The Wealth of Nations

Adam Smith production; yet it would not from thence follow, that its labour the actually existing value of goods in the market is, in conse- added nothing to the real revenue, to the real value of the annual quence of what he produces, greater than it otherwise would be. produce of the land and labour of the society. An artificer, for example, who, in the first six months after harvest, executes ten When the patrons of this system assert, that the consumption pounds worth of work, though he should, in the same time, con- of artificers, manufacturer’s, and merchants, is equal to the value sume ten pounds worth of corn and other necessaries, yet really of what they produce, they probably mean no more than that adds the value of ten pounds to the annual produce of the land their revenue, or the fund destined for their consumption, is equal and labour of the society. While he has been consuming a half- to it. But if they had expressed themselves more accurately, and yearly revenue of ten pounds worth of corn and other necessaries, only asserted, that the revenue of this class was equal to the value he has produced an equal value of work, capable of purchasing, of what they produced, it might readily have occurred to the reader, either to himself, or to some other person, an equal half-yearly that what would naturally be saved out of this revenue, must nec- revenue. The value, therefore, of what has been consumed and essarily increase more or less the real wealth of the society. In or- produced during these six months, is equal, not to ten, but to der, therefore, to make out something like an argument, it was twenty pounds. It is possible, indeed, that no more than ten pounds necessary that they should express themselves as they have done; worth of this value may ever have existed at any one moment of and this argument, even supposing things actually were as it seems time. But if the ten pounds worth of corn and other necessaries to presume them to be, turns out to be a very inconclusive one. which were consumed by the artificer, had been consumed by a soldier, or by a menial servant, the value of that part of the annual Fourthly, farmers and country labourers can no more augment, produce which existed at the end of the six months, would have without parsimony, the real revenue, the annual produce of the been ten pounds less than it actually is in consequence of the labour land and labour of their society, than artificers, manufacturers, of the artificer. Though the value of what the artificer produces, and merchants. The annual produce of the land and labour of any therefore, should not, at any one moment of time, be supposed society can be augmented only in two ways; either, first, by some greater than the value he consumes, yet, at every moment of time, improvement in the productive powers of the useful labour actu- ally maintained within it; or, secondly, by some increase in the quantity of that labour. 551

The Wealth of Nations The improvement in the productive powers of useful labour country was supposed to consist altogether, as this system seems depends, first, upon the improvement in the ability of the work- to suppose, in the quantity of subsistence which their industry man; and, secondly, upon that of the machinery with which he could procure to them; yet, even upon this supposition, the rev- works. But the labour of artificers and manufacturers, as it is ca- enue of a trading and manufacturing country must, other things pable of being more subdivided, and the labour of each workman being equal, always be much greater than that of one without reduced to a greater simplicity of operation, than that of farmers trade or manufactures. By means of trade and manufactures, a and country labourers; so it is likewise capable of both these sorts greater quantity of subsistence can be annually imported into a of improvement in a much higher degree {See book i chap. 1.} In particular country, than what its own lands, in the actual state of this respect, therefore, the class of cultivators can have no sort of their cultivation, could afford. The inhabitants of a town, though advantage over that of artificers and manufacturers. they frequently possess no lands of their own, yet draw to them- selves, by their industry, such a quantity of the rude produce of The increase in the quantity of useful labour actually employed the lands of other people, as supplies them, not only with the within any society must depend altogether upon the increase of materials of their work, but with the fund of their subsistence. the capital which employs it; and the increase of that capital, again, What a town always is with regard to the country in its must be exactly equal to the amount of the savings from the rev- neighbourhood, one independent state or country may frequently enue, either of the particular persons who manage and direct the be with regard to other independent states or countries. It is thus employment of that capital, or of some other persons, who lend it that Holland draws a great part of its subsistence from other coun- to them. If merchants, artificers, and manufacturers are, as this tries; live cattle from Holstein and Jutland, and corn from almost system seems to suppose, naturally more inclined to parsimony all the different countries of Europe. A small quantity of manu- and saving than proprietors and cultivators, they are, so far, more factured produce, purchases a great quantity of rude produce. A likely to augment the quantity of useful labour employed within trading and manufacturing country, therefore, naturally purchases, their society, and consequently to increase its real revenue, the with a small part of its manufactured produce, a great part of the annual produce of its land and labour. rude produce of other countries; while, on the contrary, a country Fifthly and lastly, though the revenue of the inhabitants of every 552

Adam Smith without trade and manufactures is generally obliged to purchase, possible, its doctrine seems to be in every respect as just as it is at the expense of a great part of its rude produce, a very small part generous and liberal. Its followers are very numerous; and as men of the manufactured produce of other countries. The one exports are fond of paradoxes, and of appearing to understand what sur- what can subsist and accommodate but a very few, and imports passes the comprehensions of ordinary people, the paradox which the subsistence and accommodation of a great number. The other it maintains, concerning the unproductive nature of manufactur- exports the accommodation and subsistence of a great number, ing labour, has not, perhaps, contributed a little to increase the and imports that of a very few only. The inhabitants of the one number of its admirers. They have for some years past made a must always enjoy a much greater quantity of subsistence than pretty considerable sect, distinguished in the French republic of what their own lands, in the actual state of their cultivation, could letters by the name of the Economists. Their works have certainly afford. The inhabitants of the other must always enjoy a much been of some service to their country; not only by bringing into smaller quantity. general discussion, many subjects which had never been well ex- amined before, but by influencing, in some measure, the public This system, however, with all its imperfections, is perhaps the administration in favour of agriculture. It has been in consequence nearest approximation to the truth that has yet been published of their representations, accordingly, that the agriculture of France upon the subject of political economy; and is upon that account, has been delivered from several of the oppressions which it before well worth the consideration of every man who wishes to examine laboured under. The term, during which such a lease can be with attention the principles of that very important science. granted, as will be valid against every future purchaser or propri- Though in representing the labour which is employed upon land etor of the land, has been prolonged from nine to twenty-seven as the only productive labour, the notions which it inculcates are, years. The ancient provincial restraints upon the transportation of perhaps, too narrow and confined; yet in representing the wealth corn from one province of the kingdom to another, have been of nations as consisting, not in the unconsumable riches of money, entirely taken away; and the liberty of exporting it to all foreign but in the consumable goods annually reproduced by the labour countries, has been established as the common law of the king- of the society, and in representing perfect liberty as the only effec- dom in all ordinary cases. This sect, in their works, which are very tual expedient for rendering this annual reproduction the greatest 553

The Wealth of Nations numerous, and which treat not only of what is properly called age, but of which our posterity will reap the benefit.’ Political Economy, or of the nature and causes or the wealth of As the political economy of the nations of modern Europe has nations, but of every other branch of the system of civil govern- ment, all follow implicitly, and without any sensible variation, the been more favourable to manufactures and foreign trade, the in- doctrine of Mr. Qttesnai. There is, upon this account, little vari- dustry of the towns, than to agriculture, the industry of the coun- ety in the greater part of their works. The most distinct and best try; so that of other nations has followed a different plan, and has connected account of this doctrine is to be found in a little book been more favourable to agriculture than to manufactures and written by Mr. Mercier de la Riviere, some time intendant of foreign trade. Martinico, entitled, The natural and essential Order of Political Societies. The admiration of this whole sect for their master, who The policy of China favours agriculture more than all other em- was himself a man of the greatest modesty and simplicity, is not ployments. In China, the condition of a labourer is said to be as inferior to that of any of the ancient philosophers for the founders much superior to that of an artificer, as in most parts of Europe that of their respective systems. ‘There have been since the world be- of an artificer is to that of a labourer. In China, the great ambition gan,’ says a very diligent and respectable author, the Marquis de of every man is to get possession of a little bit of land, either in Mirabeau, ‘three great inventions which have principally given sta- property or in lease; and leases are there said to be granted upon bility to political societies, independent of many other inventions very moderate terms, and to be sufficiently secured to the lessees. which have enriched and adorned them. The first is the invention The Chinese have little respect for foreign trade. Your beggarly com- of writing, which alone gives human nature the power of trans- merce! was the language in which the mandarins of Pekin used to mitting, without alteration, its laws, its contracts, its annals, and talk to Mr. De Lange, the Russian envoy, concerning it {See the its discoveries. The second is the invention of money, which binds Journal of Mr. De Lange, in Bell’s Travels, vol. ii. p. 258, 276, 293.}. together all the relations between civilized societies. The third is Except with Japan, the Chinese carry on, themselves, and in their the economical table, the result of the other two, which completes own bottoms, little or no foreign trade; and it is only into one or them both by perfecting their object; the great discovery of our two ports of their kingdom that they even admit the ships of for- eign nations. Foreign trade, therefore, is, in China, every way con- fined within a much narrower circle than that to which it would 554

Adam Smith naturally extend itself, if more freedom was allowed to it, either in country of so great extent, as to be alone sufficient to support very their own ships, or in those of foreign nations. great manufactures, and to admit of very considerable subdivi- sions of labour. The home market of China is, perhaps, in extent, Manufactures, as in a small bulk they frequently contain a great not much inferior to the market of all the different countries of value, and can upon that account be transported at less expense Europe put together. A more extensive foreign trade, however, from one country to another than most parts of rude produce, which to this great home market added the foreign market of all are, in almost all countries, the principal support of foreign trade. the rest of the world, especially if any considerable part of this In countries, besides, less extensive, and less favourably circum- trade was carried on in Chinese ships, could scarce fail to increase stanced for inferior commerce than China, they generally require very much the manufactures of China, and to improve very much the support of foreign trade. Without an extensive foreign mar- the productive powers of its manufacturing industry. By a more ket, they could not well flourish, either in countries so moderately extensive navigation, the Chinese would naturally learn the art of extensive as to afford but a narrow home market, or in countries using and constructing, themselves, all the different machines made where the communication between one province and another was use of in other countries, as well as the other improvements of art so difficult, as to render it impossible for the goods of any particu- and industry which are practised in all the different parts of the lar place to enjoy the whole of that home market which the coun- world. Upon their present plan, they have little opportunity of try could afford. The perfection of manufacturing industry, it must improving themselves by the example of any other nation, except be remembered, depends altogether upon the division of labour; that of the Japanese. and the degree to which the division of labour can be introduced into any manufacture, is necessarily regulated, it has already been The policy of ancient Egypt, too, and that of the Gentoo gov- shewn, by the extent of the market. But the great extent of the ernment of Indostan, seem to have favoured agriculture more than empire of China, the vast multitude of its inhabitants, the variety all other employments. of climate, and consequently of productions in its different prov- inces, and the easy communication by means of water-carriage Both in ancient Egypt and Indostan, the whole body of the between the greater part of them, render the home market of that people was divided into different casts or tribes each of which was confined, from father to son, to a particular employment, or class 555

The Wealth of Nations of employments. The son of a priest was necessarily a priest; the effect, prohibits them from all distant sea voyages. Both the Egyp- son of a soldier, a soldier; the son of a labourer, a labourer; the son tians and Indians must have depended almost altogether upon the of a weaver, a weaver; the son of a tailor, a tailor, etc. In both navigation of other nations for the exportation of their surplus countries, the cast of the priests holds the highest rank, and that produce; and this dependency, as it must have confined the mar- of the soldiers the next; and in both countries the cast of the farm- ket, so it must have discouraged the increase of this surplus pro- ers and labourers was superior to the casts of merchants and manu- duce. It must have discouraged, too, the increase of the manufac- facturers. tured produce, more than that of the rude produce. Manufactures require a much more extensive market than the most important The government of both countries was particularly attentive to parts of the rude produce of the land. A single shoemaker will the interest of agriculture. The works constructed by the ancient make more than 300 pairs of shoes in the year; and his own family sovereigns of Egypt, for the proper distribution of the waters of will not, perhaps, wear out six pairs. Unless, therefore, he has the the Nile, were famous in antiquity, and the ruined remains of custom of, at least, 50 such families as his own, he cannot dispose some of them are still the admiration of travellers. Those of the of the whole product of his own labour. The most numerous class same kind which were constructed by the ancient sovereigns of of artificers will seldom, in a large country, make more than one Indostan, for the proper distribution of the waters of the Ganges, in 50, or one in a 100, of the whole number of families contained as well as of many other rivers, though they have been less cel- in it. But in such large countries, as France and England, the num- ebrated, seem to have been equally great. Both countries, accord- ber of people employed in agriculture has, by some authors been ingly, though subject occasionally to dearths, have been famous computed at a half, by others at a third and by no author that I for their great fertility. Though both were extremely populous, know of, at less that a fifth of the whole inhabitants of the coun- yet, in years of moderate plenty, they were both able to export try. But as the produce of the agriculture of both France and En- great quantities of grain to their neighbours. gland is, the far greater part of it, consumed at home, each person employed in it must, according to these computations, require The ancient Egyptians had a superstitious aversion to the sea; little more than the custom of one, two, or, at most, of four such and as the Gentoo religion does not permit its followers to light a fire, nor consequently to dress any victuals, upon the water, it, in 556

