different employments carried on in it, as
nearly as possible in the proportion which is
most agreeable to the interest of the whole
society.
All the different regulations of the mercantile
system necessarily derange more or less
this natural and most advantageous distribution
of stock. But those which concern the
trade to America and the East Indies derange
it, perhaps, more than any other; because the
trade to those two great continents absorbs a
greater quantity of stock than any two other
branches of trade. The regulations, however,
by which this derangement is effected in those
two different branches of trade, are not altogether
the same. Monopoly is the great engine
of both; but it is a different sort of monopoly.
Monopoly of one kind or another,
indeed, seems to be the sole engine of the mercantile
system.
In the trade to America, every nation endeavours
to engross as much as possible the
whole market of its own colonies, by fairly
excluding all other nations from any direct
trade to them. During the greater part of the
sixteenth century, the Portuguese endeavoured
to manage the trade to the East Indies in the
same manner, by claiming the sole right of
sailing in the Indian seas, on account of the
merit of having first found out the road to
them. The Dutch still continue to exclude
all other European nations from any direct
trade to their spice islands. Monopolies of
this kind are evidently established against all
other European nations, who are thereby not
only excluded from a trade to which it might
be convenient for them to turn some part of
their stock, but are obliged to buy the goods
which that trade deals in, somewhat dearer
than if they could import them themselves
directly from the countries which produced
them.
But since the fall of the power of Portugal,
no European nation has claimed the exclusive
right of sailing in the Indian seas, of
which the principal ports are now open to the
ships of all European nations. Except in
Portugal, however, and within these few years
in France, the trade to the East Indies has,
in every European country, been subjected to
an exclusive company. Monopolies of this
kind are properly established against the very
nation which erects them. The greater part
of that nation are thereby not only excluded
from a trade to which it might be convenient
for them to turn some part of their stock, but
are obliged to buy the goods which that trade
deals in somewhat dearer than if it was open
and free to all their countrymen. Since the
establishment of the English East India company,
for example, the other inhabitants of
England, over and above being excluded from
the trade, must have paid, in the price of the
East India goods which they have consumed,
not only for all the extraordinary profits which
the company may have made upon those goods
in consequence of their monopoly, but for all
the extraordinary waste which the fraud and
abuse inseparable from the management of
the affairs of so great a company must necessarily
have occasioned. The absurdity of this
second kind of monopoly, therefore, is much
more manifest than that of the first.
Both these kinds of monopolies derange
more or less the natural distribution of the
stock of the society; but they do not always
derange it in the same way.
Monopolies of the first kind always attract
to the particular trade in which they are established
a greater proportion of the stock of
the society than what would go to that trade
of its own accord.
Monopolies of the second kind may sometimes
attract stock towards the particular trade
in which they are established, and sometimes
repel it from that trade, according to different
circumstances. In poor countries, they
naturally attract towards the trade more stock
than would otherwise go to it. In rich countries,
they naturally repel from it a good deal
of stock which would otherwise go to it.
Such poor countries as Sweden and Denmark,
for example, would probably have never
sent a single ship to the East Indies, had
not the trade been subjected to an exclusive
company. The establishment of such a company
necessarily encourages adventurers. Their
monopoly secures them against all competitors
in the home market, and they have the
same chance for foreign markets with the
traders of other nations. Their monopoly
shows them the certainty of a great profit upon
a considerable quantity of goods, and the
chance of a considerable profit upon a great
quantity. Without such extraordinary encouragement,
the poor traders of such poor countries
would probably never have thought of
hazarding their small capitals in so very distant
and uncertain an adventure as the trade
to the East Indies must naturally have appeared
to them.
Such a rich country as Holland, on the
contrary, would probably, in the case of a free
trade, send many more ships to the East Indies
than it actually does. The limited stock
of the Dutch East India company probably
repels from that trade many great mercantile
capitals which would otherwise go to it. The
mercantile capital of Holland is so great, that
it is, as it were, continually overflowing, sometimes
into the public funds of foreign countries,
sometimes into loans to private traders
and adventurers of foreign countries, sometimes
into the most round-about foreign trades
consumption, and sometimes into the carrying
trade. All near employments being
completely filled up, all the capital which can
be placed in them with any tolerable profit
being already placed in them, the capital of
Holland necessarily flows towards the most