the healthful action of the many. Vice and crime, for instance, are stumbling-blocks in the path of the community; they obstruct the working of the natural laws, the ordinances of Divine Providence, by which society is held together and all well-meaning members of it are made to co-operate, though unconsciously, for each other's good. To remove such stumbling-blocks, then, is not to create, but to prevent, interference with the natural order of things. Legislation directed to this end is only a legitimate carrying out of the laissez-faire principle.

The enforcement of justice in the ordinary transactions between man and man, which often requires further legislation than is needed for the mere prevention of open vice and crime, is another instance of the legitimate exercise of authority by the government. An individual may not erect a powder-manufactory in the midst of a populous village, nor carry on any operations there which would poison the air with noxious exhalations. His neighbors would have a right to call out to him, "Let us alone; you endanger our lives, and prevent us from pursuing our ordinary occupations in safety."

These are internal impediments to the natural action of society, and as such the government is bound to put them out of the way. But it is also the duty of the legislature to guard society against external dangers and hindrances. Men are separated into distinct communities, the action of which upon each other is not so much restrained by law, or by the natural requisitions of justice, as is that of individuals dwelling in the same community. The law of nations is a very imperfect code, and, from the want of any superior tribunal to enforce its enactments, it is very imperfectly observed. War is either a present evil to be averted or alleviated, or it is a possible future event, the occurrence of which is to be guarded against. For either of these ends, the action of individuals within the community may need to be restrained; for the safety of all, the freedom of all to pursue their lawful occupations without let or hindrance is not to be imperilled through the avarice or recklessness of a few. Accordingly, not mere restraints upon importation, but an absolute prohibition of intercourse, an embargo on all navigation, are among the legitimate measures, a necessity for which is created by national dissension and hostility. Independent communities are not always at war with each

other; but they are always rivals and competitors in the great market of the world. This feeling of rivalry is whetted by the different circumstances under which they are placed, by the peculiarities in the condition of each, and by the opposition of interests which often grows out of these peculiarities. The legislation of each state is primarily directed, of course, to the protection and promotion of the interests of its own subjects; and thus it often injuriously affects the interests of other nations. There is, therefore, a good deal of retaliatory legislation on the part of different governments. There is often, on both sides, a keen measure of wits in devising commercial regulations which shall affect, or render nugatory, measures adopted by the rival nation, not exactly with a hostile intent, but with an exclusive view to its own interests, and therefore frequently with an injurious effect upon the interests of others. Now, such retaliatory legislation, so far as it operates upon the members of the very community from which it emanates, so far as it limits or restrains the action of all or a portion of them, is not an infringement, but an application, of the laissez-faire principle. It is designed to procure for them a larger liberty than they would otherwise enjoy; if it is effectual, if it answers its purpose, it removes an impediment created by a foreign state, far more serious and extensive than the obstruction which it imposes.

The policy of states leads them to seek independence of each other in their economical, almost as much as in their political, relations; or we might better say that political independence requires that we should not be entirely dependent upon foreigners for the supply of great articles of prime necessity, that we should have within our own borders, and under our own control, the means of satisfying all our natural and imperative wants. It is not desirable that Massachusetts and Ohio should be rendered so far independent of each other that each could obtain from its own soil, or by the labor of its own inhabitants, all that it can need; for these two States are one in most of their political relations. Members of the same great confederacy, living under the same laws, and each exercising its due share of influence in the national legislature, neither has cause to apprehend the hostile or injurious action of the other. The political ties between them are strengthened by their dependence on each other for a supply

of many of the necessaries of civilized existence. But it is desirable that both should be independent, as far as may be, of the great powers of Europe, with whom they cannot be sure of continued friendly intercourse for any time beyond the present, and from whom they are always separated by a great breadth of ocean, and by dissimilarity of customs, institutions, and laws.

True independence, in an economical point of view, does not require us to forego all commercial intercourse with other nations : this would be rather a curse than a blessing. But it does require that each nation should be able to exercise, within its own limits, all the great branches of industry designed to satisfy the wants of man. It must be able to practise all the arts which would be necessary for its own well-being if it were the only nation on the earth. If it be restricted to agriculture alone, or to manufactures alone, a portion of the energies of its people are lost, and some of its natural advantages run to waste. To be so limited in its sphere of occupation, to be barred out from some of the natural and necessary employments of the human race, through the overwhelming competition of foreigners, is a serious evil, which it is the object of a protective policy to obviate or redress. On whatever other grounds this policy may be objected to, it is surely not open to the charge of being an infringement of the laissez-faire principle, or a restriction of every man's right to make such use as he pleases of his own industry and capital. Its object is, not to narrow, but to widen, the field for the profitable employment of industry, and to second the working of the beneficent designs of Providence in the constitution of society, by removing all artificial and unnecessary checks to their operation.