Adam Smith families as his own, in order to dispose of the whole produce of his vided, have always derived the whole, or by far the most consider- own labour. Agriculture, therefore, can support itself under the able part, of their revenue, from some sort of land tax or land rent. discouragement of a confined market much better than manufac- This land tax, or land rent, like the tithe in Europe, consisted in a tures. In both ancient Egypt and Indostan, indeed, the confine- certain proportion, a fifth, it is said, of the produce of the land, ment of the foreign market was in some measure compensated by which was either delivered in kind, or paid in money, according to the conveniency of many inland navigations, which opened, in a certain valuation, and which, therefore, varied from year to year, the most advantageous manner, the whole extent of the home according to all the variations of the produce. It was natural, there- market to every part of the produce of every different district of fore, that the sovereigns of those countries should be particularly those countries. The great extent of Indostan, too, rendered the attentive to the interests of agriculture, upon the prosperity or home market of that country very great, and sufficient to support declension of which immediately depended the yearly increase or a great variety of manufactures. But the small extent of ancient diminution of their own revenue. Egypt, which was never equal to England, must at all times, have rendered the home market of that country too narrow for sup- The policy of the ancient republics of Greece, and that of Rome, porting any great variety of manufactures. Bengal accordingly, the though it honoured agriculture more than manufactures or for- province of Indostan which commonly exports the greatest quan- eign trade, yet seems rather to have discouraged the latter employ- tity of rice, has always been more remarkable for the exportation ments, than to have given any direct or intentional encourage- of a great variety of manufactures, than for that of its grain. An- ment to the former. In several of the ancient states of Greece, for- cient Egypt, on the contrary, though it exported some manufac- eign trade was prohibited altogether; and in several others, the tures, fine linen in particular, as well as some other goods, was employments of artificers and manufacturers were considered as always most distinguished for its great exportation of grain. It was hurtful to the strength and agility of the human body, as render- long the granary of the Roman empire. ing it incapable of those habits which their military and gymnas- tic exercises endeavoured to form in it, and as thereby disqualify- The sovereigns of China, of ancient Egypt, and of the different ing it, more or less, for undergoing the fatigues and encountering kingdoms into which Indostan has, at different times, been di- the dangers of war. Such occupations were considered as fit only 557

The Wealth of Nations for slaves, and the free citizens of the states were prohibited from by Mr. Montesquieu, though not richer, have always been wrought exercising them. Even in those states where no such prohibition with less expense, and therefore with more profit, than the Turk- took place, as in Rome and Athens, the great body of the people ish mines in their neighbourhood. The Turkish mines are wrought were in effect excluded from all the trades which are now com- by slaves; and the arms of those slaves are the only machines which monly exercised by the lower sort of the inhabitants of towns. the Turks have ever thought of employing. The Hungarian mines Such trades were, at Athens and Rome, all occupied by the slaves are wrought by freemen, who employ a great deal of machinery, of the rich, who exercised them for the benefit of their masters, by which they facilitate and abridge their own labour. From the whose wealth, power, and protection, made it almost impossible very little that is known about the price of manufactures in the for a poor freeman to find a market for his work, when it came times of the Greeks and Romans, it would appear that those of the into competition with that of the slaves of the rich. Slaves, how- finer sort were excessively dear. Silk sold for its weight in gold. It ever, are very seldom inventive; and all the most important im- was not, indeed, in those times an European manufacture; and as provements, either in machinery, or in the arrangement and dis- it was all brought from the East Indies, the distance of the carriage tribution of work, which facilitate and abridge labour have been may in some measure account for the greatness of the price. The the discoveries of freemen. Should a slave propose any improve- price, however, which a lady, it is said, would sometimes pay for a ment of this kind, his master would be very apt to consider the piece of very fine linen, seems to have been equally extravagant; proposal as the suggestion of laziness, and of a desire to save his and as linen was always either an European, or at farthest, an Egyp- own labour at the master’s expense. The poor slave, instead of tian manufacture, this high price can be accounted for only by the reward would probably meet with much abuse, perhaps with some great expense of the labour which must have been employed about punishment. In the manufactures carried on by slaves, therefore, It, and the expense of this labour again could arise from nothing more labour must generally have been employed to execute the but the awkwardness of the machinery which is made use of. The same quantity of work, than in those carried on by freemen. The price of fine woollens, too, though not quite so extravagant, seems, work of the farmer must, upon that account, generally have been however, to have been much above that of the present times. Some dearer than that of the latter. The Hungarian mines, it is remarked cloths, we are told by Pliny {Plin. 1. ix.c.39.}, dyed in a particular 558

Adam Smith manner, cost a hundred denarii, or £3:6s:8d. the pound weight. of manufacturing art and industry, the expense of any one dress Others, dyed in another manner, cost a thousand denarii the pound comes to be very moderate, the variety will naturally be very great. weight, or £33:6s:8d. The Roman pound, it must be remembered, The rich, not being able to distinguish themselves by the expense contained only twelve of our avoirdupois ounces. This high price, of any one dress, will naturally endeavour to do so by the multi- indeed, seems to have been principally owing to the dye. But had tude and variety of their dresses. not the cloths themselves been much dearer than any which are made in the present times, so very expensive a dye would not The greatest and most important branch of the commerce of probably have been bestowed upon them. The disproportion would every nation, it has already been observed, is that which is carried have been too great between the value of the accessory and that of on between the inhabitants of the town and those of the country. the principal. The price mentioned by the same author {Plin. 1. The inhabitants of the town draw from the country the rude pro- viii.c.48.}, of some triclinaria, a sort of woollen pillows or cush- duce, which constitutes both the materials of their work and the ions made use of to lean upon as they reclined upon their couches fund of their subsistence; and they pay for this rude produce, by at table, passes all credibility; some of them being said to have cost sending back to the country a certain portion of it manufactured more than £30,000, others more than £300,000. This high price, and prepared for immediate use. The trade which is carried on too, is not said to have arisen from the dye. In the dress of the between these two different sets of people, consists ultimately in a people of fashion of both sexes, there seems to have been much certain quantity of rude produce exchanged for a certain quantity less variety, it is observed by Dr. Arbuthnot, in ancient than in of manufactured produce. The dearer the latter, therefore, the modern times; and the very little variety which we find in that of cheaper the former; and whatever tends in any country to raise the ancient statues, confirms his observation. He infers from this, the price of manufactured produce, tends to lower that of the that their dress must, upon the whole, have been cheaper than rude produce of the land, and thereby to discourage agriculture. ours; but the conclusion does not seem to follow. When the ex- The smaller the quantity of manufactured produce, which any pense of fashionable dress is very great, the variety must be very given quantity of rude produce, or, what comes to the same thing, small. But when, by the improvements in the productive powers which the price of any given quantity of rude produce, is capable of purchasing, the smaller the exchangeable value of that given 559

The Wealth of Nations quantity of rude produce; the smaller the encouragement which would naturally go to it, or, by extraordinary restraints, to force either the landlord has to increase its quantity by improving, or from a particular species of industry some share of the capital which the farmer by cultivating the land. Whatever, besides, tends to would otherwise be employed in it, is, in reality, subversive of the diminish in any country the number of artificers and manufactur- great purpose which it means to promote. It retards, instead of ers, tends to diminish the home market, the most important of all accelerating the progress of the society towards real wealth and markets, for the rude produce of the land, and thereby still further greatness; and diminishes, instead of increasing, the real value of to discourage agriculture. the annual produce of its land and labour. Those systems, therefore, which preferring agriculture to all other All systems, either of preference or of restraint, therefore, being employments, in order to promote it, impose restraints upon thus completely taken away, the obvious and simple system of manufactures and foreign trade, act contrary to the very end which natural liberty establishes itself of its own accord. Every man, as they propose, and indirectly discourage that very species of indus- long as he does not violate the laws of justice, is left perfectly free try which they mean to promote. They are so far, perhaps, more to pursue his own interest his own way, and to bring both his inconsistent than even the mercantile system. That system, by industry and capital into competition with those of any other man, encouraging manufactures and foreign trade more than agricul- or order of men. The sovereign is completely discharged from a ture, turns a certain portion of the capital of the society, from duty, in the attempting to perform which he must always be ex- supporting a more advantageous, to support a less advantageous posed to innumerable delusions, and for the proper performance species of industry. But still it really, and in the end, encourages of which, no human wisdom or knowledge could ever be suffi- that species of industry which it means to promote. Those agri- cient; the duty of superintending the industry of private people, cultural systems, on the contrary, really, and in the end, discour- and of directing it towards the employments most suitable to the age their own favourite species of industry. interests of the society. According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of It is thus that every system which endeavours, either, by ex- great importance, indeed, but plain and intelligible to common traordinary encouragements to draw towards a particular species understandings: first, the duty of protecting the society from the of industry a greater share of the capital of the society than what 560

Adam Smith violence and invasion of other independent societies; secondly, modern governments to mortgage some part of this revenue, or to the duty of protecting, as far as possible, every member of the contract debts; and what have been the effects of those debts upon society from the injustice or oppression of every other member of the real wealth, the annual produce of the land and labour of the it, or the duty of establishing an exact administration of justice; society. The following book, therefore, will naturally be divided and, thirdly, the duty of erecting and maintaining certain public into three chapters. works, and certain public institutions, which it can never be for the interest of any individual, or small number of individuals to erect and maintain; because the profit could never repay the ex- pense to any individual, or small number of individuals, though it may frequently do much more than repay it to a great society. The proper performance of those several duties of the sovereign necessarily supposes a certain expense; and this expense again nec- essarily requires a certain revenue to support it. In the following book, therefore, I shall endeavour to explain, first, what are the necessary expenses of the sovereign or commonwealth; and which of those expenses ought to be defrayed by the general contribu- tion of the whole society; and which of them, by that of some particular part only, or of some particular members of the society: secondly, what are the different methods in which the whole soci- ety may be made to contribute towards defraying the expenses incumbent on the whole society; and what are the principal ad- vantages and inconveniencies of each of those methods: and thirdly, what are the reasons and causes which have induced almost all 561

The Wealth of Nations APPENDIX TO BOOK IV 1779 206 55,194 29,367 15,287 0 0 1780 181 48,315 19,885 13,445 12 6 The two following accounts are subjoined, in order to illustrate 1781 135 33,992 16,593 9,613 15 6 and confirm what is said in the fifth chapter of the fourth book, concerning the Tonnage Bounty to the Whit-herring Fishery. The Totals 2,186 550,943 378,347 £165,463 14 0 reader, I believe, may depend upon the accuracy of both accounts. Sea-sticks 378,347 Bounty, at a medium, for each An account of Busses fitted out in Scotland for eleven Years, with barrel of sea-sticks, £ 0 8 2¼ the Number of empty Barrels carried out, and the Number of But a barrel of sea-sticks Barrels of Herrings caught; also the Bounty, at a Medium, on each being only reckoned two thirds Barrel of Sea-sricks, and on each Barrel when fully packed. of a barrel fully packed, one third to be deducted, which Years Number of Empty Barrels Barrels of Her- Bounty paid on ¹/³deducted 126,115 brings the bounty to £ 0 12 3¾ Barrels fully packed 252,231 Busses carried out rings caught the Busses £. s. d. 1771 29 5,948 2,832 2,885 0 0 And if the herrings are exported, there is besides a premium of £ 0 2 8 1772 168 41,316 22,237 11,055 7 6 So the bounty paid by government in money for each 1773 190 42,333 42,055 12,510 8 6 barrel is £ 0 14 11¾ 1774 240 59,303 56,365 26,932 2 6 1775 275 69,144 52,879 19,315 15 0 1776 294 76,329 51,863 21,290 7 6 But if to this, the duty of the salt usually taken credit for as ex- pended in curing each barrel, which at a medium, is, of foreign, 1777 240 62,679 43,313 17,592 2 6 one bushel and one-fourth of a bushel, at 10s. a-bushel, be added, 1778 220 56,390 40,958 16,316 2 6 562

Adam Smith viz 0 12 6 £ 0 12 3¾ the bounty on each barrel would amount to £ 1 7 5¾ From which deduct 1s. a-barrel, paid at the time they are entered for home consumption 010 If the herrings are cured with British salt, it will stand thus, viz. £ 0 11 3¾ Bounty as before £ 0 14 11¾ But if to this bounty, the duty on two bushels of Scotch salt, at But if to the bounty, the the duty on two bushel of Scotch salt, at 1s.6d. per bushel, supposed to be the quantity, at a medium, used 1s.6d. per bushel supposed to be the quantity, at a medium, used in curing each barrel is added, viz. 030 in curing each barrel, is added, viz 030 The bounty on each barrel will amount to £ 0 17 11¾ the premium for each barrel entered for home consumption will be £ 1 14 3¾ And when buss herrings are entered for home consumption in Scotland, and pay the shilling a barrel of duty, the bounty stands Though the loss of duties upon herrings exported cannot, per- haps, properly be considered as bounty, that upon herrings en- thus, to wit, as before £ 0 12 3¾ tered for home consumption certainly may. From which the shilling a barrel is to be deducted 010 £ 0 11 3¾ But to that there is to be added again, the duty of the foreign salt An account of the Quantity of Foreign Salt imported into Scot- land, and of Scotch Salt delivered Duty-free from the Works there, used curing a barrel of herring viz 0 12 6 for the Fishery, from the 5th. of April 1771 to the 5th. of April 1782 with the Medium of both for one Year. So that the premium allowed for each barrel of her- rings entered for home consumption is £ 1 3 9¾ If the herrings are cured in British salt, it will stand as follows viz. Bounty on each barrel brought in by the busses, as above 563

