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ESSAY

V

OF THE

BALANCE

OF TRADE

T
is veryto usual,
nations
ignorant ofofcommodities,
the nature ofand
commerce,
prohibitin the
exportation
to
preserve among themselves whatever they think valuable and
useful. They do not consider, that, in this prohibition, they act
directly contrary to their intention; and that the more is exported of any commodity, the more will be raised at home, of
which they themselves will always have the first offer. °
It is well known to the learned, that the ancient laws of
ATHENS rendered the exportation of figs criminal; that being
supposed a species of fruit so excellent in ATTICA, that the
ATHENIANS deemed it too delicious for the palate of any
foreigner. And in this ridiculous prohibition they were so
much in earnest, that informers were thence called sycophants

309
OF THE BALANCEOF TRADE

among them, from two GREEK words, which signify figs and
discoverer. 1.aThere are proofs in many old acts of parliament of
the same ignorance in the nature of commerce, particularly in
the reign of EDWARD III. z And to this day, in FRANCE, the
exportation of corn is almost always prohibited; in order, as
they say, to prevent famines; though it is evident, that nothing
contributes more to the frequent famines, which so much
distress that fertile country.
The same jealous fear, with regard to money, has also
prevailed among several nations; and it required both reason
and experience
to convince any people, that these prohibitions serve to no other purpose than to raise the exchange
against them, and produce a still greater exportation. 3
These errors, one may say, are gross and palpable: But
there still prevails, even in nations well acquainted with commerce, a strong jealousy with regard to the balance of trade,
and a fear, that all their gold and silver may be leaving them.
This seems to me, almost in every case, a groundless apprehension; and I should as soon dread, that all our springs and
rivers should be exhausted, as that money should abandon a
kingdom where there are people and industry. Let us carefully

1pLUT. De Curiosttate.

[Plutarch,

Z[Edward III was king of England

Moralia,

"On Curiosity,"

sec. 16.]

from 1327 to 1377.]

3[In this essay and the next, Hume combats the suspicious fear or "jealousy'" of free trade that mercantilism had helped to promote. This essay
seeks to allay the fear that an imbalance of imports over exports will
deplete a nation's supply of gold and silver money. Hume develops a
"general theory" according to which money bears a regular proportion to
the industry and commodities
of each nation. In the natural course of
things, this level will be preserved; and a nation's attempts to hoard up a
supply of money that exceeds this natural level, by trade barriers and
restrictions on the circulation of money, are ineffectual and, at worst,
destructive.
Hume does concede at the end of this essay that protective
tariffs may sometimes be beneficial, but generally his writings condemn
domestic market restrictions.
See Rotwein, David Hume: Writings on Economics, pp. lxxii-lxxxi.]

s The consequence of this situation. in a course of three years. unless we consider it with all nations. and we need never be apprehensive of losing the former. It is easy to observe. in his short viee. with an expensive foreign war. nor is the rate of exchange much better. that the whole cash of that kingdom formerly amounted but to 500. the current money of 4[Joshua The Gee. vet is it commonly supposed.31t_ ESSA_ V preserve these latter advantages. that the balance was against them for so considerable a sum as must leave them without a single shilling in five or six years. has always proved his theory. bv facts and calculations. Nothing can be more entertaining on this head than Dr. of the state of IRELAND. that all calculations concerning the balance of trade are founded on very uncertain facts and suppositions.4 Short 17ew of the State Considered Wa_ for a Nation of such Foreign of Ireland {1729). and had scarcely any other source from which they could compensate themselves. is to prevent may be rals'd at Home S[Jonathan Swift. subtitle 7_}e Trade and. and bv an enumeration of all the commodities sent to all foreign kingdoms. that out of this the IRISH remitted every year a neat million to ENGLAND. which one may safely pronounce impossible. and know also the proportions of the several sums remitted. twenty years have since elapsed. SWIFT. "That of Great-Britatn the surest the Importation "] . GEE struck the nation with an universal panic.000 l. that. for which they paid ready• money.] as . 4But luckily. by a detail of particulars. The writings of Mr. The custom-house books are allowed to be an insufficient ground of reasoning. that money is still more plentiful among us than in any former period. whatever it was. when they saw it plainly demonstrated. and little other foreign trade than the importation of FRENCH wines. . Every man. to increase Commodities ( 1727- 28). which must be owned to be disadvantageous.Vavigatton reads m part: in Riches. was. He says. an author t' so quick in discerning the mistakes and absurdities of others. who has ever reasoned on this subject.

