The Evils of the Corn Trade

3. Commerce and manufactures are hindered by:

• a comparatively low value of the precious metals or
• a high nominal price of corn and labour

Yet these permanently beneficial to those who live by wages.

Labourer X in Country X and Labourer Y in Country Y earned the same amount of corn.

• The nominal price of corn in Country X were 25% higher.
• Labourer X will have a better condition.

A free trade would encourage population from the cheapness of grain.

• After 20-25 years, this would reduce the earnings of the labourer to the same quantity of corn as at present, at the same price as in the rest of Europe

• This would worsen the condition of the lower classes in Britain

4. It might not be advisable to commence an artificial system of regulations in the trade of corn.

Yet if, by such a system already established and other concurring causes, the prices of corn and of many commodities had been raised above the level of the rest of Europe, it becomes a different question, whether it would be advisable to risk the effects of so great and sudden a fall in the price of corn, as would be the consequence of at once throwing open our ports.

Smith says “it might be deliberated how far to restore free importation after it has been for some time interrupted”

The production of corn is not exempted from the operation of this rule.

Free trade would affect the interests of landholders permanently, and farmers temporarily.

Protecting duties causes an unnatural quantity of capital to be directed towards manufactures and commerce, and taken from the land.

I reply that restoring the free trade of corn, while keeping the protecting duties on other commodities, depresses the cultivation of the land below other kinds of industry.

Even in this case, it might still be a national advantage to purchase corn where it could be had the cheapest.

• Yet the landowners should get justice.

It would appear:

• impolitic to hinder our own agriculture.
• desirable to secure an independent supply of corn

5. How far and by what sacrifices, should foreign corn importation be restricted?

With regard to the mere practicability of effecting an independent supply, it must certainly be allowed that foreign corn may be so prohibited as completely to secure this object.

A country with a large territory, which determines never to import corn, except when the price indicates a scarcity, will unquestionably in average years supply its own wants.

But a law passed with this view might be so framed as to effect its object rather by a diminution of the people than an increase of the corn:

Even if constructed in the most judicious manner, it can never be made entirely free from objections of this kind.

The evils on restricting foreign corn importation are:

1. Wasting national resources by employing a greater quantity of capital than is necessary for procuring the quantity of corn required.

2. A relative disadvantage in all foreign commercial transactions, occasioned by the high comparative prices of corn and labour, and the low value of silver, as far as they affect exportable commodities.

3. A hindrance to population growth by the hindrance of the abundance of corn, and demand for manufacturing labours, which would be the result of a perfect freedom of importation.

4. The necessity of constant revision and interference, which belongs to almost every artificial system.

During the last 20 years, under a high price of corn and labour, the following have greatly increased:

• our population
• our exported commodities

But this happened in spite of these high prices, not in consequence of them.*

This is due to the unusual success of:

• our inventions for saving labour and
• the unusual monopoly of the commerce of Europe which has been thrown into our hands by the war.

When these inventions spread and Europe recovers in some degree her industry and capital, we may not find it so easy to support the competition.