The Wealth of Nations Foreign Salt Scotch Salt delivered BOOK V PERIOD imported from the Works Bushels Bushels OF THE REVENUE OF THE SOVEREIGN From 5th. April 1771 to 168,226 OR COMMONWEALTH 5th. April 1782 936,974 15,293¼ CHAPTER I Medium for one year 85,159½ OF THE EXPENSES OF THE SOVEREIGN It is to be observed, that the bushel of foreign salt weighs 48lbs., OR COMMONWEALTH that of British weighs 56lbs. only. PART I Of the Expense of Defence THE FIRST DUTY of the sovereign, that of protecting the society from the violence and invasion of other inde- pendent societies, can be performed only by means of a military force. But the expense both of preparing this military force in time of peace, and of employing it in time of war, is very different in the different states of society, in the different periods of improvement. Among nations of hunters, the lowest and rudest state of soci- ety, such as we find it among the native tribes of North America, 564

Adam Smith every man is a warrior, as well as a hunter. When he goes to war, time of war. Whether it marches as an army, or moves about as a either to defend his society, or to revenge the injuries which have company of herdsmen, the way of life is nearly the same, though been done to it by other societies, he maintains himself by his own the object proposed by it be very different. They all go to war labour, in the same manner as when he lives at home. His society together, therefore, and everyone does as well as he can. Among (for in this state of things there is properly neither sovereign nor the Tartars, even the women have been frequently known to en- commonwealth) is at no sort of expense, either to prepare him for gage in battle. If they conquer, whatever belongs to the hostile the field, or to maintain him while he is in it. tribe is the recompence of the victory; but if they are vanquished, all is lost; and not only their herds and flocks, but their women Among nations of shepherds, a more advanced state of society, and children become the booty of the conqueror. Even the greater such as we find it among the Tartars and Arabs, every man is, in part of those who survive the action are obliged to submit to him the same manner, a warrior. Such nations have commonly no fixed for the sake of immediate subsistence. The rest are commonly dis- habitation, but live either in tents, or in a sort of covered waggons, sipated and dispersed in the desert. which are easily transported from place to place. The whole tribe, or nation, changes its situation according to the different seasons The ordinary life, the ordinary exercise of a Tartar or Arab, pre- of the year, as well as according to other accidents. When its herds pares him sufficiently for war. Running, wrestling, cudgel-play- and flocks have consumed the forage of one part of the country, it ing, throwing the javelin, drawing the bow, etc. are the common removes to another, and from that to a third. In the dry season, it pastimes of those who live in the open air, and are all of them the comes down to the banks of the rivers; in the wet season, it retires images of war. When a Tartar or Arab actually goes to war, he is to the upper country. When such a nation goes to war, the war- maintained by his own herds and flocks, which he carries with riors will not trust their herds and flocks to the feeble defence of him, in the same manner as in peace. His chief or sovereign (for their old men, their women and children; and their old men, their those nations have all chiefs or sovereigns) is at no sort of expense women and children, will not be left behind without defence, and in preparing him for the field; and when he is in it, the chance of without subsistence. The whole nation, besides, being accustomed plunder is the only pay which he either expects or requires. to a wandering life, even in time of peace, easily takes the field in An army of hunters can seldom exceed two or three hundred 565

The Wealth of Nations men. The precarious subsistence which the chace affords, could should ever become shepherds, their neighbourhood would be seldom allow a greater number to keep together for any consider- much more dangerous to the European colonies than it is at present. able time. An army of shepherds, on the contrary, may sometimes amount to two or three hundred thousand. As long as nothing In a yet more advanced state of society, among those nations of stops their progress, as long as they can go on from one district, of husbandmen who have little foreign commerce, and no other which they have consumed the forage, to another, which is yet manufactures but those coarse and household ones, which almost entire; there seems to be scarce any limit to the number who can every private family prepares for its own use, every man, in the march on together. A nation of hunters can never be formidable same manner, either is a warrior, or easily becomes such. Those to the civilized nations in their neighbourhood; a nation of shep- who live by agriculture generally pass the whole day in the open herds may. Nothing can be more contemptible than an Indian air, exposed to all the inclemencies of the seasons. The hardiness war in North America; nothing, on the contrary, can be more of their ordinary life prepares them for the fatigues of war, to some dreadful than a Tartar invasion has frequently been in Asia. The of which their necessary occupations bear a great analogy. The judgment of Thucydides, that both Europe and Asia could not necessary occupation of a ditcher prepares him to work in the resist the Scythians united, has been verified by the experience of trenches, and to fortify a camp, as well as to inclose a field. The all ages. The inhabitants of the extensive, but defenceless plains of ordinary pastimes of such husbandmen are the same as those of Scythia or Tartary, have been frequently united under the domin- shepherds, and are in the same manner the images of war. But as ion of the chief of some conquering horde or clan; and the havock husbandmen have less leisure than shepherds, they are not so fre- and devastation of Asia have always signalized their union. The quently employed in those pastimes. They are soldiers but soldiers inhabitants of the inhospitable deserts of Arabia, the other great not quite so much masters of their exercise. Such as they are, how- nation of shepherds, have never been united but once, under ever, it seldom costs the sovereign or commonwealth any expense Mahomet and his immediate successors. Their union, which was to prepare them for the field. more the effect of religious enthusiasm than of conquest, was sig- nalized in the same manner. If the hunting nations of America Agriculture, even in its rudest and lowest state, supposes a settle- ment, some sort of fixed habitation, which cannot be abandoned without great loss. When a nation of mere husbandmen, there- 566

Adam Smith fore, goes to war, the whole people cannot take the field together. European monarchies, which were founded upon the ruins of the The old men, the women and children, at least, must remain at Roman empire, both before, and for some time after, the estab- home, to take care of the habitation. All the men of the military lishment of what is properly called the feudal law, the great lords, age, however, may take the field, and in small nations of this kind, with all their immediate dependents, used to serve the crown at have frequently done so. In every nation, the men of the military their own expense. In the field, in the same manner as at home, age are supposed to amount to about a fourth or a fifth part of the they maintained themselves by their own revenue, and not by any whole body of the people. If the campaign, too, should begin after stipend or pay which they received from the king upon that par- seedtime, and end before harvest, both the husbandman and his ticular occasion. principal labourers can be spared from the farm without much loss. He trusts that the work which must be done in the mean In a more advanced state of society, two different causes con- time, can be well enough executed by the old men, the women, tribute to render it altogether impossible that they who take the and the children. He is not unwilling, therefore, to serve without field should maintain themselves at their own expense. Those two pay during a short campaign; and it frequently costs the sovereign causes are, the progress of manufactures, and the improvement in or commonwealth as little to maintain him in the field as to pre- the art of war. pare him for it. The citizens of all the different states of ancient Greece seem to have served in this manner till after the second Though a husbandman should be employed in an expedition, Persian war; and the people of Peloponnesus till after the provided it begins after seedtime, and ends before harvest, the Peloponnesian war. The Peloponnesians, Thucydides observes, interruption of his business will not always occasion any consider- generally left the field in the summer, and returned home to reap able diminution of his revenue. Without the intervention of his the harvest. The Roman people, under their kings, and during the labour, Nature does herself the greater part of the work which first ages of the republic, served in the same manner. It was not till remains to be done. But the moment that an artificer, a smith, a the seige of Veii, that they who staid at home began to contribute carpenter, or a weaver, for example, quits his workhouse, the sole something towards maintaining those who went to war. In the source of his revenue is completely dried up. Nature does nothing for him; he does all for himself. When he takes the field, therefore, in defence of the public, as he has no revenue to maintain himself, 567

The Wealth of Nations he must necessarily be maintained by the public. But in a country, ate dependents, was, after a certain period, universally exchanged of which a great part of the inhabitants are artificers and manufac- for a payment in money, which was employed to maintain those turers, a great part of the people who go to war must be drawn who served in their stead. from those classes, and must, therefore, be maintained by the public as long as they are employed in its service, The number of those who can go to war, in proportion to the whole number of the people, is necessarily much smaller in a civi- When the art of war, too, has gradually grown up to be a very lized than in a rude state of society. In a civilized society, as the intricate and complicated science; when the event of war ceases to soldiers are maintained altogether by the labour of those who are be determined, as in the first ages of society, by a single irregular not soldiers, the number of the former can never exceed what the skirmish or battle; but when the contest is generally spun out latter can maintain, over and above maintaining, in a manner suit- through several different campaigns, each of which lasts during able to their respective stations, both themselves and the other the greater part of the year; it becomes universally necessary that officers of government and law, whom they are obliged to main- the public should maintain those who serve the public in war, at tain. In the little agrarian states of ancient Greece, a fourth or a least while they are employed in that service. Whatever, in time of fifth part of the whole body of the people considered the them- peace, might be the ordinary occupation of those who go to war, selves as soldiers, and would sometimes, it is said, take the field. so very tedious and expensive a service would otherwise be by far Among the civilized nations of modern Europe, it is commonly too heavy a burden upon them. After the second Persian war, ac- computed, that not more than the one hundredth part of the in- cordingly, the armies of Athens seem to have been generally com- habitants of any country can be employed as soldiers, without posed of mercenary troops, consisting, indeed, partly of citizens, ruin to the country which pays the expense of their service. but partly, too, of foreigners; and all of them equally hired and paid at the expense of the state. From the time of the siege of Veii, The expense of preparing the army for the field seems not to the armies of Rome received pay for their service during the time have become considerable in any nation, till long after that of which they remained in the field. Under the feudal governments, maintaining it in the field had devolved entirely upon the sover- the military service, both of the great lords, and of their immedi- eign or commonwealth. In all the different republics of ancient Greece, to learn his military exercises, was a necessary part of edu- 568

Adam Smith cation imposed by the state upon every free citizen. In every city tion by which he gained his livelihood, considered himself, upon there seems to have been a public field, in which, under the pro- all ordinary occasions, as fit likewise to exercise the trade of a sol- tection of the public magistrate, the young people were taught dier, and, upon many extraordinary occasions, as bound to exer- their different exercises by different masters. In this very simple cise it. institution consisted the whole expense which any Grecian state seems ever to have been at, in preparing its citizens for war. In The art of war, however, as it is certainly the noblest of all arts, ancient Rome, the exercises of the Campus Martius answered the so, in the progress of improvement, it necessarily becomes one of same purpose with those of the Gymnasium in ancient Greece. the most complicated among them. The state of the mechanical, Under the feudal governments, the many public ordinances, that as well as some other arts, with which it is necessarily connected, the citizens of every district should practise archery, as well as sev- determines the degree of perfection to which it is capable of being eral other military exercises, were intended for promoting the same carried at any particular time. But in order to carry it to this de- purpose, but do not seem to have promoted it so well. Either from gree of perfection, it is necessary that it should become the sole or want of interest in the officers entrusted with the execution of principal occupation of a particular class of citizens; and the divi- those ordinances, or from some other cause, they appear to have sion of labour is as necessary for the improvement of this, as of been universally neglected; and in the progress of all those govern- every other art. Into other arts, the division of labour is naturally ments, military exercises seem to have gone gradually into disuse introduced by the prudence of individuals, who find that they among the great body of the people. promote their private interest better by confining themselves to a particular trade, than by exercising a great number. But it is the In the republics of ancient Greece and Rome, during the whole wisdom of the state only, which can render the trade of a soldier a period of their existence, and under the feudal governments, for a particular trade, separate and distinct from all others. A private considerable time after their first establishment, the trade of a sol- citizen, who, in time of profound peace, and without any particu- dier was not a separate, distinct trade, which constituted the sole lar encouragement from the public, should spend the greater part or principal occupation of a particular class of citizens; every sub- of his time in military exercises, might, no doubt, both improve ject of the state, whatever might be the ordinary trade or occupa- himself very much in them, and amuse himself very well; but he 569

