The National System of Political Economy (4)

Friedrich List

The National System of Political Economy (4)

Chapter 4

The English

In our account of the Hanseatic League we have shown how in England agriculture and sheep farming have been promoted by foreign trade; how at a subsequent period, through the immigration of foreign artificers, fleeing from persecution in their native land, and also owing to the fostering measures adopted by the British Government, the English woollen manufacturing industry had gradually attained to a flourishing condition; and how, as a direct consequence of that progress in manufacturing industry, as well as of the wise and energetic measures adopted by Queen Elizabeth, all the foreign trade which formerly had been monopolised by foreigners had been successfully diverted into the hands of the merchants at home.

before we continue our exposition of the development of English national economy from the point where we left off in Chapter 2, we venture here to make a few remarks as to the origin of British industry.

The source and origin of England’s industrial and commercial greatness must be traced mainly to the breeding of sheep and to the woollen manufacture.

before the first appearance of the Hansards on British soil the agriculture of England was unskilful and her sheep farming of little importance. There was a scarcity of winter fodder for the cattle, consequently a large proportion had to be slaughtered in autumn, and hence both stock and manure were alike deficient. Just as in all uncultivated territories — as formerly in Germany, and in the uncleared districts, of America up to the present time — hog breeding furnished the principal supply of meat, and that for obvious reasons. The pigs needed little care — foraged for themselves, and found a plentiful supply of food on the waste lands and in the forests; and by keeping only a moderate number of breeding sows through the winter, one was sure in the following spring of possessing considerable herds.

but with the growth of foreign trade hog breeding diminished, sheep farming assumed larger proportions, and agriculture and the breeding of horned cattle rapidly improved.

Hume, in his ’History of England,’(1*) gives a very interesting account of the condition of English agriculture at the beginning of the fourteenth century:

’In the year 1327 Lord Spencer counted upon 63 estates in his possession, 28,000 sheep, 1,000 oxen, 1,200 cows, 560 horses, and 2,000 hogs: giving a proportion of 450 sheep, 35 head of cattle, 9 horses, and 22 hogs to each estate.’

From this statement we may perceive how greatly, even in those early days, the number of sheep in England exceeded that of all the other domestic animals put together. The great advantages derived by the English aristocracy from the business of sheep farming gave them an interest in industry and in improved methods of agriculture even at that early period, when noblemen in most Continental states knew no better mode of utilising the greater part of their possessions than by preserving large herds of deer, and when they knew no more honourable occupation than harassing the neighbouring cities and their trade by hostilities of various kinds.

And at this period, as has been the case in Hungary more recently, the flocks so greatly increased that many estates could boast of the possession of from 10,000 to 24,000 sheep. Under these circumstances it necessarily followed that, under the protection afforded by the measures introduced by Queen Elizabeth, the woollen manufacture, which had already progressed very considerably in the days of former English rulers, should rapidly reach a very high degree of prosperity.(2*)

In the petition of the Hansards to the Imperial Diet, mentioned in Chapter II, which prayed for the enactment of retaliatory measures, England’s export of cloth was estimated at 200,000 pieces; while in the days of James I the total value of English cloths exported had already reached the prodigious amount of two million pounds sterling, while in the year 1354 the total money value of the wool exported had amounted only to 277,000 l., and that of all other articles of export to no more than 16,400 l. Down to the reign of the last-named monarch the great bulk of the cloth manufactured in England used to be exported to belgium in the rough state and was there dyed and dressed; but owing to the measures of protection and encouragement introduced under James I and Charles I the art of dressing cloth in England attained so high a pitch of perfection that thenceforward the importation of the finer descriptions of cloth nearly ceased, while only dyed and finely dressed cloths were exported.

In order fully to appreciate the importance of these results of the English commercial policy, it must be here observed that, prior to the great development of the linen, cotton, silk, and iron manufactures in recent times, the manufacture of cloth constituted by far the largest proportion of the medium of exchange in the trade with all European nations, particularly with the northern kingdoms, as well as in the commercial intercourse with the Levant and the East and West Indies. To what a great extent this was the case we may infer from the undoubted fact that as far back as the days of James I the export of woollen manufactures represented nine-tenths of all the English exports put together.(3*)

This branch of manufacture enabled England to drive the Hanseatic League out of the markets of Russia, Sweden, Norway, and Denmark, and to acquire for herself the best part of the profits attaching to the trade with the Levant and the East and West Indies. It was this industry that stimulated that of coal mining, which again gave rise to an extensive coasting trade and the fisheries, both which, as constituting the basis of naval power, rendered possible the passing of the famous Navigation Laws which really laid the foundation of England’s maritime supremacy. It was round the woollen industry of England that all other branches of manufacture grew up as round a common parent stem; and it thus constitutes the foundation of England’s greatness in industry, commerce, and naval power.

