POLITICAL ECONOMY. 



609 





completely demonstrated, as that of astronomy since 

 the time of Newton ; while others consider the 

 present state of political economy as far below a 

 full development and demonstration of its princi- 

 ples, as the system of the nine mundane spheres, or 

 perhaps the theory of Tycho Brahe, as compared to 

 modem astronomy. It certainly seems to be singu- 

 lar, if the rules whereby a nation may be made to 

 flourish or decay, are as well defined, and as satis- 

 factorily demonstrated, as the theorems of geome- 

 try, that they should be so rarely and so imperfectly 

 reduced to practice. Some of the fundamental doc- 

 trines of those writers, who have occupied the 

 greatest space in the written expositions of this 

 science, are not adopted by any nation whatever 

 occupying a respectable rank in the civilized world. 

 This might be accounted for, if the doctrines in ques- 

 tion were professedly proposed for simultaneous 

 adoption by all nations, like those of the peace 

 societies ; for then the doctrines might be theore- 

 tically true, but yet fundamentally inapplicable in 

 the actual condition of the world. But these doc- 

 trines are not proposed as being subject to this 

 condition ; they are pressed upon every single 

 people, without regard to the conduct of others, 

 and independently of the policy that may be pursued 

 by foreigners. It is not one of the conditions on 

 which they are recommended, that nations must be 

 prepared for their reception by an entire revolution 

 in national relations and policy, and that they can 

 have place only in the train of events attending a 

 political millennium ; their advocates profess their 

 adaptation to the present state of national rivalships 

 and collisions of interest. It follows that the practical 

 truth of these doctrines is not so demonstratively 

 proved as their advocates suppose, or that the legisla- 

 tors are not so wise as they should be. In this state 

 of the case, admitting a great deal of corruption, 

 ignorance, and error, on the part of those who control 

 the measures of the different civilized nations of 

 Christendom, yet their general concurrence in re- 

 jecting these doctrines, even in those two or three 

 countries where they are most confidently asserted 

 and most learnedly inculcated, presents an author- 

 ity against their practical utility quite as imposing 

 as that of the professors by whom they are so strenu- 

 ously advocated. This science, like other specula- 

 tive sciences, commenced in theories ; and the dis- 

 cussion and refutation of them still occupies a great 

 share in the recent treatises a circumstance which, 

 of itself, shows that it is in rather a rude state ; 

 since, in those sciences which have reached an 

 advanced state, the visionary systems of the first 

 speculators are now mentioned as matters of mere 

 historical curiosity, a formal confutation of which 

 would be superfluous. Another circumstance indi- 

 cates the rude state of this science: it is matter of 

 common observation that the early explorers of the 

 arcana of science assume a certain oracular, myste- 

 rious air, the infallible badge of empiricism, which 

 always disappears on the establishment of real 

 knowledge. And the mystical, solemn, and some- 

 what pompous air of many of the doctors of politi- 

 cal economy affords some ground for suspicion that 

 this science has not yet reached perfection. Unless 

 we should consider the notion of some ancient 

 nations, that plunder was the great source of 

 national wealth, as a theory in this science, the first 

 step in political economy was the theory of the com- 

 mercial or mercantile system, which taught that a 

 nation could grow rich only by trade, and that its 

 growing rich in this way depended on the balance 

 received in the precious metals, on adjusting its ac- 

 counts with other nations. Neither of these views 

 is entirely visionary ; for a nation may gain wealth 



by carrying on either war or trade, upon very advaii. 

 tageous terms. It is assumed, indeed, that all com. 

 mercial exchanges are only those of equivalent values. 

 But, notwithstanding this axiom, an individual mer- 

 chant or speculator will sometimes make his fortune 

 by exchanging, or, in other words, by buying and 

 selling. And so a nation, if it possesses some 

 very great commercial advantage like those of the 

 early Spanish traders with the native Americans, 

 who could exchange iron and bits of tin for a much 

 greater weight of gold, may grow wealthy by trade; 

 for the nation may in this way get, for what costs 

 them only a day's labour, what would cost them, or 

 what may be worth to them, five, six, or twenty 

 days' labour. The mercantile system had therefore 

 some foundation in fact and experience ; for every 

 one will probably admit, that any particular branch 

 of trade may be more or less advantageous to those 

 engaged in it, and to the countries to which they 

 belong, and that one branch may be more advanta- 

 geous than another. It is said, indeed, that a dis- 

 advantageous trade will cease ; and it is thence 

 inferred that all those which continue to be carried 

 on are profitable and useful. This is, at least, ad- 

 mitting that there may be a disadvantageous trade, 

 and that some branches may be advantageous will 

 not be disputed. The mercantile system, then, had 

 some foundation ; but, like some other theories of 

 political economy, it was carried too far. The 

 science of national wealth, as applied to nations 

 generally, is reduced to very narrow limits, if we 

 suppose it to rest wholly upon the bargains made in 

 foreign barter. They mistook, then, in magnifying 

 the relative' importance of foreign trade as a part 

 of the causes of national industry and resources, 

 since the annual profit derived thence, even in a 

 very commercial country, does not usually exceed 

 some very inconsiderable per centage of the whole 

 annual production and consumption. But a still 

 more objectionable part of this theory was the sup- 

 position that the gain thus derived depended wholly 

 upon the balance received in gold and silver, ac- 

 cording to which notion such a country as Mexico, 

 a great portion of the exports of which are neces- 

 sarily gold and silver, could never grow rich. The 

 more it produced of the very articles the gaining of 

 which alone could make other nations rich, the 

 more demonstrably impossible it was that it should 

 grow wealthy itself'. So far, therefore, as the theory 

 referred national growth in wealth exclusively to the 

 receipt of such a balance of trade, and made the 

 growth in wealth proportional to the amount of this 

 balance, it was entirely fanciful. This theory was 

 supported, in the latter part of the seventeenth and 

 early part of the eighteenth century, in England, by 

 Mr Mun, Sir Josiah Child, doctor Davenant, and 

 Sir James Stuart ; but it was called in question at 

 the same period by Sir William Petty, Sir Dudley 

 North, Mr Barlow, and later by Sir Matthew 

 Decker and Mr Harris. Sir Matthew Decker's 

 Essay on the Decline of Foreign Trade was pub- 

 lished in 1744, and Mr Harris's Essay upon Money 

 and Coins, in 1757. Mr Hume treated of the same 

 subject in his Political Essays, published in 1757. 

 So far, then, as this theory rested upon the notion 

 of a money balance, as being the only source of 

 national growth in wealth, it was ably discussed 

 before the publication of Smith's Wealth of Na- 

 tions. But the practical question at the bottom of 

 the theory, namely, the national advantages and 

 disadvantages of particular branches of trade, and 

 the effect upon a nation of a trade, which keeps it 

 always in debt to another, has not been settled to 

 this day; the economists of the new school, as it is 

 termed, maintaining that all foreign trade is advan- 

 2C 



