(3.xvii.14) The argument moreover supposes, that an extraordinary gain is obtained by themanufacturer, in consequence of his supposed protection; and that a correspondent evil issustained by the corn grower, unless he is favoured by a similar tax. The ignorance of principleis peculiarly visible in those suppositions, in neither of which is there a shadow of truth.
(3.xvii.15) The man who embarks his capital in the woollen, or any other manufacture, withthe produce of which that of the foreign manufacturers is not allowed to come into competition,does not, on that account, derive a greater profit from his capital. His profit is no greater thanthat of the man whose capital is embarked in trades open to the competition of all the world. Allthat happens is, that a greater number of capitalists find employment in that branch ofmanufacture; that a portion, in short, of the capitalists of the country employ themselves inproducing that particular species of manufacture, who would otherwise be employed inproducing some other species, probably in producing something for the foreign market, withwhich that commodity, if imported from the foreign manufacturer, might be bought.
(3.xvii.16) As the man who has embarked his capital in the trade, which is called protected,derives no additional profit from the protection; so the grower of corn sustains not any peculiarloss or inconvenience. Nothing, therefore, can be conceived more groundless than his demand ofa compensation on that account. The market for corn is not diminished because a tax is laidupon the importation of woollens; nor would that market be enlarged if the tax were taken off.
His business, therefore, is not in the least degree affected by it.
(3.xvii.17) It would be inconsistent with the plan of a work, confined to the exposition ofgeneral principles, to lay open all the fallacies, which lurk in the arguments for restraining the trade incorn. One or two, however, of the sources of deception, cannot be left altogether unnoticed.
(3.xvii.18) The landlord endeavours to represent his own case, and that of the manufacturer,as perfectly similar; though, in the circumstances which concern this argument, they are not onlydifferent, but opposite. The landlord also endeavours to mix up his own case with that of thefarmer; and upon the success of that endeavour almost all the plausibility of his pretensionsdepends. That no pretensions are more unfounded, may be seen by a very short process ofreasoning. The farmer, as a producer, requires, like every other producer, that all his outgoingsbe returned to him, with the due profit upon the capital which he employs. The surplus, whichthe land yields, over and above this return and profit, is what he pays to his landlord; and hisinterest is not affected by the quantity of that surplus, whether it be great or small. His interest,however, is very much affected by wages; because, in proportion as wages are low, his profits,like all other profits, are high. Wages cannot be low, if corn is dear. The interest, therefore, thepermanent interest, of the class of farmers, consists, in having corn cheap. This or that individualin the class may, that is, during the currency of a lease, have an interest in high prices; and thereason of the exception shows the truth of the general rule. The individual, who, during thecurrency of a lease, has an interest in high prices, is, by his lease, converted, to a certain extent,into a receiver of rent. During the continuance of his lease, if prices rise, he gets, not only hisdue return of profits as a farmer, but something more, namely, a portion of what is truly rent, andwhich, but for his lease, would have gone to the landlord.
(3.xvii.19) This, then, is the grand distinction. The receivers of rent are benefited by a highprice of corn; the producers of corn, as such are not benefited by it, but the reverse. The case of thefarmer corresponds with that of the manufacturer, not with that of the landlord. The farmer is aproducer and capitalist; the manufacturer is a producer and capitalist; and they have bothreceived all that belongs to them, when their capital is replaced with its profits. The landlord isnot a producer, nor a capitalist. He is the owner of certain productive powers in the soil; and allwhich the soil produces belongs to him, after paying the capital which is necessary to put thoseproductive powers in operation. It thus appears that the case of the landlord is peculiar; that ahigh price of corn is profitable to him, because, the higher the price, the smaller a portion of theproduce will suffice to replace, with its profits, the capital of the farmer; and all the rest belongsto himself. To the farmer, however, and to all the rest of the community, it is an evil, both as ittends to diminish profits, and as it enhances the charge to consumers.
Section XVIII. Colonies (3.xviii.1) Among the expedients which have been made use of, to force into particularchannels a greater quantity of the means of production, than would have flowed into them of their ownaccord; colonies are a subject of sufficient importance to require a particular consideration.
(3.xviii.2) The only point of colonial policy, which it is here necessary to consider, is that oftrade with the colonies. And the question is, whether any peculiar advantage may be derivedfrom it.
(3.xviii.3) With respect to colonies, as with respect to foreign countries, the proposition will,doubtless, be admitted, that, whatever advantage is derived from trading with them, consists inwhat is received from them, not in what is sent; because that, if not followed by a return, wouldbe altogether loss.
