The National Gain
In this text, Anders Chydenius, a Finnish priest, anticipates some of the ideas that will be made famous by Adam Smith a decade later concerning the economic freedom of the people as the best means to pursue individual and social welfare.
It is not to be gainsaid that every Nation has gain as the chief object of its Economic and Political statutes, but if we consider the expedients each one has resorted to in order to secure gain, we shall notice incredible discrepancies.
Each vies with the other to arrive first; but they steer different courses and carry quite different sails, though almost the same wind fills them all.
They try to get to windward of one another and use special sailors' tricks to run into one another, though there is space and depth enough for them to sail abreast. It seems as if now one of the ships, now the other, was without a Pilot and a Helmsman.
Nobody can deny that in this way the work follows different rules. Either the Compass is unreliable or the Chart must be wrong.
A new guide is now put before the eyes of the Reader. It is quite a small one, so that everyone may be able to carry it in his pocket. It is new as well, I said, for it hardly conforms to any other in Europe. And I think it is reliable, too, for I have attempted to found it upon reason and experience. Let us first agree as to the words.
A Nation is a multitude of people who have joined in order to secure their own prosperity and that of their descendants under the protection of the Government and through its Public Servants.
Man thrives when he enjoys his needs and comforts, which, according to our ordinary way of speaking, are called goods. Nature produces them, but they can never be of use to us without labour.
Our wants are various, and nobody has been found able to acquire even the necessaries without the aid of other people, and there is scarcely any Nation that has not stood in need of others. The Almighty himself has made our race such that we should help one another. Should this mutual aid be checked within or without the Nation, it is contrary to Nature.
When we exchange these commodities, it is called commerce, and the commodities that are commonly desired and accepted are gold and silver, larger or smaller coined parts of which are called money, which has become the measure of the value of other commodities.
No commodity exists, but that it cannot be changed into these Metals by commerce, nor can any commodity be obtained in the absence of other commodities desirable to the seller; and the quantity of money that must be paid for the commodity is called its value.
The value of exported goods in excess of that of imported ones is rightly called the gain of the Nation, and the value of imported goods in excess of that of exported ones will always be its loss. But a loss that is less compared to another one is called relative gain; and in the same way a smaller gain, when a greater can be attained, is called a loss.
If the statement were correct in every respect that last year, 1764, Sweden exported goods to the amount of about 72 Million Daler of copper currency, but that the imports did not amount to more than 66 Millions, then our National gain for that year would have been 6 Million Daler.
The value of iron is about two-thirds of all our Exports, but let us assume that within a hundred years, on account of lack of forests or from other causes, the Export of Iron were reduced to one-half and were thus not to comprise more than one-third of our Exports, but that some others, e.g. corn, food, and timber, were exported instead of the third lost in the Iron trade. Then I ask, in case all the other exported and imported goods amounted to the same value as they have now, whether the National gain would not be just as great then? Or if the Export of Iron were at some time reduced by 6 Million Daler, but if the 10 Millions paid last year to foreigners for corn remained in the Country instead, would not the Nation then equally have gained 4 Millions by this change?
If we imagine that there were a State that had neither agriculture nor mining, neither cattlebreeding nor shipping, but only made an abundance of crockery from earth or clay, which was in great demand all over Europe, and hence obtained not only all its wants, but also received 2 Millions in gold and silver every year, would not these 2 Millions undeniably be the gain of that Nation?
But if one-third of the same Nation, after the example of others, were to abandon this trade of theirs and become farmers with the intention of thereby producing bread for themselves and their fellow-citizens, thinking that they would gain more in this way, but that the corn produced was 1 Million less in value than the former production of the same one-third, it is obvious that by this they would have caused the Nation 1 Million reduction in gain or, which is the same thing, an equally great loss.
From this it leaps to the eye that a Nation does not gain through being occupied with many different trades, but through working in those that pay best, that is, in which the least number of people can produce commodities to the highest value.
Thus the wealth of a Nation consists in the multitude of products or, rather, in their value; but the multitude of products depends on two chief causes, namely, the number of workmen and their diligence. Nature will produce both, when she is left untrammelled.
Would the Great Master, who adorns the valley with flowers and covers the cliff itself with grass and mosses, exhibit such a great mistake in man, his masterpiece, that man should not be able to enrich the globe with as many inhabitants as it can support? That would be a mean thought even in a Pagan, but blasphemy in a Christian, when reading the Almighty's precept: "Be fruitful, multiply and fill the earth."
It was punishment for fallen man to support himself in the sweat of his brow; but this punishment was such that Nature itself measured it out, when man was forced to work because of his wants, when he had nothing but his own hands to rely on for his needs; and toil was made lighter by the desire for his own benefit, when he saw that he could thereby get what he needed.
If either is lacking, the fault should be sought in the laws of the Nation, hardly, however, in any want of laws, but in the impediments that are put in the way of Nature.
If by them citizens are rendered incapable of supporting themselves and their children, they must either die together with their offspring or forsake their native land. The more expedients are afforded by laws for some people to live by the toil of others, while others are prevented from supporting themselves by work, the more is diligence checked, and the Nation cannot but resemble the mould in which it is cast.
Now, if this is incontrovertible, I intend to found thereon the following proposition, i.e. that every individual spontaneously tries to find the place and the trade in which he can best increase National gain, if laws do not prevent him from doing so.
Every man seeks his own gain. This inclination is so natural and necessary that all Communities in the world are founded upon it. Otherwise Laws, punishments and rewards would not exist and mankind would soon perish altogether. The work that has the greatest value is always best paid, and what is best paid is most sought after.
