William Cunningham

“ National rivalries and national power are but mean things after all; but till the study of wealth was dissociated from these lower aims, it was hardly possible to investigate empirically how we could make the most of the resources of the world as a whole, and how material goods might be best applied for the service of man. It is owing to Adam Smith and the manner in which he severed economics from politics that we can raise and dismiss, even if we cannot solve, such problems to-day. ”

“ Most of the countries of the world are convinced that the wisest economy is to attend to the husbanding of their resources of every kind, and to direct their policy not merely with a view to consumption in the present, but rather with regard to the possibilities of increased production in the future.
This deliberate rejection of the doctrine of free trade between nations, both in its political and economic aspects, has not interfered, however, with the steady progress of free commercial intercourse within the boundaries of a single though composite political community. ”

“ National prosperity and relative superiority were vague and difiicult notions, but when the whole discussion was made to turn on wealth, the treatment seemed to be more concrete and definite, and it took hold upon the public mind.
There were of course some economists who never really adapted their habits of thought in accordance with Adam Smith's principles. Playfair speaks of him with respect, but he continued to draw his beautiful diagrams of the Balance of Trade, as if he still thought it furnished a criterion of something. ”

“ The effect of drawing any industry into the circle of distant trade with reference either to the materials or to the vent for the product, was to render capitalist intervention almost inevitable; when the capitalist system is thoroughly adopted, the employer owns the materials and also undertakes to act as an intermediary in the disposal of finished goods. ”

“ As cosmopolitan, free-trade doctrine is apt to be indifferent to national tradition and aspiration. In so far indeed as patriotism is a mere aesthetic sentiment, it may be tolerated, but in so far as it implies a genuine wish and intention to preserve and defend the national habits and character to the exclusion of alien elements, the cosmopolitan mind will condemn it as narrow and mischievous. ”

“ Men were expected to carry on their trade in a public-spirited fashion and not to regard their private lucre; but in the eighteenth century the force of self-interest was recognized as a power that was rather indifferent than hostile to the public good, so that it seemed as if a very moderate amount of direction might be brought to bear, and thus induce men who were guided by self-interest alone to carry on their business in a manner that accorded with public prosperity. ”

“ While nearly all moneyed men were under suspicion of occasional unfairness, the medieval conscience clearly recognised that the capitalist was fully entitled to some gain, so long as he transported commodities without trying to bargain himself out of risks. Capital engaged in active commerce was employed in producing goods at the places where they were most wanted; and it was being applied to facilitate the production of wealth. ”

“ The doctrine of free trade maintains that in order to secure the greatest possible mass of goods in the world as a whole, and the greatest possibility of immediate comfort for the consumer, it is expedient that there should be no restriction on the exchange of goods and services either between individuals or communities. The controversies in regard to this doctrine have not turned on its certainty as a hypothetical principle, but on the legitimacy of the arguments based upon it. It certainly supplies a principle in the light of which all proposed trade regulations should be criticized. ”

“ So far as 'political economy considered as a branch of a science of a statesman' was concerned, it was now possible to regard material wealth as a main object in view; and if this was the main object in view, then the systems of policy which had preferred one kind of wealth to another, or one kind of trade to another, on political grounds, had simply lost their raison d'être. The system of natural liberty was the necessary outcome of the new turn which Adam Smith had given to the old problem. ”

“ Commercial intercourse has increased enormously; the age of invention has brought about a veritable revolution in the processes of manufacture; and agriculture has been indirectly, but deeply, affected by these influences. Despite the growth, however, in the volume of trade, in the mass of wealth, and in the numbers of the population, similar principles of economic policy and commercial enterprise have been in vogue all this time. ”

“ It seems possible that the modern unrest in India, and the discontent in Ireland, may be connected with the economic conditions in these countries, on which free trade has been imposed without their consent. So far the population which subsists on the cheaper food, and has the lower standard of life, has been the sufferer; but the mischief might operate in another fashion. The self-governing colonies at all events feel that competition in the same market between races with different standards of comfort has infinite possibilities of mischief. ”

“ The growth of the National Debt and the impossibility of finding new sources of taxation alarmed more than one statesman, and there were not a few economists who took a pessimistic view of the condition of the country. Their writings, however, are of far more interest from the light they throw on passing events, and from the statistics they contain, than from any very remarkable advance in economic doctrine. They all start from the old standpoint. ”

“ Each is determined to be the master in his own house, and each has rejected free trade because of the cosmopolitanism which it involves.
Economically, free trade lays stress on consumption as the chief criterion of prosperity. It is, of course, true that goods are produced with the object of being consumed, and it is plausible to insist on taking this test; but it is also true that consumption and production are mutually interdependent, and that in some ways production is the more important of the two. Consumption looks to the present, and the disposal of actual goods ”

“ No part of Europe had been more ruthlessly devastated than France, during the fourteenth century and the earlier part of the fifteenth; but a turning-point was reached at last, and the reviving prosperity of the country shaped itself upon new lines. Control of industry and commerce was now exercised by national rather than civic authority, while the financial and commercial business of the realm was no longer left to Italians and other strangers, but was organised by native merchants of enterprise and resource. ”

“ Whether consciously or unconsciously, he gave the turn to economic problems which has brought about the development of modern economic theory.
The progress that has been made in this direction amply justifies the line which Adam Smith took in isolating the study of material wealth; but however complete our analysis may be, it is well to remember that we have merely analysed a group of phenomena which we have first isolated as a matter of convenience. We cannot forecast at all unless we go outside economics and take a wider view of human life. ”

“ Facilities for exchange were necessary at every step, before the capitalist administration of industry and agriculture could be introduced; there had been no opportunity for such an introduction, so long as society was organised on a basis of natural economy. In any department of life where payments are made in kind or in service rather than in money, no room remains for the operation of the capitalist. ”

“ The capitalist employer had superseded the landowner as the mainstay of the resources and revenue of the realm, and insisted that the prosperity of manufactures was the primary interest of the community as a whole. The expectation, that a thoroughgoing policy of free trade would not only favour an increase of employment, but also the cheapening of food, could only have been roused in a country which was obliged to import a considerable amount of corn. ”

“ It was not till the progress of the industrial revolution had demonstrated the frightful mischief of a partial adoption of natural liberty—that is to say, the adoption of this principle in regard to one factor of production, while it is wholly disregarded in relation to another—that the conditions of society were rendered more completely accordant to those which Adam Smith's principle assumes. ”