of her population; instead of employing her capital on these soils, which refuse increased food except at an increased rate of expense, she is about to send it abroad and exchange it for grain in America and the Baltic, where the earth yields it more freely. Her wealth will thus increase as rapidly as

ever.

The gain is even greater where a nation, instead of employing its capital in working natural agents, which become less and less productive to every increased application of labor, exchanges it for the goods produced by a savage or half civilized community. A small portion of the labor of the civilized man will produce commodities, for which the savage will give the fruit of a large portion of his own labor. The benefits of such an exchange are not confined to the civilized laborer, for it would cost the savage much more labor, (or rather it would be beyond his powers,) to produce the cloths, beads, &c., than to acquire the furs or game, which he gives in exchange. His condition is thus improved, and his wealth increased, far more rapidly than it could be without these exchanges. Commerce powerfully fosters civilization, in this manner, independently of the knowledge and moral ideas, which usually travel in its train. Civilization is rarely or never indigenous in a savage nation. So little capital, and especially so little fixed capital, without which no industry can be very productive, is saved by such a people, that the growth of wealth is exceedingly slow. So long as the powers of nature yield instant rewards to labor, and these, for the most part, consist in kinds of wealth, which do not admit of being stored for any length of time, such as fruits, fish, and game, there can be no motive to save, but the desire of a better state, and such a desire must be very weak, where the want of civilization and foreign. intercourse almost preclude the knowledge that an improved condition is possible. It might not require any large portion of the savage's time to procure sufficient food to appease his appetite, and he would pass the rest of his life in sloth and inactivity. It would be useless to produce superfluities, which there was no commerce to take off his hands. As the powers of nature, to which he was wont to resort for his wealth, are exhausted, as the game dies away from his hunting grounds, increasing wretchedness, only serves still further to tantalise him. He is engaged in never ending wars for the use of these natural agents of production, the

first right to hunt or to fish; the numbers of his tribe are thinned by war, pestilence and famine, and his attention is diverted from the invention of new modes of production. The foresight and intelligence, necessary for such inventions and for the introduction of that right of property in the soil, which is the essential condition of any extended agricultural industry, can only be expected in a mind already possessed of the rudiments of civilization. These elements of knowledge and improvement are acquired by savages from intercourse with foreigners whose commerce attracts to their country with much more certainty and rapidity, than by the slow, precarious chance of a sufficient number of themselves gaining, by their unaided genius, the wisdom, necessary for the discovery, and the prudence, requisite to combine in introducing the principles of civilization, when discovered. These foreigners must themselves trace back their civilization, from generation to generation, to the period, when it was imported from abroad, and we are tempted to ask whence came the first civilization? Was man placed on earth by his Creator in a savage state, exposed to all the risk of never emerging from it, or remaining in it for centuries? Or is it not more likely that when God created man, he endowed him with, at least, the foundation of civilization? This supposition accords with history, which traces back all our present heritage of wealth and improvement, from age to age, and country to country, till its beginnings. are lost in those Eastern climates, where the Bible records that the fathers of mankind were created, and guided by the direct inspirations of Heaven.

We have now presented such a condensed view of the whole subject, as our limits permitted. We have attempted to conduct the inquiry by defining its object clearly and exactly, and, so arriving at what seemed to us the true ideas, and then showing their foundation in reason. Such is the strictly scientific method, which is generally preferable to an investigation of a more controversial character. It was especially so in this case, as we have an opportunity of meeting any objections which may be suggested, and add. ing all proper illustrations, when we consider the doctrines taught by the principal authors, which we will now proceed to do, commencing with the father of the science,-ADAM SMITH.

The distinguished men, who have written on Political

Economy, agree substantially in many more points than they differ; yet it is with these differences that criticism is chiefly occupied. We shall say but little of the large body of truth which these authors have taught; our present object is to show the comparatively small number of errors, into which, we think, they have fallen, and if we at times repeat the arguments we have before advanced, it is from an anxiety for that clearness and precision, which suits the importance of the subject.

In the 7th chapter of Book I, of the Wealth of Nations, it is very clearly shown, that the actual or market price of any commodity is determined by the ratio between the demand for it, and the supply in market, and that this ratio is so regulated by the cost of production, that any two articles, whose cost of production is equal, will on an average exchange for each other.