As long as I can produce 6 Daler worth of goods a day in one trade, I do not willingly change to another that brings in 4. In the former case the Nation's gain and mine was one-third more than in the latter.
It is thus undoubtedly a loss to the Nation when somebody is forced or is encouraged by public rewards to work in a trade other than the one in which he earns the highest profit; for this does not happen without such inducements, just as a merchant does not sell his Wares for less than what is offered him.
If he whose work someone has been forced to do gains as much as the worker has lost, it is not National gain; but if he gains more, only the difference is the gain of the Nation, but obtained through the oppression of its citizens.
Thus it is obvious that, when somebody conducts an enterprise by the work of others, but neither pays nor is able to pay without loss as much as the workers can earn in some other trade, the deficiency in their wages must then be a National loss.
For example, if an Ironworks producing 2000 ship's pounds a year had at its command one hundred Peasants, who had to work fifty days a year each for this Works, but at one Daler Copper currency less than they would have been able to earn either by their own work or otherwise - and this to the end that the Exported goods might be sold abroad at some profit - then it is obvious that each Peasant will in that way lose 50 Daler Copper currency a year or, which is the same thing, will produce goods to the value of 50 Daler less than in other work, so that the National loss will be 5000 Daler.
If there were at the command of the same Ironworks several hundred Peasants, who had to provide it with the charcoal necessary for the work, for example 3500 chaldrons either for a number of Daler agreed upon at an earlier date or else for what the owner of the Works would give, for example 6 Daler Copper currency less for every chaldron than they would have been able to earn in another way during the same time (even if the Owner cannot pay a higher price for this commodity, if the iron is to be sold with any profit abroad; but if the same Peasants, during the time they worked on the coal, had been able in farming, handicrafts and weaving or other trades to earn the loss on every chaldron of coal, that is, had been able to produce goods to the value of 21000 Daler Copper currency more, then it is obvious that the National loss is thereby increased by as large a sum. If we add to this the almost irreparable loss of the Country's best forests, which after some time would have afforded us various materials for handicraft and timbertrees, and reckon ten cartloads of long logs for every large chaldron of charcoal used for these 2000 Ship's pounds of Bar-iron from the moment the ore was dug out of the mine till the time when the Iron is hammered out into bars, 35000 cartloads of wood, which, only reckoned at 16 öre a cartload, will increase the loss by 17500 Daler, which taken together means a loss of 43500 Daler Copper currency.
Now, if these 2000 ship's pounds were sold at an average price of 6 Riksdaler Banco a ship's pound, exclusive of the freight, and thus made a sum of 240000 Daler Copper currency at the exchange rate of 80 marks, it is obvious that rather more than one-fifth of this sum is a National loss, even though the whole quantity is sold abroad.
Gold and silver are, indeed, the most precious metals, but they do not therefore always increase the National gain when they must be extracted from the earth. All merchandise can be exchanged into so much of these metals as corresponds to its value. Neither is the Ducat ever so red that it will not be given for bread, as our ancestors used to say.
Would it not be useful to consider whether the 38 marks 4 Iods of gold and 5464 marks ½ lod of silver that have been extracted, from the beginning of 1760 to the end of 1764, are equivalent to the cost and work spent on them and to the rent of land from several parishes which has been appropriated thereto and so on? Or whether for all this many times as much silver and gold could not have been imported at the highest rate of exchange? Or whether such patriotism or love of Swedish gold and silver has really increased the National gain? Or whether they had to be maintained only in the hope of greater gain in the future?
Finally, is there not an evidence of National loss in the complaints and poverty of the workmen and peasantry at and around the Ironworks, from being under compulsion, and desirous of using their time and abilities on what would be more useful to them and the Realm at the present time?
Here I am by no means talking about such works as exist without any disadvantage to the peasantry and workmen; they are just as precious jewels of the Nation as ever Farming, Trade and Manufacture.
From this it follows of itself that it is quite unnecessary for the Government to draw workmen from one trade into another by means of laws.
Nevertheless, how many Statesmen are there that have busied themselves with this? Almost all Europe is making efforts to draw the people from their previous trades and put them into others either by force or by granting them privileges. They boast of a National gain as great as the value of the new production, and often forget that the workmen employed in this production might if free, have produced goods in their former trade, to an equal or higher value, and in the first case there was no gain, but in the second a real loss to the Nation.
If ten men produce goods to the value of 100 Daler a day in one trade, but in another to a value of not more than 80, it is obvious that in the latter eventuality the Nation will lose 20 Daler a day on those ten men's work. Whether these ten workmen be at liberty to sell their produce or be free to negotiate for daily wages with those who conduct the trade in question, the difference in their wages will always be in the said proportion, and then it is certain that they will enter the former as being more profitable to the Nation and to themselves.
But if these workmen are forced to remain in the other trade at 20 per cent. less wages, this 20 per cent. is their loss and the Nation's. How unnecessary laws seem to be in such cases!
Neither Bounties on Production nor on Exportation are of any good to increase or promote National gain.
They are resorted to almost all over Europe, but more especially in England, though they infallibly increase the real loss everywhere. The Bounties on Production do harm in a simple way, but those on Exportation in a twofold way.
If there are workmen enough in a trade and Bounties on Production are given notwithstanding, then too many people will be tempted to leave other trades, a superabundance of goods will make it less profitable and cause lack of workmen in other remunerative branches of trade, and the State will be burdened by enriching certain citizens. If people do not enter a known trade without special rewards, then it is obvious that it is less profitable than other trades in which workmen are never lacking.
