This misconception of the true nature of barter was formerly universal,1 and being adopted even by the ablest politicians was not only an immediate cause of war but increased those feelings of national hatred by which war is encouraged, each country thinking that it had a direct interest in diminishing the wealth of its neighbors.2 In the seventeenth, or even late in the sixteenth, century there were, indeed, one or two eminent thinkers who exposed some of the fallacies upon which this opinion was based. But their arguments found no favor with those that it was "impossible both should stand upon a balance, and that if we do not master their trade, they will ours. They or we must truckle. One must and will give the law to the other. There is no compounding where the contest is for the trade of the whole world" (Somers Tracts, Vol. VIII, p. 39). A few months later, still insisting on the propriety of the war, he gave as one of his reasons, that it "was necessary to the trade of England that there should be a fair adjustment of commerce in the East Indies" (Parliamentary History, Vol. IV, p. 587). In 1701 Stepney, a diplomatist and one of the lords of trade, published an essay, strongly insisting on the benefits which would accrue to English commerce by a war with France (Somers Tracts, Vol. XI, pp. 199, 217); and he says (p. 205) that one of the consequences of peace with France would be "the utter ruin and destruction of our trade." See also in Vol. XIII, p. 688, the remarks on the policy of William III. In 1743 Lord Hardwicke, one of the most eminent men of his time, said in the House of Lords, "If our wealth is diminished, it is time to ruin the commerce of that nation which has driven us from the markets of the Continent — by sweeping the seas of their ships, and by blockading their ports" (Campbell's Lives of the Chancellors, Vol. V, p. 89).

1 In regard to the seventeenth century, see Mill's History of India, Vol. I, pp. 41, 42. To this I may add, that even Locke had very confused notions respecting the use of money in trade. See "Essay on Money," in Locke's Works, Vol. IV; and in particular, pp. 9, 10, 12, 20, 21, 49-52. Berkeley, profound thinker as he was, fell into the same errors, and assumes the necessity of maintaining the balance of trade, and lessening our imports in proportion as we lessen our exports. See the Querist, Nos. xcix, clxi, in Berkeley's Works, Vol. II, pp. 246, 250; see also his proposal for a sumptuary law, in "Essay towards preventing the Ruin of Great Britain," in Works, Vol. II, p. 190. [Also in the Querist, No. ciii.] The economical views of Montesquieu (Esprit des Lois, Livre XX, chap. xii, in Œuvres, p. 353) are as hopelessly wrong; while Vattel (Droit des Gens, Vol. I, pp. 111, 117, 118, 206) goes out of his way to praise the mischievous interference of the English government, which he recommends as a pattern to other states.

2 The Earl of Bristol, a man of some ability, told the House of Lords in 1642 that it was a great advantage to England for other countries to go to war with each other, because by that means we should get their money, or, as he called it, their "wealth." See his speech in Parliamentary History, Vol. II, pp. 1274-1279. 3 Serra, who wrote in 1613, is said to have been the first to prove the absurdity of discouraging the exportation of the precious metals. See Twiss on the Progress

politicians by whom European affairs were then administered. It is doubtful if they were known; and it is certain that, if known, they were despised by statesmen and legislators, who, from the constancy of their practical occupations, cannot be supposed to have sufficient leisure to master each new discovery that is successively made, and who in consequence are, as a body, always in the rear of their age. The result was, that they went blundering on in the old track, believing that no commerce could flourish without their interference, troubling that commerce by repeated and harassing regulations, and taking for granted that it was the duty of every government to benefit the trade of its own people by injuring the trade of others.1

But in the eighteenth century a long course of events, which I shall hereafter trace, prepared the way for a spirit of improvement and a desire for reform, of which the world had then seen

of Political Economy, pp. 8, 12, 13. But I believe that the earliest approach towards modern economical discoveries is a striking essay published in 1581, and ascribed to William Stafford. It will be found in the Harleian Miscellany, Vol. IX, pp. 139-192, edited by Park, 1812; and the title, Brief Conceipt of English Policy," gives an inadequate idea of what is, on the whole, the most important work on the theory of politics which had then appeared, since the author not only displays an insight into the nature of price and value, such as no previous thinker possessed, but he points out clearly the causes of that system of inclosures which is the leading economical fact in the reign of Elizabeth, and is intimately connected with the rise of the poor-laws. Some account of this essay is given by Dr. Twiss, but the original is easily accessible, and should be read by every student of English history. Among other heretical propositions it recommends free trade in corn.

