are, confessedly, seldom deficient in technical skill and ability; yet it is not uncommon to meet with men, even of eminence in this profession, wholly ignorant of the most simple processes of the manufactures they every day make use of; who, if they were set to work to mend the simplest article of their furniture, would scarcely know how to begin, and could probably not drive a nail, without exciting the risibility of every awkward carpenter's apprentice; and if placed in a situation of a greater emergency, called upon, for instance, to save a drowning friend, or to rescue a fellow townsman from a hostile attack, would be in a truly distressing perplexity; whereas a rough peasant, inhabiting a semi-barbarous district, would probably extricate himself from a similar situation with honour.

With regard to the labouring class, the incapacity for any other than a single occupation renders the condition of mere labourers more hard and wearisome, as well as less profitable. They have less means of enforcing their own right to an equitable portion of the gross value of the product. The workman, that carries about with him the whole implements of his trade, can change his locality at pleasure, and earn his subsistence, wherever he pleases: in the other case he is a mere adjective, without individual capacity, independence, or substantive importance, when separated from his fellow labourers, and obliged to accept whatever terms his employer thinks fit to impose. On the whole, we may conclude, that division of labour is a skilful mode of employing human agency, that it consequently multiplies the productions of society, in other words, the powers and the enjoyments of mankind; but that it in some degree degrades the faculties of man in his individual capacity.(a)(1)

(a) This consideration makes it peculiarly incumbent upon the government of a manufacturing nation to diffuse the benefits of early education, and thus prevent the degeneration from being intellectual as well as corporeal. T.

(1) [“ The extensive propagation of light and refinement," says Dugald STEWART," arising from the influence of the press, aided by the spirit of commerce, seems to be the remedy provided by nature, against the fatal effects which would otherwise be produced, by the subdivision of labour accompanying the progress of the mechanical arts: Nor is any thing wanting to make the remedy effectual, but wise institutions to facilitate general instruction, and to adapt the education of individuals to the stations they are to occupy. The mind of the artist, which from the limited sphere of his activity, would sink below the level of the peasant or the savage, might receive in infancy the means of intellectual enjoyment and the seeds of moral improvement; and even the insipid uniformity of his professional engagements, by presenting no object to awaken his ingenuity or to distract his attention, might leave him at liberty to employ his faculties on subjects more interesting to himself, and more extensively useful to others."] AMERICAN EDITOR.

CHAPTER IX.

OF THE DIFFERENT METHODS OF EMPLOYING COMMERCIAL INDUSTRY, AND THE MODE IN WHICH THEY CONCUR IN PRODUCTION.

COMMODITIES are not all to be had in all places indifferently. The immediate products of the earth depend upon the local varieties of soil and climate; and even the products of industry are met with only in such places as are most favourable to their production.

Whence it follows, that, where products, whether of industry or of the earth, do not grow naturally, they can not be introduced or produced in a perfect state, and fit for consumption, without undergoing a certain modification; that is to say, that of transport or conveyance.

This transfer gives occupation to what has been called commercial industry.

External commerce consists of the supply of the home market with foreign, and of foreign markets with home products.* Internal commerce consists of the buying and re-selling of home products in the home markets.

Wholesale commerce is the buying of large quantities, and re-selling to inferior dealers.

Retail commerce is the buying of wholesale dealers, and re-selling to consumers.

The commerce of money or specie is conducted by the banker, who receives or pays on account of other people, or gives bills, orders, or letters of credit, payable elsewhere than at the place where they are given. This is sometimes called the banking trade. (b)

The broker brings buyers and sellers together.

The persons engaged in these several branches are all agents of commercial industry, whose agency tends to approxi

• Products that are bought to be re-sold, are called merchandise; and merchandise bought for consumption is denominated commodities. (a)

(a) This distinction has been discarded in the translation, for the sake of simplification; the general term products being sufficiently intelligible and specific. T.

(b) The banker's business is not confined to dealings in metal, coined or uncoined, but is extended to dealings in paper-money, and dealings in credit, as we shall see when we come to the chapter upon money, infrá. T.

The

mate products to the hands of the ultimate consumer. agency of the retailer of an ounce of pepper is quite as indispensable to the consumer, as that of the merchant, who dispatches his vessel to the Moluccas for a cargo; and the only reason why these different functions are not both performed by one and the same individual is, because they can be executed with more economy and convenience by two. To enter minutely into an examination of the limits and practices of these various departments of commercial industry, would be to write a treatise on commerce.* All we have to do in this work is, to inquire in what manner and degree they influence. the production of values.

In Book II., we shall see how the actual demand for a product, originating in its utility, is limited by the amount of the costs of production, and upon what principle its relative value is determined in each particular place. At present it is sufficient for the clear conception of commercial matters, to consider the value of a product as a given quantity or datum. Thus, without examining the reason why oil of olives is worth at Marseilles thirty, and at Paris forty sous per lb. I shall content myself with simply stating, that whoever effects the transport of that article from Marseilles to Paris, thereby increases its value to the amount of ten sous per lb. Nor is it to be supposed, that its intrinsic value has received no accession by the transit. That value has positively augmented. The intrinsic value of silver is greater at Paris than at Lima; and the cases are precisely similar.