If, by means of rewards, the State makes up the loss suffered in this trade by the workmen and the Nation, there may be those who will take it up, but their work is lost to the more remunerative trade. Thus, as much as the values of the products differ, so great undeniably will be the loss of the Nation.
But the Bounties on Exportation have not only the disadvantages mentioned above, but also much more important ones: citizens are here taxed doubly in relation to the amount of the Bounty and a great part of it is put into the hands of foreigners, a fact that cannot but pain everybody who has come to love his Native Country.
A seller always tries to get the highest price for his goods. The owner agrees with the foreigner upon, for instance, 6 Riksdaler for the article; but for this he gets a Bounty of 2 Riksdaler, and thus he will get 8 Riksdaler in all.
Now, if a Swede wants to buy this same commodity, it is undeniable that he must pay the seller as much as the latter will make by selling it to the foreigner, namely, 8 Riksdaler, otherwise the seller thinks that he has lost money on this transaction.
A foreigner will thus buy 2 Riksdaler cheaper on account of the Bounty on Exportation, and because of that a Swede will be doubly taxed, namely, 2 Riksdaler to the fund for facilitating the purchases of the foreigner and 2 Riksdaler to indemnify the seller.
Accordingly it must happen that the foreigner can carry on the most profitable trade with our products in our own country. I stick to the little example I have mentioned: the Swedish Manufactured goods that were sold to the foreigner for 6 Riksdaler he can immediately on the spot sell for 7½ Riksdaler, at a profit of 25 per cent., to a Swede, who thus makes a purchase for half a Riksdaler less, or gains 8 1/3 per cent., than if he bought them from a Swedish Factory-shop, and therefore there will never be any lack of buyers.
If we then add the 33 1/3 per cent. better bargain of the foreigner to the 25 per cent. gained on the sale, it will make a profit for him of 58 1/3 per cent., which has been gained only owing to the Bounties upon Exportation and which would otherwise never have been possible. And this is a truth that not only has been proved in theory, but has also many times been confirmed by actual experience.
I could reveal a little Commercial plan that would give Sweden several thousands from some foreign Bounties on Exportation, did I not fear to wake others from their lethargy, when they might close some secret veins which, without being noticed in the Balance of Trade, now really counterbalance our deficit.
Therefore I sincerely wish that the English and other Nations may not only maintain their Bounties on Exportation, but also that these may be markedly increased on all the goods that can be placed to our debit; but, on the other hand, that my Native Country may get rid of these Bounties together with the obligations that prevent us from taxing our neighbours freely and frequently.
Now I venture to go further and assert that laws which force people to enter certain trades are harmful to the Nation and reduce its gain: I am moved to do so for four reasons which are very important in my opinion.
In all Europe there is no fixed principle yet governing this distribution of workmen; for such laws are sometimes made to improve a new kind of handicraft or manufacture; sometimes to procure a livelihood for more inhabitants, and sometimes to give the owner of a workshop a greater profit by reducing wages.
Sometimes this is done to make our manufactures exportable; sometimes to produce some necessity or other within the Country. Now such an arrangement is made so that our own shipowners may profit by the freights on our own goods and Swedish men by wages; now, again, to get gold and silver into the country. Sometimes the Statutes aim at preventing the people emigrating; sometimes they aim at checking luxury. Sometimes they are found necessary to maintain order in trade and industry, and sometimes they must exist to prevent people driving different trades at the same time, and innumerable other things.
Is not all this lacking in the right sort of System? And must not a house built after so many designs have a strange appearance and lack the necessary stability?
The second reason is this: that no Statesman is yet found capable of stating positively which trade will give us the greatest National gain, and consequently the Legislator must remain irresolute as to what goal he should guide our workmen to by his laws.
Who could be so stupid, someone will probably think, as not to know this? I assure you that it is not so easy as people imagine. Many who have troubled to think about these matters may have laid down a System and put every trade in order of precedence, but if we compare these Systems with those of others, we shall notice what differences there are between them.
I think that mine is certainly the best, but observing that everybody thinks the same of his, one must, like a sensible being, doubt everything until the matter is fully proved.
M. says that agriculture is the best; E. S. that this honour belongs to handicrafts; 0. R. proves that it is commerce; A. G. that the Country must be helped by our ironworks, which are the source of its chief Exports, and so on. Who of all these is right?
They are all of them enlightened and scrupulous men, and they also enjoy the confidence of their fellow-citizens, and still it will be a long time before this dispute is settled. What trade, however, should the Government consider the most useful, and to which should they lead the population to the gain of the Nation? Or can mistakes be avoided in such circumstances?
However, if this controversy were quite settled, and a Statute were issued that should guide the people to the most profitable trade, I wonder if the Legislator would be capable of saying how many thousands of people could, now, work in it to the gain of the Nation, and that the same Statute would have the desired effect during so and so many years. It might happen only too soon that people would be drawn from other trades, and produce in this one a superabundance of goods, which consequently might lose their value abroad and result in an appreciable loss to the Nation.
But even if it were possible to have all the knowledge needed for this - a thing that would be absolutely impossible - might it not happen, notwithstanding, that goodwill might be lacking among those who arrange this matter, a fact which I give as the third reason.
It might easily happen that they themselves derived some advantage from the people being guided to that or another special trade, and would therefore advocate it. What else could happen then but that the most useful trade would be robbed of people to the irreparable loss of the Country?
If we finally imagine that we have surmounted all these obstacles and got ideal laws on this subject, a few special incidents might change the whole of this excellent state of things and make the most useful laws quite harmful to the Nation, in which fact the fourth reason against them is obviously to be found.