I repeat it, then, that these designs, as shown in the economical laws of human nature (i. e. in the principles of Political Economy) through their general effects upon the well-being of society, manifest the contrivance, the wisdom and beneficence, of the Deity, just as clearly as do the marvellous arrangements of the material universe, or the natural means provided for the enforcement of the moral law and the punishment of crime. The lowest passions of mankind, ostentation and ambition, petty rivalry, the love of saving and the love of gain, while they bring their own penalty upon the individual who unduly indulges them, are still overruled for good in their operation upon the interests of society; nay, they

are made the most efficient means of guarding it from harm, and advancing its welfare. In the vast round of employments in civilized society, there is hardly one in which a person can profitably exert himself, without at the same time profiting the community in which he lives, and lending aid to thousands of human beings whom he never saw. We are all servants of one another without wishing it, and even without knowing it; we are all co-operating with each other as busily and effectively as the bees in a hive, and most of us with as little perception as the bees have, that each individual effort is essential to the common defence and general prosperity.

CHAPTER II.

HOW WEALTH IS CREATED, AND WHAT CONSTITUTES EXCHANGEABLE VALUE: THE MEASURE OF VALUE: HOW WEALTH IS DISTRIBUTED AMONG ITS PRODUCERS.

A DISTINCTION has been briefly pointed out between wealth and property. Wealth consists of the aggregate of articles, chiefly material or tangible, though some immaterial products are ranked among them, which supply the wants and satisfy the desires of man; and the stock of national wealth "is kept in existence from age to age, not by preservation, but by perpetual reproduction. Every part of it is used or destroyed, — generally very soon after it is produced; but those who consume it are employed meanwhile in producing more," not only enough to replace what is consumed, but to furnish a surplus, or profit. Property is the ownership of these articles, and often remains unchanged, or fixed, for many generations, just as the river continues, though the water is perpetually running out of it into the sea.

As the articles change while the ownership continues, there must be evidences of that ownership, or "tickets of transfer,” as I have once called them, mere representatives of wealth, which command a price in the market, and are often sold, but which, in themselves, form no addition to the national wealth. Notes and mortgages, bank-bills, bank-stock, stock in any corporation or in the national

debt, are such representatives. They are mere evidences that the person holding them is the owner of a larger or smaller portion of those articles which really constitute wealth; and their value to him consists only in the fact that they enable him, whenever he sees fit, to reclaim his property, or to take possession of those articles which actually belong to him, though for a time he has trusted them to others.

The national wealth, therefore, does not consist of the land, the houses, the manufactured goods, etc., plus the public funds, bankstock, and the like. These funds and stocks are not wealth in themselves, but are certificates of ownership of those articles which really constitute riches. Nay, if any portion of these stocks is held by foreigners, the aggregate wealth of the community does not consist even of the whole amount of those articles within its territory which are properly considered as wealth, but only of that amount minus the evidences of indebtedness to foreigners. If I buy $1,000 worth of government securities, I really lend $1,000 to the government, which, in return, mortgages to me a portion of its revenues, or of the sum which it annually raises by taxation. This sum is that portion of the valuable articles annually created by the labor of the community which the government appropriates to itself, as a compensation for the care and protection which it affords. What I really own, then, is this share of the useful articles annually produced by the labor of the whole people, which is transferred, first by the people to the government, and then by the government to me. The scrap of paper, called "public stock," which I hold, is of no value whatever, except as it enables me to claim without dispute my share of this annual product.

These truths are elementary, and sufficiently obvious; but it was necessary to state them in order to clear the ground for the solution of the problem with which we are now concerned: What are the essential qualities of wealth, and how is it created? How is it, that the national stock of wealth, which we are perpetually consuming, is yet perpetually reproduced, and that, too, with a profit, or constant enlargement, so that the stock at the end of the year is considerably larger than it was at the year's commencement?

As soon as we clearly perceive that wealth consists exclusively of those useful articles, chiefly material or tangible, which have been