Part II
Essay 1. OF COMMERCE
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PART II 
ESSAY I: OF COMMERCE
The greater part of mankind may be divided into two classes; that of shallow 
thinkers, who fall short of the truth; and that of abstruse thinkers, who go 
beyond it. The latter class are by far the most rare: and I may add, by far the 
most useful and valuable. They suggest hints, at least, and start difficulties, 
which they want, perhaps, skill to pursue; but which may produce fine 
discoveries, when handled by men who have a more just way of thinking. At worst, 
what they say is uncommon; and if it should cost some pains to comprehend it, 
one has, however, the pleasure of hearing something that is new. An author is 
little to be valued, who tells us nothing but what we can learn from every 
coffee-house conversation.
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All people of shallow thought are apt to decry even those of solid 
understanding, as abstruse thinkers, and metaphysicians, and refiners; and never 
will allow any thing to be just which is beyond their own weak conceptions. 
There are some cases, I own, where an extraordinary refinement affords a strong 
presumption of falsehood, and where no reasoning is to be trusted but what is 
natural and easy. When a man deliberates concerning his conduct in any 
particular affair, and forms schemes in politics, trade, economy, or any 
business in life, he never ought to draw his arguments too fine, or connect too 
long a chain of consequences together. Something is sure to happen, that will 
disconcert his reasoning, and produce an event different from what he expected. 
But when we reason upon general subjects, one may justly affirm, that our 
speculations can scarcely ever be too fine, provided they be just; and that the 
difference between a common man and a man of genius is chiefly seen in the 
shallowness or depth of the principles upon which they proceed. General 
reasonings seem intricate, merely because they are general; nor is it easy for 
the bulk of mankind to distinguish, in a great number of particulars, that 
common circumstance in which they all agree, or to extract it, pure and unmixed, 
from the other superfluous circumstances. Every judgment or conclusion, with 
them, is particular. They cannot enlarge their view to those universal 
propositions, which comprehend under them an infinite number of individuals, and 
include a whole science in a single theorem. Their eye is confounded with such 
an extensive prospect; and the conclusions, derived from it, even though clearly 
expressed, seem intricate and obscure. But however intricate they may seem, it 
is certain, that general principles, if just and sound, must always prevail in 
the general course of things, though they may fail in particular cases; and it 
is the chief business of philosophers to regard the general course of things. I 
may add, that it is also the chief business of politicians; especially in the 
domestic government of the state, where the public good, which is, or ought to 
be their object, depends on the concurrence of a multitude of causes; not, as in 
foreign politics, on accidents and chances, and the caprices of a few persons. 
This therefore makes the difference between particular deliberations and general 
reasonings, and renders subtilty and refinement much more suitable to the latter 
than to the former.
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I thought this introduction necessary before the following discourses†a on 
commerce, money, interest, balance of trade, &c. where, perhaps, there will 
occur some principles which are uncommon, and which may seem too refined and 
subtile for such vulgar subjects. If false, let them be rejected: But no one 
ought to entertain a prejudice against them, merely because they are out of the 
common road.
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The greatness of a state, and the happiness of its subjects, how independent 
soever they may be supposed in some respects, are commonly allowed to be 
inseparable with regard to commerce; and as private men receive greater 
security, in the possession of their trade and riches, from the power of the 
public, so the public becomes powerful in proportion to the opulence and 
extensive commerce of private men. This maxim is true in general; though I 
cannot forbear thinking, that it may possibly admit of exceptions, and that we 
often establish it with too little reserve and limitation. There may be some 
circumstances, where the commerce and riches and luxury of individuals, instead 
of adding strength to the public, will serve only to thin its armies, and 
diminish its authority among the neighbouring nations. Man is a very variable 
being, and susceptible of many different opinions, principles, and rules of 
conduct. What may be true, while he adheres to one way of thinking, will be 
found false, when he has embraced an opposite set of manners and opinions.
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The bulk of every state may be divided into husbandmen and manufacturers. The 
former are employed in the culture of the land; the latter work up the materials 
furnished by the former, into all the commodities which are necessary or 
ornamental to human life. As soon as men quit their savage state, where they 
live chiefly by hunting and fishing, they must fall into these two classes; 
though the arts of agriculture employ at first the most numerous part of the 
society.†1 Time and experience improve so much these arts, that the land may 
easily maintain a much greater number of men, than those who are immediately 
employed in its culture, or who furnish the more necessary manufactures to such 
as are so employed.
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If these superfluous hands apply themselves to the finer arts, which are 
commonly denominated the arts of luxury, they add to the happiness of the state; 
since they afford to many the opportunity of receiving enjoyments, with which 
they would otherwise have been unacquainted. But may not another scheme be 
proposed for the employment of these superfluous hands? May not the sovereign 
lay claim to them, and employ them in fleets and armies, to encrease the 
dominions of the state abroad, and spread its fame over distant nations? It is 
certain that the fewer desires and wants are found in the proprietors and 
labourers of land, the fewer hands do they employ; and consequently the 
superfluities of the land, instead of maintaining tradesmen and manufacturers, 
may support fleets and armies to a much greater extent, than where a great many 
arts are required to minister to the luxury of particular persons. Here 
therefore seems to be a kind of opposition between the greatness of the state 
and the happiness of the subject. A state is never greater than when all its 
superfluous hands are employed in the service of the public. The ease and 
convenience of private persons require, that these hands should be employed in 
their service. The one can never be satisfied, but at the expence of the other. 
As the ambition of the sovereign must entrench on the luxury of individuals; so 
the luxury of individuals must diminish the force, and check the ambition of the 
sovereign.
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Nor is this reasoning merely chimerical; but is founded on history and 
experience. The republic of SPARTA was certainly more powerful than any state 
now in the world, consisting of an equal number of people; and this was owing 
entirely to the want of commerce and luxury. The HELOTES were the labourers: The 
SPARTANS were the soldiers or gentlemen. It is evident, that the labour of the 
HELOTES could not have maintained so great a number of SPARTANS, had these 
latter lived in ease and delicacy, and given employment to a great variety of 
trades and manufactures. The like policy may be remarked in ROME. And indeed, 
throughout all ancient history, it is observable, that the smallest republics 
raised and maintained greater armies, than states consisting of triple the 
number of inhabitants, are able to support at present. It is computed, that, in 
all EUROPEAN nations, the proportion between soldiers and people does not exceed 
one to a hundred. But we read, that the city of ROME alone, with its small 
territory, raised and maintained, in early times, ten legions against the 
LATINS. ATHENS, the whole of whose dominions was not larger than YORKSHIRE, sent 
to the expedition against SICILY near forty thousand men.†2 DIONYSIUS the elder, 
it is said, maintained a standing army of a hundred thousand foot and ten 
thousand horse, besides a large fleet of four hundred sail;†3 though his 
territories extended no farther than the city of SYRACUSE, about a third of the 
island of SICILY, and some sea-port towns and garrisons on the coast of ITALY 
and ILLYRICUM. It is true, the ancient armies, in time of war, subsisted much 
upon plunder: But did not the enemy plunder in their turn? which was a more 
ruinous way of levying a tax, than any other that could be devised. In short, no 
probable reason can be assigned for the great power of the more ancient states 
above the modern, but their want of commerce and luxury. Few artizans were 
maintained by the labour of the farmers, and therefore more soldiers might live 
upon it. LIVY says, that ROME, in his time, would find it difficult to raise as 
large an army as that which, in her early days, she sent out against the GAULS 
and LATINS.†4 Instead of those soldiers who fought for liberty and empire in 
CAMILLUS'S time, there were, in AUGUSTUS'S days, musicians, painters, cooks, 
players, and tailors; and if the land was equally cultivated at both periods, it 
could certainly maintain equal numbers in the one profession as in the other. 
They added nothing to the mere necessaries of life, in the latter period more 
than in the former.
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It is natural on this occasion to ask, whether sovereigns may not return to the 
maxims of ancient policy, and consult their own interest in this respect, more 
than the happiness of their subjects? I answer, that it appears to me, almost 
impossible; and that because ancient policy was violent, and contrary to the 
more natural and usual course of things. It is well known with what peculiar 
laws SPARTA was governed, and what a prodigy that republic is justly esteemed by 
every one, who has considered human nature as it has displayed itself in other 
nations, and other ages. Were the testimony of history less positive and 
circumstantial, such a government would appear a mere philosophical whim or 
fiction, and impossible ever to be reduced to practice. And though the ROMAN and 
other ancient republics were supported on principles somewhat more natural, yet 
was there an extraordinary concurrence of circumstances to make them submit to 
such grievous burthens. They were free states; they were small ones; and the age 
being martial, all their neighbours were continually in arms. Freedom naturally 
begets public spirit, especially in small states; and this public spirit, this 
amor patriae, must encrease, when the public is almost in continual alarm, and 
men are obliged, every moment, to expose themselves to the greatest dangers for 
its defence. A continual succession of wars makes every citizen a soldier: He 
takes the field in his turn: And during his service he is chiefly maintained by 
himself. This service is indeed equivalent to a heavy tax; yet is it less felt 
by a people addicted to arms, who fight for honour and revenge more than pay, 
and are unacquainted with gain and industry as well as pleasure.†5 Not to 
mention the great equality of fortunes among the inhabitants of the ancient 
republics, where every field, belonging to a different proprietor, was able to 
maintain a family, and rendered the numbers of citizens very considerable, even 
without trade and manufactures.
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But though the want of trade and manufactures, among a free and very martial 
people, may sometimes have no other effect than to render the public more 
powerful, it is certain, that, in the common course of human affairs, it will 
have a quite contrary tendency. Sovereigns must take mankind as they find them, 
and cannot pretend to introduce any violent change in their principles and ways 
of thinking. A long course of time, with a variety of accidents and 
circumstances, are requisite to produce those great revolutions, which so much 
diversify the face of human affairs. And the less natural any set of principles 
are, which support a particular society, the more difficulty will a legislator 
meet with in raising and cultivating them. It is his best policy to comply with 
the common bent of mankind, and give it all the improvements of which it is 
susceptible. Now, according to the most natural course of things, industry and 
arts and trade encrease the power of the sovereign as well as the happiness of 
the subjects; and that policy is violent, which aggrandizes the public by the 
poverty of individuals. This will easily appear from a few considerations, which 
will present to us the consequences of sloth and barbarity.
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Where manufactures and mechanic arts are not cultivated, the bulk of the people 
must apply themselves to agriculture; and if their skill and industry encrease, 
there must arise a great superfluity from their labour beyond what suffices to 
maintain them. They have no temptation, therefore, to encrease their skill and 
industry; since they cannot exchange that superfluity for any commodities, which 
may serve either to their pleasure or vanity. A habit of indolence naturally 
prevails. The greater part of the land lies uncultivated. What is cultivated, 
yields not its utmost for want of skill and assiduity in the farmers. If at any 
time the public exigencies require, that great numbers should be employed in the 
public service, the labour of the people furnishes now no superfluities, by 
which these numbers can be maintained. The labourers cannot encrease their skill 
and industry on a sudden. Lands uncultivated cannot be brought into tillage for 
some years. The armies, mean while, must either make sudden and violent 
conquests, or disband for want of subsistence. A regular attack or defence, 
therefore, is not to be expected from such a people, and their soldiers must be 
as ignorant and unskilful as their farmers and manufacturers.
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Every thing in the world is purchased by labour; and our passions are the only 
causes of labour. When a nation abounds in manufactures and mechanic arts, the 
proprietors of land, as well as the farmers, study agriculture as a science, and 
redouble their industry and attention. The superfluity, which arises from their 
labour, is not lost; but is exchanged with manufactures for those commodities, 
which men's luxury now makes them covet. By this means, land furnishes a great 
deal more of the necessaries of life, than what suffices for those who cultivate 
it. In times of peace and tranquillity, this superfluity goes to the maintenance 
of manufacturers, and the improvers of liberal arts. But it is easy for the 
public to convert many of these manufacturers into soldiers, and maintain them 
by that superfluity, which arises from the labour of the farmers. Accordingly we 
find, that this is the case in all civilized governments. When the sovereign 
raises an army, what is the consequence? He imposes a tax. This tax obliges all 
the people to retrench what is least necessary to their subsistence. Those, who 
labour in such commodities, must either enlist in the troops, or turn themselves 
to agriculture, and thereby oblige some labourers to enlist for want of 
business. And to consider the matter abstractedly, manufactures encrease the 
power of the state only as they store up so much labour, and that of a kind to 
which the public may lay claim, without depriving any one of the necessaries of 
life. The more labour, therefore, is employed beyond mere necessaries, the more 
powerful is any state; since the persons engaged in that labour may easily be 
converted to the public service. In a state without manufactures, there may be 
the same number of hands; but there is not the same quantity of labour, nor of 
the same kind. All the labour is there bestowed upon necessaries, which can 
admit of little or no abatement.
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Thus the greatness of the sovereign and the happiness of the state are, in a 
great measure, united with regard to trade and manufactures. It is a violent 
method, and in most cases impracticable, to oblige the labourer to toil, in 
order to raise from the land more than what subsists himself and family. Furnish 
him with manufactures and commodities, and he will do it of himself. Afterwards 
you will find it easy to seize some part of his superfluous labour, and employ 
it in the public service, without giving him his wonted return. Being accustomed 
to industry, he will think this less grievous, than if, at once, you obliged him 
to an augmentation of labour without any reward. The case is the same with 
regard to the other members of the state. The greater is the stock of labour of 
all kinds, the greater quantity may be taken from the heap, without making any 
sensible alteration in it.
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A public granary of corn, a storehouse of cloth, a magazine of arms; all these 
must be allowed real riches and strength in any state. Trade and industry are 
really nothing but a stock of labour, which, in times of peace and tranquillity, 
is employed for the ease and satisfaction of individuals; but in the exigencies 
of state, may, in part, be turned to public advantage. Could we convert a city 
into a kind of fortified camp, and infuse into each breast so martial a genius, 
and such a passion for public good, as to make every one willing to undergo the 
greatest hardships for the sake of the public; these affections might now, as in 
ancient times, prove alone a sufficient spur to industry, and support the 
community. It would then be advantageous, as in camps, to banish all arts and 
luxury; and, by restrictions on equipage and tables, make the provisions and 
forage last longer than if the army were loaded with a number of superfluous 
retainers. But as these principles are too disinterested and too difficult to 
support, it is requisite to govern men by other passions, and animate them with 
a spirit of avarice and industry, art and luxury. The camp is, in this case, 
loaded with a superfluous retinue; but the provisions flow in proportionably 
larger. The harmony of the whole is still supported; and the natural bent of the 
mind being more complied with, individuals, as well as the public, find their 
account in the observance of those maxims.
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The same method of reasoning will let us see the advantage of foreign commerce, 
in augmenting the power of the state, as well as the riches and happiness of the 
subject. It encreases the stock of labour in the nation; and the sovereign may 
convert what share of it he finds necessary to the service of the public. 
Foreign trade, by its imports, furnishes materials for new manufactures; and by 
its exports, it produces labour in particular commodities, which could not be 
consumed at home. In short, a kingdom, that has a large import and export, must 
abound more with industry, and that employed upon delicacies and luxuries, than 
a kingdom which rests contented with its native commodities. It is, therefore, 
more powerful, as well as richer and happier. The individuals reap the benefit 
of these commodities, so far as they gratify the senses and appetites. And the 
public is also a gainer, while a greater stock of labour is, by this means, 
stored up against any public exigency; that is, a greater number of laborious 
men are maintained, who may be diverted to the public service, without robbing 
any one of the necessaries, or even the chief conveniencies of life.
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If we consult history, we shall find, that, in most nations, foreign trade has 
preceded any refinement in home manufactures, and given birth to domestic 
luxury. The temptation is stronger to make use of foreign commodities, which are 
ready for use, and which are entirely new to us, than to make improvements on 
any domestic commodity, which always advance by slow degrees, and never affect 
us by their novelty. The profit is also very great, in exporting what is 
superfluous at home, and what bears no price, to foreign nations, whose soil or 
climate is not favourable to that commodity. Thus men become acquainted with the 
pleasures of luxury and the profits of commerce; and their delicacy and 
industry, being once awakened, carry them on to farther improvements, in every 
branch of domestic as well as foreign trade. And this perhaps is the chief 
advantage which arises from a commerce with strangers. It rouses men from their 
indolence; and presenting the gayer and more opulent part of the nation with 
objects of luxury, which they never before dreamed of, raises in them a desire 
of a more splendid way of life than what their ancestors enjoyed. And at the 
same time, the few merchants, who possess the secret of this importation and 
exportation, make great profits; and becoming rivals in wealth to the ancient 
nobility, tempt other adventurers to become their rivals in commerce. Imitation 
soon diffuses all those arts; while domestic manufactures emulate the foreign in 
their improvements, and work up every home commodity to the utmost perfection of 
which it is susceptible. Their own steel and iron, in such laborious hands, 
become equal to the gold and rubies of the INDIES.
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When the affairs of the society are once brought to this situation, a nation may 
lose most of its foreign trade, and yet continue a great and powerful people. If 
strangers will not take any particular commodity of ours, we must cease to 
labour in it. The same hands will turn themselves towards some refinement in 
other commodities, which may be wanted at home. And there must always be 
materials for them to work upon; till every person in the state, who possesses 
riches, enjoys as great plenty of home commodities, and those in as great 
perfection, as he desires; which can never possibly happen. CHINA is represented 
as one of the most flourishing empires in the world; though it has very little 
commerce beyond its own territories.
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It will not, I hope, be considered as a superfluous digression, if I here 
observe, that, as the multitude of mechanical arts is advantageous, so is the 
great number of persons to whose share the productions of these arts fall. A too 
great disproportion among the citizens weakens any state. Every person, if 
possible, ought to enjoy the fruits of his labour, in a full possession of all 
the necessaries, and many of the conveniencies of life. No one can doubt, but 
such an equality is most suitable to human nature, and diminishes much less from 
the happiness of the rich than it adds to that of the poor. It also augments the 
power of the state, and makes any extraordinary taxes or impositions be paid 
with more chearfulness. Where the riches are engrossed by a few, these must 
contribute very largely to the supplying of the public necessities. But when the 
riches are dispersed among multitudes, the burthen feels light on every 
shoulder, and the taxes make not a very sensible difference on any one's way of 
living.
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Add to this, that, where the riches are in few hands, these must enjoy all the 
power, and will readily conspire to lay the whole burthen on the poor, and 
oppress them still farther, to the discouragement of all industry.
