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employment may be as necessary for the welfare of the society as

a near one; the goods which the distant employment deals in being

necessary; perhaps; for carrying on many of the nearer

employments。 But if the profits of those who deal in such goods

are above their proper level; those goods will be sold dearer

than they ought to be; or somewhat above their natural price; and

all those engaged in the nearer employments will be more or less

oppressed by this high price。 Their interest; therefore; in this

case requires that some stock should be withdrawn from those

nearer employments; and turned towards that distant one; in order

to reduce its profits to their proper level; and the price of the

goods which it deals in to their natural price。 In this

extraordinary case; the public interest requires that some stock

should be withdrawn from those employments which in ordinary

cases are more advantageous; and turned towards one which in

ordinary cases is less advantageous to the public; and in this

extraordinary case the natural interests and inclinations of men

coincide as exactly with the public interest as in all other

ordinary cases; and lead them to withdraw stock from the near;

and to turn it towards the distant employment。

     It is thus that the private interests and passions of

individuals naturally dispose them to turn their stocks towards

the employments which in ordinary cases are most advantageous to

the society。 But if from this natural preference they should turn

too much of it towards those employments; the fall of profit in

them and the rise of it in all others immediately dispose them to

alter this faulty distribution。 Without any intervention of law;

therefore; the private interests and passions of men naturally

lead them to divide and distribute the stock of every society

among all the different employments carried on in it as nearly as

possible in the proportion which is most agreeable to the

interest of the whole society。

     All the different regulations of the mercantile system

necessarily derange more or less this natural and most

advantageous distribution of stock。 But those which concern the

trade to America and the East Indies derange it perhaps more than

any other; because the trade to those two great continents

absorbs a greater quantity of stock than any two other branches

of trade。 The regulations; however; by which this derangement is

effected in those two different branches of trade are not

altogether the same。 Monopoly is the great engine of both; but it

is a different sort of monopoly。 Monopoly of one kind or another;

indeed; seems to be the sole engine of the mercantile system。

     In the trade to America every nation endeavours to engross

as much as possible the whole market of its own colonies by

fairly excluding all other nations from any direct trade to them。

During the greater part of the sixteenth century; the Portuguese

endeavoured to manage the trade to the East Indies in the same

manner; by claiming the sole right of sailing in the Indian seas;

on account of the merit of having first found out the road to

them。 The Dutch still continue to exclude all other European

nations from any direct trade to their spice islands。 Monopolies

of this kind are evidently established against all other European

nations; who are thereby not only excluded from a trade to which

it might be convenient for them to turn some part of their stock;

but are obliged to buy the goods which that trade deals in

somewhat dearer than if they could import them themselves

directly from the countries which produce them。

     But since the fall of the power of Portugal; no European

nation has claimed the exclusive right of sailing in the Indian

seas; of which the principal ports are now open to the ships of

all European nations。 Except in Portugal; however; and within

these few years in France; the trade to the East Indies has in

every European country been subjected to an exclusive company。

Monopolies of this kind are properly established against the very

nation which erects them。 The greater part of that nation are

thereby not only excluded from a trade to which it might be

convenient for them to turn some part of their stock; but are

obliged to buy the goods which that trade deals somewhat dearer

than if it was open and free to all their countrymen。 Since the

establishment of the English East India Company; for example; the

other inhabitants of England; over and above being excluded from

the trade; must have paid in the price of the East India goods

which they have consumed; not only for all the extraordinary

profits which the company may have made upon those goods in

consequence of their monopoly; but for all the extraordinary

waste which the fraud and abuse; inseparable from the management

of the affairs of so great a company; must necessarily have

occasioned。 The absurdity of this second kind of monopoly;

therefore; is much more manifest than that of the first。

     Both these kinds of monopolies derange more or less the

natural distribution of the stock of the society; but they do not

always derange it in the same way。

     Monopolies of the first kind always attract to the

particular trade in which they are established a greater

proportion of the stock of the society than what would go to that

trade of its own accord。

     Monopolies of the second kind may sometimes attract stock

towards the particular trade in which they are established; and

sometimes repel it from that trade according to different

circumstances。 In poor countries they naturally attract towards

that trade more stock than would otherwise go to it。 In rich

countries they naturally repel from it a good deal of stock which

would otherwise go to it。

     Such poor countries as Sweden and Denmark; for example;

would probably have never sent a single ship to the East Indies

had not the trade been subjected to an exclusive company。 The

establishment of such a company necessarily encourages

adventurers。 Their monopoly secures them against all competitors

in the home market; and they have the same chance for foreign

markets with the traders of other nations。 Their monopoly shows

them the certainty of a great profit upon a considerable quantity

of goods; and the chance of a considerable profit upon a great

quantity。 Without such extraordinary encouragement; the poor

traders of such poor countries would probably never have thought

of hazarding their small capitals in so very distant and

uncertain an adventure as the trade to the East Indies must

naturally have appeared to them。

     Such a rich country as Holland; on the contrary; would

probably; in the case of a free trade; send many more ships to

the East Indies than it actually does。 The limited stock of the

Dutch East India Company probably repels from that trade many

great mercantile capitals which would otherwise go to it。 The

mercantile capital of Holland is so great that it is; as it were;

continually overflowing; sometimes into the public funds of

foreign countries; sometimes into loans to private traders and

adventurers of foreign countries; sometimes into the most

round…about foreign trades of consumption; and sometimes into the

carrying trade。 All near employments being completely filled up;

all the capital which can be placed in them with any tolerable

profit being already placed in them; the capital of Holland

necessarily flows towards the most distant employments。 The trade

to the East Indies; if it were altogether free; would probably

absorb the greater part of this redundant capital。 The East

Indies offer a market for the manufactures of Europe and for the

gold and silver as well as for several other productions of

America greater and more extensive than both Europe and America

put together。

     Every derangement of the natural distribution of stock is

necessarily hurtful to the society in which it takes place;

whether it be by repelling from a particular trade the stock

which would otherwise go to it; or by attracting towards a

particular trade that which would not otherwise come to it。 If;

without any exclusive company; the trade of Holland to the East

Indies would be greater than it actually is; that country must

suffer a considerable loss by part of its capital being excluded

from the employment most convenient for that part。 And in the

same manner; if; without an exclusive company; the trade of

Sweden and Denmark to the East Indies would be less than it

actually is; or; what perhaps is more probable; would not exist

at all; those two countries must likewise suffer a considerable

loss by part of their capital being drawn into an employment

which must be more or less unsuitable to their present

circumstances。 Better for them; perhaps; in their present

circumstances; to buy East India goods of other nations; even

though they should pay somewhat dearer; than to turn so great a

part of their small capital to so very distant a trade; in which

the returns are so very slow; in which that capital can maintain

so smal

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