"The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principle, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations; though the effect of these obstructions is always, more or less, either to encroach upon its freedom or to diminish its security." (18) That "every system which endeavors, either, by extraordinary encouragements to draw towards a particular species of industry a greater share of the capital of the society, than what would naturally go to it, or, by extraordinary restraints, to force from a particular species of industry some share of the capital which would otherwise be employed in it, is, in reality, subversive of the great purpose which it means to promote.It retards instead of accelerating, the progress of the society towards wealth and greatness; and diminishes, instead of increasing, the real value of the annual produce of its land and labor."And therefore, that "all systems, either of preference or restraint, being completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord.Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.The sovereign is completely discharged from a duty, in attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society." (19)I expect in the sequel to show that the system contains certain fundamental errors invalidating very many of the conclusions, which the author desires to establish.In the mean time, passing all such discussions, and viewing the subject in something of the light in which it seems to have been contemplated by Adam Smith himself, I would observe, that his system, if correct, must be consistent with itself, and with admitted facts.His theory pretends to show, that the source of the wealth of nations, the abundance, that is, of all the materials of comfort and enjoyment, the necessaries, the conveniences, the amusements of life which men possess, is to be found in the gradual accumulation of capital by the undisturbed industry and economy of individuals, continually, through the division of labor, introducing improvements in the modes in which this labor operates with that capital.
and, consequently, increasing with the greatest possible rapidity the returns from them.His doctrine is, that the accumulation of capital by individuals, being thus the only thing required to produce that abundance with the greatest possible rapidity, ought never to be interfered with by the legislature;and that, if he does so, it must necessarily he to the detriment of the society for which he legislates.If, therefore, even according to him, there are other sources, than the mere accumulation of capital, and consequent division of labor, on which nations are dependent for turning their labor and capital to the best account, and thus drawing from their resources the most abundant returns of necessaries, conveniences, and amusements, that is of wealth; in so far, his theory would seem imperfect, and his doctrine inapplicable.If we then in particular turn to the part of the system with which we are specially interested, we find, in reality, that as far as it is concerned, the theory is thus inconsistent with events admitted by its author, that hence this portion of it is contradictory to itself, and to admitted phenomena, and that consequently the doctrine drawn from it cannot here be maintained.
In the account of the progress of opulence, given in the Wealth of Nations, we find assigned, as one of the causes of it, the introduction into a country of new manufactures."According to the natural course of things," we are told, "the greater part of the wealth of any growing society is first directed to agriculture, afterwards to manufactures, and last of all to foreign commerce." (20) "After agriculture, the capital employed in manufactures puts into motion the greatest quantity of productive labor." (21) The utility of such manufactures is enlarged on in many parts of the work."They give a new value to the surplus part of the rude produce by saving the expense of carrying it to the water side, or to some distant market, and they furnish cultivators with something in exchange for it, that is either useful or agreeable to them, upon easier terms than they could have obtained it before.
The cultivators get a better price for their surplus produce, and can purchase cheaper other conveniences which they have occasion for.They are thus encouraged and enabled to increase this surplus produce by a farther improvement and better cultivation of the land; and as the fertility of the land had given birth to the manufacture, so the progress of the manufacture reacts upon the land, and increases still farther its fertility.The manufacturers first supply the neighborhood, and, as their work improves and refines, more distant markets.For though neither the rude produce nor even the coarse manufacture could, without the greatest difficulty, support the expense of a considerable land carriage, the refined and improved manufacture easily may.In a small bulk it frequently contains the price of a great quantity of rude produce." (22) "The revenue of a trading and manufacturing country must, other things being equal, always be much greater than that of one without trade or manufactures.
