Adam Smith · Complete work
Book IV, Chapter VIII, 3
Book IV, Chapter VIII, 3 of 152. Read it here for reference, or continue through the entire work without leaving the reader.
Open the complete readerOriginal 18th-century English
Restraints, either by prohibitions, or by taxes, upon the exportation of goods which are partially, but not completely manufactured, are not peculiar to the manufacture of leather. As long as anything remains to be done, in order to fit any commodity for immediate use and consumption, our manufacturers think that they themselves ought to have the doing of it. Woollen yarn and worsted are prohibited to be exported, under the same penalties as wool even white cloths we subject to a duty upon exportation; and our dyers have so far obtained a monopoly against our clothiers. Our clothiers would probably have been able to defend themselves against it; but it happens that the greater part of our principal clothiers are themselves likewise dyers. Watch-cases, clock-cases, and dial-plates for clocks and watches, have been prohibited to be exported. Our clock-makers and watch-makers are, it seems, unwilling that the price of this sort of workmanship should be raised upon them by the competition of foreigners.
By some old statutes of Edward III, Henry VIII. and Edward VI. the exportation of all metals was prohibited. Lead and tin were alone excepted, probably on account of the great abundance of those metals; in the exportation of which a considerable part of the trade of the kingdom in those days consisted. For the encouragement of the mining trade, the 5th of William and Mary, chap.17, exempted from this prohibition iron, copper, and mundic metal made from British ore. The exportation of all sorts of copper bars, foreign as well as British, was afterwards permitted by the 9th and 10th of William III. chap 26. The exportation of unmanufactured brass, of what is called gun-metal, bell-metal, and shroff metal, still continues to be prohibited. Brass manufactures of all sorts may be exported duty free.
The exportation of the materials of manufacture, where it is not altogether prohibited, is, in many cases, subjected to considerable duties.
By the 8th Geo. I. chap.15, the exportation of all goods, the produce of manufacture of Great Britain, upon which any duties had been imposed by former statutes, was rendered duty free. The following goods, however, were excepted: alum, lead, lead-ore, tin, tanned leather, copperas, coals, wool, cards, white woollen cloths, lapis calaminaris, skins of all sorts, glue, coney hair or wool, hares wool, hair of all sorts, horses, and litharge of lead. If you except horses, all these are either materials of manufacture, or incomplete manufactures (which may be considered as materials for still further manufacture), or instruments of trade. This statute leaves them subject to all the old duties which had ever been imposed upon them, the old subsidy, and one per cent. outwards.
By the same statute, a great number of foreign drugs for dyers use are exempted from all duties upon importation. Each of them, however, is afterwards subjected to a certain duty, not indeed a very heavy one, upon exportation. Our dyers, it seems, while they thought it for their interest to encourage the importation of those drugs, by an exemption from all duties, thought it likewise for their own interest to throw some small discouragement upon their exportation. The avidity, however, which suggested this notable piece of mercantile ingenuity, most probably disappointed itself of its object. It necessarily taught the importers to be more careful than they might otherwise have been, that their importation should not exceed what was necessary for the supply of the home market. The home market was at all times likely to be more scantily supplied; the commodities were at all times likely to be somewhat dearer there than they would have been, had the exportation been rendered as free as the importation.