000/. and the farther flowing in of money is stopped by our fulness and repletion. while their commodities. And at present.311 OF I'ftE BALANCE OF TRADE from 500. they would be run in upon us. which counterbalance the imports. suppose. IRELAND. that. became comparatively so cheap. as in the reigns of the HARRYS and EDWARDS. after we have arrived. this apprehension of the wrong balance of trade. Suppose four-fifths of all the money in GREAT BRITAIN to be annihilated in one night. that it discovers itself. that may prove the impossibility of this event. seems still to continue. as long as we preserve our people and our industry." what would be the consequence? Must not the price of all labour and commodities sink in proportion. that all the money of GRENF BRITAIN were multiplied fivefold in a night. it may here be proper to form a general argument. appears of such a nature. till we fall to a level with foreigners. must not the contrary effect follow? Must not all labour and commodities rise to such an exorbitant height. and our money flow out. Yet I know not how. was reduced to less than two. and as it can never be refuted by a particular detail of all the exports. or pretend to navigate or to sell manufactures at the same price. therefore. on the other hand. or is in low spirits. which gave the Doctor so much indignation. 6[The period from 1100 to 1553. that no neighbouring nations could afford to buy from us. wherever one is out of humour with the ministry. ° Again. and the nation reduced to the same condition.] . in spite of all the laws which could be formed. and every thing be sold as cheap as they were in those ages? What nation could then dispute with us in any foreign market. in a course of 30 years it is absolutely nothing. that opinion of the advance of riches in IRELANI). we immediately lose the advantage of the cheapness of labour and commodities. In short. I suppose. and raise us to the level of all the neighbouring nations? Where. and gain ground with every body. which to us would afford sufficient profit? In how little time. must this bring back the money which we had lost. with regard to specie.

at present. to have kept all the money in SPAIN. . till it meet a counterpoise. it is evident. and this becomes a new encouragement to export. which redresses the inequality when it happens. indeed. 7 Can one imagine. that it had ever been possible. in all neighbouring nations. All water. without finding their way thither. and must for ever. beyond its proper level? The sovereigns of these countries have shown. wherever it communicates. must depress it. that the same causes. more than any fluid. and that the same cause. gain in their trade with SPAIN and PORTUGAL. why' all nations. by any laws. the exchange turns against us. which had laid us under such disadvantages? Now. 7There is another cause. 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. is there.312 ESSAYv and lose that great superiority of riches. as much as the charge of carriage and insurance of the money which becomes due would amount to. must for ever prevent it.. but because it is impossible to heap up money. For the exchange can never rise but a little higher than that sum. without some violent external operation. if the former has no communication with the latter. which would correct these exorbitant inequalities. they tell you. if the communication be cut off. the superior gravity of that part not being balanced. that they wanted not inclination to keep their gold and silver to themselves. which checks the wrong balance of trade. were they to happen miraculously. were it to be raised in any one place. or even by any art or industry. to every particular nation to which the kingdom trades. had it been in any degree practicable. and draining from that immense treasure? What other reason. must prevent their happening in the common course of nature. preserve money nearly proportionable to the art and industry of each nation. that. When we import more goods than we export. though more limited in its operation. remains always at a level. so in money. Ask naturalists the reason. But as any body of water may be raised above the level of the surrounding element.

French. which is full as potent and infallible. in order to explain the necessity of this operation. European companies imports were textiles. This Portuguese East and the Orient. in much greater plenty than they are found in that kingdom. while he computed and magnified the sums drawn to S[The English. We need not have recourse to a physical attraction. the force of the causes abovementioned is still evident.would drain us of the overplus of our specie. How is the balance kept in the provinces of every kingdom among themselves. with regard to manual arts and manufactures. in such a case. was a matter and silk products to buy. and Europe tea. what a fund of gloomy reflections might calculations afford to a melancholy YORKSHIREMAN. coin and bullion of specie of concern India chief Since to pay became which states.313 OF THE BALANCE OF TRADE by any material or physical impediment. and draw to themselves a larger share of the WEST INDIAN treasures.] the Hume . preserve in EUROPE the gold and silver. especially the latter. but by the force of this principle. arising from the interests and passions of men. but that industrious nation. s But. (for all laws alone are ineffectual) there may. till it came nearly to a level in both places. yet are we never able to trade thither without great disadvantage. and rise in CHINA. for European wanted export. Nor can any reasonable man doubt. coffee. There is a moral attraction. and either to rise or sink beyond the proportion of the labour and commodities which are in each province? Did not long experience make people easy on this head. drain The and cotton was far from silver to the to the sufficient East. ° which we receive from AMERICA. notwithstanding this great obstruction. be a very great inequality of money. money would soon sink in EUROPE. Europeans European of below. dominated pepper demand trade and other speaks spices. were they as near us as POLAND or BARBARY. obstructing the communication. which makes it impossible for money to lose its level. And were it not for the continual recruits. The skill and ingenuity of EUROPE in general surpasses perhaps that of CHINA. between in the East for all that principal Dutch. together with the monopolies of our INDIA companies. Thus the immense distance of CHINA.

