Book IV: Chapter 5

CHAPTER V.

OF BOUNTIES.

Bounties upon exportation are, in Great Britain, frequently
petitioned for, and sometimes granted, to the produce of
particular branches of domestic industry. By means of them, our
merchants and manufacturers, it is pretended, will be enabled to
sell their goods as cheap or cheaper than their rivals in the
foreign market. A greater quantity, it is said, will thus be
exported, and the balance of trade consequently turned more in
favour of our own country. We cannot give our workmen a monopoly
in the foreign, as we have done in the home market. We cannot
force foreigners to buy their goods, as we have done our own
countrymen. The next best expedient, it has been thought,
therefore, is to pay them for buying. It is in this manner that
the mercantile system proposes to enrich the whole country, and
to put money into all our pockets, by means of the balance of
trade.

Bounties, it is allowed, ought to be given to those branches of
trade only which cannot be carried on without them. But every
branch of trade in which the merchant can sell his goods for a
price which replaces to him, with the ordinary profits of stock,
the whole capital employed in preparing and sending them to
market, can be carried on without a bounty. Every such branch is
evidently upon a level with all the other branches of trade which
are carried on without bounties, and cannot, therefore, require
one more than they. Those trades only require bounties, in which
the merchant is obliged to sell his goods for a price which does
not replace to him his capital, together with the ordinary
profit, or in which he is obliged to sell them for less than it
really cost him to send them to market. The bounty is given in
order to make up this loss, and to encourage him to continue, or,
perhaps, to begin a trade, of which the expense is supposed to be
greater than the returns, of which every operation eats up a part
of the capital employed in it, and which is of such a nature,
that if all other trades resembled it, there would soon be no
capital left in the country.

The trades, it is to be observed, which are carried on by means
of bounties, are the only ones which can be carried on between
two nations for any considerable time together, in such a manner
as that one of them shall alway's and regularly lose, or sell its
goods for less than it really cost to send them to market. But if
the bounty did not repay to the merchant what he would otherwise
lose upon the price of his goods, his own interest would soon
oblige him to employ his stock in another way, or to find out a
trade in which the price of the goods would replace to him, with
the ordinary profit, the capital employed in sending