the balance will t'rn. >ery soon the German man'factories will create s'ch a
"reat demand for a"ric'lt'ral #rod'ce that Germany will ha%e no more s'r#l's corn to sell to
forei"n co'ntries. -hat concessions, then, are yo' willin" to oLer to the German Go%ernments
to ind'ce them to lay hands on their own man'factories in order to hinder them from s#innin"
cotton for themsel%es, and from encroachin" '#on yo'r forei"n markets in additionN
4ll this the writer of the re#ort was com#elled to make clear to the landowners in ,arliament.
*he forms of the Critish State administration #ermit no secret Go%ernment re#orts. ?r
Cowrin")s re#ort m'st be #'blished, m'st therefore be seen by the Germans in translations and
e0tracts. Hence one m'st 'se no e0#ressions which mi"ht lead the Germans to a #erce#tion of
their tr'e interests. *herefore to e%ery method which was ada#ted to inO'ence ,arliament, an
antidote m'st be added for the 'se of the German Go%ernments. 9t m'st be alle"ed, that in
conseI'ence of the #rotecti%e system m'ch German ca#ital had been di%erted into im#ro#er
channels. *he a"ric'lt'ral interests of Germany wo'ld be dama"ed by the #rotecti%e system.
*hat interest for its #art o'"ht only to t'rn its attention to forei"n marketsH a"ric'lt're was in
Germany by far the most im#ortant #rod'cti%e ind'stry, for three-fo'rths of the inhabitants of
Germany were en"a"ed in it. 9t was mere nonsense to talk abo't #rotection for the #rod'cersH
the man'fact'rin" interest itself co'ld only thri%e 'nder forei"n com#etition & #'blic o#inion in
Germany desired freedom of trade. 9ntelli"ence in Germany was too 'ni%ersal for a desire for
hi"h d'ties to be entertained. *he most enli"htened men in the co'ntry were in fa%o'r of a
red'ction of d'ties on common woollen and cotton fabrics, in case the ;n"lish d'ties on corn
and timber were red'ced.
9n short, in this re#ort two entirely diLerent %oices s#eak, which contradict one another like two
o##onents. -hich of the two m'st be deemed the tr'e one-that which s#eaks to the
,arliament, or that which s#eaks to the German Go%ernmentsN *here is no diFc'lty in decidin"
this #oint, for e%erythin" which ?r Cowrin" add'ces in order to ind'ce ,arliament to lower the
im#ort d'ties on "rain and timber is s'##orted by statistical facts, calc'lations, and e%idenceH
while e%erythin" that he add'ces to diss'ade the German Go%ernments from the #rotecti%e
system is conGned to mere s'#erGcial assertions.
Let 's consider in detail the ar"'ments by which ?r Cowrin" #ro%es to the ,arliament that in
case a check is not #'t to the #ro"ress of the German #rotecti%e system in the way which he
#ointed o't, the German market for man'fact'red "oods m'st become irreco%erably lost to
;n"land.
*he German #eo#le is remarkable, says ?r Cowrin", for tem#erance, thrift, ind'stry, and
intelli"ence, and en/oys a system of 'ni%ersal ed'cation. ;0cellent #olytechnic schools diL'se
technical instr'ction thro'"ho't the entire co'ntry.
*he art of desi"n is es#ecially m'ch more c'lti%ated there than in ;n"land. *he "reat ann'al
increase of its #o#'lation, of its head of cattle, and es#ecially of shee#, #ro%es what #ro"ress
a"ric'lt're there has achie%ed. (*he re#ort makes no mention of the im#ro%ement in the %al'e
of #ro#erty, tho'"h that is an im#ortant feat're, nor of the increase in the %al'e of #rod'ce.!
*he wa"es of labo'r ha%e risen thirty #er cent in the man'fact'rin" districts. *he co'ntry
#ossesses a "reat amo'nt of water #ower, as yet 'n'sed, which is the chea#est of all moti%e
#owers. 9ts minin" ind'stry is e%erywhere Oo'rishin", more than at any #re%io's time. From
1871 '# to 1875 the im#orts of raw cotton ha%e increased from 118,=== centners to 1=,===
centnersH the im#orts of cotton yarn from 151,=== centners to 711,=== centnersH the e0#orts of
cotton fabrics from 18,=== centners to 52,=== centnersH the n'mber of cotton-wea%in" looms in
,r'ssia from 11,=== in 1812 to 71,=== in 187H the im#orts of raw wool from 66,=== centners to
162,=== centnersH the e0#orts of the same from 1==,=== centners to 111,=== centnersH the
im#orts of woollen articles from 12,=== centners to 18,=== centnersH the e0#orts of the same
from 6,=== centners to 86,=== centners.
