An Essay on the East-India Trade

INTRODUCTION The major European powers of the seventeenth and eighteenth centuries all subscribed to mercantilism, which held that the goal of foreign trade was to amass reserves of precious metals, which were needed to finance wars. Silver in particular consistently leaked out to India, China, and elsewhere in Asia, where shortages of silver made goods cheap for Europeans bearing silver. Exceptionally low food prices meant that skilled workers could live fairly well while selling cloth more cheaply than Europeans. Many European governments responded by banning Asian textiles, or taxing them heavily, but they also encouraged their merchants to make money by selling Asian cloths in other European countries. The resulting dilemmas spawned numerous tracts debating protectionism, bullionism, sumptuary laws, tax policy, and other measures.

The excerpt here, written as Parliament was debating a heavy tariff on Indian cloths, suggests a gradual transition toward the antimercantilist free-trade views enunciated by Adam Smith eighty years later. Though opposed to the increased consumption of non-necessities (which indicates success in modern economics), D'Avenant saw the trend as inevitable, and argued that Britain should try to profit from it. He also headed in new directions by arguing that pushing the general price level down through free trade would work better than tariff protection to insure the competitiveness of British woolens. But his fundamental concerns remained mercantilist, and so did Parliament's: the eighteenth century saw repeated increases in the tariffs on Indian cloth, and they remained in place until well into the Industrial Revolution, which finally undid India's competitive advantages. ∎

My Lord

Your Lordship was pleased, the other day, to intimate, that you would willingly know my opinion, in general, of the East-India trade; whether it is hurtful, or beneficial to this nation? and my thoughts, concerning the bill, for prohibiting the wearing all East-India and Persia wrought silks, bengals, and dyed, printed, or stained callicoes. . . .

For who can give a prince sound advice, and under him steer the people rightly and well, either in peace or in war, that is ignorant of the posture, condition, and interest of the country where he lives? Is there any thing in the world, that should be more thought a matter of state than trade, especially in an island? And should not that which is the common concern of all, be the principal care of such as govern? . . .

What has enabled England to support this expensive war so long, but the great wealth which for 30 years has been flowing into us from our commerce abroad?

The soil of no country is rich enough to attain a great mass of wealth, merely by the exchange and exportation of its own natural product. . . .

Whoever looks strictly and nicely into our affairs, will find, that the wealth England had once, did arise chiefly from two articles: 1st, Our plantation trade. 2ndly, Our East-India traffic.

The plantation trade gives employment to many thousand artificers here at home, and takes off a great quantity of our inferior manufactures. The returns of all which are made in tobacco, cotton, ginger, sugars, indico, etc. by which we were not only supplied for our own consumption, but we had formerly wherewithal to send to France, Flanders, Hamburgh, the East Country and Holland, for 500,000 per annum, besides what we shipped for Spain and the Streights, etc.

Since we were supplanted in the spice-trade by the Dutch, and since great part of the pepper-trade is gone by the lots of Bantam,our chief investments or importations from the East Indies have been in callicoes, wrought silks, drugs, saltpetre, raw silks, cottons, and cottn-yarn, goats wool, or carmania wool, and other products of those countries; part of which commodities are for our own use, but a much greater part, in times of peace, were brought up here for the consumption of France, Germany, Holland, Spain, Italy, and our plantations.

So that the means of our East and West-India trade, though we might lose by our dealings to some parts, yet we were gainers by the whole, and in the general balance. . . .

Some of our gentry have been for many years of opinion, that the intire welfare of England depends upon the high price of wool, as thinking thereby to advance their rents; but this proceeds from the narrow mind, and short view of such who have all along more regarded the private interest of land than the concerns of trade, which are full as important, and without which, land will soon be of little value. . . .

As to the East-India trade in general; if all Europe by common consent, would agree to have no further dealings to those parts, this side of the world, by such resolution, would certainly save a great and continual expence of treasure.

For Europe draws from thence nothing of solid use; materials to supply luxury, and only perishable commodities, and sends thither gold and silver, which is there buried and never returns.

I have good grounds to think, that the silver and gold brought from America, the gold dust brought from Africa, and the silver produced from the European mines, in the 200 years last past, has not amounted to less, in the whole, than 800 millions.

There is no appearance of this immense sum in any country of Europe. It is true indeed, there is yearly a great consumption of these metals, by the wear of gold and silver coin, waste in coinage, waste in working plate, the wear of wrought plate, the wear of things made of gold and silver thread, and wire (a high article) leaf and shell gold and silver, liquid gold and silver. There is also much loss in casualties by sea, fires, and inudations, and by being privately buried and never found.