By the above-mentioned statute, gum senega, or gum arabic, being among the enumerated dyeing drugs, might be imported duty free. They were subjected, indeed, to a small poundage duty, amounting only to threepence in the hundred weight, upon their re-exportation. France enjoyed, at that time, an exclusive trade to the country most productive of those drugs, that which lies in the neighbourhood of the Senegal; and the British market could not be easily supplied by the immediate importation of them from the place of growth. By the 25th Geo. II. therefore, gum senega was allowed to be imported (contrary to the general dispositions of the act of navigation) from any part of Europe. As the law, however, did not mean to encourage this species of trade, so contrary to the general principles of the mercantile policy of England, it imposed a duty of ten shillings the hundred weight upon such importation, and no part of this duty was to be afterwards drawn back upon its exportation. The successful war which began in 1755 gave Great Britain the same exclusive trade to those countries which France had enjoyed before. Our manufactures, as soon as the peace was made, endeavoured to avail themselves of this advantage, and to establish a monopoly in their own favour both against the growers and against the importers of this commodity. By the 5th of Geo. III. therefore, chap. 37, the exportation of gum senega, from his majesty’s dominions in Africa, was confined to Great Britain, and was subjected to all the same restrictions, regulations, forfeitures, and penalties, as that of the enumerated commodities of the British colonies in America and the West Indies. Its importation, indeed, was subjected to a small duty of sixpence the hundred weight; but its re-exportation was subjected to the enormous duty of one pound ten shillings the hundred weight. It was the intention of our manufacturers, that the whole produce of those countries should be imported into Great Britain; and in order that they themselves might be enabled to buy it at their own price, that no part of it should be exported again, but at such an expense as would sufficiently discourage that exportation. Their avidity, however, upon this, as well as upon many other occasions, disappointed itself of its object. This enormous duty presented such a temptation to smuggling, that great quantities of this commodity were clandestinely exported, probably to all the manufacturing countries of Europe, but particularly to Holland, not only from Great Britain, but from Africa. Upon this account, by the 14th Geo. III. chap.10, this duty upon exportation was reduced to five shillings the hundred weight.
In the book of rates, according to which the old subsidy was levied, beaver skins were estimated at six shillings and eight pence a piece; and the different subsidies and imposts which, before the year 1722, had been laid upon their importation, amounted to one-fifth part of the rate, or to sixteen pence upon each skin; all of which, except half the old subsidy, amounting only to twopence, was drawn back upon exportation. This duty, upon the importation of so important a material of manufacture, had been thought too high; and, in the year 1722, the rate was reduced to two shillings and sixpence, which reduced the duty upon importation to sixpence, and of this only one-half was to be drawn back upon exportation. The same successful war put the country most productive of beaver under the dominion of Great Britain; and beaver skins being among the enumerated commodities, the exportation from America was consequently confined to the market of Great Britain. Our manufacturers soon bethought themselves of the advantage which they might make of this circumstance; and in the year 1764, the duty upon the importation of beaver skin was reduced to one penny, but the duty upon exportation was raised to sevenpence each skin, without any drawback of the duty upon importation. By the same law, a duty of eighteen pence the pound was imposed upon the exportation of beaver wool or woumbs, without making any alteration in the duty upon the importation of that commodity, which, when imported by British, and in British shipping, amounted at that time to between fourpence and fivepence the piece.
Coals may be considered both as a material of manufacture, and as an instrument of trade. Heavy duties, accordingly, have been imposed upon their exportation, amounting at present (1783) to more than five shillings the ton, or more than fifteen shillings the chaldron, Newcastle measure; which is, in most cases, more than the original value of the commodity at the coal-pit, or even at the shipping port for exportation.
The exportation, however, of the instruments of trade, properly so called, is commonly restrained, not by high duties, but by absolute prohibitions. Thus, by the 7th and 8th of William III chap.20, sect.8, the exportation of frames or engines for knitting gloves or stockings, is prohibited, under the penalty, not only of the forfeiture of such frames or engines, so exported, or attempted to be exported, but of forty pounds, one half to the king, the other to the person who shall inform or sue for the same. In the same manner, by the 14th Geo. III. chap. 71, the exportation to foreign parts, of any utensils made use of in the cotton, linen, woollen, and silk manufactures, is prohibited under the penalty, not only of the forfeiture of such utensils, but of two hundred pounds, to be paid by the person who shall offend in this manner; and likewise of two hundred pounds, to be paid by the master of the ship, who shall knowingly suffer such utensils to be loaded on board his ship.
When such heavy penalties were imposed upon the exportation of the dead instruments of trade, it could not well be expected that the living instrument, the artificer, should be allowed to go free. Accordingly, by the 5th Geo. I. chap. 27, the person who shall be convicted of enticing any artificer, of or in any of the manufactures of Great Britain, to go into any foreign parts, in order to practise or teach his trade, is liable, for the first offence, to be fined in any sum not exceeding one hundred pounds, and to three months imprisonment, and until the fine shall be paid; and for the second offence, to be fined in any sum, at the discretion of the court, and to imprisonment for twelve months, and until the fine shall be paid. By the 23d Geo. II. chap. 13, this penalty is increased, for the first offence, to five hundred pounds for every artificer so enticed, and to twelve months imprisonment, and until the fine shall be paid; and for the second offence, to one thousand pounds, and to two years imprisonment, and until the fine shall be paid.