as we learn from L'ABBE l)t. ° commodities. had the Heptarchy subsisted in ENGLANI). which of these nations gains from the other by this free commerce? Or if the former kingdom has received any encrease of riches. and navigable rivers. as much as the several counties of GREAT BRITAIN. (England's forms Les tnteinterests part of the . independent Anglo-Saxon king- centunes.? It was a common apprehension in ENGLAND. BOS. in spite of the absurd jealousy of princes and states. independet_t of the legislature. What happens in small portions of mankind. Since the union has removed the barriers between SCOTLAND and ENGLAND. or the several parishes of each county. Men naturally flock to capital cities. and with ITALY. and as it is probable that the mutual hatred of these states would have been extremely violent on account of their close neighbourhood. kept their balance with each other.314 ESSA'_ \ by taxes. by the prices of commodities. and on the other side the TWEED a contrary apprehension prevailed: With what justice in both. may see. they would have loaded and oppressed all commerce. time has shown. by a jealous and superfluous caution. 1703. The River between Scotland and England. And any man who travels over EUROPE at this day. no doubt. 9 the legislature of each state had been continually alarmed by the fear of a wrong balance. The provinces of the ROMAN empire. must take place in greater.ETERRE rests de l'Angleterre mistaken boundary applied fifth mal-entendus to the to the mnth ma/-entendus. than it is often between different provinces of the same kingdom. can it reasonably be accounted for by any thing but the encrease of its art and industry. that money. sea-ports. and that the difference between one kingdom and another is not greater in this respect. and found on comparison the opposite articles so much inferior? And no doubt. has brought itself nearly to a level.] [Jean Baptiste dans la prdsente guerre in the present war). were an open trade allowed. _° that SCOq'LANI) would soon drain them of their treasure.] Tweed l)ubos. before the union. There we find LONDON 9[The Heptarchy ns a term doms of England of the J°Les interets d" ANG1. absentees.

all ale. in order to supply ENGLAND with wine. of these the money throughout I mean are in the neighbouring triple. There are many edicts of the FRENCH king. it would not be difficult to prove. Each new acre of vineyard planted in FRANCE. expence to the states. of I)ERBYSHIRE. and home-brewed liquors: But would we lay aside prejudice. in some measure. cattle. infallibly will also that can obstruct the the com- is sometimes of DERBYSHIRE. where we buy worse liquor at a higher price. level one: undraw draw the For so far so far is the communication . sown in wheat or barley. wherever level triple. and ordering all those which I_It must I speak carefully of the commodities. quadruple. as the transport between always quadruple. and the former sentiment. in order to subsist themselves. and it is evident. that they modities that of money.315 OF THE BALANCE OF TRADE more men. These passions have occasioned innumerable barriers and obstructions upon commerce. and this butter. skill. And be double. money from Thus industry. at least. the cheese. But what have we gained by the bargain? We lost the FRENCH market for our woollen manufactures. is the so much this discourse. more industry. several of transporting as the manufactures and imperfect. _j Our jealousy and our hatred of FRANCE are without bounds. where we are accused of being commonly the aggressors. and transferred the commerce of wine to SPAIN and PORTUGAL. where and these one place uf LONI×)N. 1 assert. the The obstructed is in the are double. perhaps advantageous. There are few ENGLISHMEN who would not think their country absolutely ruined. to what be remarked. the corn. prohibiting the planting of new vineyards. and consequently more money: but still the latter difference holds proportion with the former. advantages proportions. labour. its proportional only circumstance to another. that we should thereby get command of the better commodity. must be acknowledged reasonable and well-grounded. cannot of LONDON is only a seeming is expensive. would make it requisite for the FRENCH to take the produce of an ENGLISH acre. exactness equal. were FRENCH wines sold in ENGLAND so cheap and in such abundance as to supplant. money expence But this objection of commodities places which states. and the level is preserved. more commodities. that nothing could be more innocent.

316 ESSAY V are lately planted to be grubbed up: So sensible are they. What can be more shortsighted than our reasonings on this head? We fancy. 12 He entertained no doubt but these latter provinces could preserve their balance. makeit supply the place of gold and silver. Mareschal VAUBAN complains often. Projet l[rthe or General of France. Cwhich are so much practised in this kingdom. There is indeed one expedient by which it is possible to sink. circulate it throughout the whole state. It is only in our public negociations and transactions with foreigners. that are imported into BRITANNY and NORMANDY. or prevent their farther encrease. and as our paper le[S_bastien Le dixme (1707. These render paper equivalent to money. but those institutions of banks. a great on the art of fortifying. and reduce every man. royale Prestre. I scarcely know any method of sinking money below its level. And it is evident. and another by which we may raise money beyond its natural level in any kingdom. in that country. and with reason. towns. of the superior value of corn. and to bring additional authority to it. when examined. GUIENNE. that the same good effect would follow were the money of every one encreased. were his stock of money doubled.] wrote d'une Tax also . and paper-credit. notwithstanding the open commerce which he recommends. not considering. engineer and and marshal defending 1707). but these cases. in time. above every other product. of the absurd duties which load the entry of those wines of LANGUEDOC. or if it did. and by that means either banish a great part of those precious metals. Vauban. that a greater stock of money is advantageous. that a few leagues more navigation to ENGLAND would make no difference. because an individual would be much richer. de Vauban (1633- as d Project for a Royal military attacking. and other southern provinces. funds. that this would raise as much the price of every commodity. will be found to resolve into our general theory. Seigneur translated (1708). to the same condition as before. raise proportionably the price of labour and commodities. that it must operate alike on the commodities of both kingdoms.

