Adam Smith's Simplified Wealth of Nations, Book 4, Chapter 7a: Colonies
Chapter 7a, Part 1: Motives for Establishing Colonies
1 The interest which created the first European settlements in America and the West Indies was not so plain and distinct as the interest which established ancient Greek and Roman colonies.
2 All the ancient Greek states possessed a very small territory.
When the people multiplied beyond what that territory could maintain, some of them searched for new habitation in remote parts.
The warlike neighbours who surrounded them made it difficult enlarge their territory at home.
The Dorian colonies resorted chiefly to Italy and Sicily.
Italy and Sicily were inhabited by barbarous nations before the foundation of Rome.
The Ionians and Eolians were the two other great Greek tribes.
Their colonies were in Asia Minor and the islands of the Aegean Sea.
Those lands were also inhabited by barbarous nations.
The mother city considered her colony as a child.
At all times, the colony was entitled to great favour and assistance.
In return for much gratitude and respect, the mother city considered the colony as an emancipated child over whom she pretended no direct authority or jurisdiction.
settled its own form of government
enacted its own laws
elected its own magistrates
made peace or war with its neighbours as an independent state
did not wait for the approbation or consent of the mother city.
The interest in establishing such colonies was most plain and distinct.
3 Like most ancient republics, Rome was originally founded on an agrarian law.
The law divided the public territory in a certain proportion among the citizens.
This original division was deranged by:
These frequently threw the lands into the possession of a single person.
To remedy this disorder, a law restricted the quantity of land which any citizen could possess to 500 jugera or about 350 English acres.
This law was neglected or evaded.
The inequality of fortunes went on continually increasing.
Most of the citizens had no land.
Without land, the manners and customs of those times made it difficult for a freeman to maintain his independence.
Presently, though a poor man has no land of his own, if he has a little stock he may farm the lands of another or do some little retail trade.
If he has no stock, he may find employment as a country labourer or as an artificer.
But among the ancient Romans, the lands of the rich were all cultivated by slaves.
The slaves worked under an overseer who was also a slave.
A poor freeman had little chance of being employed as a farmer or as a labourer.
All manufactures and trades, even the retail trade, were done by slaves for the benefit of their masters.
The wealth, authority, and protection of their masters made it difficult for a poor freeman to compete against them.
The citizens who had no land could only subsist on the bounties of the candidates during annual elections.
The tribunes animated the people against the rich by reminding them of the ancient division of lands.
They said that the fundamental law of the republic was to restrict this private property.
The people became clamorous to get land.
The rich were perfectly determined not to give them any.
To satisfy the people. the rich frequently proposed to send out a new colony.
But Rome was under no need of turning out her citizens to seek their fortune without knowing where they were to settle.
She assigned them lands in the conquered provinces of Italy.
They could never form an independent state as those lands were within the republic.
Those settlements were a sort of corporation which had the power of enacting bylaws for its own government.
However, they were at all times subject to the authority of the mother city.
The sending out of this kind of colony gave some satisfaction to the people.
It often established a sort of garrison in a newly conquered province to impose obedience.
A Roman colony therefore was different from a Greek colony in terms of the nature or motives of its establishment.
The original words for those establishments had accordingly very different meanings.
The Latin word (Colonia) signifies a plantation.
The Greek word (apoikia), on the contrary, signifies:
a separation of dwelling
a departure from home
a going out of the house.
The interest which established Roman colonies was as plain and distinct as those of Greek colonies.
Both derived their origin from irresistible necessity or from clear and evident utility.
4 The establishment of the European colonies in America and the West Indies arose from no necessity.
Their utility was very great but not understood at their first establishment.
Utility was not the motive of the colonies nor of the discoveries occasioned by it.
The nature, extent, and limits of that utility are not well understood to this day.
5 During the 14th and 15th centuries, the Venetians had a very advantageous commerce in spiceries and East India goods.
They purchased them chiefly in Egypt and distributed them to other European nations.
Egypt was then under the Mammeluks, the enemies of the Turks.
The Turks were the enemies of the Venetians.
This union of interest, assisted by the money of Venice, formed such a connection that gave the Venetians almost a monopoly of the trade.
6"The great profits of the Venetians tempted the avidity of the Portuguese."
During the 15th century, the Portuguese tried to find a way by sea to the countries where the Moors brought ivory and gold dust across the desert to the Venetians.
The Cape de Verde Islands
The coast of Guinea
The coast of Loango
and, finally, the Cape of Good Hope.
Their discovery of the Cape of Good Hope opened a prospect of sharing the profitable traffic of the Venetians.