By the former of these two statutes, upon proof that any person has been enticing any artificer, or that any artificer has promised or contracted to go into foreign parts, for the purposes aforesaid, such artificer may be obliged to give security, at the discretion of the court, that he shall not go beyond the seas, and may be committed to prison until he give such security.
If any artificer has gone beyond the seas, and is exercising or teaching his trade in any foreign country, upon warning being given to him by any of his majesty’s ministers or consuls abroad, or by one of his majesty’s secretaries of state, for the time being, if he does not, within six months after such warning, return into this realm, and from henceforth abide and inhabit continually within the same, he is from thenceforth declared incapable of taking any legacy devised to him within this kingdom, or of being executor or administrator to any person, or of taking any lands within this kingdom, by descent, devise, or purchase. He likewise forfeits to the king all his lands, goods, and chattels; is declared an alien in every respect; and is put out of the king’s protection.
It is unnecessary, I imagine, to observe how contrary such regulations are to the boasted liberty of the subject, of which we affect to be so very jealous; but which, in this case, is so plainly sacrificed to the futile interests of our merchants and manufacturers.
The laudable motive of all these regulations, is to extend our own manufactures, not by their own improvement, but by the depression of those of all our neighbours, and by putting an end, as much as possible, to the troublesome competition of such odious and disagreeable rivals. Our master manufacturers think it reasonable that they themselves should have the monopoly of the ingenuity of all their countrymen. Though by restraining, in some trades, the number of apprentices which can be employed at one time, and by imposing the necessity of a long apprenticeship in all trades, they endeavour, all of them, to confine the knowledge of their respective employments to as small a number as possible; they are unwilling, however, that any part of this small number should go abroad to instruct foreigners.
Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.
The maxim is so perfectly self-evident, that it would be absurd to attempt to prove it. But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce.
In the restraints upon the importation of all foreign commodities which can come into competition with those of our own growth or manufacture, the interest of the home consumer is evidently sacrificed to that of the producer. It is altogether for the benefit of the latter, that the former is obliged to pay that enhancement of price which this monopoly almost always occasions.
It is altogether for the benefit of the producer, that bounties are granted upon the exportation of some of his productions. The home consumer is obliged to pay, first the tax which is necessary for paying the bounty; and, secondly, the still greater tax which necessarily arises from the enhancement of the price of the commodity in the home market.
By the famous treaty of commerce with Portugal, the consumer is prevented by duties from purchasing of a neighbouring country, a commodity which our own climate does not produce; but is obliged to purchase it of a distant country, though it is acknowledged, that the commodity of the distant country is of a worse quality than that of the near one. The home consumer is obliged to submit to this inconvenience, in order that the producer may import into the distant country some of his productions, upon more advantageous terms than he otherwise would have been allowed to do. The consumer, too, is obliged to pay whatever enhancement in the price of those very productions this forced exportation may occasion in the home market.
But in the system of laws which has been established for the management of our American and West Indian colonies, the interest of the home consumer has been sacrificed to that of the producer, with a more extravagant profusion than in all our other commercial regulations. A great empire has been established for the sole purpose of raising up a nation of customers, who should be obliged to buy, from the shops of our different producers, all the goods with which these could supply them. For the sake of that little enhancement of price which this monopoly might afford our producers, the home consumers have been burdened with the whole expense of maintaining and defending that empire. For this purpose, and for this purpose only, in the two last wars, more than two hundred millions have been spent, and a new debt of more than a hundred and seventy millions has been contracted, over and above all that had been expended for the same purpose in former wars. The interest of this debt alone is not only greater than the whole extraordinary profit which, it never could be pretended, was made by the monopoly of the colony trade, but than the whole value of that trade, or than the whole value of the goods which, at an average, have been annually exported to the colonies.
It cannot be very difficult to determine who have been the contrivers of this whole mercantile system; not the consumers, we may believe, whose interest has been entirely neglected; but the producers, whose interest has been so carefully attended to; and among this latter class, our merchants and manufacturers have been by far the principal architects. In the mercantile regulations which have been taken notice of in this chapter, the interest of our manufacturers has been most peculiarly attended to; and the interest, not so much of the consumers, as that of some other sets of producers, has been sacrificed to it.
