"Between whatever places foreign trade is carried on, they all of them derive two distinct benefits from it. It carries out that surplus part of the produce of their land and labour for which there is no demand among them, and brings back in return for it something else for which there is a demand. It gives a value to their superfluities, by exchanging them for something else, which may satisfy a part of their wants and increase their enjoyments. By means of it, the narrowness of the home-market does not hinder the division of labour, in any particular branch of art or manufacture, from being carried to the highest perfection. By opening a more extensive market for whatever part of the produce of their labour may exceed the home-consumption, it encourages them to improve its productive powers, and to augment its annual produce to the utmost, and thereby to increase the real revenue and wealth of the society." *

It is not only by procuring a sale to the surplus produce of the labour of a country that foreign trade succeeds in selling dear the home-productions, and purchasing the foreign produce cheap. The same effect would take place, if it were possible for nations to trade with the whole produce of their labour. The produce sold abroad is always higher in price than in the place of its production, and consequently foreign trade always sells dear and buys cheap.

Lastly, another advantage resulting from foreign trade, which has not been noticed by Adam Smith, is this. It invites all nations to share in the fertility of

* Wealth of Nations, vol. ii. page 175.

all soils, in the improvement of every branch of industry, and in the progress of general civilization. The enjoyments of any particular people are no longer limited by the sterility of its climate, by the aukwardness or inexperience of its labourers, nor even by the defects of its political institutions. The fertility of any soil, the improvement of any branch of industry, the goodness of any political institution, become as it were common to all individuals, to all nations, to the whole family of the human race. This sharing in the general abundance banishes poverty from all countries, or at least no nations are left in poverty but those which do not know how to avail themselves of the soil on which they are placed, or whose industry is checked by the carelessness or ignorance of their government.

That Adam Smith should have thought it more advantageous for a country to consume the produce of its labour than to sell it abroad, is so much the more surprizing, as he teaches the direct contrary when the question is of purchasing abroad.

"It is," he says, "the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. The tailor does not attempt to make his own shoes, but buys them of the shoe-maker. The shoe-maker does not attempt to make his own clothes, but employs a tailor. All of them find it for their interest to employ their whole industry in a way in which they have some advantage over their neighbours, and to purchase with a part of its produce whatever else they have occasion for.

"What is prudence in the conduct of every private family, can scarcely be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry." *

If it be the interest of a nation to purchase from a foreign counry when that country seils cheaper; how can its interest be injured by selling to the foreign country when it purchases dearer What difference is there between purchasing cheap from a foreign country and selling dear to that country? It is nat easy to discover any difference.

Does not the capital which purchases the produce of foreign industry, replace a foreign capital, as well as in the case of selling national produce to a foreign country? Is not the labour of the foreign country supported by national capital in one case as in the other? If, in the case of selling to a foreign country, the capital of the merchant replaces a foreign capital, his capital also replaces a foreign capital when he purchases the produce of the foreign country. If, by selling to the amount of twenty millions of the produce of home-industry, the capital of the merchants who import in return foreign commodities to the amount of twenty millions, exchanges twenty millions of national capital for twenty millions of foreign capital, the same merchants, when they purchase the produce of foreign industry to the amount of twenty millions, exchange alike twenty millions of

* Wealth of Nations, vol. ii, pages 191, 192.

national capital for twenty millions of foreign capital. The two cases are perfectly parallel; and it is only through an inconceivable inattention that Adam Smith has applied to each a different doctrine *.

If he supposed that, in the case of purchasing foreign commodities, the returns of the national capital are quicker than in the case of selling the produce of national labour to foreign countries, he still laboured under a manifest error.

Whether foreign countries bring the produce of their industry, or national merchants go to fetch it from the spot where it is produced, the result is always the same; and in both cases the returns are as slow as in the case of selling to a foreign country.

If national merchants fetch the produce of foreign industry, they export the produce of national industry to pay for it; and the length of the voyage out and home is the same as when the foreign trade imports the produce of foreign industry, and exports the produce of national industry; consequently, selling to a foreign country and purchasing in a foreign country are both alike subject to the inconveniency of a slow return of capital.

But does that inconveniency really exist, or is it not rather delusive and imaginary?

The capitals employed in the home-trade may, it is true, stimulate national industry in a double degree to what those employed in foreign trade do: but they cannot set so great a quantity of labour in motion, because the home-consumption is limited, whilst that of the foreign markets is unbounded. This reflection of an Italian author is, I think, as true as sagacious. See Palmieri's excellent work, Della Publica Feliçita,

The general labour of a country does not depend on the celerity or slowness of the returns of commercial capitals; credit supplies their absence; and, provided they bring back a more abundant foreign produce than the national produce exported, national labour loses nothing of its activity and productiveness. Labour is not interested in the quickness of the returns, but in the consumption of its produce; and whenever that consumption experiences no delay, labour preserves all its activity. Commerce always easily replaces the capitals of labour, when it finds a sale for its produce. The credit which it gives to the eonsumers, affords safe resources to replace the capital of labour. It can negociate the documents of the credit it has given in a thousand ways, and, by discounting its bills, accelerate the return of its capital according to the wants or exigencies of labour *.

National labour therefore is never a sufferer from the slowness of the returns of the capital destined for its support; it only suffers from the slowness, difficulty, or insufficiency of the consumption of its produce, and from its reduced price or depreciation. When the produce of labour is depreciated, or sold very cheap, the wages of labour afford but a scanty pittance to the labourers, the profit of stock is incon

*The Italian author whom I quoted in the preceding note, observes again on this head, that if the home-trade, by the rapidity of its returns, allows the same capital to be employed several times which foreign trade allows to be employed only once, foreign trade employs a greater quantity; and this greater quantity of capital employed compensates for the slowness of its returns, and yields profits much more considerable.