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the French agriculturists would be converted into competitors with



the latter�察�agricultural production would be increased�察�and the



consumption lowered。 The necessary consequence would be diminution



in value of the products�察�decline in the value of property��



national poverty and national weakness in France。 The English



'present' in mere value would be dearly paid for in loss of power��



it would seem like the present which the Sultan is wont to make to



his pashas by sending them valuable silken cords。



    Since the time when the Trojans were 'presented' by the Greeks



with a wooden horse�察�the acceptance of 'presents' from other



nations has become for the nation which receives them a very



questionable transaction。 The English have given the Continent



presents of immense value in the form of subsidies�察�but the



Continental nations have paid for them dearly by the loss of power。



These subsidies acted like a bounty on exportation in favour of the



English�察�and were detrimental to the German manufactories。 If



England bound herself to´day to supply the Germans gratuitously for



years with all they required in manufactured articles�察�we could not



recommend them to accept such an offer。 If the English are enabled



through new inventions to produce linen forty per cent。 cheaper



than the Germans can by using the old process�察�and if in the use of



their new process they merely obtain a start of a few years over



the Germans�察�in such a case�察�were it not for protective duties�察�one



of the most important and oldest branches of Germany's industry



will be ruined。 It will be as if a limb of the body of the German



nation had been lost。 And who would be consoled for the loss of an



arm by knowing that he had nevertheless bought his shirts forty per



cent cheaper��



    If the English very often find occasion to offer presents to



foreign nations�察�very different are the forms in which this is



done�察�it is not unfrequently done against their will�察�always does



it behove foreign nations well to consider whether or not the



present should be accepted。 Through their position as the



manufacturing and commercial monopolists of the world�察�their



manufactories from time to time fall into the state which they call



'glut��' and which arises from what they call 'overtrading。' At such



periods everybody throws his stock of goods into the steamers。



After the elapse of eight days the goods are offered for sale in



Hamburg�察�Berlin�察�or Frankfort�察�and after three weeks in New York��



at fifty per cent under their real value。 The English manufacturers



suffer for the moment�察�but they are saved�察�and they compensate



themselves later on by better prices。 The German and American



manufacturers receive the blows which were deserved by the English



 they are ruined。 The English nation merely sees the fire and



hears the report of the explosion�察�the fragments fall down in other



countries�察�and if their inhabitants complain of bloody heads�察�the



intermediate merchants and dealers say�察�'The crisis has done it



all��' If we consider how often by such crises the whole



manufacturing power�察�the system of credit�察�nay the agriculture�察�and



generally the whole economical system of the nations who are placed



in free competition with England�察�are shaken to their foundations��



and that these nations have afterwards notwithstanding richly to



recompense the English manufacturers by higher prices�察�ought we not



then to become very sceptical as to the propriety�察�of the



commercial conditions of nations being regulated according to the



mere theory of values and according to cosmopolitical principles��



The prevailing economical school has never deemed it expedient to



elucidate the causes and effects of such commercial crises。



    The great statesmen of all modern nations�察�almost without



exception�察�have comprehended the great influence of manufactures



and manufactories on the wealth�察�civilisation�察�and power of



nations�察�and the necessity of protecting them。 Edward III



comprehended this like Elizabeth�察�Frederick the Great like Joseph



II�察�Washington like Napoleon。 Without entering into the depths of



the industry theory�察�their foreseeing minds comprehended the nature



of in its entirety�察�and appreciated it correctly。 It was reserved



for the school of physiocrats to regard this nature from another



point of view in consequence of a sophistical line of reasoning。



Their castle in the air has disappeared�察�the more modern economical



school itself has destroyed it�察�but even the latter has also not



disentangled itself from the original errors�察�but has merely



advanced somewhat farther from them。 Since it did not recognise the



difference between productive power and mere values of exchange��



and did not investigate the former independently of the latter�察�but



subordinated it to the theory of values of exchange�察�it was



impossible for that school to arrive at the perception how greatly



the nature of the agricultural productive power differs from the



nature of the manufacturing productive power。 It does not discern



that through the development of a manufacturing industry in an



agricultural nation a mass of mental and bodily powers�察�of natural



powers and natural resources�察�and of instrumental powers too ��which



latter the prevailing school terms 'capital'���察�is brought to bear��



and brought into use�察�which had not previously been active�察�and



would never have come into activity but for the formation and



development of an internal manufacturing power�察�it imagines that by



the establishment of manufacturing industry these forces must be



taken away from agriculture�察�and transferred to manufacture��



whereas the latter to a great extent is a perfectly new and



additional power�察�which�察�very far indeed from increasing at the



expense of the agricultural interest�察�is often the means of helping



that interest to attain a higher degree of prosperity and



development。







NOTES��











1。 This is true respecting Spain up to the period of her invasion



by Napoleon�察�but not subsequently。 Our author's conclusions are��



however�察�scarcely invalidated by that exception。  TR。







2。 Say states in his Economie Politique Pratique�察�vol。 iii。 p。 242��



'Les lois ne peuvent pas cr�er des richesses。' Certainly they



cannot do this�察�but they create productive power�察�which is more



important than riches�察�i。e。 than possession of values of exchange。







3。 Wealth of Nations�察�Book IV。 chap。 ii。







4。 From the great number of passages wherein J。 B。 Say explains



this view�察�we merely quote the newest  from the sixth volume of



Economie Politique Pratique�察�p。 307
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