Economic Sophisms
by Frédéric Bastiat · English · Gutenberg #44145 · 507,224 chars · public domain (US)
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Title: Economic Sophisms
Author: Frédéric Bastiat
Translator: Patrick James Stirling
Release date: November 10, 2013 [eBook #44145]
Most recently updated: November 28, 2024
Language: English
Other information and formats: www.gutenberg.org/ebooks/44145
Credits: Produced by David Widger
*** START OF THE PROJECT GUTENBERG EBOOK ECONOMIC SOPHISMS ***
Produced by David Widger
ECONOMIC SOPHISMS
By Frédéric Bastiat
Translated From the Fifth Edition of the French, by Patrick James
Stirling, LLD., F.R.S.E.
Author Of "The Philosophy Of Trade," Etc.
Edinburgh: Oliver And Boyd, Tweeddale Court.
1873
TRANSLATOR'S PREFACE.
Bastiat's two great works on Political Economy--the Sophismes
Économiques, and the Harmonies Économiques--may be regarded as
counterparts of each other. He himself so regarded them: "the one," he
says, "pulls down, the other builds up." His object in the Sophismes was
to refute the fallacies of the Protectionist school, then predominant
in France, and so to clear the way for the establishment of what he
maintained to be the true system of economic science, which he desired
to found on a new and peculiar theory of value, afterwards fully
developed by him in the _Harmonies_. Whatever difference of opinion
may exist among economists as to the soundness of this theory, all must
admire the irresistible logic of the _Sophismes_, and "the sallies
of wit and humour," which, as Mr Cobden has said, make that work as
"amusing as a novel."
The system of Bastiat having thus a _destructive_ as well as a
_constructive_ object, a _negative_ as well as a _positive_ design, it
is perhaps only doing justice to his great reputation as an economist to
put the English reader in a position to judge of that system as a
whole. Hence the present translation of the _Sophismes_ is intended as a
companion volume to the translation of the _Harmonies._
It is unnecessary for me to say more here by way of preface, the gifted
author having himself explained the design of the work in a short but
lucid introduction.
P.J.S.
ECONOMIC SOPHISMS. FIRST SERIES.
INTRODUCTION.
My design in this little volume is to refute some of the arguments which
are urged against the Freedom of Trade.
I do not propose to engage in a contest with the protectionists; but
rather to instil a principle into the minds of those who hesitate
because they sincerely doubt.
I am not one of those who say that Protection is founded on men's
interests. I am of opinion rather that it is founded on errors, or, if
you will, upon _incomplete truths_. Too many people fear liberty, to
permit us to conclude that their apprehensions are not sincerely felt.
It is perhaps aiming too high, but my wish is, I confess, that this
little work should become, as it were, the _Manual_ of those whose
business it is to pronounce between the two principles. Where men have
not been long accustomed and familiarized to the doctrine of liberty,
the sophisms of protection, in one shape or another, are constantly
coming back upon them. In order to disabuse them of such errors when
they recur, a long process of analysis becomes necessary; and every
one has not the time required for such a process--legislators less than
others. This is my reason for endeavouring to present the analysis and
its results cut and dry.
But it may be asked, Are the benefits of liberty so hidden as to be
discovered only by Economists by profession?
* The first series of the Sophismes Économiques appeared in
the end of 1845; the second series in 1848.--Editor.
We must confess that our adversaries have a marked advantage over us in
the discussion. In very few words they can announce a half-truth; and
in order to demonstrate that it is _incomplete_, we are obliged to have
recourse to long and dry dissertations.
This arises from the nature of things. Protection concentrates on one
point the good which it produces, while the evils which it inflicts are
spread over the masses. The one is visible to the naked eye; the other
only to the eye of the mind. In the case of liberty, it is just the
reverse.
In the treatment of almost all economic questions, we find it to be so.
You say, Here is a machine which has turned thirty workmen into the
street.
Or, Here is a spendthrift who encourages every branch of industry.
Or, The conquest of Algeria has doubled the trade of Marseilles.
Or, The budget secures subsistence for a hundred thousand families.
You are understood at once and by all. Your propositions are in
themselves clear, simple, and true. What are your deductions from them?
Machinery is an evil.
Luxury, conquests, and heavy taxation, are productive of good.
And your theory has all the more success that you are in a situation to
support it by a reference to undoubted facts.
On our side, we must decline to confine our attention to the cause, and
its direct and immediate effect. We know that this very effect in its
turn becomes a cause. To judge correctly of a measure, then, we must
trace it through the whole chain of results to its definitive effect. In
other words, we are forced to _reason_ upon it.
But then clamour gets up: You are theorists, metaphysicians, idealists,
utopian dreamers, _doctrinaires_; and all the prejudices of the popular
mind are roused against us.
What, under such circumstances, are we to do? We can only invoke the
patience and good sense of the reader, and set our deductions, if we
can, in a light so clear, that truth and error must show themselves
plainly, openly, and without disguise,--and that the victory, once
gained, may remain on the side of restriction, or on that of freedom.
And here I must set down an essential observation.
Some extracts from this little volume have already appeared in the
_Journal des Economistes_.
In a critique, in other respects very favourable, from the pen of M.
le Vicomte de Romanet, he supposes that I demand the suppression of
customs. He is mistaken. I demand the suppression of the protectionist
_régime_. We don't refuse taxes to the Government, but we desire, if
possible, to dissuade the governed from taxing one another. Napoleon
said that "the customhouse should not be made an instrument of revenue,
but a means of protecting industry." We maintain the contrary, and we
contend that the customhouse ought not to become in the hands of the
working classes an instrument of reciprocal rapine, but that it may be
used as an instrument of revenue as legitimately as any other. So far
are we--or, to speak only for myself, so far am I--from demanding the
suppression of customs, that I see in that branch of revenue our future
anchor of safety. I believe our resources are capable of yielding to the
Treasury immense returns; and to speak plainly, I must add, that, seeing
how slow is the spread of sound economic doctrines, and so rapid
the increase of our budgets, I am disposed to count more upon the
necessities of the Treasury than on the force of enlightened opinion for
furthering the cause of commercial reform.
You ask me, then, What is your conclusion? and I reply, that here there
is no need to arrive at a conclusion. I combat sophisms; that is all.
But you rejoin, that it is not enough to pull down--it is also necessary
to build up. True; but to destroy an error, is to build up the truth
which stands opposed to it.
After all, I have no repugnance to declare what my wishes are. I desire
to see public opinion led to sanction a law of customs conceived nearly
in these terms:--
Articles of primary necessity to pay a duty, ad valorem, of 5 per cent.
Articles of convenience, 10 per cent.
Articles of luxury, 15 to 20 per cent.
These distinctions, I am aware, belong to an order of ideas which are
quite foreign to Political Economy strictly so called, and I am far from
thinking them as just and useful as they are commonly supposed to be.
But this subject does not fall within the compass of my present design.
I. ABUNDANCE, SCARCITY.
Which is best for man, and for society, abundance or scarcity?
What! you exclaim, can that be a question? Has any one ever asserted, or
is it possible to maintain, that scarcity is at the foundation of human
wellbeing?
Yes, this has been asserted, and is maintained every day; and I hesitate
not to affirm that the _theory of scarcity_ is much the most popular.
It is the life of conversation, of the journals, of books, and of
the tribune; and strange as it may seem, it is certain that Political
Economy will have fulfilled its practical mission when it has
established beyond question, and widely disseminated, this very
simple proposition: "The wealth of men consists in the abundance of
commodities."
Do we not hear it said every day, "The foreigner is about to inundate us
with his products?" Then we fear abundance.
Did not M. Saint Cricq exclaim, "Production is excessive?" Then he feared
abundance.
Do workmen break machines? Then they fear excess of production, or
abundance.
Has not M. Bugeaud pronounced these words, "Let bread be dear, and
agriculturists will get rich?" Now, bread cannot be dear but because it
is scarce. Therefore M. Bugeaud extols scarcity.
Does not M. d'Argout urge as an argument against sugar-growing the
very productiveness of that industry? Does he not say, "Beetroot has no
future, and its culture cannot be extended, because a few acres devoted
to its culture in each department would supply the whole consumption of
France?" Then, in his eyes, good lies in sterility, in dearth, and evil
in fertility and abundance.
The _Presse_, the _Commerce_, and the greater part of the daily papers,
have one or more articles every morning to demonstrate to the Chambers
and the Government, that it is sound policy to raise legislatively the
price of all things by means of tariffs. And do the Chambers and the
Government not obey the injunction? Now tariffs can raise prices only
by diminishing the _supply_ of commodities in the market! Then the
journals, the Chambers, and the Minister, put in practice the theory of
scarcity, and I am justified in saying that this theory is by far the
most popular.
How does it happen that in the eyes of workmen, of publicists, and
statesmen, abundance should appear a thing to be dreaded, and scarcity
advantageous? I propose to trace this illusion to its source.
We remark that a man grows richer in proportion to the return yielded by
his exertions, that is to say, in proportion as he sells his commodity
at a _higher price_. He sells at a higher price in proportion to the
rarity, to the scarcity, of the article he produces. We conclude from
this, that, as far as he is concerned at least, scarcity enriches him.
Applying successively the same reasoning to all other producers, we
construct the _theory of scarcity_. We next proceed to apply this
theory, and, in order to favour producers generally, we raise prices
artificially, and cause a scarcity of all commodities, by prohibition,
by restriction, by the suppression of machinery, and other analogous
means.
The same thing holds of abundance. We observe that when a product is
plentiful, it sells at a lower price, and the producer gains less. If
all producers are in the same situation, they are all poor. Therefore
it is abundance that ruins society And as theories are soon reduced
to practice, we see the law struggling against the abundance of
commodities.
This sophism in its more general form may make little impression, but
applied to a particular order of facts, to a certain branch of industry,
to a given class, of producers, it is extremely specious; and this
is easily explained. It forms a syllogism which is not _false_,
but _incomplete_. Now, what is _true_ in a syllogism is always and
necessarily present to the mind. But _incompleteness_ is a negative
quality, an absent _datum_, which it is very possible, and indeed very
easy, to leave out of account.
Man produces in order to consume. He is at once producer and consumer.
The reasoning which I have just explained considers him only in the
first of these points of view. Had the second been taken into account,
it would have led to an opposite conclusion. In effect, may it not be
said:--
The consumer is richer in proportion as he _purchases_ all things
cheaper; and he purchases things cheaper in proportion to their
abundance; therefore it is abundance which enriches him. This reasoning,
extended to all consumers, leads to the _theory of plenty_.
It is the notion of _exchange_ imperfectly understood which leads to
these illusions. If we consider our personal interest, we recognise
distinctly that it is double. As _sellers_ we have an interest in
dearness, and consequently in scarcity; as _buyers_, in cheapness, or
what amounts to the same thing, in the abundance of commodities. We
cannot, then, found our reasoning on one or other of these interests
before inquiring which of the two coincides and is identified with the
general and permanent interest of mankind at large.