during the interval between the encrease of money and rise of the prices. gives encouragement to industry. but the great plenty of bullion in FRANCE is. The advantages of this situation.317 OF"THE BALANCEOF TRADE is there absolutely insignificant. provisions and labour still remain cheaper among them. we are as careful to stuff the nation with this fine commodity of bank-bills and chequer-notes. as must happen upon any violent shock in public affairs. at the risk of losing all by the failing of that credit. and all the churches are full of it. I say. and can hold no more. 13We observed in Essay III. without reaping any of the advantages. Whence would it have acquired that sum? From all the kingdoms of the world. . as if we were afraid of being overburthened with the precious metals. than in nations that are not half so rich in gold and silver. It is not to be doubted. in a great measure. _3 Suppose that there are 12 millions of paper. had we not obstructed the entrance of these metals by this new invention of paper. till we be full and saturate. if you remove these 12 millions. by its means. all the ill effects arising from a great abundance of money. in point of trade as well as in great public emergencies. ["Of Money"] that money. if it be able to hold it. A good effect of this nature may follow too from paper-credit. By our present politics. we feel. But why? Because. are too evident to be disputed. so to speak. but it is dangerous to precipitate matters. when encreasing. and we must immediately draw from all of them. The FRENCH have no banks: Merchants bills do not there circulate as with us: Usury or lending on interest is not directly permitted. (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 18 millions: Here is a state which is found by experience to be able to hold a stock of 30 millions. it must of necessity have acquired it in gold and silver. so that many have large sums in their coffers: Great quantities of plate ° are used in private houses. By this means. owing to the want of papercredit. compared with our neighbours. money in this state is below its level. which circulate in the kingdom as money.

Since the introduction of that commodity. however. 9. they felt the good effect of this ordinance. while the use of silverplate was left unlimited. that. the only thing valuable in commerce. but the senate. Lives. And after the abolition of paper. money instead weight and mass of gold of this. can it be doubted but money will return. giver ordained of Sparta. What pity LYCURGUS did not think of paper-credit. in this view. Our tax on plate is. foreseeing the consequence. so as to represent the advantages of paper-credit and banks to be superior to their disadvantages. be confessed. 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. in the life of Lycurgus. while these colonies possess manufactures and commodities. they had gold and silver sufficient for their circulation.] sec. 14 dlt must. as being of so much less real and _rrtrinsic value. there are certain lights. and even an overbalance from the encrease of industry and of credit. prohibited the use of that brittle commodity beyond a certain extent. and for whose sake alone all men desire money. Before the introduction of paper-money into our colonies. And I suppose. in which this subject may be placed. in their late distresses. but specie and bullion are not of so great consequence as not to admit of a compensation. the law- and silver so as to . somewhat impolitic. That they banish specie and bullion from a state is undoubtedly true. which may be promoted by the right use of paper-money. and would also have prevented more effectually all commerce with strangers. perhaps. It is well known of what advan14[See Plutarch. the use of iron and gave only a trifling value to a great make its concealment difficult. of using services of CHINA-ware instead of plate. and whoever looks no farther than this circumstance does well to condemn them. Lycurgus. as all these questions of trade and money are extremely complicated.318 ESSAY V The same fashion a few years ago prevailed in GENOA. which still has place in ENGLAND and HOLLAND. the least inconveniency that has followed is the total banishment of the precious metals.

Merchants. resulting from this contrivance. and his bank-credit is equivalent to ready money. and the interest is discounted from the very day of the repayment. and is of this nature. when he pleases. If a man borrow a thousand pounds from a private hand. or any part of it. It is there called a BANK-CREDIT. He may. from the liberty it has to issue its notes in all payments. of a thousand pounds. the goods in his warehouse. he pays interest for it. has also been thought advantageous to SCOTLAND. As a man may find surety nearly to the amount of his substance. acquire a great facility in supporting each other's credit. which is a considerable security against bankruptcies. likewise. The advantages. whether he be using it or not: His bank-credit costs him nothing except during the very moment. . the foreign debts due to him. and he pays only the ordinary interest for it. and every thing that facilitates this species of traffic is favourable to the general commerce of a state. goes to any of his neighbours who is not in the same condition. his ships at sea. when his own bank-credit is exhausted. as it is one of the most ingenious ideas that has been executed in commerce. from this invention. his household furniture. and the bank of ENGLAND in the same manner. which was fallen upon some years ago by the banks of EDINBURGH. are manifold. besides that it is not always to be found when required. he has the liberty of drawing out whenever he pleases. and can. repay any sum so small as twenty pounds. A man goes to the bank and finds surety ° to the amount.319 OF"THE BALANCE OF TRAI)E tage it is to a merchant to be able to discount his bills upon occasion. a merchant does hereby in a manner coin his houses. while it is in his hands. and he gets the money. This money. 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. we shall suppose. and which. There was an invention of this kind. which he replaces at his convenience. A man. as if they were the current money of the country. But private bankers are enabled to give such credit by the credit they receive from the depositing of money in their shops. employ them in all payments. upon occasion.

