Modern Schools have unjustly reproached this system with recognizing no other wealth than the precious metals, whilst these are merely articles of commerce in common with others; and with holding the doctrine of selling to other countries as much as possible and of purchasing from other countries as little as possible.

The first reproach cannot be maintained against the administration of Colbert; nor can it be urged that England, since the time of George I., has placed too high an estimate upon the policy of importing the precious metals. To encourage manufactures, shipping, and foreign commerce, such were the objects of their commercial policy, a policy not without its defects, but which, on the whole, produced important results. We have seen that since the treaty of Methuen, England annually exported to the East Indies large quantities of the precious metals without its being regarded as a public evil.

When the ministers of George I. prohibited in 1721 the importation of cotton fabrics and silk goods from India, they did not say that the policy of a nation consisted in selling to foreigners as much as possible and in purchasing from them as little as possible; this absurdity was added to the industrial system by a later School. They merely declared that a nation could arrive at power and wealth only by exporting its manufactured products and importing raw materials and food. England has hitherto steadily pursued this line of policy, and by it she has attained her present power and wealth; it is the only safe policy for a country of ancient civilization and of well-advanced agriculture.*

* Whatever the errors and absurdities of the mercantile system, as practised and developed by the statesmen of England during the past two centuries, they bear no comparison with the errors and absurdities which the future historian of political economy will find in the theory now in vogue, as developed by authors and professors of political economy. Both these systems exaggerate the importance of commerce, and make it a chief agent in the production of wealth. They forget that commerce is a mere handmaid of industry, the agent for the distribution of the products of industry. The mercantile system has this advantage over the modern School, that it employed commercial restrictions as a mode of protecting

CHAPTER III.

THE SCHOOL OF THE PHYSIOCRATS; OR THE AGRICULTURAL SYSTEM.

If the wise efforts of Colbert had not been foiled, if the revocation of the Edict of Nantes, the pride of Louis XIV. and his passion for glory, if the debauchery and dissipations of his successor had not destroyed the germs planted by Colbert, and if a class of rich manufacturers and rich merchants had been. formed, if a fortunate concurrence of circumstances had placed the property of the clergy in the hands of the laity, and if an energetic Third Estate, with its appropriate chamber of legislation, had been created under the influence of which the feudal aristocracy might have been reformed, the physiocratic system had probably never seen the light. It is obvious that this system was conceived and had its birth in reference to the situation of France at the time when it appeared, and that it was calculated only for that state of things.

The greatest part of the soil of France was at that time in the hands of the clergy and nobility. The peasants who cultivated it languished in servitude and personal subjection, victims of superstition, ignorance, idleness, and misery. Those who possessed the instruments of production were wholly ad

and stimulating industry, whilst the latter asks no favor for man or for industry, it simply demands free trade, and expects all other blessings to flow from the operations of merchants unrestrained in their trade, free to do whatever the spirit of gain may dictate. If the old system has been dubbed the mercantile system, the other should be named the commercial system, as being, in fact, far more intensely commercial than the former. It places the entire interests of industry, and of course the entire material interests of men, in the hands of merchants.

We trust the time is not far remote when the era of the industrial system will be inaugurated not merely for the production of wealth, but aiming at the promotion of human comfort and human advantage, national wealth and national strength. — [S. C.]

dicted to frivolous pursuits, and had neither intelligence, nor taste for agriculture; those who held the plough were deprived of intellectual and material resources for agricultural improvements. The pressure of feudal institutions upon agriculture was aggravated by the insatiable demands of monarchy upon producers, and those demands were the more difficult to satisfy, as the nobility and clergy were exempt from taxes. In such circumstances, the most important industries, those founded upon the agricultural production of the country, and upon the consumption of the great mass of the population, could not flourish. Those only could prosper which furnished the privileged classes with articles of luxury. Foreign commerce was limited by the inability of the laboring classes to consume large quantities of tropical commodities, and to pay for them with the surplus of their products; the internal trade was nearly extinguished by provincial custom-houses.