The Wealth of Nations certainly would not promote his own interest. It is the wisdom of the state takes some new measure for the public defence, the natu- the state only, which can render it for his interest to give up the ral habits of the people render them altogether incapable of de- greater part of his time to this peculiar occupation; and states have fending themselves. not always had this wisdom, even when their circumstances had become such, that the preservation of their existence required that In these circumstances, there seem to be but two methods by they should have it. which the state can make any tolerable provision for the public defence. A shepherd has a great deal of leisure; a husbandman, in the rude state of husbandry, has some; an artificer or manufacturer It may either, first, by means of a very rigorous police, and in has none at all. The first may, without any loss, employ a great spite of the whole bent of the interest, genius, and inclinations of deal of his time in martial exercises; the second may employ some the people, enforce the practice of military exercises, and oblige part of it; but the last cannot employ a single hour in them with- either all the citizens of the military age, or a certain number of out some loss, and his attention to his own interest naturally leads them, to join in some measure the trade of a soldier to whatever him to neglect them altogether. Those improvements in husbandry, other trade or profession they may happen to carry on. too, which the progress of arts and manufactures necessarily in- troduces, leave the husbandman as little leisure as the artificer. Or, secondly, by maintaining and employing a certain number Military exercises come to be as much neglected by the inhabit- of citizens in the constant practice of military exercises, it may ants of the country as by those of the town, and the great body of render the trade of a soldier a particular trade, separate and dis- the people becomes altogether unwarlike. That wealth, at the same tinct from all others. time, which always follows the improvements of agriculture and manufactures, and which, in reality, is no more than the accumu- If the state has recourse to the first of those two expedients, its lated produce of those improvements, provokes the invasion of all military force is said to consist in a militia; if to the second, it is their neighbours. An industrious, and, upon that account, a wealthy said to consist in a standing army. The practice of military exer- nation, is of all nations the most likely to be attacked; and unless cises is the sole or principal occupation of the soldiers of a stand- ing army, and the maintenance or pay which the state affords them is the principal and ordinary fund of their subsistence. The prac- tice of military exercises is only the occasional occupation of the 570

Adam Smith soldiers of a militia, and they derive the principal and ordinary manent officers. fund of their subsistence from some other occupation. In a mili- Before the invention of fire-arms, that army was superior in which tia, the character of the labourer, artificer, or tradesman, predomi- nates over that of the soldier; in a standing army, that of the sol- the soldiers had, each individually, the greatest skill and dexterity in dier predominates over every other character; and in this distinc- the use of their arms. Strength and agility of body were of the high- tion seems to consist the essential difference between those two est consequence, and commonly determined the fate of battles. But different species of military force. this skill and dexterity in the use of their arms could be acquired only, in the same manner as fencing is at present, by practising, not Militias have been of several different kinds. In some countries, in great bodies, but each man separately, in a particular school, un- the citizens destined for defending the state seem to have been der a particular master, or with his own particular equals and com- exercised only, without being, if I may say so, regimented; that is, panions. Since the invention of fire-arms, strength and agility of without being divided into separate and distinct bodies of troops, body, or even extraordinary dexterity and skill in the use of arms, each of which performed its exercises under its own proper and though they are far from being of no consequence, are, however, of permanent officers. In the republics of ancient Greece and Rome, less consequence. The nature of the weapon, though it by no means each citizen, as long as he remained at home, seems to have prac- puts the awkward upon a level with the skilful, puts him more nearly tised his exercises, either separately and independently, or with so than he ever was before. All the dexterity and skill, it is supposed, such of his equals as he liked best; and not to have been attached which are necessary for using it, can be well enough acquired by to any particular body of troops, till he was actually called upon to practising in great bodies. take the field. In other countries, the militia has not only been exercised, but regimented. In England, in Switzerland, and, I be- Regularity, order, and prompt obedience to command, are quali- lieve, in every other country of modern Europe, where any imper- ties which, in modern armies, are of more importance towards fect military force of this kind has been established, every militia- determining the fate of battles, than the dexterity and skill of the man is, even in time of peace, attached to a particular body of soldiers in the use of their arms. But the noise of fire-arms, the troops, which performs its exercises under its own proper and per- smoke, and the invisible death to which every man feels himself every moment exposed, as soon as he comes within cannon-shot, 571

The Wealth of Nations and frequently a long time before the battle can be well said to be it was in ancient times, yet the acknowledged superiority of the engaged, must render it very difficult to maintain any consider- Prussian troops, owing, it is said, very much to their superior ex- able degree of this regularity, order, and prompt obedience, even pertness in their exercise, may satisfy us that it is, even at this day, in the beginning of a modern battle. In an ancient battle, there of very considerable consequence. was no noise but what arose from the human voice; there was no smoke, there was no invisible cause of wounds or death. Every The soldiers, who are bound to obey their officer only once a- man, till some mortal weapon actually did approach him, saw week, or once a-month, and who are at all other times at liberty to clearly that no such weapon was near him. In these circumstances, manage their own affairs their own way, without being, in any and among troops who had some confidence in their own skill respect, accountable to him, can never be under the same awe in and dexterity in the use of their arms, it must have been a good his presence, can never have the same disposition to ready obedi- deal less difficult to preserve some degree of regularity and order, ence, with those whose whole life and conduct are every day di- not only in the beginning, but through the whole progress of an rected by him, and who every day even rise and go to bed, or at ancient battle, and till one of the two armies was fairly defeated. least retire to their quarters, according to his orders. In what is But the habits of regularity, order, and prompt obedience to com- called discipline, or in the habit of ready obedience, a militia must mand, can be acquired only by troops which are exercised in great always be still more inferior to a standing army, than it may some- bodies. times be in what is called the manual exercise, or in the manage- ment and use of its arms. But, in modern war, the habit of ready A militia, however, in whatever manner it may be either disci- and instant obedience is of much greater consequence than a con- plined or exercised, must always be much inferior to a well disci- siderable superiority in the management of arms. plined and well exercised standing army. Those militias which, like the Tartar or Arab militia, go to war The soldiers who are exercised only once a week, or once a- under the same chieftains whom they are accustomed to obey in month, can never be so expert in the use of their arms, as those peace, are by far the best. In respect for their officers, in the habit who are exercised every day, or every other day; and though this of ready obedience, they approach nearest to standing armies The circumstance may not be of so much consequence in modern, as Highland militia, when it served under its own chieftains, had 572

Adam Smith some advantage of the same kind. As the Highlanders, however, respect, a match for that standing army, of which the valour ap- were not wandering, but stationary shepherds, as they had all a peared, in the last war at least, not inferior to that of the hardiest fixed habitation, and were not, in peaceable times, accustomed to veterans of France and Spain. follow their chieftain from place to place; so, in time of war, they were less willing to follow him to any considerable distance, or to This distinction being well understood, the history of all ages, it continue for any long time in the field. When they had acquired will be found, hears testimony to the irresistible superiority which any booty, they were eager to return home, and his authority was a well regulated standing army has over a militia. seldom sufficient to detain them. In point of obedience, they were always much inferior to what is reported of the Tartars and Arabs. One of the first standing armies, of which we have any distinct As the Highlanders, too, from their stationary life, spend less of account in any well authenticated history, is that of Philip of their time in the open air, they were always less accustomed to Macedon. His frequent wars with the Thracians, Illyrians, military exercises, and were less expert in the use of their arms Thessalians, and some of the Greek cities in the neighbourhood than the Tartars and Arabs are said to be. of Macedon, gradually formed his troops, which in the beginning were probably militia, to the exact discipline of a standing army. A militia of any kind, it must be observed, however, which has When he was at peace, which he was very seldom, and never for served for several successive campaigns in the field, becomes in any long time together, he was careful not to disband that army. It every respect a standing army. The soldiers are every day exercised vanquished and subdued, after a long and violent struggle, in- in the use of their arms, and, being constantly under the com- deed, the gallant and well exercised militias of the principal re- mand of their officers, are habituated to the same prompt obedi- publics of ancient Greece; and afterwards, with very little struggle, ence which takes place in standing armies. What they were before the effeminate and ill exercised militia of the great Persian empire. they took the field, is of little importance. They necessarily be- The fall of the Greek republics, and of the Persian empire was the come in every respect a standing army, after they have passed a effect of the irresistible superiority which a standing arm has over few campaigns in it. Should the war in America drag out through every other sort of militia. It is the first great revolution in the another campaign, the American militia may become, in every affairs of mankind of which history has preserved any distinct and circumstantial account. 573

The Wealth of Nations The fall of Carthage, and the consequent elevation of Rome, is the younger Asdrubal, expelled them almost entirely from that the second. All the varieties in the fortune of those two famous country. republics may very well be accounted for from the same cause. Annibal was ill supplied from home. The Roman militia, being From the end of the first to the beginning of the second continually in the field, became, in the progress of the war, a well Carthaginian war, the armies of Carthage were continually in the disciplined and well exercised standing army; and the superiority field, and employed under three great generals, who succeeded of Annibal grew every day less and less. Asdrubal judged it neces- one another in the command; Amilcar, his son-in-law Asdrubal, sary to lead the whole, or almost the whole, of the standing army and his son Annibal: first in chastising their own rebellious slaves, which he commanded in Spain, to the assistance of his brother in afterwards in subduing the revolted nations of Africa; and lastly, Italy. In this march, he is said to have been misled by his guides; in conquering the great kingdom of Spain. The army which and in a country which he did not know, was surprised and at- Annibal led from Spain into Italy must necessarily, in those differ- tacked, by another standing army, in every respect equal or supe- ent wars, have been gradually formed to the exact discipline of a rior to his own, and was entirely defeated. standing army. The Romans, in the meantime, though they had not been altogether at peace, yet they had not, during this period, When Asdrubal had left Spain, the great Scipio found nothing been engaged in any war of very great consequence; and their mili- to oppose him but a militia inferior to his own. He conquered and tary discipline, it is generally said, was a good deal relaxed. The subdued that militia, and, in the course of the war, his own militia Roman armies which Annibal encountered at Trebi, Thrasymenus, necessarily became a well disciplined and well exercised standing and Cannae, were militia opposed to a standing army. This cir- army. That standing army was afterwards carried to Africa, where cumstance, it is probable, contributed more than any other to it found nothing but a militia to oppose it. In order to defend determine the fate of those battles. Carthage, it became necessary to recal the standing army of Annibal. The disheartened and frequently defeated African mili- The standing army which Annibal left behind him in Spain had tia joined it, and, at the battle of Zama, composed the greater part the like superiority over the militia which the Romans sent to of the troops of Annibal. The event of that day determined the oppose it; and, in a few years, under the command of his brother, fate of the two rival republics. 574

Adam Smith From the end of the second Carthaginian war till the fall of the to have always retained a good deal of the manners of their ances- Roman republic, the armies of Rome were in every respect stand- tors. The ancient Germans were, like the Scythians or Tartars, a ing armies. The standing army of Macedon made some resistance nation of wandering shepherds, who went to war under the same to their arms. In the height of their grandeur, it cost them two chiefs whom they were accustomed to follow in peace. ‘Their mi- great wars, and three great battles, to subdue that little kingdom, litia was exactly of the same kind with that of the Scythians or of which the conquest would probably have been still more diffi- Tartars, from whom, too, they were probably descended. cult, had it not been for the cowardice of its last king. The militias of all the civilized nations of the ancient world, of Greece, of Syria, Many different causes contributed to relax the discipline of the and of Egypt, made but a feeble resistance to the standing armies Roman armies. Its extreme severity was, perhaps, one of those of Rome. The militias of some barbarous nations defended them- causes. In the days of their grandeur, when no enemy appeared selves much better. The Scythian or Tartar militia, which capable of opposing them, their heavy armour was laid aside as Mithridates drew from the countries north of the Euxine and unnecessarily burdensome, their laborious exercises were neglected, Caspian seas, were the most formidable enemies whom the Ro- as unnecessarily toilsome. Under the Roman emperors, besides, mans had to encounter after the second Carthaginian war. The the standing armies of Rome, those particularly which guarded Parthian and German militias, too, were always respectable, and the German and Pannonian frontiers, became dangerous to their upon several occasions, gained very considerable advantages over masters, against whom they used frequently to set up their own the Roman armies. In general, however, and when the Roman generals. In order to render them less formidable, according to armies were well commanded, they appear to have been very much some authors, Dioclesian, according to others, Constantine, first superior; and if the Romans did not pursue the final conquest withdrew them from the frontier, where they had always before either of Parthia or Germany, it was probably because they judged been encamped in great bodies, generally of two or three legions that it was not worth while to add those two barbarous countries each, and dispersed them in small bodies through the different to an empire which was already too large. The ancient Parthians provincial towns, from whence they were scarce ever removed, appear to have been a nation of Scythian or Tartar extraction, and but when it became necessary to repel an invasion. Small bodies of soldiers, quartered in trading and manufacturing towns, and 575

