and free state, is to open a great though 
distant market, for such parts of the produce 
of British industry as may exceed the demand 
of the markets nearer home, of those 
of Europe, and of the countries which lie 
round the Mediterranean sea. In its natural 
and free state, the colony trade, without drawing 
from those markets any part of the produce 
which had ever been sent to them, encourages 
Great Britain to increase the surplus 
continually, by continually presenting new 
equivalents to be exchanged for it. In its natural 
and free state, the colony trade tends to 
increase the quantity of productive labour in 
Great Britain, but without altering in any respect 
the direction of that which had been 
employed there before. In the natural and 
free state of the colony trade, the competition 
of all other nations would hinder the rate of 
profit from rising above the common level
either in the new market, or in the new employment
The new market, without drawing 
any thing from the old one, would create, if 
one may say so, a new produce for its own 
supply; and that new produce would constitute 
a new capital for carrying on the new 
employment, which, in the same manner, would 
draw nothing from the old one. 
The monopoly of the colony trade, on the 
contrary, by excluding the competition of other 
nations, and thereby raising the rate of profit
both in the new market and in the new employment
draws produce from the old market
and capital from the old employment
To augment our share of the colony trade 
beyond what it otherwise would be, is the 
avowed purpose of the monopoly. If our 
share of that trade were to be no greater with, 
than it would have been without the monopoly
there could have been no reason for establishing 
the monopoly. But whatever forces 
into a branch of trade, of which the returns 
are slower and more distant than those of the 
greater part of other trades, a greater proportion 
of the capital of any country, than what 
of its own accord would go to that branch
necessarily renders the whole quantity of productive 
labour annually maintained there, the 
whole annual produce of the land and labour 
of that country, less than they otherwise would 
be. It keeps down the revenue of the inhabitants 
of that country below what it would 
naturally rise to, and thereby diminishes their 
power of accumulation. It not only hinders
at all times, their capital from maintaining so 
great a quantity of productive labour as it 
would otherwise maintain, but it hinders it 
from increasing so fast as it would otherwise 
increase, and, consequently, from maintaining 
a still greater quantity of productive labour
The natural good effects of the colony trade
however, more than counterbalance to Great 
Britain the bad effects of the monopoly; so 
that, monopoly and altogether, that trade, 
even as it is carried on at present, is not only 
advantageous, but greatly advantageous. The 
new market and the new employment which 
are opened by the colony trade, are of much 
greater extent than that portion of the old 
market and of the old employment which is 
lost by the monopoly. The new produce and 
the new capital which has been created, if one 
may say so, by the colony trade, maintain in 
Great Britain a greater quantity of productive 
labour than what can have been thrown 
out of employment by the revulsion of capital 
from other trades of which the returns are more 
frequent. If the colony trade, however, even 
as it is carried on at present, is advantageous 
to Great Britain, it is not by means of the 
monopoly, but in spite of the monopoly
It is rather for the manufactured than for 
the rude produce of Europe, that the colony 
trade opens a new market. Agriculture is 
the proper business of all new colonies; a 
business which the cheapness of land renders 
more advantageous than any other. They 
abound, therefore, in the rude produce of 
land; and instead of importing it from other 
countries, they have generally a large surplus 
to export. In new colonies, agriculture 
either draws hands from all other employments
or keeps them from going to any other 
employment. There are few hands to spare 
for the necessary, and none for the ornamental 
manufactures. The greater part of the 
manufactures of both kinds they find it cheaper 
to purchase of other countries than to 
make for themselves. It is chiefly by encouraging 
the manufactures of Europe, that 
the colony trade indirectly encourages its 
agriculture. The manufacturers of Europe
to whom that trade gives employment, constitute 
a new market for the produce of the 
land, and the most advantageous of all markets
the home market for the corn and cattle
for the bread and butcher's meat of Europe
is thus greatly extended by means of 
the trade to America
But that the monopoly of the trade of populous 
and thriving colonies is not alone sufficient 
to establish, or even to maintain, manufactures 
in any country, the examples of 
Spain and Portugal sufficiently demonstrate
Spain and Portugal were manufacturing 
countries before they had any considerable 
colonies. Since they had the richest and 
most fertile in the world, they have both 
ceased to be so. 
In Spain and Portugal, the bad effects of 
the monopoly, aggravated by other causes, 
have, perhaps, nearly overbalanced the natural 
good effects of the colony trade. These 
causes seem to be other monopolies of different 
kinds: the degradation of the value of 
gold and silver below what it is in most other 
countries; the exclusion from foreign markets 
by improper taxes upon exportation, and the 
narrowing of the home market, by still more