If man were a solitary animal, if he laboured exclusively for himself,
if he consumed directly the fruit of his labour--in a word, _if he did
not exchange_--the theory of scarcity would never have appeared in
the world. It is too evident that, in that case, abundance would be
advantageous, from whatever quarter it came, whether from the result
of his industry, from ingenious tools, from powerful machinery of his
invention, or whether due to the fertility of the soil, the liberality
of nature, or even to a mysterious _invasion_ of products brought by the
waves and left by them upon the shore. No solitary man would ever
have thought that in order to encourage his labour and render it more
productive, it was necessary to break in pieces the instruments which
saved it, to neutralize the fertility of the soil, or give back to the
sea the good things it had brought to his door. He would perceive at
once that labour is not an end, but a means; and that it would be absurd
to reject the result for fear of doing injury to the means by which that
result was accomplished. He would perceive that if he devotes two
hours a day to providing for his wants, any circumstance (machinery,
fertility, gratuitous gift, no matter what) which saves him an hour
of that labour, the result remaining the same, puts that hour at his
disposal, and that he can devote it to increasing his enjoyments;
in short, he would see that _to save labour_ is nothing else than
_progress_.
But _exchange_ disturbs our view of a truth so simple. In the social
state, and with the separation of employments to which it leads,
the production and consumption of a commodity are not mixed up and
confounded in the same individual. Each man comes to see in his labour
no longer a means but an end. In relation to each commodity, exchange
creates two interests, that of the producer and that of the consumer;
and these two interests are always directly opposed to each other.
It is essential to analyze them, and examine their nature.
Take the case of any producer whatever, what is his immediate interest?
It consists of two things: 1st, that the fewest possible number of
persons should devote themselves to his branch of industry; 2dly, that
the greatest possible number of' persons should be in quest of the
article he produces. Political economy explains it more succinctly in
these terms, Supply very limited, demand very extended; or in other
words still, Competition limited, demand unlimited.
What is the immediate interest of the consumer? That the supply of the
product in question should be extended, and the demand restrained.
Seeing, then, that these two interests are in opposition to each other,
one of them must necessarily coincide with social interests in general,
and the other be antagonistic to them.
But which of them should legislation favour, as identical with the
public good--if, indeed, it should favour either?
To discover this, we must inquire what would happen if the secret wishes
of men were granted.
In as far as we are producers, it must be allowed that the desire of
every one of us is anti-social. Are we vine-dressers? It would give us
no great regret if hail should shower down on all the vines in the world
except our own: _this is the theory of scarcity_. Are we iron-masters?
Our wish is, that there should be no other iron in the market but our
own, however much the public may be in want of it; and for no other
reason than that this want, keenly felt and imperfectly satisfied, shall
ensure us a higher price: this _is still the theory of scarcity_. Are
we farmers? We say with M. Bugeaud, Let bread be dear, that is to say,
scarce, and agriculturists will thrive: always the same theory, _the
theory of scarcity_.
Are we physicians? We cannot avoid seeing that certain physical
ameliorations, improving the sanitary state of the country, the
development of certain moral virtues, such as moderation and temperance,
the progress of knowledge tending to enable each man to take better
care of his own health, the discovery of certain simple remedies of easy
application, would be so many blows to our professional success. In as
far as we are physicians, then, our secret wishes would be anti-social.
I do not say that physicians form these secret wishes. On the contrary,
I believe they would hail with joy the discovery of a universal panacea;
but they would not do this as physicians, but as men, and as Christians.
By a noble abnegation of self', the physician places himself in the
consumer's point of view. But as exercising a profession, from which he
derives his own and his family's subsistence, his desires, or, if you
will, his interests, are anti-social.
Are we manufacturers of cotton stuffs? We desire to sell them at the
price most profitable to ourselves. We should consent willingly to an
interdict being laid on all rival manufactures; and if we could venture
to give this wish public expression, or hope to realize it with some
chance of success, we should attain our end, to some extent, by indirect
means; for example, by excluding foreign fabrics, in order to diminish
the _supply_, and thus produce, forcibly and to our profit, a _scarcity_
of clothing.
In the same way, we might pass in review all other branches of industry,
and we should always find that the producers, as such, have anti-social
views. "The shopkeeper," says Montaigne, "thrives only by the
irregularities of youth; the farmer by the high price of corn, the
architect by the destruction of houses, the officers of justice by
lawsuits and quarrels. Ministers of religion derive their distinction
and employment from our vices and our death. No physician rejoices in
the health of his friends, nor soldiers in the peace of their country;
and so of the rest."
Hence it follows that if the secret wishes of each producer were
realized, the world would retrograde rapidly towards barbarism. The sail
would supersede steam, the oar would supersede the sail, and general
traffic would be carried on by the carrier's waggon; the latter would be
superseded by the mule, and the mule by the pedlar. Wool would exclude
cotton, cotton in its turn would exclude wool, and so on until the
dearth of all things had caused man himself to disappear from the face
of the earth.
Suppose for a moment that the legislative power and the public force
were placed at the disposal of Mimeral's committee, and that each member
of that association had the privilege of bringing in and sanctioning a
favourite law, is it difficult to divine to what sort of industrial code
the public would be subjected?
If we now proceed to consider the immediate interest of the consumer, we
shall find that it is in perfect harmony with the general interest, with
all that the welfare of society calls for. When the purchaser goes
to market, he desires to find it well stocked. Let the seasons be
propitious for all harvests; let inventions more and more marvellous
bring within reach a greater and greater number of products and
enjoyments; let time and labour be saved; let distances be effaced by
the perfection and rapidity of transit; let the spirit of justice and
of peace allow of a diminished weight of taxation; let barriers of every
kind be removed;--in all this the interest of the consumer runs parallel
with the public interest. The consumer may push his secret wishes to a
chimerical and absurd length, without these wishes becoming antagonistic
to the public welfare. He may desire that food and shelter, the hearth
and the roof, instruction and morality, security and peace, power and
health, should be obtained without exertion, and without measure, like
the dust of the highways, the water of the brook, the air which we
breathe; and yet the realization of his desires would not be at variance
with the good of society.
It may be said that if these wishes were granted, the work of the
producer would become more and more limited, and would end with
being stopped for want of aliment. But why? Because, on this extreme
supposition, all imaginable wants and desires would be fully satisfied.
Man, like Omnipotence, would create all things by a simple act of
volition. Well, on this hypotheses, what reason should we have to regret
the stoppage of industrial production?
I made the supposition, not long ago, of the existence of an assembly
composed of workmen, each member of which, in his capacity of producer,
should have the power of passing a law embodying his _secret wish_, and
I said that the code which would emanate from that assembly would be
monopoly systematized, the theory of scarcity reduced to practice.
In the same way, a chamber in which each should consult exclusively his
own immediate interest as a consumer, would tend to systematize liberty,
to suppress all restrictive measures, to overthrow all artificial
barriers--in a word, to realize the _theory of plenty_.
Hence it follows:
That to consult exclusively the immediate interest of the producer, is
to consult an interest which is anti-social.
That to take for basis exclusively the immediate interest of the
consumer, would be to take for basis the general interest.
Let me enlarge on this view of the subject a little, at the risk of
being prolix.
A radical antagonism exists between seller and buyer.*
The former desires that the subject of the bargain should be scarce, its
supply limited, and its price high.
The latter desires that it should be _abundant_, its supply large, and
its price low.
The laws, which should be at least neutral, take the part of the seller
against the buyer, of the producer against the consumer, of dearness
against cheapness,** of scarcity against abundance.
* The author has modified somewhat the terms of this
proposition in a posterior work.--See _Harmonies
Économiques_, chapter xi.--Editor.
** We have not in French a substantive to express the idea
opposed to that of dearness (cheapness). It is somewhat
remarkable that the popular instinct expresses the idea by
this periphrase, _marché avantageux, bon marche'_. The
protectionists would do well to reform this locution, for it
implies an economic system opposed to theirs.
They proceed, if not intentionally, at least logically, on this datum:
_a nation is rich when it is in want of everything_.
For they say, it is the producer that we must favour by securing him a
good market for his product. For this purpose it is necessary to raise
the price, and in order to raise the price we must restrict the supply;
and to restrict the supply is to create scarcity.
Just let us suppose that at the present moment, when all these laws
are in full force, we make a complete inventory, not in value, but in
weight, measure, volume, quantity, of all the commodities existing in
the country, which are fitted to satisfy the wants and tastes of its
inhabitants--corn, meat, cloth, fuel, colonial products, etc.
Suppose, again, that next day all the barriers which oppose the
introduction of foreign products are removed.
Lastly, suppose that in order to test the result of this reform, they
proceed three months afterwards to make a new inventory.
Is it not true that there will be found in France more corn, cattle,
cloth, linen, iron, coal, sugar, etc., at the date of the second, than
at the date of the first inventory?
So true is this, that our protective tariffs have no other purpose than
to hinder all these things from reaching us, to restrict the supply, and
prevent depreciation and abundance.
Now I would ask, Are the people who live under our laws better fed
because there is _less_ bread, meat, and sugar in the country? Are they
better clothed, because there is _less_ cloth and linen? Better warmed,
because there is _less_ coal? Better assisted in their labour, because
there are _fewer_ tools and _less_ iron, copper, and machinery?
But it may be said, If the foreigner _inundates_ us with his products,
he will carry away our money.
And what does it matter? Men are not fed on money. They do not clothe
themselves with gold, or warm themselves with silver. What matters it
whether there is more or less money in the country, if there is more
bread on our sideboards, more meat in our larders, more linen in our
wardrobes, more firewood in our cellars.
Restrictive laws always land us in this dilemma:--
Either you admit that they produce scarcity, or you do not. If you admit
it, you avow by the admission that you inflict on the people all the
injury in your power. If you do not admit it, you deny having restricted
the supply and raised prices, and consequently you deny having favoured
the producer.
What you do is either hurtful or profitless, injurious or ineffectual.
It never can be attended with any useful result.
II. OBSTACLE, CAUSE.
The obstacle mistaken for the cause,--scarcity mistaken for
abundance,--this is the same sophism under another aspect; and it is
well to study it in all its phases.
Man is originally destitute of everything.
Between this destitution and the satisfaction of his wants, there exist
a multitude of _obstacles_ which labour enables us to surmount. It is
curious to inquire how and why these very obstacles to his material
prosperity have come to be mistaken for the cause of that prosperity.
I want to travel a hundred miles. But between the starting-point and
the place of my destination, mountains, rivers, marshes, impenetrable
forests, brigands--in a word, _obstacles_--interpose themselves; and to
overcome these obstacles, it is necessary for me to employ many efforts,
or, what comes to the same thing, that others should employ many efforts
for me, the price of which I must pay them. It is clear that I should
have been in a better situation if these obstacles had not existed.