It was found. we need only return to our first supposition. which they used in all payments for goods. and merchants were thereby enabled to trade to a greater extent. than a comparison of the past and present condition of SCOTLAND in that particular. that. may. But whatever other advantages result from these inventions. that the immediate consequence of such an event would be the attraction of an equal sum from all the neighbouring kingdoms. and to require less profit in all their transactions. _But as our projects of paper-credit are almost the only expedient. and absolutely preventing their circulation. and these notes. several companies of merchants at GLASGOW carried the matter farther. tradesmen's labour of all kinds. The fluid. the only expedient. a stock of five thousand pounds was able to perform the same operations as if it were six or seven. it must still be allowed that. be raised to what height we please. commerce and manufactures of all kinds. where we found. To prove this. is a practice which we should all exclaim against as destructive. by the nature of things. By this means. of annihilating the half or any part of our cash. in my opinion. by which we can sink money below its level. They associated themselves into different banks. Nor does there seem to be any necessary bounds set. by such an artifice. namely. the current specie will not now amount to a third of that sum. by which we can raise money above it. from the established credit of the companies. the gathering of large sums into a public treasure.320 ESSAY V cArter this practice had taken place during some years at EDINBURGH. even where there is no extraordinary drain made by ENGLAND. manufactures. passed as money in all payments throughout the country. locking them up. and nothing can be a more evident proof of it. and issued notes so low as ten shillings. that there was near a million of specie in that country: But notwithstanding the great encrease of riches. it is thought. they banish the precious metals. to this practice . so. not communicating with the neighbouring element. upon the recoinage made after the union. besides giving too great facility to credit. which is dangerous.

175. which agrees so ill with our inveterate prejudices. with an enormous treasure. The Speech on the Embassy. and numbers of its people. soon falls to its proper level.] . raised to too great a height. indeed. who.? For all the GREEK historians 15and orators _6agree. and almost absolute monarch? Nor is it probable. lib. than admit of a fact.] J6Fid. like GENEVA. and probably destroy. might engross nine-tenths of the money of EUROPE. A small city. what is much more valuable. t__.SCHINISet DEMOSTHENIS Epist.C ). in this case. 24. with it. in the small republic of ATHENS with its allies. that such a sum might be amassed in twenty years. It is indeed probable. lib. amassed ha sum not much inferior to that of HARRY VII. [40. Demosthenes. So little are we commonly acquainted with this principle. between the MEDIAN and PELOPONNESIAN wars. [13] and I)101). sec.000 pounds. by a cunning. SIC. though all historians agree in relating uniformly so recent an event. as the immense treasure amassed by HARRY VII. sec. an invincible obstacle to that immense growth of riches.700. that the diminution of circulating money was ever sensibly felt by the people. [Aeschines (397?-322? B. A great state would dissipate its wealth in dangerous and ill-concerted projects. rapacious.) we rather reject their concurring testimony. or ever did them any prejudice. in about fifty years. But where is the difficulty in conceiving. bursts and destroys the vessel that contains it. and mixing itself with the surrounding element. xii. Third Olynthiac Oratton. ii. A weak state. continuing this policy for ages. by giving ENGLAND the advantage in its commerce with the neighbouring kingdoms.321 OF THE BALANCEOF"TRADE of hoarding. The sinking of the prices of all commodities would immediately replace it. in the nature of man. There seems. that. morals. Have we not an instance. The fluid. will soon become a prey to some of its poorer. that this sum might be three-fourths of all the money in ENGLAND. but more powerful neighbours. that the ATHENIANS collected in the citadel ISTHI£CYDII)ES. the industry. frugal. (which they make amount to g2.

by ancient writers.400. xlv. which they afterwards dissipated to their own ruin. comprehending lands. Hume refers to the thirty years from Philip's peace settlement with Rome (197 B. lib. in about fifty years afterwards. ii.] lSLib.Op_OL_./EMILIUS brought to ROME about 2. -'1 And 17HEp_ '_'l.D 30). commodities. to collect and keep in their treasury.: Yet these two monarchs in thirty years 19collected from the-small kingdom of MACEDON. What an ambitious high-spirited people was this. and began to communicate with the surrounding fluid.lib. ruled from 179 to 168. what was the consequence? Did it remain in the state? No.9. and which would have gone near to triple the riches of every individual! For we must observe. than in ENGLAND during that of HARRY VII. and money.6./. which was celebrated in 167 B C. 40. cap. houses. PAULUS .50. xxxiii. i. cap. 19TITILIVII.000 pounds Sterling./.) to Perseus's defeat at the hands of Lucius Aemilius Paullus in 168. a larger treasure than that of the ENGLISH monarch.] .000 talents. following his victory over Perseus.P/d. 62. slaves. with a view to conquests. [Velleius Paterculus (19? BC. The texts cited in this note and the three that follow are referring to the huge treasure that was borne in the triumphal procession of Paullus. was less than 6000 talents. But when this money was set a running. 3.] PATERC. than at the beginning of the MACEDONIAN. a sum. by the memorable census mentioned by DEMOSTHENES 17 and POLYBIUS. [Philip V was king of Macedon from 221 to 179 B C. cap. that was but a part of the MACEDONIAN [Demosthenes. z° PLINY says. 19. TM that. Historiae Romanae (Roman History) 1. 1. by a single vote. 9. to distribute among themselves. to have been no greater at the beginning of the PELOPONNESIAN war. Perseus. that the numbers and private riches of the ATHENIANS are said. [Pliny the Elder. Money was little more plentiful in GREECE during the age of PHILIP and PERSEUS. which it was every day in the power of the citizens.C. cap. in rash and imprudent enterprizes.000. his successor. sec. Natural History 33.322 ESSAY V more than 10.--after A.] Z°VEL ZlLib. On the Navy-Boards. For we find.700. the whole value of the republic.

