Chapter IV: Part 4

In short, this apprehension of the wrong balance of trade appears of such a nature that it discovers itself wherever one is out of humour with the ministry, or is in low spirits; and as it can never be refuted by a particular detail of all the exports which counterbalance the imports, it may here be proper to form a general argument which may prove the impossibility of that event as long as we preserve our people and our industry.

Suppose four-fifths of all the money in Britain to be annihilated in one night, and the nation reduced to the same condition, with regard to specie, as in the reigns of the Harrys and Edwards, what would be the consequence? Must not the price of all labour and commodities sink in proportion, and everything be sold as cheap as they were in those ages? What nation could then dispute with us in any foreign market, or pretend to navigate or to sell manufactures at the same price which to us would afford sufficient profit? In how little time, therefore, must this bring back the money which we had lost, and raise us to the level of all the neighbouring nations? where, after we have arrived, we immediately lose the advantage of the cheapness of labour and commodities, and the further flowing in of money is stopped by our fulness and repletion.

Again, suppose that all the money of Britain were multiplied fivefold in a night, must not the contrary effect follow? Must not labour and commodities rise to such an exorbitant height that no neighbouring nations could afford to buy from us, while their commodities, on the other hand, became so cheap in comparison that, in spite of all the laws which could be formed, they would be run in upon us, and our money flow out till we come to a level with foreigners, and lose that great superiority of riches which had laid us under such disadvantages?

Now, it is evident that the same causes which would correct these exorbitant inequalities, were they to happen miraculously, must prevent their happening in the common course of nature, and must for ever, in all the neighbouring nations, preserve money nearly proportionable to the art and industry of each nation. All water, wherever it communicates, remains always at a level. Ask naturalists the reason: they tell you that were it to be raised in any one place, the superior gravity of that part not being balanced, must depress it till it meets a counterpoise; and that the same cause which redresses the inequality when it happens must for ever prevent it without some violent external operation.[17]

Can one imagine that it had ever been possible, by any laws, or even by any art or industry, to have kept all the money in Spain which the galleons have brought from the Indies? or that all commodities could be sold in France for a tenth of the price which they would yield on the other side of the Pyrenees, without finding their way thither, and draining from that immense treasure? What other reason, indeed, is there why all nations at present gain in their trade with Spain and Portugal, but because it is impossible to heap up money, more than any fluid, beyond its proper level? The sovereigns of these countries have shown that they wanted not inclination to keep their gold and silver to themselves had it been in any degree practicable.

But as any body of water may be raised above the level of the surrounding element, if the former has no communication with the latter, so in money, if the communication be cut off by any material or physical impediment (for all laws alone are ineffectual), there may, in such a case, be a very great inequality of money. Thus the immense distance of China, together with the monopolies of our India companies, obstructing the communication, preserve in Europe the gold and silver, especially the latter, in much greater plenty than they are found in that kingdom. But, notwithstanding this great obstruction, the force of the causes above-mentioned is still evident. The skill and ingenuity of Europe in general surpasses perhaps that of China with regard to manual arts and manufactures, yet are we never able to trade thither without great disadvantage; and were it not for the continual recruits which we receive from America, money would very soon sink in Europe and rise in China, till it came nearly to a level in both places. Nor can any reasonable man doubt but that industrious nation, were they as near us as Poland or Barbary, would drain us of the overplus of our specie, and draw to themselves a larger share of the West Indian treasures. We need have no recourse to a physical attraction to explain the necessity of this operation; there is a moral attraction arising from the interests and passions of men which is full as potent and infallible.

How is the balance kept in the provinces of every kingdom among themselves but by the force of this principle, which makes it impossible for money to lose its level, and either to rise or sink beyond the proportion of the labour and commodities which is in each province? Did not long experience make people easy on this head, what a fund of gloomy reflections might calculations afford a melancholy Yorkshireman while he computed and magnified the sums drawn to London by taxes, absentees, commodities, and found on comparison the opposite articles so much inferior? And no doubt, had the Heptarchy subsisted in England, the legislature of each state had been continually alarmed by the fear of a wrong balance; and it is probable that the mutual hatred of these states would have been extremely violent on account of their close neighbourhood; they would have loaded and oppressed all commerce by a jealous and superfluous caution. Since the Union has removed the barriers between Scotland and England, which of these nations gains from the other by this free commerce? Or if the former kingdom has received any increase of riches, can it be reasonably accounted for by anything but the increase of its art and industry? It was a common apprehension in England before the Union, as we learn from L’Abbe du Bos, that Scotland would soon drain them of their treasure were an open trade allowed; and on the other side of the Tweed a contrary apprehension prevailed—with what justice in both time has shown.

