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His description of the special case of the banker who prints money is a tell-tale sign of what is going on today with the US banking system. Still, I can't image that Mills would have suspected the economic systems would have evolved to what they are today. Mill's discussions on economic and politics, highlighting such topics as production and on being productive, distribution of goods, demand, supply, value of goods, influence of governments Christy Zhou rated it really liked it Oct 20, Ismi rated it liked it Aug 15, Ron Moss rated it it was amazing May 25, Vii rated it liked it Jun 25, Rebekah Kensington rated it it was ok Oct 07, Philip Freidhoff rated it liked it Oct 27, Brett rated it liked it Jul 19, Rebecca rated it liked it May 08, Kevin Nguyen rated it it was amazing Aug 19, Dominick Boyle rated it it was amazing Feb 19, Nickole Schlapkohl rated it it was ok Nov 20, Islamconstitution rated it it was amazing May 23, Nicholas Kinberg rated it really liked it Nov 17, Gerry rated it it was amazing Sep 11, Mark Dandurand rated it it was amazing Feb 27, Rebekah Kensington rated it it was ok Apr 24, Nicole Luck rated it it was ok Aug 17, CAD rated it liked it Jan 28, Josh Kraushaar rated it it was amazing Dec 19, Michelle Monagin rated it it was amazing Mar 02, David Hoyt rated it it was amazing Feb 08, Rebecca McCaffrey rated it it was ok Jun 20, Susa rated it it was ok Apr 17, David added it Nov 25, M Pereira marked it as to-read Apr 09, Laura marked it as to-read Nov 19, Trevor added it Sep 04, Brian Tremaine marked it as to-read Nov 05, Ian Donnelly marked it as to-read Jan 25, Bonnie Wunderlich marked it as to-read May 13, Yuki marked it as to-read Jul 15, Catherine marked it as to-read Aug 26, Mario marked it as to-read Nov 15, This situation presents the editor with an extremely difficult choice.
The solution is, then, to gather here those writings in which the economic interest is paramount, and to place those in which it is secondary in volumes centring on, for example, political science and contemporary events. Like other nineteenth-century authors, Mill thought no subject distinction necessary in collected volumes, and included in his Dissertations and Discussions essays on aphorisms and on Austin, on Coleridge and on currency.
In these, the first volumes of the edition to be made up of short monographs, essays, reviews, and similar pieces, this policy of grouping by subject has guided us, and it is followed in each of the volumes of collected pieces throughout the edition. Letters, speeches, journals, and newspaper writings, however, are gathered by provenance and kind. Mill himself expressed firm opinions on the republication of periodical writings. The remainder were either of too little value at any time, or what value they might have was too exclusively temporary, or the thoughts they contained were inextricably mixed up with comments, now totally uninteresting, on passing events, or on some book not generally known; or lastly, any utility they may have possessed has since been superseded by other and more mature writings of the author.
Whatever the justice of his comments at that time, they are not now valid. Whether the subject of study is Mill himself, nineteenth-century thought, or nineteenth-century history, the items in this volume are of interest and value. Individually, it may be, some of them are slight, but in the context of the volume and the edition each gives, at the very least, detail that otherwise would be lacking. It is unlikely that economists will question seriously the inclusion of any of the essays in these volumes; it is hardly to be expected, however, that the principles of exclusion will please everyone.
These are reserved for a volume containing all his newspaper writings: first, because that volume, read in conjunction with the Letters and the Autobiography, will give a clearer picture of the range of interests throughout his life than is otherwise possible; second, because, as intimated above, it is impossible to select among them without inconveniencing those wishing to study other aspects of his thought. For example, it would certainly be reasonable if space allowed to include here his leading articles on Irish problems in the late s; to do so, however, would be to reject the more reasonable policy of joining them with his other writings on Ireland—in this imperfect world, where all goes by approximation, it has seemed most reasonable to put them with his other writings for the ephemeral press.
Other exclusions may be illustrated by examples. The major weight of the article, however, bears upon political rather than economic questions, and so it is gathered into the volume of Essays on Politics and Society. These are hard examples—both essays were seriously considered for inclusion here—and it is hoped that the reader will be able to see similar reasons for other exclusions.