000 pounds Sterling.. ibid. because the historian says. and had above six times as much in their treasury. a greatl_ enlarged edition of which appeared in 1727 under the title Tablesof.4ncient Corns. On the contrary. that the other successors of ALEXANDER were also frugal. and he was himself a native of ALEXANDRIA. which is at least quadruple what should naturally circulate in such a petty state.] . observes any want of money more than could be supposed in a country of that extent. and situation. though that canton has vastly encreased its treasure since 1714.). and had many of them treasures not much inferior. there are scarce any inland provinces in the continent of FRANCE or GERMANY. John Arbuthnot was author of Tables of the Grecian.40. The sum he mentions is 740. AnAccount of Switzerland lf"rtttenin the )'ear 1714 (1714).. [45. Roman and Jewish Measures ll'_ightsand Loins (1705?). and Measures.[Appian (second century A. is so prodigious. according to the foregoing theor3. the time when STANIAN wrote his judicious account of SWITZERLANI). who travels in the PAIS I)E VAUX.] Z3The poverty which S'I]_NIANspeaks of is only to be seen in the most mountainous cantons. 10 in the Loeb edition. or SAVO_on the other.'RGIq on the one hand. soil. where the inhabitants are at this time so opulent. Preface sec. And even there the people are not poorer than in the diocese of SAL'I'SBI. and so much the less. that one cannot admit of it..800. For this saving humour of the neighbouring princes must necessarily have checked the frugality of the EGYPTIAN monarchs. or 191. that the canton of BERNE had 300. that he extracted his account from the public records. according to Dr.000 pounds lent at interest.] Z4proem.666 pounds 13 shillings and 4 pence. The rest was dissipated of PERSEUS.I). Roman Histoo. It_ights. Here then is a sum hoarded of 1. ZZTH'l LIVII. z3 The account given by APPIAN '4 of the treasure of the PTOLEMIES. or any part of that canton.000 talents.166. where there is no commodity to bring money. and vet no one. ARBUTHNOT'S computation.323 OF q'HE BALAN('E treasure. z" We mav learn OF TRAI)E by the resistance and flight from Sq'ANIAN. [See Abraham Stanyan. And yet APPIAN says.

but if the duties on ZS[SeeJonathan Swift. Our modern politics embrace the only method of banishing money. and one of those Gentlemen . while it circulates. Tradesmenand Labourers of the Kingdom of Ireland ( 1728): "But I will tell you a Secret. That. and supports our southern colonies. in the arithmetic of the customs. the Consequence was to lessen that Branch of the Revenue by one Half. which serve to no purpose but to check industry. A tax on brandy encreases the sale of rum. which never will sink below it. obstructions. and rob ourselves and our neighbours of the common benefits of art and nature. have put upon trade. the practice of hoarding. and subjected to the impost. however. SWIFT. however. so different from each other. results from them. zs It can scarcely be doubted. Could any thing scatter our riches. the using of paper-credit. or from an ill-grounded apprehension of losing their specie. which I learned many Years ago from the Commissioners of the Customs in London: They said. But this general ill effect. that they deprive neighbouring nations of that free communication and exchange which the Author of the world has intended. by giving them soils. they reject the only method of amassing it. but those only which are founded on the jealousy above-mentioned.324 ESSAY V From these principles we may learn what judgment we ought to form of those numberless bars. it may be thought more convenient to lay them on foreign commodities. for the support of government. climates. And as it is necessary. A tax on GERMAN linen encourages home manufactures. We ought. it would be such impolitic contrivances. always to remember the maxim of Dr. upon foreign commodities. and they adopt a hundred contrivances. however. and thereby multiplies our people and industry. but often make only one. and geniuses. are not to be regarded as prejudicial or useless. An Answer to a Paper called A Memorial of the Poor Inhabitants. which all nations of EUROPE. and none more than ENGLAND. and imposts. two and two make not four. All taxes. when any Commodi_ appeared to be taxed above a moderateRate. from an exorbitant desire of amassing money. which can easily be intercepted at the port. which never will heap up beyond its level. that imposts should be levied.