42
*he man'fact're of linen cloths contends with diFc'lty a"ainst the hi"h d'ties in ;n"land,
France, and 9taly and has not increased. @n the other hand, the im#orts of linen yarn ha%e
increased from 7=,=== centners in 1871 to 88,=== centners in 1872, chieOy thro'"h the im#orts
from ;n"land, which are still increasin". *he cons'm#tion of indi"o increased from 11,===
centners in 1871 to 1,=== centners in 1875H a strikin" #roof of the #ro"ress of German
ind'stry. *he e0#orts of #ottery ha%e been more than do'bled from 1871 to 1878. *he im#orts
of stoneware ha%e diminished from 2,=== centners to 1,=== centners, and the e0#orts of it
increased from ,=== centners to 18,=== centners. *he im#orts of #orcelain ha%e diminished
from ,=== centners to 1,=== centners, and the e0#orts of it ha%e increased from 5== centners
to ,=== centners. *he o't#'t of coal has increased from 8,===,=== ,r'ssian tons in 1871 to
6,===,=== in 1878. 9n 1818 there were 8,===,=== shee# in ,r'ssiaH and in 1875, 12,===,===.
9n Sa0ony in 1871 there were 1,=== stockin"-wea%in" machinesH in 1878, 1=,===. From 1871
to 1875, the n'mber of man'factories for s#innin" woollen yarn and of s#indles had increased
in Sa0ony to more than do'ble their #re%io's n'mber. ;%erywhere machine man'factories had
arisen, and many of these were in the most Oo'rishin" condition.
9n short, in all branches of ind'stry, in #ro#ortion as they ha%e been #rotected, Germany has
made enormo's ad%ances, es#ecially in woollen and cotton "oods for common 'se, the
im#ortation of which from ;n"land had entirely ceased. 4t the same time ?r Cowrin" admits, in
conseI'ence of a tr'stworthy o#inion which had been e0#ressed to him, )that the #rice of the
,r'ssian st'Ls was decidedly lower than that of the ;n"lishH that certainly in res#ect of some of
the colo'rs they were inferior to the best ;n"lish tints, b't that others were #erfect and co'ld
not be s'r#assedH that in s#innin", wea%in", and all #re#aratory #rocesses, the German "oods
were f'lly eI'al to the Critish, b't only in the Gnish a distinct inferiority mi"ht be obser%ed, b't
that the want of this wo'ld disa##ear after a little time.)
9t is %ery easy to 'nderstand how by means of s'ch re#resentations as these the ;n"lish
,arliament may at len"th be ind'ced to abandon its corn laws, which ha%e hitherto o#erated as
a #rotecti%e system to Germany. C't it a##ears to 's 'tterly incom#rehensible how the German
3nion, which has made s'ch enormo's ad%ances in conseI'ence of the #rotecti%e system,
sho'ld be ind'ced by this re#ort to de#art from a system which has yielded them s'ch
e0cellent res'lts.
9t is %ery well for ?r Cowrin" to ass're 's that the home ind'stry of Germany is bein"
#rotected at the e0#ense of the a"ric'lt'rists. C't how can we attach any credence to his
ass'rance, when we see, on the contrary, that the demand for a"ric'lt'ral #rod'ce, #rices of
#rod'ce, the wa"es of labo'r, the rents, the %al'e of #ro#erty, ha%e e%erywhere considerably
risen, witho't the a"ric'lt'rist ha%in" to #ay more than he did before for the man'fact'red
"oods which he reI'iresN
9t is %ery well for ?r Cowrin" to "i%e 's an estimate showin" that in Germany three #ersons are
en"a"ed in a"ric'lt're to e%ery one in man'fact'res, b't that statement con%inces 's that the
n'mber of Germans en"a"ed in man'fact'rin" is not yet in #ro#er #ro#ortion to the n'mber of
German a"ric'lt'rists. 4nd we cannot see by what other means this dis#ro#ortion can be
eI'alised, than by increasin" the #rotection on those branches of man'fact're which are still
carried on in ;n"land for the s'##ly of the German market by #ersons who cons'me ;n"lish
instead of German a"ric'lt'ral #rod'ce. 9t is all %ery well for ?r Cowrin" to assert that German
a"ric'lt're m'st only direct its attention to forei"n co'ntries if it desires to increase its sale of
#rod'ceH b't that a "reat demand for a"ric'lt'ral #rod'ce can only be attained by a Oo'rishin"
home man'fact'rin" #ower is ta'"ht 's not alone by the e0#erience of ;n"land, b't ?r
Cowrin" himself im#licitly admits this, by the a##rehension which he e0#resses in his re#ort,
that if ;n"land delays for some time to abolish her corn laws, Germany will then ha%e no
s'r#l's of either corn or timber to sell to forei"n co'ntries.
?r Cowrin" is certainly ri"ht when he asserts that the a"ric'lt'ral interest in Germany is still
the #redominant one, b't /'st for the %ery reason that it is #redominant it m'st (as we ha%e
shown in former cha#ters!, by #romotin" the man'fact'rin" interests, seek to #lace itself in a
/'st #ro#ortion with them, beca'se the #ros#erity of a"ric'lt're de#ends on its bein" in eI'al
#ro#ortion with the man'fact'rin" interest, b't not on its own #re#onderance o%er it.
