CHAPTER XII.

Increase of exports and imports is the index of national prosperity.”

QUIETLY assumed. But is it consistent either with reason or with facts?

We have seen how much more important home production is, than foreign production.* Yet the superseding of home-production by foreign production, is a process which necessarily increases imports, and will generally be followed by some increase, (though it may not be a proportionate one) of exports also. When you buy from abroad to the value of a million sterling a year, shoes which you used to make at home, and annually export to pay for them a million worth of cotton and other manufactures, which your own shoemakers used to consume at home, you increase the annual imports a million sterling, and you increase the annual exports a million sterling also. But your manufacturers of cotton and other goods, get no more than they had before.

Now look at your shoemakers. They have lost an

income of a million sterling a year. Their expenditure to that extent is gone. The home-market to that extent is gone. The annual product of the labour of the country is diminished by a million sterling a year. And there is no compensation for all this. Thus a real blight on industry, a real loss to the nation, may shew itself, not only in increased imports, but in increased exports.

So on the other hand, suppose Ireland, instead of importing flax from abroad, should henceforth grow it at home. That would wonderfully relieve her distress. But flax would no longer figure in her imports, nor the articles that pay for it, in her exports; for they, or their equivalent, would be used by her own people, now idle and starving. Here would be an example of improvement, indicated by a decrease both of exports and imports.

Superficial observers point to your exports and imports, and say, distress is imaginary, because these have both increased. If there are customs' duties, then they further point to the customs, and say truly, your revenue has increased.

But patient and unprejudiced inquirers, who, distrusting alike great names, and popular notions, will sift the matter to the bottom, find out that the true state of things is this. Domestic exchanges are unregistered, and do not figure in any returns. Supersede them by foreign ones, and these foreign ones are immediately doubly registered, published, and paraded, both as ex

ports and imports. When domestic production and mutual domestic exchange flourished, there was no register of their existence. When half the benefit leaves the Englishman, and passes over to the foreigner, there is no register of the death of the deceased domestic industry. But the entry of the superseding foreign industry into the home-market is registered, and the departure of the products of home industry, to be enjoyed and spent by a foreigner, instead of being enjoyed and spent by an Englishman, is registered also. And the new direction which the exchanges have taken, being no longer latent but public, government can lay hold of both exports and imports in their transit, tax them, and then point to an increase of revenue.

So far, therefore, from an increase of exports and imports, necessarily betokening an increase of the annual products of the land and labor of a country, or the improved condition of the people; reason shews us that they may be symptomatic of the very reverse. They certainly, therefore, are no criterion or index of national prosperity.

Now let us see whether FACTS shew them to be such a criterion.

The most prosperous of all nations, for the last fifty years, has been the United States. Yet the exports and imports of the American Union, notwithstanding its vast augmentation in population, are not very much greater than they were in 1805. It is the unregistered

home production, and home trade, doubling, and quadrupling over and over again, that has created this unexampled prosperity.

Next to the United States comes the United Kingdom. The increase of exports and imports with us, though great, has not been at all proportionate to the increase of wealth, and very much less than the increase of the exports and imports of France, whose progress has been much behind ours.

In France, indeed, the increase of exports and imports has been immense, since 1805 and even since 1815. But her progress in wealth and population is infinitely less than that of the United States, or even that of the United Kingdom.

CHAPTER XIII.

"All commodities should be rendered as cheap as possible."

No word is so seductive as the word cheap, yet no word has more meanings. "The world," says Horne Tooke, "is governed by words." A word so alluring and yet so ambiguous, is, of all other words, surest of conquest and dominion. Accordingly it has subjugated the popular opinion of England.

First, cheapness, in its strict and proper sense, means cheapness in money. A thing is in this sense cheap, when it fetches but little money,-but little of the precious metals; when a little money will purchase it. This is the first sense of cheapness.

But secondly, cheapness may also be taken, and by political economists is often taken, to mean a low exchangeable value, that is, a low value, estimating that value in other commodities. In this sense a ton of iron is cheap if it can be purchased with but little corn, but little cloth or silk, but few hats or shoes. This is the second sense of the word cheapness.