Five different events, unforeseen and unthought of, have very fortunately concurred to hinder Great Britain from feeling, so sensibly as it was generally expected she would, the total exclusion which has now taken place for more than a year (from the first of December, 1774) from a very important branch of the colony trade, that of the twelve associated provinces of North America.First, those colonies, in preparing themselves for their non-importation agreement, drained Great Britain completely of all the commodities which were fit for their market; secondly, the extraordinary demand of the Spanish Flota has, this year, drained Germany and the North of many commodities, linen in particular, which used to come into competition, even in the British market, with the manufactures of Great Britain; thirdly, the peace between Russia and Turkey has occasioned an extraordinary demand from the Turkey market, which, during the distress of the country, and while a Russian fleet was cruising in the Archipelago, had been very poorly supplied; fourthly, the demand of the North of Europe for the manufactures of Great Britain has been increasing from year to year for some time past;and fifthly, the late partition and consequential pacification of Poland, by opening the market of that great country, have this year added an extraordinary demand from thence to the increasing demand of the North.These events are all, except the fourth, in their nature transitory and accidental, and the exclusion from so important a branch of the colony trade, if unfortunately it should continue much longer, may still occasion some degree of distress.This distress, however, as it will come on gradually, will be felt much less severely than if it had come on all at once; and, in the meantime, the industry and capital of the country may find a new employment and direction, so as to prevent this distress from ever rising to any considerable height.
The monopoly of the colony trade, therefore, so far as it has turned towards that trade a greater proportion of the capital of Great Britain than what would otherwise have gone to it, has in all cases turned it, from a foreign trade of consumption with a neighbouring into one with a more distant country; in many cases, from a direct foreign trade of consumption into a round-about one; and in some cases, from all foreign trade of consumption into a carrying trade.It has in all cases, therefore, turned it from a direction in which it would have maintained a greater quantity of productive labour into one in which it can maintain a much smaller quantity.By suiting, besides, to one particular market only so great a part of the industry and commerce of Great Britain, it has rendered the whole state of that industry and commerce more precarious and less secure than if their produce had been accommodated to a greater variety of markets.
We must carefully distinguish between the effects of the colony trade and those of the monopoly of that trade.The former are always and necessarily beneficial; the latter always and necessarily hurtful.But the former are so beneficial that the colony trade, though subject to a monopoly, and notwithstanding the hurtful effects of that monopoly, is still upon the whole beneficial, and greatly beneficial; though a good deal less so than it otherwise would be.
The effect of the colony trade in its natural and free state is to open a great, though distant, market for such parts of the produce of British industry as may exceed the demand of the markets nearer home, of those of Europe, and of the countries which lie round the Mediterranean Sea.In its natural and free state, the colony trade, without drawing from those markets any part of the produce which had ever been sent to them, encourages Great Britain to increase the surplus continually by continually presenting new equivalents to be exchanged for it.In its natural and free state, the colony trade tends to increase the quantity of productive labour in Great Britain, but without altering in any respect the direction of that which had been employed there before.In the natural and free state of the colony trade, the competition of all other nations would hinder the rate of profit from rising above the common level either in the new market or in the new employment.The new market, without drawing anything from the old one, would create, if one may say so, a new produce for its own supply; and that new produce would constitute a new capital for carrying on the new employment, which in the same manner would draw nothing from the old one.
The monopoly of the colony trade, on the contrary, by excluding the competition of other nations, and thereby raising the rate of profit both in the new market and in the new employment, draws produce from the old market and capital from the old employment.To augment our share of the colony trade beyond what it otherwise would be is the avowed purpose of the monopoly.If our share of that trade were to be no greater with than it would have been without the monopoly, there could have been no reason for establishing the monopoly.But whatever forces into a branch of trade of which the returns are slower and more distant than those of the greater part of other trades, a greater proportion of the capital of any country than what of its own accord would go to that branch, necessarily renders the whole quantity of productive labour annually maintained there, the whole annual produce of the land and labour of that country, less than they otherwise would be.It keeps down the revenue of the inhabitants of that country below what it would naturally rise to, and thereby diminishes their power of accumulation.It not only hinders, at all times, their capital from maintaining so great a quantity of productive labour as it would otherwise maintain, but it hinders it from increasing so fast as it would otherwise increase, and consequently from maintaining a still greater quantity of productive labour.