Part 38 (1/2)

It is for this reason, that, by obliging a man to create more than he himself consumes, taxation increases the wealth of a nation; so that the flouris.h.i.+ng state of England is a very natural effect of heavy taxation. The misery and poverty of those people who have little or nothing to pay, is equally natural, though it does not astonish one quite so much.

As there is nothing in the world without a bound, and a limit, it is clear, that, in laying it down as a principle, that rent and taxes occasion wealth instead of poverty, it is only to be understood, to a certain extent; that is to say, to the length to which the nature of things will admit of the exertion of man augmenting his industry, but not a step farther.

To ascertain this point would be to solve a most curious problem; observing, that the solution would, in every case, depend on a great variety of particular circ.u.mstances.

Something like a general investigation, however, is possible. It will not be accurate, nor is that wanted, but it may lay the foundation for understanding the matter better at a future period.

In London, rent and taxes are heavier than in any other part of the kingdom, and in Scotland they are less than in any other; yet, the working people, from all parts of the kingdom, come to London, and from the poorest places, in the greatest numbers. Ireland, Scotland, and Wales, are the poor countries, _lightly taxed_, and from them

{189} Acc.u.mulation is sometimes not a pa.s.sion, but arises from necessity; by acc.u.mulation, is meant the increasing the value of the stock you possess, whether it consists of land, cattle, money, or merchandize.

Thus, for example, the Americans are increasing in wealth, from necessity, because their country is becoming better, by being cultivated, in order to produce what is necessary. They cannot have what they want, in the way they wish, without increasing or bettering the property of which they have taken possession.

If they had no more rent and taxes than they have, and if this were not the case, they would remain a poor people. Thus, the inhabitants of Syria, of Egypt, of Arabia Felix, formerly the finest countries in the world, having a property that does not better in their possession, and having scarcely either rent or taxes to pay, remain, from generation to generation, creating little, and consuming what they create.

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people come, perpetually, to pay _heavy taxes_ in London. Yes, but it will be said, in answer, these are poor countries. They are, however, richer than England was in the days of Queen Elizabeth; and, if the nature of things could have admitted of people _changing centuries_, as they _change countries_, the people of the seventeenth century, with light taxes, would have emigrated to the nineteenth century, with all its heavy taxes, just as those Irish and Scotch come to London.

This proves that, even in London, the excess of taxes is not yet such as to create a retrograde effect, and it proves it in a very striking manner.

Though there may, at first sight, appear something ludicrous in the idea of emigrating from the seventeenth to the nineteenth, from the reign of Queen Elizabeth to that of his present majesty, it is a perfectly fair comparison, and will hold good, examine it as much as one will.

The common expression, (and a very significant one it is,) that one part of the country is a century behind another, or twenty years, or fifty years, is exactly the same idea, expressed in other words, for it is a comparison between the changes which a lapse of time makes in one case, and a removal of place in the other. The present times are then better to live in than those of Elizabeth, as London is better than any distant part of the country.

That the ability of the nation to sustain a given burthen, for a certain number of years, is no proof of a permanent ability to support it, must be admitted, even if the same annual resources were to continue; but, that permanent ability becomes much less certain, when we consider that the annual resources are perpetually varying, that, therefore, they have so many uncertain quant.i.ties, that it is impossible to resolve the problem.

As to the effect, with respect to the increasing the burthens of the people, that has been treated under the general head of taxation.

Whether the money goes to pay for a s.h.i.+p of war, a regiment of soldiers, or the interest of loans, makes no difference to him who pays the tax; and, indeed, makes little to the general system of national economy, as, in every case, what is paid to the state is employed on unproductive labourers or idle people. That is to say, it is consumed, and never appears again.

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National debt, then, so far as it increases the taxes of a country, is like any other national expenditure; and, in maintaining unproductive and idle people, it is also the same; but it has, in another point of view, a different effect, and that effect is an advantageous one.

In every nation, the greatest part of the capital is employed, or, as it is called, sunk. Land, houses, machines, merchandize, &c. are the princ.i.p.al employments of capital. As those are transferred from one to another, or as the use or produce of them is paid for, by one to another, money is wanted occasionally; and, if there were no other employments, money must either be lying idle in some persons =sic= hands, till an employment could be found for it, or the possessor of it must begin some enterprise, and sink it himself.

But, when money is thus employed, it is no longer in the power of the proprietor; and, though money may be borrowed on such sort of security, it is slowly, and with difficulty. The expense, the inconveniency =sic=, and time necessary, prevent the lenders of money from lending any for occasional purposes on such sort of security; but when a nation borrows, and the stock is divisible and transferable at will, money can always be realized when it is wanted for any purpose that affords a greater advantage than the stock affords.

{190}

Without this had been one of the effects of national debt, how could the facility of borrowing have increased, {191} as it has done? or how could merchants and individuals raise the sums they now do? {192}

{190} In 1793, 5,000,000 L. was lent to merchants on exchequer-bills.

The property, on which the money was secured, was really merchandize, but the lenders would have nothing to do with the goods; government stepped in, and took the goods as a security, creating a stock transferrable, that represented the same goods, and, as if by magic, the money was found in a moment. I know of no operation so fit for elucidating the advantage of national debt as this.

{191} Borrowing on life rents is bad, for this reason; where there is no employment of this sort, all money is constantly employed in some sort of trade or enterprise that will produce profit, but cannot be realised. Example, Paris, &c.

{192} When money was wanted, in Queen Anne's time, the Chancellor of the Exchequer, (Mr. Montague,) attended by the Lord Mayor and Sheriffs, went about, from shop to shop, to borrow it, much in the way that is occasionally practised by the beadles for a public charity!! Yet England's credit was good, it owed little, the war was popular, and the country rich.