At the same time the other branches of English manufacture were in no way neglected.

Already under the reign of Elizabeth the importation of metal and leather goods, and of a great many other manufactured articles, had been prohibited, while the immigration of German miners and metal workers was encouraged. Formerly ships had been bought of the Hansards or were ordered to be built in the baltic ports. But she contrived, by restrictions on the one hand and encouragements on the other, to promote shipbuilding at home.

The timber required for the purpose was brought to England from the baltic ports, whereby again a great impetus was given to the British export trade to those regions.

The herring fishery had been learned from the Dutch, whale fishing from the dwellers on the shores of the Bay of Biscay; and both these fisheries were now stimulated by means of bounties. James I more particularly took a lively interest in the encouragement of shipbuilding and of fisheries. Though we may smile at his unceasing exhortations to his people to eat fish, yet we must do him the justice to say that he very clearly perceived on what the future greatness of England depended. The immigration into England, moreover, of the Protestant artificers who had been driven from Belgium and France by Philip II and Louis XIV gave to England an incalculable increase of industrial skill and manufacturing capital. To these men England owes her manufactures of fine woollen cloth, her progress in the arts of making hats, linen, glass, paper, silk, clocks and watches, as well as a part of her metal manufacture; branches of industry which she knew how speedily to increase by means of prohibition and high duties.

The island kingdom borrowed from every country of the Continent its skill in special branches of industry, and planted them on English soil, under the protection of her customs system. Venice had to yield (amongst other trades in articles of luxury) the art of glass manufacture, while Persia had to give up the art of carpet weaving and dyeing.

Once possessed of any one branch of industry, England bestowed upon it sedulous care and attention, for centuries treating it as a young tree which requires support and care. Whoever is not yet convinced that by means of diligence, skill, and economy, every branch of industry must become profitable in time — that in any nation already advanced in agriculture and civilisation, by means of moderate protection, its infant manufactures, however defective and dear their productions at first may be, can by practice, experience, and internal competition readily attain ability to equal in every respect the older productions of their foreign competitors; whoever is ignorant that the success of one particular branch of industry depends on that of several other branches, or to what a high degree a nation can develop its productive powers, if she takes care that each successive generation shall continue the work of industry where former generations have left it; let him first study the history of English industry before he ventures to frame theoretical systems, or to give counsel to practical statesmen to whose hands is given the power of promoting the weal or the woe of nations.

Under George I English statesmen had long ago clearly perceived the grounds on which the greatness of the nation depends. At the opening of Parliament in 1721, the King is made to say by the Ministry, that ’it is evident that nothing so much contributes to promote the public well-being as the exportation of manufactured goods and the importation of foreign raw material.(4*)

This for centuries had been the ruling maxim of English commercial policy, as formerly it had been that of the commercial policy of the Venetian Republic. It is in force at this day (1841) just as it was in the days of Elizabeth. The fruits it has borne lie revealed to the eyes of the whole world. The theorists have since contended that England has attained to wealth and power not by means of, but in spite of, her commercial policy. As well might they argue that trees have grown to vigour and fruitfulness, not by means of, but in spite of, the props and fences with which they had been supported when they were first planted.

Nor does English history supply less conclusive evidence of the intimate connection subsisting between a nation’s general political policy and political economy. Clearly the rise and growth of manufactures in England, with the increase of population resulting from it, tended to create an active demand for salt fish and for coals, which led to a great increase of the mercantile marine devoted to fisheries and the coasting trade. Both the fisheries and the coasting trade were previously in the hands of the Dutch. Stimulated by high customs duties and by bounties, the English now directed their own energies to the fishery trade, and by the Navigation Laws they secured chiefly to British sailors not only the transport of sea-borne coal, but the whole of the carrying trade by sea. The consequent increase in England’s mercantile marine led to a proportionate augmentation of her naval power, which enabled the English to bid defiance to the Dutch fleet. Shortly after the passing of the Navigation Laws, a naval war broke out between England and Holland, whereby the trade of the Dutch with countries beyond the English Channel suffered almost total suspension, while their shipping in the North Sea and the Baltic was almost annihilated by English privateers. Hume estimates the number of Dutch vessels which thus fell into the hands of English cruisers at 1,600, while Davenant, in his ’Report on the Public Revenue,’ assures us that in the course of the twenty-eight years next following the passing of the English Navigation Laws, the English shipping trade had increased to double its previous extent.(5*)

