The Effect of Regulations fixing the Manner of Production

However, as society is possessed of a natural right to regulate the exercise of any class of industry, that without regulation might prejudice the rest of the community, physicians, surgeons, and apothecaries, are with perfect justice subjected to an examination into their professional ability.

The lives of their fellow-citizens are dependent upon their skill, and a test of that skill may fairly be established; but. it does not seem advisable to limit the number of practitioners nor the plan of their education. Society has no interest further than to ascer- tain their qualification.

On the same grounds, regulation is useful and proper, when aimed at the prevention of fraud or contrivance, manifestly injurious to other kinds of production, or to the public safety, and not at prescribing the nature of the products and the methods of fabrication.

Thus, a manufacturer must not be allowed to advertise his goods to the public as of better than their actual quality= the home consumer is entitled to the public protection against such a breach of faith; and so, indeed, is the mercantile character of the nation, which must suffer in the estimation and demand of foreign customers from such practices.

This is an exception to the general rule, that the best of all guarantees is the personal interest of the manufac- turer. For, possibly, when about to give up business, he may find it answer to increase his profit by a breach of faith, and sacrifice a future object he is about to relinquish for a present benefit. A fraud of this kind ruined the French cloths in the Levant market, about the year 1783; since when the German and British have entirely supplanted them. 183 We may go still further. An article often derives a value from the name, or from the place of its manufacture. When we judge from long experience, that cloths of such a denomination, and made at such a place, will be of a certain breadth and substance, it is a fraud to fabricate, under the same name and at the same place, a commodity of inferior substance and quality to the ordinary standard, and thus to send it into the world under a false certificate.

In Great Britain, the individual inventor of a new product or of a new process may obtain the exclusive right to it, by ob- taining what is called a patent. While the patent remains in force, the absence of competitors enables him to raise his price far above the ordinary return of his outlay with interest, and the wages of his own industry. Thus he receives a pre- mium from the government, charged upon the consumers of the new article; and this premium is often very large, as may be supposed in a country so immediately productive as Great Britain, where there are consequently abundance of affluent individuals, ever on the look-out for some new object of en- joyment. Some years ago a man invented a spiral or worm spring for insertion between the leather braces of carriages, to ease their motion, and made his fortune by the patent for so trifling an invention.

Privileges of this kind no one can reasonably object to; for they neither interfere with, nor cramp any branch of industry, previously in operation. Moreover, the expense incurred is purely voluntary; and those who choose to incur it, are not obliged to renounce the satisfaction of any previous wants, either of necessity or of amusement.

However, as it is the duty of every government to aim at the constant amelioration of its subjects’ condition, it cannot de- prive other producers to eternity of the right to employ part of their industry and capital in this particular channel, which Hence we may form an opinion of the extent to which gov- ernment may carry its interference with benefit. The corre-

times fixed by the government itself, which thus assigns a limit to the partiality it exercises towards the producers, and the injustice it practises upon the consumers= otherwise, the avarice of the privileged company would be bounded only by the dread of losing more by the reduction of the. gross amount of its sales, in consequence of increased prices, than it would gain by their unnatural elevation. At all events, the consumer pays for the commodity more than its worth; and government generally contrives to share in the profits of the monopoly. perhaps they might sooner or later have themselves discov- ered, or preclude the consumer for a very long period from the advantages of a competition price. Foreign nations being out of its jurisdiction, would of course grant no privilege to the inventor, and would, therefore, in this particular, during the operation of the patent, be better off than the nation where the invention originated.

France 185 has imitated the wise example of England, in as- signing a limit to the duration of these patent rights, after which the invention is free for all the world to avail them- selves of. It is also provided, that, if the process be capable of concealment, it shall be divulged at the expiration of the term. And the patentee, who in this case, it may be supposed, could do without the patent, has this advantage= that if his secret be discovered by any body in the interim, it cannot be made available till the expiration of the term.

It has been said, for the most ruinous expedient is sure to find some plausible argument or other to support it, that the com- merce with certain nations requires precautionary measures, which privileged companies only can enforce. At one time the plea is, that forts must be built, and marine establishments kept up; as if in truth it were worth while to traffic sword in hand, or an army were necessary to protect plain dealing; or as if the state did not already maintain at great charge a mili- tary force for the protection of its subjects! At another, that diplomatic address is indispensable. The Chinese, for instance, are a people so bigoted to form and prone to suspicion — so entirely independent of other nations, by reason of their re- mote position, the extent of their territory, and the peculiar character of their wants, that is a matter of special and pre- carious favour to be allowed to deal with them. We must, therefore, elect either to go without their teas, silks, and nankeens, or be content to submit tc precautions, which can alone insure the continuance of the trade; for the dealings of individuals might endanger the continuance of that good humour, without which the mutual intercourse of the two na- tions would be at an end.

Nor is it at all necessary that the government should inquire into the novelty or utility of the invention; for, if it be useless, so much the worse for the inventor, and, if it be already known, every body is competent to plead and prove that fact, and the previous right of the public; so that the only sufferer is the inventor, who has been at the expense of a patent for nothing. Thus the public is no loser by this species of encouragement, but, on the contrary, may derive prodigious advantage.

The regulations tending to direct either the object or the method of production, which have been above observed upon, by no means comprise all the measures adopted by different nations with those views. Indeed, were I to specify them all, my catalogue would soon be incomplete; for new ones are every day brought into practice.

The great point is, to lay down certain principles, that may enable us beforehand to judge of their consequences.

But there are two other branches of commerce, that have been the subject of more than usual regulation, and are, therefore, worthy of more special inves- tigation. I shall devote the two succeeding sections to their exclusive examination.

But, let me ask, is it so certain that the agents of a company, who are too apt to presume upon the support of the military power, either of the nation or at least of the company,-is it quite certain, that such agents are more likely to keep alive an amicable feeling than private traders, in whom more deference to local institutions might be expected, and who would have an immediate interest in keeping clear of any misunderstanding that should endanger both their persons and their property?

But, supposing the worst that could happen, and granting, for argument’s sake, that the trade with China can not be conducted otherwise than by a privileged company, does it follow, that with out one we must needs give up the taste for Chinese productions? Certainly not.

The trade in Chinese goods will always exist because it suits both parties – the Chinese and their customers.

But shall we not~pay dearer for those goods? There is no ground for thinking so.

3/4 of the European states have never sent a single ship to China, and yet are abundantly supplied with teas, with silks, and with nankeens, and that too at a very cheap rate.