Superphysics Superphysics
Chapter 2d

Restoring Free Trade

by Adam Smith
6 minutes  • 1080 words

40 It may be deliberated how to properly restore the free importation of foreign goods after it has been interrupted, especially when its local monopoly already employs so many people.

In this case, humanity may require that the freedom of trade should be restored slowly, with much reserve and circumspection.

If those high duties and prohibitions were all removed at once, cheaper foreign goods might enter so fast. They would deprive our people of their employment.

This might create a very big disorder. But it would probably be much less than imagined, for 2 reasons:

41 All those manufactured exports, without a bounty, to other European countries, could be very little affected by the freest importation of foreign goods.

Such manufactures would be sold as cheap abroad as foreign goods of the same kind and quality. Consequently, they would:

  • be sold cheaper at home, and
  • still hold the home market.

A capricious man of fashion might prefer foreign goods to cheaper and better local goods, merely because they were foreign. This folly would not:

  • extend to all people
  • affect their employment

The following of our manufactures employ the most hands, and are exported to other European countries without a bounty:

  • our woollen manufactures
  • our tanned leather
  • our hardware
  • our silk manufactures – perhaps this would suffer the most by this freedom of trade.
  • our linen – this would suffer next after silk.

42 Many people would be immediately thrown out of their ordinary employment by the restoration of free trade. But it would not mean that they would be deprived of employment. More than 100,000 soldiers and seamen were immediately thrown out of employment by the reduction of the military at the end of the recent war.

That number is equal to the number employed in our greatest manufactures.

They suffered some inconvenience.

  • But they were not deprived of all employment and subsistence.

Most of the seamen gradually went to the merchant-service.

The seamen and the soldiers were:

  • absorbed into society, and
  • employed in various occupations.

No sensible disorder arose from it, even if those men were used to rapine and plunder.

  • The number of vagrants was not sensibly increased by it.
  • In any occupation, wages were not reduced by it, except in seamen’s wages in the merchant-service.

The soldier’s habits do not disqualify him from being employed in any new trade, just like the manufacturer’s habits do not disqualify the manufacturer from any new trade.

The manufacturer is used to look for his subsistence from his labour only.

  • The soldier expects it from his pay.

Application and industry is familiar to the manufacturer

  • Idleness and dissipation is familiar to the soldier.

It is much easier to change the labour of one industry to another industry, than to change idleness and dissipation into industry.

Most manufactures have other collateral manufactures of similar nature.

A worker can easily transfer his industry from manufacture to another.

Most of such workmen too are occasionally employed in country labour.

  • The stock which employed them in one manufacture before, will still remain in the country to employ other people in some other way.

The country’s capital remains the same, so the demand for labour will likewise be the same, though it may be exerted in different places and occupations. Soldiers and seamen discharged from military service are free to exercise any trade within Great Britain or Ireland.

Let the same natural liberty, of exercising the industry they please, be restored to all his Majesty’s subjects, in the same way as to soldiers and seamen:

  • break down the exclusive privileges of corporations
  • repeal the statute of apprenticeship
    • Both are real encroachments on natural liberty.
  • repeal the law of settlements
    • So that a poor worker, when thrown out of employment, may seek it in another trade or place without the fear of prosecution or removal.

Society will not suffer much more from the occasional disbanding of some manufacturers than from the disbanding of soldiers. Our manufacturers have great merit with their country.

But they:

  • cannot have more than those who defend it with their blood
  • do not deserve to be treated with more delicacy.

43 It is absurd to expect that the freedom of trade should ever be entirely restored in Great Britain. This is just as absurd to expect that an Oceana or Utopia should ever be established in it.

It is irresistibly opposed by:

  • public prejudice, and
  • many private interests – this is much more unconquerable.

If the army officers opposed any reduction of their forces with the zeal and unanimity that our master manufacturers have against laws that increase their rivals in the home-market:

  • any attempt to reduce the army would be as dangerous as to attempt to reduce our manufacturers’ monopoly against us, and
  • the officers would animate their soldiers in the same way as master manufacturers enflame their workers to attack the proposers of such regulations.

This monopoly has so much increased their numbers that, like an overgrown army, they have become formidable to the government.

They have intimidated the legislature on many occasions.

The Member of Parliament who supports proposals for strengthening this monopoly will surely acquire:

  • the reputation of understanding trade
  • the great popularity and influence with wealthy and important men

If he opposes and thwarts them, the most acknowledged probity, the highest rank, and the greatest public services would not be able to protect him from:

  • the most infamous abuse and detraction
  • personal insults
  • real danger, all arising from the insolent outrage of furious and disappointed monopolists.

44 A big factory owner would suffer very much from the sudden competition of foreigners.

  • His circulating capital might find another employment easily.
  • But his fixed capital in his workhouses and instruments of trade could not be disposed without considerable loss.

His interest should be equally regarded.

Changes of this kind should never be introduced suddenly, but slowly, gradually, and after a very long warning. The legislature should always be:

  • directed by an extensive view of the general good and not by the clamour of partial interests.
  • careful not to establish any new monopolies nor extend those monopolies already established

Every such regulation introduces some degree of real disorder which will be difficult to cure without creating another disorder.

45 In Book 5, Chapter 2, I shall consider how far taxes can be properly imposed on imported goods to raise a revenue for government.

Taxes which prevent or reduce importation destroy the revenue of the customs just as it destroys free trade.

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