The increase of demand for labour and employment are the best en couragements to pulation. a spur to agricultural industry; the treasures of the earth are now called forth in greater abundance; and the increase of food and of population gradually proceeds, and will proceed until the means of creating and gratifying new wants, or the possibility of increasing the produce of the soil, shall cease and be totally exhausted. From these considerations this general principle may be deduced, that the way to increase the population of a country usefully and permanently, is to increase the effective demand for labour (1). Whether it be the labour of the husbandman, who increase of po- is employed by the occupier of the land to till and reap it; or the labour of the manufacturer, who works up the raw productions of nature; or the labour of the merchant, who conveys from one part of the kingdom to another, or circulates to and fro between distant kingdoms the natural or artificial commodities peculiar to each; or under whatever denomination the labour may fall, as long as it be wanted and amply paid for, that is to say, as long as the demand for it be really an effective demand, so long will the increase of employment be valuable alike to the individua! who supplies it, and to the community which rewards it; so long it will increase the general power to purchase, and thus encourage agriculture to provide for the subsistence of a still increasing population. It should therefore be the aim of every state, in promoting the increase of its population, to enlarge as far as possible the quantity of that employment for which the people in general will be willing to pay. (2) Interference of legislature how far advisable. It has however been laid down, by some of the most eminent writers on political economy (3), that this is not to be effected by positive institutions, and that every active interference of the legislature with its subjects, by prohibiting or restraining any particular branch of honest labour, or by encouraging any particular branch at the expence of the others, whether in agriculture or in commerce, has uniformly retarded the advances of public opulence; and that the sound policy of a legislator is not to (1) 2 Paley, 367. 2 Smith, 200. (2) 2 Paley, 345, 6. 2 Malthus, 433. 2 Smith, 200. (5) 2 Smith, 118, 9. 125. 201. 204, 5. 3 Smith, 183. 2 Malthus, 196. 2 Paley, 400. 402. 3 Hume, 403. Sir J. Child on Trade, 2d part, pp. 46, 7. 81. 86. 132, 3.; and Buchanan's Observations on Smith's Wealth of Nat: 2d ed. vol. 4. pp. 156, 7.-Id. Introduction, 3. impose restrictions or regulations upon domestic industry, but rather to prevent them from being imposed by the contrivance or folly of others (1). Upon this point the opinions of those celebrated writers, Smith, Hume, Faley, and Malthus, are uniform. Dr. Adam Smith (2) observes, that " every individual is continually exerting himself to find out the most advantageous employment: it is his own advantage indeed, and not that of society, which he has in view; but the study of his own advantage naturally, or rather necessarily, leads him to prefer that employment which, under existing circumstances, is most advantageous to the community (3). What is the species of domestic industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can in his local situation judge much better than any statesman or lawgiver can do for him. The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could be safely entrusted, not only to no single person, but to no council or senate whatever; and which would no where be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it." Hume (4) observes, that all limitations and methods of supporting populousness and increasing manufactures, except by the interests of proprietors, are violent and ineffectual. And Dr. Paley observes, that from those regulations of law relating to commerce, to plenty, to riches, and to the number of people, more is expected than laws can do: that the natural basis of trade is the rivalship of quality and price, or, which is the same thing, of skill and industry; and that every attempt to force trade by operation of law, is sure to be either eluded by the quicksightedness and incessant activity of private interest, or to be frustrated by retaliation; and that perhaps the only way in which the interposition of law is salutary in trade, is in the prevention of frauds. (1) Id. ibid. See some valuable suggestions as to the policy of the legislature on the subject of trade, Sir J. Child, 154 to 164. (2) 2 Smith, 201. 204, 5. (3) See also Tucker on Trade, Introd. 7. where it is laid down, that the private interest of merchants for the most part coincides with the general interest of their country. And again: "There is a great similitude between the affairs of a private person, and of a nation; the former being but a little family, and the latter a great family." Sir J. Child, 149. (4) 3 Hume Hist. 403. Malthus, who was an advocate, under the then existing circumstances, for legislative interference in favor of agriculture, regrets that a system of general liberty, with regard to commerce, does not exist; and that the restraints and encouragements of peculiar branches of it should give occasion for the interference which he proposes. (1) But it has been admitted by the same authors, that some exceptions must be allowed to this rule; and that, for instance, the provisions of the navigation acts, which will hereafter be fully considered, though crowded with prohibitions and encouragements which diminish our profit, have always been held politic, because, by excluding foreigners from participation in certain parts of our trade, and providing a nursery for our seamen, they materially contribute to the national defence (2); and it has been doubted by other authors whether the doctrine that government ought to interfere as little as possible in trade and commerce is well founded (3). It must be admitted that, with reference to foreign