Adam Smith's Simplified Wealth of Nations, Book 4, Chapter 7b, Part 2: The Causes of Prosperity of new Colonies
Chapter 7b, Part 2: The Causes of Prosperity of new Colonies
23The colony of a civilised nation which acquires a waste country or one thinly inhabited, advances more rapidly to wealth and greatness than any other human society.
24 The colonists carry with them a knowledge of agriculture and useful arts superior to what was naturally known by barbarous nations.
They carry with them too:
the habit of subordination
some notion of the regular government which takes place in their own country:
the system of laws which supports the government
a regular administration of justice
They naturally establish something of the same kind in the new settlement.
But among barbarous nations, the natural progress of law and government is still slower than the natural progress of arts.
Every colonist gets more land than he can possibly cultivate.
"He has no rent, and scarce any taxes to pay."
No landlord shares with him in its produce
The share of the sovereign is commonly but a trifle.
He has every motive to render as great as possible a produce which is almost entirely his own.
His land is commonly so extensive.
With all the industry of his own and of other people he can employ, he can seldom make it produce 10% of what it is capable of.
He is eager to collect labourers and reward them with the most liberal wages.
But those liberal wages, with the plenty and cheapness of land, soon make those labourers leave him to become landlords themselves.
They reward with equal liberality other labourers who soon leave them for the same reason.
The liberal reward of labour encourages marriage.
During infancy, their children are well fed and properly taken care of.
When they are grown up, the value of their labour greatly overpays their maintenance.
At maturity, the high price of labour and the low price of land, enable them to establish themselves as their fathers did.
25In other countries, rent and profit eat up wages.
The two superior orders of people, those who live by rent and those who live by profits, oppress the inferior one, those who live by wages.
But in new colonies, the interest of the two superior orders obliges them to treat the inferior one with more generosity and humanity, at least where that inferior one is not a slave.
Waste lands of the greatest natural fertility can be acquired for a trifle.
In this case, the proprietor is always the undertaker.
The increase of revenue which he expects from their improvement, constitutes his profit.
In these circumstances, it is commonly very great.
But this great profit cannot be made without employing people in clearing and cultivating the land.
He cannot easily get this labour because of the scarcity of people.
He is willing to employ labour at any price.
The high wages encourage population.
The cheapness and plenty of good land encourage improvement.
They enable the proprietor to pay those high wages.
In those wages consists almost the whole price of the land.
Though wages are high, the value of wages are low relative to the value of the land's produce.
What encourages the progress of population and improvement encourages the progress of real wealth and greatness.
26 Many ancient Greek colonies progressed very rapidly towards wealth and greatness.
In a century or two, several of them rivalled and even surpassed their mother cities.
The following were at least equal the ancient Greek cities:
Syracuse and Agrigentum in Sicily
Tarentum and Locri in Italy
Ephesus and Miletus in Lesser Asia
Though posterior in their establishment, yet all the arts of refinement, philosophy, poetry, and eloquence seem to have been cultivated as early, and to have been improved as highly in them as in any part of the mother country.
The schools of Thales and Pythagoras were the oldest in Greece.
They were established in an Asiatic colony and an Italian colony, not in ancient Greece.
Those colonies established themselves in barbarous countries which easily gave place to the new settlers.
They had plenty of good land and were independent of the mother city.
They were free to manage their own affairs in the way most suitable to their own interest.
27 The history of the Roman colonies is not so brilliant.
Some of them, such as Florence, grew up to be big states after the fall of the mother city after many ages.
But their progress was not very rapid.
They were all established in conquered provinces, which were already fully inhabited.
The quantity of land assigned to each colonist was seldom very big.
The colony was not independent.
They were not always free to manage their own affairs in the way most suitable to their own interest.
28 In the plenty of good land, the European colonies in America and the West Indies resemble and greatly surpass those of ancient Greece.
In their dependence on the mother state, the European colonies resemble those of ancient Rome.
Their great distance from Europe alleviated this dependence.
They are less in the view and power of their mother country.
In pursuing their interest their own way, their conduct has been overlooked in Europe because it was not known nor understood.
On some occasions, it was allowed because their distance made it difficult to restrain.
Even the violent and arbitrary Spanish government has recalled or softened its orders for her colonies for fear of a general insurrection.
The progress of all European colonies in wealth, population, and improvement, has accordingly been very great.
29 The crown of Spain derived some revenue from its colonies by its share of gold and silver.
This share excited the most extravagant expectations of greater riches.
From the moment of their first establishment, the Spanish colonies attracted very much the attention of Spain.
The colonies of other European nations were neglected for a long time.
The Spanish colonies perhaps did not thrive better because of this attention.
The other European colonies did not do worse because of this neglect.
The Spanish colonies are less populous and less thriving than the colonies of other European nations, in proportion to their area.
The progress of the Spanish colonies in population and improvement, has certainly been very rapid and very great.
The city of Lima was founded since the conquest.
According to Ulloa, it had 50,000 inhabitants nearly 30 years ago.
Quito was a miserable hamlet of Indians.
Ulloa represents it as being equally populous at the same time.
Gemelli Carreri is a pretended traveller who has written extremely good information from everywhere.
He represents the city of Mexico as having 100,000 people.
It is probably more than five times greater than the population during Montezuma's time.
Spanish writers have frequently exaggerated the population of Mexico.
Mexico's population greatly exceeds those of Boston, New York, and Philadelphia
Those three are the three greatest cities of the English colonies.
Before the Spanish conquest, there were no cattle fit for pulling heavy loads in Mexico or Peru.
"The llama was their only beast of burden."
Its strength was much inferior to the strength of a common ass.
"The plough was unknown among them."