What happens in small portions of mankind must take place in greater. The provinces of the Roman empire no doubt kept their balance with each other, and with Italy, independent of the legislature, as much as the several counties of Britain or the several parishes of each county. And any man who travels over Europe at this day may see by the prices of commodities that money, in spite of the absurd jealousy of princes and states, has brought itself nearly to a level, and that the difference between one kingdom and another is not greater in this respect than it is often between different provinces of the same kingdom. Men naturally flock to capital cities, seaports, and navigable rivers. There we find more men, more industry, more commodities, and consequently more money; but still the latter difference holds proportion with the former, and the level is preserved.[18]

Our jealousy and our hatred of France are without bounds, and the former sentiment at least must be acknowledged very reasonable and well-grounded. These passions have occasioned innumerable barriers and obstructions upon commerce, where we are accused of being commonly the aggressors. But what have we gained by the bargain? We lost the French market for our woollen manufactures, and transferred the commerce of wine to Spain and Portugal, where we buy much worse liquor at a higher price. There are few Englishmen who would not think their country absolutely ruined were French wines sold in England so cheap and in such abundance as to supplant, in some measure, all ale and home-brewed liquors; but would we lay aside prejudice, it would not be difficult to prove that nothing could be more innocent, perhaps advantageous. Each new acre of vineyard planted in France, in order to supply England with wine, would make it requisite for the French to take the produce of an English acre, sown in wheat or barley, in order to subsist themselves; and it is evident that we have thereby got command of the better commodity.

There are many edicts of the French King prohibiting the planting of new vineyards, and ordering all those already planted to be grubbed up, so sensible are they in that country of the superior value of corn above every other product.

Mareschal Vauban complains often, and with reason, of the absurd duties which load the entry of those wines of Languedoc, Guienne, and other southern provinces that are imported into Brittany and Normandy. He entertained no doubt but these latter provinces could preserve their balance notwithstanding the open commerce which he recommends. And it is evident that a few leagues more navigation to England would make no difference; or if it did, that it must operate alike on the commodities of both kingdoms.

There is indeed one expedient by which it is possible to sink, and another by which we may raise, money beyond its natural level in any kingdom; but these cases, when examined, will be found to resolve into our general theory, and to bring additional authority to it.

I scarce know any method of sinking money below its level but those institutions of banks, funds, and paper-credit which are so much practised in this kingdom. These render paper equivalent to money, circulate it through the whole state, make it supply the place of gold and silver, raise proportionally the price of labour and commodities, and by that means either banish a great part of those precious metals, or prevent their further increase. What can be more short-sighted than our reasonings on this head? We fancy, because an individual would be much richer were his stock of money doubled, that the same good effect would follow were the money of every one increased, not considering that this would raise as much the price of every commodity, and reduce every man in time to the same condition as before. It is only in our public negotiations and transactions with foreigners that a greater stock of money is advantageous; and as our paper is there absolutely insignificant, we feel, by its means, all the ill effects arising from a great abundance of money without reaping any of the advantages.[19]

Suppose that there are twelve millions of paper which circulate in the kingdom as money (for we are not to imagine that all our enormous funds are employed in that shape), and suppose the real cash of the kingdom to be eighteen millions: here is a state which is found by experience able to hold a stock of thirty millions. I say, if it be able to hold it, it must of necessity have acquired it in gold and silver had we not obstructed the entrance of these metals by this new invention of paper. Whence would it have acquired that sum? From all the kingdoms of the world. But why? Because, if you remove these twelve millions, money in this state is below its level compared with our neighbours; and we must immediately draw from all of them till we be full and saturate, so to speak, and can hold no more. By our present politics we are as careful to stuff the nation with this fine commodity of bank-bills and chequer notes as if we were afraid of being overburdened with the precious metals.

It is not to be doubted but the great plenty of bullion in France is, in a great measure, owing to the want of paper-credit. The French have no banks; merchants’ bills do not there circulate as with us; usury or lending on interest is not directly permitted, so that many have large sums in their coffers; great quantities of plate are used in private houses, and all the churches are full of it. By this means provision and labour still remain much cheaper among them than in nations that are not half so rich in gold and silver. The advantages of this situation in point of trade, as well as in great public emergencies, are too evident to be disputed.

The same fashion a few years ago prevailed in Genoa which still has place in England and Holland, of using services of china ware instead of plate; but the Senate, wisely foreseeing the consequence, prohibited the use of that brittle commodity beyond a certain extent, while the use of silver plate was left unlimited. And I suppose, in their late distresses, they felt the good effect of this ordinance. Our tax on plate is, perhaps, in this view, somewhat impolitic.

Before the introduction of paper-money into our colonies, they had gold and silver sufficient for their circulation. Since the introduction of that commodity, the least inconveniency that has followed is the total banishment of the precious metals. And after the abolition of paper, can it be doubted but money will return, while these colonies possess manufactures and commodities, the only thing valuable in commerce, and for whose sake alone all men desire money?

What pity Lycurgus did not think of paper-credit when he wanted to banish gold and silver from Sparta! It would have served his purpose better than the lumps of iron he made use of as money, and would also have prevented more effectually all commerce with strangers, as being of so much less real and intrinsic value.