1 In regard to the interference of the English legislature, it is stated by Mr. M'Culloch (Political Economy, p. 269), on the authority of a committee of the House of Commons, that before the year 1820 "no fewer than two thousand laws with respect to commerce had been passed at different periods." It may be confidently asserted that every one of those laws was an unmitigated evil, since no trade, and indeed no interest of any kind, can be protected by government without inflicting immeasurably greater loss upon the unprotected interests and trades; while if the protection is universal, the loss will be universal. Some striking instances of the absurd laws which have been passed respecting trade are col· lected in Barrington's Observations on the Statutes, pp. 279-285. Indeed, it was considered necessary that every Parliament should do something in this way; and Charles II, in one of his speeches, says, "I pray, contrive any good short bills which may improve the industry of the nation . . . and so God bless your councils " (Parliamentary History, Vol. IV, p. 291). Compare the remarks on the fishery trade, in Somers Tracts, Vol. XII, p. 33.

no example. This great movement displayed its energy in every department of knowledge; and now it was that a successful attempt was first made to raise political economy to a science, by discovering the laws which regulate the creation and diffusion of wealth. In the year 1776 Adam Smith published his Wealth of Nations, which, looking at its ultimate results, is probably the most important book that has ever been written, and is certainly the most valuable contribution ever made by a single man towards establishing the principles on which government should be based. In this great work the old theory of protection as applied to commerce was destroyed in nearly all its parts;1. the doctrine of the balance of trade was not only attacked but its falsehood was demonstrated; and innumerable absurdities, which had been accumulating for ages, were suddenly swept away.2

If the Wealth of Nations had appeared in any preceding century, it would have shared the fate of the great works of Stafford and Serra; and although the principles which it advocated would no doubt have excited the attention of speculative thinkers, they would in all probability have produced no effect on practical politicians, or, at all events, would only have exercised an indirect and precarious influence. But the diffusion of knowledge had now become so general that even our ordinary legislators were in some degree prepared for these great truths which in a former period they would have despised as idle novelties. The result was, that the doctrines of Adam Smith soon found their way into the House of Commons, and, being adopted by a few of the

1 To this the only exception of any moment is the view taken of the usury laws, which Jeremy Bentham has the honor of demolishing.

2 Before Adam Smith, the principal merit is due to Hume; but the works of that profound thinker were too fragmentary to produce much effect. Indeed, Hume, notwithstanding his vast powers, was inferior to Smith in comprehensiveness as well as in industry.

3 The first notice I have observed of the Wealth of Nations in Parliament is in 1783; and between then and the end of the century it is referred to several times, and latterly with increasing frequency. See Parliamentary History, Vol. XXIII, p. 1152; Vol. XXVI, pp. 481, 1035; Vol. XXVII, p. 385; Vol. XXIX, pp. 834, 905, 982, 1065; Vol. XXX, pp. 330, 333; Vol. XXXII, p. 2; Vol. XXXIII, pp. 353, 386, 522, 548, 549, 563, 774, 777, 778, 822, 823, 824, 825, 827, 1249; Vol. XXXIV, pp. 11, 97, 98, 141, 142, 304, 473, 850, 901, 902, 903. It is possible that one or two passages may have been overlooked; but I believe that these are