commerce in particular, the legislature or the government in which they repose confidence, may be aware of circumstances not within the knowledge of private individuals, who attend only to their own particular interests; and which may enable such legislature to foresee that prejudicial consequences will ensue to the community, if some, at least temporary, restrictions, regulations, or encouragements of a particular branch of commerce, be not introduced. And therefore, though in general bounties and drawbacks may be inexpedient, yet exceptions have been admitted, even by those authors who most strenuously insist that no legislative interference is advisable. Thus Dr. Adam Smith allows that the encouragement of fisheries is a national benefit, and therefore their extension may in general be an object for bounties and encouragement at the expence of the public (4). So it is advisable for the legislature, as in the case of patents, to give exclusive privileges to the first inventor of a manufacture, in order the more effectually to encourage the productions of genius: and many regulations affecting commerce have been (1) 2 Malthus, 195, 6. (2) 2 Smith, 214, 215. Sir J. Child on Trade, Preface, and chap. 4. .page 9. Ld. Sheffield's Strictures on Navigation System. 3 Adolphus, 163. (3) See 3 Adolphus, 277, 8. Sir J. Child in his celebrated Treatise on Trade, 49. (4) 2 Smith, 279. 3 Adolphus, 277. introduced, either with a view to revenue, or to prevent the impositions and frauds which the cupidity of ill-designing persons might induce them to practice (1). So in a country like England, where the want of subordination in the lower class of people is attended with pernicious consequences, both in a commercial and a moral view, laws are necessary to prevent combi nations for the increase of wages, or to destroy implements of trade. (2) However, these are exceptions justifiable only in particular cases, and do not affect the general principle that the legislature should be cautious in interfering to regulate the employment of the capital of any individual: for where there is a free competition, the labour and the capital of every person will in general be employed by him in the channel most conducive to his own ultimate interest. Of that interest each one is himself, from a thousand circumstances, the best possible judge; and the interests of the whole community must be most effectually ensured, when that of each individual is most judiciously consulted. (3) A best directed for and individuals. benefit of state It is now necessary concisely to consider what directions of How a capital capital generally set the largest quantity of employment in motion, and are consequently most beneficial to the state; and we will then endeavour to show how it happens that the largest quantity of employment in every particular case is set in motion by that direction of capital, which, under the peculiar circumstances of that case, is the most profitable to the owner. capital may be employed in four different ways (4); first, in raising raw produce for the supply of the society; secondly, in preparing or manufacturing that produce for immediate use; thirdly, in transporting the raw or the manufactured produce from the places where they abound to those where they are wanted; and, lastly, in retailing produce by small quantities for immediate consumption. In the first mode are employed the capitals of all those who undertake the improvement or cul (1) See observations in Sir J. Child on Trade, Preface; and Tucker on Trade, Introd. 7, 8. And see further as to the effect of laws on the commercial habits of the people, Sir J. Child on Trade, 28. 2d part. (2) Tucker on Trade, 36, 37. (4) 2 Smith, 103. tivation of lands, mines, or fisheries; in the second, those of all master manufacturers; in the third, those of all wholesale merchants; and, in the fourth, those of all retailers. The three last of these occupations are useful in proportion as they promote the first, which is the increase of the earth's produce; and this they effect, as we have before observed, by enabling increased multitudes of labourers to pay for such additional productions (1). With equal profit the direction of capital most advantageous to the state, after agriculture, is the establishment of manufactures; inasmuch as manufactures employ and pay a greater number of individuals than retail trade or even wholesale commerce. For the same reason wholesale commerce is preferable to retail trade. The retailer does not provide profitable employment to any but himself, or even if his business be on the largest scale, to any but the servants in his shop; whereas the wholesale merchant employs not only the clerks, porters, and other labourers about his premises, but also the broker and the wharfinger, and intermediately the sailors and carriers who transport his goods between one place and another. The several subdivisions of capital also which occur in the class of wholesale commerce, are with equal profits extremely various in their comparative utility. These subdivisions are threefold; the home trade, the foreign trade of consumption, and the carrying trade (2). The home trade is the purchase of domestic commodities in one district of our own country to be sold in another of its districts; this comprehends both the inland and the coasting trade. The foreign trade of consumption is the importation of foreign goods for domestic consumption, or the exportation of domestic goods for foreign consumption. The carrying trade is the conveying the surplus produce of one foreign country to another. The comparative benefits of these three trades have been so clearly explained by Dr. Adam Smith, that it would be impossible to state them in any words so advantageously as his own. He says, (3)` the "The capital which is employed in purchasing in one part of country in order to sell in another the produce of the industry in that country, generally replaces by every such operation two |