On his long journey through life, from the cradle to the grave, man
has need to assimilate to himself a prodigious quantity of alimentary
substances, to protect himself against the inclemency of the weather,
to preserve himself from a number of ailments, or cure himself of them.
Hunger, thirst, disease, heat, cold, are so many obstacles strewn along
his path. In a state of isolation he must overcome them all, by hunting,
fishing, tillage, spinning, weaving, building; and it is clear that
it would be better for him that these obstacles were less numerous
and formidable, or, better still, that they did not exist at all. In
society, he does not combat these obstacles personally, but others do
it for him; and in return he employs himself in removing one of those
obstacles which are encountered by his fellow-men.
It is clear also, considering things in the gross, that it would be
better for men in the aggregate, or for society, that these obstacles
should be as few and feeble as possible.
But when we come to scrutinize the social phenomena in detail, and men's
sentiments as modified by the introduction of exchange, we soon perceive
how they have come to confound wants with wealth, the obstacle with the
cause.
The separation of employments, the division of labour, which results
from the faculty of exchanging, causes each man, instead of struggling
on his own account to overcome all the obstacles which surround him, to
combat only _one_ of them; he overcomes that one not for himself but for
his fellow-men, who in turn render him the same service.
The consequence is that this man, in combating this obstacle which it is
his special business to overcome for the sake of others, sees in it the
immediate source of his own wealth. The greater, the more formidable,
the more keenly felt this obstacle is, the greater will be the
remuneration which his fellow-men will be disposed to accord him; that
is to say, the more ready will they be to remove the obstacles which
stand in his way.
The physician, for example, does not bake his own bread, or manufacture
his own instruments, or weave or make his own coat. Others do these
things for him, and in return he treats the diseases with which his
patients are afflicted. The more numerous, severe, and frequent these
diseases are, the more others consent, and are obliged, to do for his
personal comfort. Regarding it from this point of view, disease,
that general obstacle to human happiness, becomes a cause of material
prosperity to the individual physician. The same argument applies to
all producers in their several departments. The shipowner derives his
profits from the obstacle called _distance_; the agriculturist from that
called _hunger_; the manufacturer of cloth from that called _cold_; the
schoolmaster lives upon _ignorance_; the lapidary upon _vanity_; the
attorney on _cupidity_; the notary upon possible _bad faith_,--just
as the physician lives upon the diseases of men. It is quite true,
therefore, that each profession has an immediate interest in the
continuation, nay in the extension, of the special obstacle which it is
its business to combat.
Observing this, theorists make their appearance, and, founding a system
on their individual sentiments, tell us: Want is wealth, labour is
wealth, obstacles to material prosperity are prosperity. To multiply
obstacles is to support industry.
Then statesmen intervene. They have the disposal of the public force;
and what more natural than to make it available for developing and
multiplying obstacles, since this is developing and multiplying wealth?
They say, for example: If we prevent the importation of iron from places
where it is abundant, we place an obstacle in the way of its being
procured. This obstacle, keenly felt at home, will induce men to pay in
order to be set free from it. A certain number of our fellow-citizens
will devote themselves to combating it, and this obstacle will make
their fortune. The greater the obstacle is--that is, the scarcer, the
more inaccessible, the more difficult to transport, the more distant
from the place where it is to be used, the mineral sought for
becomes--the more hands will be engaged in the various ramifications
of this branch of industry. Exclude, then, foreign iron, create an
obstacle, for you thereby create the labour which is to overcome it.
The same reasoning leads to the proscription of machinery.
Here, for instance, are men who are in want of casks for the storage of
their wine. This is an obstacle; and here are other men whose business
it is to remove that obstacle by making the casks that are wanted. It
is fortunate, then, that this obstacle should exist, since it gives
employment to a branch of national industry, and enriches a certain
number of our fellow-citizens. But then we have ingenious machinery
invented for felling the oak, cutting it up into staves, and forming
them into the wine-casks that are wanted. By this means the obstacle is
lessened, and so are the gains of the cooper. Let us maintain both at
their former elevation by a law, and put down the machinery.
To get at the root of this sophism, it is necessary only to reflect
that human labour is not the _end_, but the _means. It never remains
unemployed_. If one obstacle is removed, it does battle with another;
and society is freed from two obstacles by the same amount of labour
which was formerly, required for the removal of one. If the labour of
the cooper is rendered unnecessary in one department, it will soon take
another direction. But how and from what source will it be remunerated?
From the same source exactly from which it is remunerated at present;
for when a certain amount of labour becomes disposable by the removal of
an obstacle, a corresponding amount of remuneration becomes disposable
also. To maintain that human labour will ever come to want employment,
would be to maintain that the human race will cease to encounter
obstacles. In that case labour would not only be impossible; it would be
superfluous. We should no longer have anything to do, because we should
be omnipotent; and we should only have to pronounce our _fiat_ in order
to ensure the satisfaction of all our desires and the supply of all our
wants.*
* See post, ch. xiv. of second series of _Sophismes
Economiques_, and ch. iii. and xi. of the _Harmonies
Économiques_.
III. EFFORT, RESULT.
We have just seen that between our wants and the satisfaction of
these wants, obstacles are interposed. We succeed in overcoming these
obstacles, or in diminishing their force by the employment of our
faculties. We may say in a general way, that industry is an effort
followed by a result.
But what constitutes the measure of our prosperity, or of our wealth?
Is it the result of the effort? or is it the effort itself? A relation
always subsists between the effort employed and the result obtained.
Progress consists in the relative enhancement of the second or of the
first term of this relation.
Both theses have been maintained; and in political economy they have
divided the region of opinion and of thought.
According to the first system, wealth is the result of labour,
increasing as the relative _proportion of result to effort increases_.
Absolute perfection, of which God is the type, consists in the infinite
distance interposed between the two terms--in this sense, effort is
_nil_, result infinite.
The second system teaches that it is the effort itself which constitutes
the measure of wealth. To make progress is to increase the relative
proportion _which effort bears to result_. The ideal of this system may
be found in the sterile and eternal efforts of Sisyphus.*
The first system naturally welcomes everything which tends to diminish
_pains_ and augment _products_; powerful machinery which increases the
forces of man, exchange which allows him to derive greater advantage
from natural agents distributed in various proportions over the face
of the earth, intelligence which discovers, experience which proves,
competition which stimulates, etc.
Logically, the second invokes everything which has the effect of
increasing pains and diminishing products; privileges, monopolies,
restrictions, prohibitions, suppression of machinery, sterility, etc.
It is well to remark that the _universal practice_ of mankind always
points to the principle of the first system. We have never seen,
we shall never see, a man who labours in any department, be he
agriculturist, manufacturer, merchant, artificer, soldier, author, or
philosopher, who does not devote all the powers of his mind to work
better, to work with more rapidity, to work more economically--in a
word, to effect _more with less_.
The opposite doctrine is in favour only with theorists, deputies,
journalists, statesmen, ministers--men, in short, born to make
experiments on the social body.
* For this reason, and for the sake of conciseness, the
reader will pardon us for designating this system in the
sequel by the name of _sisyphism_.
At the same time, we may observe, that in what concerns themselves
personally, they act as every one else does, on the principle of
obtaining from labour the greatest possible amount of useful results.
Perhaps I may be thought to exaggerate, and that there are no true
_sisyphists_.
If it be argued that in practice they do not press their principle to
its most extreme consequences, I willingly grant it. This is always the
case when one sets out with a false principle. Such a principle soon
leads to results so absurd and so mischievous that we are obliged to
stop short. This is the reason why practical industry never admits
_sisyphism_; punishment would follow error too closely not to expose it.
But in matters of speculation, such as theorists and statesmen deal
in, one may pursue a false principle a long time before discovering
its falsity by the complicated consequences to which men were formerly
strangers; and when at last its falsity is found out, the authors take
refuge in the opposite principle, turn round, contradict themselves, and
seek their justification in a modern maxim of incomparable absurdity: in
political economy, there is no inflexible rule, no absolute principle.
Let us see, then, if these two opposite principles which I have just
described do not predominate by turns, the one in practical industry,
the other in industrial legislation.
I have already noticed the saying of M. Bugeaud (that "when bread is
dear, agriculturists become rich"); but in M. Bugeaud are embodied two
separate characters, the agriculturist and the legislator.
As an agriculturist, M. Bugeaud directs all his efforts to two ends,--to
save labour, and obtain cheap bread. When he prefers a good plough to a
bad one; when he improves his pastures; when, in order to pulverize the
soil, he substitutes as much as possible the action of the atmosphere
for that of the harrow and the hoe; when he calls to his aid all the
processes of which science and experiment have proved the efficacy,--he
has but one object in view, viz., to diminish _the proportion of effort
to result_. We have indeed no other test of the ability of a cultivator,
and the perfection of his processes, than to measure to what extent they
have lessened the one and added to the other. And as all the farmers
in the world act upon this principle, we may assert that the effort of
mankind at large is to obtain, for their own benefit undoubtedly, bread
and all other products cheaper, to lessen the labour needed to procure a
given quantity of what they want.
This incontestable tendency of mankind once established, should, it
would seem, reveal to the legislator the true principle, and point out
to him in what way he should aid industry (in as far as it falls within
his province to aid it); for it would be absurd to assert that human
laws should run counter to the laws of Providence.
And yet we have heard M. Bugeaud, as a deputy, exclaim: "I understand
nothing of this theory of cheapness; I should like better to see bread
dearer and labour more abundant." And following out this doctrine, the
deputy of the Dordogne votes legislative measures, the effect of
which is to hamper exchanges, for the very reason that they procure us
indirectly what direct production could not procure us but at greater
expense.
Now, it is very evident that M. Bugeaud's principle as a deputy is
directly opposed to the principle on which he acts as an agriculturist.
To act consistently, he should vote against all legislative restriction,
or else import into his farming operations the principle which he
proclaims from the tribune. We should then see him sow his corn in his
most sterile fields, for in this way he would succeed in _working much
to obtain little_. We should see him throwing aside the plough, since
hand-culture would satisfy his double wish for dearer bread and more
abundant labour.
Restriction has for its avowed object, and its acknowledged effect, to
increase labour.
It has also for its avowed object, and its acknowledged effect, to cause
dearness, which means simply scarcity of products; so that, carried out
to its extreme limits, it is pure _sisyphism_, such as we have defined
it,--_labour infinite, product nil_.
Baron Charles Dupin, the light of the peerage, it is said, on economic
science, accuses railways of _injuring navigation_; and it is certain
that it is of the nature of a more perfect, to restrict the use of a
less perfect means of conveyance. But railways cannot hurt navigation
except by attracting traffic; and they cannot attract traffic but by
conveying goods and passengers more cheaply; and they cannot convey
them more cheaply but by _diminishing the proportion which the effort
employed bears to the result obtained_, seeing that that is the very
thing which constitutes cheapness. When, then, Baron Dupin deplores this
diminution of the labour employed to effect a given result, it is the
doctrine of _sisyphism_ which he preaches. Logically, since he prefers
the ship to the rail, he should prefer the cart to the ship, the
pack-saddle to the cart, and the pannier to all other known means of
conveyance, for it is the latter which exacts the most labour with the
least result.