Amongst the more important results of the Navigation Laws, the following deserve special mention, viz.:

1. The expansion of the English trade with all the northern kingdoms, with Germany and Belgium (export of manufactures and import of raw material), from which, according to Anderson’s account, up to the year 1603 the English had been almost entirely shut out by the Dutch.

2. An immense extension of the contraband trade with Spain and Portugal, and their West Indian colonies.

3. A great increase of England’s herring and whale fisheries, which the Dutch had previously almost entirely monopolised.

4. The conquest of the most important English colony in the West Indies — Jamaica — in 1655; and with that, the command of the West Indian sugar trade.

5. The conclusion of the Methuen Treaty (1703) with Portugal, of which we have fully treated in the chapters devoted to Spain and Portugal in this work. By the operation of this treaty the Dutch and the Germans were entirely excluded from the important trade with Portugal and her colonies: Portugal sank into complete political dependence upon England, while England acquired the means, through the gold and silver earned in her trade with Portugal, of extending enormously her own commercial intercourse with China and the East Indies, and thereby subsequently of laying the foundation for her great Indian empire, and dispossessing the Dutch from their most important trading stations.

The two results last enumerated stand in intimate connection one with the other. And the skill is especially noteworthy with which England contrived to make these two countries — Portugal and India — the instruments of her own future greatness. Spain and Portugal had in the main little to dispose of besides the precious metals, while the requirements of the East, with the exception of cloths, consisted chiefly of the precious metals. So far everything suited most admirably. But the East had principally only cotton and silk manufactures to offer in exchange, and that did not fit in with the principle of the English Ministry before referred to, namely, to export manufactured articles and import raw materials. How, then, did they act under the circumstances? Did they rest content with the profits accruing from the trade in cloths with Portugal and in cotton and silk manufactures with India? By no means. The English Ministers saw farther than that.

Had they sanctioned the free importation into England of Indian cotton and silk goods, the English cotton and silk manufactories must of necessity soon come to a stand. India had not only the advantage of cheaper labour and raw material, but also the experience, the skill, and the practice of centuries. The effect of these advantages could not fail to tell under a system of free competition.

But England was unwilling to found settlements in Asia in order to become subservient to Asia in manufacturing industry. She strove for commercial supremacy, and felt that of two countries maintaining free trade between one another, that one would be supreme which sold manufactured goods, while that one would be subservient which could only sell agricultural produce. In her North American colonies England had already acted on those principles in disallowing the manufacture in those colonies of even a single horseshoe nail, and, still more, that no horseshoe nails made there should be imported into England. How could it be expected of her that she would give up her own market for manufactures, the basis of her future greatness, to a people so numerous, so thrifty, so experienced and perfect in the old systems of manufacture as the Hindoos?

Accordingly, England prohibited the import of the goods dealt in by her own factories, the Indian cotton and silk fabrics.(6*) The prohibition was complete and peremptory. Not so much as a thread of them would England permit to be used. She would have none of these beautiful and cheap fabrics, but preferred to consume her own inferior and more costly stuffs. She was, however, quite willing to supply the Continental nations with the far finer fabrics of India at lower prices, and willingly yielded to them all the benefit of that cheapness; she herself would have none of it.

Was England a fool in so acting? Most assuredly, according to the theories of Adam Smith and J. B. Say the Theory of Values. For, according to them, England should have bought what she required where she could buy them cheapest and best: it was an act of folly to manufacture for herself goods at a greater cost than she could buy them at elsewhere, and at the same time give away that advantage to the Continent.

The case is quite the contrary, according to our theory, which we term the Theory of the Powers of Production, and which the English Ministry, without having examined the foundation on which it rests, yet practically adopted when enforcing their maxim of importing produce and exporting fabrics.

The English Ministers cared not for the acquisition of low-priced and perishable articles of manufacture, but for that of a more costly but enduring manufacturing power.

They have attained their object in a brilliant degree. At this day England produces seventy million pounds’ worth of cotton and silk goods, and supplies all Europe, the entire world, India itself included, with British manufactures. Her home production exceeds by fifty or a hundred times the value of her former trade in Indian manufactured goods.