Musean translation
Mouseia’s complete machine-assisted Musean translation, made directly from the complete English text of all five books for fidelity, the author’s force and cadence, and modern clarity.
Restrictions on the export of goods that are partly, but not completely, manufactured, whether by prohibitions or taxes, are not confined to leather. So long as anything remains to be done to make a commodity fit for immediate use and consumption, our manufacturers think they should be the ones to do it. Woolen yarn and worsted are prohibited from export under the same penalties as wool; even undyed cloth is subject to an export duty, and our dyers have thus obtained a monopoly at the expense of our clothiers. The clothiers could probably have defended themselves against it, but most of our leading clothiers happen to be dyers as well. Watch cases, clock cases, and dial plates for clocks and watches have been prohibited from export. Our clockmakers and watchmakers, it seems, do not want foreign competition to raise the price of this workmanship for them.
Some old statutes of Edward III, Henry VIII. and Edward VI. prohibited the export of all metals. Only lead and tin were excepted, probably because these metals were so abundant and their export then formed a considerable part of the kingdom's trade. To encourage mining, the 5th of William and Mary, chap.17, exempted iron, copper, and mundic metal made from British ore from this prohibition. The export of all kinds of copper bars, foreign as well as British, was later permitted by the 9th and 10th of William III. chap 26. The export of unmanufactured brass, of what are called gunmetal, bell metal, and shroff metal, remains prohibited. Brass manufactures of every kind may be exported duty free.
Where the export of manufacturing materials is not altogether prohibited, it is in many cases subject to substantial duties.
By the 8th Geo. I. chap.15, all goods produced or manufactured in Great Britain on which earlier statutes had imposed duties were made duty free on export. The following goods, however, were excepted: alum, lead, lead ore, tin, tanned leather, copperas, coal, wool, cards, undyed woolen cloth, lapis calaminaris, skins of every kind, glue, rabbit hair or wool, hare's wool, hair of every kind, horses, and litharge of lead. Apart from horses, all these are either materials for manufacture, unfinished manufactures (which can themselves be considered materials for further manufacture), or instruments of trade. The statute leaves them subject to every old duty ever imposed on them, the old subsidy, and one per cent. on export.
The same statute exempts a great number of foreign drugs used by dyers from all import duties. Each, however, is then subjected to an export duty, though not a very heavy one. Our dyers apparently thought it in their interest both to encourage the import of these drugs by exempting them from all duties and to place a slight obstacle in the way of their export. But the greed that inspired this remarkable feat of mercantile ingenuity most probably defeated its own purpose. It necessarily made importers more careful than they might otherwise have been to import no more than the home market needed. That market was therefore always likely to be supplied less abundantly, and the commodities to cost somewhat more there than if exports had been made as free as imports.
Under the statute just mentioned, gum senega, or gum arabic, as one of the listed dyeing drugs, could be imported duty free. On re-export it was, indeed, subject to a small duty by weight, amounting to only threepence per hundredweight. At that time France held an exclusive trade with the country producing most of these drugs, the country around the Senegal; Britain could not easily supply its market by importing them directly from where they grew. The 25th Geo. II. therefore allowed gum senega to be imported from any part of Europe, contrary to the general provisions of the act of navigation. But as the law did not mean to encourage a trade so contrary to the general principles of England's mercantile policy, it imposed a duty of ten shillings per hundredweight on such imports, with no part to be drawn back upon export. The successful war that began in 1755 gave Great Britain the same exclusive trade with those countries that France had previously enjoyed. As soon as peace was made, our manufacturers sought to take advantage of it and establish a monopoly in their own favor against both the growers and the importers of the commodity. Accordingly, the 5th of Geo. III. chap. 37 confined the export of gum senega from his majesty's dominions in Africa to Great Britain and subjected it to all the restrictions, regulations, forfeitures, and penalties imposed on the listed commodities of the British colonies in America and the West Indies. Its import was, to be sure, subject to a small duty of sixpence per hundredweight; its re-export, however, was subject to the enormous duty of one pound ten shillings per hundredweight. Our manufacturers intended the whole output of those countries to be imported into Great Britain and, so that they could buy it at their own price, none of it to be exported again except at a cost sufficiently high to discourage export. Here, as on many other occasions, their greed defeated its own purpose. This enormous duty created such a temptation to smuggle that great quantities were secretly exported, probably to all the manufacturing countries of Europe and particularly to Holland, not only from Great Britain but also from Africa. For this reason the 14th Geo. III. chap.10 reduced the export duty to five shillings per hundredweight.
