F.—ECONOMIC SCIENCE AND STATISTICS. 171 
“may sigh for the uncomplicated simplicity of the time when every country 
sed only, and used all of, the capital it had itself accumulated. But 
that is not the world in which we live. 
17,8. The next of the generally accepted propositions in the sequence 
we are now considering was this : that while the capital and labour within a 
country were quantities the amount of which no Government action could 
influence, they could readily be transferred from one industry to another 
within a country, if their previous employment were taken from them by 
imports. It is the doctrine of the Internal Transferability of capital and 
abour, as existing conditions rendering free trade always beneficial. 
The history of the literary presentation of the idea is suggestive. Like 
‘so much else, it probably came to Smith from Hume. Hume, in seeking to 
remove the alarm lest the ‘interference’ of our neighbours with any of our 
staple trades could do us great harm, argues that ‘ “if the spirit of industry 
_be preserved, it may easily y be diverted from one branch to another ; and 
the manufacturers of wool, for instance, be employed in linen, silk, ire on, OF 
any other commodities for which there appears to be a demand.’ ?? 
From this statement Hume would probably not have been disposed 
to draw the sweeping practical conclusions of later writers ;7* yet here is 
the transferability idea in germ. Of the idea in relation to ‘capital T have 
already said something. Let us fix our attention on labour ; for ‘ manu- 
facturers ’ here means manual operatives. 
Hume was writing in 1758. The use of coke for smelting iron was only 
just beginning; none of the great inventions in the iron and mining 
industries had yet been introduced: neither puddling, nor rolling, nor the 
steam engine. The only textile industry to which ‘ power’ had been applied 
was the relatively small silk industry ; not one of the revolutionary changes 
in cotton spinning and weaving had been made, and the engineering and 
‘shipbuilding trades were far in the future. Moreover, Hume is specifically 
referring to ‘the staple industries’ of the country ; and there may have 
been some justification in the pre-machine age for thinking that—except 
im the case of highly skilled artisan crafts producing luxury goods— 
labour could move pretty easily to and fro. Even so, the ‘ easy ’ diversion 
of workpeople from the textile industries to the iron manufacture rather 
suggests a literary man’s unacquaintance with the actual conditions of 
working-class life. 
_ Adam Smith, twenty years later, thought it necessary to argue the 
matter more at length. He makes four points.’® The first is, that the 
soldiers and seamen disbanded at the end of the Seven Years’ War were 
gradually absorbed in the great mass of the people and found work in a 
variety of ways, without any ‘sensible disorder,’ ‘ though they no doubt 
suffered some ineonventency.’ ‘To turn the direction of industry from one 
sort of labour to another’ ‘is surely much easier.’ The second is that, 
: to the greater part of manufactures there are other collateral manufactures 
of so similar a nature that a workman can easily transfer his industry from 
me of them to another.’ The third is that ‘ the greater part of such workmen 
_ 77 Essay, Of the Jealousy of Trade. (Reprint, p. 197.) 
: ‘ 78 For he continued to print by the side of this Teds the preceding Essay in which 
he Beeced that * a Government has great reason to preserve with care its people and 
79 Bk. IV., ch. ii. (IL., 43) ; italics added. 