It must, however, be confessed that, as all these questions of trade and money are extremely complicated, there are certain lights in which this subject may be placed so as to represent the advantages of paper-credit and banks to be superior to their disadvantages. That they banish specie and bullion from a state is undoubtedly true, and whoever looks no farther than this circumstance does well to condemn them; but specie and bullion are not of so great consequence as not to admit of a compensation, and even an overbalance from the increase of industry and of credit which may be promoted by the right use of paper-money. It is well known of what advantage it is to a merchant to be able to discount his bills upon occasion; and everything that facilitates this species of traffic is favourable to the general commerce of a state. But private bankers are enabled to give such credit by the credit they receive from the depositing of money in their shops; and the Bank of England in the same manner, from the liberty they have to issue their notes in all payments. There was an invention of this kind which was fallen upon some years ago by the banks of Edinburgh, and which, as it is one of the most ingenious ideas that has been executed in commerce, has also been found very advantageous to Scotland. It is there called a bank-credit, and is of this nature: A man goes to the bank and finds surety to the amount, we shall suppose, of five thousand pounds. This money, or any part of it, he has the liberty of drawing out whenever he pleases, and he pays only the ordinary interest for it while it is in his hands. He may, when he pleases, repay any sum so small as twenty pounds, and the interest is discounted from the very day of the repayment. The advantages resulting from this contrivance are manifold. As a man may find surety nearly to the amount of his substance, and his bank-credit is equivalent to ready money, a merchant does hereby in a manner coin his houses, his household furniture, the goods in his warehouse, the foreign debts due to him, his ships at sea; and can, upon occasion, employ them in all payments as if they were the current money of the country. If a man borrows five thousand pounds from a private hand, besides that it is not always to be found when required, he pays interest for it whether he be using it or not; his bank-credit costs him nothing except during the very moment in which it is of service to him, and this circumstance is of equal advantage as if he had borrowed money at much lower interest. Merchants likewise from this invention acquire a great facility in supporting each other’s credit, which is a considerable security against bankruptcies. A man, when his own bank-credit is exhausted, goes to any of his neighbours who is not in the same condition, and he gets the money, which he replaces at his convenience.

After this practice had taken place during some years at Edinburgh, several companies of merchants at Glasgow carried the matter farther. They associated themselves into different banks and issued notes so low as ten shillings, which they used in all payments for goods, manufactures, tradesmen, labour of all kinds; and these notes, from the established credit of the companies, passed as money in all payments throughout the country. By this means a stock of five thousand pounds was able to perform the same operations as if it were ten, and merchants were thereby enabled to trade to a greater extent, and to require less profit in all their transactions. In Newcastle and Bristol, as well as other trading places, the merchants have since instituted banks of a like nature, in imitation of those in Glasgow. But whatever other advantages result from these inventions, it must still be allowed that they banish the precious metals; and nothing can be a more evident proof of it than a comparison of the past and present condition of Scotland in that particular. It was found, upon the recoinage made after the Union, that there was near a million of specie in that country; but notwithstanding the great increase of riches, commerce and manufactures of all kinds, it is thought that, even where there is no extraordinary drain made by England, the current specie will not now amount to a fifth of that sum.

But as our projects of paper-credit are almost the only expedient by which we can sink money below its level, so, in my opinion, the only expedient by which we can raise money above its level is a practice which we should all exclaim against as destructive—viz., the gathering large sums into a public treasure, locking them up, and absolutely preventing their circulation. The fluid not communicating with the neighbouring element may, by such an artifice, be raised to what height we please. To prove this we need only return to our first supposition of the annihilating the half or any part of our cash, where we found that the immediate consequence of such an event would be the attraction of an equal sum from all the neighbouring kingdoms. Nor does there seem to be any necessary bounds set by the nature of things to this practice of hoarding. A small city like Geneva, continuing this policy for ages, might engross nine-tenths of the money of Europe. There seems, indeed, in the nature of man an invincible obstacle to that immense growth of riches. A weak state with an enormous treasure will soon become a prey to some of its poorer but more powerful neighbours; a great state would dissipate its wealth in dangerous and ill-concerted projects, and probably destroy with it what is much more valuable—the industry, morals, and number of its people. The fluid in this case, raised to too great a height, bursts and destroys the vessel that contains it, and mixing itself with the surrounding element, soon falls to its proper level.

So little are we commonly acquainted with this principle that, though all historians agree in relating uniformly so recent an event as the immense treasure amassed by Harry VII. (which they make amount to £1,700,000), we rather reject their concurring testimony than admit of a fact which agrees so ill with our inveterate prejudices. It is indeed probable that that sum might be three-fourths of all the money in England; but where is the difficulty that such a sum might be amassed in twenty years by a cunning, rapacious, frugal, and almost absolute monarch? Nor is it probable that the diminution of circulating money was ever sensibly felt by the people, or ever did them any prejudice. The sinking of the prices of all commodities would immediately replace it, by giving England the advantage in its commerce with all the neighbouring kingdoms.