In the book of rates used to levy the old subsidy, beaver skins were valued at six shillings and eight pence apiece. The various subsidies and imposts imposed on their import before the year 1722 amounted to one-fifth of that valuation, or sixteen pence per skin. On export, all but half the old subsidy, amounting to only twopence, was drawn back. The import duty on so important a manufacturing material had been thought too high; in the year 1722 the valuation was reduced to two shillings and sixpence, lowering the import duty to sixpence, only half of which was to be drawn back on export. The same successful war brought the country that produced the most beaver under British rule; as beaver skins were among the listed commodities, exports from America were consequently confined to the British market. Our manufacturers soon realized how they might profit from this circumstance, and in the year 1764 the duty on importing beaver skin was lowered to one penny, while the export duty was raised to sevenpence per skin, with no drawback of the import duty. The same law imposed a duty of eighteen pence per pound on the export of beaver wool or woumbs, without altering the import duty on that commodity, which, when imported by British people in British ships, then amounted to between fourpence and fivepence per piece.
Coal may be regarded both as a material for manufacture and as an instrument of trade. Heavy duties have accordingly been imposed on its export, amounting at present (1783) to more than five shillings per ton, or more than fifteen shillings per chaldron, Newcastle measure. In most cases this exceeds the commodity's original value at the coal pit, or even at the port where it is shipped for export.
The export of instruments of trade in the strict sense, however, is usually restrained not by heavy duties but by outright prohibitions. Thus the 7th and 8th of William III chap.20, sect.8, forbids the export of frames or machines for knitting gloves or stockings, on pain not only of forfeiting any such frames or machines exported or attempted to be exported, but also of paying forty pounds, half to the king and half to the informer or prosecutor. Likewise, the 14th Geo. III. chap. 71 forbids the export to foreign countries of any implements used in cotton, linen, woolen, and silk manufacture. Besides forfeiting those implements, the offender must pay two hundred pounds, and the ship's master who knowingly allows them to be loaded aboard must likewise pay two hundred pounds.
When such heavy penalties were imposed on the export of the lifeless instruments of trade, one could hardly expect the living instrument, the artisan, to be free to leave. Accordingly, under the 5th Geo. I. chap. 27, anyone convicted of enticing an artisan belonging to or employed in any British manufacture to go abroad to practice or teach his trade is liable for the first offense to a fine of up to one hundred pounds and three months' imprisonment, continuing until the fine is paid; for a second offense he is liable to a fine of any amount at the court's discretion and twelve months' imprisonment, continuing until the fine is paid. The 23d Geo. II. chap. 13 increases the penalty for a first offense to five hundred pounds for every artisan enticed and twelve months' imprisonment, continuing until the fine is paid; for a second offense it increases the penalty to one thousand pounds and two years' imprisonment, continuing until the fine is paid.
Under the first of these two statutes, on proof that anyone has been enticing an artisan, or that an artisan has promised or contracted to go abroad for these purposes, the artisan may be required to provide security, as the court sees fit, that he will not go overseas, and may be imprisoned until he provides it.
If an artisan has gone overseas and is practicing or teaching his trade in a foreign country, and is warned by one of his majesty's ministers or consuls abroad, or by one of his majesty's current secretaries of state, to return to this realm, but fails to return within six months and thereafter live here permanently, he is declared incapable of receiving any legacy left to him in this kingdom, of serving as executor or administrator to anyone, or of acquiring land in this kingdom by inheritance, bequest, or purchase. He also forfeits all his lands, goods, and possessions to the king, is declared a foreigner in every respect, and loses the king's protection.
I need hardly observe how contrary such regulations are to the much-vaunted liberty of the subject, of which we profess to be so jealous, yet which in this case is so plainly sacrificed to the paltry interests of our merchants and manufacturers.
