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is raised; and with it the capability of procuring the material
capital required for his improvements。
Adam Smith passes over these conditions of the exchangeable
value of land in silence。 J。 B。 Say; on the contrary; believes that
the exchangeable value of land is of little importance; inasmuch
as; whether its value be high or low; it always serves equally well
for production。 It is sad to read from an author whom his German
translators regard as a universal national authority; such
fundamentally wrong views about a matter which affects so deeply
the prosperity of nations。 We; on the contrary; believe it
essential to maintain that there is no surer test of national
prosperity than the rising and falling of the value of the land;
and that fluctuations and crises in that are to be classed among
the most ruinous of all plagues that can befall a country。
Into this erroneous view the school has also been led by its
predilection for the theory of free trade (as it desires the latter
term to be understood)。 For nowhere are fluctuations and crises in
the value and price of land greater than in those purely
agricultural nations which are in unrestricted commercial
intercourse with rich and powerful manufacturing and commercial
nations。
Foreign commerce also; it is true; acts on the increase of rent
and the value of land; but it does so incomparably less decidedly;
uniformly; and permanently; than the establishment of home
manufactures; the continuous regular increase of manufacturing
production; and the exchange of home manufacturing products for
home agricultural products。
So long as the agricultural nation still possesses a large
quantity of uncultivated or badly cultivated land; so long as it
produces staple articles which are readily taken by the richer
manufacturing nation in exchange for manufactured goods; so long as
these articles are easy of transport; so long also as the demand
for them is lasting and capable of annual increase at a rate
corresponding with the growth of the productive powers of the
agricultural nation; and so long as it is not interrupted by wars
or foreign tariff regulations; under such circumstances foreign
commerce has a powerful effect on the increase of rents and on the
exchangeable value of land。 But as soon as any one of these
conditions fails or ceases to operate; foreign commerce may become
the cause of national stagnation; nay frequently of considerable
and long…continued retrogression。
The fickleness of foreign demand has the most baneful effect of
all in this respect; if in consequence of wars; failure of crops;
diminution of importation from other parts; or owing to any other
circumstances and occurrences; the manufacturing nation requires
larger quantities especially of the necessaries of life or raw
materials; or of the special staple articles referred to; and then
if this demand again to a great extent ceases; in consequence of
the restoration of peace; of rich harvests; of larger importation
from other countries; or in consequence of political measures。 If
the demand lasts merely for a short time; some benefit may result
from it to the agricultural nation; but if it last for years or a
series of years then all the circumstances of the agricultural
nation; the scale of expenditure of all private establishments;
will have become regulated by it。 The producer becomes accustomed
to a certain scale of consumption; and certain enjoyments; which
under other circumstances he would have regarded as luxuries;
become necessaries to him。 Relying on the increased yield and value
of his landed property; he undertakes improvements in cultivation;
in buildings; and makes purchases which otherwise he would never
have done。 Purchases and sales; contracts of letting land; loans;
are concluded according to the scale of increased rents and values。
The State itself does not hesitate to increase its expenses in
accordance with the increased prosperity of private persons。 But if
this demand afterwards suddenly ceases; disproportion between
production and consumption follows; disproportion between the
decreased values of land and the money encumbrances upon it which
continue undiminished in amount; disproportion between the money
rent payable under the leases; and the money produce of the land
which has been taken on lease; disproportion between national
income and national expenditure; and in consequence of these
disproportions; bankruptcy; embarrassment; discouragement;
retrogression in the economical as well as in the mental and
political development of the nation。 Agricultural prosperity would
under these circumstances act like the stimulant of opium or strong
drink; stimulating merely for a moment; but weakening for a whole
lifetime。 It would be like Franklin's flash of lightning; which for
a moment displayed the objects in a shining light; but only to
throw them back into deeper darkness。
A period of temporary and passing prosperity in agriculture is
a far greater misfortune than uniform and lasting poverty。 If
prosperity is to bring real benefit to individuals and nations; it
must be continuous。 It; however; becomes continuous only in case it
increases gradually; and in case the nation possesses guarantees
for this increase and for its duration。 A lower value of land is
incomparably better than fluctuations in its value; it is only a
gradual but steady increase in that value that affords to the
nation lasting prosperity。 And only by the possession of a
manufacturing power of their own; can well…developed nations
possess any guarantee for the steady and permanent increase of that
value。
To how very small an extent clear ideas prevail as to the
effect of a home manufacturing power on the rent and value of land
in comparison with the effect which foreign trade has on them; is
shown most plainly by the circumstance that the proprietors of
vineyards in France still always believe that they are injuriously
affected by the French system of protection; and demand the
greatest possible freedom of commerce with England in hopes of
thereby increasing their rents。
Dr Bowring; in his report of the commercial relations existing
between England and France; the fundamental tendency of which is to
show the benefit to France which a larger importation of English
fabrics and a consequently increasing exportation of French wines
would occasion; has adduced facts from which the most striking
proof against his own argument can be brought。 Dr Bowring quotes
the importation of French wines into the Netherlands (2;515;193
gallons; 1829) against the annual importation into England (431;509
gallons) to prove how greatly the sale of French wines in England
could be increased by freer commercial interchange between the two
countries。
Now supposing (although it is more than improbable that the
sale of French wines in England would not find obstacles in the
predilection existing there for spirituous liquors; for strong
beer; and for the strong and cheap wines of Portugal; Spain;
Sicily; Teneriffe; Madeira; and the Cape) supposing that England
really was to extend her consumption of French wines to the same
proportion as that of the Netherlands; she would certainly
(calculating according to her population) be able to increase her
consumption to five or six million gallons (i。e。 to from ten to
fifteen fold her present amount); and from a superficial point of
view this certainly appears to promise great advantage to France;
and to the French vineyard proprietors。
If; however; we investigate this matter to the bottom; we
obtain another result。 By as much freedom of trade as is possible
we will not say complete freedom of trade; although the latter
would have to be accepted according to the principle enunciated;
and to Bowring's arguments it can scarcely be doubted that the
English would draw to themselves a large part of the French market
for manufactured goods (especially as regards the manufactures of
woollens; cotton; linen; iron; and pottery)。 On the most moderate
estimate we must assume; that in consequence of this decreased
French manufacturing production one million fewer inhabitants would
live in the French towns; and that one million fewer persons would
be employed in agriculture for the purpose of supplying the
citizens of those towns with raw material and necessaries of life。