F'rther, the a'thor of the re#ort a##ears to be 'tterly stee#ed in error when he maintains that
forei"n com#etition in German markets is necessary for the German man'fact'rin" interest
itself, beca'se the German man'fact'rers, as soon as they are in a #osition to s'##ly the
German markets, m'st com#ete with the man'fact'rers of other co'ntries for the dis#osal of
their s'r#l's #rod'ce, which com#etition they can only s'stain by means of chea# #rod'ction.
43
C't chea# #rod'ction will not consist with the e0istence of the #rotecti%e system, inasm'ch as
the ob/ect of that system is to sec're hi"her #rices to the man'fact'rers.
*his ar"'ment contains as many errors and falsehoods as words. ?r Cowrin" cannot deny that
the man'fact'rer can oLer his #rod'cts at chea#er #rices, the more he is enabled to
man'fact're -- that, therefore, a man'fact'rin" ,ower which e0cl'si%ely #ossesses its home
market can work so m'ch the chea#er for forei"n trade. *he #roof of this he can Gnd in the
same tables which he has #'blished on the ad%ances made by German ind'stryH for in the
same #ro#ortion in which the German man'factories ha%e acI'ired #ossession of their own
home market, their e0#ort of man'fact'red "oods has also increased. *h's the recent
e0#erience of Germany, like the ancient e0#erience of ;n"land, shows 's that hi"h #rices of
man'fact'red "oods are by no means a necessary conseI'ence of #rotection.
Finally, German ind'stry is still %ery far from entirely s'##lyin" her home market. 9n order to do
that, she m'st Grst man'fact're for herself the 17,=== centners of cotton fabrics, the 18,===
centners of woollen fabrics, the 2==,=== centners of cotton yarn, thread, and linen yarn, which
at #resent are im#orted from ;n"land. 9f, howe%er, she accom#lishes that, she will then im#ort
2==,=== centners more raw cotton than before, by which she will carry on so m'ch the more
direct e0chan"e trade with tro#ical co'ntries, and be able to #ay for the "reater #art if not the
whole of that reI'irement with her own man'fact'red "oods.
-e m'st correct the %iew of the a'thor of the re#ort, that #'blic o#inion in Germany is in
fa%o'r of free trade, by statin" that since the establishment of the $ommercial 3nion #eo#le
ha%e acI'ired a clearer #erce#tion of what it is that ;n"land 's'ally 'nderstands by the term
)free trade,) for, as he himself says, )Since that #eriod the sentiments of the German #eo#le
ha%e been di%erted from the re"ion of ho#e and of fantasy to that of their act'al and material
interests.) *he a'thor of the re#ort is I'ite ri"ht when he says that intelli"ence is %ery "reatly
diL'sed amon"st the German #eo#le, b't for that %ery reason #eo#le in Germany ha%e ceased
to ind'l"e in cosmo#olitical dreams. ,eo#le here now think for themsel%es -- they tr'st their
own concl'sions, their own e0#erience, their own so'nd common sense, more than one-sided
systems which are o##osed to all e0#erience. *hey be"in to com#rehend why it was that C'rke
declared in conGdence to 4dam Smith )that a nation m'st not be "o%erned accordin" to
cosmo#olitical systems, b't accordin" to knowled"e of their s#ecial national interests acI'ired
by dee# research.) ,eo#le in Germany distr'st co'nsellors who blow both cold and hot o't of
the same mo'th. ,eo#le know also how to estimate at their #ro#er %al'e the interests and the
ad%ice of those who are o'r ind'strial com#etitors. Finally, #eo#le in Germany bear in mind as
often as ;n"lish oLers are 'nder disc'ssion the well-known #ro%erb of the #resents oLered by
the ?anaidae.
For these %ery reasons we may do'bt that inO'ential German statesmen ha%e serio'sly "i%en
"ro'nds for ho#e to the a'thor of the re#ort, that Germany is willin" to abandon her #rotecti%e
#olicy for the beneGt of ;n"land, in e0chan"e for the #itif'l concession of #ermission to e0#ort
to ;n"land a little "rain and timber. 4t any rate #'blic o#inion in Germany wo'ld "reatly
hesitate to consider s'ch statesmen to be tho'"htf'l ones. 9n order to merit that title in
Germany in the #resent day, it is not eno'"h that a man sho'ld ha%e thoro'"hly learned
s'#erGcial #hrases and ar"'ments of the cosmo#olitical school. ,eo#le reI'ire that a statesman
sho'ld be well acI'ainted with the #owers and the reI'irements of the nation, and, witho't
tro'blin" himself with scholastic systems, sho'ld de%elo# the former and satisfy the latter. C't
that man wo'ld betray an 'nfathomable i"norance of those #owers and wants, who did not
know what enormo's e0ertions are reI'isite to raise a national ind'stry to that sta"e to which
the German ind'stry has already attainedH who cannot in s#irit foresee the "reatness of its
f't'reH who co'ld so "rie%o'sly disa##oint the conGdence which the German ind'strial classes
ha%e re#osed in their Go%ernments, and so dee#ly wo'nd the s#irit of enter#rise in the nationH
who was inca#able of distin"'ishin" between the lofty #osition which is occ'#ied by a
man'fact'rin" nation of the Grst rank, and the inferior #osition of a co'ntry which merely
e0#orts corn and timberH who is not intelli"ent eno'"h to estimate how #recario's a forei"n
market for "rain and timber is e%en in ordinary times, how easily concessions of this kind can
be a"ain re%oked, and what con%'lsions are in%ol%ed in an interr'#tion of s'ch a trade,
occasioned by wars or hostile commercial re"'lationsH who, Gnally, has not learned from the
e0am#le of other "reat states how "reatly the e0istence, the inde#endence, and the #ower of
the nation de#ends on its #ossession of a man'fact'rin" #ower of its own, de%elo#ed in all its
branches.