What changes in goods, what different values, are not to be seen daily? Quite unexpectedly Providence opens to a Nation a source of Wealth that will last for some time; but often it suddenly dries up, and a second or a third comes into existence on which the National gain will chiefly depend. Among the thousands of possibilities the law - even if it is the very best - is thus useful only in certain circumstances, namely, in those for which it was made, but harmful in all others.
And these are the real reasons why our well intentioned Statutes must have had such an ill effect.
Now I think it is about time to investigate more closely what kind of Statutes these are that draw people from one trade to another.
Such are all those that directly or indirectly grant privileges to one trade in preference to another. This is done directly, when the words of the Statute explicitly grant them; but indirectly, when the privileges are a necessary consequence of the observance of the Statute.
Thus, all privileges in trade belong here, not only the Exclusive ones, but also all those which give a producer some special advantage; all classifications of trade made by Law; for Nature itself makes a classification, which is the safest; but as soon as the Laws add to or deduct something from it, disturbances will immediately be noticed, which favour some special persons, but prevent others from carrying on their trade. Further, all Bounties on Production and Exportation are classed among these, together with all restrictions of liberty of dwelling or carrying on trade in towns or in the country.
What else are these things but dams that collect people in certain places, remove them from one place to another without anyone being able to say in which place they will be of most use, or whether they will increase or reduce the National gain, as is proved above.
When a stream is allowed to flow smoothly, every drop of water is in motion. When there are no hindrances, every workman strives for his daily bread and thereby increases the gain of the Nation. But by Statutes the people are collected into certain groups, the possibilities of trade become limited, and in each group a small number keeps at the top above the great body of the people whose opulence is used as a reason for assuming the prosperity of the whole Nation.
These dams are the same that impede the increase of the number of Swedish workmen, which, however, as shown in § 4, is the first foundation of National gain.
The weight of the water in a dam rests on the Water nearest to the bottom, so that the building must be much stronger and much more solid there; for we know from experience that the water at the bottom pours out through the smallest opening with greater rapidity than it does at the surface.
It is just the same thing with our population. We may turn to any trade and the number of people working in it.
If we look at the landowners, we shall scarcely find a single example of anybody who owns a large estate wanting to emigrate, though those who are waiting to get the same property after him are willing to give him money for the journey; but I wonder whether we can be just as sure about the Crofters of this Estate and their children?
I have often asked them where their children were, but from most of them I have got sad answers. "What should we do with them at home now? We have to toil hard to support ourselves in this place as long as God permits it. For some years our eldest son was a sailor on a boat running to Holland, but stayed out there and is said to be prospering now. The second is on a boat running to England, but the last time we saw him he said good-bye for ever, intending to settle down there. The third went to Pomerania with the Army; he was taken prisoner by the King of Prussia, but when God gave us peace he did not want to return; he is now in the Prussian service and has married out there. The fourth is still a boy in petticoats, and God only knows what he will do or what will become of him."
Why does not a Yeoman remove? Because he is rooted there. But why should a farm-hand be more likely to do so? The answer is obvious: because the Statutes have not allowed him to settle down in any one place.
If we look at our Guilds and the crowds within them, we shall notice a few well-off Masters, who need no longer sit in their workshops themselves, who live comfortably, dress themselves and their families after the latest fashion, keep a good table every day, pay and receive calls most of the time, and have ten or twelve workmen in their workshops, six of whom work for their food only, the others for a few Dalers a week. I ask, "Does such a man want to leave the country? " He will not do so as long as the Guild can provide him with workmen and takes care that the number of Masters does not become so great that he will of necessity be short of work and thus unable to dictate the price.
But what happens to his Journeymen and Apprentices? That is a more delicate question. I have sometimes heard their swan song and a general complaint in the Country, because they leave for Prussia and Russia; for there those soon become Masters who like.
Fancy! How benevolent are our Guilds not to cast off a poor man's children, but allow them to fill a gap thus opened without any payment.
If we turn to our Iron works, we shall soon notice that it is far from being the wish of the owners of most of those Works to leave Sweden; but several poor Owners, who lack capital for carrying on their business, complain about slow sales, compulsory prices and the poverty they are threatened with, and that is quite another matter.
What is it that Smiths and Workmen complain of? Why do not the imported foreign workmen stay long? Why do the natives seldom marry and mostly become miserable creatures in the end? And how is it that the Corn and Provision business is only a little less profitable to the Owner than the Forging of Iron itself? And what is the cause of the peasants, who are under the command of the Works, getting breeze in their fields* and telling such stories about their children as did the Crofter mentioned above?
The manufacturer is really as well dressed in his own produce as anybody, but the workmen in the spinning-mill often sit half naked, and others walk the streets in rags, and beg, saying that they are foreigners who have been induced to come to the Country, but who now wish they were home again rather than in Sweden, where they have to stand at other people's doors and will finally have to die in poverty.
Among those who move from the towns, the mania for moving seldom affects those who are well-off or are Aldermen, but often does the poor and humble Burghers.
I think it is almost unheard of that Sea-Captains and Mates should desert their ships in a foreign harbour unless on account of crimes; but I dare not say the same about the ordinary Sailor or the Cook's boy.
Honoured Reader! Do you not now see the reason why our number of workmen does not increase and thereby our National gain? As far as I can see, it will for ever be impossible to stop this running away, if the dams are not opened.
The less the pressure is, the easier is the water retained; but the lower the water column is, the less is the pressure, and the column will always be lowest when the lock-gate is taken away.
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*A peasant under the command of the Works is said to get breeze in his fields, when he has so much to do for the Iron works that because of that he neglects his farming and thus suffers from failure of crops (Author's note).
The other foundation of National gain is the workmen's diligence - that is, when the least number of people produce goods to the highest value possible.