The praiseworthy motive behind all these regulations is to expand our manufactures, not by improving them, but by depressing those of all our neighbors and putting an end, as far as possible, to the troublesome competition of such hateful and disagreeable rivals. Our master manufacturers consider it reasonable that they should hold a monopoly over the ingenuity of all their countrymen. Although they all try to confine knowledge of their trades to as few people as possible by limiting the number of apprentices who may be employed at once in some trades and requiring a long apprenticeship in every trade, they are unwilling for any of that small number to go abroad and teach foreigners.
Consumption is the sole end and purpose of all production; the producer's interest should be considered only insofar as it may be necessary to advance the consumer's.
This maxim is so self-evident that attempting to prove it would be absurd. In the mercantile system, however, the consumer's interest is almost constantly sacrificed to the producer's; the system seems to regard production, not consumption, as the ultimate end and purpose of all industry and commerce.
In restrictions on the import of foreign commodities that can compete with those we grow or manufacture ourselves, the home consumer's interest is plainly sacrificed to the producer's. It is solely for the latter's benefit that the former is forced to pay the higher price this monopoly almost always brings about.
It is solely for the producer's benefit that bounties are granted on the export of some of his products. The home consumer has to pay, first, the tax required to fund the bounty and, second, the still greater tax that necessarily results when the commodity's price rises in the home market.
Under the famous commercial treaty with Portugal, duties prevent the consumer from buying from a neighboring country a commodity our own climate cannot produce. He is obliged instead to buy it from a distant country, though it is acknowledged that the distant country's product is worse than the neighbor's. The home consumer must endure this inconvenience so that the producer can import some of his products into the distant country on more favorable terms than would otherwise have been allowed. The consumer must also pay whatever increase this forced export may cause in the home price of those very products.
But in the laws established to manage our American and West Indian colonies, the home consumer's interest has been sacrificed to the producer's with greater extravagance than in any other commercial regulations. A great empire has been established solely to create a nation of customers obliged to buy from the shops of our various producers every good they can supply. For the sake of the small increase in price this monopoly might yield our producers, home consumers have borne the entire cost of maintaining and defending that empire. For this purpose, and this purpose alone, more than two hundred millions have been spent in the two last wars, and a new debt of more than a hundred and seventy millions contracted, beyond everything spent for the same purpose in earlier wars. The interest on this debt alone exceeds not merely the entire extraordinary profit that could ever plausibly be claimed for the monopoly of colonial trade, but the entire value of that trade—the entire value of the goods exported to the colonies in an average year.
It cannot be very hard to determine who devised this entire mercantile system: not the consumers, we may suppose, whose interests were wholly neglected, but the producers, whose interests received such careful attention. Of the latter, our merchants and manufacturers have been by far its chief architects. In the mercantile regulations discussed in this chapter, particular attention has been paid to the interests of our manufacturers; and it is not so much consumers as certain other groups of producers whose interests have been sacrificed to them.
Plain English translation
Mouseia’s complete Plain English edition, made independently and directly from the complete English text of all five books.
Bans and taxes on exporting goods that are partly, but not fully, manufactured are not limited to leather. Whenever any work remains before a product is ready to use, our manufacturers think they should be the ones to do it. Woolen yarn and worsted cannot be exported, under the same penalties as wool. Even undyed cloth is taxed when exported, so our dyers have gained a partial monopoly at the expense of our clothiers. The clothiers probably could have defended themselves against it, but most of our leading clothiers are also dyers. The export of watchcases, clock cases, and dial plates for clocks and watches has also been banned. It seems our clockmakers and watchmakers do not want competition from foreigners to raise the prices they pay for these parts.
Some old laws from Edward III, Henry VIII. and Edward VI. banned the export of all metals. Only lead and tin were exempt, probably because these metals were abundant and their export made up a substantial part of the kingdom's trade at the time. To encourage mining, the 5th of William and Mary, chap.17, exempted iron, copper, and mundic metal made from British ore. The 9th and 10th of William III. chap 26 later allowed the export of every kind of copper bar, foreign as well as British. Unmanufactured brass, including what are called gun-metal, bell-metal, and shroff metal, still cannot be exported. Manufactured goods made of brass can all be exported duty-free.
Where exports of manufacturing materials are not completely banned, they often face substantial duties.
