And now we have to ask how the Physiocrats proposed to raise the revenue necessary for the defence and administration of the State, if all duties whatever, external and internal, were to be abolished? Nothing could be simpler, said they; all you have to do is to put a single tax on land values alone, and the thing will be done, not only without the people feeling it, but without the landlords suffering from it! For what is paid in taxes by the landlord is first deducted from the whole amount of produce, and the balance is sold at higher prices. In this way the tax is quietly shifted on to the shoulders of the people, and the landowners are untouched by it. But, on the other hand, so equally diffused will the burden be over the whole population, that not only will the taxes be secured with a minimum of friction and injustice to individuals by this mode of levying them, but like all indirect taxes which operate through prices, almost without people knowing it. If it should happen that the landlords were not able to shift the tax from their own shoulders, the scheme of the Physiocrats would be frustrated, for the landlords would then be prevented from improving the soil, on the surplus produce of which, by the hypothesis, not only the subsistence of the people but the wealth of the nation depended.

Such in barest skeleton and outline, and in its logical concatenation, was the system of the Physiocrats, which through its adoption (in its main features at least) by Adam Smith was destined to play so important a part in the political economy of the world. But as I shall have to deal with the modifications made in this system by him in my next chapter, I shall say no more in reference to it here than that it is precisely the sort of proposition we can imagine a despot, as for example the Czar of Russia, making to the vast population of manufacturers, artisans, and labourers, who are under his sway, in words to this effect; - that if they would only live as sparingly as they could, buy as cheaply as they could, and so permit him and his landlords to accumulate as great a surplus as possible, it would really be for their own and their country's good. For would not the surplus which would accumulate as the result of it in the imperial treasury and in the granaries of the landlords be used to keep them and their families better fed and clothed and housed, better employed and better paid, than before? That is to say, if they would only consent to empty as much of the water from their buckets as they could into his and his landlords', these in turn would have all the more left over to pour back into theirs! They would have lived in the mean time somehow, and all that they had stinted themselves of, and more, would come back to them later on as at once a solid bonus and a delightful surprise!

The truth is, the whole argument is a piece of pure logical hocus-pocus, and it is little wonder that the system itself should have long faded from the thoughts of men. And vet it must not be forgotten that Adam Smith deliberately says of it; "This system with all its imperfections is perhaps the nearest approximation to the truth that has yet been published upon the subject of Political Economy, and is upon that account well worth the consideration of every man who wishes to examine with attention the principles of that very important Science." And indeed, as we shall now see, Adam Smith embraced the system as a whole with but the most superficial modifications in detail.

To sum up the history of this strange system in a word, then, we may say, firstly that it was through it, and by a single stroke of the pen as it were, that the great twin doctrines of laissez-faire and of Freedom of Trade, which have played so great a part in the political economy of the nineteenth century were born into the world; and secondly, that both these doctrines alike are the necessary logical corollaries from the, to us, amazing first principle, that' in Agriculture alone does Nature lend her aid to the labour of man, whereas in Manufactures, Nature does nothing but man does all.'