Dr. Smith goes on to say that this cost of production is determined by the ordinary or natural rates of wages, profits, and rents. It would be more correct to say that both depended on the same cause, the productiveness of labor. As we before showed, when equal capitals are expended in the production of any two commodities, A and B, they must exchange for each other, one capital will make a larger profit than the other, and all political economists agree that this cannot continue, but that all capitals must on an average receive equal returns. It matters not therefore, whether profits be high or low; the relative or exchangeable value of A and B remains unchanged. The capitals employed in their production are spent in labor, either in labor to create and renew the fixed capitals necessary, or in labor to set those fixed capitals in motion. But since these capitals are equal, they must command equal quantities of labor, else wages would be unequal, which they cannot permanently be, according to another leading doctrine of the science. Therefore to say, that A and B are produced by equal capitals, is to say that they are produced by equal quantities of labor, and we have just proved that they will exchange for each other. Their relative value is not affected by the size of the capitals employed, (which regulates the rate of the wages received by the labor,) so long as they are equal. It appears then that the rates of wages and profits do not affect those average rates of exchangeable value, which are general and permanent, or as Dr. Smith calls

them, natural prices. As little are these prices changed by the rise or fall of rent, so long as that rise or fall does not proceed from a variation in the productive powers of labor. We have shown this at sufficient length before, and we shall advert to it again.

Did price rise with profits and wages, it would follow that corn would be dearest in new and fertile countries, where wages and profits are always high, yet the reverse is notoriously true.

What is false of natural, may be true of market prices. In any particular employment, where labor continues equally productive, profits can rise, while wages remain stationary, only because of a rise in the market price of its productions, occasioned by a diminished supply or increased demand. Such unusual profits will attract capital from other less lucrative occupations, until the supply is so increased as to reduce the price to the former standard. In this case the rise of price was the cause, not the effect, of the rise of profits. It must be always understood, that we are speaking of such commodities only as are freely produced.

Dr. Smith confounded these variations of market and natural price by looking to the case of a single branch of industry, instead of all society. The profits of all the capital of society can rise, only, because labor has become more productive, so that a larger surplus is left after replacing the capital expended. But since this cause operates on all productions or commodities alike, it cannot affect their relative value. If the increased productiveness of labor was confined to any one employment, the commodities produced would be cheapened as to all other commodities, for the same labor would furnish a larger supply, and the larger profits or wages, which the capital or labor engaged might for a time. reap, would ultimately conform to the general average, as we have shown.

Dr. Smith distinguishes four different prices-the market price, or the quantity of all other commodities, for which, a given commodity, A, is actually exchanged; the natural price, which agrees with the average market price, and is regulated by the cost of production; the money or nominal price, or that quantity of money which A actually commands in exchange; and lastly, the real price, or the quantity of labor, which it exchanges for. To determine how VOL. XI. NO. 21.

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much labor other commodities command, is to ascertain how much of those commodities labor will command, or its wages, and we may thus pass from the laws, which regulate the exchange of all commodities, to those, which determine the manner of their distribution among the members of society.

It is in reference to this real price, that Dr. Smith says that "labor is the real measure of the exchangeable value of all commodities. (p. 13.) If he means that the labor it costs to produce any two commodities, A and B, is the measure or rule by which they will, on an average, be exchanged, his proposition agrees with the various results of our previous investigations, and the general tenor of his own writings. It might be inferred from some expressions, that his meaning is, that, when A and B exchange for an equal quantity of labor, they will exchange for each other; but, in this sense, labor is no more a real measure of value, than any other commodity. It is but another form of saying that things equal to a third are equal to each other.

Neither of these meanings is the true one; which is apparent, when Dr. Smith says below, that labor always remains of the same value, because it costs the laborer, when "in his ordinary state of health, strength, and spirits, in the ordinary degree of his skill and dexterity," "the same portion of his ease, his liberty, and his happiness." (p. 15.) But this is not the exchangeable value of labor, but only its value in use to the laborer, which, as Smith himself remarks, is often greatest when the exchangeable value is least. That such was his real meaning, may be also inferred from his saying that in the early stages of society "the produce of labor is its natural recompence." (p. 29.) He evidently thought that since labor always costs the laborer the same toil to perform, it will exchange for the productions of any equivalent labor. But were this true; did A command only, the labor it cost to produce it, labor must always receive the whole of its own productions, and nothing would be left for profits. To escape this absurdity, Dr. Smith supposes that after the accumulation of stock, exchangeable value, especially that of labor, is regulated by different laws, and that, as labor receives less than its natural recompence, a balance is left for profits and rents. This is to suppose that the natural laws of value change with the progress of society. It is inconsistent with his theory of the ultimate con