What would it have profited her had she been buying for a century the cheap goods of Indian manufacture?

And what have they gained who purchased those goods so cheaply of her? The English have gained power, incalculable power, while the others have gained the reverse of power.

That in the face of results like these, historically attested upon unimpeachable evidence, Adam Smith should have expressed so warped a judgment upon the Navigation Laws, can only be accounted for upon the same principle on which we shall in another chapter explain this celebrated author’s fallacious conclusions respecting commercial restrictions. These facts stood in the way of his pet notion of unrestricted free trade. It was therefore necessary for him to obviate the objection that could be adduced against his principle from the effects of the Navigation Laws, by drawing a distinction between their political objects and their economical objects. He maintained that, although the Navigation Laws had been politically necessary and beneficial, yet that they were economically prejudicial and injurious. How little this distinction can be justified by the nature of things or by experience, we trust to make apparent in the course of this treatise.

J. B. Say, though he might have known better from the experience of North America, here too, as in every instance where the principles of free trade and protection clash, goes still farther than his predecessor. Say reckons up what the cost of a sailor to the French nation is, owing to the fishery bounties, in order to show how wasteful and unremunerative these bounties are.

The subject of restrictions upon navigation constitutes a formidable stumbling-block in the path of the advocates of unrestricted free trade, which they are only too glad to pass over in silence, especially if they are members of the mercantile community in seaport towns.

The truth of the matter is this. Restrictions on navigation are governed by the same law as restrictions upon any other kind of trade. Freedom of navigation and the carrying trade conducted by foreigners are serviceable and welcome to communities in the early stages of their civilisation, so long as their agriculture and manufactures still remain undeveloped. Owing to want of capital and of experienced seamen, they are willing to abandon navigation and foreign trade to other nations. Later on, however, when they have developed their producing power to a certain point and acquired skill in shipbuilding and navigation, then they will desire to extend their foreign trade, to carry it on in their own ships, and become a naval power themselves. Gradually their own mercantile marine grows to such a degree that they feel themselves in a position to exclude the foreigner and to conduct their trade to the most distant places by means of their own vessels. Then the time has come when, by means of restrictions on navigation, a nation can successfully exclude the more wealthy, more experienced, and more powerful foreigner from participation in the profits of that business. When the highest degree of progress in navigation and maritime power has been reached, a new era will set in, no doubt; and such was that stage of advancement which Dr Priestley had in his mind when he wrote ’that the time may come when it may be as politic to repeal this Act as it was to make it.’(7*)

Then it is that, by means of treaties of navigation based upon equality of rights, a nation can, on the one hand, secure undoubted advantages as against less civilised nations, who will thus be debarred from introducing restrictions on navigation in their own special behalf; while, on the other hand, it will thereby preserve its own seafaring population from sloth, and spur them on to keep pace with other countries in shipbuilding and in the art of navigation. While engaged in her struggle for supremacy, Venice was doubtless greatly indebted to her policy of restrictions on navigation; but as soon as she had acquired supremacy in trade, manufactures, and navigation, it was folly to retain them. For owing to them she was left behind in the race, both as respects shipbuilding, navigation, and seamanship of her sailors, with other maritime and commercial nations which were advancing in her footsteps. Thus England by her policy increased her naval power, and by means of her naval power enlarged the range of her manufacturing and commercial powers, and again, by the latter, there accrued to her fresh accessions of maritime strength and of colonial possessions. Adam Smith, when he maintains that the Navigation Laws have not been beneficial to England in commercial respects, admits that, in any case, these laws have increased her power. And power is more important than wealth. That is indeed the fact. Power is more important than wealth. And why? Simply because national power is a dynamic force by which new productive resources are opened out, and because the forces of production are the tree on which wealth grows, and because the tree which bears the fruit is of greater value than the fruit itself. Power is of more importance than wealth because a nation, by means of power, is enabled not only to open up new productive sources, but to maintain itself in possession of former and of recently acquired wealth, and because the reverse of power — namely, feebleness — leads to the relinquishment of all that we possess, not of acquired wealth alone, but of our powers of production, of our civilisation, of our freedom, nay, even of our national independence, into the hands of those who surpass us in might, as is abundantly attested by the history of the Italian republics, of the Hanseatic League, of the Belgians, the Dutch, the Spaniards, and the Portuguese.