XII Aug. One other unfortunate gap should be mentioned: the manuscript of the work submitted by Mill in to the Society for the Diffusion of Useful Knowledge has disappeared without record. See Edition: current; Page: [ xlvi ] Francis E. Mineka, ed. The reasons for grouping essays by subject within the edition apply with less force to arrangements within individual volumes. Chronological ordering, which allows a clear view of development of interest and idea, and fixes periods, appears best. Most of the items in these volumes were not republished by Mill: he included three of them in the first edition of Dissertations and Discussions; 2 and five were republished in by his step-daughter, Helen Taylor, in the fourth volume of Dissertations and Discussions we do not know if Mill himself had a hand in the selection.
The volume of Essays on Some Unsettled Questions of Political Economy was also republished by Helen Taylor, in , without significant alterations; the fifth essay in this work is a revised version of an article in the Westminster Review. In establishing our text, we have ignored later republications, as they have no textual authority. Most of the major articles appeared first in the great reviews, nine in the Westminster including the one republished in the Essays on Some Unsettled Questions , five in the Fortnightly, and one in the Edinburgh. In Appendices see p.
Specific details about the texts will be found in headnotes to each item. These are not, of course, designed as essays on the text. Five chapters on Socialism. Earlier versions, and those in which he may have had a hand though published Edition: current; Page: [ xlviii ] after his death , are collated with the basic text, and the resulting substantive variants are given as footnotes. The variants derive mainly from the republication of essays in Dissertations and Discussions; other sources are corrections by Mill in his own copies, and the two manuscript fragments mentioned above.
It is likely that the essays in the first two volumes of Dissertations and Discussions were revised at the same time see xlvin above , and since Mill in the Preface to the first volume explains that he made no attempt to bring the essays into full coherence with his views in , it is not surprising that there are very few major alterations. Mill did little rewriting for the second edition of Dissertations and Discussions; only fourteen of the variants, minor in nature, derive from that edition.
The changes are best studied in their context, but a few general comments may be made. They are almost all corrections of misprints and misreadings found in the periodical versions; the two manuscript variants at pp.
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One interesting speculation: in a passage on p. Apart from the variants reflecting the changes made in quoting the first of the Essays on Some Unsetled Questions in his Principles see headnote on p. Method of Indicating Variants. All the substantive variants are governed by the principles enunciated below, except for a few special cases, in which self-explanatory footnotes are given in square brackets and italics. These are of three kinds: addition of a word or words, substitution of a word or words, deletion of a word or words.
Addition of a word or words: see g-g. Information explaining the use of these abbreviations is given in each headnote, as required. Any added editorial information is enclosed in square brackets and italicized. Substitution of a word or words: see a-a. Here the different readings, in chronological order, are separated by a square bracket.
Deletion of a word or words: see i.
Essays on some unsettled Questions of Political Economy by John Stuart Mill
To avoid four levels of text on the page, a different method has been used to indicate the few changes in the notes supplied by Mill. Dates of footnotes. Here the practice is to place immediately after the footnote indicator, in square brackets, the figures indicating the edition in which the footnote first appeared, if it was not in the first version. If no such figure appears, the note is in all versions. Punctuation and spelling. In general, changes between versions in punctuation and spelling are ignored.
For the sake of purists, it might be noted that, given the obvious intrusions by the printer in other writings of Mill where we have the manuscript, and given the range of different periodical and other sources from which the items below are taken, there is insufficient reason to adopt accidentals from the earliest version, in Edition: current; Page: [ lii ] contravention of our normal acceptance of the latest version as copy-text. Those changes which occur as part of a substantive variant are included in that variant, and the superscript letters in the text are placed exactly with reference to punctuation.
As alterations in terminal punctuation indicate at least a slight change in emphasis, these are included, as are changes between italic and roman type. Other textual liberties. The practice of heading articles in the reviews simply by an article number and the titles of the books under consideration makes it necessary to affix new titles in many cases. Similarly in other cases the original is inadequately titled, for example in the evidence before parliamentary committees. The dates added to the titles are those of first publication.
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The original footnotes to the titles, giving bibliographic information, have been deleted, and the information is given in the headnotes. Typographical errors have been silently corrected in the text; the note below lists them. Also, in accordance with modern practice, all long quotations have been reduced in size, and the quotation marks removed. These pieces are taken out of the normal chronological order and appended for special reasons. Appendix C is the examination paper for Girton mentioned above. For easy reference, the questions asked by members of parliamentary committees are treated as quotations under individual names.