Have we not an instance in the small republic of Athens with its allies, who in about fifty years between the Median and Peloponnesian Wars amassed a sum greater than that of Harry VII.?[20] for all the Greek historians and orators agree that the Athenians collected in the citadel more than 10,000 talents, which they afterwards dissipated, to their own ruin, in rash and imprudent enterprises. But when this money was set a-running, and began to communicate with the surrounding fluid, what was the consequence? Did it remain in the state? No; for we find by the memorable census mentioned by Demosthenes and Polybius that, in about fifty years afterwards, the whole value of the republic, comprehending lands, houses, commodities, slaves, and money was less than 6000 talents.

What an ambitious, high-spirited people was this, to collect and keep in their treasury, with a view to conquests, a sum which it was every day in the power of the citizens, by a single vote, to distribute among themselves, and which would go near to triple the riches of every individual; for we must observe that the numbers and private riches of the Athenians are said by ancient writers to have been no greater at the beginning of the Peloponnesian War than at the beginning of the Macedonian.

Money was little more plentiful in Greece during the age of Philip and Perseus than in England during that of Harry VII., yet these two monarchs in thirty years collected from the small kingdom of Macedon a much larger treasure than that of the English monarch. Paulus Æmilius brought to Rome about £1,700,000 sterling—Pliny says £2,400,000—and that was but a part of the Macedonian treasure; the rest was dissipated by the resistance and flight of Perseus.

We may learn from Stanyan that the Canton of Berne had £300,000 lent at interest, and had above six times as much in their treasury. Here, then, is a sum hoarded of £1,800,000 sterling, which is at least quadruple of what should naturally circulate in such a petty state; and yet no one who travels into the Pais de Vaux, or any part of that canton, observes any want of money more than could be supposed in a country of that extent, soil, and situation. On the contrary, there are scarce any inland provinces in the countries of France or Germany where the inhabitants are at this time so opulent, though that canton has vastly increased its treasure since 1714, the time when Stanyan wrote his judicious account of Switzerland.[21]

The account given by Appian of the treasure of the Ptolemies is so prodigious that one cannot admit of it, and so much the less because the historian says the other successors of Alexander were all so frugal, and had many of them treasures not much inferior; for this saving humour of the neighbouring princes must necessarily have checked the frugality of the Egyptian monarchs, according to the foregoing theory. The sum he mentions is 740,000 talents, or £191,166,666 13s. 4d., according to Dr. Arbuthnot’s computation; and yet Appian says that he extracted his account from the public records, and he was himself a native of Alexandria.

From these principles we may learn what judgment we ought to form of those numberless bars, obstructions, and imposts which all nations of Europe, and none more than England, have put upon trade, from an exorbitant desire of amassing money, which never will heap up beyond its level while it circulates; or from an ill-grounded apprehension of losing their specie, which never will sink below it. Could anything scatter our riches, it would be such impolitic contrivances. But this general ill effect, however, results from them, that they deprive neighbouring nations of that free communication and exchange which the Author of the world has intended, by giving them soils, climates, and geniuses so different from each other.

Our modern politics embrace the only method of banishing money—the using paper-credit; they reject the only method of amassing it, the practice of hoarding; and they adopt a hundred contrivances which serve to no purpose but to check industry, and rob ourselves and our neighbours of the common benefits of art and nature.

All taxes, however, upon foreign commodities are not to be regarded as prejudicial or useless, but those only which are founded on the jealousy above mentioned. A tax on German linen encourages home manufactures, and thereby multiplies our people and industry; a tax on brandy increases the sale of rum, and supports our southern colonies. And as it is necessary imposts should be levied for the support of government, it may be thought more convenient to lay them on foreign commodities, which can easily be intercepted at the port and subjected to the impost. We ought, however, always to remember the maxim of Dr. Swift, that, in the arithmetic of the customs, two and two make not four, but often make only one. It can scarcely be doubted but if the duties on wine were lowered to a third, they would yield much more to the Government than at present; our people might thereby afford to drink commonly a better and more wholesome liquor, and no prejudice would ensue to the balance of trade, of which we are so jealous. The manufacture of ale beyond the agriculture is but inconsiderable, and gives employment to few hands. The transport of wine and corn would not be much inferior.

But are there not frequent instances, you will say, of states and kingdoms which were formerly rich and opulent, and are now poor and beggarly? Has not the money left them with which they formerly abounded? I answer, if they lose their trade, industry, and people, they cannot expect to keep their gold and silver, for these precious metals will hold proportion to the former advantages. When Lisbon and Amsterdam got the East India trade from Venice and Genoa, they also got the profits and money which arose from it. Where the seat of government is transferred, where expensive armies are maintained at a distance, where great funds are possessed by foreigners, there naturally follows from these causes a diminution of the specie. But these, we may observe, are violent and forcible methods of carrying away money, and are in time commonly attended with the transport of people and industry; but where these remain, and the drain is not continued, the money always finds its way back again, by a hundred canals of which we have no notion or suspicion. What immense treasures have been spent, by so many nations, in Flanders since the revolution, in the course of three long wars! More money perhaps than the half of what is at present in all Europe. But what has now become of it? Is it in the narrow compass of the Austrian provinces? No, surely; it has most of it returned to the several countries whence it came, and has followed that art and industry by which at first it was acquired. For above a thousand years the money of Europe has been flowing to Rome by an open and sensible current; but it has been emptied by many secret and insensible canals, and the want of industry and commerce renders at present the papal dominions the poorest territories in all Italy.