But how came it that, unmindful of this law of alternating action and reaction between political power, the forces of production and wealth, Adam Smith could venture to contend that the Methuen Treaty and the Act of Navigation had not been beneficial to England from a commercial point of view? We have shown how England by the policy which she pursued acquired power, and by her political power gained productive power, and by her productive power gained wealth. Let us now see further how, as a result of this policy, power has been added to power, and productive forces to productive forces.

England has got into her possession the keys of every sea, and placed a sentry over every nation: over the Germans, Heligoland; over the French, Guernsey and Jersey; over the inhabitants of North America, Nova Scotia and the Bermudas; over Central America, the island of Jamaica; over all countries bordering on the Mediterranean, Gibraltar, Malta, and the Ionian Islands. She possesses every important strategical position on both the routes to India with the exception of the Isthmus of Suez, which she is striving to acquire; she dominates the Mediterranean by means of Gibraltar, the Red Sea by Aden, and the Persian Gulf by Bushire and Karrack. She needs only the further acquisition of the Dardanelles, the Sound, and the Isthmuses of Suez and Panama, in order to be able to open and close at her pleasure every sea and every maritime highway. Her navy alone surpasses the combined maritime forces of all other countries, if not in number of vessels, at any rate in fighting strength.

Her manufacturing capacity excels in importance that of all other nations. And although her cloth manufactures have increased more than tenfold (to forty-four and a half millions) since the days of James I, we find the yield of another branch of industry, which was established only in the course of the last century, namely, the manufacture of cotton, amounting to a much larger sum, fifty-two and a half millions.(8*)

Not content with that, England is now attempting to raise her linen manufacture, which has been long in a backward state as compared with that of other countries, to a similar position, possibly to a higher one than that of the two above-named branches of industry: it now amounts to fifteen and a half millions sterling. In the fourteenth century, England was still so poor in iron that she thought it necessary to prohibit the exportation of this indispensable metal; she now, in the nineteenth century, manufactures more iron and steel wares than all the other nations on earth (namely, thirty-one millions’ worth), while she produces thirty-four millions in value of coal and other minerals. These two sums exceed by over sevenfold the value of the entire gold and silver production of all other nations, which amount to about two hundred and twenty million francs, or nine millions sterling.

At this day she produces more silk goods than all the Italian republics produced in the Middle Ages together, namely, thirteen and a half million pounds. Industries which at the time of Henry VIII and Elizabeth scarcely deserved classification, now yield enormous sums; as, for instance, the glass, china, and stoneware manufactures, representing eleven millions; the copper and brass manufactures, four and a half millions; the manufactures of paper, books, colours, and furniture, fourteen millions.

England produces, moreover, sixteen millions’ worth of leather goods, besides ten millions’ worth of unenumerated articles. The manufacture of beer and spirituous liquors in England alone greatly exceeds in value the aggregate of national production in the days of James I, namely, forty-seven millions sterling.

The entire manufacturing production of the United Kingdom at the present time, is estimated to amount to two hundred and fifty-nine and a half millions sterling.

As a consequence, and mainly as a consequence, of this gigantic manufacturing production, the productive power of agriculture has been enabled to yield a total value exceeding twice that sum (five hundred and thirty-nine millions sterling).

It is true that for this increase in her power, and in her productive capacity, England is not indebted solely to her commercial restrictions, her Navigation Laws, or her commercial treaties, but in a large measure also to her conquests in science and in the arts.

But how comes it, that in these days one million of English operatives can perform the work of hundreds of millions? It comes from the great demand for manufactured goods which by her wise and energetic policy she has known how to create in foreign lands, and especially in her colonies; from the wise and powerful protection extended to her home industries; from the great rewards which by means of her patent laws she has offered to every new discovery; and from the extraordinary facilities for her inland transport afforded by public roads, canals, and railways.

England has shown the world how powerful is the effect of facilities of transport in increasing the powers of production, and thereby increasing the wealth, the population, and the political power of a nation. She has shown us what a free, industrious, and well-governed community can do in this respect within the brief space of half a century, even in the midst of foreign wars. That which the Italian republics had previously accomplished in these respects was mere child’s play. It is estimated that as much as a hundred and eighteen millions sterling have been expended in England upon these mighty instruments of the nation’s productive power.

England, however, only commenced and carried out these works when her manufacturing power began to grow strong. Since then, it has become evident to all observers that that nation only whose manufacturing power begins to develop itself upon an extensive scale is able to accomplish such works; that only in a nation which develops concurrently its internal manufacturing and agricultural resources will such costly engines of trade repay their cost; and that in such a nation only will they properly fulfil their purpose.