Many a man who observes our Nation only, might easily imagine that there was no lack of diligence among them, but I must confess that it has hurt me to hear foreigners reproach us for being a lazy Nation compared to others.
A Dutch Merchant will be sitting in his office every morning at five or six o'clock seeing to all his Business; he dresses plainly and his table does not bend beneath sumptuous dishes; he is anxious to accomplish something every hour and makes a laughing-stock of Frenchified bucks and aristocratic airs.
An Englishman is hardy and indefatigable in his work. A Carpenter at the English dockyards caulks with such strength and rapidity that, when he works, one can scarcely see the club in his hand, and he gets a Man-of-War ready in as many days as weeks would be needed in the Swedish Royal dockyards.
What is the cause of all this? Somebody might think it is the workmen's slackness, as there is no strict watch kept over them. "Vagabonds," they say, "are idling everywhere in the country; journeymen and Apprentices are no longer what they were; Men and Maids won't move unless their Master is with them himself."
I do not know whether there are more Inspectors anywhere than with us. But who is to keep watch, when the Inspectors themselves sleep till ten o'clock in the morning? I have heard several proposals of this kind: that when a peasant will not work diligently on his farm he should be whipped at the whipping-post or at least be driven from his freehold. Indeed, it has already actually happened that some have been punished, because they have not been able at once to give up a very old source of livelihood without which they would, in the first place, have had to be at least half-starved.
Such people unfailingly understand our liberty. Flogging and liberty together, a strange idea!
Do not let us accuse the Nation and its genius of slackness; do not lay the blame on corrupted morals. True, we should most easily get away from the problem in that way, but the Country will gain little good thereby. The source of this evil is to be found elsewhere.
The more opportunities there are in a Society for some persons to live upon the toil of others, and the less those others may enjoy the fruits of their work themselves, the more is diligence killed, the former become insolent, the latter despairing, and both negligent.
This foundation is so firm and so established by our knowledge of the human heart and our daily experience that I challenge anybody to overthrow it fairly.
Industry and diligence require a gay heart and constant competition, if they are not to slacken. They are never to be found under the yoke; but when they are encouraged by liberty, quick returns and individual gain, the natural torpor, which can never in the long run be driven away by blows, will be overcome.
Commodities are never produced without being wanted and demanded. Wants show themselves; they are manifold, and thus they spontaneously call into existence trade and products, which latter will later be sold to those, who need them. If anyone who needs a commodity is prevented from buying it, this commodity will remain on the producer's hands, will be a burden to him and get a black stamp on it, on which the words may be read: "Wasted expenditure of energy."
This is hitting assiduity below the belt. Here is the cord that binds the workman's hands behind his back, and the beverage that makes citizens bad and lethargic.
No Nation can be diligent as long as this stamp remains on its products, and the stamp can never be obliterated until the commodity can be produced by anyone who wants to make it and sold to him who needs it.
I shall not refer to the example of other States in evidence of this: my own Country is an incontrovertible witness, which I refer to with all the more boldness as its condition is best known, and nobody is likely to think of his country without anxiety for its adversities.
Swedish diligence is like a crop on a badly cultivated field. Here and there stand a few thriving tufts, but most of it is withered and will scarcely return the grain sown.
In Westrogothia, handicraft and weaving are carried on with diligence: there an old man is not ashamed of sitting at the spinning-wheel; there knives, bowls, plates, tapes, bells, scissors and other articles can be had for less than elsewhere. What is the reason? The dweller in that county is entitled to go wherever he wants and sell his goods. The town of Boris has since times of old been allowed to carry on peddling all over the Country, i.e. enjoyed the liberty to go about the farms and buy goods and sell its own to others.
As no other Province in the Country but this one has had that liberty, I defy anyone to show in any other Province the industry that is to be found among its inhabitants. Thus it is obvious that here either diligence has produced liberty or liberty diligence.
Some years ago in Westrobothnia, Helsingland and West-Norrland a great many chairs and spinning-wheels were made, and the former were sold at a price of 9 to 12 Daler a dozen, the latter at 6 to 9 Daler a piece. Owing to sales restrictions the production has now ceased to a large extent and it seems as if the inhabitants would soon have to buy these articles from others.
Along the coast of Ostrobothnia, people are active both winter and summer, but 30 to 40 (Swedish) miles inland, where there are no towns, most people's occupation during the winter is to sleep and make Torches, as many as they will burn. There are no buyers for goods, therefore there are none to sell.
About Björneborg, Raumo and Nystad the Peasants are almost indefatigable in making wooden articles. All through the winter the worker is hard at work making all kinds of wooden vessels as early as one or two o'clock in the morning, and thus he can sell his goods cheaper than anybody in all Finland, though many others along the coast have not only a better supply of forests, but also of workmen well versed in this trade. Let us look for the cause of this. It is quite impossible that such diligence could arise and be maintained without freedom of Export.
The towns mentioned above have of old had the liberty of sailing round the Baltic with poles, laths and wooden vessels. The Staple Towns have often tried to deprive them of this privilege, but have up till now been unsuccessful. Now those towns supply not only several foreign places with such goods at reasonable prices, but even Stockholm itself to some degree, and at such prices that they undersell almost everybody else.
But had the prohibition been successful, the sales would of necessity have been limited, and consequently production to the same extent. Limited production makes idle hands and expensive goods, and if it should one day happen that other towns are allowed to stop these sales or prevent workmen from free occupation, then it is as certain as that two and two make four that Stockholm would have to buy more expensive wooden vessels than before, these towns would have their trade reduced, the country would lose inhabitants and earnings and the State its gain.