Not counting these or general references to Statutes and Parliamentary Papers, Mill refers to over publications in these papers, seventeen of which in whole or part or ostensibly he reviews, and from sixty of which he quotes. As would be expected, his most frequent citations are of Adam Smith and Ricardo, followed by those of McCulloch especially in the early essays , Edition: current; Page: [ lv ] Tooke, and Malthus. There are fewer references to James Mill than one might expect, and only one to Senior. The collation with sources demonstrates further the trouble printers had with his hand, and displays his facility in translation from the French.
The suppressions in quotations are of minor importance; worthy of note are his excisions of complimentary references to himself This Appendix serves as an index to persons, books, and statutes, so references to them are omitted from the Index proper, which has been prepared by R. Constance Allen, my editorial assistant, R. Schoeffel and R. Davidson, the copy editors, and Professor F. Priestley, the General Editor, have helped expunge errors, the remainder of which must be debited to my sad account.
Essays on some unsettled Questions of Political Economy
To them, and to the members of the Editorial Committee of the Collected Works, my grateful thanks. It is also a pleasure to admit my indebtedness to the printing staff of the University of Toronto Press, whose struggles with an often unruly manuscript have never disrupted our relations. Westminster Review, II July, , Unsigned; not republished. By William Blake, Esq. London, Murray, There never, perhaps, was a period which presented to the political economist so many interesting objects of enquiry as that which has occurred during the continuance, and since the termination of the late war.
Peace, instead of its accustomed attendant blessings, seems to have brought calamity and distress upon almost every class of society; and the circumstances in which we are placed appear to be so peculiar and anomalous, as scarcely to admit of a satisfactory solution. We have seen landed proprietors without rents; farmers and manufacturers without a market; the monied capitalist ready to lend, and the merchant not wanting to borrow; a redundant capital, yet a redundant population; and the industrious poor compelled to apply, like mendicants, at the parish workhouse.
Before broaching a theory to explain an alleged fact, it would have been better if Mr. Blake had first ascertained whether the fact itself was real. To us he appears to have pursued a contrary course. He first started a theory; and because it suited his theory that there should be universal distress, he persuaded himself that universal distress existed.
We confess, however, that it has hitherto escaped our observation. We neither saw nor heard it, except in the cant of the agriculturists. Distress among the landlords, there undoubtedly was: as much distress as is implied in the necessity of contracting the expenses to which they had become habituated in the days of that good fortune, which was altogether unlooked-for and unearned, and of which, had they studied general principles, instead of scoffing at them, they would have foreseen the speedy termination.
All classes, however, not directly or indirectly connected with the land, were so far from partaking in Edition: current; Page: [ 4 ] the agricultural distress, that they were actually in the enjoyment of unexampled prosperity. A few years before, the manufacturers complained of distress: but then, rents were high, and landlords insolent. Similar vicissitudes of distress and prosperity—to-day, agricultural prosperity and manufacturing distress—to-morrow, agricultural distress and manufacturing prosperity, may be expected to recur again and again without end, unless our corn laws should be repealed, or the seasons should cease to vary.
Even Mr. Blake cannot assert it without contradicting himself.
EconPapers: Essays on Some Unsettled Questions of Political Economy
The great fluctuations, however, which have taken place during the last thirty years, in the prices of agricultural produce, are highly interesting phenomena, and every plausible attempt to explain them is worthy of some attention. The ability, moreover, which Mr. Blake has displayed, even in the support of what we deem erroneous doctrines, and his general acquaintance, in which he is excelled by few, with the science of political economy, give an importance to his errors, even greater than they derive from the nature of the subject: since, if it can be shewn that even he could urge in their defence no arguments which may not be satisfactorily refuted, the true doctrines on this subject may be considered as placed beyond the reach of dispute.
There are three causes, to some one, or more, of which, the fluctuations in prices have been attributed:. Tooke, in his excellent work on High and Low Prices, enters into a detailed examination of these three suppositions; and arrives at the conclusion, that the variations in prices were owing, in some degree, to the alterations in the currency, but mainly to the seasons, and in no degree to war, except in as far as it tended to obstruct the supply of imported commodities.