The Wealth of Nations seldom removed from those quarters, became themselves trades ued for some time to be of the same kind in their new settlements, men, artificers, and manufacturers. The civil came to predomi- as it had been in their original country. It was a militia of shep- nate over the military character; and the standing armies of Rome herds and husbandmen, which, in time of war, took the field un- gradually degenerated into a corrupt, neglected, and undisciplined der the command of the same chieftains whom it was accustomed militia, incapable of resisting the attack of the German and Scythian to obey in peace. It was, therefore, tolerably well exercised, and militias, which soon afterwards invaded the western empire. It tolerably well disciplined. As arts and industry advanced, how- was only by hiring the militia of some of those nations to oppose ever, the authority of the chieftains gradually decayed, and the to that of others, that the emperors were for some time able to great body of the people had less time to spare for military exer- defend themselves. The fall of the western empire is the third great cises. Both the discipline and the exercise of the feudal militia, revolution in the affairs of mankind, of which ancient history has therefore, went gradually to ruin, and standing armies were gradu- preserved any distinct or circumstantial account. It was brought ally introduced to supply the place of it. When the expedient of a about by the irresistible superiority which the militia of a barba- standing army, besides, had once been adopted by one civilized rous has over that of a civilized nation; which the militia of a nation, it became necessary that all its neighbours should follow nation of shepherds has over that of a nation of husbandmen, the example. They soon found that their safety depended upon artificers, and manufacturers. The victories which have been gained their doing so, and that their own militia was altogether incapable by militias have generally been, not over standing armies, but over of resisting the attack of such an army. other militias, in exercise and discipline inferior to themselves. Such were the victories which the Greek militia gained over that The soldiers of a standing army, though they may never have of the Persian empire; and such, too, were those which, in later seen an enemy, yet have frequently appeared to possess all the cour- times, the Swiss militia gained over that of the Austrians and age of veteran troops, and, the very moment that they took the Burgundians. field, to have been fit to face the hardiest and most experienced veterans. In 1756, when the Russian army marched into Poland, The military force of the German and Scythian nations, who the valour of the Russian soldiers did not appear inferior to that of established themselves upon ruins of the western empire, contin- the Prussians, at that time supposed to be the hardiest and most 576

Adam Smith experienced veterans in Europe. The Russian empire, however, As it is only by means of a well regulated standing army, that a had enjoyed a profound peace for near twenty years before, and civilized country can be defended, so it is only by means of it that a could at that time have very few soldiers who had ever seen an barbarous country can be suddenly and tolerably civilized. A stand- enemy. When the Spanish war broke out in 1739, England had ing army establishes, with an irresistible force, the law of the sover- enjoyed a profound peace for about eight-and-twenty years. The eign through the remotest provinces of the empire, and maintains valour of her soldiers, however, far from being corrupted by that some degree of regular government in countries which could not long peace, was never more distinguished than in the attempt upon otherwise admit of any. Whoever examines with attention, the im- Carthagena, the first unfortunate exploit of that unfortunate war. provements which Peter the Great introduced into the Russian In a long peace, the generals, perhaps, may sometimes forget their empire, will find that they almost all resolve themselves into the skill; but where a well regulated standing army has been kept up, establishment of a well regulated standing army. It is the instrument the soldiers seem never to forget their valour. which executes and maintains all his other regulations. That degree of order and internal peace, which that empire has ever since en- When a civilized nation depends for its defence upon a militia, joyed, is altogether owing to the influence of that army. it is at all times exposed to be conquered by any barbarous nation which happens to be in its neighbourhood. The frequent con- Men of republican principles have been jealous of a standing quests of all the civilized countries in Asia by the Tartars, suffi- army, as dangerous to liberty. It certainly is so, wherever the inter- ciently demonstrates the natural superiority which the militia of a est of the general, and that of the principal officers, are not neces- barbarous has over that of a civilized nation. A well regulated stand- sarily connected with the support of the constitution of the state. ing army is superior to every militia. Such an army, as it can best The standing army of Caesar destroyed the Roman republic. The be maintained by an opulent and civilized nation, so it can alone standing army of Cromwell turned the long parliament out of defend such a nation against the invasion of a poor and barbarous doors. But where the sovereign is himself the general, and the neighbour. It is only by means of a standing army, therefore, that principal nobility and gentry of the country the chief officers of the civilization of any country can be perpetuated, or even pre- the army; where the military force is placed under the command served, for any considerable time. of those who have the greatest interest in the support of the civil 577

The Wealth of Nations authority, because they have themselves the greatest share of that The first duty of the sovereign, therefore, that of defending the authority, a standing army can never be dangerous to liberty. On society from the violence and injustice of other independent societ- the contrary, it may, in some cases, be favourable to liberty. The ies, grows gradually more and more expensive, as the society ad- security which it gives to the sovereign renders unnecessary that vances in civilization. The military force of the society, which origi- troublesome jealousy, which, in some modern republics, seems to nally cost the sovereign no expense, either in time of peace, or in watch over the minutest actions, and to be at all times ready to time of war, must, in the progress of improvement, first be main- disturb the peace of every citizen. Where the security of the mag- tained by him in time of war, and afterwards even in time of peace. istrate, though supported by the principal people of the country, is endangered by every popular discontent; where a small tumult The great change introduced into the art of war by the inven- is capable of bringing about in a few hours a great revolution, the tion of fire-arms, has enhanced still further both the expense of whole authority of government must be employed to suppress and exercising and disciplining any particular number of soldiers in punish every murmur and complaint against it. To a sovereign, on time of peace, and that of employing them in time of war. Both the contrary, who feels himself supported, not only by the natural their arms and their ammunition are become more expensive. A aristocracy of the country, but by a well regulated standing army, musket is a more expensive machine than a javelin or a bow and the rudest, the most groundless, and the most licentious remon- arrows; a cannon or a mortar, than a balista or a catapulta. The strances, can give little disturbance. He can safely pardon or neglect powder which is spent in a modern review is lost irrecoverably, them, and his consciousness of his own superiority naturally dis- and occasions a very considerable expense. The javelins and ar- poses him to do so. That degree of liberty which approaches to rows which were thrown or shot in an ancient one, could easily be licentiousness, can be tolerated only in countries where the sover- picked up again, and were, besides, of very little value. The can- eign is secured by a well regulated standing army. It is in such coun- non and the mortar are not only much dearer, but much heavier tries only, that the public safety does not require that the sovereign machines than the balista or catapulta; and require a greater ex- should be trusted with any discretionary power, for suppressing even pense, not only to prepare them for the field, but to carry them to the impertinent wantonness of this licentious liberty. it. As the superiority of the modern artillery, too, over that of the ancients, is very great; it has become much more difficult, and 578

Adam Smith consequently much more expensive, to fortify a town, so as to PART II resist, even for a few weeks, the attack of that superior artillery. In modern times, many different causes contribute to render the de- Of the Expense of Justice fence of the society more expensive. The unavoidable effects of the natural progress of improvement have, in this respect, been a THE SECOND DUTY of the sovereign, that of protecting, as far as good deal enhanced by a great revolution in the art of war, to possible, every member of the society from the injustice or op- which a mere accident, the invention of gunpowder, seems to have pression of every other member of it, or the duty of establishing given occasion. an exact administration of justice, requires two very different de- grees of expense in the different periods of society. In modern war, the great expense of firearms gives an evident advantage to the nation which can best afford that expense; and, Among nations of hunters, as there is scarce any property, or at consequently, to an opulent and civilized, over a poor and barba- least none that exceeds the value of two or three days labour; so rous nation. In ancient times, the opulent and civilized found it there is seldom any established magistrate, or any regular admin- difficult to defend themselves against the poor and barbarous na- istration of justice. Men who have no property, can injure one tions. In modern times, the poor and barbarous find it difficult to another only in their persons or reputations. But when one man defend themselves against the opulent and civilized. The inven- kills, wounds, beats, or defames another, though he to whom the tion of fire-arms, an invention which at first sight appears to be so injury is done suffers, he who does it receives no benefit. It is pernicious, is certainly favourable, both to the permanency and to otherwise with the injuries to property. The benefit of the person the extension of civilization. who does the injury is often equal to the loss of him who suffers it. Envy, malice, or resentment, are the only passions which can prompt one man to injure another in his person or reputation. But the greater part of men are not very frequently under the influence of those passions; and the very worst men are so only occasionally. As their gratification, too, how agreeable soever it 579

The Wealth of Nations may be to certain characters, is not attended with any real or per- Where there is no property, or at least none that exceeds the value manent advantage, it is, in the greater part of men, commonly of two or three days labour, civil government is not so necessary. restrained by prudential considerations. Men may live together in society with some tolerable degree of security, though there is no Civil government supposes a certain subordination. But as the civil magistrate to protect them from the injustice of those pas- necessity of civil government gradually grows up with the acquisi- sions. But avarice and ambition in the rich, in the poor the hatred tion of valuable property; so the principal causes, which naturally of labour and the love of present ease and enjoyment, are the pas- introduce subordination, gradually grow up with the growth of sions which prompt to invade property; passions much more steady that valuable property. in their operation, and much more universal in their influence. Wherever there is a great property, there is great inequality. For The causes or circumstances which naturally introduce subor- one very rich man, there must be at least five hundred poor, and dination, or which naturally and antecedent to any civil institu- the affluence of the few supposes the indigence of the many. The tion, give some men some superiority over the greater part of their affluence of the rich excites the indignation of the poor, who are brethren, seem to be four in number. often both driven by want, and prompted by envy to invade his possessions. It is only under the shelter of the civil magistrate, that The first of those causes or circumstances, is the superiority of the owner of that valuable property, which is acquired by the labour personal qualifications, of strength, beauty, and agility of body; of of many years, or perhaps of many successive generations, can wisdom and virtue; of prudence, justice, fortitude, and modera- sleep a single night in security. He is at all times surrounded by tion of mind. The qualifications of the body, unless supported by unknown enemies, whom, though he never provoked, he can never those of the mind, can give little authority in any period of soci- appease, and from whose injustice he can be protected only by the ety. He is a very strong man, who, by mere strength of body, can powerful arm of the civil magistrate, continually held up to chas- force two weak ones to obey him. The qualifications of the mind tise it. The acquisition of valuable and extensive property, there- can alone give very great authority They are however, invisible fore, necessarily requires the establishment of civil government. qualities; always disputable, and generally disputed. No society, whether barbarous or civilized, has ever found it convenient to settle the rules of precedency of rank and subordination, accord- ing to those invisible qualities; but according to something that is 580

Adam Smith more plain and palpable. his society does not afford him any manufactured produce any The second of those causes or circumstances, is the superiority trinkets or baubles of any kind, for which he can exchange that part of his rude produce which is over and above his own con- of age. An old man, provided his age is not so far advanced as to sumption. The thousand men whom he thus maintains, depend- give suspicion of dotage, is everywhere more respected than a young ing entirely upon him for their subsistence, must both obey his man of equal rank, fortune, and abilities. Among nations of hunt- orders in war, and submit to his jurisdiction in peace. He is neces- ers, such as the native tribes of North America, age is the sole sarily both their general and their judge, and his chieftainship is foundation of rank and precedency. Among them, father is the the necessary effect of the superiority of his fortune. In an opulent appellation of a superior; brother, of an equal; and son, of an infe- and civilized society, a man may possess a much greater fortune, rior. In the most opulent and civilized nations, age regulates rank and yet not be able to command a dozen of people. Though the among those who are in every other respect equal; and among produce of his estate may be sufficient to maintain, and may, per- whom, therefore, there is nothing else to regulate it. Among broth- haps, actually maintain, more than a thousand people, yet, as those ers and among sisters, the eldest always takes place; and in the people pay for every thing which they get from him, as he gives succession of the paternal estate, every thing which cannot be di- scarce any thing to any body but in exchange for an equivalent, vided, but must go entire to one person, such as a title of honour, there is scarce anybody who considers himself as entirely depen- is in most cases given to the eldest. Age is a plain and palpable dent upon him, and his authority extends only over a few menial quality, which admits of no dispute. servants. The authority of fortune, however, is very great, even in an opulent and civilized society. That it is much greater than that The third of those causes or circumstances, is the superiority of either of age or of personal qualities, has been the constant com- fortune. The authority of riches, however, though great in every plaint of every period of society which admitted of any consider- age of society, is, perhaps, greatest in the rudest ages of society, able inequality of fortune. The first period of society, that of hunt- which admits of any considerable inequality of fortune. A Tartar ers, admits of no such inequality. Universal poverty establishes chief, the increase of whose flocks and herds is sufficient to main- their universal equality; and the superiority, either of age or of tain a thousand men, cannot well employ that increase in any other way than in maintaining a thousand men. The rude state of 581

