Foreign Economic Systems

³⁹ The political economy of modern European nations was more favourable to manufactures and foreign trade, the industry of the towns, than to agriculture, the industry of the countryside.

Other nations were more favourable to agriculture than to manufactures and foreign trade.

The Policy of China

⁴⁰ The policy of China favours agriculture more than all other employments.

In China, the condition of a labourer much superior to the condition of an artificer. In most of Europe, the condition of an artificer is much superior to the condition of a labourer. In China, the great ambition of every man is to possess some little land in purchase or lease. Leases there are granted on very moderate terms. Those terms are sufficiently secured to the lessees. The Chinese have little respect for foreign trade. The Mandarins of Peking used to say Your beggarly commerce! to the Russian envoy, Mr. de Lange, about it. Except with Japan, the Chinese carry on little or no foreign trade themselves and in their own ships.

They admit foreign ships only in one or two of their ports. Foreign trade in China is confined within a much narrower circle than what would naturally extend itself, if more freedom was allowed in Chinese or foreign ships.

⁴¹ Manufactures frequently contain a great value in a small bulk.

They can be transported cheaper than most rude produce. In almost all countries, they are the principal support of foreign trade. Manufactures need the support of foreign trade in small countries and in those less favourably circumstanced for commerce than China. Without an extensive foreign market= they could not flourish well, they would be confined to:

• countries with a narrow home market, and
• countries where communication was so difficult that it is impossible for goods to be transported to the proper local market.

The perfection of the manufacturing industry depends on the division of labour.

The degree to which the division of labour can be introduced into any manufacture is regulated by the extent of the market. The Chinese home market is of so extensive because of= the great size of the Chinese empire, its huge population, the variety of its climate which leads to a variety of productions in its different provinces, and the easy communication by water transport between its provinces. The Chinese home market is alone sufficient to= support very great manufactures, and allow very considerable subdivisions of labour. The Chinese home market is perhaps not much inferior in extent to the entire European market put together. If the global foreign market was added to its own Chinese market, especially if most of this trade was carried on in Chinese ships, could surely= very much increase Chinese manufactures, and very much improve the productivity of its manufacturing industry. By a more extensive navigation, the Chinese would naturally learn= the art of using and constructing themselves all the machines used in other countries, and the other improvements of art and industry in the world. Upon their present plan they have little opportunity except that of the Japanese.

The policy of India and Egypt

⁴² The policy of ancient Egypt and India favoured agriculture more than all other employments.

⁴³ The people there were divided into different castes or tribes. Each was confined, from father to son, to a particular employment.

• The son of a priest was a priest.
• The son of a soldier was a soldier.
• The son of a labourer was a labourer.
• The son of a weaver was a weaver.

In both countries, the caste of the priests held the highest rank.

• The caste of the soldiers was next highest.
• The caste of the farmers and labourers was superior to the castes of merchants and manufacturers.

⁴⁴ The governments of ancient Egypt and India were particularly attentive to the interest of agriculture.

The works built by the ancient Egyptian sovereigns for the proper water distribution of the Nile were famous in antiquity. Similar works were built by the ancient Indian sovereigns for the proper water distribution of the Ganges and other rivers.

They were equally great though they were less celebrated. Both countries were famous for their great fertility even though they occasionally had dearths. Both were extremely populous. In years of moderate plenty, they were both able to export plenty of grain.

⁴⁵ The ancient Egyptians had a superstitious aversion to the sea.

The Hindu religion does not permit its followers to= light a fire on the water, and dress any victuals on the water. In effect, it bans them from all distant sea voyages. The Egyptians and Indians must have depended on foreign navigators to export their surplus produce. This dependency must have confined the market.

It must have discouraged the increase of=

• this surplus produce, and
• the manufactured produce, more than the rude produce.

Manufactures require a more extensive market than the most important rude produce of the land.

A single shoemaker will make more than 300 pairs of shoes a year. His own family will not, perhaps, wear out six pairs. He cannot dispose of all of his produce unless he has at least 50 such families as his own. In a large country, the most numerous class of artificers will seldom make more than 2% or 1% of the total number of families in it.

But in large countries such as France and England, the population employed in agriculture was computed=

• by some authors at 50%,
• by other authors at 33%,
• by no author at less than 20% of the country’s total population.

Most of the agricultural produce of France and England is consumed at home.

According to these computations, each person employed in it must require little more than the custom of 1-4 such families as his own to dispose of the whole produce of his own labour. Agriculture, can support itself under the discouragement of a confined market much better than manufactures.

In ancient Egypt and India, the confinement of the foreign market was compensated by the conveniency of many inland navigations.

These navigations opened their home market to the produce of all their own districts. The great extent of India, too, rendered its home market=

• very great, and
• sufficient to support a great variety of manufactures.

But the small extent of ancient Egypt was never equal to England.

It must have rendered its home market too narrow to support any great variety of manufactures. Ancient Egypt exported some manufactures such as fine linen. It was always most distinguished for its great grain exports. It was long the granary of the Roman empire. Bengal is an Indian province.

It commonly exports the greatest amount of rice. It has always been more remarkable for its various manufacturing exports than for its grain exports.

⁴⁶ The sovereigns of China, ancient Egypt, and India have always derived the biggest part of their revenue from land-tax or land-rent.

This land-tax or land-rent is like the tithe in Europe. It consisted in 20% of the produce of the land. This produce was delivered in kind or paid in money according to a certain valuation. This valuation therefore varied from year to year according to the variations of the produce. It was natural therefore that those sovereigns should be attentive to the interests of agriculture. The prosperity or decline of agriculture immediately depended the yearly increase or reduction of their own revenue.