Chapter 12: The Opinion that no Expense at Home can be hurtful
The absurd notion that national opulence consists in money has another bad effect.
It is commonly imagined that whatever people spend in their own country cannot reduce public opulence, if you take care of exports and imports.
This is the foundation of Dr. Mandeville’s system that private vices are public benefits.
What is spent at home is all spent among ourselves.
None of it goes out of the country.
But when any man wears and tears and spends his stock, without employing himself in any species of industry, the nation is at the end of the year so much the poorer by it.
If he spends only the interest of the money, he does no harm since the capital still remains and is employed in promoting industry.
But if he spends the capital, the whole is gone.
To illustrate this, suppose that my father at his death, instead of 1,000 pounds in cash, leaves me the necessaries and conveniences of life worth 1,000 pounds, which I would have bought if I received cash instead.
I get a number of idle folks about me and eat, drink, tear, and wear, until the whole is consumed.
By this, I not only reduce myself to want, but certainly rob the public stock of 1,000 pounds, as it is spent and nothing produced for it.
Another illustration of the public hurt from such practices:
Let us suppose that this island was invaded by Tartars, who have little or no idea of industry.
They would find here all commodities for the taking.
They would put on fine clothes, eat, drink, tear, and wear everything they could get.
From the highest degree of opulence, the whole country would be reduced to the lowest misery and brought back to its ancient state.
The 30 million pounds of money would probably remain for some time.
But all the necessaries of life would be consumed.
This shows the absurdity of the opinion that no home consumption can hurt the country's opulence.
Upon this principle:
a war in Germany is thought as a dreadful calamity as it drains the country of money, and
a land war is always thought more prejudicial than a sea war for the same reason.
But upon reflection, we will find that it is the same thing to the nation, how or where its stock be spent.
If I purchase 1,000 pounds’ worth of French wines and drink them all, the country is 2,000 pounds poorer because the goods and money are gone.
If I spend 1,000 pounds worth of goods at home on myself, the country is only deprived of 1,000 pounds, as the money still remains.
But in maintaining an army in a distant war, it is the same thing whether we pay them in goods or money, because the consumption is the same at any rate.
Perhaps it is the better police to pay them in money, as goods are better fitted for the purposes of life at home.
For the same reason, there is no difference between land and sea wars, as commonly imagined.
From the above considerations:
Britain should be made a free port so that there would be no interruptions on foreign trade.
All duties, customs, and excise should be abolished if it were possible to defray government expenses by any other method
Free commerce and liberty of exchange should be allowed with all nations, and for all things.
On the same absurd principles, an apology is made for the public debt.
They say that though we presently owe more than 100 million, we owe it to ourselves, or at least very little of it to foreigners.
It is just the right hand owing the left.
On the whole, it can be little or no disadvantage.
But the interest of this 100 million is paid by industrious people and given to support idle people employed in gathering it.
Thus, industry is taxed to support idleness.
If the debt had not been contracted, the nation would have been much richer by prudence and economy than at present.
Their industry would not be hurt by the oppression of those idle people who live on it.
Instead of the brewer paying taxes which are often improper, the stock might have been lent out to industrious people who would:
have made 6 or 7% by it, and
have given better interest than the government does.
This stock would then have been employed for the country’s welfare.
When there are such heavy taxes to pay, every merchant must carry on less trade.
He must pay his taxes before selling his commodities.
This narrows his stock and hinders his trade from being so extensive as it otherwise would be.
To stop this clamour, Sir Robert Walpole tried to show that the public debt was no inconvenience.
Though I suppose that he saw the contrary himself.