ed. are violent and forcible methods of carrying away money. or suspicion. of states and kingdoms. The manufacture of ale beyond the agriculture few hands.325 OF" THE BALANCE OF TRAI)E wine were lowered to a third.. in FLANDERS. But where these remain. by since the revolution." In Herbert The Prose Works of Jonathan Swift (Oxford: Blackwell. and the drain is not continued. and Two to make Four. where great funds are possessed by foreigners. which were formerly rich and opulent. where expensive armies are maintained at a distance. course of three long wars? z6 More Mistake of Parliaments. whereas. 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. by a hundred canals. and are now poor and beggarly? Has not the money left them. and people. that the back again. was owing to an Error of computing Two in the Business of laying heavy Imposttions. which happens by on such Occasions. with which they formerly abounded? I answer. What immense treaso many nations. of which we are so jealous. in the pleasantly told me. p. they also got the profits and money which arose from it. and no prejudice would ensue to the balance of trade. than One. inferior. you will say.] Z6[The historic department region of Nord. But these. is but inconsiderable. the money always finds its way of which we have no notion sures have been spent. we may observe. there naturally follows from these causes a diminution of the specie. and are in time commonly attended with the transport of people and industry. industry. Two and Two never made more lessening the Import. When LISBON and AMSTERDAM got the EAST-INDIA trade from VENICE and GENOA. they cannot expect to keep their gold and silver: For these precious metals will hold proportion to the former advantages. If they lose their trade. Temptation Davis. and gives employment to The transport of wine and corn would not be much But are there not frequent instances. of Flanders is today the provinces Belgian divided of East between Flanders the French and West . 1939-68) 12. 21. and the strong of running such Goods as paid high Duties. Where the seat of government is transferred.

40. it had been a part of the Spanish Netherlands. But what has now become of it? Is it in the narrow compass of the AUSTRIAN provinces? No. In the period of which Hume speaks (1688. Its money. 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 territory in all ITALY. Flanders. 'For above a thousand years. In short. by which at first it was acquired. the money of EUROPE has been flowing to ROME." pp. The three wars to which Hume refers here. 338. Spain.¢a'ties that ended them. it ought only to be so far as it affects the former.1752). it may safely trust to the course of human affairs. surely: It has most of it returned to the several countries whence it came. and the tr. and has followed that art and industry. During the seventeenth century. Or if it ever give attention to this latter circumstance. Most of Flanders was under Austrian rule at the time Hume wrote. without fear or jealousy. are discussed in "Of the Balance of Power. Holland. and the Holy Roman Empire. by an open and sensible current. a government has great reason to preserve with care its people and its manufactures. France. and the Dutch province of Zeeland.326 ESSAYV money perhaps than the half of what is at present in EUROPE.] . the region was the scene of rival territorial claims and bloody wars involving England.

This essay. the fear that trading will cause a nation harm insofar as it contributes to the improvement and prosperity of its neighbors. 1 Nothing is more usual. Hume argued that no nation need fear that its supply of money will be depleted by trade. which seems equally groundless. this essay appeared for the first time in the 1758 edition of the . represents the culmination of Hume's thinking about the mutual benefits of trade or commerce and the undesirability of raising barriers to protect even what might be considered a nation's "staple" commodities. According to Green and Grose. among states l[In the preceding essay. it may not be amiss to mention another. namely. which made its first appearance some eight years later than the other economic essays. Now he addresses another of the "jealousies" that inhibit free trade. which is so prevalent among commercial nations.ESSAY VI OF THE JEALOUSY OF TRADE AVINGendeavoured to remove one species of ill-founded jealousy.

where all the surrounding states are buried in ignorance. while we imagine that it drains us of Essays and Treatiseson SeveralSubjects. and barbarism. it is impossible but the domestic industry of every one must receive an encrease from the improvements of the others. however. to our great discontent. but at their expence. ed. therefore. Compare the situation of GREAT BRITAIN at present. All the arts both of agriculture and manufactures were then extremely rude and imperfect. to consider all trading states as their rivals. Greig. 1:272 and 317. sloth. the inventions and improvements of our neighbours. I will venture to assert. See J. It is obvious. that the encrease of riches and commerce in any one nation. in every art. that both this essay and the one entitled "Of the Coalition of Parties" were printed and paged separately and bound up with later copies of the 1758 edition of the Essays and Treatises. T. and to suppose that it is impossible for any of them to flourish. was late 1759 or early 1760. 1932). we are so far removed from all reason of jealousy. and that a state can scarcely carry its trade and industry very far. has arisen from our imitation of foreigners. and as this branch of commerce is undoubtedly the most important in any extensive kingdom. Every improvement.] . with what it was two centuries ago. In opposition to this narrow and malignant opinion.328 ESSAY VI which have made some advances in commerce. that the domestic industry of a people cannot be hurt by the greatest prosperity of their neighbours. we daily adopt. that where an open communication is preserved among nations. Y. The commodity is first imported from abroad. and we ought so far to esteem it happy. which we have since made. instead of hurting. and observe. than to look on the progress of their neighbours with a suspicious eye.. But I go farther. But this intercourse is still upheld to our great advantage: Notwithstanding the advanced state of our manufactures. that they had previously made advances in arts and ingenuity. The Letters of David Hume (Oxford: Clarendon Press. The actual date of its appearance. Greig points out. commonly promotes the riches and commerce of all its neighbours.