But having computed what may be allowed for the yearly consumption of gold and silver on all the foregoing heads, and what quanity of those metals may be now remaining in Europe, I cannot find what is become of the 800 millions of it be carried away and sunk in the East-Indies.

From whence I have reason to conclude, that the European nations in general had been richer by full 1/3d, than they now are, if that trade had never been discovered and undertaken.

But since Europe has tasted of this luxury, since the custom of a hundred years has made their spices necessary to the constitutions of all degrees of people, since their silks are pleasing every where to the better sort, and since their callicoes are a useful wear at home, and in our own plantations, and for the Spaniards in America, it can never be advisable for England to quit this trade, and leave it to any other nation.

The burthen which this commerce lays upon the collective body of Europe, does bear hard only upon those countries which consume the Indian commodities, without having any share of the traffic, and therefore France did about 12 years ago very wisely prohibit the wearing callicoes that were not of their own importation.

The English and Dutch, which together are not 1/10th part of Europe, enjoy this traffic almost without any rivalship; and if it be a burthen, it lies not upon the one, but on the other 9 parts, so that if the East-India trade carry out the gold and silver from this side of the world, it is truly and properly, at the cost and expence of France, Germany, Spain, and the northern kingdoms, who have little or no opportunities of trading thither. . . .

And after much thought and study on this subject, and by consulting others versed in spectulations of the like nature, I find that this encrease to the nation's general flock [since 1688], did probably arise from the 3 following articles, viz.

From our manufactures and home product sent to the plantations, and from the returns thereof, exported to foreign parts. . . 900,000. From our woolen manufacture, lead, tin, leather, and our other native product sent to France, Spain, Italy, Germany, etc. . . . 500,000. From the neat profit accruing by the East-India trade. . . 600,000. Total 2,000,000.

If the East-India trade did, in peaceful times, bring so great an encrease to the annual income of the kingdom (and I think the contrary is capable of no clear demonstration) the legislative power ought to proceed with much caution in any matter relating to it.

Whatever country can be in the full and undisputed possession of it, will give law to all the commercial world.

Should we quit the hold we have in India, and abandon the traffic, our neighbours the Dutch will undoubtedly engross the whole: and if to their naval strength in Europe, such a foreign strength and welath be added, England must hereafter be contented to trade by their protection, and under their banners. . . .

The scarcity of money in a long war, makes any exportation of bullion thought a great grievance; of which, in quiet times, we should not be sensible. . . .

The East-India company has been for a long time looked upon with an evil eye, by some people, because there has formerly been ill management in their affairs; and for that some of their goods were thought to hinder the consumption of our own manufactures; and because it was seen what silver they really carried out, and not enough considered what bullion their effects brought hither in return. . . .

They who promote this bill, do it, as is presumed, upon the following grounds and reasons:

1st, They believe such a prohibition will advance the consumption of wool, and the woollen manufactures.

2dly, They think it will advance the silk and linen manufactures of England.

3dly, They imagine such a prohibition may be made by act of parliament, without ruin to the traffic in general.

These 3 points, my lord, I shall endeavour to examine and state fairly before your lordship: and I shall discourse of the East-India trade first, as it has relation to the woollen manufacture. 2dly, As it has relation to the silk and linen manufactures. And 3dly, I shall shew how this prohibition will affect the East India trade in general.

And first, as to the woollen manufacture.

Trade is the general concern of this nation, but every distinct trade has a distinct interest. The wisdom of the legislative power consists, in keeping aneven hand to promote all; and chiefly to encourage such trades as encrease the public stock, and add to the kingdom's wealth, considered as a collective body.

Trade is in its nature free, finds it own channel, and best directeth its own course: and all laws to give it rules and directions, and to limit and circumscribe it, may serve the particular ends of private men, but are seldom advantageous to the public.

Governments, in relation to it, are to take a providential care of the whole, but generally to let 2d causes work their own way; and considering all the links and chains, by which they hang together, peradventure it may be affirmed, that, in the main, all traffics whatsoever are beneficial to a country.

They say few laws in a state are an indication of wisdom in a people; but it may be more truly said, that few laws relating to trade are the mark of a nation that thrives by traffic.