"Labour constitutes the wealth of a people," said M. de Saint-Cricq,
that Minister of Commerce who has imposed so many restrictions upon
trade. We must not suppose that this was an elliptical expression,
meaning, "The results of labour constitute the wealth of a people." No,
this economist distinctly intended to affirm that it is the _intensity_
of labour which is the measure of wealth, and the proof of it is, that
from consequence to consequence, from one restriction to another, he
induced France (and in this he thought he was doing her good) to expend
double the amount of labour, in order, for example, to provide herself
with an equal quantity of iron. In England, iron was then at eight
francs, while in France it cost sixteen francs. Taking a day's labour at
one franc, it is clear that France could, by means of exchange, procure
a quintal of iron by subtracting eight days' work from the aggregate
national labour. In consequence of the restrictive measures of M. de
Saint-Cricq, France was obliged to expend sixteen days' labour in order
to provide herself with a quintal of iron by direct production. Double
the labour for the same satisfaction, hence double the wealth. Then it
follows that wealth is not measured by the result, but by the intensity
of the labour. Is not this _sisyphism_ in all its purity?
And in order that there may be no mistake as to his meaning, the
Minister takes care afterwards to explain more fully his ideas; and as
he had just before called the intensity of labour _wealthy_ he goes on
to call the more abundant results of that labour, or the more abundant
supply of things proper to satisfy our wants, _poverty_. "Everywhere,"
he says, "machinery has taken the place of manual labour; everywhere
production superabounds; everywhere the equilibrium between the faculty
of producing, and the means of consuming, is destroyed." We see, then,
to what, in M. de Saint-Cricq's estimation, the critical situation
of the country was owing--it was to having produced too much, and her
labour being too intelligent, and too fruitful. We were too well
fed, too well clothed, too well provided with everything; a too rapid
production surpassed all our desires. It was necessary, then, to put a
stop to the evil, and for that purpose, to force us, by restrictions, to
labour more in order to produce less.
I have referred likewise to the opinions of another Minister of
Commerce, M. d'Argout. They deserve to be dwelt upon for an instant.
Desiring to strike a formidable blow at beet-root culture, he says,
"Undoubtedly, the cultivation of beet-root is useful, _but this utility
is limited_. The developments attributed to it are exaggerated. To be
convinced of this, it is sufficient to observe that this culture will be
necessarily confined within the limits of consumption. Double, triple,
if you will, the present consumption of France, _you will always find
that a very trifling portion of the soil will satisfy the requirements
of that consumption_." (This is surely rather a singular subject of
complaint!) "Do you desire proof of this? How many _hectares_ had we
under beet-root in 1828? 3130, which is equivalent to 1-10, 540th of
our arable land. At the present time, when indigenous sugar supplies
one-third of our consumption, how much land is devoted to that culture?
16,700 _hectares_, or 1-1978th of the arable land, or 45 _centiares_
in each commune. Suppose indigenous sugar already supplied our whole
consumption, we should have only 48,000 hectares under beet-root, or
1-689th of the arable land."*
There are two things to be remarked upon in this citation--the facts and
the doctrine. The facts tend to prove that little land, little capital,
and little labour are required to produce a large quantity of sugar, and
that each commune of France would be abundantly provided by devoting to
beet-root cultivation one hectare of its soil. The doctrine consists in
regarding this circumstance as adverse, and in seeing in the very power
and fertility of the new industry, _a limit to its utility_.
* It is fair to M. d'Argout to say that he put this language
in the mouth of the adversaries of beet-root culture. But he
adopts it formally, and sanctions it besides, by the law
which it was employed to justify.
I do not mean to constitute myself here the defender of beet-root
culture, or a judge of the strange facts advanced by M. d'Argout; * but
it is worth while to scrutinize the doctrine of a statesman, to whom
France for a long time entrusted the care of her agriculture and of her
commerce.
I remarked in the outset that a variable relation exists between an
industrial effort and its result; that absolute imperfection consists
in an infinite effort without any result; absolute perfection in
an unlimited result without any effort; and perfectibility in the
progressive diminution of effort compared with the result.
But M. d'Argout tells us there is death where we think we perceive
life, and that the importance of any branch of industry is in direct
proportion to its powerlessness. What are we to expect, for instance,
from the cultivation of beet-root? Do you not see that 48,000 _hectares_
of land, with capital and manual labour in proportion, are sufficient
to supply all France with sugar? Then, this is a branch of industry of
limited utility; limited, of course, with reference to the amount
of labour which it demands, the only way in which, according to the
ex-Minister, any branch of industry can be useful. This utility would be
still more limited, if, owing to the fertility of the soil, and the
richness of the beet-root, we could reap from 24,000 hectares, what at
present we only obtain from 48,000. Oh! were only twenty times, a
hundred times, more land, capital, and labour necessary to _yield us the
same result_, so much the better. We might build some hopes on this new
branch of industry, and it would be worthy of state protection, for it
would offer a vast field to our national industry. But to produce much
with little! that is a bad example, and it is time for the law to
interfere.
* Supposing that 48,000 or 50,000 hectares were sufficient
to supply the present consumption, it would require 150,000
for triple that consumption, which M. d'Argout admits as
possible. Moreover, if beet-root entered into a six years'
rotation of crops, it would occupy successively 900,000
hectares, or 1-38th of the arable land.
But what is true with regard to sugar, cannot be otherwise with regard
to bread. If, then, the _utility_ of any branch of industry is to be
estimated not by the amount of satisfactions it is fitted to procure us
with a determinate amount of labour, but, on the contrary, by the amount
of labour which it exacts in order to yield us a determinate amount of
satisfactions, what we ought evidently to desire is, that each acre of
land should yield less corn, and each grain of com less nourishment; in
other words, that our land should be comparatively barren; for then the
quantity of land, capital, and manual labour that would be required for
the maintenance of our population would be much more considerable;
we could then say that the demand for human labour would be in
direct proportion to this barrenness. The aspirations of MM. Bugeaud,
Saint-Cricq, Dupin, and d'Argout, would then be satisfied; bread would
be dear, labour abundant, and France rich--rich at least in the sense in
which these gentlemen understand the word.
What we should desire also is, that human intelligence should be
enfeebled or extinguished; for, as long as it survives, it will be
continually endeavouring to augment _the proportion which the end bears
to the means, and which the product bears to the labour_. It is in that
precisely that intelligence consists.
Thus, it appears that _sisyphism_ has been the doctrine of all the
men who have been intrusted with our industrial destinies. It would be
unfair to reproach them with it. This principle guides Ministers only
because it is predominant in the Chambers; and it predominates in the
Chambers only because it is sent there by the electoral body, and
the electoral body is imbued with it only because public opinion is
saturated with it.
I think it right to repeat here that I do not accuse men such as MM.
Bugeaud, Dupin, Saint-Cricq, and d'Argout of being absolutely and under
all circumstances _sisyphists_. They are certainly not so in their
private transactions; for in these they always desire to obtain _by
way of exchange_ what would cost them dearer to procure _by direct
production_; but I affirm they are _sisyphists_ when they hinder the
country from doing the same thing.*
* See on the same subject, _Sophismes Économiques_, second
series, ch. xvi., post, and _Harmonies Économiques_, ch. vi.
IV. TO EQUALIZE THE CONDITIONS OF PRODUCTION.
It has been said.....but in case I should be accused of putting sophisms
into the mouths of the protectionists, I shall allow one of their most
vigorous athletes to speak for them.
"It has been thought that protection in our case should simply represent
the difference which exists between the cost price of a commodity which
we produce and the cost price of the same commodity produced by our
neighbours.... A protective duty calculated on this basis would only
ensure free competition....; free competition exists only when there is
equality in the conditions and in the charges. In the case of a horse
race, we ascertain the weight which each horse has to carry, and
so equalize the conditions; without that there could be no fair
competition. In the case of trade, if one of the sellers can bring his
commodity to market at less cost, he ceases to be a competitor, and
becomes a monopolist.... Do away with this protection which represents
the difference of cost price, and the foreigner invades our markets and
acquires a monopoly."*
"Every one must wish, for his own sake, as well as for the sake of
others, that the production of the country should be protected against
foreign competition, _whenever the latter can furnish products at a
lower price._"**
* M. le Vicomte de Romanet.
** Matthieu le Dombasle.
This argument recurs continually in works of the protectionist school.
I propose to examine it carefully, and I solicit earnestly the reader's
patience and attention. I shall consider, first of all, the inequalities
which are attributable to nature, and afterwards those which are
attributable to diversity of taxation.
In this, as in other cases, we shall find protectionist theorists
viewing their subject from the producer's stand-point, whilst we
advocate the cause of the unfortunate consumers, whose interests they
studiously keep out of sight. They institute a comparison between the
field of industry and the _turf_. But as regards the latter, the race is
at once the _means_ and the _end_. The public feels no interest in the
competition beyond the competition itself. When you start your horses,
your _end_, your object, is to find out which is the swiftest runner,
and I see your reason for equalizing the weights. But if your _end_,
your object, were to secure the arrival of some important and urgent
news at the winning-post, could you, without inconsistency, throw
obstacles in the way of any one who should offer you the best means of
expediting your message? This is what you do in commercial affairs.
You forget the end, the object sought to be attained, which is material
prosperity; you disregard it, you sacrifice it to a veritable _petitio
principii_; in plain language, you are begging the question.
But since we cannot bring our opponents to our point of view, let us
place ourselves in theirs, and examine the question in its relations
with production.
I shall endeavour to prove,
1st, That to level and equalize the conditions of labour, is to attack
exchange in its essence and principle.
2d, That it is not true that the labour of a country is neutralized by
the competition of more favoured countries.
3d, That if that were true, protective duties would not equalize the
conditions of production.
4th, That liberty, freedom of trade, levels these conditions as much as
they can be levelled.
5th, That the least favoured countries gain most by exchange.
I. To level and equalize the conditions of labour is not simply to cramp
exchanges in certain branches of trade, it is to attack exchange in its
principle, for its principle rests upon that very diversity, upon those
very inequalities of fertility, aptitude, climate, and temperature,
which you desire to efface. If Guienne sends wine to Brittany, and if
Brittany sends corn to Guienne, it arises from their being placed
under different conditions of production. Is there a different law for
international exchanges? To urge against international exchanges that
inequality of conditions which gives rise to them, and explains them,
is to argue against their very existence. If protectionists had on their
side sufficient logic and power, they would reduce men, like snails,
to a state of absolute isolation. Moreover, there is not one of their
sophisms which, when submitted to the test of rigorous deductions, does
not obviously tend to destruction and annihilation.