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In this circumstance consists the great advantage of ENGLAND above any nation at 
present in the world, or that appears in the records of any story. It is true, 
the ENGLISH feel some disadvantages in foreign trade by the high price of 
labour, which is in part the effect of the riches of their artisans, as well as 
of the plenty of money: But as foreign trade is not the most material 
circumstance, it is not to be put in competition with the happiness of so many 
millions. And if there were no more to endear to them that free government under 
which they live, this alone were sufficient. The poverty of the common people is 
a natural, if not an infallible effect of absolute monarchy; though I doubt, 
whether it be always true, on the other hand, that their riches are an 
infallible result of liberty. Liberty must be attended with particular 
accidents, and a certain turn of thinking, in order to produce that effect. Lord 
BACON, accounting for the great advantages obtained by the ENGLISH in their wars 
with FRANCE, ascribes them chiefly to the superior ease and plenty of the common 
people amongst the former; yet the government of the two kingdoms was, at that 
time, pretty much alike. Where the labourers and artisans are accustomed to work 
for low wages, and to retain but a small part of the fruits of their labour, it 
is difficult for them, even in a free government, to better their condition, or 
conspire among themselves to heighten their wages. But even where they are 
accustomed to a more plentiful way of life, it is easy for the rich, in an 
arbitrary government, to conspire against them, and throw the whole burthen of 
the taxes on their shoulders.
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It may seem an odd position, that the poverty of the common people in FRANCE, 
ITALY, and SPAIN, is, in some measure, owing to the superior riches of the soil 
and happiness of the climate; yet there want not reasons to justify this 
paradox. In such a fine mould or soil as that of those more southern regions, 
agriculture is an easy art; and one man, with a couple of sorry horses, will be 
able, in a season, to cultivate as much land as will pay a pretty considerable 
rent to the proprietor. All the art, which the farmer knows, is to leave his 
ground fallow for a year, as soon as it is exhausted; and the warmth of the sun 
alone and temperature of the climate enrich it, and restore its fertility. Such 
poor peasants, therefore, require only a simple maintenance for their labour. 
They have no stock or riches, which claim more; and at the same time, they are 
for ever dependant on their landlord, who gives no leases, nor fears that his 
land will be spoiled by the ill methods of cultivation. In ENGLAND, the land is 
rich, but coarse; must be cultivated at a great expence; and produces slender 
crops, when not carefully managed, and by a method which gives not the full 
profit but in a course of several years. A farmer, therefore, in ENGLAND must 
have a considerable stock, and a long lease; which beget proportional profits. 
The fine vineyards of CHAMPAGNE and BURGUNDY, that often yield to the landlord 
above five pounds per acre, are cultivated by peasants, who have scarcely bread: 
The reason is, that such peasants need no stock but their own limbs, with 
instruments of husbandry, which they can buy for twenty shillings. The farmers 
are commonly in some better circumstances in those countries. But the grasiers 
are most at their ease of all those who cultivate the land. The reason is still 
the same. Men must have profits proportionable to their expence and hazard. 
Where so considerable a number of the labouring poor as the peasants and farmers 
are in very low circumstances, all the rest must partake of their poverty, 
whether the government of that nation be monarchical or republican.
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We may form a similar remark with regard to the general history of mankind. What 
is the reason, why no people, living between the tropics, could ever yet attain 
to any art or civility, or reach even any police in their government, and any 
military discipline; while few nations in the temperate climates have been 
altogether deprived of these advantages? It is probable that one cause of this 
phenomenon is the warmth and equality of weather in the torrid zone, which 
render clothes and houses less requisite for the inhabitants, and thereby 
remove, in part, that necessity, which is the great spur to industry and 
invention. Curis acuens mortalia corda. Not to mention, that the fewer goods or 
possessions of this kind any people enjoy, the fewer quarrels are likely to 
arise amongst them, and the less necessity will there be for a settled police or 
regular authority to protect and defend them from foreign enemies, or from each 
other.
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†1 Mons. MELON, in his political essay on commerce, asserts, that even at 
present, if you divide FRANCE into 20 parts, 16 are labourers or peasants; two 
only artizans; one belonging to the law, church, and military; and one 
merchants, financiers, and bourgeois. This calculation is certainly very 
erroneous. In FRANCE, ENGLAND, and indeed most parts of EUROPE, half of the 
inhabitants live in cities; and even of those who live in the country, a great 
number are artizans, perhaps above a third.
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†2 THUCYDIDES, lib. vii. 75.
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†3 DIOD. SIC. lib. ii. 5. This account, I own, is somewhat suspicious, not to 
say worse; chiefly because this army was not composed of citizens, but of 
mercenary forces.
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†4 TITI LIVII, lib. vii. cap. 25. "Adeo in quae laboramus," says he, "sola 
crevimus, divitias luxuriemque."
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†5 The more antient ROMANS lived in perpetual war with all their neighbours: And 
in old LATIN, the term hostis, expressed both a stranger and an enemy. This is 
remarked by CICERO; but by him is ascribed to the humanity of his ancestors, who 
softened, as much as possible, the denomination of an enemy, by calling him by 
the same appellation which signified a stranger. De Off. lib. i. 12. 'Tis 
however much more probable, from the manners of the times, that the ferocity of 
those people was so great as to make them regard all strangers as enemies, and 
call them by the same name. It is not, besides, consistent with the most common 
maxims of policy or of nature, that any state should regard its public enemies 
with a friendly eye, or preserve any such sentiments for them as the ROMAN 
orator would ascribe to his ancestors. Not to mention, that the early ROMANS 
really exercised piracy, as we learn from their first treaties with CARTHAGE, 
preserved by POLYBIUS, lib. 3. and consequently, like the SALLEE and ALGERINE 
rovers, were actually at war with most nations, and a stranger and an enemy were 
with them almost synonimous.
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†a On commerce, luxury, money, interest, &c. Editions H to M.

Essay 2. OF REFINEMENT IN THE ARTS
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ESSAY II: OF REFINEMENT IN THE ARTS†a
Luxury is a word of an uncertain signification, and may be taken in a good as 
well as in a bad sense. In general, it means great refinement in the 
gratification of the senses; and any degree of it may be innocent or blameable, 
according to the age, or country, or condition of the person. The bounds between 
the virtue and the vice cannot here be exactly fixed, more than in other moral 
subjects. To imagine, that the gratifying of any sense, or the indulging of any 
delicacy in meat, drink, or apparel, is of itself a vice, can never enter into a 
head, that is not disordered by the frenzies of enthusiasm. I have, indeed, 
heard of a monk abroad, who, because the windows of his cell opened upon a noble 
prospect, made a covenant with his eyes never to turn that way, or receive so 
sensual a gratification. And such is the crime of drinking CHAMPAGNE or 
BURGUNDY, preferably to small beer or porter. These indulgences are only vices, 
when they are pursued at the expence of some virtue, as liberality or charity; 
in like manner as they are follies, when for them a man ruins his fortune, and 
reduces himself to want and beggary. Where they entrench upon no virtue, but 
leave ample subject whence to provide for friends, family, and every proper 
object of generosity or compassion, they are entirely innocent, and have in 
every age been acknowledged such by almost all moralists. To be entirely 
occupied with the luxury of the table, for instance, without any relish for the 
pleasures of ambition, study, or conversation, is a mark of stupidity, and is 
incompatible with any vigour of temper or genius. To confine one's expence 
entirely to such a gratification, without regard to friends or family, is an 
indication of a heart destitute of humanity or benevolence. But if a man reserve 
time sufficient for all laudable pursuits, and money sufficient for all generous 
purposes, he is free from every shadow of blame or reproach.
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Since luxury may be considered either as innocent or blameable, one may be 
surprized at those preposterous opinions, which have been entertained concerning 
it; while men of libertine principles bestow praises even on vicious luxury, and 
represent it as highly advantageous to society; and on the other hand, men of 
severe morals blame even the most innocent luxury, and represent it as the 
source of all the corruptions, disorders, and factions, incident to civil 
government. We shall here endeavour to correct both these extremes, by proving, 
first, that the ages of refinement are both the happiest and most virtuous; 
secondly, that wherever luxury ceases to be innocent, it also ceases to be 
beneficial; and when carried a degree too far, is a quality pernicious, though 
perhaps not the most pernicious, to political society.
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To prove the first point, we need but consider the effects of refinement both on 
private and on public life. Human happiness, according to the most received 
notions, seems to consist in three ingredients; action, pleasure, and indolence: 
And though these ingredients ought to be mixed in different proportions, 
according to the particular disposition of the person; yet no one ingredient can 
be entirely wanting, without destroying, in some measure, the relish of the 
whole composition. Indolence or repose, indeed, seems not of itself to 
contribute much to our enjoyment; but, like sleep, is requisite as an indulgence 
to the weakness of human nature, which cannot support an uninterrupted course of 
business or pleasure. That quick march of the spirits, which takes a man from 
himself, and chiefly gives satisfaction, does in the end exhaust the mind, and 
requires some intervals of repose, which, though agreeable for a moment, yet, if 
prolonged, beget a languor and lethargy, that destroys all enjoyment. Education, 
custom, and example, have a mighty influence in turning the mind to any of these 
pursuits; and it must be owned, that, where they promote a relish for action and 
pleasure, they are so far favourable to human happiness. In times when industry 
and the arts flourish, men are kept in perpetual occupation, and enjoy, as their 
reward, the occupation itself, as well as those pleasures which are the fruit of 
their labour. The mind acquires new vigour; enlarges its powers and faculties; 
and by an assiduity in honest industry, both satisfies its natural appetites, 
and prevents the growth of unnatural ones, which commonly spring up, when 
nourished by ease and idleness. Banish those arts from society, you deprive men 
both of action and of pleasure; and leaving nothing but indolence in their 
place, you even destroy the relish of indolence, which never is agreeable, but 
when it succeeds to labour, and recruits the spirits, exhausted by too much 
application and fatigue.
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Another advantage of industry and of refinements in the mechanical arts, is, 
that they commonly produce some refinements in the liberal; nor can one be 
carried to perfection, without being accompanied, in some degree, with the 
other. The same age, which produces great philosophers and politicians, renowned 
generals and poets, usually abounds with skilful weavers, and ship-carpenters. 
We cannot reasonably expect, that a piece of woollen cloth will be wrought to 
perfection in a nation, which is ignorant of astronomy, or where ethics are 
neglected. The spirit of the age affects all the arts; and the minds of men, 
being once roused from their lethargy, and put into a fermentation, turn 
themselves on all sides, and carry improvements into every art and science. 
Profound ignorance is totally banished, and men enjoy the privilege of rational 
creatures, to think as well as to act, to cultivate the pleasures of the mind as 
well as those of the body.
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The more these refined arts advance, the more sociable men become: nor is it 
possible, that, when enriched with science, and possessed of a fund of 
conversation, they should be contented to remain in solitude, or live with their 
fellow-citizens in that distant manner, which is peculiar to ignorant and 
barbarous nations. They flock into cities; love to receive and communicate 
knowledge; to show their wit or their breeding; their taste in conversation or 
living, in clothes or furniture. Curiosity allures the wise; vanity the foolish; 
and pleasure both. Particular clubs and societies are every where formed: Both 
sexes meet in an easy and sociable manner; and the tempers of men, as well as 
their behaviour, refine apace. So that, beside the improvements which they 
receive from knowledge and the liberal arts, it is impossible but they must feel 
an encrease of humanity, from the very habit of conversing together, and 
contributing to each other's pleasure and entertainment. Thus industry, 
knowledge, and humanity, are linked together by an indissoluble chain, and are 
found, from experience as well as reason, to be peculiar to the more polished, 
and, what are commonly denominated, the more luxurious ages.
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Nor are these advantages attended with disadvantages, that bear any proportion 
to them. The more men refine upon pleasure, the less will they indulge in 
excesses of any kind; because nothing is more destructive to true pleasure than 
such excesses. One may safely affirm, that the TARTARS are oftener guilty of 
beastly gluttony, when they feast on their dead horses, than EUROPEAN courtiers 
with all their refinements of cookery. And if libertine love, or even infidelity 
to the marriage-bed, be more frequent in polite ages, when it is often regarded 
only as a piece of gallantry; drunkenness, on the other hand, is much less 
common: A vice more odious, and more pernicious both to mind and body. And in 
this matter I would appeal, not only to an OVID or a PETRONIUS, but to a SENECA 
or a CATO. We know, that CAESAR, during CATILINE'S conspiracy, being 
necessitated to put into CATO'S hands a billet-doux, which discovered an 
intrigue with SERVILIA, CATO'S own sister, that stern philosopher threw it back 
to him with indignation; and in the bitterness of his wrath, gave him the 
appellation of drunkard, as a term more opprobrious than that with which he 
could more justly have reproached him.
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But industry, knowledge, and humanity, are not advantageous in private life 
alone: They diffuse their beneficial influence on the public, and render the 
government as great and flourishing as they make individuals happy and 
prosperous. The encrease and consumption of all the commodities, which serve to 
the ornament and pleasure of life, are advantageous to society; because, at the 
same time that they multiply those innocent gratifications to individuals, they 
are a kind of storehouse of labour, which, in the exigencies of state, may be 
turned to the public service. In a nation, where there is no demand for such 
superfluities, men sink into indolence, lose all enjoyment of life, and are 
useless to the public, which cannot maintain or support its fleets and armies, 
from the industry of such slothful members.
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The bounds of all the EUROPEAN kingdoms are, at present, nearly the same they 
were two hundred years ago: But what a difference is there in the power and 
grandeur of those kingdoms? Which can be ascribed to nothing but the encrease of 
art and industry. When CHARLES VIII. of FRANCE invaded ITALY, he carried with 
him about 20,000 men: Yet this armament so exhausted the nation, as we learn 
from GUICCIARDIN, that for some years it was not able to make so great an 
effort. The late king of FRANCE, in time of war, kept in pay above 400,000 
men;†1 though from MAZARINE'S death to his own, he was engaged in a course of 
wars that lasted near thirty years.
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This industry is much promoted by the knowledge inseparable from ages of art and 
refinement; as, on the other hand, this knowledge enables the public to make the 
best advantage of the industry of its subjects. Laws, order, police, discipline; 
these can never be carried to any degree of perfection, before human reason has 
refined itself by exercise, and by an application to the more vulgar arts, at 
least, of commerce and manufacture. Can we expect, that a government will be 
well modelled by a people, who know not how to make a spinning-wheel, or to 
employ a loom to advantage? Not to mention, that all ignorant ages are infested 
with superstition, which throws the government off its bias, and disturbs men in 
the pursuit of their interest and happiness.
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Knowledge in the arts of government naturally begets mildness and moderation, by 
instructing men in the advantages of humane maxims above rigour and severity, 
which drive subjects into rebellion, and make the return to submission 
impracticable, by cutting off all hopes of pardon. When the tempers of men are 
softened as well as their knowledge improved, this humanity appears still more 
conspicuous, and is the chief characteristic which distinguishes a civilized age 
from times of barbarity and ignorance. Factions are then less inveterate, 
revolutions less tragical, authority less severe, and seditions less frequent. 
Even foreign wars abate of their cruelty; and after the field of battle, where 
honour and interest steel men against compassion as well as fear, the combatants 
divest themselves of the brute, and resume the man.
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Nor need we fear, that men, by losing their ferocity, will lose their martial 
spirit, or become less undaunted and vigorous in defence of their country or 
their liberty. The arts have no such effect in enervating either the mind or 
body. On the contrary, industry, their inseparable attendant, adds new force to 
both. And if anger, which is said to be the whetstone of courage, loses somewhat 
of its asperity, by politeness and refinement; a sense of honour, which is a 
stronger, more constant, and more governable principle, acquires fresh vigour by 
that elevation of genius which arises from knowledge and a good education. Add 
to this, that courage can neither have any duration, nor be of any use, when not 
accompanied with discipline and martial skill, which are seldom found among a 
barbarous people. The ancients remarked, that DATAMES was the only barbarian 
that ever knew the art of war. And PYRRHUS, seeing the ROMANS marshal their army 
with some art and skill, said with surprize, These barbarians have nothing 
barbarous in their discipline! It is observable, that, as the old ROMANS, by 
applying themselves solely to war, were almost the only uncivilized people that 
ever possessed military discipline; so the modern ITALIANS are the only 
civilized people, among EUROPEANS, that ever wanted courage and a martial 
spirit. Those who would ascribe this effeminacy of the ITALIANS to their luxury, 
or politeness, or application to the arts, need but consider the FRENCH and 
ENGLISH, whose bravery is as uncontestable, as their love for the arts, and 
their assiduity in commerce. The ITALIAN historians give us a more satisfactory 
reason for this degeneracy of their countrymen. They shew us how the sword was 
dropped at once by all the ITALIAN sovereigns; while the VENETIAN aristocracy 
was jealous of its subjects, the FLORENTINE democracy applied itself entirely to 
commerce; ROME was governed by priests, and NAPLES by women. War then became the 
business of soldiers of fortune, who spared one another, and to the astonishment 
of the world, could engage a whole day in what they called a battle, and return 
at night to their camp, without the least bloodshed.
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What has chiefly induced severe moralists to declaim against refinement in the 
arts, is the example of ancient ROME, which, joining, to its poverty and 
rusticity, virtue and public spirit, rose to such a surprizing height of 
grandeur and liberty; but having learned from its conquered provinces†b the 
ASIATIC luxury, fell into every kind of corruption; whence arose sedition and 
civil wars, attended at last with the total loss of liberty. All the LATIN 
classics, whom we peruse in our infancy, are full of these sentiments, and 
universally ascribe the ruin of their state to the arts and riches imported from 
the East: Insomuch that SALLUST represents a taste for painting as a vice, no 
less than lewdness and drinking. And so popular were these sentiments, during 
the later ages of the republic, that this author abounds in praises of the old 
rigid ROMAN virtue, though himself the most egregious instance of modern luxury 
and corruption; speaks contemptuously of the GRECIAN eloquence, though the most 
elegant writer in the world; nay, employs preposterous digressions and 
declamations to this purpose, though a model of taste and correctness.
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But it would be easy to prove, that these writers mistook the cause of the 
disorders in the ROMAN state, and ascribed to luxury and the arts, what really 
proceeded from an ill modelled government, and the unlimited extent of 
conquests.†c Refinement on the pleasures and conveniencies of life has no 
natural tendency to beget venality and corruption. The value, which all men put 
upon any particular pleasure, depends on comparison and experience; nor is a 
porter less greedy of money, which he spends on bacon and brandy, than a 
courtier, who purchases champagne and ortolans. Riches are valuable at all 
times, and to all men; because they always purchase pleasures, such as men are 
accustomed to, and desire: Nor can any thing restrain or regulate the love of 
money, but a sense of honour and virtue; which, if it be not nearly equal at all 
times, will naturally abound most in ages of knowledge and refinement.
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Of all EUROPEAN kingdoms, POLAND seems the most defective in the arts of war as 
well as peace, mechanical as well as liberal; yet it is there that venality and 
corruption do most prevail. The nobles seem to have preserved their crown 
elective for no other purpose, than regularly to sell it to the highest bidder. 
This is almost the only species of commerce, with which that people are 
acquainted.
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The liberties of ENGLAND, so far from decaying since the improvements in the 
arts, have never flourished so much as during that period. And though corruption 
may seem to encrease of late years; this is chiefly to be ascribed to our 
established liberty, when our princes have found the impossibility of governing 
without parliaments, or of terrifying parliaments by the phantom of prerogative. 
Not to mention, that this corruption or venality prevails much more among the 
electors than the elected; and therefore cannot justly be ascribed to any 
refinements in luxury.