In short, a government has great reason to preserve with care its people and its manufactures. Its money it may safely trust to the course of human affairs, without fear or jealousy; or if it ever give attention to this latter circumstance, it ought only to be so far as it affects the former.

NOTES, OF THE BALANCE OF TRADE.

[17] There is another cause, though more limited in its operation, which checks the wrong balance of trade, to every particular nation to which the kingdom trades. When we import more goods than we export, the exchange turns against us, and this becomes a new encouragement to export, as much as the charge of carriage and insurance of the money which becomes due would amount to. For the exchange can never rise higher than that sum.

[18] It must carefully be remarked that throughout this discourse, wherever I speak of the level of money I mean always its proportional level to the commodities, labour, industry, and skill which is in the several states; and I assert that where these advantages are double, treble, quadruple to what they are in the neighbouring states, the money infallibly will also be double, treble, quadruple. The only circumstance that can obstruct the exactness of these proportions is the expense of transporting the commodities from one place to another, and this expense is sometimes unequal. Thus the corn, cattle, cheese, butter of Derbyshire cannot draw the money of London so much as the manufactures of London draw the money of Derbyshire. But this objection is only a seeming one, for so far as the transport of commodities is expensive, so far is the communication between the places obstructed and imperfect.

[19] We observed in essay _Of Money_, that money, when increasing, gives encouragement to industry during the interval between the increase of money and the rise of the prices. A good effect of this nature may follow too from paper-credit; but it is dangerous to precipitate matters at the risk of losing all by the failing of that credit, as must happen upon any violent shock in public affairs.

[20] There were about eight ounces of silver in a pound sterling in Harry VII.’s time.

[21] The poverty which Stanyan speaks of is only to be seen in the most mountainous cantons, where there is no commodity to bring money; and even there the people are not poorer than in the diocese of Saltsburg on the one hand, or Savoy on the other.

OF THE JEALOUSY OF TRADE.

Having endeavoured to remove one species of ill-founded jealousy which is so prevalent among commercial nations, it may not be amiss to mention another which seems equally groundless. Nothing is more usual, among states which have made some advances in commerce, than to look on the progress of their neighbours with a suspicious eye, to consider all trading states as their rivals, and to suppose that it is impossible for any of them to flourish but at their expense. In opposition to this narrow and malignant opinion, I will venture to assert that the increase of riches and commerce in any one nation, instead of hurting, commonly promotes the riches and commerce of all its neighbours; and that a state can scarcely carry its trade and industry very far where all the surrounding states are buried in ignorance, sloth, and barbarism.

It is obvious that the domestic industry of a people cannot be hurt by the greatest prosperity of their neighbours; and as this branch of commerce is undoubtedly the most important in any extensive kingdom, we are so far removed from all reason of jealousy. But I go farther, and observe that where an open communication is preserved among nations, it is impossible but the domestic industry of every one must receive an increase from the improvements of the others. Compare the situation of Great Britain at present with what it was two centuries ago. All the arts, both of agriculture and manufactures, were then extremely rude and imperfect. Every improvement which we have since made has arisen from our imitation of foreigners, and we ought so far to esteem it happy that they had previously made advances in arts and ingenuity. But this intercourse is still upheld to our great advantage. Notwithstanding the advanced state of our manufactures, we daily adopt in every art the inventions and improvements of our neighbours. The commodity is first imported from abroad, to our great discontent, while we imagine that it drains us of our money; afterwards the art itself is gradually imported, to our visible advantage. Yet we continue still to repine that our neighbours should possess any art, industry, and invention, forgetting that had they not first instructed us we should have been at present barbarians, and did they not still continue their instructions, the arts must fall into a state of languor, and lose that emulation and novelty which contribute so much to their advancement.

The increase of domestic industry lays the foundation of foreign commerce. Where a great number of commodities are raised and perfected for the home-market there will always be found some which can be exported with advantage. But if our neighbours have no art nor cultivation, they cannot take them, because they will have nothing to give in exchange. In this respect, states are in the same condition as individuals. A single man can scarce be industrious where all his fellow-citizens are idle. The riches of the several members of a community contribute to increase my riches, whatever profession I may follow. They consume the produce of my industry, and afford me the produce of theirs in return.

Nor need any state entertain apprehensions that their neighbours will improve to such a degree in every art and manufacture as to have no demand from them. Nature, by giving a diversity of geniuses, climates, and soils to different nations, has secured their mutual intercourse and commerce, as long as they all remain industrious and civilized. Nay, the more the arts increase in any state, the more will be its demands from its industrious neighbours. The inhabitants, having become opulent and skilful, desire to have every commodity in the utmost perfection; and as they have plenty of commodities to give in exchange, they make large importations from every foreign country. The industry of the nations from whom they import receives encouragement; their own is also increased by the sale of the commodities which they give in exchange.