It must be admitted, too, that the enormous producing capacity and the great wealth of England are not the effect solely of national power and individual love of gain. The people’s innate love of liberty and of justice, the energy, the religious and moral character of the people, have a share in it. The constitution of the country, its institutions, the wisdom and power of the Government and of the aristocracy, have a share in it. The geographical position, the fortunes of the country, nay, even good luck, have a share in it.

It is not easy to say whether the material forces exert a greater influence over the moral forces, or whether the moral outweigh the material in their operation; whether the social forces act upon the individual forces the more powerfully, or whether the latter upon the former. This much is certain, however, namely, that between the two there subsists an interchanging sequence of action and reaction, with the result that the increase of one set of forces promotes the increase of the other, and that the enfeeblement of the one ever involves the enfeeblement of the other.

Those who seek for the fundamental causes of England’s rise and progress in the blending of Anglo-Saxon with the Norman blood, should first cast a glance at the condition of the country before the reign of Edward III. Where were then the diligence and the habits of thrift of the nation? Those again who would look for them in the constitutional liberties enjoyed by the people will do well to consider how Henry VIII and Elizabeth treated their Parliaments. Wherein did England’s constitutional freedom consist under the Tudors? At that period the cities of Germany and Italy enjoyed a much greater amount of individual freedom than the English did.

Only one jewel out of the treasure-house of freedom was preserved by the Anglo-Saxon-Norman race — before other peoples of Germanic origin; and that was the germ from which all the English ideas of freedom and justice have sprung — the right of trial by jury.

While in Italy the Pandects were being unearthed, and the exhumed remains (no doubt of departed greatness and wisdom in their day) were spreading the pestilence of the Codes amongst Continental nations, we find the English Barons declaring they would not hear of any change in the law of the land. What a store of intellectual force did they not thereby secure for the generations to come! How much did this intellectual force subsequently influence the forces of material production!

How greatly did the early banishment of the Latin language from social and literary circles, from the State departments, and the courts of law in England, influence the development of the nation, its legislation, law administration, literature, and industry! What has been the effect upon Germany of the long retention of the Latin in conjunction with foreign Codes, and what has been its effect in Hungary to the present day? What an effect have the invention of gunpowder, the art of printing, the Reformation, the discovery of the new routes to India and of America, had on the growth of English liberties, of English civilisation, and of English industry? Compare with this their effect upon Germany and France. In Germany — discord in the Empire, in the provinces, even within the walls of cities; miserable controversies, barbarism in literature, in the administration of the State and of the law; civil war, persecutions, expatriation, foreign invasion, depopulation, desolation; the ruin of cities, the decay of industry, agriculture, and trade, of freedom and civic institutions; supremacy of the great nobles; decay of the imperial power, and of nationality; severance of the fairest provinces from the Empire. In France — subjugation of the cities and of the nobles in the interest of despotism; alliance with the priesthood against intellectual freedom, but at the same time national unity and power; conquest with its gain and its curse, but, as against that, downfall of freedom and of industry. In England — the rise of cities, progress in agriculture, commerce, and manufactures; subjection of the aristocracy to the law of the land, and hence a preponderating participation by the nobility in the work of legislation, in the administration of the State and of the law, as also in the advantages of industry; development of resources at home, and of political power abroad; internal peace; influence over all less advanced communities; limitation of the powers of the Crown, but gain by the Crown in royal revenues, in splendour and stability. Altogether, a higher degree of well-being, civilisation, and freedom at home, and preponderating might abroad.

But who can say how much of these happy results is attributable to the English national spirit and to the constitution; how much to England’s geographical position and circumstances in the past; or again, how much to chance, to destiny, to fortune?

Let Charles V and Henry VIII change places, and, in consequence of a villanous divorce trial, it is conceivable (the reader will understand why we say ’conceivable’) that Germany and the Netherlands might have become what England and Spain have become. Place in the position of Elizabeth, a weak woman allying herself to a Philip II, and how would it have fared with the power, the civilisation, and the liberties of Great Britain?

If the force of national character will alone account for everything in this mighty revolution, must not then the greatest share of its beneficial results have accrued to the nation from which it sprang, namely, to Germany? Instead of that, it is just the German nation which reaped nothing save trouble and weakness from this movement in the direction of progress.