"They were ignorant of the use of iron."
"A sort of wooden spade was their principal instrument of agriculture."
They had no coined money, nor any instrument of commerce of any kind.
"Their commerce was carried on by barter."
Sharp stones served as knives and hatchets
Fish bones and the hard sinews of certain animals were their needles to sew with.
These were their principal instruments of trade.
In this state of things, it seems impossible that those empires could have been so much improved as at present.
Presently, they have:
Knowledge of the use of iron, plough, and many European arts introduced among them
"But the populousness of every country must be in proportion to the degree of its improvement and cultivation."
The cruel destruction of the natives followed the conquest.
Despite this, those two great empires are probably more populous now than ever before.
The people are surely very different.
The Spanish creoles are superior to the ancient native Americans.
30 After the Spanish settlements, those of the Portuguese in Brazil are the oldest European settlement in America.
But it was for a long time greatly neglected because neither gold nor silver mines were found in it.
It afforded little or no revenue to the crown.
During this state of neglect, it grew up to be a great and powerful colony.
While Portugal was under the dominion of Spain, Brazil was attacked by the Dutch.
The Dutch got possession of 7 of the 14 provinces of Brazil.
They expected to conquer the other seven, when Portugal recovered its independency by the elevation of the Braganza family to the throne.
The Portuguese became enemies of the Spaniards and became friends of the Dutch.
The Dutch agreed to leave the unconquered part of Brazil to the king of Portugal.
The king of Portugal agreed to leave the Dutch part to the Dutch.
But the Dutch government soon oppressed the Portuguese colonists.
The Portuguese colonists took arms against their new masters.
By their own valour and resolution, without any avowed assistance from Portugal, they drove the Dutch out of Brazil.
The Dutch found it impossible to keep any part of Brazil to themselves.
They restored it entirely to the crown of Portugal.
Brazil had over 600,000 people composed of:
Portuguese or descended from Portuguese
a mixed race of Portugueze and Brazilians
No other American colony contains so great a number of people of European extraction.
31 Towards the end of the 15th and during the 16th century, Spain and Portugal were the two great naval powers.
The Venetian fleets rarely sailed beyond the Mediterranean.
The Spaniards claimed all America as their own, by virtue of the first discovery.
They could not hinder Portugal from settling in Brazil.
At that time, such was the terror of Spain, that most European nations were afraid to establish themselves in any other part of America.
The French who attempted to settle in Florida were all murdered by the Spaniards.
The decline of Spanish naval power was caused by the defeat of their Invincible Armada in the 16th century.
They became powerless to obstruct the settlements of other European nations.
The English, French, Dutch, Danes, and Swedes are great European nations with ocean ports.
In the 17th century, they all attempted to make settlements in the new world.
32 The Swedes established New Jersey.
This colony could have prospered if it were protected by Sweden.
This is demonstrated by the number of Swedish families still living in New Jersey.
Being neglected by Sweden, it was soon swallowed up by the Dutch colony of New York.
New York fell to the English in 1674.
33 The small islands of St. Thomas and Santa Cruz are the only Danish colonies in America.
These little settlements were under the government of an exclusive company.
It had the sole right of:
Purchasing the surplus produce of the colonists
Supplying them with goods of other countries
It had the power and the greatest temptation of oppressing the colonists.
The government of an exclusive company of merchants is, perhaps, the worst of all governments for any country.
It rendered the progress of those colonies more slow and languid.
The recent King of Denmark dissolved this company.
Since that time, the prosperity of these colonies has been very great.
34 The Dutch settlements in the West and East Indies, were originally under the government of an exclusive company.
The progress of some of them was considerable.
But it was languid and slow compared to established countries and most other new colonies.
The colony of Surinam was very considerable.
It is still inferior to most other European sugar colonies.
The colony of Nova Belgia is now divided into the provinces of New York and New Jersey.
It would probably have become considerable even if it remained under the Dutch.
The plenty and cheapness of good land are such powerful causes of prosperity.
The very worst government is not capable of stopping it.
By smuggling, the great distance from the mother country would enable the colonists to evade the monopoly of the company.
At present, the company allows all Dutch ships to trade to Surinam upon paying 2.5% of the value of their cargo for a licence.
The direct trade from Africa to America consists almost entirely in the slave trade.
This is the only exclusive trade of the Dutch company
This relaxation in the exclusive privileges of the company is probably the principal cause of Surinam's present prosperity.
Curaçoa and Eustatia are the two principal islands belonging to the Dutch.
They are free ports open to the ships of all nations.
This freedom has been the great cause of the prosperity of those two barren islands.
35 During the last and present centuries, the French colony of Canada was under the government of an exclusive company.
Its progress was very slow compared with other new colonies because it was under a very unfavourable administration.
It became much more rapid when this company was dissolved after the fall of the Mississippi scheme.
When the English acquired this country, they found it to have nearly double the number of inhabitants which Father Charlevoix assigned to it 20-30 years before.
That Jesuit travelled all over the whole country.
He had no inclination to represent it as less considerable than it really was.
36 The French colony of St. Domingo was established by pirates and free-booters.
It did not require the protection nor the authority of France for a long time.
When that race of banditti became citizens and acknowledged this authority, it was necessary to exercise it with great gentleness for a long time.
During this period, the population and improvement of this colony increased very fast.
All French colonies were oppressed for some time by an exclusive company.
Even this was unable to stop its progress, though it retarded it.
"The course of its prosperity returned as soon as it was relieved from that oppression."
It is now the most important sugar colony in the West Indies.
Its produce is greater than all the English sugar colonies combined.
The other French sugar colonies are all very thriving.
Next: Chapter 7c: The English Colonies