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If we consider the matter in a proper light, we shall find, that a progress in 
the arts is rather favourable to liberty, and has a natural tendency to 
preserve, if not produce a free government. In rude unpolished nations, where 
the arts are neglected, all labour is bestowed on the cultivation of the ground; 
and the whole society is divided into two classes, proprietors of land, and 
their vassals or tenants. The latter are necessarily dependent, and fitted for 
slavery and subjection; especially where they possess no riches, and are not 
valued for their knowledge in agriculture; as must always be the case where the 
arts are neglected. The former naturally erect themselves into petty tyrants; 
and must either submit to an absolute master, for the sake of peace and order; 
or if they will preserve their independency, like the†d ancient barons, they 
must fall into feuds and contests among themselves, and throw the whole society 
into such confusion, as is perhaps worse than the most despotic government. But 
where luxury nourishes commerce and industry, the peasants, by a proper 
cultivation of the land, become rich and independent; while the tradesmen and 
merchants acquire a share of the property, and draw authority and consideration 
to that middling rank of men, who are the best and firmest basis of public 
liberty. These submit not to slavery, like the peasants, from poverty and 
meanness of spirit; and having no hopes of tyrannizing over others, like the 
barons, they are not tempted, for the sake of that gratification, to submit to 
the tyranny of their sovereign. They covet equal laws, which may secure their 
property, and preserve them from monarchical, as well as aristocratical tyranny.
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The lower house is the support of our popular government; and all the world 
acknowledges, that it owed its chief influence and consideration to the encrease 
of commerce, which threw such a balance of property into the hands of the 
commons. How inconsistent then is it to blame so violently a refinement in the 
arts, and to represent it as the bane of liberty and public spirit!
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To declaim against present times, and magnify the virtue of remote ancestors, is 
a propensity almost inherent in human nature: And as the sentiments and opinions 
of civilized ages alone are transmitted to posterity, hence it is that we meet 
with so many severe judgments pronounced against luxury, and even science; and 
hence it is that at present we give so ready an assent to them. But the fallacy 
is easily perceived, by comparing different nations that are contemporaries; 
where we both judge more impartially, and can better set in opposition those 
manners, with which we are sufficiently acquainted. Treachery and cruelty, the 
most pernicious and most odious of all vices, seem peculiar to uncivilized ages; 
and by the refined GREEKS and ROMANS were ascribed to all the barbarous nations, 
which surrounded them. They might justly, therefore, have presumed, that their 
own ancestors, so highly celebrated, possessed no greater virtue, and were as 
much inferior to their posterity in honour and humanity, as in taste and 
science. An ancient FRANK or SAXON may be highly extolled: But I believe every 
man would think his life or fortune much less secure in the hands of a MOOR or 
TARTAR, than in those of a FRENCH or ENGLISH gentleman, the rank of men the most 
civilized in the most civilized nations.
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We come now to the second position which we proposed to illustrate, to wit, 
that, as innocent luxury, or a refinement in the arts and conveniencies of life, 
is advantageous to the public; so wherever luxury ceases to be innocent, it also 
ceases to be beneficial; and when carried a degree farther, begins to be a 
quality pernicious, though, perhaps, not the most pernicious, to political 
society.
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Let us consider what we call vicious luxury. No gratification, however sensual, 
can of itself be esteemed vicious. A gratification is only vicious, when it 
engrosses all a man's expence, and leaves no ability for such acts of duty and 
generosity as are required by his situation and fortune. Suppose, that he 
correct the vice, and employ part of his expence in the education of his 
children, in the support of his friends, and in relieving the poor; would any 
prejudice result to society? On the contrary, the same consumption would arise; 
and that labour, which, at present, is employed only in producing a slender 
gratification to one man, would relieve the necessitous, and bestow satisfaction 
on hundreds. The same care and toil that raise a dish of peas at CHRISTMAS, 
would give bread to a whole family during six months. To say, that, without a 
vicious luxury, the labour would not have been employed at all, is only to say, 
that there is some other defect in human nature, such as indolence, selfishness, 
inattention to others, for which luxury, in some measure, provides a remedy; as 
one poison may be an antidote to another. But virtue, like wholesome food, is 
better than poisons, however corrected.
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Suppose the same number of men, that are at present in GREAT BRITAIN, with the 
same soil and climate; I ask, is it not possible for them to be happier, by the 
most perfect way of life that can be imagined, and by the greatest reformation 
that Omnipotence itself could work in their temper and disposition? To assert, 
that they cannot, appears evidently ridiculous. As the land is able to maintain 
more than all its present inhabitants, they could never, in such a UTOPIAN 
state, feel any other ills than those which arise from bodily sickness; and 
these are not the half of human miseries. All other ills spring from some vice, 
either in ourselves or others; and even many of our diseases proceed from the 
same origin. Remove the vices, and the ills follow. You must only take care to 
remove all the vices. If you remove part, you may render the matter worse. By 
banishing vicious luxury, without curing sloth and an indifference to others, 
you only diminish industry in the state, and add nothing to men's charity or 
their generosity. Let us, therefore, rest contented with asserting, that two 
opposite vices in a state may be more advantageous than either of them alone; 
but let us never pronounce vice in itself advantageous. Is it not very 
inconsistent for an author to assert in one page, that moral distinctions are 
inventions of politicians for public interest; and in the next page maintain, 
that vice is advantageous to the public? And indeed it seems upon any system of 
morality, little less than a contradiction in terms, to talk of a vice, which is 
in general beneficial to society.†e
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I thought this reasoning necessary, in order to give some light to a 
philosophical question, which has been much disputed in ENGLAND. I call it a 
philosophical question, not a political one. For whatever may be the consequence 
of such a miraculous transformation of mankind, as would endow them with every 
species of virtue, and free them from every species of vice; this concerns not 
the magistrate, who aims only at possibilities. He cannot cure every vice by 
substituting a virtue in its place. Very often he can only cure one vice by 
another; and in that case, he ought to prefer what is least pernicious to 
society. Luxury, when excessive, is the source of many ills; but is in general 
preferable to sloth and idleness, which would commonly succeed in its place, and 
are more hurtful both to private persons and to the public. When sloth reigns, a 
mean uncultivated way of life prevails amongst individuals, without society, 
without enjoyment. And if the sovereign, in such a situation, demands the 
service of his subjects, the labour of the state suffices only to furnish the 
necessaries of life to the labourers, and can afford nothing to those who are 
employed in the public service.
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†1 The inscription on the PLACE-DE-VENDOME says 440,000.
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†a In Editions H to M this Essay is headed: Of Luxury.
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†b The Grecian and Asiatic luxury: Editions H to K.
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†c Luxury or refinement on pleasure has, &c.: Editions H to M.
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†d The Gothic barons: Editions H to N.
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†e Prodigality is not to be confounded with a refinement in the arts. It even 
appears, that that vice is much less frequent in the cultivated ages. Industry 
and gain beget this frugality, among the lower and middle ranks of men; and in 
all the busy professions. Men of high rank, indeed, it may be pretended, are 
more allured by the pleasures, which become more frequent. But idleness is the 
great source of prodigality at all times; and there are pleasures and vanities 
in every age, which allure men equally when they are unacquainted with better 
enjoyments. Not to mention, that the high interest, payed in rude times, quickly 
consumes the fortunes of the landed gentry, and multiplies their 
necessities.--Edition P in the text.

Essay 3. OF MONEY
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ESSAY III: OF MONEY
Money is not, properly speaking, one of the subjects of commerce; but only the 
instrument which men have agreed upon to facilitate the exchange of one 
commodity for another. It is none of the wheels of trade: It is the oil which 
renders the motion of the wheels more smooth and easy. If we consider any one 
kingdom by itself, it is evident, that the greater or less plenty of money is of 
no consequence; since the prices of commodities are always proportioned to the 
plenty of money, and a crown in HARRY VII.'s time served the same purpose as a 
pound does at present. It is only the public which draws any advantage from the 
greater plenty of money; and that only in its wars and negociations with foreign 
states. And this is the reason, why all rich and trading countries from CARTHAGE 
to GREAT BRITAIN and HOLLAND, have employed mercenary troops, which they hired 
from their poorer neighbours. Were they to make use of their native subjects, 
they would find less advantage from their superior riches, and from their great 
plenty of gold and silver; since the pay of all their servants must rise in 
proportion to the public opulence. Our small army of 20,000 men is maintained at 
as great expence as a FRENCH army†a twice as numerous. The ENGLISH fleet, during 
the late war, required as much money to support it as all the ROMAN legions, 
which kept the whole world in subjection, during the time of the emperors.†1
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The greater number of people and their greater industry are serviceable in all 
cases; at home and abroad, in private, and in public. But the greater plenty of 
money, is very limited in its use, and may even sometimes be a loss to a nation 
in its commerce with foreigners.
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There seems to be a happy concurrence of causes in human affairs, which checks 
the growth of trade and riches, and hinders them from being confined entirely to 
one people; as might naturally at first be dreaded from the advantages of an 
established commerce. Where one nation has gotten the start of another in trade, 
it is very difficult for the latter to regain the ground it has lost; because of 
the superior industry and skill of the former, and the greater stocks, of which 
its merchants are possessed, and which enable them to trade on so much smaller 
profits. But these advantages are compensated, in some measure, by the low price 
of labour in every nation which has not an extensive commerce, and does not much 
abound in gold and silver. Manufactures, therefore gradually shift their places, 
leaving those countries and provinces which they have already enriched, and 
flying to others, whither they are allured by the cheapness of provisions and 
labour; till they have enriched these also, and are again banished by the same 
causes. And, in general, we may observe, that the dearness of every thing, from 
plenty of money, is a disadvantage, which attends an established commerce, and 
sets bounds to it in every country, by enabling the poorer states to undersel 
the richer in all foreign markets.
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This has made me entertain a doubt concerning the benefit of banks and 
paper-credit, which are so generally esteemed advantageous to every nation. That 
provisions and labour should become dear by the encrease of trade and money, is, 
in many respects, an inconvenience; but an inconvenience that is unavoidable, 
and the effect of that public wealth and prosperity which are the end of all our 
wishes. It is compensated by the advantages, which we reap from the possession 
of these precious metals, and the weight, which they give the nation in all 
foreign wars and negociations. But there appears no reason for encreasing that 
inconvenience by a counterfeit money, which foreigners will not accept of in any 
payment, and which any great disorder in the state will reduce to nothing. There 
are, it is true, many people in every rich state, who having large sums of 
money, would prefer paper with good security; as being of more easy transport 
and more safe custody. If the public provide not a bank, private bankers will 
take advantage of this circumstance; as the goldsmiths formerly did in LONDON, 
or as the bankers do at present in DUBLIN: And therefore it is better, it may be 
thought, that a public company should enjoy the benefit of that paper-credit, 
which always will have place in every opulent kingdom. But to endeavour 
artificially to encrease such a credit, can never be the interest of any trading 
nation; but must lay them under disadvantages, by encreasing money beyond its 
natural proportion to labour and commodities, and thereby heightening their 
price to the merchant and manufacturer. And in this view, it must be allowed, 
that no bank could be more advantageous, than such a one as locked up all the 
money it received,†2 and never augmented the circulating coin, as is usual, by 
returning part of its treasure into commerce. A public bank, by this expedient, 
might cut off much of the dealings of private bankers and money-jobbers; and 
though the state bore the charge of salaries to the directors and tellers of 
this bank (for, according to the preceding supposition, it would have no profit 
from its dealings), the national advantage, resulting from the low price of 
labour and the destruction of paper-credit, would be a sufficient compensation. 
Not to mention, that so large a sum, lying ready at command, would be a 
convenience in times of great public danger and distress; and what part of it 
was used might be replaced at leisure, when peace and tranquillity was restored 
to the nation.
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But of this subject of paper credit we shall treat more largely hereafter. And I 
shall finish this essay on money, by proposing and explaining two observations, 
which may, perhaps, serve to employ the thoughts of our speculative 
politicians.†c
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It was a shrewd observation of ANACHARSIS†3 the SCYTHIAN, who had never seen 
money in his own country, that gold and silver seemed to him of no use to the 
GREEKS, but to assist them in numeration and arithmetic. It is indeed evident, 
that money is nothing but the representation of labour and commodities, and 
serves only as a method of rating or estimating them. Where coin is in greater 
plenty; as a greater quantity of it is required to represent the same quantity 
of goods; it can have no effect, either good or bad, taking a nation within 
itself; any more than it would make an alteration on a merchant's books, if, 
instead of the ARABIAN method of notation, which requires few characters, he 
should make use of the ROMAN, which requires a great many. Nay, the greater 
quantity of money, like the ROMAN characters, is rather inconvenient, and 
requires greater trouble both to keep and transport it. But notwithstanding this 
conclusion, which must be allowed just, it is certain, that, since the discovery 
of the mines in AMERICA, industry has encreased in all the nations of EUROPE, 
except in the possessors of those mines; and this may justly be ascribed, 
amongst other reasons, to the encrease of gold and silver. Accordingly we find, 
that, in every kingdom, into which money begins to flow in greater abundance 
than formerly, every thing takes a new face: labour and industry gain life; the 
merchant becomes more enterprising, the manufacturer more diligent and skilful, 
and even the farmer follows his plough with greater alacrity and attention. This 
is not easily to be accounted for, if we consider only the influence which a 
greater abundance of coin has in the kingdom itself, by heightening the price of 
commodities, and obliging every one to pay a greater number of these little 
yellow or white pieces for every thing he purchases. And as to foreign trade, it 
appears, that great plenty of money is rather disadvantageous, by raising the 
price of every kind of labour.
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To account, then, for this phenomenon, we must consider, that though the high 
price of commodities be a necessary consequence of the encrease of gold and 
silver, yet it follows not immediately upon that encrease; but some time is 
required before the money circulates through the whole state, and makes its 
effect be felt on all ranks of people. At first, no alteration is perceived; by 
degrees the price rises, first of one commodity, then of another; till the whole 
at last reaches a just proportion with the new quantity of specie which is in 
the kingdom. In my opinion, it is only in this interval or intermediate 
situation, between the acquisition of money and rise of prices, that the 
encreasing quantity of gold and silver is favourable to industry. When any 
quantity of money is imported into a nation, it is not at first dispersed into 
many hands; but is confined to the coffers of a few persons, who immediately 
seek to employ it to advantage. Here are a set of manufacturers or merchants, we 
shall suppose, who have received returns of gold and silver for goods which they 
sent to CADIZ. They are thereby enabled to employ more workmen than formerly, 
who never dream of demanding higher wages, but are glad of employment from such 
good paymasters. If workmen become scarce, the manufacturer gives higher wages, 
but at first requires an encrease of labour; and this is willingly submitted to 
by the artisan, who can now eat and drink better, to compensate his additional 
toil and fatigue. He carries his money to market, where he finds every thing at 
the same price as formerly, but returns with greater quantity and of better 
kinds, for the use of his family. The farmer and gardener, finding, that all 
their commodities are taken off, apply themselves with alacrity to the raising 
more; and at the same time can afford to take better and more cloths from their 
tradesmen, whose price is the same as formerly, and their industry only whetted 
by so much new gain. It is easy to trace the money in its progress through the 
whole commonwealth; where we shall find, that it must first quicken the 
diligence of every individual, before it encrease the price of labour.
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And that the specie may encrease to a considerable pitch, before it have this 
latter effect, appears, amongst other instances, from the frequent operations of 
the FRENCH king on the money; where it was always found, that the augmenting of 
the numerary value did not produce a proportional rise of the prices, at least 
for some time. In the last year of LOUIS XIV. money was raised three-sevenths, 
but prices augmented only one. Corn in FRANCE is now sold at the same price, or 
for the same number of livres, it was in 1683; though silver was then at 30 
livres the mark, and is now at 50.†4 Not to mention the great addition of gold 
and silver, which may have come into that kingdom since the former period.
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From the whole of this reasoning we may conclude, that it is of no manner of 
consequence, with regard to the domestic happiness of a state, whether money be 
in a greater or less quantity. The good policy of the magistrate consists only 
in keeping it, if possible, still encreasing; because, by that means, he keeps 
alive a spirit of industry in the nation, and encreases the stock of labour, in 
which consists all real power and riches. A nation, whose money decreases, is 
actually, at that time, weaker and more miserable than another nation, which 
possesses no more money, but is on the encreasing hand. This will be easily 
accounted for, if we consider, that the alterations in the quantity of money, 
either on one side or the other, are not immediately attended with 
proportionable alterations in the price of commodities. There is always an 
interval before matters be adjusted to their new situation; and this interval is 
as pernicious to industry, when gold and silver are diminishing, as it is 
advantageous when these metals are encreasing. The workman has not the same 
employment from the manufacturer and merchant; though he pays the same price for 
every thing in the market. The farmer cannot dispose of his corn and cattle; 
though he must pay the same rent to his landlord. The poverty, and beggary, and 
sloth, which must ensue, are easily foreseen.
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II. The second observation which I proposed to make with regard to money, may be 
explained after the following manner. There are some kingdoms, and many 
provinces in EUROPE, (and all of them were once in the same condition) where 
money is so scarce, that the landlord can get none at all from his tenants; but 
is obliged to take his rent in kind, and either to consume it himself, or 
transport it to places where he may find a market. In those countries, the 
prince can levy few or no taxes, but in the same manner: And as he will receive 
small benefit from impositions so paid, it is evident that such a kingdom has 
little force even at home; and cannot maintain fleets and armies to the same 
extent, as if every part of it abounded in gold and silver. There is surely a 
greater disproportion between the force of GERMANY, at present, and what it was 
three centuries ago,†5 than there is in its industry, people, and manufactures. 
The AUSTRIAN dominions in the empire are in general well peopled and well 
cultivated, and are of great extent; but have not a proportionable weight in the 
balance of EUROPE; proceeding, as is commonly supposed, from the scarcity of 
money. How do all these facts agree with that principle of reason, that the 
quantity of gold and silver is in itself altogether indifferent? According to 
that principle wherever a sovereign has numbers of subjects, and these have 
plenty of commodities, he should of course be great and powerful, and they rich 
and happy, independent of the greater or lesser abundance of the precious 
metals. These admit of divisions and subdivisions to a great extent; and where 
the pieces might become so small as to be in danger of being lost, it is easy to 
mix the gold or silver with a baser metal, as is practised in some countries of 
EUROPE; and by that means raise the pieces to a bulk more sensible and 
convenient. They still serve the same purposes of exchange, whatever their 
number may be, or whatever colour they may be supposed to have.
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To these difficulties I answer, that the effect, here supposed to flow from 
scarcity of money, really arises from the manners and customs of the people; and 
that we mistake, as is too usual, a collateral effect for a cause. The 
contradiction is only apparent; but it requires some thought and reflection to 
discover the principles, by which we can reconcile reason to experience.
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It seems a maxim almost self-evident, that the prices of every thing depend on 
the proportion between commodities and money, and that any considerable 
alteration on either has the same effect, either of heightening or lowering the 
price. Encrease the commodities, they become cheaper; encrease the money, they 
rise in their value. As, on the other hand, a diminution of the former, and that 
of the latter, have contrary tendencies.
