The Evolution of Modern Capitalism: A Study of Machine Production. J. A. Hobson
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The selfish and short-sighted policy of this protective system found its culminating point in the treatment of Ireland and the American plantations. The former was forbidden all manufacture which might either directly or indirectly compete with English industry, and was compelled to deal exclusively with England; the American colonies were forbidden to weave cloth, to make hats, or to forge a bolt, and were compelled to take all the manufactured goods required for their consumption from England.
The freedom and expansion of international commerce was further hampered by the policy of assigning monopolies of colonial and foreign trade to close Chartered Companies. This policy, however, defensible as an encouragement of early mercantile adventure, was carried far beyond these legitimate limits in the eighteenth century. In England the East Indian was the most powerful and successful of these companies, but the assignment of the trade with Turkey, Russia, and other countries to chartered companies was a distinct hindrance to the development of foreign trade.
Our foreign trade at that period might indeed be classed or graded in accordance with the degree of encouragement or discouragement offered by the State.
Imports would fall into four classes.
1. Imports forbidden either (a) by legislative prohibition, or (b) by prohibitive taxation.
2. Imports admitted but taxed.
3. Free imports.
4. Imports encouraged by bounties.
Exports might be graded in similar fashion.
1. Prohibited exports (e.g., sheep and wool, raw hides, tanned leather, woollen yarn, textile implements,[12] certain forms of skilled labour).
2. Exports upon which duties are levied (e.g., coals[13]).
3. Free exports.
4. Exports encouraged by bounties, or by drawbacks.
The unnatural and injurious character of most of this legislation is best proved by the notable inability to effectively enforce its application. The chartered companies were continually complaining of the infringement of their monopolies by private adventurers, and more than one of them failed through inability to crush out this illegal competition. A striking condemnation of our policy towards France consisted in the growth of an enormous illicit trade which, in spite of the difficulties which beset it, made a considerable part of our aggregate foreign trade during the whole of the century. The lack of any clear perception of the mutuality of advantage in foreign and colonial trade was the root fallacy which underlay these restrictions. Professor Cunningham rightly says of the colonial policy of England, that it "implied that each distinct member should strengthen the head, and not at all that these members should mutually strengthen each other."[14]
So, as we tried to get the better of our colonies, still more rigorously did we apply the same methods to foreign countries, regarding each gain which accrued to us as an advantage which would have wholly gone to the foreigner if we had not by firmness and enterprise secured it for ourselves.
The slight extent of foreign intercourse was, however, partly due to causes which are to be regarded as genuinely economic. The life and experience of the great mass of the population of all countries was extremely restricted; they were a scattered and rural folk whose wants and tastes were simple, few, home-bred, and customary. The customary standard of consumption, slowly built up in conformity with local production, gave little encouragement to foreign trade. Moreover, to meet the new tastes and the more varied consumption which gradually found its way over this country, it was in conformity with the economic theory and practice of the day to prefer the establishment of new home industries, equipped if necessary with imported foreign labour, to the importation of the products of such labour from abroad. So far as England, in particular, is concerned, the attitude was favoured by the political and religious oppression of the French government which supplied England in the earlier eighteenth century with a constant flow of skilled artisan labour. Many English manufacturers profited by this flow. Our textile industries in silk, wool, and linen, calico-printing, glass, paper, and pottery are special beholden to the new arts thus introduced.
Among the economic barriers must be reckoned the slight development of international credit, and of the machinery of exchange.
§ 4. These barriers, natural, political, social, economic, against free international intercourse, throw important light upon the general structure of world-industry in the eighteenth century.
In this application they determined and strictly limited not only the quantity but the nature of the international trade. The export trade of England, for example, in 1730 was practically confined to woollen goods and other textile materials, a small quantity of leather, iron, lead, silver, and gold plate, and a certain number of re-exported foreign products, such as tobacco and Indian calicoes. The import trade consisted of wine and spirits, foreign foods, such as rice, sugar, coffee, oil, furs, and some quantity of foreign wool, hemp, silk, and linen-yarn, as material for our specially favoured manufactures. Having regard to the proportion of the several commodities, it would not be much exaggeration to summarise our foreign trade by saying that we sent out woollen goods and received foreign foods. These formed the great bulk of our foreign trade.[15] Excepting the woollen goods and a small trade in metals, leather is the only manufactured article which figured to any appreciable extent in our export of 1730. At that time it is clear that in the main English manufacture, as well as English agriculture, was for the supply of English wants. The same was true of other industrial countries. Holland and France, who divided with England the shipping supremacy, had a foreign trade which, though then deemed considerable, bore no greater proportion to the total industry of these countries than in the case of England. Germany, Italy, Russia, Spain, and even Portugal were almost wholly self-sustained.
Regarding, then, the known and related world of that time in the light of an industrial organism, we must consider it as one in which the processes of integration and of differentiation of parts has advanced but a little way, consisting as yet of a number of homogeneous and incoherent national cells.
This homogeneity is of course qualified by differences in production and consumption due to climate, natural products, national character and institutions, and the development of industrial arts in the several nations.
§ 5. This consideration of the approximate homogeneity of the national units of world-industry gives a higher scientific value to the analysis of a single typical industrial nation such as England, than would be the case in modern times, when the work of differentiation of industrial functions among the several nations has advanced much further.
Taking, therefore, the national industry of England as the special subject of analysis, we may seek to obtain a clear conception of the size, structure, and connections, of the several branches of industry, paying special regard to the manufactures upon which the new industrial forces were chiefly to operate.
It is not possible to form a very accurate estimate of the relative importance of the different industries as measured either by the money value of their products, or by the amount of labour engaged in producing them. Eighteenth century statistics, as we saw, furnished no close estimate of the total income of the nation or of the value of home industries. Since no direct census of the English population was taken before 1805, the numbers were never exactly known, and eighteenth century economists spent much time and ingenuity in trying to ascertain the growth of population by calculations based upon the number of occupied houses, or by generalising from slender and unreliable local statistics, without in the end arriving at any close agreement. Still less reliable will be the estimates of the relative size and importance of the different industries.
Two such attempts, however, one slightly prior to the special period we are investigating,