In a word, gold will have now become a 'measure of value,' and no longer remain in the economic category of a 'medium of exchange.'

The same fallacy in identifying the economic interests of nations standing economically alone and independent, with those same nations when in trade relations with other nations, is seen in the importance which Adam Smith attaches to the number of artisans and labourers required in different employments, as giving investments in these employments their relative position in his scale or hierarchy. For although this consideration may be of the utmost importance for national defence, for the civilization and culture that come from the close association of aggregates of men (as seen in towns versus the country districts), as well as for the varied life essential to human beings in civilized States; on the other hand, for the accumulation of wealth by a nation freely trading with other nations, it is a matter of the smallest importance. Half a dozen men on a desert island who were sure of picking up a Kohinoor diamond every year, might command and continue to command as much of the wealth of the world of every species and variety, as many a small State supporting a working population of peasant proprietors as thick on the ground as moving ant-hills, and sweltering their lives away from morning to night in the sun.

And so again with the economic principle of Monopoly, against which Adam Smith has directed all his batteries in his chapters on the Colonial trade. It will be remembered that he had no objection to that trade in itself, if only it had been thrown open freely to all the world; what he objected to was the monopoly which England had gained in it. And the reason he objected to this monopoly was, that it seduced individuals to invest their capital in it out of the proper order of that hierarchy of wealth-producing investments which he had laid down, thus withdrawing capital, as by a kind of hothouse forcing, from the still greater wealth-producing employments of Agriculture, Manufactures, and the Home trade, and thereby lessening the possible wealth-producing capacity of the mother country as a whole. But here again he was confusing the effects of a monopoly conferred on one trade as against another in the same country, with the monopoly of one country against another in trade relations with it, - a fatal oversight.

It is admitted, for example, that the patents of monopoly conferred by the Tudor and Stuart sovereigns on their favourites or parasites were a pure detriment to the nation, inasmuch as, unlike patents for new or improved processes and mechanical inventions, these monopolies neither tapped new powers of Nature nor increased the capabilities of old ones, and so added nothing either to the immediate or permanent wealth-producing assets of the country. But a monopoly obtained by one nation over the productions of another, whether natural or artificial, whether at the bottom or at the top of the economic hierarchy, is quite a different matter, and is the greatest of all the wealth-producing assets which any nation can acquire. It matters not how or by what means it is acquired; - whether frankly by the sword, as by Rome over her conquered provinces; or by the despotism of a mother country over her Colonies, as that enjoyed in the time of Adam Smith by Holland, Spain, Portugal, and England; whether by the fact of geographical situation, as of Venice and the other Italian Republics before the discovery of the Cape route to the East; or purely by unequalled facilities for production, which in certain classes of commodities can beat all rivals out of the field, as in the case of the silks and wines and artistic skill of France, or the cotton, woollen, and cutlery manufactures of England; or again by giant combinations of capital in the hands of a few men in a particular nation, which by strategetical dispositions are able to quash the opposition of the dispersed and smaller capitals of other nations, - as in some of the combinations preparing in America at the present time, and so on.

For monopolies of this kind, of one country over another, are as great a national asset as is the domination of one country over the resources of another through conquest in war; the only difference being, that whereas in the latter case the tax is taken directly as tribute, in the former it is taken by a monopoly of trade. Neither is at all likely to be achieved without ' prayer and much fasting,' and without being worked up to by the blood or sweat of many lives, continued, perhaps, through many generations; but once gained it is a wealth-producing asset not lightly to be thrown away. For although the world is slowly outgrowing the lust for territorial conquests in its zeal for a more concentrated racial or geographical independence, this lust for trade monopolies of one nation over another burns more fiercely than ever, and is the ideal goal and ambition of the business men of every nation the world over. And the reason is obvious. For a monopoly by its very nature has precisely the same effect on the fortunes of the individual or nation that has managed to secure it, as if that individual or nation had beaten its rivals out of the field by fair competition on even terms, inasmuch as, like the bank of Monte Carlo which by its zero has the advantage over all the players in every spin, a smaller amount of labour expended in production by the monopolizing individual or nation will always, by the pressure that can be brought to bear, exchange for a larger amount of the labour of those with whom they are trading.