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It is also evident, that the prices do not so much depend on the absolute 
quantity of commodities and that of money, which are in a nation, as on that of 
the commodities, which come or may come to market, and of the money which 
circulates. If the coin be locked up in chests, it is the same thing with regard 
to prices, as if it were annihilated; if the commodities be hoarded in†e 
magazines and granaries, a like effect follows. As the money and commodities, in 
these cases, never meet, they cannot affect each other. Were we, at any time, to 
form conjectures concerning the price of provisions, the corn, which the farmer 
must reserve†f for seed and for the maintenance of himself and family, ought 
never to enter into the estimation. It is only the overplus, compared to the 
demand, that determines the value.
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To apply these principles, we must consider, that, in the first and more 
uncultivated ages of any state, ere fancy has confounded her wants with those of 
nature, men, content with the produce of their own fields, or with those rude 
improvements which they themselves can work upon them, have little occasion for 
exchange, at least for money, which, by agreement, is the common measure of 
exchange. The wool of the farmer's own flock, spun in his own family, and 
wrought by a neighbouring weaver, who receives his payment in corn or wool, 
suffices for furniture and cloathing. The carpenter, the smith, the mason, the 
tailor, are retained by wages of a like nature; and the landlord himself, 
dwelling in the neighbourhood, is content to receive his rent in the commodities 
raised by the farmer. The greater part of these he consumes at home, in rustic 
hospitality: The rest, perhaps, he disposes of for money to the neighbouring 
town, whence he draws the few materials of his expence and luxury.
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But after men begin to refine on all these enjoyments, and live not always at 
home, nor are content with what can be raised in their neighbourhood, there is 
more exchange and commerce of all kinds, and more money enters into that 
exchange. The tradesmen will not be paid in corn; because they want something 
more than barely to eat. The farmer goes beyond his own parish for the 
commodities he purchases, and cannot always carry his commodities to the 
merchant who supplies him. The landlord lives in the capital, or in a foreign 
country; and demands his rent in gold and silver, which can easily be 
transported to him. Great undertakers, and manufacturers, and merchants, arise 
in every commodity; and these can conveniently deal in nothing but in specie. 
And consequently, in this situation of society, the coin enters into many more 
contracts, and by that means is much more employed than in the former.
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The necessary effect is, that, provided the money encrease not in the nation, 
every thing must become much cheaper in times of industry and refinement, than 
in rude, uncultivated ages. It is the proportion between the circulating money, 
and the commodities in the market, which determines the prices. Goods, that are 
consumed at home, or exchanged with other goods in the neighbourhood, never come 
to market; they affect not in the least the current specie; with regard to it 
they are as if totally annihilated; and consequently this method of using them 
sinks the proportion on the side of the commodities, and encreases the prices. 
But after money enters into all contracts and sales, and is every where the 
measure of exchange, the same national cash has a much greater task to perform; 
all commodities are then in the market; the sphere of circulation is enlarged; 
it is the same case as if that individual sum were to serve a larger kingdom; 
and therefore, the proportion being here lessened on the side of the money, 
every thing must become cheaper, and the prices gradually fall.
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By the most exact computations, that have been formed all over EUROPE, after 
making allowance for the alteration in the numerary value or the denomination, 
it is found, that the prices of all things have only risen three, or at most, 
four times, since the discovery of the WEST INDIES. But will any one assert, 
that there is not much more than four times the coin in EUROPE, that was in the 
fifteenth century, and the centuries preceding it? The SPANIARDS and PORTUGUESE 
from their mines, the ENGLISH, FRENCH, and DUTCH, by their AFRICAN trade, and by 
their interlopers in the WEST INDIES, bring home about†g six millions a year, of 
which not above a third goes to the EAST-INDIES. This sum alone, in ten years, 
would probably double the ancient stock of money in EUROPE. And no other 
satisfactory reason can be given, why all prices have not risen to a much more 
exorbitant height, except that which is derived from a change of customs and 
manners. Besides that more commodities are produced by additional industry, the 
same commodities come more to market, after men depart from their ancient 
simplicity of manners. And though this encrease has not been equal to that of 
money, it has, however, been considerable, and has preserved the proportion 
between coin and commodities nearer the ancient standard.
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Were the question proposed, Which of these methods of living in the people, the 
simple or refined, is the most advantageous to the state or public? I should, 
without much scruple, prefer the latter, in a view to politics at least; and 
should produce this as an additional reason for the encouragement of trade and 
manufactures.
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While men live in the ancient simple manner, and supply all their necessaries 
from domestic industry or from the neighbourhood, the sovereign can levy no 
taxes in money from a considerable part of his subjects; and if he will impose 
on them any burthens, he must take payment in commodities, with which alone they 
abound; a method attended with such great and obvious inconveniencies, that they 
need not here be insisted on. All the money he can pretend to raise, must be 
from his principal cities, where alone it circulates; and these, it is evident, 
cannot afford him so much as the whole state could, did gold and silver 
circulate throughout the whole. But besides this obvious diminution of the 
revenue, there is another cause of the poverty of the public in such a 
situation. Not only the sovereign receives less money, but the same money goes 
not so far as in times of industry and general commerce. Every thing is dearer, 
where the gold and silver are supposed equal; and that because fewer commodities 
come to market, and the whole coin bears a higher proportion to what is to be 
purchased by it; whence alone the prices of every thing are fixed and 
determined.
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Here then we may learn the fallacy of the remark, often to be met with in 
historians, and even in common conversation, that any particular state is weak, 
though fertile, populous, and well cultivated, merely because it wants money. It 
appears, that the want of money can never injure any state within itself: For 
men and commodities are the real strength of any community. It is the simple 
manner of living which here hurts the public, by confining the gold and silver 
to few hands, and preventing its universal diffusion and circulation. On the 
contrary, industry and refinements of all kinds incorporate it with the whole 
state, however small its quantity may be: They digest it into every vein, so to 
speak; and make it enter into every transaction and contract. No hand is 
entirely empty of it. And as the prices of every thing fall by that means, the 
sovereign has a double advantage: He may draw money by his taxes from every part 
of the state; and what he receives, goes farther in every purchase and payment.
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We may infer, from a comparison of prices, that money is not more plentiful in 
CHINA, than it was in EUROPE three centuries ago: But what immense power is that 
empire possessed of, if we may judge by the civil and military establishment 
maintained by it? POLYBIUS†6 tells us, that provisions were so cheap in ITALY 
during his time, that in some places the†h stated price for a meal at the inns 
was a semis a head, little more than a farthing! Yet the ROMAN power had even 
then subdued the whole known world. About a century before that period, the 
CARTHAGINIAN ambassador said, by way of raillery, that no people lived more 
sociably amongst themselves than the ROMANS; for that, in every entertainment, 
which, as foreign ministers, they received, they still observed the same plate 
at every table.†7 The absolute quantity of the precious metals is a matter of 
great indifference. There are only two circumstances of any importance, namely, 
their gradual encrease, and their thorough concoction and circulation through 
the state; and the influence of both these circumstances has here been 
explained.
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In the following Essay we shall see an instance of a like fallacy as that above 
mentioned; where a collateral effect is taken for a cause, and where a 
consequence is ascribed to the plenty of money; though it be really owing to a 
change in the manners and customs of the people.
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†1 A private soldier in the ROMAN infantry had a denarius a day, somewhat less 
than eightpence. The ROMAN emperors had commonly 25 legions in pay, which 
allowing 5000 men to a legion, makes 125,000. TACIT. Ann. lib. iv. 5. It is 
true, there were also auxiliaries to the legions; but their numbers are 
uncertain, as well as their pay. To consider only the legionaries, the pay of 
the private men could not exceed 1,600,000 pounds. Now, the parliament in the 
last war commonly allowed for the fleet 2,500,000. We have therefore 900,000 
over for the officers and other expences of the ROMAN legions. There seem to 
have been but few officers in the ROMAN armies, in comparison of what are 
employed in all our modern troops, except some SWISS corps. And these officers 
had very small pay: A centurion, for instance, only double a common soldier. And 
as the soldiers from their pay (TACIT. Ann. lib. i. 17) bought their own 
cloaths, arms, tents, and baggage; this must also diminish considerably the 
other charges of the army. So little expensive was that mighty government, and 
so easy was its yoke over the world. And, indeed, this is the more natural 
conclusion from the foregoing calculations. For money, after the conquest of 
AEGYPT, seems to have been nearly in as great plenty at ROME, as it is at 
present in the richest of the EUROPEAN kingdoms.
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†2 This is the case with the bank of AMSTERDAM.†b
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†3 PLUT. Quomodo quis suos profectus in virtute sentire possit.
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†4 These facts I give upon the authority of Mons. du TOT in his Reflections 
politiques, an author of reputation. Though I must confess, that the facts which 
he advances on other occasions, are often so suspicious, as to make his 
authority less in this matter. However, the general observation, that the 
augmenting of the money in FRANCE does not at first proportionably augment the 
prices, is certainly just.
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By the by, this seems to be one of the best reasons which can be given, for a 
gradual and universal encrease of the denomination of money, though it has been 
entirely overlooked in all those volumes which have been written on that 
question by MELON, Du TOT, and PARIS de VERNEY. Were all our money, for 
instance, recoined, and a penny's worth of silver taken from every shilling, the 
new shilling would probably purchase every thing that could have been bought by 
the old; the prices of every thing would thereby be insensibly diminished; 
foreign trade enlivened; and domestic industry, by the circulation of a great 
number of pounds and shillings, would receive some encrease and encouragement. 
In executing such a project, it would be better to make the new shilling pass 
for 24 halfpence, in order to preserve the illusion, and make it be taken for 
the same. And as a recoinage of our silver begins to be requisite, by the 
continual wearing of our shillings and sixpences, it may be doubtful, whether we 
ought to imitate the example in King WILLIAM'S reign, when the clipt money was 
raised to the old standard.†d
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†5 The ITALIANS gave to the Emperor MAXIMILIAN, the nickname of POCCI-DANARI. 
None of the enterprises of that prince ever succeeded, for want of money.
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†6 Lib. ii. cap. 15.
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†7 PLIN. lib. xxxiii. cap. 11.
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†a Thrice: Editions H to P.
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†b This note was added in Ed. K.
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†c Editions H to P add: For to these only I all along address myself. 'Tis 
enough that I submit to the ridicule sometimes, in this age, attached to the 
character of a philosopher, without adding to it that which belongs to a 
projector.
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†d This last sentence is entered, to be added, in the list of errata in H: it 
was incorporated in the text of I.
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†e Magazines and: first added in Edition Q.
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†f For seed and: first added in Edition R.
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†g Editions H and I read: Seven millions . . . a tenth part.
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†h Editions H to P read: The stated club at the inns.

Essay 4. OF INTEREST
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ESSAY IV: OF INTEREST
Nothing is esteemed a more certain sign of the flourishing condition of any 
nation than the lowness of interest: And with reason; though I believe the cause 
is somewhat different from what is commonly apprehended. Lowness of interest is 
generally ascribed to plenty of money. But money, however plentiful, has no 
other effect, if fixed, than to raise the price of labour. Silver is more common 
than gold; and therefore you receive a greater quantity of it for the same 
commodities. But do you pay less interest for it? Interest in BATAVIA and 
JAMAICA is at 10 per cent. in PORTUGAL at 6; though these places, as we may 
learn from the prices of every thing, abound more in gold and silver than either 
LONDON or AMSTERDAM.
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Were all the gold in ENGLAND annihilated at once, and one and twenty shillings 
substituted in the place of every guinea, would money be more plentiful or 
interest lower? No surely: We should only use silver instead of gold. Were gold 
rendered as common as silver, and silver as common as copper; would money be 
more plentiful or interest lower? We may assuredly give the same answer. Our 
shillings would then be yellow, and our halfpence white; and we should have no 
guineas. No other difference would ever be observed; no alteration on commerce, 
manufactures, navigation, or interest; unless we imagine, that the colour of the 
metal is of any consequence.
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Now, what is so visible in these greater variations of scarcity or abundance in 
the precious metals, must hold in all inferior changes. If the multiplying of 
gold and silver fifteen times makes no difference, much less can the doubling or 
tripling them. All augmentation has no other effect than to heighten the price 
of labour and commodities; and even this variation is little more than that of a 
name. In the progress towards these changes, the augmentation may have some 
influence, by exciting industry; but after the prices are settled, suitably to 
the new abundance of gold and silver, it has no manner of influence.
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An effect always holds proportion with its cause. Prices have risen near four 
times since the discovery of the INDIES; and it is probable gold and silver have 
multiplied much more: But interest has not fallen much above half. The rate of 
interest, therefore, is not derived from the quantity of the precious metals.
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Money having chiefly a fictitious value,†a the greater or less plenty of it is 
of no consequence, if we consider a nation within itself; and the quantity of 
specie, when once fixed, though ever so large, has no other effect, than to 
oblige every one to tell out a greater number of those shining bits of metal, 
for clothes, furniture or equipage, without encreasing any one convenience of 
life. If a man borrow money to build a house, he then carries home a greater 
load; because the stone, timber, lead, glass, &c. with the labour of the masons 
and carpenters, are represented by a greater quantity of gold and silver. But as 
these metals are considered chiefly as representations, there can no alteration 
arise, from their bulk or quantity, their weight or colour, either upon their 
real value or their interest. The same interest, in all cases, bears the same 
proportion to the sum. And if you lent me so much labour and so many 
commodities; by receiving five per cent. you always receive proportional labour 
and commodities, however represented, whether by yellow or white coin, whether 
by a pound or an ounce. It is in vain, therefore, to look for the cause of the 
fall or rise of interest in the greater or less quantity of gold and silver, 
which is fixed in any nation.
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High interest arises from three circumstances: A great demand for borrowing; 
little riches to supply that demand; and great profits arising from commerce: 
And these circumstances are a clear proof of the small advance of commerce and 
industry, not of the scarcity of gold and silver. Low interest, on the other 
hand, proceeds from the three opposite circumstances: A small demand for 
borrowing; great riches to supply that demand; and small profits arising from 
commerce: And these circumstances are all connected together, and proceed from 
the encrease of industry and commerce, not of gold and silver. We shall 
endeavour to prove these points; and shall begin with the causes and the effects 
of a great or small demand for borrowing.
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When a people have emerged ever so little from a savage state, and their numbers 
have encreased beyond the original multitude, there must immediately arise an 
inequality of property; and while some possess large tracts of land, others are 
confined within narrow limits, and some are entirely without any landed 
property. Those who possess more land than they can labour, employ those who 
possess none, and agree to receive a determinate part of the product. Thus the 
landed interest is immediately established; nor is there any settled government, 
however rude, in which affairs are not on this footing. Of these proprietors of 
land, some must presently discover themselves to be of different tempers from 
others; and while one would willingly store up the produce of his land for 
futurity, another desires to consume at present what should suffice for many 
years. But as the spending of a settled revenue is a way of life entirely 
without occupation; men have so much need of somewhat to fix and engage them, 
that pleasures, such as they are, will be the pursuit of the greater part of the 
landholders, and the prodigals among them will always be more numerous than the 
misers. In a state, therefore, where there is nothing but a landed interest, as 
there is little frugality, the borrowers must be very numerous, and the rate of 
interest must hold proportion to it. The difference depends not on the quantity 
of money, but on the habits and manners which prevail. By this alone the demand 
for borrowing is encreased or diminished. Were money so plentiful as to make an 
egg be sold for sixpence; so long as there are only landed gentry and peasants 
in the state, the borrowers must be numerous, and interest high. The rent for 
the same farm would be heavier and more bulky: But the same idleness of the 
landlord, with the higher price of commodities, would dissipate it in the same 
time, and produce the same necessity and demand for borrowing.†b
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Nor is the case different with regard to the second circumstance which we 
proposed to consider, namely, the great or little riches to supply the demand. 
This effect also depends on the habits and way of living of the people, not on 
the quantity of gold and silver. In order to have, in any state, a great number 
of lenders, it is not sufficient nor requisite, that there be great abundance of 
the precious metals. It is only requisite, that the property or command of that 
quantity, which is in the state, whether great or small, should be collected in 
particular hands, so as to form considerable sums, or compose a great monied 
interest. This begets a number of lenders, and sinks the rate of usury; and this 
I shall venture to affirm, depends not on the quantity of specie, but on 
particular manners and customs, which make the specie gather into separate sums 
or masses of considerable value.
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For suppose, that, by miracle, every man in GREAT BRITAIN should have five 
pounds slipt into his pocket in one night; this would much more than double the 
whole money that is at present in the kingdom; yet there would not next day, nor 
for some time, be any more lenders, nor any variation in the interest. And were 
there nothing but landlords and peasants in the state, this money, however 
abundant, could never gather into sums; and would only serve to encrease the 
prices of every thing, without any farther consequence. The prodigal landlord 
dissipates it, as fast as he receives it; and the beggarly peasant has no means, 
nor view, nor ambition of obtaining above a bare livelihood. The overplus of 
borrowers above that of lenders continuing still the same, there will follow no 
reduction of interest. That depends upon another principle; and must proceed 
from an encrease of industry and frugality, of arts and commerce.
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Every thing useful to the life of man arises from the ground; but few things 
arise in that condition which is requisite to render them useful. There must, 
therefore, beside the peasants and the proprietors of land, be another rank of 
men, who receiving from the former the rude materials, work them into their 
proper form, and retain part for their own use and subsistence. In the infancy 
of society, these contracts between the artisans and the peasants, and between 
one species of artisans and another are commonly entered into immediately by the 
persons themselves, who, being neighbours, are easily acquainted with each 
other's necessities, and can lend their mutual assistance to supply them. But 
when men's industry encreases, and their views enlarge, it is found, that the 
most remote parts of the state can assist each other as well as the more 
contiguous, and that this intercourse of good offices may be carried on to the 
greatest extent and intricacy. Hence the origin of merchants, one of the most 
useful races of men, who serve as agents between those parts of the state, that 
are wholly unacquainted, and are ignorant of each other's necessities. Here are 
in a city fifty workmen in silk and linen, and a thousand customers; and these 
two ranks of men, so necessary to each other, can never rightly meet, till one 
man erects a shop, to which all the workmen and all the customers repair. In 
this province, grass rises in abundance: The inhabitants abound in cheese, and 
butter, and cattle; but want bread and corn, which, in a neighbouring province, 
are in too great abundance for the use of the inhabitants. One man discovers 
this. He brings corn from the one province and returns with cattle; and 
supplying the wants of both, he is, so far, a common benefactor. As the people 
encrease in numbers and industry, the difficulty of their intercourse encreases: 
The business of the agency or merchandize becomes more intricate; and divides, 
subdivides, compounds, and mixes to a greater variety. In all these 
transactions, it is necessary, and reasonable, that a considerable part of the 
commodities and labour should belong to the merchant, to whom, in a great 
measure, they are owing. And these commodities he will sometimes preserve in 
kind, or more commonly convert into money, which is their common representation. 