In fact, the transport of products can not be effected without the concurrence of a variety of means, which have each an intrinsic value of their own, and of which the actual transport itself, in the literal and confined sense of the term, is commonly not the most chargeable. There must be one commercial establishment at the place where the products are collected; another at the place it is transported to; besides package and warehousing. There must be an advance of capital equivalent to the value transported. Moreover, there are agents, insurers, and brokers, to be paid. All these are really productive occupations, since, without their agency, the consumer can never enjoy the product; and supposing their remuneration to be reduced by competition to the lowest rate possible, he can be in no way cheaper supplied.

In commercial, as well as manufacturing industry, the discovery of a more economical or more expeditious process, the more skilful employment of natural agents, the substitution, for instance, of a canal in place of a road, or the removal of a difficulty interposed by nature or by human institutions, reduces the cost of production, and procures a gain to the con

* A complete treatise on commerce is still a desideratum in literature, notwithstanding the labours of Melon and Forbonnais, for hitherto the principles and consequences of commerce have been little understood.

sumer, without any consequent loss to the producer, who can. lower his price without prejudice to himself, because his own outlay and advance are likewise reduced.

The same principles govern both external and internal commerce. The merchant that exports silks to Germany or to Russia, and sells at Petersburgh for 8 fr. per yard, stuffs that have cost but 6 fr. at Lyons, creates a value of 2 fr. per yard. If the same merchant brings a return cargo of peltry from Russia, and sells at Havre for 1200 fr. what cost him at Riga but 1000 fr., or a value equivalent to 1000 fr. there will be a new value of 200 fr. created and shared amongst the different agents engaged in this production of value, whatever nation they may belong to, and whatever be the relative importance of their respective productive agency, from the first rate merchant to the ticket-porter inclusive.* And, by this creation of value, the wealth of the French nation is enriched to the amount of all the gains of French industry and of French capital, in the course of this production: and the Russian nation to the amount of those of Russian industry and Russian capital. Nay, perhaps a third nation, independent both of France and of Russia, may get the whole profit accruing from the mutual commercial intercourse between these nations; and yet neither of them lose any thing, if their industry and capital have other equally lucrative employments at home. The very circumstance of the existence of an active external commerce, no matter what agents it be conducted by, is a very powerful stimulus to internal industry. The Chinese, who abandon the whole of their external commerce to other nations, must nevertheless raise an enormous gross product, otherwise they could never support, as they do, a population twice as large as that of all Europe, upon a surface of nearly equal extent. A shopkeeper in good business is quite as well off as a pedlar that travels the country with his wares on his back.t Commercial jealousy is, after all, nothing but prejudice: it is a wild fruit, that will drop of itself when it has arrived at maturity.

The external commerce of all countries is inconsiderable, compared with the internal. To convince ourselves of the truth of this position, it will be sufficient to take note at all numerous or even sumptuous entertainments, how very small is the proportion of values of foreign growth, in comparison with those of home production; especially, if we take into the

*The ordinary proportions of this division will be explained, infrà, Book II. Chap. 7.

It has been often asked, Why not combine commercial with agricultu ral and manufacturing productions? Why, for the same reason, that makes a wholesale cotton spinner, if he have a surplus of time and capital, more apt to extend his spinning concern, than to employ his labour and capital in the working up of his own filature into muslin and printed calicos.

account, as we ought to do, the value of buildings and habitations, which is necessarily of home production.*(a)

The internal commerce of a country, though, from its minute ramification, it is less obvious and striking, besides being the most considerable, is likewise the most advantageous. (1) For both the remittances and returns of this commerce are necessarily home products. It sets in motion a double production, and the profits of it are not participated with foreigners. For this reason, roads, canals, bridges, the abolition of internal duties (b), tolls, duties on transit (c), which are in effect tolls, every measure, in short, which promotes internal circulation, is favourable to national wealth.

There is a further branch of commerce, called the trade of speculation, which consists in the purchase of goods at one time, to be re-sold in the same place and condition at another time, when they are expected to be dearer. Even this trade is pro

It would be impossible to estimate the proportion with any tolerable accuracy, even in countries, where calculations of this kind are most in vogue. Indeed, the attempt would be a sad waste of time. To say the truth, statistical statements are of little real utility; for, be their accuracy ever so well assured, they can only be correct for the moment. The only knowledge really useful is, the knowledge of general principles and laws, that is to say, the knowledge of the connexion between caue and effect, which alone can safely teach us what measures it is best to adopt in every possible emergency. The sole use of statistics in political economy is, to supply examples and illustrations of general principles. They can never be the basis of principles, which are grounded upon the nature of things; whereas statistics, in the most improved state, are only an index of their quantity.

(a) This position may be correct or not, according to circumstances. The national wants must always, in the long run, be supplied by the national industry and exertions: but what is there to prevent a nation from exchanging the larger portion of its domestic products for the products of other nations? The people of Tyre probably consumed more products of external, than of domestic industry, although indeed those external must have been purchased with domestic products. Tyre, it is true, was rather a city than a nation. Holland resembled her in many particulars. The observation applies to every community, the chief part of whose production is, the modification of external products. T.

(b) Douanes.

(c) Octrois.

(1) [The author has here, in common with Dr. Smith, fallen into an error. Capital, whether employed in the home or foreign trade, is equally productive. If, for example, the home trade realized greater profits than foreign commerce, every cent of capital employed in the latter, would in a very little time, be withdrawn from so comparatively disadvantageous an investment. Capital will flow into the foreign, instead of the home trade, only because it will thereby yield a larger profit. The internal commerce of a country can not therefore be said to be "the most advantageous."]

AMERICAN EDITOR.