But what if a nation has any staple commodity, such as the woollen manufacture is to England? Must not the interfering of their neighbours in that manufacture be a loss to them? I answer that when any commodity is denominated the staple of a kingdom, it is supposed that that kingdom has some peculiar and natural advantages for raising the commodity; and if, notwithstanding these advantages, they lose such a manufactory, they ought to blame their own idleness or bad government, not the industry of their neighbours. It ought also to be considered that by the increase of industry among the neighbouring nations the consumption of every particular species of commodity is also increased; and though foreign manufactures interfere with us in the market, the demand for our product may still continue, or even increase. And even should it diminish, ought the consequence to be esteemed so fatal? If the spirit of industry be preserved, it may easily be diverted from one branch to another, and the manufactures of wool, for instance, be employed in linen, silk, iron, or other commodities for which there appears to be a demand. We need not apprehend that all the objects of industry will be exhausted, or that our manufacturers, while they remain on an equal footing with those of our neighbours, will be in danger of wanting employment; the emulation among rival nations serves rather to keep industry alive in all of them. And any people is happier who possess a variety of manufactures, than if they enjoyed one single great manufacture, in which they are all employed. Their situation is less precarious, and they will feel less sensibly those revolutions and uncertainties to which every particular branch of commerce will always be exposed.

The only commercial state which ought to dread the improvements and industry of their neighbours is such a one as Holland, which enjoying no extent of land, nor possessing any native commodity, flourishes only by being the brokers, and factors, and carriers of others. Such a people may naturally apprehend that as soon as the neighbouring states come to know and pursue their interest, they will take into their own hands the management of their affairs, and deprive their brokers of that profit which they formerly reaped from it. But though this consequence may naturally be dreaded, it is very long before it takes place; and by art and industry it may be warded off for many generations, if not wholly eluded. The advantage of superior stocks and correspondence is so great that it is not easily overcome; and as all the transactions increase by the increase of industry in the neighbouring states, even a people whose commerce stands on this precarious basis may at first reap a considerable profit from the flourishing condition of their neighbours. The Dutch, having mortgaged all their revenues, make not such a figure in political transactions as formerly; but their commerce is surely equal to what it was in the middle of the last century, when they were reckoned among the great powers of Europe.

Were our narrow and malignant politics to meet with success, we should reduce all our neighbouring nations to the same state of sloth and ignorance that prevails in Morocco and the coast of Barbary. But what would be the consequence? They could send us no commodities, they could take none from us. Our domestic commerce itself would languish for want of emulation, example, and instruction; and we ourselves should soon fall into the same abject condition to which we had reduced them. I shall therefore venture to acknowledge that not only as a man, but as a British subject, I pray for the flourishing commerce of Germany, Spain, Italy, and even France itself. I am at least certain that Great Britain and all these nations would flourish more did their sovereigns and ministers adopt such enlarged and benevolent sentiments towards each other.

OF THE BALANCE OF POWER.

It is a question whether the _idea_ of the balance of power be owing entirely to modern policy, or whether the _phrase_ only has been invented in these latter ages. It is certain that Xenophon, in his institution of Cyrus, represents the combination of the Asiatic powers to have arisen from a jealousy of the increasing force of the Medes and Persians; and though that elegant composition should be supposed altogether a romance, this sentiment, ascribed by the author to the Eastern princes, is at least a proof of the prevailing notions of ancient times.

In all the politics of Greece the anxiety with regard to the balance of power is most apparent, and is expressly pointed out to us even by the ancient historians. Thucydides represents the league which was formed against Athens, and which produced the Peloponnesian war, as entirely owing to this principle. And after the decline of Athens, when the Thebans and Lacedemonians disputed for sovereignty, we find that the Athenians (as well as many other republics) threw themselves always into the lighter scale, and endeavoured to preserve the balance. They supported Thebes against Sparta, till the great victory gained by Epaminondas at Leuctra, after which they immediately went over to the conquered, from generosity as they pretended, but in reality from their jealousy of the conquerors.

Whoever will read Demosthenes’ oration for the Megalopolitans may see the utmost refinements on this principle which ever entered into the head of a Venetian or English speculatist; and upon the first rise of the Macedonian power, this orator immediately discovered the danger, sounded the alarm through all Greece, and at last assembled that confederacy under the banners of Athens which fought the great and decisive battle of Chæronea.

It is true the Grecian wars are regarded by historians as wars of emulation rather than of politics, and each state seems to have had more in view the honour of leading the rest than any well-grounded hopes of authority and dominion. If we consider, indeed, the small number of inhabitants in any one republic compared to the whole, the great difficulty of forming sieges in those times, and the extraordinary bravery and discipline of every freeman among that noble people, we shall conclude that the balance of power was of itself sufficiently secured in Greece, and needed not to be guarded with that caution which may be requisite in other ages. But whether we ascribe the shifting sides in all the Grecian republics to jealous emulation or cautious politics, the effects were alike, and every prevailing power was sure to meet with a confederacy against it, and that often composed of its former friends and allies.