If gold and silver have encreased in the state together with the industry, it 
will require a great quantity of these metals to represent a great quantity of 
commodities and labour. If industry alone has encreased, the prices of every 
thing must sink, and a small quantity of specie will serve as a representation.
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There is no craving or demand of the human mind more constant and insatiable 
than that for exercise and employment; and this desire seems the foundation of 
most of our passions and pursuits. Deprive a man of all business and serious 
occupation, he runs restless from one amusement to another; and the weight and 
oppression, which he feels from idleness, is so great, that he forgets the ruin 
which must follow him from his immoderate expences. Give him a more harmless way 
of employing his mind or body, he is satisfied, and feels no longer that 
insatiable thirst after pleasure. But if the employment you give him be 
lucrative, especially if the profit be attached to every particular exertion of 
industry, he has gain so often in his eye, that he acquires, by degrees, a 
passion for it, and knows no such pleasure as that of seeing the daily encrease 
of his fortune. And this is the reason why trade encreases frugality, and why, 
among merchants, there is the same overplus of misers above prodigals, as, among 
the possessors of land, there is the contrary.
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Commerce encreases industry, by conveying it readily from one member of the 
state to another, and allowing none of it to perish or become useless. It 
encreases frugality, by giving occupation to men, and employing them in the arts 
of gain, which soon engage their affection, and remove all relish for pleasure 
and expence. It is an infallible consequence of all industrious professions, to 
beget frugality, and make the love of gain prevail over the love of pleasure. 
Among lawyers and physicians who have any practice, there are many more who live 
within their income, than who exceed it, or even live up to it. But lawyers and 
physicians beget no industry; and it is even at the expence of others they 
acquire their riches; so that they are sure to diminish the possessions of some 
of their fellow-citizens, as fast as they encrease their own. Merchants, on the 
contrary, beget industry, by serving as canals to convey it through every corner 
of the state: And at the same time, by their frugality, they acquire great power 
over that industry, and collect a large property in the labour and commodities, 
which they are the chief instruments in producing. There is no other profession, 
therefore, except merchandize, which can make the monied interest considerable, 
or, in other words, can encrease industry, and, by also encreasing frugality, 
give a great command of that industry to particular members of the society. 
Without commerce, the state must consist chiefly of landed gentry, whose 
prodigality and expence make a continual demand for borrowing; and of peasants, 
who have no sums to supply that demand. The money never gathers into large 
stocks or sums, which can be lent at interest. It is dispersed into numberless 
hands, who either squander it in idle show and magnificence, or employ it in the 
purchase of the common necessaries of life. Commerce alone assembles it into 
considerable sums; and this effect it has merely from the industry which it 
begets, and the frugality which it inspires, independent of that particular 
quantity of precious metal which may circulate in the state.
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Thus an encrease of commerce, by a necessary consequence, raises a great number 
of lenders, and by that means produces lowness of interest. We must now consider 
how far this encrease of commerce diminishes the profits arising from that 
profession, and gives rise to the third circumstance requisite to produce 
lowness of interest.
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It may be proper to observe on this head, that low interest and low profits of 
merchandize are two events, that mutually forward each other, and are both 
originally derived from that extensive commerce, which produces opulent 
merchants, and renders the monied interest considerable. Where merchants possess 
great stocks, whether represented by few or many pieces of metal, it must 
frequently happen, that, when they either become tired of business, or leave 
heirs unwilling or unfit to engage in commerce, a great proportion of these 
riches naturally seeks an annual and secure revenue. The plenty diminishes the 
price, and makes the lenders accept of a low interest. This consideration 
obliges many to keep their stock employed in trade, and rather be content with 
low profits than dispose of their money at an under-value. On the other hand, 
when commerce has become extensive, and employs large stocks, there must arise 
rivalships among the merchants, which diminish the profits of trade, at the same 
time that they encrease the trade itself. The low profits of merchandize induce 
the merchants to accept more willingly of a low interest, when they leave off 
business, and begin to indulge themselves in ease and indolence. It is needless, 
therefore, to enquire which of these circumstances, to wit, low interest or low 
profits, is the cause, and which the effect? They both arise from an extensive 
commerce, and mutually forward each other. No man will accept of low profits, 
where he can have high interest; and no man will accept of low interest, where 
he can have high profits. An extensive commerce, by producing large stocks, 
diminishes both interest and profits; and is always assisted, in its diminution 
of the one, by the proportional sinking of the other. I may add, that, as low 
profits arise from the encrease of commerce and industry, they serve in their 
turn to its farther encrease, by rendering the commodities cheaper, encouraging 
the consumption, and heightening the industry. And thus, if we consider the 
whole connexion of causes and effects, interest is the barometer of the state, 
and its lowness is a sign almost infallible of the flourishing condition of a 
people. It proves the encrease of industry, and its prompt circulation through 
the whole state, little inferior to a demonstration. And though, perhaps, it may 
not be impossible but a sudden and a great check to commerce may have a 
momentary effect of the same kind, by throwing so many stocks out of trade; it 
must be attended with such misery and want of employment in the poor, that, 
besides its short duration, it will not be possible to mistake the one case for 
the other.
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Those who have asserted, that the plenty of money was the cause of low interest, 
seem to have taken a collateral effect for a cause; since the same industry, 
which sinks the interest, commonly acquires great abundance of the precious 
metals. A variety of fine manufactures, with vigilant enterprising merchants, 
will soon draw money to a state, if it be any where to be found in the world. 
The same cause, by multiplying the conveniencies of life, and encreasing 
industry, collects great riches into the hands of persons, who are not 
proprietors of land, and produces, by that means, a lowness of interest. But 
though both these effects, plenty of money and low interest, naturally arise 
from commerce and industry, they are altogether independent of each other. For 
suppose a nation removed into the Pacific ocean, without any foreign commerce, 
or any knowledge of navigation: Suppose, that this nation possesses always the 
same stock of coin, but is continually encreasing in its numbers and industry: 
It is evident, that the price of every commodity must gradually diminish in that 
kingdom; since it is the proportion between money and any species of goods, 
which fixes their mutual value; and, upon the present supposition, the 
conveniencies of life become every day more abundant, without any alteration in 
the current specie. A less quantity of money, therefore, among this people, will 
make a rich man, during the times of industry, than would suffice to that 
purpose, in ignorant and slothful ages. Less money will build a house, portion a 
daughter, buy an estate, support a manufactory, or maintain a family and 
equipage. These are the uses for which men borrow money; and therefore, the 
greater or less quantity of it in a state has no influence on the interest. But 
it is evident, that the greater or less stock of labour and commodities must 
have a great influence; since we really and in effect borrow these, when we take 
money upon interest. It is true, when commerce is extended all over the globe, 
the most industrious nations always abound most with the precious metals: So 
that low interest and plenty of money are in fact almost inseparable. But still 
it is of consequence to know the principle whence any phenomenon arises, and to 
distinguish between a cause and a concomitant effect. Besides that the 
speculation is curious, it may frequently be of use in the conduct of public 
affairs. At least, it must be owned, that nothing can be of more use than to 
improve, by practice, the method of reasoning on these subjects, which of all 
others are the most important; though they are commonly treated in the loosest 
and most careless manner.
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Another reason of this popular mistake with regard to the cause of low interest, 
seems to be the instance of some nations; where, after a sudden acquisition of 
money or of the precious metals, by means of foreign conquest, the interest has 
fallen, not only among them, but in all the neighbouring states, as soon as that 
money was dispersed, and had insinuated itself into every corner. Thus, interest 
in SPAIN fell near a half immediately after the discovery of the WEST INDIES, as 
we are informed by GARCILASSO DE LA VEGA: And it has been ever since gradually 
sinking in every kingdom of EUROPE. Interest in ROME, after the conquest of 
EGYPT, fell from 6 to 4 per cent. as we learn from DION.†1
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The causes of the sinking of interest, upon such an event, seem different in the 
conquering country and in the neighbouring states; but in neither of them can we 
justly ascribe that effect merely to the encrease of gold and silver.
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In the conquering country, it is natural to imagine, that this new acquisition 
of money will fall into a few hands, and be gathered into large sums, which seek 
a secure revenue, either by the purchase of land or by interest; and 
consequently the same effect follows, for a little time, as if there had been a 
great accession of industry and commerce. The encrease of lenders above the 
borrowers sinks the interest; and so much the faster, if those, who have 
acquired those large sums, find no industry or commerce in the state, and no 
method of employing their money but by lending it at interest. But after this 
new mass of gold and silver has been digested, and has circulated through the 
whole state, affairs will soon return to their former situation; while the 
landlords and new money-holders, living idly, squander above their income; and 
the former daily contract debt, and the latter encroach on their stock till its 
final extinction. The whole money may still be in the state, and make itself 
felt by the encrease of prices: But not being now collected into any large 
masses or stocks, the disproportion between the borrowers and lenders is the 
same as formerly, and consequently the high interest returns.
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Accordingly we find, in ROME, that, so early as TIBERIUS'S time, interest had 
again mounted to 6 per cent.†2 though no accident had happened to drain the 
empire of money. In TRAJAN'S time, money lent on mortgages in ITALY, bore 6 per 
cent.;†3 on common securities in BITHYNIA, 12.†4 And if interest in SPAIN has 
not risen to its old pitch; this can be ascribed to nothing but the continuance 
of the same cause that sunk it, to wit, the large fortunes continually made in 
the INDIES, which come over to SPAIN from time to time, and supply the demand of 
the borrowers. By this accidental and extraneous cause, more money is to be lent 
in SPAIN, that is, more money is collected into large sums than would otherwise 
be found in a state, where there are so little commerce and industry.
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As to the reduction of interest, which has followed in ENGLAND, FRANCE, and 
other kingdoms of EUROPE, that have no mines, it has been gradual; and has not 
proceeded from the encrease of money, considered merely in itself; but from that 
of industry, which is the natural effect of the former encrease, in that 
interval, before it raises the price of labour and provisions. For to return to 
the foregoing supposition; if the industry of ENGLAND had risen as much from 
other causes, (and that rise might easily have happened, though the stock of 
money had remained the same) must not all the same consequences have followed, 
which we observe at present? The same people would, in that case, be found in 
the kingdom, the same commodities, the same industry, manufactures, and 
commerce; and consequently the same merchants, with the same stocks, that is, 
with the same command over labour and commodities, only represented by a smaller 
number of white or yellow pieces; which being a circumstance of no moment, would 
only affect the waggoner, porter, and trunk-maker. Luxury, therefore, 
manufactures, arts, industry, frugality, flourishing equally as at present, it 
is evident, that interest must also have been as low; since that is the 
necessary result of all these circumstances; so far as they determine the 
profits of commerce, and the proportion between the borrowers and lenders in any 
state.
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†1 Lib. 51, 21.
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†2 COLUMELLA, lib. iii. cap. 3.
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†3 PLINII epist. lib. vii. ep. 18.
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†4 Id. lib. x. ep. 62.
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†a Value, arising from the agreement and convention of men: Editions H to P.
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†b Editions H to N add: I have been informed by a very eminent lawyer, and a man 
of great knowledge and observation, that it appears from antient papers and 
records, that, about four centuries ago, money in SCOTLAND, and probably in 
other parts of EUROPE, was only at five per cent. and afterwards rose to ten 
before the discovery of the WEST-INDIES. The fact is curious; but might easily 
be reconciled to the foregoing reasoning. Men, in that age, lived so much at 
home, and in so very simple and frugal a manner, that they had no occasion for 
money; and though the lenders were then few, the borrowers were still fewer. The 
high rate of interest among the early ROMANS is accounted for by historians from 
the frequent losses sustained by the inroads of the enemy.

Essay 5. OF THE BALANCE OF TRADE
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ESSAY V: OF THE BALANCE OF TRADE
It is very usual, in nations ignorant of the nature of commerce, to prohibit the 
exportation of commodities, and to preserve among themselves whatever they think 
valuable and useful. They do not consider, that, in this prohibition, they act 
directly contrary to their intention; and that the more is exported of any 
commodity, the more will be raised at home, of which they themselves will always 
have the first offer.
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It is well known to the learned, that the ancient laws of ATHENS rendered the 
exportation of figs criminal; that being supposed a species of fruit so 
excellent in ATTICA, that the ATHENIANS deemed it too delicious for the palate 
of any foreigner. And in this ridiculous prohibition they were so much in 
earnest, that informers were thence called sycophants among them, from two GREEK 
words, which signify figs and discoverer.†1†a There are proofs in many old acts 
of parliament of the same ignorance in the nature of commerce, particularly in 
the reign of EDWARD III. And to this day, in FRANCE, the exportation of corn is 
almost always prohibited; in order, as they say, to prevent famines; though it 
is evident, that nothing contributes more to the frequent famines, which so much 
distress that fertile country.
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The same jealous fear, with regard to money, has also prevailed among several 
nations; and it required both reason and experience to convince any people, that 
these prohibitions serve to no other purpose than to raise the exchange against 
them, and produce a still greater exportation.
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These errors, one may say, are gross and palpable: But there still prevails, 
even in nations well acquainted with commerce, a strong jealousy with regard to 
the balance of trade, and a fear, that all their gold and silver may be leaving 
them. This seems to me, almost in every case, a groundless apprehension; and I 
should as soon dread, that all our springs and rivers should be exhausted, as 
that money should abandon a kingdom where there are people and industry. Let us 
carefully preserve these latter advantages; and we need never be apprehensive of 
losing the former.
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It is easy to observe, that all calculations concerning the balance of trade are 
founded on very uncertain facts and suppositions. The custom-house books are 
allowed to be an insufficient ground of reasoning; nor is the rate of exchange 
much better; unless we consider it with all nations, and know also the 
proportions of the several sums remitted; which one may safely pronounce 
impossible. Every man, who has ever reasoned on this subject, has always proved 
his theory, whatever it was, by facts and calculations, and by an enumeration of 
all the commodities sent to all foreign kingdoms.
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The writings of Mr. GEE struck the nation with an universal panic, when they saw 
it plainly demonstrated, by a detail of particulars, that the balance was 
against them for so considerable a sum as must leave them without a single 
shilling in five or six years. But luckily, twenty years have since elapsed, 
with an expensive foreign war; yet is it commonly supposed, that money is still 
more plentiful among us than in any former period.
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Nothing can be more entertaining on this head than Dr. SWIFT; an author†b so 
quick in discerning the mistakes and absurdities of others. He says, in his 
short view of the state of IRELAND, that the whole cash of that kingdom formerly 
amounted but to 500,000l.; that out of this the IRISH remitted every year a neat 
million to ENGLAND, and had scarcely any other source from which they could 
compensate themselves, and little other foreign trade than the importation of 
FRENCH wines, for which they paid ready money. The consequence of this 
situation, which must be owned to be disadvantageous, was, that, in a course of 
three years, the current money of IRELAND, from 500,000l. was reduced to less 
than two. And at present, I suppose, in a course of 30 years it is absolutely 
nothing. Yet I know not how, that opinion of the advance of riches in IRELAND, 
which gave the Doctor so much indignation, seems still to continue, and gain 
ground with every body.
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In short, this apprehension of the wrong balance of trade, appears of such a 
nature, that it discovers itself, wherever one is out of humour with the 
ministry, or is in low spirits; and as it can never be refuted by a particular 
detail of all the exports, which counterbalance the imports, it may here be 
proper to form a general argument, that may prove the impossibility of this 
event, as long as we preserve our people and our industry.
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Suppose four-fifths of all the money in GREAT BRITAIN to be annihilated in one 
night, and the nation reduced to the same condition, with regard to specie, as 
in the reigns of the HARRYS and EDWARDS, what would be the consequence? Must not 
the price of all labour and commodities sink in proportion, and every thing be 
sold as cheap as they were in those ages? What nation could then dispute with us 
in any foreign market, or pretend to navigate or to sell manufactures at the 
same price, which to us would afford sufficient profit? In how little time, 
therefore, must this bring back the money which we had lost, and raise us to the 
level of all the neighbouring nations? Where, after we have arrived, we 
immediately lose the advantage of the cheapness of labour and commodities; and 
the farther flowing in of money is stopped by our fulness and repletion.
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Again, suppose, that all the money of GREAT BRITAIN were multiplied fivefold in 
a night, must not the contrary effect follow? Must not all labour and 
commodities rise to such an exorbitant height, that no neighbouring nations 
could afford to buy from us; while their commodities, on the other hand, became 
comparatively so cheap, that, in spite of all the laws which could be formed, 
they would be run in upon us, and our money flow out; till we fall to a level 
with foreigners, and lose that great superiority of riches, which had laid us 
under such disadvantages?
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Now, it is evident, that the same causes, which would correct these exorbitant 
inequalities, were they to happen miraculously, must prevent their happening in 
the common course of nature, and must for ever, in all neighbouring nations, 
preserve money nearly proportionable to the art and industry of each nation. All 
water, wherever it communicates, remains always at a level. Ask naturalists the 
reason; they tell you, that, were it to be raised in any one place, the superior 
gravity of that part not being balanced, must depress it, till it meet a 
counterpoise; and that the same cause, which redresses the inequality when it 
happens, must for ever prevent it, without some violent external operation.†2
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Can one imagine, that it had ever been possible, by any laws, or even by any art 
or industry, to have kept all the money in SPAIN, which the galleons have 
brought from the INDIES? Or that all commodities could be sold in FRANCE for a 
tenth of the price which they would yield on the other side of the PYRENEES, 
without finding their way thither, and draining from that immense treasure? What 
other reason, indeed, is there, why all nations, at present, gain in their trade 
with SPAIN and PORTUGAL; but because it is impossible to heap up money, more 
than any fluid, beyond its proper level? The sovereigns of these countries have 
shown, that they wanted not inclination to keep their gold and silver to 
themselves, had it been in any degree practicable.
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But as any body of water may be raised above the level of the surrounding 
element, if the former has no communication with the latter; so in money, if the 
communication be cut off, by any material or physical impediment, (for all laws 
alone are ineffectual) there may, in such a case, be a very great inequality of 
money. Thus the immense distance of CHINA, together with the monopolies of our 
INDIA companies, obstructing the communication, preserve in EUROPE the gold and 
silver, especially the latter, in much greater plenty than they are found in 
that kingdom. But, notwithstanding this great obstruction, the force of the 
causes abovementioned is still evident. The skill and ingenuity of EUROPE in 
general surpasses perhaps that of CHINA, with regard to manual arts and 
manufactures; yet are we never able to trade thither without great disadvantage. 
And were it not for the continual recruits, which we receive from AMERICA, money 
would soon sink in EUROPE, and rise in CHINA, till it came nearly to a level in 
both places. Nor can any reasonable man doubt, but that industrious nation, were 
they as near us as POLAND or BARBARY, would drain us of the overplus of our 
specie, and draw to themselves a larger share of the WEST INDIAN treasures. We 
need not have recourse to a physical attraction, in order to explain the 
necessity of this operation. There is a moral attraction, arising from the 
interests and passions of men, which is full as potent and infallible.