II. It is not true, in point of _fact_, that inequality of conditions
existing between two similar branches of industry entails necessarily
the ruin of that which is least favourably situated. On the turf, if
one horse gains the prize, the other loses it; but when two horses
are employed in useful labour, each produces a beneficial result in
proportion to its powers; and if the more vigorous renders the greater
service, it does not follow that the other renders no service at all.
We cultivate wheat in all the departments of France, although there are
between them enormous differences of fertility; and if there be any
one department which does not cultivate wheat, it is because it is not
profitable to engage in that species of culture in that locality. In the
same way, analogy shows us that under the _régime_ of liberty, in spite
of similar differences, they produce wheat in all the countries of
Europe; and if there be one which abandons the cultivation of that
grain, it is because it is found _more for its interest_ to give another
direction to the employment of its land, labour, and capital And why
should the fertility of one department not paralyze the agriculturist of
a neighbouring department which is less favourably situated? Because
the economic phenomena have a flexibility, an elasticity, _levelling
powers_, so to speak, which appear to have altogether escaped the notice
of the protectionist school. That school accuses us of being given up
to system; but it is the protectionists who are systematic in the last
degree, if the spirit of system consists in bolstering up arguments
which rest upon one fact instead of upon an aggregation of facts. In the
example which we have given, it is the difference in the value of lands
which compensates the difference in their fertility. Your field produces
three times more than mine. Yes, but it has cost you ten times more, and
I can still compete with you. This is the whole mystery. And observe,
that superiority in some respects leads to inferiority in others. It is
just because your land is more fertile that it is dearer; so that it
is not _accidentally_, but _necessarily_, that the equilibrium is
established, or tends to be established; and it cannot be denied that
liberty is the _régime_ which is most favourable to this tendency.
I have referred to a branch of agricultural industry; I might as well
have referred to industry in a different department. There are tailors
at Quimper, and that does not hinder there being tailors also in Paris,
though the latter pay a higher rent, and live at much greater expense.
But then they have a different set of customers, and that serves not
only to redress the balance, but to make it incline to their side.
When we speak, then, of equalizing the conditions of labour, we must not
omit to examine whether liberty does not give us what we seek from an
arbitrary system.
This natural levelling power of the economic phenomena is so important
to the question we are considering, and at the same time so fitted to
inspire us with admiration of the providential wisdom which presides
over the equitable government of society, that I must ask permission to
dwell upon it for a little.
The protectionist gentlemen tell us: Such or such a people have over
us an advantage in the cheapness of coal, of iron, of machinery, of
capital--we cannot compete with them.
We shall examine the proposition afterwards under all its aspects. At
present, I confine myself to the inquiry whether, when a superiority and
an inferiority are both present, they do not possess in themselves, the
one an ascending, the other a descending force, which must ultimately
bring them back to a just equilibrium.
Suppose two countries, A and B. A possesses over B all kinds of
advantages. You infer from this, that every sort of industry will
concentrate itself in A, and that B is powerless. A, you say, sells much
more than it buys; B buys much more than it sells. I might dispute this,
but I respect your hypothesis.
On this hypothesis, labour is much in demand in A, and will soon rise in
price there.
Iron, coal, land, food, capital, are much in demand in A, and they will
soon rise in price there.
Contemporaneously with this, labour, iron, coal, land, food, capital,
are in little request in B, and will soon fall in price there.
Nor is this all. While A is always selling, and B is always buying,
money passes from B to A. It becomes abundant in A, and scarce in B.
But abundance of money means that we must have plenty of it to buy
everything else. Then in A, to the _real dearness_ which arises from a
very active demand, there is added a _nominal dearness_, which is due to
a redundancy of the precious metals.
Scarcity of money means that little is required for each purchase. Then
in B a _nominal cheapness_ comes to be combined with _real cheapness_.
In these circumstances, industry will have all sorts of
motives--motives, if I may say so, carried to the highest degree of
intensity--to desert A and establish itself in B.
Or, to come nearer what would actually take place under such
circumstances, we may affirm that sudden displacements being so
repugnant to the nature of industry, such a transfer would not have been
so long delayed, but that from the beginning, under the free _régime_,
it would have gradually and progressively shared and distributed itself
between A and B, according to the laws of supply and demand--that is to
say, according to the laws of justice and utility.
And when I assert that if it were possible for industry to concentrate
itself upon one point, that very circumstance would set in motion an
irresistible decentralizing force, I indulge in no idle hypothesis.
Let us listen to what was said by a manufacturer in addressing the
Manchester Chamber of Commerce (I omit the figures by which he supported
his demonstration):--
"Formerly we exported stuffs; then that exportation gave place to that
of yams, which are the raw material of stuffs; then to that of machines,
which are the instruments for producing yarn; afterwards to the
exportation of the capital with which we construct our machines;
finally, to that of our workmen and our industrial skill, which are
the source of our capital. All these elements of labour, one after the
other, are set to work wherever they find the most advantageous opening,
wherever the expense of living is cheaper and the necessaries of
life are moat easily procured; and at the present day, in Prussia, in
Austria, in Saxony, in Switzerland, in Italy, we see manufactures on
an immense scale founded and supported by English capital, worked by
English operatives, and directed by English engineers."
You see very clearly, then, that nature, or rather that Providence, more
wise, more far-seeing than your narrow and rigid theory supposes,
has not ordered this concentration of industry, this monopoly of all
advantages upon which you found your reasoning as upon a fact which is
unalterable and without remedy. Nature has provided, by means as simple
as they are infallible, that there should be dispersion, diffusion,
solidarity, simultaneous progress; all constituting a state of things
which your restrictive laws paralyze as much as they can; for the
tendency of such laws is, by isolating communities, to render the
diversity of condition much more marked, to prevent equalization, hinder
fusion, neutralize countervailing circumstances, and segregate nations,
whether in their superiority or in their inferiority of condition.
III. In the third place, to contend that by a protective duty you
equalize the conditions of production, is to give currency to an error
by a deceptive form of speech. It is not true that an import duty
equalizes the conditions of production. These remain, after the
imposition of the duty, the same as they were before. At most, all that
such a duty equalizes are _the conditions of sale_. It may be said,
perhaps, that I am playing upon words, but I throw back the accusation.
It is for my opponents to show that _production and sale_ are synonymous
terms; and if they cannot do this, I am warranted in fastening upon them
the reproach, if not of playing on words, at least of mixing them up and
confusing them.
To illustrate what I mean by an example: I suppose some Parisian
speculators to devote themselves to the production of oranges. They know
that the oranges of Portugal can be sold in Paris for a penny apiece,
whilst they, on account of the frames and hot-houses which the colder
climate would render necessary, could not sell them for less than a
shilling as a remunerative price. They demand that Portuguese oranges
should have a duty of elevenpence imposed upon them. By means of this
duty, they say, the _conditions af production_ will be equalized;
and the Chamber, giving effect, as it always does, to such reasoning,
inserts in the tariff a duty of elevenpence upon every foreign orange.
Now, I maintain that the _conditions of production_ are in nowise
changed. The law has made no change on the heat of the sun of Lisbon, or
on the frequency and intensity of the frosts of Paris. The ripening of
oranges will continue to go on naturally on the banks of the Tagus, and
artificially on the banks of the Seine--that is to say, much more
human labour will be required in the one country than in the other. The
conditions of sale are what have been equalized. The Portuguese must now
sell us their oranges at a shilling, elevenpence of which goes to pay
the tax. That tax will be paid, it is evident, by the French consumer.
And look at the whimsical result. Upon each Portuguese orange consumed,
the country will lose nothing, for the extra elevenpence charged to the
consumer will be paid into the treasury. This will cause displacement,
but not loss. But upon each French orange consumed there will be a loss
of elevenpence, or nearly so, for the purchaser will certainly lose that
sum, and the seller as certainly will not gain it, seeing that by the
hypothesis he will only have received the cost price. I leave it to the
protectionists to draw the inference.
IV. If I have dwelt upon this distinction between the conditions
of production and the conditions of sale, a distinction which the
protectionists will no doubt pronounce paradoxical, it is because it
leads me to inflict on them another, and a much stranger, paradox, which
is this: Would you equalize effectually the conditions of production,
leave exchange free.
Now, really, it will be said, this is too much; you must be making game
of us. Well, then, were it only for curiosity, I entreat the gentlemen
protectionists to follow me on to the conclusion of my argument. It will
not be long. I revert to my former illustration.
Let us suppose for a moment that the average daily wage which a
Frenchman earns is equal to a shilling, and it follows incontestably
that to produce directly an orange in France, a day's work, or its
equivalent, is required; while to produce the value of a Portuguese
orange, only a twelfth part of that day's labour would be necessary;
which means exactly this, that the sun does at Lisbon what human labour
does at Paris. Now, is it not very evident that if I can produce an
orange, or, what comes to the same thing, the means of purchasing one,
with a twelfth part of a day's labour, I am placed, with respect to this
production, under exactly the same conditions as the Portuguese producer
himself, excepting the carriage, which must be at my expense. It is
certain, then, that liberty equalizes the conditions of production
direct or indirect, as far as they can be equalized, since it leaves
no other difference, but the inevitable one arising from the expense of
transport.
I add, that liberty equalizes also the conditions of enjoyment, of
satisfaction, of consumption, with which the protectionists never
concern themselves, and which are yet the essential consideration,
consumption being the end and object of all our industrial efforts. In
virtue of free trade, we enjoy the sun of Portugal like the Portuguese
themselves. The inhabitants of Havre and the citizens of London are put
in possession, and on the same conditions, of all the mineral resources
which nature has bestowed on Newcastle.
V. Gentlemen protectionists, you find me in a paradoxical humour; and I
am disposed to go further still. I say, and I sincerely think, that if
two countries are placed under unequal conditions of production, _it is
that one of the two which is least favoured by nature which has most
to gain by free trade_. To prove this, I must depart a little from the
usual form of such a work as this. I shall do so nevertheless, first of
all, because the entire question lies there, and also because it will
afford me an opportunity of explaining an economic law of the highest
importance, and which, if rightly understood, appears to me to be fitted
to bring back to the science all those sects who, in our day, seek in
the land of chimeras that social harmony which they fail to discover
in nature. I refer to the law of consumption, which it is perhaps to be
regretted that the majority of economists have neglected.
Consumption is the _end_ and final cause of all the economic phenomena,
and it is in consumption consequently that we must expect to find their
ultimate and definitive solution.
Nothing, whether favourable or unfavourable, can abide permanently with
the producer. The advantages which nature and society bestow upon him,
the inconveniences he may experience, glide past him, so to speak, and
are absorbed and mixed up with the community in as far as the community
represents consumers. This is an admirable law both in its cause and
in its effects, and he who shall succeed in clearly describing it is
entitled, in my opinion, to say, "I have not passed through life without
paying my tribute to society." Everything which favours the work of
production is welcomed with joy by the producer, for the _immediate
effect_ of it is to put him in a situation to render greater service
to the community, and to exact from it a greater remuneration. Every
circumstance which retards or interrupts production gives pain to
the producer, for the _immediate effect_ of it is to circumscribe his
services, and consequently his remuneration. _Immediate_ good or ill
circumstances--fortunate or unfortunate--necessarily fall upon the
producer, and leave him no choice but to accept the one and eschew the
other.