In no European kingdom is the institution of an aristocracy more judiciously designed than in England for securing to the nobility, in their relation to the Crown and the commonalty, individual independence, dignity, and stability; to give them a Parliamentary training and position; to direct their energies to patriotic and national aims; to induce them to attract to their own body the йlite of the commonalty, to include in their ranks every commoner who earns distinction, whether by mental gifts, exceptional wealth, or great achievements; and, on the other hand, to cast back again amongst the commons the surplus progeny of aristocratic descent, thus leading to the amalgamation of the nobility and the commonalty in future generations. By this process the nobility is ever receiving from the Commons fresh accessions of civic and patriotic energy, of science, learning, intellectual and material resources, while it is ever restoring to the people a portion of the culture and of the spirit of independence peculiarly its own, leaving its own children to trust to their own resources, and supplying the commonalty with incentives to renewed exertion. In the case of the English lord, however large may be the number of his descendants, only one can hold the title at a time. The other members of the family are commoners, who gain a livelihood either in one of the learned professions, or in the Civil Service, in commerce, industry, or agriculture. The story goes that some time ago one of the first dukes in England conceived the idea of inviting all the blood relations of his house to a banquet, but he was fain to abandon the design because their name was legion, notwithstanding that the family pedigree had not reached farther back than for a few centuries. It would require a whole volume to show the effect of this institution upon the spirit of enterprise, the colonisation, the might and the liberties, and especially upon the forces of production of this nation.(9*)

The geographical position of England, too, has exercised an immense influence upon the independent development of the nation. England in its relation to the continent of Europe has ever been a world by itself; and was always exempt from the effects of the rivalries, the prejudices, the selfishness, the passions, and the disasters of her Continental neighbours. To this isolated condition she is mainly indebted for the independent and unalloyed growth of her political constitution, for the undisturbed consummation of the Reformation, and for the secularisation of ecclesiastical property which has proved so beneficial to her industries. To the same cause she is also indebted for that continuous peace, which, with the exception of the period of the civil war, she has enjoyed for a series of centuries, and which enabled her to dispense with standing armies, while facilitating the early introduction of a consistent customs system.

By reason of her insular position, England not only enjoyed immunity from territorial wars, but she also derived immense advantages for her manufacturing supremacy from the Continental wars. Land wars and devastations of territory inflict manifold injury upon the manufactures at the seat of hostilities; directly, by interfering with the farmer’s work and destroying the crops, which deprives the tiller of the soil of the means wherewithal to purchase manufactured goods, and to produce raw material and food for the manufacturer; indirectly, by often destroying the manufactories, or at any rate ruining them, because hostilities interfere with the importation of raw material and with the exportation of goods, and because it becomes a difficult matter to procure capital and labour just at the very time when the masters have to bear extraordinary imposts and heavy taxation; and lastly the injurious effects continue to operate even after the cessation of the war, because both capital and individual effort are ever attracted towards agricultural work and diverted from manufactures, precisely in that proportion in which the war may have injured the farmers and their crops, and thereby opened up a more directly profitable field for the employment of capital and of labour than the manufacturing industries would then afford. While in Germany this condition of things recurred twice in every hundred years, and caused German manufactures to retrograde, those of England made uninterrupted progress. English manufacturers, as opposed to their Continental competitors, enjoyed a double and treble advantage whenever England, by fitting out fleets and armies, by subsidies, or by both these means combined, proceeded to take an active part in foreign wars.

We cannot agree with the defenders of unproductive expenditure, namely, of that incurred by wars and the maintenance of large armies, nor with those who insist upon the positively beneficial character of a public debt; but neither do we believe that the dominant school are in the right when they contend that all consumption which is not directly reproductive — for instance, that of war — is absolutely injurious without qualification. The equipment of armies, wars, and the debts contracted for these purposes, may, as the example of England teaches, under certain circumstances, very greatly conduce to the increase of the productive powers of a nation. Strictly speaking, material wealth may have been consumed unproductively, but this consumption may, nevertheless, stimulate manufacturers to extraordinary exertions, and lead to new discoveries and improvements, especially to an increase of productive powers. This productive power then becomes a permanent acquisition; it will increase more and more, while the expense of the war is incurred only once for all.(10*) And thus it may come to pass, under favouring conditions such as have occurred in England, that a nation has gained immeasurably more than it has lost from that very kind of expenditure which theorists hold to be unproductive. That such was really the case with England, may be shown by figures. For in the course of the war, that country had acquired in the cotton manufacture alone a power of production which yields annually a much larger return in value than the amount which the nation has to find to defray the interest upon the increased national debt, not to mention the vast development of all other branches of industry, and the additions to her colonial wealth.