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How is the balance kept in the provinces of every kingdom among themselves, but 
by the force of this principle, which makes it impossible for money to lose its 
level, and either to rise or sink beyond the proportion of the labour and 
commodities which are in each province? Did not long experience make people easy 
on this head, what a fund of gloomy reflections might calculations afford to a 
melancholy YORKSHIREMAN, while he computed and magnified the sums drawn to 
LONDON by taxes, absentees, commodities, and found on comparison the opposite 
articles so much inferior? And no doubt, had the Heptarchy subsisted in ENGLAND, 
the legislature of each state had been continually alarmed by the fear of a 
wrong balance; and as it is probable that the mutual hatred of these states 
would have been extremely violent on account of their close neighbourhood, they 
would have loaded and oppressed all commerce, by a jealous and superfluous 
caution. Since the union has removed the barriers between SCOTLAND and ENGLAND, 
which of these nations gains from the other by this free commerce? Or if the 
former kingdom has received any encrease of riches, can it reasonably be 
accounted for by any thing but the encrease of its art and industry? It was a 
common apprehension in ENGLAND, before the union, as we learn from L'ABBE DU 
BOS,†3 that SCOTLAND would soon drain them of their treasure, were an open trade 
allowed; and on the other side the TWEED a contrary apprehension prevailed: With 
what justice in both, time has shown.
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What happens in small portions of mankind, must take place in greater. The 
provinces of the ROMAN empire, no doubt, kept their balance with each other, and 
with ITALY, independent of the legislature; as much as the several counties of 
GREAT BRITAIN, or the several parishes of each county. And any man who travels 
over EUROPE at this day, may see, by the prices of commodities, that money, in 
spite of the absurd jealousy of princes and states, has brought itself nearly to 
a level; and that the difference between one kingdom and another is not greater 
in this respect, than it is often between different provinces of the same 
kingdom. Men naturally flock to capital cities, sea-ports, and navigable rivers. 
There we find more men, more industry, more commodities, and consequently more 
money; but still the latter difference holds proportion with the former, and the 
level is preserved.†4
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Our jealousy and our hatred of FRANCE are without bounds; and the former 
sentiment, at least, must be acknowledged reasonable and well-grounded. These 
passions have occasioned innumerable barriers and obstructions upon commerce, 
where we are accused of being commonly the aggressors. But what have we gained 
by the bargain? We lost the FRENCH market for our woollen manufactures, and 
transferred the commerce of wine to SPAIN and PORTUGAL, where we buy worse 
liquor at a higher price. There are few ENGLISHMEN who would not think their 
country absolutely ruined, were FRENCH wines sold in ENGLAND so cheap and in 
such abundance as to supplant, in some measure, all ale, and home-brewed 
liquors: But would we lay aside prejudice, it would not be difficult to prove, 
that nothing could be more innocent, perhaps advantageous. Each new acre of 
vineyard planted in FRANCE, in order to supply ENGLAND with wine, would make it 
requisite for the FRENCH to take the produce of an ENGLISH acre, sown in wheat 
or barley, in order to subsist themselves; and it is evident, that we should 
thereby get command of the better commodity.
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There are many edicts of the FRENCH king, prohibiting the planting of new 
vineyards, and ordering all those which are lately planted to be grubbed up: So 
sensible are they, in that country, of the superior value of corn, above every 
other product.
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Mareschal VAUBAN complains often, and with reason, of the absurd duties which 
load the entry of those wines of LANGUEDOC, GUIENNE, and other southern 
provinces, that are imported into BRITANNY and NORMANDY. He entertained no doubt 
but these latter provinces could preserve their balance, notwithstanding the 
open commerce which he recommends. And it is evident, that a few leagues more 
navigation to ENGLAND would make no difference; or if it did, that it must 
operate alike on the commodities of both kingdoms.
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There is indeed one expedient by which it is possible to sink, and another by 
which we may raise money beyond its natural level in any kingdom; but these 
cases, when examined, will be found to resolve into our general theory, and to 
bring additional authority to it.
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I scarcely know any method of sinking money below its level, but those 
institutions of banks, funds, and paper-credit,†c which are so much practised in 
this kingdom. These render paper equivalent to money, circulate it throughout 
the whole state, make it supply the place of gold and silver, raise 
proportionably the price of labour and commodities, and by that means either 
banish a great part of those precious metals, or prevent their farther encrease. 
What can be more shortsighted than our reasonings on this head? We fancy, 
because an individual would be much richer, were his stock of money doubled, 
that the same good effect would follow were the money of every one encreased; 
not considering, that this would raise as much the price of every commodity, and 
reduce every man, in time, to the same condition as before. It is only in our 
public negociations and transactions with foreigners, that a greater stock of 
money is advantageous; and as our paper is there absolutely insignificant, we 
feel, by its means, all the ill effects arising from a great abundance of money, 
without reaping any of the advantages.†5
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Suppose that there are 12 millions of paper, which circulate in the kingdom as 
money, (for we are not to imagine, that all our enormous funds are employed in 
that shape) and suppose the real cash of the kingdom to be 18 millions: Here is 
a state which is found by experience to be able to hold a stock of 30 millions. 
I say, if it be able to hold it, it must of necessity have acquired it in gold 
and silver, had we not obstructed the entrance of these metals by this new 
invention of paper. Whence would it have acquired that sum? From all the 
kingdoms of the world. But why? Because, if you remove these 12 millions, money 
in this state is below its level, compared with our neighbours; and we must 
immediately draw from all of them, till we be full and saturate, so to speak, 
and can hold no more. By our present politics, we are as careful to stuff the 
nation with this fine commodity of bank-bills and chequer-notes, as if we were 
afraid of being overburthened with the precious metals.
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It is not to be doubted, but the great plenty of bullion in FRANCE is, in a 
great measure, owing to the want of paper-credit. The FRENCH have no banks: 
Merchants bills do not there circulate as with us: Usury or lending on interest 
is not directly permitted; so that many have large sums in their coffers: Great 
quantities of plate are used in private houses; and all the churches are full of 
it. By this means, provisions and labour still remain cheaper among them, than 
in nations that are not half so rich in gold and silver. The advantages of this 
situation, in point of trade as well as in great public emergencies, are too 
evident to be disputed.
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The same fashion a few years ago prevailed in GENOA, which still has place in 
ENGLAND and HOLLAND, of using services of CHINA-ware instead of plate; but the 
senate, foreseeing the consequence, prohibited the use of that brittle commodity 
beyond a certain extent; while the use of silver-plate was left unlimited. And I 
suppose, in their late distresses, they felt the good effect of this ordinance. 
Our tax on plate is, perhaps, in this view, somewhat impolitic.
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Before the introduction of paper-money into our colonies, they had gold and 
silver sufficient for their circulation. Since the introduction of that 
commodity, the least inconveniency that has followed is the total banishment of 
the precious metals. And after the abolition of paper, can it be doubted but 
money will return, while these colonies possess manufactures and commodities, 
the only thing valuable in commerce, and for whose sake alone all men desire 
money.
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What pity LYCURGUS did not think of paper-credit, when he wanted to banish gold 
and silver from SPARTA! It would have served his purpose better than the lumps 
of iron he made use of as money; and would also have prevented more effectually 
all commerce with strangers, as being of so much less real and intrinsic value.
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†d It must, however, be confessed, that, as all these questions of trade and 
money are extremely complicated, there are certain lights, in which this subject 
may be placed, so as to represent the advantages of paper-credit and banks to be 
superior to their disadvantages. That they banish specie and bullion from a 
state is undoubtedly true; and whoever looks no farther than this circumstance 
does well to condemn them; but specie and bullion are not of so great 
consequence as not to admit of a compensation, and even an overbalance from the 
encrease of industry and of credit, which may be promoted by the right use of 
paper-money. It is well known of what advantage it is to a merchant to be able 
to discount his bills upon occasion; and every thing that facilitates this 
species of traffic is favourable to the general commerce of a state. But private 
bankers are enabled to give such credit by the credit they receive from the 
depositing of money in their shops; and the bank of ENGLAND in the same manner, 
from the liberty it has to issue its notes in all payments. There was an 
invention of this kind, which was fallen upon some years ago by the banks of 
EDINBURGH; and which, as it is one of the most ingenious ideas that has been 
executed in commerce, has also been thought advantageous to SCOTLAND. It is 
there called a BANK-CREDIT; and is of this nature. A man goes to the bank and 
finds surety to the amount, we shall suppose, of a thousand pounds. This money, 
or any part of it, he has the liberty of drawing out whenever he pleases, and he 
pays only the ordinary interest for it, while it is in his hands. He may, when 
he pleases, repay any sum so small as twenty pounds, and the interest is 
discounted from the very day of the repayment. The advantages, resulting from 
this contrivance, are manifold. As a man may find surety nearly to the amount of 
his substance, and his bank-credit is equivalent to ready money, a merchant does 
hereby in a manner coin his houses, his household furniture, the goods in his 
warehouse, the foreign debts due to him, his ships at sea; and can, upon 
occasion, employ them in all payments, as if they were the current money of the 
country. If a man borrow a thousand pounds from a private hand, besides that it 
is not always to be found when required, he pays interest for it, whether he be 
using it or not: His bank-credit costs him nothing except during the very 
moment, in which it is of service to him: And this circumstance is of equal 
advantage as if he had borrowed money at much lower interest. Merchants, 
likewise, from this invention, acquire a great facility in supporting each 
other's credit, which is a considerable security against bankruptcies. A man, 
when his own bank-credit is exhausted, goes to any of his neighbours who is not 
in the same condition; and he gets the money, which he replaces at his 
convenience.
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†e After this practice had taken place during some years at EDINBURGH, several 
companies of merchants at GLASGOW carried the matter farther. They associated 
themselves into different banks, and issued notes so low as ten shillings, which 
they used in all payments for goods, manufactures, tradesmen's labour of all 
kinds; and these notes, from the established credit of the companies, passed as 
money in all payments throughout the country. By this means, a stock of five 
thousand pounds was able to perform the same operations as if it were six or 
seven; and merchants were thereby enabled to trade to a greater extent, and to 
require less profit in all their transactions. But whatever other advantages 
result from these inventions, it must still be allowed that, besides giving too 
great facility to credit, which is dangerous, they banish the precious metals; 
and nothing can be a more evident proof of it, than a comparison of the past and 
present condition of SCOTLAND in that particular. It was found, upon the 
recoinage made after the union, that there was near a million of specie in that 
country: But notwithstanding the great encrease of riches, commerce and 
manufactures of all kinds, it is thought, that, even where there is no 
extraordinary drain made by ENGLAND, the current specie will not now amount to a 
third of that sum.
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†f But as our projects of paper-credit are almost the only expedient, by which 
we can sink money below its level; so, in my opinion, the only expedient, by 
which we can raise money above it, is a practice which we should all exclaim 
against as destructive, namely, the gathering of large sums into a public 
treasure, locking them up, and absolutely preventing their circulation. The 
fluid, not communicating with the neighbouring element, may, by such an 
artifice, be raised to what height we please. To prove this, we need only return 
to our first supposition, of annihilating the half or any part of our cash; 
where we found, that the immediate consequence of such an event would be the 
attraction of an equal sum from all the neighbouring kingdoms. Nor does there 
seem to be any necessary bounds set, by the nature of things, to this practice 
of hoarding. A small city, like GENEVA, continuing this policy for ages, might 
engross nine-tenths of the money of EUROPE. There seems, indeed, in the nature 
of man, an invincible obstacle to that immense growth of riches. A weak state, 
with an enormous treasure, will soon become a prey to some of its poorer, but 
more powerful neighbours. A great state would dissipate its wealth in dangerous 
and ill-concerted projects; and probably destroy, with it, what is much more 
valuable, the industry, morals, and numbers of its people. The fluid, in this 
case, raised to too great a height, bursts and destroys the vessel that contains 
it; and mixing itself with the surrounding element, soon falls to its proper 
level.
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So little are we commonly acquainted with this principle, that, though all 
historians agree in relating uniformly so recent an event, as the immense 
treasure amassed by HARRY VII. (which they make amount to†g 2,700,000 pounds,) 
we rather reject their concurring testimony, than admit of a fact, which agrees 
so ill with our inveterate prejudices. It is indeed probable, that this sum 
might be three-fourths of all the money in ENGLAND. But where is the difficulty 
in conceiving, that such a sum might be amassed in twenty years, by a cunning, 
rapacious, frugal, and almost absolute monarch? Nor is it probable, that the 
diminution of circulating money was ever sensibly felt by the people, or ever 
did them any prejudice. The sinking of the prices of all commodities would 
immediately replace it, by giving ENGLAND the advantage in its commerce with the 
neighbouring kingdoms.
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Have we not an instance, in the small republic of ATHENS with its allies, who, 
in about fifty years, between the MEDIAN and PELOPONNESIAN wars, amassed†h a sum 
not much inferior to that of HARRY VII.? For all the GREEK historians†6 and 
orators†7 agree, that the ATHENIANS collected in the citadel more than 10,000 
talents, which they afterwards dissipated to their own ruin, in rash and 
imprudent enterprizes. But when this money was set a running, and began to 
communicate with the surrounding fluid; what was the consequence? Did it remain 
in the state? No. For we find, by the memorable census mentioned by 
DEMOSTHENES†8 and POLYBIUS,†9 that, in about fifty years afterwards, the whole 
value of the republic, comprehending lands, houses, commodities, slaves, and 
money, was less than 6000 talents.
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What an ambitious high-spirited people was this, to collect and keep in their 
treasury, with a view to conquests, a sum, which it was every day in the power 
of the citizens, by a single vote, to distribute among themselves, and which 
would have gone near to triple the riches of every individual! For we must 
observe, that the numbers and private riches of the ATHENIANS are said, by 
ancient writers, to have been no greater at the beginning of the PELOPONNESIAN 
war, than at the beginning of the MACEDONIAN.
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Money was little more plentiful in GREECE during the age of PHILIP and PERSEUS, 
than in ENGLAND during that of HARRY VII.: Yet these two monarchs in thirty 
years†10 collected from the small kingdom of MACEDON, a larger treasure than 
that of the ENGLISH monarch. PAULUS AEMILIUS brought to ROME about 1,700,000 
pounds Sterling.†11 PLINY says, 2,400,000.†12 And that was but a part of the 
MACEDONIAN treasure. The rest was dissipated by the resistance and flight of 
PERSEUS.†13
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We may learn from STANIAN, that the canton of BERNE had 300,000 pounds lent at 
interest, and had above six times as much in their treasury. Here then is a sum 
hoarded of 1,800,000 pounds Sterling, which is at least quadruple what should 
naturally circulate in such a petty state; and yet no one, who travels in the 
PAIS DE VAUX, or any part of that canton, observes any want of money more than 
could be supposed in a country of that extent, soil, and situation. On the 
contrary, there are scarce any inland provinces in the continent of FRANCE or 
GERMANY, where the inhabitants are at this time so opulent, though that canton 
has vastly encreased its treasure since 1714, the time when STANIAN wrote his 
judicious account of SWITZERLAND.†14
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The account given by APPIAN†15 of the treasure of the PTOLEMIES, is so 
prodigious, that one cannot admit of it; and so much the less, because the 
historian says, that the other successors of ALEXANDER were also frugal, and had 
many of them treasures not much inferior. For this saving humour of the 
neighbouring princes must necessarily have checked the frugality of the EGYPTIAN 
monarchs, according to the foregoing theory. The sum he mentions is 740,000 
talents, or 191,166,666 pounds 13 shillings and 4 pence, according to Dr. 
ARBUTHNOT'S computation. And yet APPIAN says, that he extracted his account from 
the public records; and he was himself a native of ALEXANDRIA.
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From these principles we may learn what judgment we ought to form of those 
numberless bars, obstructions, and imposts, which all nations of EUROPE, and 
none more than ENGLAND, have put upon trade; from an exorbitant desire of 
amassing money, which never will heap up beyond its level, while it circulates; 
or from an ill-grounded apprehension of losing their specie, which never will 
sink below it. Could any thing scatter our riches, it would be such impolitic 
contrivances. But this general ill effect, however, results from them, that they 
deprive neighbouring nations of that free communication and exchange which the 
Author of the world has intended, by giving them soils, climates, and geniuses, 
so different from each other.
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Our modern politics embrace the only method of banishing money, the using of 
paper-credit; they reject the only method of amassing it, the practice of 
hoarding; and they adopt a hundred contrivances, which serve to no purpose but 
to check industry, and rob ourselves and our neighbours of the common benefits 
of art and nature.
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All taxes, however, upon foreign commodities, are not to be regarded as 
prejudicial or useless, but those only which are founded on the jealousy 
above-mentioned. A tax on GERMAN linen encourages home manufactures, and thereby 
multiplies our people and industry. A tax on brandy encreases the sale of rum, 
and supports our southern colonies. And as it is necessary, that imposts should 
be levied, for the support of government, it may be thought more convenient to 
lay them on foreign commodities, which can easily be intercepted at the port, 
and subjected to the impost. We ought, however, always to remember the maxim of 
Dr. SWIFT, That, in the arithmetic of the customs, two and two make not four, 
but often make only one. It can scarcely be doubted, but if the duties on wine 
were lowered to a third, they would yield much more to the government than at 
present: Our people might thereby afford to drink commonly a better and more 
wholesome liquor; and no prejudice would ensue to the balance of trade, of which 
we are so jealous. The manufacture of ale beyond the agriculture is but 
inconsiderable, and gives employment to few hands. The transport of wine and 
corn would not be much inferior.
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But are there not frequent instances, you will say, of states and kingdoms, 
which were formerly rich and opulent, and are now poor and beggarly? Has not the 
money left them, with which they formerly abounded? I answer, If they lose their 
trade, industry, and people, they cannot expect to keep their gold and silver: 
For these precious metals will hold proportion to the former advantages. When 
LISBON and AMSTERDAM got the EAST-INDIA trade from VENICE and GENOA, they also 
got the profits and money which arose from it. Where the seat of government is 
transferred, where expensive armies are maintained at a distance, where great 
funds are possessed by foreigners; there naturally follows from these causes a 
diminution of the specie. But these, we may observe, are violent and forcible 
methods of carrying away money, and are in time commonly attended with the 
transport of people and industry. But where these remain, and the drain is not 
continued, the money always finds its way back again, by a hundred canals, of 
which we have no notion or suspicion. What immense treasures have been spent, by 
so many nations, in FLANDERS, since the revolution, in the course of three long 
wars? More money perhaps than the half of what is at present in EUROPE. But what 
has now become of it? Is it in the narrow compass of the AUSTRIAN provinces? No, 
surely: It has most of it returned to the several countries whence it came, and 
has followed that art and industry, by which at first it was acquired.†i For 
above a thousand years, the money of EUROPE has been flowing to ROME, by an open 
and sensible current; but it has been emptied by many secret and insensible 
canals: And the want of industry and commerce renders at present the papal 
dominions the poorest territory in all ITALY.
