The English capital, which had before carried on but a part of it, was now to carry on the whole.The capital which had before supplied the colonies with but a part of the goods which they wanted from Europe was now all that was employed to supply them with the whole.But it could not supply them with the whole, and the goods with which it did supply them were necessarily sold very dear.The capital which had before bought but a part of the surplus produce of the colonies, was now all that was employed to buy the whole.But it could not buy the whole at anything near the old price, and, therefore, whatever it did buy it necessarily bought very cheap.But in an employment of capital in which the merchant sold very dear and bought very cheap, the profit must have been very great, and much above the ordinary level of profit in other branches of trade.This superiority of profit in the colony trade could not fail to draw from other branches of trade a part of the capital which had before been employed in them.But this revulsion of capital, as it must have gradually increased the competition of capitals in the colony trade, so it must have gradually diminished that competition in all those other branches of trade; as it must have gradually lowered the profits of the one, so it must have gradually raised those of the other, till the profits of all came to a new level, different from and somewhat higher than that at which they had been before.
This double effect of drawing capital from all other trades, and of raising the rate of profit somewhat higher than it otherwise would have been in all trades, was not only produced by this monopoly upon its first establishment, but has continued to be produced by it ever since.
First, this monopoly has been continually drawing capital from all other trades to be employed in that of the colonies.
Though the wealth of Great Britain has increased very much since the establishment of the Act of Navigation, it certainly has not increased in the same proportion as that of the colonies.
But the foreign trade of every country naturally increases in proportion to its wealth, its surplus produce in proportion to its whole produce; and Great Britain having engrossed to herself almost the whole of what may be called the foreign trade of the colonies, and her capital not having increased in the same proportion as the extent of that trade, she could not carry it on without continually withdrawing from other branches of trade some part of the capital which had before been employed in them as well as withholding from them a great deal more which would otherwise have gone to them.Since the establishment of the Act of Navigation, accordingly, the colony trade has been continually increasing, while many other branches of foreign trade, particularly of that to other parts of Europe, have been continually decaying.Our manufactures for foreign sale, instead of being suited, as before the Act of Navigation, to the neighbouring market of Europe, or to the more distant one of the countries which lie round the Mediterranean Sea, have, the greater part of them, been accommodated to the still more distant one of the colonies, to the market in which they have the monopoly rather than to that in which they have many competitors.
The causes of decay in other branches of foreign trade, which, by Sir Matthew Decker and other writers, have been sought for in the excess and improper mode of taxation, in the high price of labour, in the increase of luxury, etc., may all be found in the overgrowth of the colony trade.The mercantile capital of Great Britain, though very great, yet not being infinite, and though greatly increased since the Act of Navigation, yet not being increased in the same proportion as the colony trade, that trade could not possibly be carried on without withdrawing some part of that capital from other branches of trade, nor consequently without some decay of those other branches.
England, it must be observed, was a great trading country, her mercantile capital was very great and likely to become still greater and greater every day, not only before the Act of Navigation had established the monopoly of the colony trade, but before that trade was very considerable.In the Dutch war, during the government of Cromwell, her navy was superior to that of Holland; and in that which broke out in the beginning of the reign of Charles II, it was at last equal, perhaps superior, to the united navies of France and Holland.Its superiority, perhaps, would scarce appear greater in the present times; at least if the Dutch navy was to bear the same proportion to the Dutch commerce now which it did then.But this great naval power could not, in either of those wars, be owing to the Act of Navigation.During the first of them the plan of that act had been but just formed; and though before the breaking out of the second it had been fully enacted by legal authority, yet no part of it could have had time to produce any considerable effect, and least of all that part which established the exclusive trade to the colonies.Both the colonies and their trade were inconsiderable then in comparison of what they are now.The island of Jamaica was an unwholesome desert, little inhabited, and less cultivated.New York and New Jersey were in the possession of the Dutch: the half of St.Christopher's in that of the French.The island of Antigua, the two Carolinas, Pennsylvania, Georgia, and Nova Scotia were not planted.