The 8th Geo. I. chap.15 made exports of goods produced or manufactured in Great Britain duty-free, even if earlier laws had imposed duties on them. It excepted the following goods: alum, lead, lead ore, tin, tanned leather, copperas, coal, wool, cards, white woolen cloth, lapis calaminaris, skins of every sort, glue, rabbit hair or wool, hare wool, all kinds of hair, horses, and lead litharge. Apart from horses, every item is either a manufacturing material, a partly made product that can serve as material for further work, or an instrument of trade. The law keeps all previous duties on these goods, including the old subsidy and one per cent. on exports.
The same law exempts many foreign substances used by dyers from all duties when imported. But it puts a specific, though fairly small, duty on each when exported again. Our dyers evidently thought it served them to encourage imports of these substances by removing all duties, but also to discourage exports a little. Their greed behind this ingenious trade policy probably defeated its own purpose. It made importers more careful not to bring in more than the home market needed. So the home market was always likely to have a tighter supply, and these goods were likely to cost somewhat more there than if exports had been as free as imports.
Under that law, gum senega, or gum arabic, was one of the named dyeing substances and could be imported duty-free. Its re-export did face a small duty, only threepence per hundred weight. At the time, France had exclusive trade with the country around the Senegal, the main source of these substances. It was hard to supply the British market by importing them directly from where they grew. So the 25th Geo. II. allowed gum senega to be imported from any part of Europe, contrary to the general terms of the act of navigation. But the law did not mean to encourage trade so opposed to the general principles of England's mercantile policy. It charged ten shillings per hundred weight on such imports, with no refund of that duty on subsequent exports. The successful war that began in 1755 gave Great Britain the same exclusive trade with those countries that France had enjoyed before. Once peace came, our manufacturers tried to use that advantage to establish a monopoly against both the growers and the importers of gum senega. So the 5th of Geo. III. chap. 37 restricted its export from his majesty's African dominions to Great Britain. It subjected the trade to all the restrictions, rules, confiscations, and penalties applying to the listed products of Britain's colonies in America and the West Indies. Import duty was only sixpence per hundred weight, but duty on re-export was an enormous one pound ten shillings per hundred weight. Our manufacturers intended that the entire output of those countries should enter Great Britain. To let them buy at their own price, they also wanted the cost of any re-export to be high enough to discourage it. As on many other occasions, their greed defeated their purpose. This enormous duty offered such a strong incentive to smuggle that large quantities were secretly exported, probably to every manufacturing country in Europe, and especially to Holland, from both Great Britain and Africa. For that reason, the 14th Geo. III. chap.10 reduced the export duty to five shillings per hundred weight.
The book of rates used for the old subsidy valued beaver skins at six shillings and eight pence each. Before 1722, the various import subsidies and taxes totaled one-fifth of that valuation, or sixteen pence per skin. On export, all these duties were refunded except half the old subsidy, which was only twopence. The import duty on such an important manufacturing material was thought too high. In 1722, the listed value fell to two shillings and sixpence. That reduced import duty to sixpence, and only half of that was refundable on export. The same successful war put the country that produced the most beaver under British rule. Beaver skins were among the listed commodities whose export from America was restricted to the British market. Our manufacturers soon saw how they could take advantage of this. In 1764, the import duty on beaver skin was cut to one penny, but the export duty rose to sevenpence per skin, with no refund of the import duty. The same law imposed an export duty of eighteen pence per pound on beaver wool or woumbs. It did not change the import duty on that product, which at the time was between fourpence and fivepence per piece when imported by British people in British ships.
Coal can be viewed both as manufacturing material and as an instrument of trade. It has therefore faced heavy export duties, now (1783) exceeding five shillings per ton, or fifteen shillings per chaldron, Newcastle measure. In most cases that is more than the coal's original value at the mine, or even at the port from which it is exported.
Actual instruments of trade, however, are usually kept from being exported by outright bans rather than high duties. For example, the 7th and 8th of William III chap.20, sect.8 bans the export of frames or machines used to knit gloves or stockings. Exporting them, or trying to, means losing the equipment and paying forty pounds, half to the king and half to whoever reports or prosecutes the offense. Similarly, the 14th Geo. III. chap. 71 bans exports to foreign countries of any tools used to manufacture cotton, linen, woolen goods, or silk. Besides losing the tools, the offender must pay two hundred pounds. The ship's captain must also pay two hundred pounds if he knowingly allows the tools to be loaded aboard.