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In short, a government has great reason to preserve with care its people and its 
manufactures. Its money, it may safely trust to the course of human affairs, 
without fear or jealousy. Or if it ever give attention to this latter 
circumstance, it ought only to be so far as it affects the former.
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†1 PLUT. De Curiositate.
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†2 There is another cause, though more limited in its operation, which checks 
the wrong balance of trade, to every particular nation to which the kingdom 
trades. When we import more goods than we export, the exchange turns against us, 
and this becomes a new encouragement to export; as much as the charge of 
carriage and insurance of the money which becomes due would amount to. For the 
exchange can never rise but a little higher than that sum.
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†3 Les interets d'ANGLETERRE mal-entendus.
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†4 It must carefully be remarked, that throughout this discourse, wherever I 
speak of the level of money, I mean always its proportional level to the 
commodities, labour, industry, and skill, which is in the several states. And I 
assert, that where these advantages are double, triple, quadruple, to what they 
are in the neighbouring states, the money infallibly will also be double, 
triple, quadruple. The only circumstance that can obstruct the exactness of 
these proportions, is the expence of transporting the commodities from one place 
to another; and this expence is sometimes unequal. Thus the corn, cattle, 
cheese, butter, of DERBYSHIRE, cannot draw the money of LONDON, so much as the 
manufactures of LONDON draw the money of DERBYSHIRE. But this objection is only 
a seeming one: For so far as the transport of commodities is expensive, so far 
is the communication between the places obstructed and imperfect.
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†5 We observed in ‡‡Essay III. that money, when encreasing, gives encouragement 
to industry, during the interval between the encrease of money and rise of the 
prices. A good effect of this nature may follow too from paper-credit; but it is 
dangerous to precipitate matters, at the risk of losing all by the failing of 
that credit, as must happen upon any violent shock in public affairs.
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†6 THUCYDIDES. lib. ii. 13 and DIOD. SIC. lib. xii. 40.
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†7 Vid. AESCHINIS (p. 688) et DEMOSTHENIS Epist.
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†8 {Peri Symmorias}, 183.
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†9 Lib. ii. cap. 62.
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†10 TITI LIVII. lib. xlv. cap. 40.
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†11 VEL. PATERC. lib. i. cap. 9.
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†12 Lib. xxxiii. cap. 3.
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†13 TITI LIVII, ibid.
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†14 The poverty which STANIAN speaks of is only to be seen in the most 
mountainous cantons, where there is no commodity to bring money. And even there 
the people are not poorer than in the diocese of SALTSBURGH on the one hand, or 
SAVOY on the other.
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†15 Proem. 10.
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†a For this sentence Editions H to M read: I have been told, that many old acts 
of parliament show the same ignorance in the nature of Commerce. And to this 
day, in a neighbouring kingdom, &c.
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Edition N reads: There are proofs in many old acts of the SCOTCH parliament of 
the same ignorance in the nature of commerce. And to this day, in France, &c.
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†b Editions H and I read: An author, who has more humour than knowledge, more 
taste than judgment, and more spleen, prejudice, and passion than any of these 
qualities.
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†c Editions H to N read: With which we are in this kingdom so much infatuated.
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†d This paragraph does not occur in Editions H to N.
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†e This paragraph does not occur in Editions H to N.
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†f Editions H to N resume: But as our darling projects of paper-credit are 
pernicious, being almost, &c.
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†g Editions H to P read: 1,700,000.
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†h Editions H to P read: A sum greater than that of Harry VII. (There were about 
eight ounces of silver in a pound sterling in Harry VII.'s time.)
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†i This sentence is not in Editions H and I.

Essay 6. OF THE JEALOUSY OF TRADE
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†a ESSAY VI: OF THE JEALOUSY OF TRADE
Having endeavoured to remove one species of ill-founded jealousy, which is so 
prevalent among commercial nations, it may not be amiss to mention another, 
which seems equally groundless. Nothing is more usual, among states which have 
made some advances in commerce, than to look on the progress of their neighbours 
with a suspicious eye, to consider all trading states as their rivals, and to 
suppose that it is impossible for any of them to flourish, but at their expence. 
In opposition to this narrow and malignant opinion, I will venture to assert, 
that the encrease of riches and commerce in any one nation, instead of hurting, 
commonly promotes the riches and commerce of all its neighbours; and that a 
state can scarcely carry its trade and industry very far, where all the 
surrounding states are buried in ignorance, sloth, and barbarism.
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It is obvious, that the domestic industry of a people cannot be hurt by the 
greatest prosperity of their neighbours; and as this branch of commerce is 
undoubtedly the most important in any extensive kingdom, we are so far removed 
from all reason of jealousy. But I go farther, and observe, that where an open 
communication is preserved among nations, it is impossible but the domestic 
industry of every one must receive an encrease from the improvements of the 
others. Compare the situation of GREAT BRITAIN at present, with what it was two 
centuries ago. All the arts both of agriculture and manufactures were then 
extremely rude and imperfect. Every improvement, which we have since made, has 
arisen from our imitation of foreigners; and we ought so far to esteem it happy, 
that they had previously made advances in arts and ingenuity. But this 
intercourse is still upheld to our great advantage: Notwithstanding the advanced 
state of our manufactures, we daily adopt, in every art, the inventions and 
improvements of our neighbours. The commodity is first imported from abroad, to 
our great discontent, while we imagine that it drains us of our money: 
Afterwards, the art itself is gradually imported, to our visible advantage: Yet 
we continue still to repine, that our neighbours should possess any art, 
industry, and invention; forgetting that, had they not first instructed us, we 
should have been at present barbarians; and did they not still continue their 
instructions, the arts must fall into a state of languor, and lose that 
emulation and novelty, which contribute so much to their advancement.
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The encrease of domestic industry lays the foundation of foreign commerce. Where 
a great number of commodities are raised and perfected for the home-market, 
there will always be found some which can be exported with advantage. But if our 
neighbours have no art or cultivation, they cannot take them; because they will 
have nothing to give in exchange. In this respect, states are in the same 
condition as individuals. A single man can scarcely be industrious, where all 
his fellow-citizens are idle. The riches of the several members of a community 
contribute to encrease my riches, whatever profession I may follow. They consume 
the produce of my industry, and afford me the produce of theirs in return.
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Nor needs any state entertain apprehensions, that their neighbours will improve 
to such a degree in every art and manufacture, as to have no demand from them. 
Nature, by giving a diversity of geniuses, climates, and soils, to different 
nations, has secured their mutual intercourse and commerce, as long as they all 
remain industrious and civilized. Nay, the more the arts encrease in any state, 
the more will be its demands from its industrious neighbours. The inhabitants, 
having become opulent and skilful, desire to have every commodity in the utmost 
perfection; and as they have plenty of commodities to give in exchange, they 
make large importations from every foreign country. The industry of the nations, 
from whom they import, receives encouragement: Their own is also encreased, by 
the sale of the commodities which they give in exchange.
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But what if a nation has any staple commodity, such as the woollen manufacture 
is in ENGLAND? Must not the interfering of our neighbours in that manufacture be 
a loss to us? I answer, that, when any commodity is denominated the staple of a 
kingdom, it is supposed that this kingdom has some peculiar and natural 
advantages for raising the commodity; and if, notwithstanding these advantages, 
they lose such a manufacture, they ought to blame their own idleness, or bad 
government, not the industry of their neighbours. It ought also to be 
considered, that, by the encrease of industry among the neighbouring nations, 
the consumption of every particular species of commodity is also encreased; and 
though foreign manufactures interfere with them in the market, the demand for 
their product may still continue, or even encrease. And should it diminish, 
ought the consequence to be esteemed so fatal? If the spirit of industry be 
preserved, it may easily be diverted from one branch to another; and the 
manufacturers of wool, for instance, be employed in linen, silk, iron, or any 
other commodities, for which there appears to be a demand. We need not 
apprehend, that all the objects of industry will be exhausted, or that our 
manufacturers, while they remain on an equal footing with those of our 
neighbours, will be in danger of wanting employment. The emulation among rival 
nations serves rather to keep industry alive in all of them: And any people is 
happier who possess a variety of manufactures, than if they enjoyed one single 
great manufacture, in which they are all employed. Their situation is less 
precarious; and they will feel less sensibly those revolutions and 
uncertainties, to which every particular branch of commerce will always be 
exposed.
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The only commercial state, that ought to dread the improvements and industry of 
their neighbours, is such a one as the DUTCH, who enjoying no extent of land, 
nor possessing any number of native commodities, flourish only by their being 
the brokers, and factors, and carriers of others. Such a people may naturally 
apprehend, that, as soon as the neighbouring states come to know and pursue 
their interest, they will take into their own hands the management of their 
affairs, and deprive their brokers of that profit, which they formerly reaped 
from it. But though this consequence may naturally be dreaded, it is very long 
before it takes place; and by art and industry it may be warded off for many 
generations, if not wholly eluded. The advantage of superior stocks and 
correspondence is so great, that it is not easily overcome; and as all the 
transactions encrease by the encrease of industry in the neighbouring states, 
even a people whose commerce stands on this precarious basis, may at first reap 
a considerable profit from the flourishing condition of their neighbours. The 
DUTCH, having mortgaged all their revenues, make not such a figure in political 
transactions as formerly; but their commerce is surely equal to what it was in 
the middle of the last century, when they were reckoned among the great powers 
of EUROPE.
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Were our narrow and malignant politics to meet with success, we should reduce 
all our neighbouring nations to the same state of sloth and ignorance that 
prevails in MOROCCO and the coast of BARBARY. But what would be the consequence? 
They could send us no commodities: They could take none from us: Our domestic 
commerce itself would languish for want of emulation, example, and instruction: 
And we ourselves should soon fall into the same abject condition, to which we 
had reduced them. I shall therefore venture to acknowledge, that, not only as a 
man, but as a BRITISH subject, I pray for the flourishing commerce of GERMANY, 
SPAIN, ITALY, and even FRANCE itself. I am at least certain, that GREAT BRITAIN, 
and all those nations, would flourish more, did their sovereigns and ministers 
adopt such enlarged and benevolent sentiments towards each other.
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†a This Essay first appeared in Edition M.

Essay 7. OF THE BALANCE OF POWER
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ESSAY VII: OF THE BALANCE OF POWER
It is a question whether the idea of the balance of power be owing entirely to 
modern policy, or whether the phrase only has been invented in these later ages? 
It is certain, that XENOPHON,†1 in his Institution of CYRUS, represents the 
combination of the ASIATIC powers to have arisen from a jealousy of the 
encreasing force of the MEDES and PERSIANS; and though that elegant composition 
should be supposed altogether a romance, this sentiment, ascribed by the author 
to the eastern princes, is at least a proof of the prevailing notion of ancient 
times.
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In all the politics of GREECE, the anxiety, with regard to the balance of power, 
is apparent, and is expressly pointed out to us, even by the ancient historians. 
THUCYDIDES†2 represents the league, which was formed against ATHENS, and which 
produced the PELOPONNESIAN war, as entirely owing to this principle. And after 
the decline of ATHENS, when the THEBANS and LACEDEMONIANS disputed for 
sovereignty, we find, that the ATHENIANS (as well as many other republics) 
always threw themselves into the lighter scale, and endeavoured to preserve the 
balance. They supported THEBES against SPARTA, till the great victory gained by 
EPAMINONDAS at LEUCTRA; after which they immediately went over to the conquered, 
from generosity, as they pretended, but in reality from their jealousy of the 
conquerors.†3
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Whoever will read DEMOSTHENES'S oration for the MEGALOPOLITANS, may see the 
utmost refinements on this principle, that ever entered into the head of a 
VENETIAN or ENGLISH speculatist. And upon the first rise of the MACEDONIAN 
power, this orator immediately discovered the danger, sounded the alarm 
throughout all GREECE, and at last assembled that confederacy under the banners 
of ATHENS, which fought the great and decisive battle of CHAERONEA.
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It is true, the GRECIAN wars are regarded by historians as wars of emulation 
rather than of politics; and each state seems to have had more in view the 
honour of leading the rest, than any well-grounded hopes of authority and 
dominion. If we consider, indeed, the small number of inhabitants in any one 
republic, compared to the whole, the great difficulty of forming sieges in those 
times, and the extraordinary bravery and discipline of every freeman among that 
noble people; we shall conclude, that the balance of power was, of itself, 
sufficiently secured in GREECE, and needed not to have been guarded with that 
caution which may be requisite in other ages. But whether we ascribe the 
shifting of sides in all the GRECIAN republics to jealous emulation or cautious 
politics, the effects were alike, and every prevailing power was sure to meet 
with a confederacy against it, and that often composed of its former friends and 
allies.
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The same principle, call it envy or prudence, which produced the Ostracism of 
ATHENS, and Petalism of SYRACUSE, and expelled every citizen whose fame or power 
overtopped the rest; the same principle, I say, naturally discovered itself in 
foreign politics, and soon raised enemies to the leading state, however moderate 
in the exercise of its authority.
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The PERSIAN monarch was really, in his force, a petty prince, compared to the 
GRECIAN republics; and therefore it behoved him, from views of safety more than 
from emulation, to interest himself in their quarrels, and to support the weaker 
side in every contest. This was the advice given by ALCIBIADES to 
TISSAPHERNES,†4 and it prolonged near a century the date of the PERSIAN empire; 
till the neglect of it for a moment, after the first appearance of the aspiring 
genius of PHILIP, brought that lofty and frail edifice to the ground, with a 
rapidity of which there are few instances in the history of mankind.
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The successors of ALEXANDER showed great jealousy of the balance of power; a 
jealousy founded on true politics and prudence, and which preserved distinct for 
several ages the partition made after the death of that famous conqueror. The 
fortune and ambition of ANTIGONUS†5 threatened them anew with a universal 
monarchy; but their combination, and their victory at IPSUS saved them. And in 
subsequent times, we find, that, as the Eastern princes considered the GREEKS 
and MACEDONIANS as the only real military force, with whom they had any 
intercourse, they kept always a watchful eye over that part of the world. The 
PTOLEMIES, in particular, supported first ARATUS and the ACHAEANS, and then 
CLEOMENES king of SPARTA, from no other view than as a counterbalance to the 
MACEDONIAN monarchs. For this is the account which POLYBIUS gives of the 
EGYPTIAN politics.†6
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The reason, why it is supposed, that the ancients were entirely ignorant of the 
balance of power, seems to be drawn from the ROMAN history more than the 
GRECIAN; and as the transactions of the former are generally more familiar to 
us, we have thence formed all our conclusions. It must be owned, that the ROMANS 
never met with any such general combination or confederacy against them, as 
might naturally have been expected from the rapid conquests and declared 
ambition; but were allowed peaceably to subdue their neighbours, one after 
another, till they extended their dominion over the whole known world. Not to 
mention the fabulous history of their†a ITALIC wars; there was, upon HANNIBAL'S 
invasion of the ROMAN state, a remarkable crisis, which ought to have called up 
the attention of all civilized nations. It appeared afterwards (nor was it 
difficult to be observed at the time)†7 that this was a contest for universal 
empire; yet no prince or state seems to have been in the least alarmed about the 
event or issue of the quarrel. PHILIP of MACEDON remained neuter, till he saw 
the victories of HANNIBAL; and then most imprudently formed an alliance with the 
conqueror, upon terms still more imprudent. He stipulated, that he was to assist 
the CARTHAGINIAN state in their conquest of ITALY; after which they engaged to 
send over forces into GREECE, to assist him in subduing the GRECIAN 
commonwealths.†8
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The RHODIAN and ACHAEAN republics are much celebrated by ancient historians for 
their wisdom and sound policy; yet both of them assisted the ROMANS in their 
wars against PHILIP and ANTIOCHUS. And what may be esteemed still a stronger 
proof, that this maxim was not generally known in those ages; no ancient author 
has remarked the imprudence of these measures, nor has even blamed that absurd 
treaty above-mentioned, made by PHILIP with the CARTHAGINIANS. Princes and 
statesmen, in all ages, may, before-hand, be blinded in their reasonings with 
regard to events: But it is somewhat extraordinary, that historians, afterwards, 
should not form a sounder judgment of them.
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MASSINISSA, ATTALUS, PRUSIAS, in gratifying their private passions, were, all of 
them, the instruments of the ROMAN greatness; and never seem to have suspected, 
that they were forging their own chains, while they advanced the conquests of 
their ally. A simple treaty and agreement between MASSINISSA and the 
CARTHAGINIANS, so much required by mutual interest, barred the ROMANS from all 
entrance into AFRICA, and preserved liberty to mankind.
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The only prince we meet with in the ROMAN history, who seems to have understood 
the balance of power, is HIERO king of SYRACUSE. Though the ally of ROME, he 
sent assistance to the CARTHAGINIANS, during the war of the auxiliaries; 
"Esteeming it requisite," says POLYBIUS,†9 "both in order to retain his 
dominions in SICILY, and to preserve the ROMAN friendship, that CARTHAGE should 
be safe; lest by its fall the remaining power should be able, without contrast 
or opposition, to execute every purpose and undertaking. And here he acted with 
great wisdom and prudence. For that is never, on any account, to be overlooked; 
nor ought such a force ever to be thrown into one hand, as to incapacitate the 
neighbouring states from defending their rights against it." Here is the aim of 
modern politics pointed out in express terms.
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In short, the maxim of preserving the balance of power is founded so much on 
common sense and obvious reasoning, that it is impossible it could altogether 
have escaped antiquity, where we find, in other particulars, so many marks of 
deep penetration and discernment. If it was not so generally known and 
acknowledged as at present, it had, at least, an influence on all the wiser and 
more experienced princes and politicians. And indeed, even at present, however 
generally known and acknowledged among speculative reasoners, it has not, in 
practice, an authority much more extensive among those who govern the world.
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After the fall of the ROMAN empire, the form of government, established by the 
northern conquerors, incapacitated them, in a great measure, for farther 
conquests, and long maintained each state in its proper boundaries. But when 
vassalage and the feudal militia were abolished, mankind were anew alarmed by 
the danger of universal monarchy, from the union of so many kingdoms and 
principalities in the person of the emperor CHARLES. But the power of the house 
of AUSTRIA, founded on extensive but divided dominions, and their riches, 
derived chiefly from mines of gold and silver, were more likely to decay, of 
themselves, from internal defects, than to overthrow all the bulwarks raised 
against them. In less than a century, the force of that violent and haughty race 
was shattered, their opulence dissipated, their splendor eclipsed. A new power 
succeeded, more formidable to the liberties of EUROPE, possessing all the 
advantages of the former, and labouring under none of its defects; except a 
share of that spirit of bigotry and persecution, with which the house of AUSTRIA 
was so long, and still is so much infatuated.
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†b In the general wars, maintained against this ambitious power, GREAT BRITAIN 
has stood foremost; and she still maintains her station. Beside her advantages 
of riches and situation, her people are animated with such a national spirit, 
and are so fully sensible of the blessings of their government, that we may hope 
their vigour never will languish in so necessary and so just a cause. On the 
contrary, if we may judge by the past, their passionate ardour seems rather to 
require some moderation; and they have oftener erred from a laudable excess than 
from a blameable deficiency.
