The monopoly hinders the capital of that country, whatever may at any particular time be the extent of that capital, from maintaining so great a quantity of productive labour as it would otherwise maintain, and from affording so great a revenue to the industrious inhabitants as it would otherwise afford.But as capital can be increased only by savings from revenue, the monopoly, by hindering it from affording so great a revenue as it would otherwise afford, necessarily hinders it from increasing so fast as it would otherwise increase, and consequently from maintaining a still greater quantity of productive labour, and affording a still greater revenue to the industrious inhabitants of that country.One great original source of revenue, therefore, the wages of labour, the monopoly must necessarily have rendered at all times less abundant than it otherwise would have been.
By raising the rate of mercantile profit, the monopoly discourages the improvement of land.The profit of improvement depends upon the difference between what the land actually produces, and what, by the application of a certain capital, it can be made to produce.If this difference affords a greater profit than what can be drawn from an equal capital in any mercantile employment, the improvement of land will draw capital from all mercantile employments.If the profit is less, mercantile employments will draw capital from the improvement of land.Whatever, therefore, raises the rate of mercantile profit, either lessens the superiority or increases the inferiority of the profit of improvement; and in the one case hinders capital from going to improvement, and in the other draws capital from it.But by discouraging improvement, the monopoly necessarily retards the natural increase of another great original source of revenue, the rent of land.By raising the rate of profit, too, the monopoly necessarily keeps up the market rate of interest higher than it otherwise would be.But the price of land in proportion to the rent which it affords, the number of years purchase which is commonly paid for it, necessarily falls as the rate of interest rises, and rises as the rate of interest falls.
The monopoly, therefore, hurts the interest of the landlord two different ways, by retarding the natural increase, first, of his rent, and secondly, of the price which he would get for his land in proportion to the rent which it affords.
The monopoly indeed raises the rate of mercantile profit, and thereby augments somewhat the gain of our merchants.But as it obstructs the natural increase of capital, it tends rather to diminish than to increase the sum total of the revenue which the inhabitants of the country derive from the profits of stock; a small profit upon a great capital generally affording a greater revenue than a great profit upon a small one.The monopoly raises the rate of profit, but it hinders the sum of profit from rising so high as it otherwise would do.
All the original sources of revenue, the wages of labour, the rent of land, and the profits of stock, the monopoly renders much less abundant than they otherwise would be.To promote the little interest of one little order of men in one country, it hurts the interest of all other orders of men in that country, and of all men in all other countries.
It is solely by raising the ordinary rate of profit that the monopoly either has proved or could prove advantageous to any one particular order of men.But besides all the bad effects to the country in general, which have already been mentioned as necessarily resulting from a high rate of profit, there is one more fatal, perhaps, than all these put together, but which, if we may judge from experience, is inseparably connected with it.
The high rate of profit seems everywhere to destroy that parsimony which in other circumstances is natural to the character of the merchant.When profits are high that sober virtue seems to be superfluous and expensive luxury to suit better the affluence of his situation.But the owners of the great mercantile capitals are necessarily the leaders and conductors of the whole industry of every nation, and their example has a much greater influence upon the manners of the whole industrious part of it than that of any other order of men.
If his employer is attentive and parsimonious, the workman is very likely to be so too; but if the master is dissolute and disorderly, the servant who shapes his work according to the pattern which his master prescribes to him will shape his life too according to the example which he sets him.Accumulation is thus prevented in the hands of all those who are naturally the most disposed to accumulate, and the funds destined for the maintenance of productive labour receive no augmentation from the revenue of those who ought naturally to augment them the most.