The same principle—call it envy or prudence—which produced the ostracism of Athens and petalism of Syracuse, and expelled every citizen whose fame or power overtopped the rest—the same principle, I say, naturally discovered itself in foreign politics, and soon raised enemies to the leading state, however moderate in the exercise of its authority.

The Persian monarch was really, in his force, a petty prince compared to the Grecian republics, and therefore it behoved him, from views of safety more than from emulation, to interest himself in their quarrels, and to support the weaker side in every contest. This was the advice given by Alcibiades to Tissaphernes, and it prolonged near a century the date of the Persian empire; till the neglect of it for a moment, after the first appearance of the aspiring genius of Philip, brought that lofty and frail edifice to the ground with a rapidity of which there are few instances in the history of mankind.

The successors of Alexander showed an infinite jealousy of the balance of power, a jealousy founded on true politics and prudence, and which preserved distinct for several ages the partitions made after the death of that famous conqueror. The fortune and ambition of Antigonus threatened them anew with a universal monarchy, but their combination and their victory at Ipsus saved them; and in after times we find that as the Eastern princes considered the Greeks and Macedonians as the only real military force with whom they had any intercourse, they kept always a watchful eye over that part of the world. The Ptolemies, in particular, supported first Aratus and the Achæans, and then Cleomenes King of Sparta, from no other view than as a counterbalance to the Macedonian monarchs; for this is the account which Polybius gives of the Egyptian politics.

The reason why it is supposed that the ancients were entirely ignorant of the balance of power seems to be drawn from the Roman history more than the Grecian, and as the transactions of the former are generally the most familiar to us, we have thence formed all our conclusions. It must be owned that the Romans never met with any such general combination or confederacy against them as might naturally be expected from their rapid conquests and declared ambition, but were allowed peaceably to subdue their neighbours, one after another, till they extended their dominion over the whole known world. Not to mention the fabulous history of their Italic wars, there was, upon Hannibal’s invasion of the Roman state, a very remarkable crisis which ought to have called up the attention of all civilized nations. It appeared afterwards (nor was it difficult to be observed at the time[22]) that this was a contest for universal empire, and yet no prince or state seems to have been in the least alarmed about the event or issue of the quarrel. Philip of Macedon remained neuter till he saw the victories of Hannibal, and then most imprudently formed an alliance with the conqueror, upon terms still more imprudent. He stipulated that he was to assist the Carthaginian state in their conquest of Italy, after which they engaged to send over forces into Greece, to assist him in subduing the Grecian commonwealths.

The Rhodean and Achæan republics are much celebrated by ancient historians for their wisdom and sound policy; yet both of them assisted the Romans in their wars against Philip and Antiochus. And what may be esteemed still a stronger proof that this maxim was not familiarly known in those ages, no ancient author has ever remarked the imprudence of these measures, nor has even blamed that absurd treaty above-mentioned made by Philip with the Carthaginians. Princes and statesmen may in all ages be blinded in their reasonings with regard to events beforehand, but it is somewhat extraordinary that historians afterwards should not form a sounder judgment of them.

Massinissa, Attalus, Prusias, in satisfying their private passions, were all of them the instruments of the Roman greatness, and never seem to have suspected that they were forging their own chains while they advanced the conquests of their ally. A simple treaty and agreement between Massinissa and the Carthaginians, so much required by mutual interest, barred the Romans from all entrance into Africa, and preserved liberty to mankind.

The only prince we meet with in the Roman history who seems to have understood the balance of power is Hiero, King of Syracuse. Though the ally of Rome, he sent assistance to the Carthaginians during the war of the auxiliaries: “Esteeming it requisite,” says Polybius, “both in order to retain his dominions in Sicily and to preserve the Roman friendship, that Carthage should be safe; lest by its fall the remaining power should be able, without contrast or opposition, to execute every purpose and undertaking. And here he acted with great wisdom and prudence; for that is never, on any account, to be overlooked, nor ought such a force ever to be thrown into one hand as to incapacitate the neighbouring states from defending their rights against it.” Here is the aim of modern politics pointed out in express terms.

In short, the maxim of preserving the balance of power is founded so much on common sense and obvious reasoning that it is impossible it could altogether have escaped antiquity, where we find, in other particulars, so many marks of deep penetration and discernment. If it was not so generally known and acknowledged as at present, it had at least an influence on all the wiser and more experienced princes and politicians; and indeed, even at present, however generally known and acknowledged among speculative reasoners, it has not, in practice, an authority much more extensive among those who govern the world.