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In the first place, we seem to have been more possessed with the ancient GREEK 
spirit of jealous emulation, than actuated by the prudent views of modern 
politics. Our wars with FRANCE have been begun with justice, and even, perhaps, 
from necessity; but have always been too far pushed from obstinacy and passion. 
The same peace, which was afterwards made at RYSWICK in 1697, was offered so 
early as the year ninety-two; that concluded at UTRECHT in 1712 might have been 
finished on as good conditions at GERTRUYTENBERG in the year eight; and we might 
have given at FRANKFORT, in 1743, the same terms, which we were glad to accept 
of at AIX-LA-CHAPELLE in the year forty-eight. Here then we see, that above half 
of our wars with FRANCE, and all our public debts, are owing more to our own 
imprudent vehemence, than to the ambition of our neighbours.
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In the second place, we are so declared in our opposition to FRENCH power, and 
so alert in defence of our allies, that they always reckon upon our force as 
upon their own; and expecting to carry on war at our expence, refuse all 
reasonable terms of accommodation. Habent subjectos, tanquam suos: viles, ut 
alienos. All the world knows, that the factious vote of the House of Commons, in 
the beginning of the last parliament, with the professed humour of the nation, 
made the queen of HUNGARY inflexible in her terms, and prevented that agreement 
with PRUSSIA, which would immediately have restored the general tranquillity of 
EUROPE.
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In the third place, we are such true combatants, that, when once engaged, we 
lose all concern for ourselves and our posterity, and consider only how we may 
best annoy the enemy. To mortgage our revenues at so deep a rate, in wars, where 
we were only accessories, was surely the most fatal delusion, that a nation, 
which had any pretension to politics and prudence, has ever yet been guilty of. 
That remedy of funding, if it be a remedy, and not rather a poison, ought, in 
all reason, to be reserved to the last extremity; and no evil, but the greatest 
and most urgent, should ever induce us to embrace so dangerous an expedient.
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These excesses, to which we have been carried, are prejudicial; and may, 
perhaps, in time, become still more prejudicial another way, by begetting, as is 
usual, the opposite extreme, and rendering us totally careless and supine with 
regard to the fate of EUROPE. The ATHENIANS, from the most bustling, intriguing, 
warlike people of GREECE, finding their error in thrusting themselves into every 
quarrel, abandoned all attention to foreign affairs; and in no contest ever took 
part on either side, except by their flatteries and complaisance to the victor.
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Enormous monarchies†c are, probably, destructive to human nature; in their 
progress, in their continuance,†10 and even in their downfal, which never can be 
very distant from their establishment. The military genius, which aggrandized 
the monarchy, soon leaves the court, the capital, and the center of such a 
government; while the wars are carried on at a great distance, and interest so 
small a part of the state. The ancient nobility, whose affections attach them to 
their sovereign, live all at court; and never will accept of military 
employments, which would carry them to remote and barbarous frontiers, where 
they are distant both from their pleasures and their fortune. The arms of the 
state, must, therefore, be entrusted to mercenary strangers, without zeal, 
without attachment, without honour; ready on every occasion to turn them against 
the prince, and join each desperate malcontent, who offers pay and plunder. This 
is the necessary progress of human affairs: Thus human nature checks itself in 
its airy elevation: Thus ambition blindly labours for the destruction of the 
conqueror, of his family, and of every thing near and dear to him. The BOURBONS, 
trusting to the support of their brave, faithful, and affectionate nobility, 
would push their advantage, without reserve or limitation. These, while fired 
with glory and emulation, can bear the fatigues and dangers of war; but never 
would submit to languish in the garrisons of HUNGARY or LITHUANIA, forgot at 
court, and sacrificed to the intrigues of every minion or mistress, who 
approaches the prince. The troops are filled with CRAVATES and TARTARS, HUSSARS 
and COSSACS; intermingled, perhaps, with a few soldiers of fortune from the 
better provinces: And the melancholy fate of the ROMAN emperors, from the same 
cause, is renewed over and over again, till the final dissolution of the 
monarchy.
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†1 Lib. i. 5, 3.
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†2 Lib. i. 23.
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†3 XENOPH. Hist. GRAEC. lib. vi. and vii.
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†4 THUCYD. lib. viii. 46.
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†5 DIOD. SIC. lib. xx. 106.
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†6 Lib. ii. cap. 51.
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†7 It was observed by some, as appears by the speech of AGELAUS of NAUPACTUM, in 
the general congress of GREECE. See POLYB. lib. v. cap. 104.
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†8 TITI LIVII. lib. xxiii. cap. 33.
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†9 Lib. i. cap. 83.
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†10 If the ROMAN empire was of advantage, it could only proceed from this, that 
mankind were generally in a very disorderly, uncivilized condition, before its 
establishment.
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†a Editions H and L add as a note: There have strong suspicions, of late, arisen 
among critics, and, in my opinion, not without reason, concerning the first ages 
of the ROMAN history; as if they were almost entirely fabulous, 'till after the 
sacking of the city by the GAULS; and were even doubtful for some time 
afterwards, 'till the GREEKS began to give attention to ROMAN affairs, and 
commit them to writing. This scepticism, however, seems to me, scarcely 
defensible in its full extent, with regard to the domestic history of ROME, 
which has some air of truth and probability, and cou'd scarce be the invention 
of an historian, who had so little morals or judgment as to indulge himself in 
fiction and romance. The revolutions seem so well proportion'd to their causes: 
The progress of the factions is so conformable to political experience: The 
manners and maxims of the age are so uniform and natural, that scarce any real 
history affords more just reflection and improvement. Is not MACHIAVEL'S comment 
on LIVY (a work surely of great judgment and genius) founded entirely on this 
period, which is represented as fabulous. I wou'd willingly, therefore, in my 
private sentiments, divide the matter with these critics; and allow, that the 
battles and victories and triumphs of those ages had been extremely falsify'd by 
family memoirs, as CICERO says they were: But as in the accounts of domestic 
factions, there were two opposite relations transmitted to posterity, this both 
serv'd as a check upon fiction, and enabled latter historians to gather some 
truth from comparison and reasoning. Half of the slaughter which LIVY commits on 
the AEQUI and the VOLSCI, would depopulate FRANCE and GERMANY; and that 
historian, tho' perhaps he may be justly charged as superficial, is at last 
shock'd himself with the incredibility of his narration. The same love of 
exaggeration seems to have magnify'd the numbers of the ROMANS in their armies, 
and census.
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†b Editions H to P proceed as follows: Europe has now, for above a century, 
remained on the defensive against the greatest force that ever, perhaps, was 
formed by the civil or political combination of mankind. And such is the 
influence of the maxim here treated of, that tho' that ambitious nation, in the 
five last general wars, have been victorious in four,†1 and unsuccessful only in 
one,†2 they have not much enlarged their dominions, nor acquired a total 
ascendant over EUROPE. There remains rather room to hope, that, by maintaining 
the resistance for some time, the natural revolutions of human affairs, together 
with unforeseen events and accidents, may guard us against universal monarchy, 
and preserve the world from so great an evil.
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In the three last of these general wars, BRITAIN has stood foremost in the 
glorious struggle; and she still maintains her station, as guardian of the 
general liberties of EUROPE, and patron of mankind.
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†1 Those concluded by the peace of the PYRENEES, NIMEGUEN, RYSWICK, and 
AIX-LA-CHAPELLE.
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†2 That concluded by the peace of UTRECHT.
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†c Editions H to O: Such as EUROPE is at present threatened with.

Essay 8. OF TAXES
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ESSAY VIII: OF TAXES
There is a prevailing maxim,†a among some reasoners, that every new tax creates 
a new ability in the subject to bear it, and that each encrease of public 
burdens encreases proportionably the industry of the people. This maxim is of 
such a nature as is most likely to be abused; and is so much the more dangerous, 
as its truth cannot be altogether denied: but it must be owned, when kept within 
certain bounds, to have some foundation in reason and experience.
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When a tax is laid upon commodities, which are consumed by the common people, 
the necessary consequence may seem to be, either that the poor must retrench 
something from their way of living, or raise their wages, so as to make the 
burden of the tax fall entirely upon the rich. But there is a third consequence, 
which often follows upon taxes, namely, that the poor encrease their industry, 
perform more work, and live as well as before, without demanding more for their 
labour. Where taxes are moderate, are laid on gradually, and affect not the 
necessaries of life, this consequence naturally follows; and it is certain, that 
such difficulties often serve to excite the industry of a people, and render 
them more opulent and laborious, than others, who enjoy the greatest advantages. 
For we may observe, as a parallel instance, that the most commercial nations 
have not always possessed the greatest extent of fertile land; but, on the 
contrary, that they have laboured under many natural disadvantages. TYRE, 
ATHENS, CARTHAGE, RHODES, GENOA, VENICE, HOLLAND, are strong examples to this 
purpose. And in all history, we find only three instances of large and fertile 
countries, which have possessed much trade; the NETHERLANDS, ENGLAND, and 
FRANCE. The two former seem to have been allured by the advantages of their 
maritime situation, and the necessity they lay under of frequenting foreign 
ports, in order to procure what their own climate refused them. And as to 
FRANCE, trade has come late into that kingdom, and seems to have been the effect 
of reflection and observation in an ingenious and enterprizing people, who 
remarked the riches acquired by such of the neighbouring nations as cultivated 
navigation and commerce.
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The places mentioned by CICERO,†1 as possessed of the greatest commerce in his 
time, are ALEXANDRIA, COLCHUS, TYRE, SIDON, ANDROS, CYPRUS, PAMPHYLIA, LYCIA, 
RHODES, CHIOS, BYZANTIUM, LESBOS, SMYRNA, MILETUM, COOS. All these, except 
ALEXANDRIA, were either small islands, or narrow territories. And that city owed 
its trade entirely to the happiness of its situation.
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Since therefore some natural necessities or disadvantages may be thought 
favourable to industry, why may not artificial burdens have the same effect? Sir 
WILLIAM TEMPLE,†2 we may observe, ascribes the industry of the DUTCH entirely to 
necessity, proceeding from their natural disadvantages; and illustrates his 
doctrine by a striking comparison with IRELAND; "where," says he, "by the 
largeness and plenty of the soil, and scarcity of people, all things necessary 
to life are so cheap, that an industrious man, by two days labour, may gain 
enough to feed him the rest of the week. Which I take to be a very plain ground 
of the laziness attributed to the people. For men naturally prefer ease before 
labour, and will not take pains if they can live idle; though when, by 
necessity, they have been inured to it, they cannot leave it, being grown a 
custom necessary to their health, and to their very entertainment. Nor perhaps 
is the change harder, from constant ease to labour, than from constant labour to 
ease." After which the author proceeds to confirm his doctrine, by enumerating, 
as above, the places where trade has most flourished, in ancient and modern 
times; and which are commonly observed to be such narrow confined territories, 
as beget a necessity for industry.†b
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The best taxes are such as are levied upon consumptions, especially those of 
luxury; because such taxes are least felt by the people. They seem, in some 
measure, voluntary; since a man may chuse how far he will use the commodity 
which is taxed: They are paid gradually and insensibly:†c They naturally produce 
sobriety and frugality, if judiciously imposed: And being confounded with the 
natural price of the commodity, they are scarcely perceived by the consumers. 
Their only disadvantage is, that they are expensive in the levying.
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Taxes upon possessions are levied without expence; but have every other 
disadvantage. Most states, however, are obliged to have recourse to them, in 
order to supply the deficiencies of the other.
Hume: ESY Pt. 2 E. 8 Para. 7/11 mp. 345 gp. 358
But the most pernicious of all taxes are the arbitrary. They are commonly 
converted, by their management, into punishments on industry; and also, by their 
unavoidable inequality, are more grievous, than by the real burden which they 
impose. It is surprising, therefore, to see them have place among any civilized 
people.
Hume: ESY Pt. 2 E. 8 Para. 8/11 mp. 346 gp. 358
In general, all poll-taxes, even when not arbitrary, which they commonly are, 
may be esteemed dangerous: Because it is so easy for the sovereign to add a 
little more, and a little more, to the sum demanded, that these taxes are apt to 
become altogether oppressive and intolerable. On the other hand, a duty upon 
commodities checks itself; and a prince will soon find, that an encrease of the 
impost is no encrease of his revenue. It is not easy, therefore, for a people to 
be altogether ruined by such taxes.
Hume: ESY Pt. 2 E. 8 Para. 9/11 mp. 346 gp. 358
Historians inform us, that one of the chief causes of the destruction of the 
ROMAN state, was the alteration, which CONSTANTINE introduced into the finances, 
by substituting an universal poll-tax, in lieu of almost all the tithes, 
customs, and excises, which formerly composed the revenue of the empire. The 
people, in all the provinces, were so grinded and oppressed by the publicans, 
that they were glad to take refuge under the conquering arms of the barbarians; 
whose dominion, as they had fewer necessities and less art, was found preferable 
to the refined tyranny of the ROMANS.
Hume: ESY Pt. 2 E. 8 Para. 10/11 mp. 346 gp. 359
†d It is an opinion, zealously promoted by some political writers, that, since 
all taxes, as they pretend, fall ultimately upon land, it were better to lay 
them originally there, and abolish every duty upon consumptions. But it is 
denied, that all taxes fall ultimately upon land. If a duty be laid upon any 
commodity, consumed by an artisan, he has two obvious expedients for paying it; 
he may retrench somewhat of his expence, or he may encrease his labour. Both 
these resources are more easy and natural, than that of heightening his wages. 
We see, that, in years of scarcity, the weaver either consumes less or labours 
more, or employs both these expedients of frugality and industry, by which he is 
enabled to reach the end of the year. It is but just, that he should subject 
himself to the same hardships, if they deserve the name, for the sake of the 
publick, which gives him protection. By what contrivance can he raise the price 
of his labour? The manufacturer who employs him, will not give him more: Neither 
can he, because the merchant, who exports the cloth, cannot raise its price, 
being limited by the price which it yields in foreign markets. Every man, to be 
sure, is desirous of pushing off from himself the burden of any tax, which is 
imposed, and of laying it upon others: But as every man has the same 
inclination, and is upon the defensive; no set of men can be supposed to prevail 
altogether in this contest. And why the landed gentleman should be the victim of 
the whole, and should not be able to defend himself, as well as others are, I 
cannot readily imagine. All tradesmen, indeed, would willingly prey upon him, 
and divide him among them, if they could: But this inclination they always have, 
though no taxes were levied; and the same methods, by which he guards against 
the imposition of tradesmen before taxes, will serve him afterwards, and make 
them share the burden with him.†e They must be very heavy taxes, indeed, and 
very injudiciously levied, which the artizan will not, of himself, be enabled to 
pay, by superior industry and frugality, without raising the price of his 
labour.
Hume: ESY Pt. 2 E. 8 Para. 11/11 mp. 347 gp. 360
I shall conclude this subject with observing, that we have, with regard to 
taxes, an instance of what frequently happens in political institutions, that 
the consequences of things are diametrically opposite to what we should expect 
on the first appearance. It is regarded as a fundamental maxim of the TURKISH 
government, that the Grand Signior, though absolute master of the lives and 
fortunes of each individual, has no authority to impose a new tax; and every 
OTTOMAN prince, who has made such an attempt, either has been obliged to 
retract, or has found the fatal effects of his perseverance. One would imagine, 
that this prejudice or established opinion were the firmest barrier in the world 
against oppression; yet it is certain, that its effect is quite contrary. The 
emperor, having no regular method of encreasing his revenue, must allow all the 
bashaws and governors to oppress and abuse the subjects: And these he squeezes 
after their return from their government. Whereas, if he could impose a new tax, 
like our EUROPEAN princes, his interest would so far be united with that of his 
people, that he would immediately feel the bad effects of these disorderly 
levies of money, and would find, that a pound, raised by a general imposition, 
would have less pernicious effects, than a shilling taken in so unequal and 
arbitrary a manner.
Hume: ESY Pt. 2 E. 8 Foot. 1 mp. 344 gp. 357
†1 Epist. ad ATT. lib. ix. ep. II.
Hume: ESY Pt. 2 E. 8 Foot. 2 mp. 344 gp. 357
†2 Account of the NETHERLANDS, chap. 6.
Hume: ESY Pt. 2 E. 8 Var. a mp. 635 gp. 356
†a Editions H to P read: Among those whom in this country we call ways and means 
men, and who are denominated Financiers and Maltotiers in FRANCE.
Hume: ESY Pt. 2 E. 8 Var. b Para. 1/2 mp. 635 gp. 357
†b Editions H to P insert as follows: 'Tis always observed, in years of 
scarcity, if it be not extreme, that the poor labour more, and really live 
better, than in years of great plenty, when they indulge themselves in idleness 
and riot. I have been told, by a considerable manufacturer, that in the year 
1740, when bread and provisions of all kinds were very dear, his workmen not 
only made a shift to live, but paid debts, which they had contracted in former 
years, that were much more favourable and abundant.†1
Hume: ESY Pt. 2 E. 8 Var. b Para. 2/2 mp. 635 gp. 357
This doctrine, therefore, with regard to taxes, may be admitted in some degree: 
But beware of the abuse. Exorbitant taxes, like extreme necessity, destroy 
industry, by producing despair; and even before they reach this pitch, they 
raise the wages of the labourer and manufacturer, and heighten the price of all 
commodities. An attentive disinterested legislature, will observe the point when 
the emolument ceases, and the prejudice begins: But as the contrary character is 
much more common, 'tis to be feared that taxes, all over EUROPE, are multiplying 
to such a degree, as will intirely crush all art and industry; tho', perhaps, 
their first increase, together with other circumstances, might have contributed 
to the growth of these advantages.
Hume: ESY Pt. 2 E. 8 Var. b Foot. 1 mp. 635 gp. 357
†1 To this purpose see also Essay I. at the end.
Hume: ESY Pt. 2 E. 8 Var. c mp. 635 gp. 358
†c This clause was first added in Edition Q.
Hume: ESY Pt. 2 E. 8 Var. d mp. 635 gp. 359
†d Editions H to P omit the opening sentences as far as "foreign markets," and 
read instead of them: There is a prevailing opinion, that all taxes, however 
levied, fall upon the land at last. Such an opinion may be useful in BRITAIN, by 
checking the landed gentlemen, in whose hands our legislature is chiefly lodged, 
and making them preserve great regard for trade and industry. But I must 
confess, that this principle, tho' first advanced by a celebrated writer, has so 
little appearance of reason, that, were it not for his authority, it had never 
been received by any body.
Hume: ESY Pt. 2 E. 8 Var. e mp. 636 gp. 360
†e The concluding sentence is not in Editions H to O.--Ed. P. reads in its 
place: No labour in any commodities, that are exported, can be very considerably 
raised in the price, without losing the foreign market; and as some part of 
almost every manufactory is exported, this circumstance keeps the price of most 
species of labour nearly the same after the imposition of taxes. I may add, that 
it has this effect upon the whole: For were any kind of labour paid beyond its 
proportion, all hands would flock to it, and would soon sink it to a level with 
the rest.

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