Behold! Here is the key to diligence and benefit. If the door is opened to gain by freedom of trade and sale, then everybody will be fully occupied within a few years; but if that is not done, the Nation will certainly remain yawning, as before, and sleepy in broad daylight, in spite of all other measures.
"Freedom," my Reader will think, "there certainly should be, but not without order. One must distinguish strictly between the trade of the Towns and of the Country and not allow Farmers to busy themselves with anything else, so that farming may not be neglected." Very well said, especially to the taste of the day! But there is one reservation I should like to make most respectfully, namely, that whoever undertakes this Despotic Protectorship over the farmer, and thus binds him to the soil exclusively, should, when farming can no longer support him and his children, like a real paterfamilias see to it that the farmer does not perish of starvation. If that cannot be done, I think it wiser to turn the beast of burden out to grass to seek its food itself rather than to tether it to a post and leave it there for some weeks without taking care of it; for it is too late to learn a handicraft when there is no food left.
To prevent trade in the countryside is to check the growth of the population and of all cultivation, and to prohibit handicrafts and trade is to reduce the business of old towns and the foundation of new ones.
An experienced Tanner settled in the country several miles from the town and served the Peasantry and Gentry by supplying them with well curried leather. He was forbidden by the nearest town to carry on this trade there and was ordered to move into the town. The order was good, but the man, who had thriven in the country, became a miserable creature in town, and more than one thousand hides were now spoilt every year owing to bad treatment. There you see how the National gain is increased.
That section of our Statutes which concerns Peddling is particularly worth our attention. A trader is not allowed to go about the country selling his goods, nor is the Farmer allowed to buy anything from his neighbours and take it to town, nor to bring them articles from town in return.
If the neighbour will not become his agent, the Farmer must make a two or three days' journey to the town himself, maybe in the busiest harvest time, and that often for a piece of flint or an ell of tobacco. Who, then, shall pay for his journey? Had his neighbour been allowed to trade in the most necessary goods, he would have been spared this waste of time, but as this is forbidden, I cannot but put his loss down to the Account of the Statute itself.
I must regret that this Statute has not been observed; but it is my firmest conviction that this breach of the law has saved at least one quarter of the Country from desolation.
To set out such a great matter as this cannot be done now. I only want to give the Reader occasion to think about it a little.
All Savolax, Tavastland and Carelia are situated far from any towns. Corn and provisions are their goods, by means of which they provide themselves with salt and other necessaries from the towns. Now the wealthier people buy up goods from their neighbours who have no horses themselves or are not able to go to town with those goods, and in return they provide them with their needs.
Nobody undertakes to be an agent of the poor, and nobody is capable of keeping accounts with fifty or sixty persons. Thus, if this Peddling had not been done, the Nation would have lacked those commodities, and the poor would have perished in hunger and idleness. If the commodity is not desired, its production will cease, and where does the National gain come in then?
I know a Peasant living five [Swedish] miles from the nearest town, who, amongst other peddling, buys cattle in the autumn for slaughter over a district of several miles around his farm, and every year he drives to town three or four droves of cattle of twenty or thirty head each.
The law permits no other Burghers than Butchers to go about the country to purchase cattle, but everyone is obliged to take his own cattle to town. Few of them have more than one or two animals to sell, which must be driven by two or three persons, as many as the Pedlar needs for the whole drove.
These two or three persons will lose four or five days' work each on this journey to town in a busy harvest time, so that the transport to town will cost eight or ten working days often for one small animal only, and that means a deduction of 4 or 5 plåtar from the payment, and the necessary work on the farm is being neglected. Therefore nothing is more certain than that the farmer will eat his ox himself rather than consume half of its value in transport expenses.
Thus, if the Statutes about peddling were observed, the town would, through this pedlar alone, lose fifty or sixty head of slaughter cattle a year, and of his many droves scarcely ten oxen would reach the town, nor would his neighbours any longer feel inclined to increase their stock. Who knows whether the lack of corn and Victuals in the Land is not caused by these and other similar Statutes, which are regarded as trifling matters by most people?
I do not recommend that a farmer should allow peddling to interfere with his farming. I would rather that the Townspeople, who especially in winter have plenty of time for it, would undertake to serve the country about the towns and thus be well served at the same time themselves.
But as our towns will not do this, it seems to me as if they wanted to be regarded as the Fathers of the country, who order their children to assemble around their chairs, so that each of them can put food into the children's mouths. What a time, when the offspring have begun to order their mother about, and the child wants to make a show of the grey hairs of its father's head!
A merchant who is entitled to trade freely enlarges his cares; he will be busy every moment turning over his goods with profit. If anyone tries to gain too much, he will get competitors, who will divide the gain and save citizens from barefaced robbery. Everyone must then be content with less profit on each commodity, but must instead turn it over much more frequently.
Then the interest of money will decline; then even the small trades will be sought after, which cannot be carried on, or even thought of, when the interest of money is high, as they are less profitable. In a word: Monopolies, Exchange manipulations and National loss will never occur if they are not protected by Law; but they may be maintained after having once got a footing.
Owing to a strange difference between Inland Towns and Staple Towns, the foreigner is prevented from looking for goods and paying for them in Cash in a great many harbours. Goods must be offered to the inhabitants of the Staple Town: if he does not want to pay for them, there is no way of getting them sold. Diligence will then lose a good deal of its incentive, the products will be reduced and money will begin to leave the Country. A fine gain for the Nation!
