Wealth: Naturaland Artificial, Certain and Uncertain

Another distinction of the English authors is that between natural and artificial wealth. “Natural wealth” consists of the products of the land, mines and sea. Some products can be reproduced through the action of nature itself (fish, forests, wild fruits), others are so through man’s action (cereals, livestock and vegetables), while still others are more or less exhaustible (mines and quarries).

Some remarks on the distinction between natural and artificial wealth are apposite. First, the writers generally thought that it was better to preserve one’s natural wealth than to export it. Edgar Johnson (1937) provides the example of the “staple system”, namely, the English export policy, in force until the sixteenth century, of native raw products: wool, tin, wheat, leather, and so on. This system was based on the concession of privileges to the Merchants of Staples, in particular that of exporting these products to Hanseatic markets. This was challenged by a rival body, the Merchant Adventurers, on the grounds that this system was unfavourable to England. The latter argued in favour of another policy discouraging the export of native raw products and encouraging that of manufactured products. Paramount in the seventeenth century, this new policy was based on the “principle of conservation” (Johnson 1937: 302) by which foreign manufac­tured goods were burdened with duties while foreign raw materials were allowed to enter with no or almost no duties.

Second, the assumed superiority of artificial wealth highlights the key role of the foreign trade. The literature on trade underrates domestic trade because of its assumed limited capacity to enrich the nation. Mun writes: “for we may exchange amongst our selves, or with strangers; if amongst our selves, the Commonwealth cannot be enriched thereby; for the gain of one subject is the loss of another. And if we exchange with strangers, then our profit is the gain of the Commonwealth” (Mun 1664 [1986]: 52). The superiority of foreign trade is stressed, for example, by Petyt (1680 [1856]: 289-90), Petty (1690 [1986], 295) and Child (1693 [1698]: preface, 25, 152).

Third, many authors noted the uncertainty in foreign trade and the unpredictable nature of the wealth it brings. John Wheeler (1560-1617) emphasised the irregularity of a foreign trade which would operate without great trading companies (Wheeler 1601 [1931]: 363), and Barbon (1690 [1905]: 11) stressed that the foreign staples, whether or not reworked, are “uncertain wealth” if the country only establishes a single kind of trade with another country. If this trade ceases, the country is in difficulty. This uncer­tainty correlated to the inevitable rivalry between nations instilled in minds the idea of trade as a sort of zero-sum game. This idea we encounter, for example, in John Hales (1581 [1907]: 96), Francis Bacon (1597 [1740]: 322), Montchretien (1615 [1999]: 303), William Temple (1673 [1705]: 245) and, in a way, in Mun (1664 [1986]: 52). However, the metaphor can accommodate some variations. For example, Petyt writes (1680 [1856]: 487): “it does not follow that everything which will prejudice the Trade of one Nation, shall better the Trade of another” (see also Child 1693 [1698]: 174-5). The commonly held belief at the end of the seventeenth century is rather that world trade represents a volume of business or an amount of gains relatively fixed, which does not ipso facto mean that this trade cannot produce effects which are mutually beneficial (see Irwin 1996: 31).