The Wealth of Nations personal qualities, are the feeble, but the sole foundations of au- that his inferior should be set over his head; so men easily submit thority and subordination. There is, therefore, little or no author- to a family to whom they and their ancestors have always submit- ity or subordination in this period of society. The second period ted; but are fired with indignation when another family, in whom of society, that of shepherds, admits of very great inequalities of they had never acknowledged any such superiority, assumes a do- fortune, and there is no period in which the superiority of fortune minion over them. gives so great authority to those who possess it. There is no period, accordingly, in which authority and subordination are more per- The distinction of birth, being subsequent to the inequality of fectly established. The authority of an Arabian scherif is very great; fortune, can have no place in nations of hunters, among whom all that of a Tartar khan altogether despotical. men, being equal in fortune, must likewise be very nearly equal in birth. The son of a wise and brave man may, indeed, even among The fourth of those causes or circumstances, is the superiority them, be somewhat more respected than a man of equal merit, of birth. Superiority of birth supposes an ancient superiority of who has the misfortune to be the son of a fool or a coward. The fortune in the family of the person who claims it. All families are difference, however will not be very great; and there never was, I equally ancient; and the ancestors of the prince, though they may believe, a great family in the world, whose illustration was entirely be better known, cannot well be more numerous than those of the derived from the inheritance of wisdom and virtue. beggar. Antiquity of family means everywhere the antiquity either of wealth, or of that greatness which is commonly either founded The distinction of birth not only may, but always does, take upon wealth, or accompanied with it. Upstart greatness is every- place among nations of shepherds. Such nations are always strangers where less respected than ancient greatness. The hatred of usurp- to every sort of luxury, and great wealth can scarce ever be dissi- ers, the love of the family of an ancient monarch, are in a great pated among them by improvident profusion. There are no na- measure founded upon the contempt which men naturally have tions, accordingly, who abound more in families revered and for the former, and upon their veneration for the latter. As a mili- honoured on account of their descent from a long race of great tary officer submits, without reluctance, to the authority of a su- and illustrious ancestors; because there are no nations among whom perior by whom he has always been commanded, but cannot bear wealth is likely to continue longer in the same families. Birth and fortune are evidently the two circumstances which 582

Adam Smith principally set one man above another. They are the two great person complained of, than that of any other person would be. sources of personal distinction, and are, therefore, the principal His birth and fortune thus naturally procure him some sort of causes which naturally establish authority and subordination judicial authority. among men. Among nations of shepherds, both those causes op- erate with their full force. The great shepherd or herdsman, re- It is in the age of shepherds, in the second period of society, that spected on account of his great wealth, and of the great number of the inequality of fortune first begins to take place, and introduces those who depend upon him for subsistence, and revered on ac- among men a degree of authority and subordination, which could count of the nobleness of his birth, and of the immemorial antiq- not possibly exist before. It thereby introduces some degree of uity or his illustrious family, has a natural authority over all the that civil government which is indispensably necessary for its own inferior shepherds or herdsmen of his horde or clan. He can com- preservation; and it seems to do this naturally, and even indepen- mand the united force of a greater number of people than any of dent of the consideration of that necessity. The consideration of them. His military power is greater than that of any of them. In that necessity comes, no doubt, afterwards, to contribute very much time of war, they are all of them naturally disposed to muster to maintain and secure that authority and subordination. The rich, themselves under his banner, rather than under that of any other in particular, are necessarily interested to support that order of person; and his birth and fortune thus naturally procure to him things, which can alone secure them in the possession of their some sort of executive power. By commanding, too, the united own advantages. Men of inferior wealth combine to defend those force of a greater number of people than any of them, he is best of superior wealth in the possession of their property, in order that able to compel any one of them, who may have injured another, men of superior wealth may combine to defend them in the pos- to compensate the wrong. He is the person, therefore, to whom session of theirs. All the inferior shepherds and herdsmen feel, all those who are too weak to defend themselves naturally look up that the security of their own herds and flocks depends upon the for protection. It is to him that they naturally complain of the security of those of the great shepherd or herdsman; that the main- injuries which they imagine have been done to them; and his in- tenance of their lesser authority depends upon that of his greater terposition, in such cases, is more easily submitted to, even by the authority; and that upon their subordination to him depends his power of keeping their inferiors in subordination to them. They 583

The Wealth of Nations constitute a sort of little nobility, who feel themselves interested to particular territory or district. Originally, both the sovereign and defend the property, and to support the authority, of their own the inferior chiefs used to exercise this jurisdiction in their own little sovereign, in order that he may be able to defend their prop- persons. Afterwards, they universally found it convenient to del- erty, and to support their authority. Civil government, so far as it egate it to some substitute, bailiff, or judge. This substitute, how- is instituted for the security of property, is, in reality, instituted for ever, was still obliged to account to his principal or constituent for the defence of the rich against the poor, or of those who have the profits of the jurisdiction. Whoever reads the instructions (They some property against those who have none at all. are to be found in Tyrol’s History of England) which were given to the judges of the circuit in the time of Henry II will see clearly The judicial authority of such a sovereign, however, far from that those judges were a sort of itinerant factors, sent round the being a cause of expense, was, for a long time, a source of revenue country for the purpose of levying certain branches of the king’s to him. The persons who applied to him for justice were always revenue. In those days, the administration of justice not only af- willing to pay for it, and a present never failed to accompany a forded a certain revenue to the sovereign, but, to procure this rev- petition. After the authority of the sovereign, too, was thoroughly enue, seems to have been one of the principal advantages which established, the person found guilty, over and above the satisfac- he proposed to obtain by the administration of justice. tion which he was obliged to make to the party, was like-wise forced to pay an amercement to the sovereign. He had given This scheme of making the administration of justice subservi- trouble, he had disturbed, he had broke the peace of his lord the ent to the purposes of revenue, could scarce fail to be productive king, and for those offences an amercement was thought due. In of several very gross abuses. The person who applied for justice the Tartar governments of Asia, in the governments of Europe with a large present in his hand, was likely to get something more which were founded by the German and Scythian nations who than justice; while he who applied for it with a small one was overturned the Roman empire, the administration of justice was a likely to get something less. Justice, too, might frequently be de- considerable source of revenue, both to the sovereign, and to all layed, in order that this present might be repeated. The amerce- the lesser chiefs or lords who exercised under him any particular ment, besides, of the person complained of, might frequently sug- jurisdiction, either over some particular tribe or clan, or over some gest a very strong reason for finding him in the wrong, even when 584

Adam Smith he had not really been so. That such abuses were far from being maintained in the same manner as any of his vassals or subjects, uncommon, the ancient history of every country in Europe bears by the increase of his own herds or flocks. Among those nations of witness. husbandmen, who are but just come out of the shepherd state, and who are not much advanced beyond that state, such as the When the sovereign or chief exercises his judicial authority in Greek tribes appear to have been about the time of the Trojan war, his own person, how much soever he might abuse it, it must have and our German and Scythian ancestors, when they first settled been scarce possible to get any redress; because there could seldom upon the ruins of the western empire; the sovereign or chief is, in be any body powerful enough to call him to account. When he the same manner, only the greatest landlord of the country, and is exercised it by a bailiff, indeed, redress might sometimes be had. If maintained in the same manner as any other landlord, by a rev- it was for his own benefit only, that the bailiff had been guilty of enue derived from his own private estate, or from what, in mod- an act of injustice, the sovereign himself might not always be un- ern Europe, was called the demesne of the crown. His subjects, willing to punish him, or to oblige him to repair the wrong. But if upon ordinary occasions, contribute nothing to his support, ex- it was for the benefit of his sovereign; if it was in order to make cept when, in order to protect them from the oppression of some court to the person who appointed him, and who might prefer of their fellow-subjects, they stand in need of his authority. The him, that he had committed any act of oppression; redress would, presents which they make him upon such occasions constitute the upon most occasions, be as impossible as if the sovereign had com- whole ordinary revenue, the whole of the emoluments which, ex- mitted it himself. In all barbarous governments, accordingly, in all cept, perhaps, upon some very extraordinary emergencies, he de- those ancient governments of Europe in particular, which were rives from his dominion over them. When Agamemnon, in Homer, founded upon the ruins of the Roman empire, the administration offers to Achilles, for his friendship, the sovereignty of seven Greek of justice appears for a long time to have been extremely corrupt; cities, the sole advantage which he mentions as likely to be derived far from being quite equal and impartial, even under the best from it was, that the people would honour him with presents. As monarchs, and altogether profligate under the worst. long as such presents, as long as the emoluments of justice, or what may be called the fees of court, constituted, in this manner, Among nations of shepherds, where the sovereign or chief is only the greatest shepherd or herdsman of the horde or clan, he is 585

The Wealth of Nations the whole ordinary revenue which the sovereign derived from his the judges, which were supposed to compensate to them the loss sovereignty, it could not well be expected, it could not even de- of whatever might have been their share of the ancient emolu- cently be proposed, that he should give them up altogether. It ments of justice; as the taxes more than compensated to the sover- might, and it frequently was proposed, that he should regulate eign the loss of his. Justice was then said to be administered gratis. and ascertain them. But after they had been so regulated and as- certained, how to hinder a person who was all-powerful from ex- Justice, however, never was in reality administered gratis in any tending them beyond those regulations, was still very difficult, country. Lawyers and attorneys, at least, must always be paid by the not to say impossible. During the continuance of this state of things, parties; and if they were not, they would perform their duty still therefore, the corruption of justice, naturally resulting from the worse than they actually perform it. The fees annually paid to law- arbitrary and uncertain nature of those presents, scarce admitted yers and attorneys, amount, in every court, to a much greater sum of any effectual remedy. than the salaries of the judges. The circumstance of those salaries being paid by the crown, can nowhere much diminish the necessary But when, from different causes, chiefly from the continually expense of a law-suit. But it was not so much to diminish the ex- increasing expense of defending the nation against the invasion of pense, as to prevent the corruption of justice, that the judges were other nations, the private estate of the sovereign had become alto- prohibited from receiving my present or fee from the parties. gether insufficient for defraying the expense of the sovereignty; and when it had become necessary that the people should, for The office of judge is in itself so very honourable, that men are their own security, contribute towards this expense by taxes of willing to accept of it, though accompanied with very small emolu- different kinds; it seems to have been very commonly stipulated, ments. The inferior office of justice of peace, though attended that no present for the administration of justice should, under with a good deal of trouble, and in most cases with no emolu- any pretence, be accepted either by the sovereign, or by his bailiffs ments at all, is an object of ambition to the greater part of our and substitutes, the judges. Those presents, it seems to have been country gentlemen. The salaries of all the different judges, high supposed, could more easily be abolished altogether, than effectu- and low, together with the whole expense of the administration ally regulated and ascertained. Fixed salaries were appointed to and execution of justice, even where it is not managed with very good economy, makes, in any civilized country, but a very incon- 586

Adam Smith siderable part of the whole expense of government. of a considerable number of judges, by proportioning the share of The whole expense of justice, too, might easily be defrayed by each judge to the number of hours and days which he had em- ployed in examining the process, either in the court, or in a com- the fees of court; and, without exposing the administration of jus- mittee, by order of the court, those fees might give some encour- tice to any real hazard of corruption, the public revenue might agement to the diligence of each particular judge. Public services thus be entirely discharged from a certain, though perhaps but a are never better performed, than when their reward comes only in small incumbrance. It is difficult to regulate the fees of court ef- consequence of their being performed, and is proportioned to the fectually, where a person so powerful as the sovereign is to share in diligence employed in performing them. In the different parlia- them and to derive any considerable part of his revenue from them. ments of France, the fees of court (called epices and vacations) It is very easy, where the judge is the principal person who can constitute the far greater part of the emoluments of the judges. reap any benefit from them. The law can very easily oblige the After all deductions are made, the neat salary paid by the crown to judge to respect the regulation though it might not always be able a counsellor or judge in the parliament of Thoulouse, in rank and to make the sovereign respect it. Where the fees of court are pre- dignity the second parliament of the kingdom, amounts only to cisely regulated and ascertained where they are paid all at once, at 150 livres, about £6:11s. sterling a-year. About seven years ago, a certain period of every process, into the hands of a cashier or that sum was in the same place the ordinary yearly wages of a receiver, to be by him distributed in certain known proportions common footman. The distribution of these epices, too, is ac- among the different judges after the process is decided and not till cording to the diligence of the judges. A diligent judge gains a it is decided; there seems to be no more danger of corruption than comfortable, though moderate revenue, by his office; an idle one when such fees are prohibited altogether. Those fees, without gets little more than his salary. Those parliaments are, perhaps, in occasioning any considerable increase in the expense of a law-suit, many respects, not very convenient courts of justice; but they have might be rendered fully sufficient for defraying the whole expense never been accused; they seem never even to have been suspected of justice. But not being paid to the judges till the process was of corruption. determined, they might be some incitement to the diligence of the court in examining and deciding it. In courts which consisted The fees of court seem originally to have been the principal 587