forgetting that. had they not first instructed us. to our visible advantage: Yet we continue still to repine. climates. they make large importations from every foreign country. and invention. they cannot take them. But if our neighbours have no art or cultivation. from whom they import. as long as they all remain industrious and civilized. They consume the produce of my industry. which contribute so much to their advancement. Nor needs any state entertain apprehensions. having become opulent and skilful. The inhabitants. The encrease of domestic industry lays the foundation of foreign commerce. But what if a nation has any staple commodity. whatever profession I may follow. °that our neighbours should possess any art. Where a great number of commodities are raised and perfected for the home-market. and did they not still continue their instructions. The industry of the nations. Nature. desire to have every commodity in the utmost perfection. and as they have plenty of commodities to give in exchange. Nay. the more will be its demands from its industrious neighbours. to different nations. In this respect. by the sale of the commodities which they give in exchange. the art itself is gradually imported. such as the woollen manufacture is in ENGLAND? Must not the inter- . there will always be found some which can be exported with advantage. states are in the same condition as individuals. the arts must fall into a state of languor. The riches of the several members of a community contribute to encrease my riches. because they will have nothing to give in exchange. and lose that emulation and novelty. the more the arts encrease in any state. has secured their mutual intercourse and commerce. where all his fellowcitizens are idle. that their neighbours will improve to such a degree in every art and manufacture. A single man can scarcely be industrious. by giving a diversity of geniuses. as to have no demand from them. receives encouragement: Their own is also encreased. and afford me the produce of theirs in return. industry.329 OF THE JEALOUSY OF TRADE our money: Afterwards. and soils. we should have been at present barbarians.

or that our manufacturers. notwithstanding these advantages.330 ESSAY VI fering of our neighbours in that manufacture be a loss to us? I answer. ° and carriers of others. and they will feel less sensibly those revolutions and uncertainties. and deprive their brokers of that profit. iron. The only commercial state. And should it diminish. for which there appears to be a demand. and if. and the manufacturers of wool. that ought to dread the improvements and industry of their neighbours. silk. not the industry of their neighbours. is such a one as the DUTCH. to which every particular branch of commerce will always be exposed. that. it is supposed that this kingdom has some peculiar and natural advantages for raising the commodity. that. that all the objects of industry will be exhausted. or bad government. or any other commodities. Their situation is less precarious. be employed in linen. will be in danger of wanting employment. or even encrease. they ought to blame their own idleness. for instance. they lose such a manufacture. We need not apprehend. who enjoying no extent of land. that. It ought also to be considered. it may easily be diverted from one branch to another. Such a people may naturally apprehend. the consumption of every particular species of commodity is also encreased. than if they enjoyed one single great manufacture. and factors. as soon as the neighbouring states come to know and pursue their interest. the demand for their product may still continue. while they remain on an equal footing with those of our neighbours. by the encrease of industry among the neighbouring nations. they will take into their own hands the management of their affairs. and though foreign manufactures interfere with them in the market. nor possessing any number of native commodities. which they formerly . ought the consequence to be esteemed so fatal? If the spirit of industry be preserved. flourish only by their being the brokers. The emulation among rival nations s_rves rather to keep industry alive in all of them: And any people is happier who possess a variety of manufactures. when any commodity is denominated the staple of a kingdom. in which they are all employed.

that GREAT BRITAIN. The DUTCH. would flourish more. it is very long before it takes place. and even FRANCE itself. even a people whose commerce stands on this precarious basis. did their sovereigns and ministers adopt such enlarged and benevolent sentiments towards each other. may at first reap a considerable profit from the flourishing condition of their neighbours. Were our narrow and malignant politics to meet with success. SPAIN. and by art and industry it may be warded off for many generations. But though this consequence may naturally be dreaded. The advantage of superior stocks and correspondence is so great. not only as a man. and all those nations. if not wholly eluded. having mortgaged all their revenues. we should reduce all our neighbouring nations to the same state of sloth and ignorance that prevails in MOROCCO and the coast of BARBARY. and as all the transactions encrease by the encrease of industry in the neighbouring states. example. that it is not easily overcome.331 OF THE JEALOUSY OF TRADE reaped from it. I am at least certain. to which we had reduced them. but their commerce is surely equal to what it was in the middle of the last century. 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. but as a BRITISH subject. that. ITALY. . I pray for the flourishing commerce of GERMANY. when they were reckoned among the great powers of EUROPE. and instruction: And we ourselves should soon fall into the same abject condition. make not such a figure in political transactions as formerly. I shall therefore venture to acknowledge.