It is very natural in such a state of things that thinkers, reflecting upon the causes of the misery then prevailing, should be convinced that so long as agriculture should labor under such disadvantages; so long as the proprietors of the soil and of capital should be without interest in it; so long as peasants should remain in subjection to superstition, idleness, and ignorance; so long as taxes should not be diminished nor justly imposed, internal custom-houses must be continued, foreign commerce could not flourish, and the country could not prosper.

But these philosophers were physicians of the monarch, court protegés, and intimate friends of the nobility and clergy; they did not wish to make open war upon absolute power any more than upon the clergy or the nobility. No better expedient offered than to conceal their plan of reform in the darkness of an abstruse system, just as before and after them ideas of political and religious reform were veiled under the semblance of philosophical systems. After the example of the philosophers of their time and country, who, amidst the perturbations of France, sought some consolation in the vast field of philanthropy and cosmopolitism, as the father of a family, ruined and in despair, betakes himself for relief to the recreations of the

tavern, the physiocrats, infatuated with the cosmopolite principle of free trade, seized upon it as an universal panacea, capable of curing all the evils of humanity. After having gained that idea in a very wide range of thought, they dug deeply, and found in the net income of the soil a basis conformable to their views. Their system was then announced: "The soil alone yields a net income, consequently agriculture is the only source of wealth" a maxim from which important consequences were deduced. At the first step the whole feudal edifice was to fall, and that for the special benefit of the proprietors of land; all taxes were to be imposed upon land as the source of all wealth, and thus the privileges of nobility and clergy were to cease; finally, manufacturers being an unproductive class, paying no taxes, were to have no protection from the State, and, of course, import duties were to be suppressed.

In a word, they had recourse to the most absurd arguments and allegations to establish the great truths they had undertaken to prove.

Of the nation, of its degree of culture and of its condition relatively to other countries, there could be no question, for L'Encyclopédie Méthodique taught that the "welfare of individuals was dependent upon that of the whole human family." There were to be according to this system no nations, thereafter, no wars, no commercial restrictions on the part of foreign countries; history and experience were thus either disregarded or defaced.

This theory had the great advantage of appearing to be opposed to the system of Colbert and the privileges of manufacturers, and of favoring the owners of land, whilst in fact it bore with great severity upon the privileges of proprietors. Poor Colbert was made solely responsible for the sad state of French agriculture, though it was well known that France possessed no very successful department of industry until after the time of Colbert; and though mere common sense teaches that manufactures are the chief means of promoting the prosperity of agriculture and commerce.

The revocation of the Edict of Nantes, the foolish wars of

Louis XIV., and the prodigalities of Louis XV. were entirely forgotten.

Quesnay in his subsequent works reproduced and affected to refute, one by one, the objections which his system had encountered; and it astonishes us to notice how much good sense he puts in the mouths of his adversaries, and with what mystical absurdities he opposes them. These absurdities were nevertheless regarded as wisdom by his contemporaries, because the tendencies of his system responded to the condition of France at that time, as well as to the cosmopolite propensity of the eighteenth century.

CHAPTER IV.

THE SYSTEM OF EXCHANGEABLE VALUE, IMPROPERLY CALLED BY THE SCHOOL THE INDUSTRIAL SYSTEM.*

ADAM SMITH.

THE doctrine of Adam Smith in regard to international commerce, is but a continuation of that of the physiocrats. Like the latter, it disregards nationality; it excludes almost entirely politics and government; it supposes the existence of perpetual peace and universal association; it depreciates the advantages of national manufacturing industry, as well as the means of acquiring it; it demands absolute free trade.

Adam Smith, following the traces of the physiocrats, has committed the capital fault of considering absolute free trade as a dictate of reason, and of neglecting to study profoundly the historical development of that idea.

* It is only in opposition to the absolute agricultural system of the physiocrats that the epithet industrial has been applied to the system of Adam Smith. It is indeed by no means applicable if taken in the sense of manufacturing; for although Smith admits that manufactures are productive, he does not conceal his preference for agriculture and agriculturists.— [H. R.]