In the same way, when a workman succeeds in discovering an improved
process in manufactures, the _immediate_ profit from the improvement
results to him. This was necessary, in order to give his labour an
intelligent direction; and it is just, because it is fair that an effort
crowned with success should carry its recompense along with it.
But I maintain that these good or bad effects, though in their own
nature permanent, are not permanent as regards the producer. If it had
been so, a principle of progressive, and, therefore, of indefinite,
inequality would have been introduced among men, and this is the reason
why these good or evil effects become very soon absorbed in the general
destinies of the human race.
How is this brought about? I shall show how it takes place by some
examples.
Let us go back to the thirteenth century. The men who then devoted
themselves to the art of copying received for the service which they
rendered _a remuneration regulated by the general rate of earnings_.*
Among them there arose one who discovered the means of multiplying
copies of the same work rapidly. He invented printing.
In the first instance, one man was enriched, and many others were
impoverished. At first sight, marvellous as the invention proves itself
to be, we hesitate to decide whether it is hurtful or useful. It seems
to introduce into the world, as I have said, an indefinite element
of inequality. Guttemberg profits by his invention, and extends his
invention with its profits indefinitely, until he has ruined all the
copyists. As regards the public, in the capacity of consumer, it gains
little; for Guttemberg takes care not to lower the price of his books,
but just enough to undersell his rivals.
But the intelligence which has introduced harmony into the movements of
the heavenly bodies, has implanted it also in the internal mechanism of
society. We shall see the economic advantages of the invention when it
has ceased to be individual property, and has become for ever the common
patrimony of the masses.
At length the invention comes to be known. Guttemberg is no longer the
only printer; others imitate him. Their profits' at first are large.
They are thus rewarded for having been the first to imitate the
invention; and it is right that it should be so, for this higher
remuneration was necessary to induce them to concur in the grand
definite result which is approaching. They gain a great deal, but they
gain less than the inventor, for _competition_ now begins its work.
The price of books goes on falling. The profit of imitators goes on
diminishing in proportion as the invention becomes of older date; that
is to say, in proportion as the imitation becomes less meritorious.....
* The author, here and elsewhere, uses the French word
_profits_; but it is clear from the context that he does not
refer to the returns from capital, in which sense alone the
English economists employ the term _profits_. We have
therefore substituted the words _earnings or wages_.--
Translator,
The new branch of industry at length reaches its normal state; in other
words, the remuneration of printers ceases to be exceptionally high, and
comes, like that of the copyist, to be _regulated by the ordinary rate
of earnings_. Here we have production, as such, brought back to the
point from which it started. And yet the invention is not the less an
acquisition; the saving of time, of labour, of effort to produce a given
result, that is, to produce a determinate number of copies, is not the
less realized. But how does it show itself? In the cheapness of books.
And to whose profit? To the profit of the consumer, of society, of the
human race. The printers, who have thenceforth no exceptional merit,
no longer receive exceptional remuneration. As men, as consumers,
they undoubtedly participate in the advantages which the invention
has conferred upon the community. But that is all. As printers, as
producers, they have returned to the ordinary condition of the other
producers of the country. Society pays them for their labour, and not
for the utility of the invention. The latter has become the common and
gratuitous heritage of mankind at large.
I confess that the wisdom and the beauty of these laws call forth my
admiration and respect. I see in them Saint-Simonianism:
_To each according to his capacity; to each capacity according to its
works_. I see in them, communism; that is, the tendency of products
to become the _common_ heritage of men; but a Saint-Simonianism, a
communism, regulated by infinite prescience, and not abandoned to the
frailties, the passions, and the arbitrary will of men.
What I have said of the art of printing, may be affirmed of all the
instruments of labour, from the nail and the hammer to the locomotive
and the electric telegraph. Society becomes possessed of all through
its more abundant consumption, and _it enjoys all gratuitously_, for
the effect of inventions and discoveries is to reduce the price of
commodities; and all that part of the price which has been annihilated,
and which represents the share invention has in production, evidently
renders the product gratuitous to that extent. All that remains to be
paid for is the human labour, the immediate labour, /and it is paid for
without reference to the result of the invention, at least when that
invention has passed through the cycle I have just described--the cycle
which it is designed to pass through. I send for a tradesman to my
house; he comes and brings his saw with him; I pay him two shillings for
his day's work, and he saws me twenty-five boards. Had the saw not been
invented, he would probably not have made out to furnish me with one,
and I should have had to pay him the same wages for his day's work.
The _utility_ produced by the saw is then, as far as I am concerned, a
gratuitous gift of nature, or rather it is a part of that inheritance
which, _in common_ with all my brethren, I have received from my
ancestors. I have two workmen in my field. The one handles the plough,
the other the spade. The result of their labour is very different,
but the day's wages are the same, because the remuneration is not
proportioned to the utility produced, but to the effort, the labour,
which is exacted.
I entreat the reader's patience, and beg him to believe that I have not
lost sight of free trade. Let him only have the goodness to remember the
conclusion at which I have arrived: _Remuneration is not in proportion
to the utilities which the producer brings to market, but to his
labour_.*
* It is true that labour does not receive a uniform
remuneration. It may be more or less intense, dangerous,
skilled, etc. Competition settles the usual or current price
in each department--and this is the fluctuating price of
which I speak.
I have drawn my illustrations as yet from human inventions. Let us now
turn our attention to natural advantages.
In every branch of production, nature and man concur. But the portion
of utility which nature contributes is always gratuitous. It is only
the portion of utility which human labour contributes which forms the
subject of exchange, and, consequently, of remuneration. The latter
varies, no doubt, very much in proportion to the intensity of the
labour, its skill, its promptitude, its suitableness, the need there
is of it, the temporary absence of rivalry, etc. But it is not the less
true, in principle, that the concurrence of natural laws, which are
common to all, counts for nothing in the price of the product.
We do not pay for the air we breathe, although it is so _useful_ to us,
that, without it, we could not live two minutes. We do not pay for it,
nevertheless; because nature furnishes it to us without the aid of human
labour. But if, for example, we should desire to separate one of the
gases of which it is composed, to make an experiment, we must make an
exertion; or if we wish another to make that exertion for us, we must
sacrifice for that other an equivalent amount of exertion, although
we may have embodied it in another product. Whence we see that pains,
efforts, and exertions are the real subjects of exchange. It is not,
indeed, the oxygen gas that I pay for, since it is at my disposal
everywhere, but the labour necessary to disengage it, labour which has
been saved me, and which must be recompensed. Will it be said that there
is something else to be paid for, materials, apparatus, etc.? Still, in
paying for these, I pay for labour. The price of the coal employed, for
example, represents the labour necessary to extract it from the mine and
to transport it to the place where it is to be used.
We do not pay for the light of the sim, because it is a gift of nature.
But we pay for gas, tallow, oil, wax, because there is here human labour
to be remunerated; and it will be remarked that, in this case, the
remuneration is proportioned, not to the utility produced, but to the
labour employed, so much so that it may happen that one of these kinds
of artificial light, though more intense, costs us less, and for this
reason, that the same amount of human labour affords us more of it.
Were the porter who carries water to my house to be paid in proportion
to the _absolute utility_ of water, my whole fortune would be
insufficient to remunerate him. But I pay him in proportion to the
exertion he makes. If he charges more, others will do the work, or, if
necessary, I will do it myself. Water, in truth, is not the subject of
our bargain, but the labour of carrying it. This view of the matter is
so important, and the conclusions which I am about to deduce from it
throw so much light on the question of the freedom of international
exchanges, that I deem it necessary to elucidate it by other examples.
The alimentary substance contained in potatoes is not very costly,
because we can obtain a large amount of it with comparatively little
labour. We pay more for wheat, because the production of it costs a
greater amount of human labour. It is evident that if nature did for
the one what it does for the other, the price of both would tend to
equality. It is impossible that the producer of wheat should permanently
gain much more than the producer of potatoes. The law of competition
would prevent it.
If by a happy miracle the fertility of all arable lands should come to
be augmented, it would not be the agriculturist, but the consumer, who
would reap advantage from that phenomenon for it would resolve itself
into abundance and cheapness. There would be less labour incorporated
in each quarter of corn, and the cultivator could exchange it only for
a smaller amount of labour worked up in some other product. If, on the
other hand, the fertility of the soil came all at once to be diminished,
nature's part in the process of production would be less, that of human
labour would be greater, and the product dearer. I am, then, warranted
in saying that it is in consumption, in the human element, that all the
economic phenomena come ultimately to resolve themselves. The man who
has failed to regard them in this light, to follow them out to their
ultimate effects, without stopping short at _immediate_ results, and
viewing them from the _producer's_ standpoint, can no more be regarded
as an economist than the man who should prescribe a draught, and,
instead of watching its effect on the entire system of the patient,
should inquire only how it affected the mouth and throat, could be
regarded as a physician.
Tropical regions are very favourably situated for the production of
sugar and of coffee. This means that nature does a great part of the
work, and leaves little for human labour to do. But who reaps the
advantage of this liberality of nature? Not the producing countries, for
competition causes the price barely to remunerate the labour. It is the
human race that reaps the benefit, for the result of nature's liberality
is cheapness, and cheapness benefits everybody.
Suppose a temperate region where coal and iron-ore are found on the
surface of the ground, where one has only to stoop down to get them.
That, in the first instance, the inhabitants would profit by this happy
circumstance, I allow. But competition would soon intervene, and the
price of coal and iron-ore would go on falling, till the gift of nature
became free to all, and then the human labour employed would be alone
remunerated according to the general rate of earnings.
Thus the liberality of nature, like improvements in the processes
of production, is, or continually tends to become, under the law of
competition, the common and gratuitous patrimony of consumers, of the
masses, of mankind in general. Then, the countries which do not possess
these advantages have everything to gain by exchanging their products
with those countries which possess them, because the subject of exchange
is _labour_, apart from the consideration of the natural utilities
worked up with that labour; and the countries which have incorporated
in a given amount of their labour the greatest amount of these _natural
utilities_, are evidently the most favoured countries. Their products
which represent the least amount of human labour are the least
profitable; in other words, they _are cheaper_; and if the whole
liberality of nature resolves itself into _cheapness_, it is evidently
not the producing, but the consuming, country which reaps the benefit.
Hence we see the enormous absurdity of consuming countries which reject
products for the very reason that they are cheap. It is as if they said,
"We want nothing that nature gives us. You ask me for an effort equal to
two, in exchange for a product which I cannot create without an effort
equal to four; you can make that effort, because in your case nature
does half the work. Be it so; I reject your offer, and I shall wait
until your climate, having become more inclement, will force you to
demand from me an effort equal to four, in order that I may treat with
you _on a footing of equality_."