After the fall of the Roman Empire the form of government established by the northern conquerors incapacitated them in a great measure from further conquests, and long maintained each state in its proper boundaries; but when vassalage and the feudal militia were abolished mankind were anew alarmed by the danger of universal monarchy, from the union of so many kingdoms and principalities in the person of the Emperor Charles. But the power of the house of Austria, founded on extensive but divided dominions, and their riches, derived chiefly from mines of gold and silver, were more likely to decay, of themselves, from internal defects, than to overthrow all the bulwarks raised against them. In less than a century the force of that violent and haughty race was shattered, their opulence dissipated, their splendour eclipsed. A new power succeeded, more formidable to the liberties of Europe, possessing all the advantages of the former and labouring under none of its defects, except a share of that spirit of bigotry and persecution with which the house of Austria were so long and still are so much infatuated.

Europe has now, for above a century, remained on the defensive against the greatest force that ever perhaps was formed by the civil or political combination of mankind. And such is the influence of the maxim here treated of, that though that ambitious nation in the five last general wars has been victorious in four,[23] and unsuccessful only in one,[24] they have not much enlarged their dominions, nor acquired a total ascendant over Europe. There remains rather room to hope that by maintaining the resistance some time the natural revolutions of human affairs, together with unforeseen events and accidents, may guard us against universal monarchy, and preserve the world from so great an evil.

In the three last of these general wars Britain has stood foremost in the glorious struggle, and she still maintains her station as guardian of the general liberties of Europe, and patron of mankind. Beside her advantages of riches and situation, her people are animated with such a national spirit, and are so fully sensible of the inestimable blessings of their government, that we may hope their vigour never will languish in so necessary and so just a cause. On the contrary, if we may judge by the past, their passionate ardour seems rather to require some moderation, and they have oftener erred from a laudable excess than from a blameable deficiency.

In the first place, we seem to have been more possessed with the ancient Greek spirit of jealous emulation than actuated with the prudent views of modern politics. Our wars with France have been begun with justice, and even, perhaps, from necessity; but have always been too far pushed from obstinacy and passion. The same peace which was afterwards made at Ryswick in 1697 was offered so early as the ninety-two; that concluded at Utrecht in 1712 might have been finished on as good conditions at Gertruytenberg in the eight; and we might have given at Frankfort in 1743 the same terms which we were glad to accept of at Aix-la-Chapelle in the forty-eight. Here then we see that above half of our wars with France, and all our public debts, are owing more to our own imprudent vehemence than to the ambition of our neighbours.

In the second place, we are so declared in our opposition to French power, and so alert in defence of our allies, that they always reckon upon our force as upon their own, and expecting to carry on war at our expense, refuse all reasonable terms of accommodation. _Habent subjectos, tanquam suos; viles, ut alienos._ All the world knows that the factious vote of the House of Commons in the beginning of the last Parliament, with the professed humour of the nation, made the Queen of Hungary inflexible in her terms, and prevented that agreement with Prussia which would immediately have restored the general tranquillity of Europe.

In the third place, we are such true combatants that, when once engaged, we lose all concern for ourselves and our posterity, and consider only how we may best annoy the enemy. To mortgage our revenues at so deep a rate in wars where we are only accessories was surely the most fatal delusion that a nation, who had any pretension to politics and prudence, has ever yet been guilty of. That remedy of funding—if it be a remedy and not rather a poison—ought, in all reason, to be reserved to the last extremity, and no evil but the greatest and most urgent should ever induce us to embrace so dangerous an expedient.

These excesses to which we have been carried are prejudicial, and may perhaps in time become still more prejudicial another way, by begetting, as is usual, the opposite extreme, and rendering us totally careless and supine with regard to the fate of Europe. The Athenians, from the most bustling, intriguing, warlike people of Greece, finding their error in thrusting themselves into every quarrel, abandoned all attention to foreign affairs, and in no contest ever took party on either side, except by their flatteries and complaisance to the victor.

Enormous monarchies are probably destructive to human nature—in their progress, in their continuance,[25] and even in their downfall, which never can be very distant from their establishment. The military genius which aggrandized the monarchy soon leaves the court, the capital, and the centre of such a government; while the wars are carried on at a great distance, and interest so small a part of the state. The ancient nobility, whose affections attach them to their sovereign, live all at court; and never will accept of military employments which would carry them to remote and barbarous frontiers, where they are distant both from their pleasures and their fortune. The arms of the state must therefore be trusted to mercenary strangers, without zeal, without attachment, without honour, ready on every occasion to turn them against the prince, and join each desperate malcontent who offers pay and plunder. This is the necessary progress of human affairs; thus human nature checks itself in its airy elevations, thus ambition blindly labours for the destruction of the conqueror, of his family, and of everything near and dear to him. The Bourbons, trusting to the support of their brave, faithful, and affectionate nobility, would push their advantage without reserve or limitation. These, while fired with glory and emulation, can bear the fatigues and dangers of war; but never would submit to languish in the garrisons of Hungary or Lithuania, forgot at court, and sacrificed to the intrigues of every minion or mistress who approaches the prince. The troops are filled with Cravates and Tartars, Hussars and Cossacks, intermingled perhaps with a few soldiers of fortune from the better provinces; and the melancholy fate of the Roman emperors, from the same cause, is renewed over and over again till the final dissolution of the monarchy.

NOTES, OF THE BALANCE OF POWER.