CHAPTER II.

ERROR RESPECTING THE INTERCHANGE OF COMMODITIES.

There exists in society a widely-spread error relating to the very principle of that interchange of property between individuals which is usually called a bargain. It is almost always supposed that one party is a gainer whilst the other is a loser. Indeed, by those whose reasoning on the subject has been limited to this single view of the question, it is with some plausibility maintained, that since the quantity of the commodities interchanged is in no case augmented by the bargain, the gain of one party can be accomplished only by an equal loss on the part of the other.

The insufficiency of this reasoning depends upon the truth of the principle that each party, being the best judge of the pleasure or advantage he can derive from the possession of a thing, _himself_ decides that in his own case it will be increased by the exchange.

It may, however, be asked, How does it happen that the sum of two commodities so exchanged has a greater value after the exchange than before? or in other words, Whence has the profit arisen?—is there any third party at whose expense it has been acquired? The answer is—that there is another source which almost always either directly or indirectly contributes towards this profit. The advantage is most frequently won by industry and knowledge from nature herself.

§ The following illustration, which happens also to be a tolerable approach to truth, will explain this principle more clearly:—

It is found by experience that the upper-leather of Boots made in France, is better and more durable than the upper-leather manufactured in England. On the other hand, it is found that the leather prepared in England for the soles of boots is less permeable by water, and more durable than that made in France.

Let us suppose that in each country a pair of boots will endure twelve months’ continual wear; after which time they are thrown aside.

In England the destruction of the boots will arise from that of the upper-leather, whilst in France it will be caused by that of the sole. Let us also suppose that the upper-leather of France will wear three months longer than the French soles, and reciprocally that the soles of England will wear three months longer than the English upper-leather.

Under these circumstances, it is clear that if the inhabitants of each country insist on making their boots _entirely_ with the produce of _their own_ tanneries, the average duration of a pair of boots both in France and in England will be twelve months.

Let us assume, for the sake of simplicity, that in each country the upper-leather and the soles have the same value. Then it is equally clear, if England were to give to France a million pair of soles in exchange for a million pair of French upper-leathers, that one million of the inhabitants of each nation would find their boots last during fifteen instead of twelve months.

This prolonged duration of their boots would not have been acquired by any sacrifice on either side: the exchange is here for the common and great advantage of both.

This probably arises from the joint action of many causes. The animals which in each country supply the hides, may either from breed, from food, or from climate be best adapted to produce that kind of leather in which each country excels. The water, the bark, or the climate peculiar to each country, may then contribute its share to the same effect. Again, the industry, the skill, and the knowledge of the people employed, as well as the character of the population and the distribution of its capital, may also have its influence on these results.

If we pursue this illustration one stage further, it will appear that it is our interest not only that we should make these exchanges with France, but that she should also make exchanges with other countries than our own.

Let us suppose that France, having a larger population than England, required for its annual consumption two million pair of boots, and also that she possessed no other commodities which we required. Under these circumstances there could be no further direct interchange of leather, and France would possess a million pair of upper-leathers beyond our demand. But it is clear that if France could exchange these upper-leathers for the wools or any other produce of Germany which we might require, she would not only gain the additional duration of three months for her own extra million pair of boots, but would also enrich us by the advantage which we should derive from the exchange of the strong hides of England for the produce transmitted to us from Germany.

§ The general result of all those inquiries of which only the slightest sketch has now been attempted, is that—_the free and unlimited exchange of commodities between nations, contributes to the advantage and the wealth of all_;—that this benefit arises from no sacrifice on the part of one nation for the profit of another; but that the sum of the productive powers of man is by these means, without any increased labour, largely augmented throughout the world;—that this increment is won partly by the suppression of ignorance and fraud, and partly by the united effects of industry, of skill, and of science, in compelling nature to minister to the wants of man.

All who admit the truth of these principles, must feel an earnest desire to support every effort which may assist in their dissemination amongst the masses of mankind. Education is the earliest, and the most effective aid; but it must be secular education. It must be the education of the faculties of each child, with reference to the wants of his future course of life. The religion of the uneducated and unenlightened man, even when true, partakes of the nature of superstition, and instruction in religious truth _alone_ will not be enough: his mind must be opened and informed on other subjects also. He who by observation and inquiry has arrived at the conviction that any line of conduct which is dishonest towards his neighbour, will most probably prove unprofitable to himself in this world, will surely have a strong additional motive to guard him in the hour of temptation from those courses which his religion teaches him will incur punishment in a future state.