Most conspicuous was the advantage accruing to the English manufacturing interest during the Continental wars, when England maintained army corps on the Continent or paid subsidies. The whole expenditure on these was sent, in the shape of English manufactures, to the seat of war, where these imports then materially contributed to crush the already sorely suffering foreign manufacturers, and permanently to acquire the market of the foreign country for English manufacturing industry. It operated precisely like an export bounty instituted for the benefit of British and for the injury of foreign manufacturers.(11*)

In this way, the industry of the Continental nations has ever suffered more from the English as allies, than from the English as enemies. In support of this statement we need refer only to the Seven Years’ War, and to the wars against the French Republic and Empire.

Great, however, as have been the advantages heretofore mentioned, they have been greatly surpassed in their effect by those which England derived from immigrations attracted by her political, religious, and geographical conditions.

As far back as the twelfth century political circumstances induced Flemish woollen weavers to emigrate to Wales. Not many centuries later exiled Italians came over to London to carry on business as money changers and bankers. That from Flanders and Brabant entire bodies of manufacturers thronged to England at various periods, we have shown in Chapter II. From Spain and Portugal came persecuted Jews; from the Hanse Towns, and from Venice in her decline, merchants who brought with them their ships, their knowledge of business, their capital, and their spirit of enterprise. Still more important were the immigrations of capital and of manufacturers in consequence of the Reformation and the religious persecutions in Spain, Portugal, France, Belgium, Germany, and Italy; as also of merchants and manufacturers from Holland in consequence of the stagnation of trade and industry in that country occasioned by the Act of Navigation and the Methuen Treaty. Every political movement, every war upon the Continent, brought England vast accessions of fresh capital and talents, so long as she possessed the privileges of freedom, the right of asylum, internal tranquillity and peace, the protection of the law, and general well-being. So more recently did the French Revolution and the wars of the Empire; and so did the political commotions, the revolutionary and reactionary movements and the wars in Spain, in Mexico, and in South America. By means of her Patent Laws, England long monopolised the inventive genius of every nation. It is no more than fair that England, now that she has attained the culminating point of her industrial growth and progress, should restore again to the nations of Continental Europe a portion of those productive forces which she originally derived from them.


1. Hume, vol. ii, p. 143.

2. No doubt the decrees prohibiting the export of wool, not to mention the restrictions placed on the trade in wool in markets near the coast, were vexations and unfair; yet at the same time the operated beneficially in the promotion of English industry, and in the suppression of that of the Flemings.

3. Hume (in 1603). Macpherson, Histoire du Commerce (in 1651).

4. See Ustaritz, Thйorie du Commerce, ch. xxviii. Thus we see George I did not want to export goods and import nothing but specie in return, which is stated as the fundamental principle of the so-called ’mercantile system’, and which in any case would be absurd. What he desired was to export manufactures and import raw material.

5. Hume, vol. v. p. 39.

6. Anderson for the year 1721.

7. Priestley, Lectures on History and General Policy, Pt. II, p. 289.

8. These and the following figures relating to English statistics are taken from a paper written by McQueen, the celebrated English statistician, and appearing in the July number of Tait’s Edinburgh Magazine for the year 1839. Possibly they may be somewhat exaggerated for the moment. But even if so, it is more than probable that the figures as stated will be reached within the present decade.

9. Before his lamented death, the gifted author of this remark, in his Letters on England, read the nobles of his native country a lesson in this respect which they would do well to lay to heart.

10. England’s national debt would not be so great an evil as it now appears to us, if England’s aristocracy would concede that this burden should be borne by the class who were benefited by the cost of wars, namely, by the rich. McQueen estimates the capitalised value of property in the three kingdoms at 4,000 million pounds sterling, and Martin estimates the capital invested in the colonies at about 2,600 millions sterling. Hence we see that one-ninth part of Englishmen’s private property would suffice to cover the entire national debt. Nothing could be more just than such an appropriation, or at least than the payment of the interest on the national debt out of the proceeds of an income tax. The English aristocracy, however, deem it more convenient to provide for this charge by the imposition of taxes upon articles of consumption, by which the existence of the working classes is embittered beyond the point of endurance.

11. See Appendix A.