In this opinion we fully coincide. To take even a cursory view of the evidence upon which it is founded, forms no part of our present purpose, and we must be content with referring the reader to Mr. Blake has adopted the theory of war demand: and upon this hypothesis, he endeavours to account, not only for that portion of the fluctuations in prices, which Mr. Tooke ascribes to the seasons, but even for that portion which Mr. Tooke in conjunction, we believe, with all other political economists, except Mr.
Blake ascribes to the alterations in the currency. Blake, in fact, denies that any depreciation whatever took place during the Bank restriction: and to prove this, is the ostensible object of his pamphlet. We have witnessed a depression of the exchanges, to a degree, and for a continuance, that has been unexampled. We have had the market price of gold exceeding the mint price, far beyond the limits that could have occurred if the Bank had been paying in specie. We have seen the legislature compelled to pass an act to make Bank notes a legal tender, in order to prevent an avowed difference between payments in gold, and payments in paper.
And all this accompanied by a general rise of price in most of the articles of consumable produce. Now, I have no hesitation in admitting, that all the symptoms just enumerated, are indications of an excess of currency, and of depreciation: and, further, that an over-issue of currency could not exist for any length of time, without producing these symptoms.
I have, however, perfectly convinced my own mind, that all the results above specified, may have arisen from causes not necessarily connected with an alteration in the value of the currency; and moreover, that such other causes are not hypothetical merely, but have been in actual operation.
These other causes, it seems, are to be sought for in the war expenditure of government. I have very little doubt that the whole of these appearances may be traced, and will be found to have originated, in the enormous expenditure occasioned by the late war, the extent of which has perhaps had no parallel either in degree or duration, and never before has been combined with a restriction on payments in specie by the Bank.
By object is, to shew, that these effects not only may have arisen, but must have arisen, from such an enormous and continued expenditure, although the currency had remained in its most perfect state, and had been invariably kept to the due proportion which it ought to bear in relation to the commodities to be circulated by it. In order not to perplex the argument, [he continues,] it will be advisable to divide the subject into two distinct parts: in the first of which, I shall endeavour Edition: current; Page: [ 6 ] to prove that the adverse exchanges, and the excess of the market price above the mint price of bullion, were mainly caused by the large foreign expenditure of government:—and in the second, that the general rise in the price of all consumable produce was the necessary effect of circumstances connected with the war, and the increased internal expenditure of government.
Blake has divided his work into two parts, corresponding with these two divisions of his subject. As the second part is of far greater importance than the first, because it includes the peculiar features of Mr. Blake ascribes the high premium on foreign bills to the increased demand for them on the part of government during the war, for the purpose of foreign payments. It might be asked, Why, after the premium on foreign bills had risen so much as to exceed the expense of transmitting bullion, when debtors would of course find it more advantageous to discharge their debts by the transmission of bullion than of bills, bullion was not sent abroad, and the equilibrium by that means restored?
In answer to this objection, Mr. Blake admits, that if the Bank Restriction Act had not then been in operation, the process which we have described would actually have taken place. As, however, no gold could be procured at the Bank, it was necessary to apply to the bullion-broker; who would consider that, by exporting bullion, and drawing a bill against it, which he could sell at a premium, he would gain the difference between the premium and the cost of carriage.
If, therefore, instead of exporting his bullion, he consented to sell it to an exchange broker for exportation, it must be at a price which would afford him at least equal profit. And thus, according to Mr. Blake, bullion rose in price, and gave rise to the supposition that our paper currency was depreciated; whereas in fact, it was not paper which fell, but gold which rose.
This reasoning, we fear, will not bear examination. There can be no doubt that an absorption of bullion, either from a sudden government demand, or from any other cause, may raise the price of bullion, and depress the exchanges for a few days, or even for a few weeks; but it is well known by what process these effects are corrected.
A sudden enhancement of the value of the precious metals, which is tantamount to a sudden fall in the bullion values of all commodities, infallibly remedies itself, by causing an increase of exports, and a proportional diminution of imports. The steps of this process are so very generally understood, that we shall not weary the reader by tracing them.
