1776 - Commerce

Commerce

France's controller general Jacques Turgot presents Louis XVI with Six Edicts in January (see 1774). One edict ends the guilds' monopoly, another abolishes the corvée (see 1761), and the proposals bring demands by the clergy, courtiers, the nobility, and the queen Marie Antoinette that Turgot be dismissed. His opponents forge letters in which Turbot is alleged to have made offensive remarks about the king; Louis XVI stands by his minister, saying, "Only Monsieur Turgot and I really love the people," but he yields to pressure in May and requests Turgot's resignation.

Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith proposes a system of natural liberty in trade and commerce (see Hume, 1739; Smith, 1759). "Consumption is the sole end and purpose of all production, and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer," who in the long run has full control over what will and will not be produced, says Smith, who is now 53, teaches at the University of Glasgow, and says prosperity requires freedom, a competitive system, and an effective judicial system. "The real price of everything is the toil and trouble of acquiring it" (I); "The propensity to truck, barter, and exchange . . . is common to all men, and to be found in no other race of animals" (I, ii); "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest" (II). "Every individual endeavors to employ his capital so that its produce may be of greatest value. He generally neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own security, only his own gain. And he is in this led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it." "To found a great empire for the sole purpose of raising up a people of customers may at first sight appear unfit for a nation of shopkeepers; but extremely fit for a nation whose Government is influenced by shopkeepers" (II, iv, 7). Smith's massive work establishes the classical school of political economy and will influence all future thinking on politics and economics, but it shows no awareness of the developing industrial revolution, and while it espouses free-market competition with limited government intervention it regards unemployment as a necessary evil to keep costs (and therefore prices) in check (see Ricardo, 1817). "The discovery of America, and that of a passage to the East Indies by the Cape of Good Hope, are the two greatest and most important events recorded in the history of mankind," writes Adam Smith. His 1,000-page work is a bestseller whose first printing sells out in a few weeks.

The colonists who risk their lives by signing the Declaration of Independence August 2 and pledging their fortunes to the cause include some of the richest men in the country: Carter Braxton, 39, of Chericoke and Elsing Green, Benjamin Harrison V of Berkeley, 50, Thomas Jefferson of Monticello, and Richard Henry Lee have huge Virginia plantations; Annapolis-born lawyer and planter Charles Carroll, 38, received a 10,000-acre tract (Carrollton Manor) in Maryland's Frederick County from his father 10 years ago; Philadelphia merchant George Clymer, 37, is a partner in the prosperous firm Merediths & Clymer; Marblehead-born Boston merchant Elbridge Gerry, 31, has been building up a fortune since his graduation from Harvard in 1762; John Hancock has more personal wealth than anyone else in Massachusetts; Connecticut farmer John Hart, 65, owns fulling factories and grist mills; Kingston, New Jersey-born North Carolina merchant Joseph Hewes, 46, has built up a substantial mercantile and shipping business; Welsh-born New York merchant Francis Lewis, 63, has accumulated a fortune in contracts supplying British troops; New York patroon Robert Livingston, 29, has vast holdings on the Hudson River; South Carolina jurist Arthur Middleton, 34, inherited his plantation on the Ashley River through his mother; New York landowner Lewis Morris, 50, has inherited large family estates; Thomas Nelson, Jr., 37, is a Virginia lawyer; Kittery, Maine-born Portsmouth, New Hampshire, merchant William Whipple, 46, gave up slave trading and deep-water sea voyages in 1760 to form a mercantile partnership with his brother Joseph. The 56 signers include 24 lawyers and jurists, 11 merchants, and nine farmers and large plantation owners; all have much to lose financially if the bid for independence fails, many will pay dearly for supporting the revolution (nine will die of wounds or from hardships suffered in the war, five will be captured as traitors and tortured before they die, two will lose their sons, one will have his two sons captured, 12 will have their homes ransacked and burnt), but the rich men who cautiously remain loyal to the Crown will suffer most in the end.

The Continental Congress starts a national lottery to raise money for the Continental Army. Congress borrows $5 million October 3 to halt the rapid depreciation of paper money; Rhode Island establishes wage and price controls December 31, limiting pay to 70¢ per day for carpenters, 42¢ for tailors.

A good harvest in France reduces the price of bread, but the French again abolish internal free trade in grain (see 1774; 1787).