44
*r'ly one m'st "reatly 'nder-estimate the s#irit of nationality and of 'nity which has arisen in
Germany since 187=, if one belie%ed, as the a'thor of the re#ort does (#. 18!, that the #olicy of
the $ommercial 3nion will follow the se#arate interests of ,r'ssia, beca'se two-thirds of the
#o#'lation of the 3nion are ,r'ssian. C't ,r'ssia)s interests demand the e0#ort of "rain and
timber to ;n"landH the amo'nt of her ca#ital de%oted to man'fact'res is 'nim#ortantH ,r'ssia
will therefore o##ose e%ery system which im#edes the im#ort of forei"n man'fact'res, and all
the heads of de#artments in ,r'ssia are of that o#inion. :e%ertheless the a'thor of the re#ort
says at the be"innin" of his re#ort& )*he German $'stoms 3nion is an incarnation of the idea of
national 'nity which widely #er%ades this co'ntry. 9f this 3nion is well led, it m'st brin" abo't
the f'sion of all German interests in one common lea"'e. *he e0#erience of its beneGts has
made it #o#'lar. 9t is the Grst ste# towards the nationalisation of the German #eo#le. Cy means
of the common interest in commercial I'estions, it has #a%ed the way for #olitical nationality,
and in #lace of narrow-minded %iews, #re/'dices, and c'stoms, it has laid down a broader and
stron"er element of German national e0istence.) :ow, how does the o#inion a"ree with these
#erfectly tr'e #refatory obser%ations, that ,r'ssia will sacriGce the inde#endence and the
f't're "reatness of the nation to a narrow re"ard to her own s'##osed (b't in any case only
momentary! #ri%ate interest -- that ,r'ssia will not com#rehend that Germany m'st either rise
or fall with her national commercial #olicy, as ,r'ssia herself m'st rise or fall with GermanyN
How does the assertion that the ,r'ssian heads of de#artments are o##osed to the #rotecti%e
system, a"ree with the fact that the hi"h d'ties on ordinary woollen and cotton fabrics
emanated from ,r'ssia herselfN 4nd m'st we not be com#elled to con/ect're from these
contradictions, and from the fact that the a'thor of the re#ort #aints in s'ch "lowin" colo'rs
the condition and the #ro"ress of the ind'stry of Sa0ony, that he himself is desiro's of e0citin"
the #ri%ate /ealo'sy of ,r'ssiaN
Ce that as it may, it is %ery stran"e that ?r Cowrin" attaches s'ch "reat im#ortance to the
#ri%ate statements of heads of de#artments, he an ;n"lish a'thor who o'"ht to be well aware
of the #ower of #'blic o#inion -- who o'"ht to know that in o'r days the #ri%ate %iews of heads
of de#artments e%en in 'nconstit'tional states co'nt for %ery little if they are o##osed to #'blic
o#inion, and es#ecially to the material interests of the whole nation, and if they fa%o'r
retro"rade ste#s which endan"er the whole nationality. *he a'thor of the re#ort also feels this
well eno'"h himself, when he states at #a"e 68 that the ,r'ssian Go%ernment has s'Fciently
e0#erienced, as the ;n"lish Go%ernment has done in connection with the abolition of the
;n"lish corn laws, that the %iews of #'blic oFcials cannot e%erywhere be carried into eLect,
that hence it mi"ht be necessary to consider whether German "rain and timber sho'ld not be
admitted to the ;n"lish markets e%en witho't #re%io's concessions on the #art of the German
3nion, beca'se by that %ery means the way mi"ht be #a%ed for the admission of the ;n"lish
man'fact'red "oods into the German market. *his %iew is in any case a correct one. ?r Cowrin"
sees clearly that the German ind'stry wo'ld ne%er ha%e been stren"thened b't for those lawsH
that conseI'ently the abolition of the corn laws wo'ld not only check the f'rther ad%ances of
German ind'stry, b't m'st ca'se it a"ain to retro"rade "reatly, #ro%ided always that in that
case the German c'stoms le"islation remains 'nchan"ed. 9t is only a #ity that the Critish did
not #ercei%e the so'ndness of this ar"'ment twenty years a"oH b't now, after that the
le"islation of ;n"land has itself 'ndertaken the di%orce of German a"ric'lt're from ;n"lish
man'fact'res, after that Germany has #'rs'ed the #ath of #erfectin" her ind'stry for twenty
years, and has made enormo's sacriGces for this ob/ect, it wo'ld betoken #olitical blindness if