Blake himself does not call in question the general principle. But he endeavours to prove this case to have been an exception. His argument principally rests upon the obstacles thrown in the way of exportation by the anti-commercial decrees of the French government. Because these obstacles greatly enhanced the cost of conveying goods from this country to the continent, he assumes that they counteracted the effect which the rise in the value of bullion would otherwise have had in promoting exportation.
Some estimate, [says he,] of the extent of these difficulties, and of the expenses of sending goods to the continent, may be formed from the fact that during the Milan decrees, the insurance against the risk of seizure in the ports of the Baltic could not be effected for a less premium than from 20 to 30 per cent.
Note to p. The expense of exportation may have attained any amount, and the argument might not be affected by it. The question is, not what was the expense, but whether the profit exceeded the expense. It is necessary here to call in some chronological considerations. Down Edition: current; Page: [ 8 ] to the year , the difference between paper and gold was a mere trifle.
So early as the close of the year , the obstacles to direct commercial intercourse between this country and the continent, were as great as at any subsequent period. From these facts, two inferences may be drawn. This renders Mr. In the years and , notwithstanding the enhanced expenses of transit, exportation proceeded not only to its usual extent, but to an extent rather exceeding the average of the preceding four years: as is apparent from the following table.
At the end of this period, it is to be observed, that the exchange was nearly at par, and gold nearly at the mint price. Then came, according to Mr. Blake, a sudden rise of the value of bullion, not only relatively to paper, but relatively to commodities: a rise, let us suppose, of 10 per cent, equivalent to a fall of 10 per cent in the bullion values of commodities.
There can be no doubt, that if this 10 per cent were the whole of the profit upon exportation, and the charges exceeded 10 per cent, no exportation could take place. But, in the present case, the 10 per cent, instead of being the whole of the profit, was exactly 10 per cent superadded, to a profit already sufficient. Nothwithstanding the obstructions to commerce, goods could be exported and sold with the ordinary profit, while they remained at their Edition: current; Page: [ 9 ] former value in the home market. It follows, that when goods fell 10 per cent below their former value, the profit upon their exportation must have been increased by 10 per cent.
They could already be exported with the ordinary profit; they could now be exported with the ordinary profit, and 10 per cent more. It will not be maintained, that an occurrence took place which must necessarily have added 10 per cent to the profit upon exportation, and that an increase of exportation was not the consequence. A rise of three, two, or even one per cent, in the value of bullion, would have sufficed to produce such an exportation of goods, as would have speedily sunk bullion to its former level.
This reasoning appears to us conclusive. It proves that gold neither did, nor could, experience a rise of any duration as compared with commodities, by reason of the government expenditure. The conclusion, however, does not rest solely upon this basis, strong as it is. Let it be supposed for a moment, that gold rises in this country 10 per cent; or which is the same thing, that all commodities fall 10 per cent, as compared with gold.
This effect would correct itself, partly, as we have observed, by promoting exportation; but partly also by discouraging importation. If some commodities, which were before too dear, are now cheap enough, to be exported; there are some commodities also, which were imported before, but which, having fallen in the home, without falling in the foreign market, can be imported no longer.
The exports therefore would be increased, the imports diminished, and gold would be imported, until prices, in both countries, were restored to their former level. Suppose, now, that from any cause whatever, an increase of exportation should become impossible: the same result which was formerly brought about by two causes, increased exportation and diminished importation, would now be brought about by the latter cause only. Merchants might be prevented from exporting at a profit, but they could not be forced to import at a loss.
The imports must be diminished: and as the inducement to diminish them would only cease, when the influx of gold had sunk the metal to its former value, a much greater diminution would be necessary, than would have been required if the current of gold had been swelled by an increase of exportation. If then we were to grant to Mr. Blake the full value of his assertion, that the obstructions to commerce prevented any increase of exports, the refutation would not be, on that account, the less complete.
He will scarcely contend that anti-commercial decrees prevent commerce from being diminished, however much they may prevent it from being increased. He may urge, indeed, that the imports were not in fact diminished, or not to the extent which would have been necessary to restore the value of gold. This we admit: and we regard it as a decisive reductio ad absurdum of his Edition: current; Page: [ 10 ] own argument. It must, we think, be allowed, that if bullion rose in value, and the exports were not increased, the imports must have been diminished.