The Product-Placat prevented foreigners from visiting even the smaller Staple Towns with any advantage, as they could not sell whole cargoes of their own products there and they were not allowed to assort their goods with other goods. There were few among these towns that had whole Cargoes of their own Exports, so that these had to be sold in the bigger Staple Towns. Nor were the Dutch and the English allowed to supply them with salt, neither was it worth while to sail in ballast to Portugal for it, but that, too, had to be bought from the bigger towns.
It is truly remarkable how trade was drawn to a few places from other parts of the Country. True, the name of Staple Towns remained, but the advantage had in reality disappeared from most of them.
It would, nevertheless, have been well enough with our trade, if at any rate the foreigner had been allowed to trade freely in the largest towns, and by means of competition had checked the domestic covetousness. But he finds no profit in that after having been expelled from the salt trade, which then fell into the hands of a few citizens, in whose discretion it was to supply the Country with this commodity or not and at whatever price they chose.
Thus the number of purchasers of our Exports was reduced. The products remained in the hands of the manufacturer or were sold to the Exporters at a loss. The loss forced many owners to leave their works, which fell into the hands of the Exporters or made the former tributaries to the latter.
To correct this evil the Ironmasters' Association was founded, which was to make advances to poor Owners of works, when iron lost its value; but everybody knows whether these advances have fallen into the hands of the poor or the wealthy.
The coins disappeared from circulation on the issuing of irredeemable bank-notes. Imports could not then be paid for in cash or any coin be exported for their payment, but everything had to be paid by Bills from Exports, which had to be obtained from a few people for the business of the whole Country and the Crown, who could therefore deal absolutely autocratically with the Bills. Freedom of trade was thus suppressed, and I do not know if it is right to accuse certain persons only of this. The state of things was such that liberty had to be lost.
"If Caesar and Pompey," says Montesquieu, "had thought as Cato did, others might have thought, on the contrary, as Caesar and Pompey did." And in another place he says: "When one gives away a title, one knows precisely what one gives, but if one adds power to it as well, one never knows how far that power might be extended."
Laws, Restraints, Regulations and Classifications had then to be secured to sanction this power. The care of other traders was confined to special goods, special places and special times, and, moreover, these traders would be made poor and idle, and they would make the country around them poor and idle as well.
It is strange to want to exonerate the Product-Placat from such necessary consequences. Were not shortage and resultant high prices predicted by the Estate of the Burgesses? The prediction came true, and in case of general distress an attempt was made to effect an alleviation by suspending it. Yet it is said: "The Nation profits by the Product-Placat."
We want to run a water-mill: we have seen that it begins to move when the dam is opened, yet we say that it moves best when the dam is closed. Must it not be a fine National gain that is attained by killing trade and by the misery of the citizens?
We complain of the consequences, but we do not want to go to the source from which they arise. As soon as I say anything about free trade I get the answer: "We must not mix up such private matters with public affairs." I do not know what to say. Either we read nothing or we think little.
Is not the malady of Foreign Exchange the greatest restraint of trade in the world? Can we think of any other remedy than making trade free?
There are especially two chief remedies for this: the first is, without respect of persons, to break the power of those who have exercised the tyranny of Bills, so that they are rendered incapable of doing anything more. If this cannot be done now, it is obvious that the country has given up too much and is now obliged to dread those weapons which it has itself put into their hands. When power is gone, it is better to bow the head.
The second is to repeal such Statutes as in any way impede trade and kill industry. If every man had the right and the opportunity to trade with the foreigner himself, there would not be so many who were obliged to sacrifice at the altars of the Exporters in order to be allowed to buy Bills; and to bind them down by Laws and oaths to a reasonable price and in that way expect the recovery of the Realm is, as I see it, to build castles in the air.
Both these remedies are very necessary. The second is of no use if the first does not precede it, and the first can be of no help if the Statutes remain; for then some others must of necessity be put in their place, and it is of small benefit to the Nation whether the autocrat is called Caesar or Octavius. Bad enough, when liberty is gone!
Simple though these remedies may seem for a fluctuating rate of Exchange, yet they remain the only true ones, without which no help can be expected.
All agree that to increase the Exports of the Country and to get genuine coins into general circulation will reduce the premium on foreign Bills. The former can never be done without freedom of trade, and no other road to the acquisition of money than that of foreign trade is known to me. If this trade lies in the hands of a few people, similar Exchange Offices will of necessity be kept by them, though under other names than those spoken of before, and these offices must have the same effect upon the Rate of Exchange.
All domestic Operations and the most subtle Financial tricks which do not also open up foreign trade are in my opinion as useless as such a fine artifice as a perpetuum mobile or a water-mill that is to run by itself in a well.
The inventor of these artifices may go as far as he likes. In the end they must stop, nevertheless. And whoever has been most subtle in his calculations must at last see, when his proposal is being tried, that the whole operation has been nothing else than taking from one hand and putting into the other.
As soon as a new trade has been discovered in which people can be occupied, their production is thought to be a National gain, though the trade in question does not pay its workmen satisfactorily.
We think that the people who are drawn to this trade did not earn anything before or had not been able to do so, though a man who, without begging or stealing, had unfailingly supported himself and his family in his former trade earned more than in his new one, in which his income is scarcely enough for himself alone, and his wife and children must trudge the streets and live on the earnings of others.
It is quite useful for a Nation to discover new trades; among them there might be one that was more profitable than any of the old ones and might thus increase the National gain. But in the long run to carry on an activity by bounties or by constraint on other citizens will always be an infallible loss to the Nation.
The answer that more people can live when trades are increased is of no avail here, for it is by no means their number that increases the gain of the Nation, but only the value of their products, if it were only in one trade. As long as the soil is not cultivated, the Factories lack workmen and our workshops are empty, anxiety to carry on even more trades is superfluous in my opinion.