The Wealth of Nations support of the different courts of justice in England. Each court of conscience, first took upon it to enforce the specific perfor- endeavoured to draw to itself as much business as it could, and mance of agreements. When the breach of contract consisted in was, upon that account, willing to take cognizance of many suits the non-payment of money, the damage sustained could be com- which were not originally intended to fall under its jurisdiction. pensated in no other way than by ordering payment, which was The court of king’s bench, instituted for the trial of criminal causes equivalent to a specific performance of the agreement. In such only, took cognizance of civil suits; the plaintiff pretending that cases, therefore, the remedy of the courts of law was sufficient. It the defendant, in not doing him justice, had been guilty of some was not so in others. When the tenant sued his lord for having trespass or misdemeanour. The court of exchequer, instituted for unjustly outed him of his lease, the damages which he recovered the levying of the king’s revenue, and for enforcing the payment were by no means equivalent to the possession of the land. Such of such debts only as were due to the king, took cognizance of all causes, therefore, for some time, went all to the court of chancery, other contract debts; the planitiff alleging that he could not pay to the no small loss of the courts of law. It was to draw back such the king, because the defendant would not pay him. In conse- causes to themselves, that the courts of law are said to have in- quence of such fictions, it came, in many cases, to depend alto- vented the artificial and fictitious writ of ejectment, the most ef- gether upon the parties, before what court they would choose to fectual remedy for an unjust outer or dispossession of land. have their cause tried, and each court endeavoured, by superior dispatch and impartiality, to draw to itself as many causes as it A stamp-duty upon the law proceedings of each particular court, could. The present admirable constitution of the courts of justice to be levied by that court, and applied towards the maintenance in England was, perhaps, originally, in a great measure, formed by of the judges, and other officers belonging to it, might in the same this emulation, which anciently took place between their respec- manner, afford a revenue sufficient for defraying the expense of tive judges: each judge endeavouring to give, in his own court, the the administration of justice, without bringing any burden upon speediest and most effectual remedy which the law would admit, the general revenue of the society. The judges, indeed, might in for every sort of injustice. Originally, the courts of law gave dam- this case, be under the temptation of multiplying unnecessarily ages only for breach of contract. The court of chancery, as a court the proceedings upon every cause, in order to increase, as much as possible, the produce of such a stamp-duty. It has been the cus- 588

Adam Smith tom in modern Europe to regulate, upon most occasions, the pay- it an improper one for the maintenance of an institution which ment of the attorneys and clerks of court according to the number ought to last for ever. of pages which they had occasion to write; the court, however, requiring that each page should contain so many lines, and each The separation of the judicial from the executive power, seems line so many words. In order to increase their payment, the attor- originally to have arisen from the increasing business of the soci- neys and clerks have contrived to multiply words beyond all ne- ety, in consequence of its increasing improvement. The adminis- cessity, to the corruption of the law language of, I believe, every tration of justice became so laborious and so complicated a duty, court of justice in Europe. A like temptation might, perhaps, oc- as to require the undivided attention of the person to whom it was casion a like corruption in the form of law proceedings. entrusted. The person entrusted with the executive power, not having leisure to attend to the decision of private causes himself, a But whether the administration of justice be so contrived as to deputy was appointed to decide them in his stead. In the progress defray its own expense, or whether the judges be maintained by of the Roman greatness, the consul was too much occupied with fixed salaries paid to them from some other fund, it does not seen the political affairs of the state, to attend to the administration of necessary that the person or persons entrusted with the executive justice. A praetor, therefore, was appointed to administer it in his power should be charged with the management of that fund, or stead. In the progress of the European monarchies, which were with the payment of those salaries. That fund might arise from founded upon the ruins of the Roman empire, the sovereigns and the rent of landed estates, the management of each estate being the great lords came universally to consider the administration of entrusted to the particular court which was to be maintained by justice as an office both too laborious and too ignoble for them to it. That fund might arise even from the interest of a sum of money, execute in their own persons. They universally, therefore, discharged the lending out of which might, in the same manner, be entrusted themselves of it, by appointing a deputy, bailiff or judge. to the court which was to be maintained by it. A part, though indeed but a small part of the salary of the judges of the court of When the judicial is united to the executive power, it is scarce session in Scotland, arises from the interest of a sum of money. possible that justice should not frequently be sacrificed to what is The necessary instability of such a fund seems, however, to render vulgarly called politics. The persons entrusted with the great in- terests of the state may even without any corrupt views, some- 589

The Wealth of Nations times imagine it necessary to sacrifice to those interests the rights PART III of a private man. But upon the impartial administration of justice depends the liberty of every individual, the sense which he has of Of the Expense of public Works and public Institutions his own security. In order to make every individual feel himself perfectly secure in the possession of every right which belongs to THE THIRD AND LAST DUTY of the sovereign or commonwealth, is him, it is not only necessary that the judicial should be separated that of erecting and maintaining those public institutions and those from the executive power, but that it should be rendered as much public works, which though they may be in the highest degree ad- as possible independent of that power. The judge should not be vantageous to a great society, are, however, of such a nature, that the liable to be removed from his office according to the caprice of profit could never repay the expense to any individual, or small that power. The regular payment of his salary should not depend number of individuals; and which it, therefore, cannot be expected upon the good will, or even upon the good economy of that power. that any individual, or small number of individuals, should erect or maintain. The performance of this duty requires, too, very different degrees of expense in the different periods of society. After the public institutions and public works necessary for the defence of the society, and for the administration of justice, both of which have already been mentioned, the other works and insti- tutions of this kind are chiefly for facilitating the commerce of the society, and those for promoting the instruction of the people. The institutions for instruction are of two kinds: those for the education of the youth, and those for the instruction of people of all ages. The consideration of the manner in which the expense of those different sorts of public works and institutions may be most properly defrayed will divide this third part of the present chapter 590

Adam Smith into three different articles. tries, assigned to the executive power. The greater part of such public works may easily be so managed, as to afford a particular ARTICLE I. — Of the public Works and Institutions for fa- revenue, sufficient for defraying their own expense without bring- cilitating the Commerce of the Society. ing any burden upon the general revenue of the society. And, first, of those which are necessary for facilitating Com- A highway, a bridge, a navigable canal, for example, may, in merce in general. most cases, be both made add maintained by a small toll upon the carriages which make use of them; a harbour, by a moderate port- That the erection and maintenance of the public works which duty upon the tonnage of the shipping which load or unload in it. facilitate the commerce of any country, such as good roads, bridges, The coinage, another institution for facilitating commerce, in many navigable canals, harbours, etc. must require very different de- countries, not only defrays its own expense, but affords a small grees of expense in the different periods of society, is evident with- revenue or a seignorage to the sovereign. The post-office, another out any proof. The expense of making and maintaining the public institution for the same purpose, over and above defraying its own roads of any country must evidently increase with the annual pro- expense, affords, in almost all countries, a very considerable rev- duce of the land and labour of that country, or with the quantity enue to the sovereign. and weight of the goods which it becomes necessary to fetch and carry upon those roads. The strength of a bridge must be suited to When the carriages which pass over a highway or a bridge, and the number and weight of the carriages which are likely to pass the lighters which sail upon a navigable canal, pay toll in propor- over it. The depth and the supply of water for a navigable canal tion to their weight or their tonnage, they pay for the mainte- must be proportioned to the number and tonnage of the lighters nance of those public works exactly in proportion to the wear and which are likely to carry goods upon it; the extent of a harbour, to tear which they occasion of them. It seems scarce possible to in- the number of the shipping which are likely to take shelter in it. vent a more equitable way of maintaining such works. This tax or toll, too, though it is advanced by the carrier, is finally paid by the It does not seem necessary that the expense of those public works consumer, to whom it must always be charged in the price of the should be defrayed from that public revenue, as it is commonly goods. As the expense of carriage, however, is very much reduced called, of which the collection and application are in most coun- 591

The Wealth of Nations by means of such public works, the goods, notwithstanding the cannot be made through a desert country, where there is little or toll, come cheaper to the consumer than they could otherwise no commerce, or merely because it happens to lead to the country have done, their price not being so much raised by the toll, as it is villa of the intendant of the province, or to that of some great lowered by the cheapness of the carriage. The person who finally lord, to whom the intendant finds it convenient to make his court. pays this tax, therefore, gains by the application more than he A great bridge cannot be thrown over a river at a place where loses by the payment of it. His payment is exactly in proportion to nobody passes, or merely to embellish the view from the windows his gain. It is, in reality, no more than a part of that gain which he of a neighbouring palace; things which sometimes happen in coun- is obliged to give up, in order to get the rest. It seems impossible tries, where works of this kind are carried on by any other revenue to imagine a more equitable method of raising a tax. than that which they themselves are capable of affording. When the toll upon carriages of luxury, upon coaches, post- In several different parts of Europe, the toll or lock-duty upon a chaises, etc. is made somewhat higher in proportion to their weight, canal is the property of private persons, whose private interest than upon carriages of necessary use, such as carts, waggons, etc. obliges them to keep up the canal. If it is not kept in tolerable the indolence and vanity of the rich is made to contribute, in a order, the navigation necessarily ceases altogether, and, along with very easy manner, to the relief of the poor, by rendering cheaper it, the whole profit which they can make by the tolls. If those tolls the transportation of heavy goods to all the different parts of the were put under the management of commissioners, who had them- country. selves no interest in them, they might be less attentive to the main- tenance of the works which produced them. The canal of When high-roads, bridges, canals, etc. are in this manner made Languedoc cost the king of France and the province upwards of and supported by the commerce which is carried on by means of thirteen millions of livres, which (at twenty-eight livres the mark them, they can be made only where that commerce requires them, of silver, the value of French money in the end of the last century) and, consequently, where it is proper to make them. Their ex- amounted to upwards of nine hundred thousand pounds sterling. pense, too, their grandeur and magnificence, must be suited to When that great work was finished, the most likely method, it what that commerce can afford to pay. They must be made, con- was found, of keeping it in constant repair, was to make a present sequently, as it is proper to make them. A magnificent high-road 592

Adam Smith of the tolls to Riquet, the engineer who planned and conducted observed, is not of very long standing. We should not wonder, the work. Those tolls constitute, at present, a very large estate to therefore, if it has not yet been brought to that degree of perfec- the different branches of the family of that gentleman, who have, tion of which it seems capable. If mean and improper persons are therefore, a great interest to keep the work in constant repair. But frequently appointed trustees; and if proper courts of inspection had those tolls been put under the management of commission- and account have not yet been established for controlling their ers, who had no such interest, they might perhaps, have been dis- conduct, and for reducing the tolls to what is barely sufficient for sipated in ornamental and unnecessary expenses, while the most executing the work to be done by them; the recency of the institu- essential parts of the works were allowed to go to ruin. tion both accounts and apologizes for those defects, of which, by the wisdom of parliament, the greater part may, in due time, be The tolls for the maintenance of a highroad cannot, with any gradually remedied. safety, be made the property of private persons. A high-road, though entirely neglected, does not become altogether impassable, though The money levied at the different turnpikes in Great Britain, is a canal does. The proprietors of the tolls upon a high-road, there- supposed to exceed so much what is necessary for repairing the fore, might neglect altogether the repair of the road, and yet con- roads, that the savings which, with proper economy, might be tinue to levy very nearly the same tolls. It is proper, therefore, that made from it, have been considered, even by some ministers, as a the tolls for the maintenance of such a work should be put under very great resource, which might, at some time or another, be the management of commissioners or trustees. applied to the exigencies of the state. Government, it has been said, by taking the management of the turnpikes into its own hands, In Great Britain, the abuses which the trustees have committed and by employing the soldiers, who would work for a very small in the management of those tolls, have, in many cases, been very addition to their pay, could keep the roads in good order, at a justly complained of. At many turnpikes, it has been said, the much less expense than it can be done by trustees, who have no money levied is more than double of what is necessary for execut- other workmen to employ, but such as derive their whole subsis- ing, in the completest manner, the work, which is often executed tence from their wages. A great revenue, half a million, perhaps in a very slovenly manner, and sometimes not executed at all. The {Since publishing the two first editions of this book, I have got system of repairing the high-roads by tolls of this kind, it must be 593

The Wealth of Nations good reasons to believe that all the turnpike tolls levied in Great lions, if they were tripled {I have now good reason to believe that Britain do not produce a neat revenue that amounts to half a mil- all these conjectural sums are by much too large.}. This great rev- lion; a sum which, under the management of government, would enue, too, might be levied without the appointment of a single new not be sufficient to keep, in repair five of the principal roads in the officer to collect and receive it. But the turnpike tolls, being con- kingdom}, it has been pretended, might in this manner be gained, tinually augmented in this manner, instead of facilitating the inland without laying any new burden upon the people; and the turn- commerce of the country, as at present, would soon become a very pike roads might be made to contribute to the general expense of great incumbrance upon it. The expense of transporting all heavy the state, in the same manner as the post-office does at present. goods from one part of the country to another, would soon be so much increased, the market for all such goods, consequently, would That a considerable revenue might be gained in this manner, I soon be so much narrowed, that their production would be in a have no doubt, though probably not near so much as the projec- great measure discouraged, and the most important branches of the tors of this plan have supposed. The plan itself, however, seems domestic industry of the country annihilated altogether. liable to several very important objections. Secondly, A tax upon carriages, in proportion to their weight, First, If the tolls which are levied at the turnpikes should ever be though a very equal tax when applied to the sole purpose of re- considered as one of the resources for supplying the exigencies of pairing the roads, is a very unequal one when applied to any other the state, they would certainly be augmented as those exigencies purpose, or to supply the common exigencies of the state. When were supposed to require. According to the policy of Great Brit- it is applied to the sole purpose above mentioned, each carriage is ain, therefore, they would probably he augmented very fast. The supposed to pay exactly for the wear and tear which that carriage facility with which a great revenue could be drawn from them, occasions of the roads. But when it is applied to any other pur- would probably encourage administration to recur very frequently pose, each carriage is supposed to pay for more than that wear and te this resource. Though it may, perhaps, be more than doubtful tear, and contributes to the supply of some other exigency of the whether half a million could by any economy be saved out of the state. But as the turnpike toll raises the price of goods in propor- present tolls, it can scarcely be doubted, but that a million might tion to their weight and not to their value, it is chiefly paid by the be saved out of them, if they were doubled; and perhaps two mil- 594