Germany were now, owin" to the abolition of the ;n"lish corn laws, to abstain in any de"ree
from #'rs'in" her "reat national career. 9ndeed, we are Grmly con%inced that in s'ch a case it
wo'ld be necessary for Germany to increase her #rotecti%e d'ties in the same #ro#ortion in
which the ;n"lish man'factories wo'ld deri%e ad%anta"e from the abolition of the corn laws as
com#ared with those of Germany. Germany can for a lon" time follow no other #olicy in res#ect
to ;n"land than that of a less ad%anced man'fact'rin" nation which is stri%in" with all her
#ower to raise herself to an eI'al #osition with the most ad%anced man'fact'rin" nation. ;%ery
other #olicy or meas're than that, in%ol%es the im#erillin" of the German nationality. 9f the
;n"lish are in want of forei"n corn or timber, then they may "et it in Germany or where else
they #lease. Germany will not on that acco'nt any the less #rotect the ad%ances in ind'stry
which she has made '# to this time, or stri%e any the less to make f't're ad%ances. 9f the
Critish will ha%e nothin" to do with German "rain and timber, so m'ch the better. 9n that case
the ind'stry, the na%i"ation, the forei"n trade of Germany will raise their heads so m'ch the
I'icker, the German internal means of trans#ort will be so m'ch the sooner com#leted, the
45
German nationality will so m'ch the more certainly rest on its nat'ral fo'ndation. ,erha#s
,r'ssia may not in this way so soon be able to sell the corn and timber of her Caltic #ro%inces
at hi"h #rices as if the ;n"lish markets were s'ddenly o#ened to her. C't thro'"h the
com#letion of the internal means of trans#ort, and thro'"h the internal demand for a"ric'lt'ral
#rod'ce created by the man'factories, the sales of those #ro%inces to the interior of Germany
will increase fast eno'"h, and e%ery beneGt to these #ro%inces which is fo'nded on the home
demand for a"ric'lt'ral #rod'ce will be "ained by them for all f't're time. *hey will ne%er more
ha%e to oscillate as heretofore between calamity and #ros#erity from one decade to another.
C't f'rther, as a #olitical #ower ,r'ssia will "ain a h'ndred-fold more in concentrated stren"th
in the interior of Germany by this #olicy than the material %al'es which she sacriGces for the
moment in her maritime #ro%inces, or rather in%ests for re#ayment in the f't're.
*he ob/ect of the ;n"lish ministry in this re#ort is clearly to obtain the admission into Germany
of ordinary ;n"lish woollen and cotton fabrics, #artly thro'"h the abolition or at least
modiGcation of char"in" d'ties by wei"ht, #artly thro'"h the lowerin" of the tariL, and #artly
by the admission of the German "rain and timber into the ;n"lish market. Cy these means the
Grst breach can be made in the German #rotecti%e system. *hese articles of ordinary 'se (as
we ha%e already shown in a former cha#ter! are by far the most im#ortant, they are the
f'ndamental element of the national ind'stry. ?'ties of ten #er cent ad %alorem, which are
clearly aimed at by ;n"land, wo'ld, with the assistance of the 's'al tricks of 'nder declaration
of %al'e, sacriGce the "reater #art of the German ind'stry to ;n"lish com#etition, es#ecially if
in conseI'ence of commercial crises the ;n"lish man'fact'rers were sometimes ind'ced to
throw on the market their stocks of "oods at any #rice. 9t is therefore no e0a""eration if we
maintain that the tendency of the ;n"lish #ro#osals aims at nothin" less than the o%erthrow of
the entire Germ an #rotecti%e system, in order to red'ce Germany to the #osition of an ;n"lish
a"ric'lt'ral colony. -ith this ob/ect in %iew it is im#ressed on.the notice of ,r'ssia how "reatly
her a"ric'lt're mi"ht "ain by the red'ction of the ;n"lish corn and timber d'ties, and how
'nim#ortant her man'fact'rin" interest is. -ith the same %iew, the #ros#ect is oLered to
,r'ssia of a red'ction of the d'ties on brandy. 4nd in order that the other states may not "o
I'ite em#ty away a fi%e #er cent red'ction of the d'ties on :.rember" wares, children)s toys,
ea' de $olo"ne, and other triOes, is #romised. *hat "i%es satisfaction to the small German
states, and also does not cost m'ch.