Laws to compel the consumption of some commodities, and prohibit the use of others, may do well enough where trade is forced, and only artificial, as in France; but in countries inclined by genius, and adapted to it by situation, such laws are needless, unnatural, and can have no effect conducive to the public good.

I have often wondered upon what grounds the parliament proceeded in the act for burying in woollen: it occasions indeed a consumption of wool, but such a consumption as produces no advantage to the kingdom.

For were it not plainly better, that this wool made into cloth were exported, paid for, and worn by the living abroad, than laid in the earth here at home.

And were it not plainly better, that this wool made into cloth were exported, paid for, and worn by the living abroad, than laid in the earth here at home.

And were it not better, that the common people (who make up the bulk and are the great consumers) should be buried in an old sheer, fit for nothing else, as formerly, than in so much new wool, which is thereby utterly lost.

The natural way of promoting the woollen manufacture, is not to force its consumption at home, but by wholesome laws to contrive, that it may be wrought cheaply in England, which consequently will enable us to command the markets abroad.

The only beneficial way to England of making wool yield a good price, is to have it manufactured cheaply. . . .

The act for maintenance of the poor is the true bane and destruction to all the English manufactures in general. For it apparently encourages sloth and beggary; whereas if the legislative power would make some good provision, that workhouses might in every parish be erected, and the poor, such as are able, compelled to work, so many new hands might thereby be brought in, as would indeed make the English manufactures flourish.

I have reason to think, that the people receiving alms in this kingdom are 1,200,000; if but half could be brought to work, besides their own nourishment, their labour, one with another, might produce to the public, at 20s per head, at least per ann. 600,000.

If this could be compassed, the woollen manufacture would advance without any unnatural driving or compulsion. For we want hands, not manufactures, in England; and laws to compel the poor to work, not work wherewithal to give them employment.

To make England a true gainer by the woollen manufacture, we should be able to work the commodity so cheap, as to undersell all comers to the markets abroad. . . .

But this can never be, if, by arts and inventions, we endeavour to give wool an unnatural price here at home. . . .

If the people of England are willing, and pleased to wear Indian silks and stuffs, of which the prime cost in India is not above 1/4th part of what their own commodities would stand them in here; and if they are thereby thus enabled to export, so much of their own product, whatever is so saved is clear gain to the kingdom in general. . . .

It is granted, that bengals and stained callicoes, and other East-India goods, do hinder the consumption of Norwich stuffs, crapes, English ratines, shaloons, says, perpetuanas and antherines: but the same objection will lie against the use of any thing that is of foreign growth; for the importation of wine undoubltedly hinders the consumption of barley; and Engalnd could subsist, and the poor perhaps would have fuller employment, if foreign trade were quite laid aside; but this would ill consist with our being great at sea, upon which (under the present posture of affairs in Europe) all our safety does certainly depend. . . .

My lord, after much thought upon this subject, I am come to these conclusions within myself, which I submit to your better judgment.

1st, That our silk and linen manufactures obstruct trades more important and more profitable.

2dly, That though a prohibition of East-India goods may advance their present interest, who are engaged in the silk and linen manufactures here, yet that it will bring no future advantage to the kingdom.

3dly, That luxury is so deeply rooted in this nation, that should this prohibition pass, it will only carry us to European markets, where we shall pay perhaps 50 per cent dearer, may be, for the same, or for vanities of the like nature. So that Upon the whole matter, my lord, I am humbly of opinion, that the importation of wrought silks, bengals, stained callicoes, etc. does not so interfere with our silk and linen manufactures, as to hurt the public, and bring damage to the collective body of England. . . .

No prohibitions of a foreign or domestic commodity can have any effect without sumptuary laws, strictly penned and rigorously put in execution. . . .

However, though such a method is peradventure the only way of keeping down this luxury, I am very far, my lord, from thinking it advisable.

For the laws of all countries must be suited to the bent and inclinations of the people; and (which I am loth to say) there is sometimes a necessity they should be a little accommodated to their depraved manners and corruptions.

The people of England, who have been long accustomed to mild laws and a loose administration, can never endure that severity, which is needful to make such a prohibition have effect: nor can they suffer high duties, or penalties to be imposed upon their pleasures, or bear a strict inquisition into their furniture and apparel. . . .

And I must here take notice, that (as I am informed) all the saltpetre, produced in this side of the world, is not sufficient to take such a place of strength as Dunkirk. If the fact be so, as war is made now, must not whatever country can obtain the sole trade to India, and the monopoly of that commodity, give laws to the rest of Europe?