different employments carried on in it, as 
nearly as possible in the proportion which is 
most agreeable to the interest of the whole 
All the different regulations of the mercantile 
system necessarily derange more or less 
this natural and most advantageous distribution 
of stock. But those which concern the 
trade to America and the East Indies derange 
it, perhaps, more than any other; because the 
trade to those two great continents absorbs a 
greater quantity of stock than any two other 
branches of trade. The regulations, however, 
by which this derangement is effected in those 
two different branches of trade, are not altogether 
the same. Monopoly is the great engine 
of both; but it is a different sort of monopoly
Monopoly of one kind or another, 
indeed, seems to be the sole engine of the mercantile 
In the trade to America, every nation endeavours 
to engross as much as possible the 
whole market of its own colonies, by fairly 
excluding all other nations from any direct 
trade to them. During the greater part of the 
sixteenth century, the Portuguese endeavoured 
to manage the trade to the East Indies in the 
same manner, by claiming the sole right of 
sailing in the Indian seas, on account of the 
merit of having first found out the road to 
them. The Dutch still continue to exclude 
all other European nations from any direct 
trade to their spice islands. Monopolies of 
this kind are evidently established against all 
other European nations, who are thereby not 
only excluded from a trade to which it might 
be convenient for them to turn some part of 
their stock, but are obliged to buy the goods 
which that trade deals in, somewhat dearer 
than if they could import them themselves 
directly from the countries which produced 
But since the fall of the power of Portugal, 
no European nation has claimed the exclusive 
right of sailing in the Indian seas, of 
which the principal ports are now open to the 
ships of all European nations. Except in 
Portugal, however, and within these few years 
in France, the trade to the East Indies has, 
in every European country, been subjected to 
an exclusive company. Monopolies of this 
kind are properly established against the very 
nation which erects them. The greater part 
of that nation are thereby not only excluded 
from a trade to which it might be convenient 
for them to turn some part of their stock, but 
are obliged to buy the goods which that trade 
deals in somewhat dearer than if it was open 
and free to all their countrymen. Since the 
establishment of the English East India company
for example, the other inhabitants of 
England, over and above being excluded from 
the trade, must have paid, in the price of the 
East India goods which they have consumed
not only for all the extraordinary profits which 
the company may have made upon those goods 
in consequence of their monopoly, but for all 
the extraordinary waste which the fraud and 
abuse inseparable from the management of 
the affairs of so great a company must necessarily 
have occasioned. The absurdity of this 
second kind of monopoly, therefore, is much 
more manifest than that of the first. 
Both these kinds of monopolies derange 
more or less the natural distribution of the 
stock of the society; but they do not always 
derange it in the same way. 
Monopolies of the first kind always attract 
to the particular trade in which they are established 
a greater proportion of the stock of 
the society than what would go to that trade 
of its own accord
Monopolies of the second kind may sometimes 
attract stock towards the particular trade 
in which they are established, and sometimes 
repel it from that trade, according to different 
circumstances. In poor countries, they 
naturally attract towards the trade more stock 
than would otherwise go to it. In rich countries
they naturally repel from it a good deal 
of stock which would otherwise go to it. 
Such poor countries as Sweden and Denmark
for example, would probably have never 
sent a single ship to the East Indies, had 
not the trade been subjected to an exclusive 
company. The establishment of such a company 
necessarily encourages adventurers. Their 
monopoly secures them against all competitors 
in the home market, and they have the 
same chance for foreign markets with the 
traders of other nations. Their monopoly 
shows them the certainty of a great profit upon 
a considerable quantity of goods, and the 
chance of a considerable profit upon a great 
quantity. Without such extraordinary encouragement
the poor traders of such poor countries 
would probably never have thought of 
hazarding their small capitals in so very distant 
and uncertain an adventure as the trade 
to the East Indies must naturally have appeared 
to them. 
Such a rich country as Holland, on the 
contrary, would probably, in the case of a free 
trade, send many more ships to the East Indies 
than it actually does. The limited stock 
of the Dutch East India company probably 
repels from that trade many great mercantile 
capitals which would otherwise go to it. The 
mercantile capital of Holland is so great, that 
it is, as it were, continually overflowing, sometimes 
into the public funds of foreign countries
sometimes into loans to private traders 
and adventurers of foreign countries, sometimes 
into the most round-about foreign trades 
consumption, and sometimes into the carrying 
trade. All near employments being 
completely filled up, all the capital which can 
be placed in them with any tolerable profit 
being already placed in them, the capital of 
Holland necessarily flows towards the most