In 1497, Vasco de Gama sailed from Lisbon with four ships.
After 11 months, he arrived in India.
He completed a course of discoveries which was pursued with great steadiness and very little interruption for nearly a century.
7 Some years before this, the success of the Portuguese projects appeared doubtful.
While Europe was in suspense about those projects, a Genoese pilot formed the more daring project of sailing to the East Indies by the West.
At that time, the location of those countries was very imperfectly known in Europe.
The few European travellers who had been there magnified the distance, perhaps through simplicity and ignorance.
The great distance was made it appear almost infinite by:
those who could not measure it
those who wanted to increase the marvel of their own adventures
Columbus very justly concluded that the longer the way was by the east.
He proposed to take the way west as the shortest and surest.
He was fortunate to convince Isabella of Castile of the probability of his project.
He sailed from Palos in August 1492, nearly five years before the expedition of Vasco de Gama from Portugal.
After a voyage of 2-3 months, he discovered:
The Bahamas or Lucayan islands
The great island of St. Domingo
8 But the countries Columbus discovered did not resemble those he was looking for.
Instead of the wealth, cultivation, and populousness of China and India, he found countries which were:
uncultivated and covered with wood
inhabited by tribes of naked and miserable savages
He was not willing to believe that they were different from the countries described by Marco Polo.
Marco Polo was the first European to visit and describe China or the East Indies.
It had a very slight resemblance.
He found the name of Cibao, a mountain in St. Domingo, to resemble the name of Cipango mentioned by Marco Polo.
It was sufficient to make him frequently return to this favourite prepossession, though contrary to the clearest evidence.
In his letters to Ferdinand and Isabella, Columbus called the countries he discovered as the Indies.
He entertained no doubt that they were the extremity of those described by Marco Polo.
He thought that they were not very far from the Ganges or from the countries conquered by Alexander.
Even when he was convinced that they were different, he still flattered himself that those rich countries were not far.
In a subsequent voyage, he went in quest of them along the coast of Terra Firma and towards the Isthmus of Darien.
9 Because of Columbus' mistake, the name of the Indies has stuck to those unfortunate countries ever since.
When it was finally clearly discovered that the new Indies were different from the old Indies, the former were called the West Indies and the old Indies were called the East Indies.
10 It was important to Columbus that his discovered countries should be represented of very great consequence to the Spanish court.
The real riches of every country then was the animal and vegetable produce of the soil.
Those countries had nothing which could justify such a representation.
11 The Cori was something between a rat and a rabbit.
It was supposed by Mr. Buffon to be the same with the Aperea of Brazil (Guinea Pig).
It was the largest viviparous quadruped in St. Domingo and was never very numerous.
The dogs and cats of the Spaniards have long ago almost entirely destroyed it with other smaller species.
These and a pretty large lizard, called the Iguana, was the main animal food from the land.
12 The vegetable food of the inhabitants was not so scanty, though it was not very abundant because of their lack of industry.
It consisted in plants which were then unknown in Europe: Indian corn, yams, potatoes, bananas, etc.
Those plants have never been very much esteemed.
It was not supposed to yield more sustenance than the common grain and pulse already cultivated.
13 The cotton plant afforded the material of a very important manufacture.
At that time, it was the most valuable of all plants of those islands to Europeans.
In the end of the 15th century, the muslins and other cotton goods of the East Indies were much esteemed in Europe.
But the cotton manufacture itself was not cultivated in Europe.
Even this production, therefore, at that time was not of very great consequence to Europeans.
14 Columbus turned to the minerals of the newly discovered countries after finding nothing in their animals or vegetables which could justify an advantageous representation.
He flattered himself that he found a full compensation in minerals for the insignificance of those plants and animals.
The inhabitants ornamented their dress with bits of gold from the small streams from the mountains.
Those were sufficient to satisfy him that those mountains abounded with the richest gold mines.
St. Domingo was represented as a country abounding with gold.
According to the prejudices of those times and the present time, this was an inexhaustible source of real wealth to Spain.
When Columbus returned from his first voyage, he was introduced with triumphal honours to the sovereigns of Castile and Arragon.
The main produce of the countries he discovered were carried in solemn procession before him.
The only valuable part of them consisted in:
some little fillets, bracelets, and ornaments of gold
some bales of cotton.
The rest were mere objects of vulgar wonder and curiosity:
some reeds of an extraordinary size
some birds of a very beautiful plumage
some stuffed skins of the huge alligator and manati
all of which were preceded by six or seven of the wretched natives
15 Because of the representations of Columbus, the council of Castile determined to possess those defenceless countries.
"The pious purpose of converting them to Christianity sanctified the injustice of the project."