leading members, were listened to with astonishment by that great assembly whose opinions were mainly regulated by the wisdom of their ancestors, and who were loth to believe that anything could be discovered by the moderns which was not already known to the ancients. But it is in vain that such men as these always set themselves up to resist the pressure of advancing knowledge. No great truth, which has once been found, has ever afterwards been lost, nor has any important discovery yet been made which has not eventually carried everything before it. Even so, the principles of free trade, as demonstrated by Adam Smith, and all the consequences which flow from them, were vainly struggled against by the most overwhelming majorities of both houses of Parliament. Year by year the great truth made its way,- always advancing, never receding.1 The majority was at first deserted by a few men of ability, then by ordinary men, then it became a minority, then even the minority began to dwindle; and at the present day, eighty years after the publication of Smith's Wealth of Nations, there is not to be found any one of tolerable education who is not ashamed of holding opinions which, before the time of Adam Smith, were universally received.

Such is the way in which great thinkers control the affairs of men, and by their discoveries regulate the march of nations. And truly the history of this one triumph alone should be enough to repress the presumption of statesmen and legislators, who so exaggerate the importance of their craft as to ascribe the only instances of Adam Smith being referred to during seventeen years. From a passage in Pellew's Life of Sidmouth, Vol. I, p. 51, it appears that even Addington was studying Adam Smith in 1787.

1 In 1797 Pulteney, in one of his financial speeches, appealed to "the authority of Dr. Smith, who, it was well said, would persuade the present generation and govern the next " (Parliamentary History, Vol. XXXIII, p. 778). In 1813 Dugald Stewart (Philosophy of the Human Mind, Vol. II, p. 472) announced that the doctrine of free trade "has now, I believe, become the prevailing creed of thinking men all over Europe." And in 1816 Ricardo said: "The reasoning by which the liberty of trade is supported is so powerful that it is daily obtaining converts. It is with pleasure that I see the progress which this great principle is making amongst those whom we should have expected to cling the longest to old prejudices" ("Proposals for an Economical Currency," in Ricardo's Works, p. 407).

great results to their own shifting and temporary contrivances. For whence did they derive that knowledge of which they are always ready to assume the merit? How did they obtain their opinions? How did they get at their principles? These are the elements of their success; and these they can only learn from their masters, from those great teachers who, moved by the inspiration of genius, fertilize the world with their discoveries. Well may it be said of Adam Smith, and said too without fear of contradiction, that this solitary Scotchman has, by the publication of one single work, contributed more towards the happiness of man than has been effected by the united abilities of all the statesmen and legislators of whom history has preserved an authentic account.

The result of these great discoveries I am not here concerned to examine, except so far as they aided in diminishing the energy of the warlike spirit. And the way in which they effected this may be easily stated. As long as it was generally believed that the wealth of a country consists of its gold, it was of course also believed that the sole object of trade is to increase the influx of the precious metals; it therefore became natural that government should be expected to take measures by which such influx could be secured. This, however, could only be done by draining other countries of their gold, a result which they, for precisely the same reasons, strenuously resisted. The consequence was, that any idea of real reciprocity was impossible; every commercial treaty was an attempt made by one nation to outwit another; 1 every new tariff was a declaration of hostility; and that which ought to be the most peaceable of all pursuits became one of the causes of those national jealousies and national animosities

1 Sir Theodore Janson, in his General Maxims of Trade, published in 1713, lays it down as a principle universally recognized, that "All the nations of Europe seem to strive who shall outwit one another in point of trade; and they concur in this maxim, That the less they consume of foreign commodities, the better it is for them" (Somers Tracts, Vol. XIII, p. 292). Thus, too, in a Dialogue between an Englishman and a Dutchman, published in 1700, the Dutchman is represented as boasting that his government had "forced treaties of commerce exclusive to all other nations" (Somers Tracts, Vol. XI, p. 376). This is the system of "narrow selfishness" denounced by Dr. Story, in his noble work, Conflict of Laws, 1841, p. 32.