When such heavy penalties applied to exporting inanimate tools of trade, it was hardly likely that skilled workers themselves would be free to leave. Under the 5th Geo. I. chap. 27, anyone convicted of persuading a skilled worker in any British manufacture to go abroad to practice or teach his trade faces a fine of up to one hundred pounds for the first offense and three months in prison, remaining there until the fine is paid. For a second offense, the court can set any fine, with twelve months in prison and continued confinement until it is paid. Under the 23d Geo. II. chap. 13, the first-offense penalty rises to five hundred pounds for each worker persuaded to go, twelve months in prison, and continued confinement until payment. A second offense brings one thousand pounds, two years in prison, and continued confinement until payment.
Under the first of these two laws, if there is proof that someone has been trying to persuade a skilled worker to go abroad, or that such a worker has promised or contracted to go there for those purposes, the court can require the worker to provide a guarantee that he will not leave the country. It can imprison him until he provides it.
Suppose a skilled worker has gone abroad and is practicing or teaching his trade there. A royal minister or consul abroad, or one of the current royal secretaries of state, may warn him to return. If he does not return to this kingdom within six months of the warning and then live here continuously, he can no longer inherit a bequest made to him within the kingdom. He cannot act as executor or administrator of anyone's estate or acquire land here by inheritance, bequest, or purchase. He also loses all his land, goods, and possessions to the king, is treated as a foreigner in every respect, and loses the king's protection.
I hardly need to say how these rules conflict with the much-praised freedom of the subject. We claim to guard that freedom very carefully, yet here we plainly sacrifice it for the worthless interests of our merchants and manufacturers.
The supposedly admirable aim of all these rules is to expand our manufacturing, not by improving it, but by holding back our neighbors' manufacturing and removing as much competition as possible from those troublesome, hated rivals. Our master manufacturers think it reasonable to monopolize the skill of all their fellow citizens. In some trades they limit how many apprentices can work at once, and in every trade they require a long apprenticeship. That way they try to keep knowledge of each trade in as few hands as possible. Yet they do not want any of those few to travel abroad and teach foreigners.
The only purpose of production is consumption. Producers' interests deserve consideration only insofar as doing so helps consumers.
This principle is so obvious that trying to prove it would be absurd. Yet the mercantile system almost constantly sacrifices consumers' interests for producers'. It seems to treat production, rather than consumption, as the ultimate purpose of all work and trade.
Restrictions on imports of foreign goods that compete with our own agricultural or manufactured goods plainly sacrifice home consumers for producers. Producers alone benefit when consumers must pay the higher price that this monopoly almost always brings.
Export bounties on some products likewise exist entirely for producers' benefit. Home consumers first have to pay the tax that funds the bounty. Then they pay an even greater cost when the bounty raises the price of the product at home.
Under the famous trade treaty with Portugal, duties stop consumers from buying a product that our own climate cannot produce from a neighboring country. They must instead buy it from a distant one, although that distant country's product is admittedly worse. Home consumers bear this inconvenience so that producers can export some of their products to that distant country on better terms than would otherwise be allowed. Consumers must also pay any rise in the home price of those very products caused by these forced exports.
But the laws governing our American and West Indian colonies sacrifice home consumers for producers even more extravagantly than our other trade rules do. A great empire has been established solely to create a nation of customers required to buy from our producers' shops all the goods those producers can supply. To give producers the slight increase in price that this monopoly might bring, home consumers have had to bear the whole cost of maintaining and defending that empire. For this purpose alone, the two most recent wars have cost more than two hundred millions and created more than a hundred and seventy millions of new debt. That comes on top of all spending for the same purpose in earlier wars. Interest on this debt alone exceeds not only the entire extra profit supposedly earned from monopolizing colonial trade—though no one could ever reasonably claim such a profit was earned—but even the whole value of that trade, or the whole average annual value of goods exported to the colonies.
It is not hard to tell who designed this whole mercantile system. It was not the consumers, whose interests were completely ignored. It was the producers, whose interests received so much attention. Among producers, merchants and manufacturers were by far its main architects. The trade rules described in this chapter have especially favored manufacturers. They have sacrificed not only consumers' interests but also those of other groups of producers.