Page:The Economic Journal Volume 1.djvu/107

 Rh of natural liberty was the necessary outcome of the new turn which Adam Smith had given to the old problem. We have already seen, in connexion with Massie and Sir James Steuart, how little his ablest predecessors were satisfied with the expedients then in vogue; and when Adam Smith propounded the new doctrine that all efforts to direct trade wisely were labour thrown away, the public of his age were ready to give him a hearing and to accept the new principles which followed from concentrating attention not on power, but on the necessaries and conveniences of life.

At no previous time perhaps, would it have been possible to proclaim this doctrine with any chance of success, but the circumstances of the day supplied the conditions which his principle assumes. The local obstacles to the fluidity of capital were for the most part disappearing. Even in towns like Hull, where the trading corporations had had an uninterrupted tenure of power for centuries, their influence was coming to an end, and the incorporated companies for commerce and for industry were no longer so exclusive or no longer so important. Everywhere there was freedom for internal commerce, and thus capital was able to flow into any direction which the rate of profit rendered attractive to the capitalist, and where as that very rate of profit showed, there was opportunity for developing some neglected side of national wealth. Till this was approximately the case, it would not have been so easy to urge that the system of natural liberty was most consonant with national prosperity.

In regard to other individual factors, there was no such free play; the system of natural liberty was realized in a somewhat one-sided fashion. The English law of entail and the custom of common-field cultivation, sufficed in many places to prevent the improvement of the land. The laws of settlement placed crushing restrictions on the fluidity of labour, and the laws against combinations put the workers at a terrible disadvantage in competing for better wages. Adam Smith was prompt to denounce these evils, but the British public were not prompt to recognize them. It was not till the progress of the industrial revolution had demonstrated the frightful mischief of a partial adoption of natural liberty—that is to say, the adoption of this principle in regard to one factor of production, while it is wholly disregarded in relation to another—that the conditions of society were rendered more completely accordant to those which Adam Smith's principle assumes.

7. By isolating wealth, and the causes of wealth, as a subject