But the hope of finding treasures of gold there was its sole motive.
To give this motive greater weight, Columbus proposed that half of all the gold and silver found there should belong to the crown.
This proposal was approved of by the council.
16 As long as the gold could be easily got by plundering the defenceless natives, it was perhaps not very difficult to pay even this heavy 50% tax.
But when the natives were stripped of all their gold after 6-8 years, it became necessary to dig for it in the mines.
It was no longer possible to pay this tax.
The high taxes first caused the total abandonment of the mines of St. Domingo.
Those mines were never wrought since.
It was soon reduced to 1/3, then to 1/5, then to 1/10, and at last to 1/20 of the gross produce of the gold mines.
The tax on silver continued for a long time to be 1/5 of the gross produce.
It was reduced to 1/10 only during the present century.
But the first adventurers were mainly interested in gold, not silver.
17 All the other Spanish enterprises in the new world after those of Columbus were prompted by the sacred thirst of gold.
This motive carried:
Oieda, Nicuessa, and Vasco Nugnes de Balboa, to the Isthmus of Darien
Cortez to Mexico
Almagro and Pizzarro to Chili and Peru
When those adventurers arrived on any unknown coast, their first inquiry was always if there was any gold to be found there.
With this information, they determined to quit the country or settle in it.
18The search for new silver and gold mines is perhaps the most ruinous of all those expensive and uncertain projects which can bring bankruptcy.
It is perhaps the most disadvantageous lottery in the world.
It is a lottery where the gain of the winners bears the least proportion to the loss of the losers.
"for though the prizes are few and the blanks many, the common price of a ticket is the whole fortune of a very rich man."
Mining projects absorb both capital and profit.
They do not replace the capital employed in them with the ordinary profits of stock.
A prudent law-giver who desired to increase the capital of his nation would least choose to encourage mining.
"Such in reality is the absurd confidence which almost all men have in their own good fortune that, wherever there is the least probability of success, too great a share of it is apt to go to them of its own accord."
19 The judgement of sober reason and experience has always been extremely unfavourable on mining projects.
The judgement of human avidity has commonly been extremely favourable.
The same passion which suggested the absurd idea of the philosopher's stone to so many people, has suggested the equally absurd idea of immensely rich gold and silver mines.
"They did not consider that the value of those metals has, in all ages and nations, arisen chiefly from their scarcity"
They did not consider that their scarcity arose from:
The very small quantities which nature has deposited in one place.
The hard and intractable substances which nature has surrounded those small quantities
The labour and expence necessary to get to them.
They flattered themselves that veins of those metals might be found as large and abundant as those of lead, copper, tin, or iron.
"The dream of Sir Walter Raleigh concerning the golden city and country of Eldorado, may satisfy us that even wise men are not always exempt from such strange delusions."
More than 100 years after the death of that great man, the Jesuit Gumila was still convinced of the reality of El Dorado.
Gumila expressed with great warmth and sincerity, his happiness in carrying the gospel to its people who could well reward his pious labours.
20 In the countries first discovered by the Spaniards, no gold or silver mines are presently known to be worth the working.
The first adventurers probably very much magnified:
The quantities of those metals they found
The fertility of the mines wrought immediately after their first discovery
What those adventurers found was sufficient to inflame the avidity of all Spaniards.
Every Spaniard who sailed to America expected to find an El Dorado.
Fortune fulfilled the extravagant hopes of her devotees, something she does very seldomly.
The discovery and conquest of Mexico happened about 30 years after the first expedition of Columbus.
That of Peru happened about after 40 years of his expedition.
Fortune presented the first adventurers with something similar to that profusion of precious metals they sought for.
21 A project of commerce to the East Indies caused the discovery of the West Indies.
A project of conquest created all Spanish establishments in those newly discovered countries.
Their motive was a project of gold and silver mines.
A course of accidents, which no human wisdom could foresee, rendered this project much more successful than expected.
22 The first adventurers of all other European nations who attempted to settle in America were animated by the like chimerical views.
But they were not equally successful.
"It was more than 100 years after the first settlement of Brazil before any silver, gold, or diamond mines were discovered there."
None have yet been discovered in the English, French, Dutch, and Danish colonies that are worth the working.
The first English settlers in North America offered 1/5 of all the gold and silver to the king as a motive for granting them their patents.
This 1/5 was reserved to the crown in the patents to Sir Walter Raleigh, London and Plymouth Companies, Council of Plymouth, etc.
Those first settlers joined the quest of discovering gold and silver mines and a northwest passage to the East Indies.