Chapter 11: The Balance of Trade

The idea of public opulence consisting in money has caused other bad effects.

France is thought to produce more of the elegancies of life than England.

On the other hand, Spain and Portugal take more of our commodities than we take of theirs,

The absurdity of these regulations will appear on the least reflection.

The case is exactly the same between any two nations.

Again, by banning the exportation of goods to foreign markets, the country's industry is greatly discouraged.

  • If we are banned from sending corn and cloth to France, that industry which raises corn and prepares cloth for the French market is stopped.
  • 'If we were allowed to trade with France, we would not exchange our commodities with theirs, but our money.
  • but if we attend to it, we shall find that it comes to the same thing at last.
  • By hindering people to dispose of their money as they think proper, you discourage those manufactures by which this money is gained.
  • All jealousies between different nations, and prejudices of this kind, are extremely hurtful to commerce, and limit public opulence.
  • In general, these jealousies and prohibitions are most hurtful to the richest nations, just as free trade would be advantageous.

  • Similarly, when a rich and a poor nation engage in trade, the rich nation will have the greatest advantage.
  • All our trade with France is prohibited by the high duties imposed on every imported French commodity.
  • France is:
  • Our industry, which a commerce with France would have excited, would have been much greater.
  • 20 million people working to each other’s hands through the division of labour, would produce 1,000 times more goods than another society of only 3 million.
  • In general, no nation has been ruined by this balance of trade.

  • Despite all this, we are far richer than before.
  • A late minister of state levied 23 million in one year with greater ease than Lord Godolphin could levy 6 million in Queen Anne’s time.
  • The French and Dutch writers embraced the same principle.
  • They frequently alarmed their country with the same groundless terror.
  • But they still continue to flourish.
  • The nation's poverty can never proceed from foreign trade if done with wisdom and prudence.
  • If its annual produce is 90 million and its annual consumption is 100 million, then it spends, eats, and drinks, wears and tears, 10 million more than it produces.