*he ne0t attem#t will be to con%ince the German "o%ernments, by means of this re#ort, how
ad%anta"eo's to them it wo'ld be to let ;n"land s#in cotton and linen yarns for them. 9t cannot
be do'bted that hitherto the #olicy ado#ted by the 3nion, Grst of all to enco'ra"e and #rotect
the #rintin" of cloths and then wea%in", and to im#ort the medi'm and Gner yarns, has been
the ri"ht one. C't from that it in nowise follows that it wo'ld contin'e to be the ri"ht one for all
time. *he tariL le"islation m'st ad%ance as the national ind'stry ad%ances if it is ri"htly to f'lGl
its #'r#ose. -e ha%e already shown that the s#innin" factories, I'ite a#art from their
im#ortance in themsel%es, yet are the so'rce of f'rther incalc'lable beneGts, inasm'ch as they
#lace 's in direct commercial comm'nication with the co'ntries of warm climate, and hence
that they e0ercise an incalc'lable inO'ence on o'r na%i"ation and on o'r e0#ort of
man'fact'res, and that they beneGt o'r man'factories of machinery more than any other
branch of man'fact're. 9nasm'ch as it cannot be do'bted that Germany cannot be hindered
either by want of water #ower and of ca#able workmen, or by lack of material ca#ital or
intelli"ence, from carryin" on for herself this "reat and fr'itf'l ind'stry, so we cannot see why
we sho'ld not "rad'ally #rotect the s#innin" of yarns from one n'mber to another, in s'ch a
way that in the co'rse of G%e to ten years we may be able to s#in for o'rsel%es the "reater #art
of what we reI'ire. Howe%er hi"hly one may estimate the ad%anta"es of the e0#ort of "rain
and timber, they cannot nearly eI'al the beneGts which m'st accr'e to 's from the s#innin"
man'fact're. 9ndeed, we ha%e no hesitation in e0#ressin" the belief that it co'ld be
incontestably #ro%ed, by a calc'lation of the cons'm#tion of a"ric'lt'ral #rod'cts and timber
which wo'ld be created by the s#innin" ind'stry, that from this branch of man'fact're alone
far "reater beneGts m'st accr'e to the German landowners than the forei"n market will e%er or
can e%er oLer them.
?r Cowrin" do'bts that Hano%er, Cr'nswick, the two +ecklenb'r"s, @ldenb'r", and the Hanse
*owns will /oin the 3nion, 'nless the latter is willin" to make a radical red'ction in its im#ort
d'ties. *he latter #ro#osal, howe%er, cannot be serio'sly considered, beca'se it wo'ld be
immeas'rably worse than the e%il which by it, it is desired to remedy.
46
@'r conGdence in the #ros#erity of the f't're of Germany is, howe%er, by no means so weak as
that of the a'thor of the re#ort. B'st as the <e%ol'tion of B'ly has #ro%ed beneGcial to the
German $ommercial 3nion, so m'st the ne0t "reat "eneral con%'lsion make an end of all the
minor hesitations by which these small states ha%e hitherto been withheld from yieldin" to the
"reater reI'irements of the German nationality. @f what %al'e the commercial 'nity has been
to the nationality, and of what %al'e it is to German "o%ernments, I'ite a#art from mere
material interests, has been recently for the Grst time %ery stron"ly demonstrated, when the
desire to acI'ire the <hine frontier has been lo'dly e0#ressed in France.
From day to day it is necessary that the "o%ernments and #eo#les of Germany sho'ld be more
con%inced that national 'nity is the rock on which the ediGce of their welfare, their hono'r, their
#ower, their #resent sec'rity and e0istence, and their f't're "reatness, m'st be fo'nded. *h's
from day to day the a#ostasy of these small maritime states will a##ear more and more, not
only to the states in the 3nion, b't to these small states themsel%es, in the li"ht of a national
scandal which m'st be "ot rid of at any #rice. 4lso, if the matter is intelli"ently considered, the
material ad%anta"es of /oinin" the 3nion are m'ch "reater for those states themsel%es than the
sacriGce which it reI'ires. *he more that man'fact'rin" ind'stry, that the internal means of
trans#ort, the na%i"ation, and the forei"n trade of Germany, de%elo# themsel%es, in that
de"ree in which 'nder a wise commercial #olicy they can and m'st be de%elo#ed in accordance
with the reso'rces of the nation, so m'ch the more will the desire become more %i"oro's on
the #art of those small states directly to #artici#ate in these ad%anta"es, and so m'ch the more
will they lea%e oL the bad habit of lookin" to forei"n co'ntries for blessin"s and #ros#erity.
9n reference to the Hanse *owns es#ecially, the s#irit of im#erial citiAenshi# of the so%erei"n
#arish of Hamb'r" in no way deters 's from o'r ho#es. 9n those cities, accordin" to the
testimony of the a'thor of the re#ort himself, dwell a "reat n'mber of men who com#rehend
that Hamb'r", Cremen, and L'beck are and m'st be to the German nation that which London
and Li%er#ool are to the ;n"lish, that which :ew Sork, Coston, and ,hiladel#hia are to the
4mericans -- men who clearly see that the $ommercial 3nion can oLer ad%anta"es to their
commerce with the world which far e0ceed the disad%anta"es of s'b/ection to the re"'lations
of the 3nion, and that a #ros#erity witho't any "'arantee for its contin'ance is f'ndamentally a
del'sion.