If then it be true that the imports were not diminished, one of two things must necessarily follow. Either bullion did not rise, or, bullion having risen, the exports were increased. Both suppositions are equally fatal to the hypothesis of Mr. If Mr. Blake should still hold out against arguments to all appearance so convincing, there is one fact, which we think, even he himself will acknowledge to be decisive. In the years and , all obstacles to exportation were removed; and in consequence of speculations on supplying the continental market with goods which had long been partially excluded from it, exportation was going on to an extent almost unexampled.
If, therefore, Mr. Yet so far was this from being the case, that gold was in that year at its highest elevation, being nearly 25 per cent above the mint price.
On what principles can Mr. Blake explain this? We leave it for his consideration. There is one fact, to which Mr. This, however, only proves what no one ever denied; that a great and sudden disturbance in the ordinary state of the interchange between two countries, does not rectify itself all at once. The fall of the exchanges was evidently owing to a speculation upon the profit to be derived by supplying government with bills at a high premium, for immediate transmission to the continent.
It was a speculation such as no one who could trace the connexion of cause and effect would have made, since it was easy to foresee that the foreign payments would eventually be performed, by the transmission, not of bullion, but of goods. Had the war continued somewhat longer than it did, this would soon have been experimentally proved. But in consequence of the speedy termination of the war, the foreign expenditure of government did not take place to the extent which had been anticipated, and the exchanges and the price of gold speedily returned to their former level.
The attempt, therefore, to prove that the high price of gold and the low exchanges were the effect of war expenditure, in whatever light we regard it, appears equally abortive. Not content with maintaining his own position, Mr. Blake steps out of his way to combat one of the most important principles in the theory of foreign commerce, as laid down by Mr. Ricardo; a principle which, by the way, we are almost led to doubt whether he fully comprehends. Ricardo, whose opinions upon subjects connected with political economy will always be received with the deference due to one whose writings have so much contributed to the advancement of the science, entertains such very peculiar notions on the subject of exchanges, that I do not see how he can attain a correct view of the bearings of this question: for he seems to maintain, in all his publications, that the variations of the exchange arise solely from the variations in the comparative value of the currencies of different countries, and does not admit that the exchange is dependent upon the balance of debts and credits.
Now we will take upon ourselves to assert that Mr. Ricardo never maintained so preposterous a doctrine, as that the exchange is not dependant upon the balance of debts and credits. What he maintained was, that the balance of debts and credits among the countries of the world, is dependant upon the comparative values of their currencies, and in the ordinary state of the intercourse between one nation and another, when their mutual transactions are of a purely commercial nature, and when neither goods nor gold are exported and imported for any other purpose than that of deriving profit from them; the proposition of Mr.
Ricardo, is, in our opinion, strictly true. And this, we think, a very slight consideration will suffice to show. There is a certain state of the precious metals throughout the world, to which they have a constant tendency to approximate: a state in which their value, although not equal in all countries, differs only in proportion to the unavoidable differences in the cost of conveying them from the mines, and in which, therefore, they cannot be exported from one country to another with advantage.
When the precious metals are distributed in this manner among commercial countries, their imports and exports exactly balance one another, and the exchange is at par. Let us now suppose that the exchange between England and some other country, say France, has become unfavourable to England: and let us consider, what may be inferred.
In the first place, it is evident, that a balance of the precious metals is due from England to France. England, therefore, must have imported more than she has exported: in other words, it does not suit her to pay for the whole of her imports by means of goods. Now this is in itself a proof that the habitual distribution of the precious metals has been disturbed. Had it been otherwise, it would still have been, as before, more profitable for England to pay for her imports in goods than in gold. She now exports gold; formerly she exported goods only: gold, which was before a disadvantageous remittance, has now become an advantageous one.
One of two things, therefore, must have happened: gold must either have fallen in England, or risen in France. In either case, the variation in the exchange is caused by a variation in the comparative values of the two currencies. It does not enter into our present purpose, to refute all the objections which have been brought against this theory; but one objection, which has Edition: current; Page: [ 12 ] been urged by Mr. Blake, as it is extremely plausible, is worthy of a concise refutation.
On the Words Productive and Unproductive. On Profits and Interest. Only it must take care that these duties be not so high as to exceed all that remains of the advantage of the trade, and put an end to importation altogether; causing the article to be either produced at home, or imported from another and a dearer market.