Here I recall Aesop's Moral in the fable about the Dog which, while swimming, saw the reflection of the piece of meat in the water and tried to get hold of it, but at the same time lost the piece it had got at the Butcher's. "He who gapes after much," he says, "will often lose the whole piece."
Neither do I consider the argument fully valid that work should be carried on by imported workmen. For if, at great expense to the State, they could be enticed to come to this country to work in a less profitable trade, then, without any expense at all to the State, thousands would have immigrated, had they only been free to support themselves as best they could, i.e. to carry on the trade in which they would have most increased the real gain of the Nation.
As soon as foreigners have immigrated, a sound Policy demands that the best should be got out of their work, and this is infallibly to be secured in the trade that pays its workmen the best wages, but never in those in which they must be a burden to the State and the Public. The first they will find for themselves; the second they will not remain in except by compulsion, and there poverty will at last be the reward of their removal.
This conception of the National gain, however hard it may seem to be on our new enterprises, is nevertheless the simplest and easiest in itself.
It gives liberty to all lawful trades, though not at the expense of the others. It protects the poorest business and encourages diligence and free trade.
It weighs everybody in the same scales, and gain is the right measure that shows who should have the preference.
It relieves the Government from thousands of uneasy worries, Statutes and supervisions, when private and National gain merge into one interest, and the harmful selfishness, which always tries to cloak itself beneath the Statutes, can then most surely be controlled by mutual competition.
It allows a Swede to exercise the dearest and greatest right in Nature the Almighty has given him as man, i.e. to support himself in the sweat of his brow in whatever way he thinks best.
It snatches away the pillow of laziness from the arms of those who, thanks to their Privileges, can now safely sleep away two-thirds of their time. All expedients to live without work will be removed and none but the diligent can become well-off.
It makes a desirable reduction in our Lawsuits. The numerous Statutes, their explanations, exceptions and applications, which fetter trades in one way or another, will then be unnecessary and grow silent, and when the Law is annulled, its breach will amount to nothing.
I know well enough that these novelties will not please many of my Readers. But they have amused me very much and I consider it my duty to tell them to the Public, among whom I never doubt that there are many who will honestly share my amusement.
Uncertainty as to the succour of my Native Country has made me think of this subject, and as a free Swedish Citizen it was my duty to know the Statutes of my Country. I compared them with each other, but I missed the consistency which is generally to be found in a careful master's orders, i.e. that they should all aim at one purpose.
I hear complaints of people leaving the country and at the same time I see many arrangements that drive them away. We want to encourage Trade, yet we prevent the diligent workman from supporting himself. We wish that the prosperity of the country should be promoted, and prohibit a whole Province from buying bread, only on the pretext of stopping Smuggling. Obedience is claimed for the orders of the Crown, but many of these orders are several Centuries old, so that the Lawyers themselves can recognise them only with difficulty, and sometimes they are such that they can hardly be obeyed, if people are not to perish in misery.
We complain of an unfavourable balance of trade, and we impede one another as much as possible in selling our goods abroad. We want to enlarge trade, and we work for its limitation to fifteen or twenty persons. We grow emaciated through a high premium on foreign Bills, yet we try with all our might to restrict Remittances to as few Drawers as possible, who besides this already have quite an autocratic power over the Rate of Exchange.
We want to increase the National gain, and at the same time we occupy our people with work in which they can scarcely earn bread and water for the day. We think of Loyalty and of reducing the number of Lawsuits, and yet we add to our Laws daily, so that the judge himself hardly recognises them in the Statute Book, and scarcely onehundredth of the citizens know their duties. Just tell me, my benevolent Reader, what will finally result from all this?
I, for my part, cannot but sing with Lucidor, the Misanthrope:
"I hear many words, my thoughts are far astray;
I see so many lights that I mistake my way.
Too much of arguing makes me confused, I fear,
And though I Swedish know, I know not what I hear."
I have tried in every way to analyse one single little branch of trade and in my imagination to prescribe the Statutes that should be laid down for it, but as soon as I have not been led by self conceit, I have everywhere met with insuperable obstacles and therefore I have made no progress, especially on account of the reasons mentioned in § 11 and the following sections.
When I consulted experience, I soon realised that the more liberty had been allowed to reign in a trade, the greater was always its increase, and vice versa, and the more evenly this liberty was distributed, the more naturally were the trades balanced against each other.
The way in which other States treated trades also taught me that the liberty granted was always the measure of their greatness. But wherever I turned I saw selfishness so well entrenched behind the Statutes that it was everywhere difficult to exterminate it, but in most places it was quite invincible.
The more I began to measure our trades by liberty, the more I seemed to see the possibility of encouraging them; I was spared my trouble about the preference of the trades and various Statutes about them. A subject which, I am convinced, is far above human understanding and which Nature carries out so easily itself.
One single Statute, i.e. the one to reduce the number of our Statutes, has ever since been a pleasant subject of work to me, which I want to recommend highly as the very first and the most important before any new Statutes are invented.
The aim of this small treatise is to obtain some co-operation in this work. Opponents do not worry me at all. The truth I have been looking for is so pleasant that I am satisfied only with having told it to my Fellow-Citizens. It is immovable and not affrighted, though the waves splash their gall over it. It can stand burial by selfishness in the bottom gravel with which enraged waves cover it, yet in spite of all this it remains firm as a rock and irrevocable.
"Truth, O truth, thy sparkling rays
Penetrate the hardest stone;
Virtue's clean in thee alone.
In vain the mask conceals the face;
Thou wilt show it all the days,
Thou rewardest everyone."