-hat sensible inhabitant of those sea#orts co'ld heartily con"rat'late himself on the contin'al
increase of their tonna"e, on the contin'al e0tension of their commercial relations, if he
reOected that two fri"ates, which comin" from Heli"oland co'ld be stationed at the mo'ths of
the -eser and the ;lbe, wo'ld be in a #osition to destroy in twenty-fo'r ho'rs this work of a
I'arter of a cent'ryN C't the 3nion will "'arantee to these sea#orts their #ros#erity and their
#ro"ress for all f't're time, #artly by the creation of a Oeet of its own and #artly by alliances. 9t
will foster their Gsheries, sec're s#ecial ad%anta"es to their shi##in", #rotect and #romote their
forei"n commercial relations, by eLecti%e cons'lar establishments and by treaties. ,artly by
their means it will fo'nd new colonies, and by their means carry on its own colonial trade. For a
'nion of States com#risin" thirty-G%e millions of inhabitants (for the 3nion will com#rise that
n'mber at least when it is f'lly com#leted!, which owin" to an ann'al increase of #o#'lation of
one and a half #er cent can easily s#are ann'ally two or three h'ndred tho'sand #ersons,
whose #ro%inces abo'nd with well-informed and c'lti%ated inhabitants who ha%e a #ec'liar
#ro#ensity to seek their fort'ne in distant co'ntries, #eo#le who can take root anywhere and
make themsel%es at home where%er 'nocc'#ied land is to be c'lti%ated, are called '#on by
:at're herself to #lace themsel%es in the Grst rank of nations who colonise and diL'se
ci%ilisation.
*he feelin" of the necessity for s'ch a #erfect com#letion of the $ommercial 3nion is so
'ni%ersally entertained in Germany, that hence the a'thor of the re#ort co'ld not hel#
remarkin", )+ore coasts, more harbo'rs, more na%i"ation, a 3nion Oa", the #ossession of a
na%y and of a mercantile marine, are wishes %ery "enerally entertained by the s'##orters of
the $ommercial 3nion, b't there is little #ros#ect at #resent of the 3nion makin" head a"ainst
the increasin" Oeet of <'ssia and the commercial marine of Holland and the Hanse *owns.)
4"ainst them certainly not, b't so m'ch the more with them and by means of them. 9t lies in
the %ery nat're of e%ery #ower to seek to di%ide in order to r'le. 4fter the a'thor of the re#ort
has shown why it wo'ld be foolish on the #art of the maritime states to /oin the 3nion, he
desires also to se#arate the "reat sea#orts from the German national body for all time,
inasm'ch as he s#eaks to 's of the wareho'ses of 4ltona which m'st become dan"ero's to the
wareho'ses of Hamb'r", as tho'"h s'ch a "reat commercial em#ire co'ld not Gnd the means
47
of makin" the wareho'ses of 4ltona ser%iceable to its ob/ects. -e will not follow the a'thor
thro'"h his ac'te inferences from this #ointH we will only say, that if they were a##lied to
;n"land, they wo'ld #ro%e that London and Li%er#ool wo'ld increase their commercial
#ros#erity in an e0traordinary de"ree if they were se#arated from the body of the ;n"lish
nation. *he s#irit which 'nderlies these ar"'ments is 'nmistakably e0#ressed in the re#ort of
the ;n"lish cons'l at <otterdam. )For the commercial interests of Great Critain,) says +r
4le0ander Ferrier at the end of his re#ort, )it a##ears of the "reatest #ossible im#ortance that
no means sho'ld be left 'ntried to #re%ent the aforesaid states, and also Cel"i'm, from
enterin" the Doll%erein, for reasons which are too clear to need any e0#osition.) -ho co'ld
#ossibly blame +r Ferrier for s#eakin" th's, or ?r Cowrin" for s#eakin" th's, or the ;n"lish
ministers for actin" as the others s#eakN *he national instinct of ;n"land s#eaks and acts
thro'"h them. C't to e0#ect #ros#erity and blessin" to Germany from #ro#osals which #roceed
from s'ch a so'rce as that, wo'ld a##ear to e0ceed e%en a decent de"ree of national "ood
nat're. )-hate%er may ha##en,) adds +r Ferrier to the words abo%e I'oted, )Holland m'st at all
times be considered as the main channel for the commercial relations of So'th Germany with
other co'ntries.) $learly +r Ferrier 'nderstands by the term )other co'ntries) merely ;n"landH
clearly he means to say that if the ;n"lish man'fact'rin" s'#remacy sho'ld lose its means of
access to Germany or the :orth Sea and the Caltic, Holland wo'ld still remain to it as the "reat
means of access by which it co'ld #redominate o%er the markets for man'fact'red "oods and
colonial #rod'ce of the so'th of Germany.