A is a favoured country. B is a country to which nature has been less
bountiful. I maintain that exchange benefits both, but benefits B
especially; because exchange is not an exchange of _utilities for
utilities_, but _of value for value_. Now A includes _a greater amount
of utility in the same value_, seeing that the utility of a product
includes what nature has put there, as well as what labour has put
there; whilst value includes only what labour has put there. Then B
makes quite an advantageous bargain. In recompensing the producer of A
for his labour only, it receives into the bargain a greater amount of
natural utility than it has given.
This enables us to lay down the general rule: Exchange is a barter of
_values_; value under the action of competition being made to represent
labour, exchange becomes a barter of equal labour. What nature has
imparted to the products exchanged is on both sides given _gratuitously
and into the bargain_; whence it follows necessarily that exchanges
effected with countries the most favoured by nature are the most
advantageous.
The theory of which in this chapter I have endeavoured to trace the
outlines would require great developments. I have glanced at it only
in as far as it bears upon my subject of free trade. But perhaps the
attentive reader may have perceived in it the fertile germ which in the
rankness of its maturity will not only smother protection, but, along
with it, _Fourierisrme, Saint-Simonianisme, communisme_, and all those
schools whose object it is to exclude from the government of the world
the law of _competition_. Regarded from the producer's point of view,
competition no doubt frequently clashes with our _immediate_ and
individual interests; but if we change our point of view and extend our
regards to industry in general, to universal prosperity--in a word, to
_consumption_--we shall find that competition in the moral world plays
the same part which equilibrium does in the material world. It lies
at the root of true communism, of true socialism, of that equality of
conditions and of happiness so much desired in our day; and if so
many sincere publicists, and well-meaning reformers seek after the
_arbitrary_, it is for this reason--that they do not understand
liberty.*
* The theory sketched in this chapter, is the same which,
four years afterwards, was developed in the _Harmonies
Économiques_. Remuneration reserved exclusively for human
labour; the gratuitous nature of natural agents; progressive
conquest of these agents, to the profit of mankind, whose
common property they thus become; elevation of general
wellbeing and tendency to relative equalization of
conditions; we recognise here the essential elements of the
most important of all the works of Bastiat.--Editor.
V. OUR PRODUCTS ARE BURDENED WITH TAXES.
We have here again the same sophism. We demand that foreign products
should be taxed to neutralize the effect of the taxes which weigh
upon our national products. The object, then, still is to equalize the
conditions of production. We have only a word to say, and it is this:
that the tax is an artificial obstacle which produces exactly the same
result as a natural obstacle, its effect is to enhance prices. If this
enhancement reach a point which makes it a greater loss to create the
product for ourselves than to procure it from abroad by producing a
counter value, _laissez faire_, let well alone. Of two evils, private
interest will do well to choose the least. I might, then, simply refer
the reader to the preceding demonstration; but the sophism which we have
here to combat recurs so frequently in the lamentations and demands, I
might say in the challenges, of the protectionist school, as to merit a
special discussion.
If the question relate to one of those exceptional taxes which are
imposed on certain products, I grant readily that it is reasonable to
impose the same duty on the foreign product. For example, it would be
absurd to exempt foreign salt from duty; not that, in an economical
point of view, France would lose anything by doing so, but the reverse.
Let them say what they will, principles are always the same; and France
would gain by the exemption as she must always gain by removing a
natural or artificial obstacle. But in this instance the obstacle
has been interposed for purposes of revenue. These purposes must be
attained; and were foreign salt sold in our market duty free, the
Treasury would lose its hundred millions of francs (four millions
sterling); and must raise that sum from some other source. There would
be an obvious inconsistency in creating an obstacle, and failing in
the object. It might have been better to have had recourse at first
to another tax than that upon French salt. But I admit that there are
certain circumstances in which a tax may be laid on foreign commodities,
provided it is not _protective_, but fiscal.
But to pretend that a nation, because she is subjected to heavier taxes
than her neighbours, should protect herself by tariffs against the
competition of her rivals, in this is a sophism, and it is this sophism
which I intend to attack.
I have said more than once that I propose only to explain the theory,
and lay open, as far as possible, the sources of protectionist
errors. Had I intended to raise a controversy, I should have asked the
protectionists why they direct their tariffs chiefly against England
and Belgium, the most heavily taxed countries in the world? Am I not
warranted in regarding their argument only as a pretext? But I am
not one of those who believe that men are prohibitionists from
self-interest, and not from conviction. The doctrine of protection is
too popular not to be sincere. If the majority had faith in liberty, we
should be free. Undoubtedly it is self-interest which makes our tariffs
so heavy; but conviction is at the root of it. "The will," says Pascal,
"is one of the principal organs of belief." But the belief exists
nevertheless, although it has its root in the will, and in the insidious
suggestions of egotism.
Let us revert to the sophism founded on taxation.
The State may make a good or a bad use of the taxes which it levies.
When it renders to the public services which are equivalent to the value
it receives, it makes a good use of them. And when it dissipates its
revenues without giving any service in return, it makes a bad use of
them.
In the first case, to affirm that the taxes place the country which pays
them under conditions of production more unfavourable than those of a
country which is exempt from them, is a sophism. We pay twenty millions
of francs for justice and police; but then we have them, with the
security they afford us, and the time which they save us; and it is very
probable that production is neither more easy nor more active in those
countries, if there are any such, where the people take the business
of justice and police into their own hands. We pay many hundreds
of millions (of francs) for roads, bridges, harbours, and railways.
Granted; but then we have the benefit of these roads, bridges,
harbours, and railways; and whether we make a good or a bad bargain in
constructing them, it cannot be said that they render us inferior to
other nations, who do not indeed support a budget of public works,
but who have no public works. And this explains why, whilst accusing
taxation of being a cause of industrial inferiority, we direct our
tariffs especially against those countries which are the most heavily
taxed. Their taxes, well employed, far from deteriorating, have
ameliorated, _the conditions of production_ in these countries. Thus we
are continually arriving at the conclusion that protectionist sophisms
are not only not true, but are the very reverse of true.*
* See Harmonies Économiques, ch. xvii.
If taxes are improductive, suppress them, if you can; but assuredly
the strangest mode of neutralizing their effect is to add individual to
public taxes. Fine compensation truly! You tell us that the State
taxes are too much; and you give that as a reason why we should tax one
another!
A protective duty is a tax directed against a foreign product; but
we must never forget that it falls back on the home consumer. Now the
consumer is the tax-payer. The agreeable language you address to him is
this: "Because your taxes are heavy, we raise the price of everything
you buy; because the State lays hold of one part of your income, we hand
over another to the monopolist."
But let us penetrate a little deeper into this sophism, which is in such
repute with our legislators, although the extraordinary thing is that it
is just the very people who maintain unproductive taxes who attribute to
them our industrial inferiority, and in that inferiority find an excuse
for imposing other taxes and restrictions.
It appears evident to me that the nature and effects of protection would
not be changed, were the State to levy a direct tax and distribute the
money afterwards in premiums and indemnities to the privileged branches
of industry.
Suppose that while foreign iron cannot be sold in our market below eight
francs, French iron cannot be sold for less than twelve francs.
On this hypothesis, there are two modes in which the State can secure
the home market to the producer.
The first mode is to lay a duty of five francs on foreign iron. It is
evident that that duty would exclude it, since it could no longer be
sold under thirteen francs, namely, eight francs for the cost price, and
five francs for the tax, and at that price it would be driven out of the
market by French iron, the price of which we suppose to be only twelve
francs. In this case, the purchaser, the consumer, would be at the whole
cost of the protection.
Or again, the State might levy a tax of five francs from the public, and
give the proceeds as a premium to the ironmaster. The protective effect
would be the same. Foreign iron would in this case be equally excluded;
for our ironmaster can now sell his iron at seven francs, which, with
the five francs premium, would make up to him the remunerative price of
twelve francs. But with home iron at seven francs the foreigner
could not sell his for eight, which by the supposition is his lowest
remunerative price.
Between these two modes of going to work, I can see only one difference.
The principle is the same; the effect is the same; but in the one,
certain individuals pay the price of protection; in the other, it is
paid for by the nation at large.
I frankly avow my predilection for the second mode. It appears to me
more just, more economical, and more honourable; more just, because if
society desires to give largesses to some of its members, all should
contribute; more economical, because it would save much expense in
collecting, and get us rid of many restrictions; more honourable,
because the public would then see clearly the nature of the operation,
and act accordingly.
But if the protectionist system had taken this form, it would have been
laughable to hear men say, "We pay heavy taxes for the army, for the
navy, for the administration of justice, for public works, for
the university, the public debt, etc.--in all exceeding a milliard
[£40,000,000 sterling]. For this reason, the State should take another
milliard from us, to relieve these poor ironmasters, these poor
shareholders in the coal-mines of Anzin, these unfortunate proprietors
of forests, these useful men who supply us with cod-fish."
Look at the subject closely, and you will be satisfied that this is the
true meaning and effect of the sophism we are combating. It is all in
vain; you cannot _give money_ to some members of the community but by
taking it from others. If you desire to ruin the tax-payer, you may do
so. But at least do not banter him by saying, "In order to compensate
your losses, I take from you again as much as I have taken from you
already." To expose fully all that is false in this sophism would be an
endless work. I shall confine myself to three observations. You assert
that the country is overburdened with taxes, and on this fact you found
an argument for the protection of certain branches of industry. But we
have to pay these taxes in spite of protection. If, then, a particular
branch of industry presents itself, and says, "I share in the payment
of taxes; that raises the cost price of my products, and I demand that a
protecting duty should also raise their selling price," what does such
a demand amount to? It amounts simply to this, that the tax should be
thrown over on the rest of the community. The object sought for is to
be reimbursed the amount of the tax by a rise of prices. But as the
Treasury requires to have the full amount of all the taxes, and as the
masses have to pay the higher price, it follows that they have to bear
not only their own share of taxation but that of the particular branch
of industry which is protected. But we mean to protect everybody, you
will say. I answer, in the first place, that that is impossible; and,
in the next place, that if it were possible, there would be no relief.
I would pay for you, and you would pay for me; but the tax must be paid
all the same.
You are thus the dupes of an illusion. You wish in the first instance
to pay taxes in order that you may have an army, a navy, a church,
a university, judges, highways, etc., and then you wish to free from
taxation first one branch of industry, then a second, then a third,
always throwing back the burden upon the masses. You do nothing more
than create interminable complications, without any other result than
these complications themselves. Show me that a rise of price caused
by protection falls upon the foreigner, and I could discover in your
argument something specious. But if it be true that the public pays
the tax before your law, and that after the law is passed it pays for
protection and the tax into the bargain, truly I cannot see what is
gained by it.
