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Show I A WISE VAGARY. H Adam Smith died one hundred and ten years ago. H Ho is still quoted as a profound authority on H political economy. But he made some proposi-H proposi-H lions which experience has demonstrated are not very sound. He lays down the axiom that "the Bj general industry of society can never exceed what H the capital of the society can employ." We believe that is true, but at once, he pro- cceds to declare that "what is prudence in the conduct of every private family can scarcely be folly in that of a great kingdom. If a foreign H county can supply us with a commodity cheaper Hthan we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage." As an abstract proposition that it well enough, and if there was no- money in tho world, if all the dealings between men and nations were through barter the exchange of commodities that would be a snfo rule to follow. But tho trade of nations is conducted on a basis, not of commodities, but of that material which is the measure of the values of commodities, namely, money. In starting out the great thinker ack-nowledges ack-nowledges the full power of capital, and rates labor as part of a nation's capital upon which it draws interest, but he nowhere in his argument favoring free trade seems to consider the advant-ages advant-ages of skilled labor over unskilled labor, or the fact that whon one nation exchanges its raw 'material for a finished product which is tangible to imthe eye and the touch, but it is likewise obliged )Hlo purchase whatevor amount of brain the foreign ,Martisan has, in invisible threads, woven into the fabric. Further, the great reasoner failed utterly Eee' that the inevitable result of exchanging raw products for costly manufactured products has the 'LIrCCt effect of compelling five or twenty men in (P,le county to work for one man in another. That jMl tll slcilletl product of one artisan buys the JBwduct of the labor of from five to twenty un-iB-Wlled laborers in another country. Had the "easoning been a little deeper the great writer JBvoukl havo seen that the exchanges would not Be vn, that naturally there would be a trade bal-jMce bal-jMce in favor of one or tho other; 'that this would Mnevitably bo in favor of the nation selling the ' more costly goods, and that the balance would have to be made good in that material which all nations accept as a basis of trade, namely, money. But in another place tho great writer admits that the volume of money regulates prices, that prices increase and decrease precisely as does tho volume of money in a country. This paying the yearly balance then could have but the effect to reduced the prices in tho land paying it and to increase the prices in the land receiving it. This multiplied vastly faster than ever before, just after the death of Adam Smith, through the application of steam as a working force. Under it the world saw Great Britain, which had the machinery, the ships, the factories, the mines and the harbors close to the factories, in the beginning of the last century, especially after Waterloo, enter into the legitimate business of despoiling the nations through trade, through exchanging ex-changing her manufactured products for the world's raw products. She took about all that Spain had left of the product of the American mines. She left Italy well nigh bankrupt, Turkey and Egypt too poor to make a sign; she kept all her colonies drained of money, even Australia, after the mighty yield of her placer mines in the '50's; she occasionally occasion-ally got a chance at the United States and every time left her treasury empty and her laborers without employment. Still our country is filled with statesmen who go back to the reasoning of Adam Smith, declare that it is faultless and unanswerable, and that the truth of that proposition is so manifest that only fools and knaves attempt to combat it. |