and free state, is to open a great though
distant market, for such parts of the produce
of British industry as may exceed the demand
of the markets nearer home, of those
of Europe, and of the countries which lie
round the Mediterranean sea. In its natural
and free state, the colony trade, without drawing
from those markets any part of the produce
which had ever been sent to them, encourages
Great Britain to increase the surplus
continually, by continually presenting new
equivalents to be exchanged for it. In its natural
and free state, the colony trade tends to
increase the quantity of productive labour in
Great Britain, but without altering in any respect
the direction of that which had been
employed there before. In the natural and
free state of the colony trade, the competition
of all other nations would hinder the rate of
profit from rising above the common level,
either in the new market, or in the new employment.
The new market, without drawing
any thing from the old one, would create, if
one may say so, a new produce for its own
supply; and that new produce would constitute
a new capital for carrying on the new
employment, which, in the same manner, would
draw nothing from the old one.
The monopoly of the colony trade, on the
contrary, by excluding the competition of other
nations, and thereby raising the rate of profit,
both in the new market and in the new employment,
draws produce from the old market,
and capital from the old employment.
To augment our share of the colony trade
beyond what it otherwise would be, is the
avowed purpose of the monopoly. If our
share of that trade were to be no greater with,
than it would have been without the monopoly,
there could have been no reason for establishing
the monopoly. But whatever forces
into a branch of trade, of which the returns
are slower and more distant than those of the
greater part of other trades, a greater proportion
of the capital of any country, than what
of its own accord would go to that branch,
necessarily renders the whole quantity of productive
labour annually maintained there, the
whole annual produce of the land and labour
of that country, less than they otherwise would
be. It keeps down the revenue of the inhabitants
of that country below what it would
naturally rise to, and thereby diminishes their
power of accumulation. It not only hinders,
at all times, their capital from maintaining so
great a quantity of productive labour as it
would otherwise maintain, but it hinders it
from increasing so fast as it would otherwise
increase, and, consequently, from maintaining
a still greater quantity of productive labour.
The natural good effects of the colony trade,
however, more than counterbalance to Great
Britain the bad effects of the monopoly; so
that, monopoly and altogether, that trade,
even as it is carried on at present, is not only
advantageous, but greatly advantageous. The
new market and the new employment which
are opened by the colony trade, are of much
greater extent than that portion of the old
market and of the old employment which is
lost by the monopoly. The new produce and
the new capital which has been created, if one
may say so, by the colony trade, maintain in
Great Britain a greater quantity of productive
labour than what can have been thrown
out of employment by the revulsion of capital
from other trades of which the returns are more
frequent. If the colony trade, however, even
as it is carried on at present, is advantageous
to Great Britain, it is not by means of the
monopoly, but in spite of the monopoly.
It is rather for the manufactured than for
the rude produce of Europe, that the colony
trade opens a new market. Agriculture is
the proper business of all new colonies; a
business which the cheapness of land renders
more advantageous than any other. They
abound, therefore, in the rude produce of
land; and instead of importing it from other
countries, they have generally a large surplus
to export. In new colonies, agriculture
either draws hands from all other employments,
or keeps them from going to any other
employment. There are few hands to spare
for the necessary, and none for the ornamental
manufactures. The greater part of the
manufactures of both kinds they find it cheaper
to purchase of other countries than to
make for themselves. It is chiefly by encouraging
the manufactures of Europe, that
the colony trade indirectly encourages its
agriculture. The manufacturers of Europe,
to whom that trade gives employment, constitute
a new market for the produce of the
land, and the most advantageous of all markets;
the home market for the corn and cattle,
for the bread and butcher's meat of Europe,
is thus greatly extended by means of
the trade to America.
But that the monopoly of the trade of populous
and thriving colonies is not alone sufficient
to establish, or even to maintain, manufactures
in any country, the examples of
Spain and Portugal sufficiently demonstrate.
Spain and Portugal were manufacturing
countries before they had any considerable
colonies. Since they had the richest and
most fertile in the world, they have both
ceased to be so.
In Spain and Portugal, the bad effects of
the monopoly, aggravated by other causes,
have, perhaps, nearly overbalanced the natural
good effects of the colony trade. These
causes seem to be other monopolies of different
kinds: the degradation of the value of
gold and silver below what it is in most other
countries; the exclusion from foreign markets
by improper taxes upon exportation, and the
narrowing of the home market, by still more