Adam Smith consumers of coarse and bulky, not by those of precious and light By the ancient law of France, as well as by that of most other commodities. Whatever exigency of the state, therefore, this tax parts of Europe, the labour of the country people was under the might be intended to supply, that exigency would be chiefly sup- direction of a local or provincial magistracy, which had no imme- plied at the expense of the poor, not of the rich; at the expense of diate dependency upon the king’s council. But, by the present those who are least able to supply it, not of those who are most practice, both the labour of the country people, and whatever other able. fund the king may choose to assign for the reparation of the high- roads in any particular province or generality, are entirely under Thirdly, If government should at any time neglect the repara- the management of the intendant; an officer who is appointed tion of the high-roads, it would be still more difficult, than it is at and removed by the king’s council who receives his orders from it, present, to compel the proper application of any part of the turn- and is in constant correspondence with it. In the progress of des- pike tolls. A large revenue might thus be levied upon the people, potism, the authority of the executive power gradually absorbs without any part of it being applied to the only purpose to which that of every other power in the state, and assumes to itself the a revenue levied in this manner ought ever to be applied. If the management of every branch of revenue which is destined for any meanness and poverty of the trustees of turnpike roads render it public purpose. In France, however, the great post-roads, the roads sometimes difficult, at present, to oblige them to repair their wrong; which make the communication between the principal towns of their wealth and greatness would render it ten times more so in the kingdom, are in general kept in good order; and, in some the case which is here supposed. provinces, are even a good deal superior to the greater part of the turnpike roads of England. But what we call the cross roads, that In France, the funds destined for the reparation of the high- is, the far greater part of the roads in the country, are entirely roads are under the immediate direction of the executive power. neglected, and are in many places absolutely impassable for any Those funds consist, partly in a certain number of days labour, heavy carriage. In some places it is even dangerous to travel on which the country people are in most parts of Europe obliged to horseback, and mules are the only conveyance which can safely be give to the reparation of the highways; and partly in such a por- trusted. The proud minister of an ostentatious court, may fre- tion of the general revenue of the state as the king chooses to spare from his other expenses. 595

The Wealth of Nations quently take pleasure in executing a work of splendour and mag- works, however, which have been transmitted to Europe, have gen- nificence, such as a great highway, which is frequently seen by the erally been drawn up by weak and wondering travellers; frequently principal nobility, whose applauses not only flatter his vanity, but by stupid and lying missionaries. If they had been examined by even contribute to support his interest at court. But to execute a more intelligent eyes, and if the accounts of them had been re- great number of little works, in which nothing that can be done ported by more faithful witnesses, they would not, perhaps, ap- can make any great appearance, or excite the smallest degree of pear to be so wonderful. The account which Bernier gives of some admiration in any traveller, and which, in short, have nothing to works of this kind in Indostan, falls very short of what had been recommend them but their extreme utility, is a business which reported of them by other travellers, more disposed to the marvel- appears, in every respect, too mean and paltry to merit the atten- lous than he was. It may too, perhaps, be in those countries, as it tion of so great a magistrate. Under such an administration there- is in France, where the great roads, the great communications, fore, such works are almost always entirely neglected. which are likely to be the subjects of conversation at the court and in the capital, are attended to, and all the rest neglected. In China, In China, and in several other governments of Asia, the execu- besides, in Indostan, and in several other governments of Asia, the tive power charges itself both with the reparation of the high- revenue of the sovereign arises almost altogether from a land tax roads, and with the maintenance of the navigable canals. In the or land rent, which rises or falls with the rise and fall of the annual instructions which are given to the governor of each province, produce of the land. The great interest of the sovereign, therefore, those objects, it is said, are constantly recommended to him, and his revenue, is in such countries necessarily and immediately con- the judgment which the court forms of his conduct is very much nected with the cultivation of the land, with the greatness of its regulated by the attention which he appears to have paid to this produce, and with the value of its produce. But in order to render part of his instructions. This branch of public police, accordingly, that produce both as great and as valuable as possible, it is neces- is said to be very much attended to in all those countries, but sary to procure to it as extensive a market as possible, and conse- particularly in China, where the high-roads, and still more the quently to establish the freest, the easiest, and the least expensive navigable canals, it is pretended, exceed very much every thing of communication between all the different parts of the country; the same kind which is known in Europe. The accounts of those 596

Adam Smith which can be done only by means of the best roads and the best there any probability that they would be so well lighted and paved navigable canals. But the revenue of the sovereign does not, in any as they are at present, or even at so small an expense? The expense, part of Europe, arise chiefly from a land tax or land rent. In all the besides, instead of being raised by a local tax upon the inhabitants great kingdoms of Europe, perhaps, the greater part of it may of each particular street, parish, or district in London, would, in ultimately depend upon the produce of the land: but that depen- this case, be defrayed out of the general revenue of the state, and dency is neither so immediate nor so evident. In Europe, there- would consequently be raised by a tax upon all the inhabitants of fore, the sovereign does not feel himself so directly called upon to the kingdom, of whom the greater part derive no sort of benefit promote the increase, both in quantity and value of the produce from the lighting and paving of the streets of London. of the land, or, by maintaining good roads and canals, to provide the most extensive market for that produce. Though it should be The abuses which sometimes creep into the local and provincial true, therefore, what I apprehend is not a little doubtful, that in administration of a local and provincial revenue, how enormous some parts of Asia this department of the public police is very soever they may appear, are in reality, however, almost always very properly managed by the executive power, there is not the least trifling in comparison of those which commonly take place in the probability that, during the present state of things, it could be administration and expenditure of the revenue of a great empire. tolerably managed by that power in any part of Europe. They are, besides, much more easily corrected. Under the local or provincial administration of the justices of the peace in Great Brit- Even those public works, which are of such a nature that they ain, the six days labour which the country people are obliged to cannot afford any revenue for maintaining themselves, but of which give to the reparation of the highways, is not always, perhaps, very the conveniency is nearly confined to some particular place or judiciously applied, but it is scarce ever exacted with any circum- district, are always better maintained by a local or provincial rev- stance of cruelty or oppression. In France, under the administra- enue, under the management of a local and provincial administra- tion of the intendants, the application is not always more judi- tion, than by the general revenue of the state, of which the execu- cious, and the exaction is frequently the most cruel and oppres- tive power must always have the management. Were the streets of sive. Such corvees, as they are called, make one of the principal London to be lighted and paved at the expense of the treasury, is instruments of tyranny by which those officers chastise any parish 597

The Wealth of Nations or communeaute, which has had the misfortune to fall under their strangers to possess any fortified place within their territory, it displeasure. may be necessary to maintain some ambassador, minister, or con- sul, who may both decide, according to their own customs, the Of the public Works and Institution which are necessary for differences arising among his own countrymen, and, in their dis- facilitating particular Branches of Commerce. putes with the natives, may by means of his public character, in- terfere with more authority and afford them a more powerful pro- The object of the public works and institutions above mentioned, tection than they could expect from any private man. The inter- is to facilitate commerce in general. But in order to facilitate some ests of commerce have frequently made it necessary to maintain particular branches of it, particular institutions are necessary, which ministers in foreign countries, where the purposes either of war or again require a particular and extraordinary expense. alliance would not have required any. The commerce of the Tur- key company first occasioned the establishment of an ordinary Some particular branches of commerce which are carried on ambassador at Constantinople. The first English embassies to with barbarous and uncivilized nations, require extraordinary pro- Russia arose altogether from commercial interests. The constant tection. An ordinary store or counting-house could give little se- interference with those interests, necessarily occasioned between curity to the goods of the merchants who trade to the western the subjects of the different states of Europe, has probably intro- coast of Africa. To defend them from the barbarous natives, it is duced the custom of keeping, in all neighbouring countries, am- necessary that the place where they are deposited should be in bassadors or ministers constantly resident, even in the time of peace. some measure fortified. The disorders in the government of This custom, unknown to ancient times, seems not to be older Indostan have been supposed to render a like precaution neces- than the end of the fifteenth, or beginning of the sixteenth cen- sary, even among that mild and gentle people; and it was under tury; that is, than the time when commerce first began to extend pretence of securing their persons and property from violence, itself to the greater part of the nations of Europe, and when they that both the English and French East India companies were al- first began to attend to its interests. lowed to erect the first forts which they possessed in that country. Among other nations, whose vigorous government will suffer no It seems not unreasonable, that the extraordinary expense which 598

Adam Smith the protection of any particular branch of commerce may occa- ers, nations have not always acted consistently; and in the greater sion, should be defrayed by a moderate tax upon that particular part of the commercial states of Europe, particular companies of branch; by a moderate fine, for example, to be paid by the traders merchants have had the address to persuade the legislature to en- when they first enter into it; or, what is more equal, by a particular trust to them the performance of this part of the duty of the sov- duty of so much per cent. upon the goods which they either im- ereign, together with all the powers which are necessarily con- port into, or export out of, the particular countries with which it nected with it. is carried on. The protection of trade, in general, from pirates and freebooters, is said to have given occasion to the first institution of These companies, though they may, perhaps, have been useful the duties of customs. But, if it was thought reasonable to lay a for the first introduction of some branches of commerce, by mak- general tax upon trade, in order to defray the expense of protect- ing, at their own expense, an experiment which the state might ing trade in general, it should seem equally reasonable to lay a not think it prudent to make, have in the long-run proved, uni- particular tax upon a particular branch of trade, in order to defray versally, either burdensome or useless, and have either misman- the extraordinary expense of protecting that branch. aged or confined the trade. The protection of trade, in general, has always been considered When those companies do not trade upon a joint stock, but are as essential to the defence of the commonwealth, and, upon that obliged to admit any person, properly qualified, upon paying a account, a necessary part of the duty of the executive power. The certain fine, and agreeing to submit to the regulations of the com- collection and application of the general duties of customs, there- pany, each member trading upon his own stock, and at his own fore, have always been left to that power. But the protection of risk, they are called regulated companies. When they trade upon a any particular branch of trade is a part of the general protection of joint stock, each member sharing in the common profit or loss, in trade; a part, therefore, of the duty of that power; and if nations proportion to his share in this stock, they are called joint-stock always acted consistently, the particular duties levied for the pur- companies. Such companies, whether regulated or joint-stock, poses of such particular protection, should always have been left sometimes have, and sometimes have not, exclusive privileges. equally to its disposal. But in this respect, as well as in many oth- Regulated companies resemble, in every respect, the corpora- tion of trades, so common in the cities and towns of all the differ- 599

The Wealth of Nations ent countries of Europe; and are a sort of enlarged monopolies of The regulated companies for foreign commerce which at present the same kind. As no inhabitant of a town can exercise an incor- subsist in Great Britain, are the ancient merchant-adventurers com- porated trade, without first obtaining his freedom in the incorpo- pany, now commonly called the Hamburgh company, the Russia ration, so, in most cases, no subject of the state can lawfully carry company, the Eastland company, the Turkey company, and the on any branch of foreign trade, for which a regulated company is African company. established, without first becoming a member of that company. The monopoly is more or less strict, according as the terms of The terms of admission into the Hamburgh company are now admission are more or less difficult, and according as the directors said to be quite easy; and the directors either have it not in their of the company have more or less authority, or have it more or less power to subject the trade to any troublesome restraint or regula- in their power to manage in such a manner as to confine the greater tions, or, at least, have not of late exercised that power. It has not part of the trade to themselves and their particular friends. In the always been so. About the middle of the last century, the fine for most ancient regulated companies, the privileges of apprentice- admission was fifty, and at one time one hundred pounds, and the ship were the same as in other corporations, and entitled the per- conduct of the company was said to be extremely oppressive. In son who had served his time to a member of the company, to 1643, in 1645, and in 1661, the clothiers and free traders of the become himself a member, either without paying any fine, or upon west of England complained of them to parliament, as of mo- paying a much smaller one than what was exacted of other people. nopolists, who confined the trade, and oppressed the manufac- The usual corporation spirit, wherever the law does not restrain it, tures of the country. Though those complaints produced no act of prevails in all regulated companies. When they have been allowed parliament, they had probably intimidated the company so far, as to act according to their natural genius, they have always, in order to oblige them to reform their conduct. Since that time, at least, to confine the competition to as small a number of persons as there have been no complaints against them. By the 10th and possible, endeavoured to subject the trade to many burdensome 11th of William III. c.6, the fine for admission into the Russia regulations. When the law has restrained them from doing this, company was reduced to five pounds; and by the 25th of Charles they have become altogether useless and insignificant. II. c.7, that for admission into the Eastland company to forty shillings; while, at the same time, Sweden, Denmark, and Nor- 600