C't we from a national #oint of %iew say and maintain that Holland is in reference to its
"eo"ra#hical #osition, as well as in res#ect to its commercial and ind'strial circ'mstances, and
to the ori"in and lan"'a"e of its inhabitants, a German #ro%ince, which has been se#arated
from Germany at a #eriod of German national dis'nion, witho't whose reincor#oration in the
German 3nion Germany may be com#ared to a ho'se the door of which belon"s to a stran"er&
Holland belon"s as m'ch to Germany as Crittany and :ormandy belon" to France, and so lon"
as Holland is determined to constit'te an inde#endent kin"dom of her own, Germany can as
little attain inde#endence and #ower as France wo'ld ha%e been enabled to attain these if
those #ro%inces had remained in the hands of the ;n"lish. *hat the commercial #ower of
Holland has declined, is owin" to the 'nim#ortance of the co'ntry. Holland will and m'st also,
notwithstandin" the #ros#erity of her colonies, contin'e to decline, beca'se the nation is too
weak to s'##ort the enormo's e0#ense of a considerable military and na%al #ower. *hro'"h her
e0ertions to maintain her nationality Holland m'st become more and more dee#ly in%ol%ed in
debt. :otwithstandin" her "reat colonial #ros#erity, she is and remains all the same a co'ntry
de#endent on ;n"land, and by her seemin" inde#endence she only stren"thens the ;n"lish
s'#remacy. *his is also the secret reason why ;n"land at the con"ress of >ienna took 'nder her
#rotection the restoration of the ?'tch seemin" inde#endence. *he case is e0actly the same as
with the Hanse *owns. @n the side of ;n"land, Holland is a satellite for the ;n"lish Oeet -- 'nite
it with Germany, she is the leader of the German na%al #ower. 9n her #resent #osition Holland
cannot nearly so well deri%e #roGt from her colonial #ossessions as if they became a
constit'ent #art of the German 3nion, es#ecially beca'se she is too weak in the elements
which are necessary for colonisation -- in #o#'lation and in mental #owers. F'rther than this,
the #roGtable de%elo#ment of her colonies, so far as that has hitherto been eLected, de#ends
for the most #art on German "ood nat're, or rather on the nonacI'aintance of the Germans
with their own national commercial interestsH for while all other nations reser%e their market for
colonial #rod'ce for their own colonies and for the co'ntries s'b/ect to them, the German
market is the only one which remains o#en to the ?'tch for the dis#osal of their s'r#l's colonial
#rod'ce. 4s soon as the Germans clearly com#rehend that those from whom they #'rchase
colonial #rod'ce m'st be made to 'nderstand that they on their #art m'st #'rchase
man'fact'red "oods from Germany 'nder diLerentially fa%o'rable treatment, then the
Germans will also clearly see that they ha%e it in their #ower to com#el Holland to /oin the
Doll%erein. *hat 'nion wo'ld be of the "reatest ad%anta"e to both co'ntries. Germany wo'ld
"i%e Holland the means not only of deri%in" #roGt from her colonies far better than at #resent,
b't also to fo'nd and to acI'ire new colonies. Germany wo'ld "rant s#ecial #referential
#ri%ile"es to the ?'tch and Hanseatic shi##in", and "rant s#ecial #referential #ri%ile"es to
?'tch colonial #rod'ce in the German markets. Holland and the Hanse *owns, in ret'rn, wo'ld
#referentially e0#ort German man'fact'res, and #referentially em#loy their s'r#l's ca#ital in
the man'factories and the a"ric'lt're of the interior of Germany.
48
Holland , as she has s'nk from her eminence as a commercial #ower beca'se she, the mere
fraction of a nation, wanted to make herself #ass as an entire nationH beca'se she so'"ht her
ad%anta"e in the o##ression and the weakenin" of the #rod'cti%e #owers of Germany , instead
of basin" her "reatness on the #ros#erity of the co'ntries which lie behind her, with which
e%ery maritime state m'st stand or fallH beca'se she so'"ht to become "reat by her se#aration
from the German nation instead of by her 'nion with itH Holland can only a"ain attain to her
ancient state of #ros#erity by means of the German 3nion and in the closest connection with it.
@nly by this 'nion is it #ossible to constit'te an a"ric'lt'ral man'fact'rin" commercial
nationality of the Grst ma"nit'de.
?r Cowrin" "ro'#s in his tables the im#orts and e0#orts of the German $'stoms 3nion with the
Hanse *owns and Holland and Cel"i'm all to"ether, and from this "ro'#in" it clearly a##ears
how "reatly all these co'ntries are de#endent on the ;n"lish man'fact'rin" ind'stry, and how
immeas'rably they mi"ht "ain in their entire #rod'cti%e #ower by 'nion. He estimates the
im#orts of these co'ntries from ;n"land at 16,81,111 l. sterlin" of oFcial %al'e, or 8,22=,75
l. of declared %al'e, b't the e0#orts of those co'ntries to ;n"land (on the other hand! at only
,8=,61 l. sterlin"H in which, by the way, are incl'ded the "reat I'antities of Ba%a coLee,
cheese, b'tter, Rc. which ;n"land im#orts from Holland. *hese totals s#eak %ol'mes. -e thank
the ?octor for his statistical "ro'#in" to"ether -- wo'ld that it mi"ht betoken a s#eedy #olitical
"ro'#in".
:@*;S&
1. <e#ort on the German Doll%erein to Lord >isco'nt ,almerston, by
Bohn Cowrin", 18=.
1. See statement of <. C. ,orter, note to #. 166.
49