But I go further, and maintain that the heavier our taxes are, the more
we should hasten to throw open our ports and our frontiers to foreigners
less heavily taxed than ourselves. And why? In order to throw back upon
them a greater share of our burden. Is it not an incontestable axiom in
political economy that taxes ultimately fall on the consumer? The more,
then, our exchanges are multiplied, the more will foreign consumers
reimburse us for the taxes incorporated and worked up in the products
we sell them; whilst we in this respect will have to make them a smaller
restitution, seeing that their products, according to our hypothesis,
are less heavily burdened than ours.
In fine, have you never asked yourselves whether these heavy burdens on
which you found your argument for a prohibitory régime are not caused
by that very régime? If commerce were free, what use would you have for
your great standing armies and powerful navies?.... But this belongs to
the domain of politics.
Et ne confondons pas, pour trop approfondir,
Leurs affaires avec les nôtres.
VI. BALANCE OF TRADE.
Our adversaries have adopted tactics which are rather embarrassing.
Do we establish our doctrine? They admit it with the greatest possible
respect. Do we attack their principle? They abandon it with the best
grace in the world. They demand only one thing--that our doctrine, which
they hold to be true, should remain relegated in books, and that their
principle, which they acknowledge to be vicious, should reign paramount
in practical legislation. Resign to them the management of tariffs, and
they will give up all dispute with you in the domain of theory.
"Assuredly," said M. Gauthier de Rumilly, on a recent occasion, "no one
wishes to resuscitate the antiquated theories of the balance of trade."
Very right, Monsieur Gauthier, but please to remember that it is not
enough to give a passing slap to error, and immediately afterwards, and
for two hours together, reason as if that error were truth.
Let me speak of M. Lestiboudois. Here we have a consistent reasoner, a
logical disputant. There is nothing in his conclusions which is not
to be found in his premises. He asks nothing in practice, but what
he justifies in theory. His principle may be false; that is open to
question. But, at any rate, he has a principle. He believes, and he
proclaims it aloud, that if France gives ten, in order to receive
fifteen, she loses five; and it follows, of course, that he supports
laws which are in keeping with this view of the subject "The important
thing to attend to," he says, "is that the amount of our importations
goes on augmenting, and exceeds the amount of our exportations--that
is to say, France every year purchases more foreign products, and sells
less of her own. Figures prove this. What do we see? In 1842, imports
exceeded exports by 200 millions. These facts appear to prove in the
clearest manner that national industry _is not sufficiently protected_,
that we depend upon foreign labour for our supplies, that the
competition of our rivals _oppresses_ our industry. The present law
appears to me to recognise the fact, which is not true according to the
economists, that when we purchase we necessarily sell a corresponding
amount of commodities. It is evident that we can purchase, not with our
usual products, not with our revenue, not with the results of permanent
labour, but with our capital, with products which have been accumulated
and stored up, those intended for reproduction--that is to say, that we
may expend, that we may dissipate, the proceeds of anterior economies,
that we may impoverish ourselves, that we may proceed on the road to
ruin, and consume entirely the national capital. _This is exactly what
we are doing. Every year we give away 200 millions of francs to the
foreigner_."
Well, here is a man with whom we can come to an understanding. There is
no hypocrisy in this language. The doctrine of the balance of trade is
openly avowed. France imports 200 millions more than she exports.
Then we lose 200 millions a year. And what is the remedy? To place
restrictions on importation. The conclusion is unexceptionable.
It is with M. Lestiboudois, then, that we must deal, for how can we
argue with M. Gauthier? If you tell him that the balance of trade is an
error, he replies that that was what he laid down at the beginning. If
you say that the balance of trade is a truth, he will reply that that is
what he proves in his conclusions.
The economist school will blame me, no doubt, for arguing with M.
Lestiboudois. To attack the balance of trade, it will be said, is to
fight with a windmill.
But take care. The doctrine of the balance of trade is neither so
antiquated, nor so sick, nor so dead as M. Gauthier would represent it,
for the entire Chamber--M. Gauthier himself included--has recognised by
its votes the theory of M. Lestiboudois.
I shall not fatigue the reader by proceeding to probe that theory, but
content myself with subjecting it to the test of facts.
We are constantly told that our principles do not hold good, except in
theory. But tell me, gentlemen, if you regard the books of merchants as
holding good in practice? It appears to me that if there is anything
in the world which should have practical authority, when the question
regards profit and loss, it is commercial accounts. Have all the
merchants in the world come to an understanding for centuries to keep
their books in such a way as to represent profits as losses, and losses
as profits? It may be so, but I would much rather come to the conclusion
that M. Lestiboudois is a bad economist.
Now, a merchant of my acquaintance having had two transactions, the
results of which were very different, I felt curious to compare the
books of the counting-house with the books of the Customhouse, as
interpreted by M. Lestiboudois to the satisfaction of our six hundred
legislators.
M. T. despatched a ship from Havre to the United States, with a cargo of
French goods, chiefly those known as _articles de Paris_, amounting to
200,000 francs. This was the figure declared at the Customhouse. When
the cargo arrived at New Orleans it was charged with 10 per cent,
freight and 30 per cent, duty, making a total of 280,000 francs. It was
sold with 20 per cent, profit, or 40,000 francs, and produced a total of
320,000 francs, which the consignee invested in cottons. These cottons
had still for freight, insurance, commission, etc., to bear a cost of
10 per cent. so that when the new cargo arrived at Havre it had cost
352,000 francs, which was the figure entered in the Customhouse books.
Finally M. T. realized upon this return cargo 20 per cent, profit, or
70,400 francs; in other words, the cottons were sold for 422,400 francs.
If M. Lestiboudois desires it, I shall send him an extract from the
books of M. T. He will there see _at the credit_ of the _profit and
loss_ account--that is to say, as profits--two entries, one of 40,000,
another of 70,400 francs, and M. T. is very sure that his accounts are
accurate.
And yet, what do the Customhouse books tell M. Lestiboudois regarding
this transaction? They tell him simply that France exported 200,000
francs' worth, and imported to the extent of 352,000 francs; whence the
honourable deputy concludes "_that she had expended, and dissipated the
profits of her anterior economies, that she is impoverishing herself
that she is on the high road to ruin, and has given away to the
foreigner 152,000 francs of her capital_."
Some time afterwards, M. T. despatched another vessel with a cargo also
of the value of 200,000 francs, composed of the products of our native
industry. This unfortunate ship was lost in a gale of wind after leaving
the harbour, and all M. T. had to do was to make two short entries in
his books, to this effect:--
"_Sundry goods debtors to X_, 200,000 francs, for purchases of different
commodities despatched by the ship N.
"_Profit and loss debtors to sundry goods_, 200,000 francs, in
consequence of _definitive and total loss_ of the cargo."
At the same time, the Customhouse books bore an entry of 200.000 francs
in the list of _exportations_; and as there was no corresponding entry
to make in the list of _importations_, it follows that M. Lestiboudois
and the Chamber will see in this shipwreck _a clear and net profit_ for
France of 200,000 francs.
There is still another inference to be deduced from this, which is,
that according to the theory of the balance of trade, France has a very
simple means of doubling her capital at any moment. It is enough to pass
them through the Customhouse, and then pitch them into the sea. In this
case the exports will represent the amount of her capital, the imports
will be _nil_, and even impossible, and we shall gain all that the sea
swallows up.
This is a joke, the protectionists will say. It is impossible' we could
give utterance to such absurdities. You do give utterance to them,
however, and, what is more, you act upon them, and impose them on your
fellow-citizens to the utmost of your power.
The truth is, it would be necessary to take the balance of trade
_backwards [au rebours]_, and calculate the national profits from
foreign trade by the excess of imports over exports. This excess, after
deducting costs, constitutes the real profit. But this theory, which
is true, leads directly to free trade. I make you a present of it,
gentlemen, as I do of all the theories in the preceding chapters.
Exaggerate it as much as you please--it has nothing to fear from that
test. Suppose, if that amuses you, that the foreigner inundates us with
all sorts of useful commodities without asking anything in return, that
our imports are _infinite_ and exports _nil_, I defy you to prove to me
that we should be poorer on that account.
VII. OF THE MANUFACTURERS
OF CANDLES, WAX-LIGHTS, LAMPS, CANDLESTICKS, STREET LAMPS, SNUFFERS,
EXTINGUISHERS, AND OF THE PRODUCERS OF OIL, TALLOW, ROSIN, ALCOHOL, AND,
GENERALLY, OF EVERYTHING CONNECTED WITH LIGHTING.
To Messieurs the Members of the Chamber of Deputies.
Gentlemen,--You are on the right road. You reject abstract theories, and
have little consideration for cheapness and plenty Your chief care is
the interest of the producer. You desire to emancipate him from external
competition, and reserve the _national market for national industry_.
We are about to offer you an admirable opportunity of applying
your--what shall we call it? your theory? No; nothing is more deceptive
than theory; your doctrine? your system? your principle? but you dislike
doctrines, you abhor systems, and as for principles, you deny that
there are any in social economy: we shall say, then, your practice, your
practice without theory and without principle.
We are suffering from the intolerable competition of a foreign rival,
placed, it would seem, in a condition so far superior to ours for the
production of light, that he absolutely _inundates our national market_
with it at a price fabulously reduced. The moment he shows himself,
our trade leaves us--all consumers apply to him; and a branch of native
industry, having countless ramifications, is all at once rendered
completely stagnant. This rival, who is no other than the Sun, wages war
to the knife against us, and we suspect that he has been raised up by
_perfidious Albion_ (good policy as times go); inasmuch as he displays
towards that haughty island a circumspection with which he dispenses in
our case.
What we pray for is, that it may please you to pass a law ordering the
shutting up of all windows, sky-lights, dormer-windows, outside and
inside shutters, curtains, blinds, bull's-eyes; in a word, of all
openings, holes, chinks, clefts, and fissures, by or through which the
light of the sun has been in use to enter houses, to the prejudice of
the meritorious manufactures with which we flatter ourselves we have
accommodated our country,--a country which, in gratitude, ought not to
abandon us now to a strife so unequal.
We trust, Gentlemen, that you will not regard this our request as a
satire, or refuse it without at least previously hearing the reasons
which we have to urge in its support.
And, first, if you shut up as much as possible all access to natural
light, and create a demand for artificial light, which of our French
manufactures will not be encouraged by it?
If more tallow is consumed, then there must be more oxen and sheep; and,
consequently, we shall behold the multiplication of artificial meadows,
meat, wool, hides, and, above all, manure, which is the basis and
foundation of all agricultural wealth.
If more oil is consumed, then we shall have an extended cultivation of
the poppy, of the olive, and of rape. These rich and exhausting plants
will come at the right time to enable us to avail ourselves of the
increased fertility which the rearing of additional cattle will impart
to our lands.
Our heaths will be covered with resinous trees. Numerous swarms of bees
will, on the mountains, gather perfumed treasures, now wasting their
fragrance on the desert air, like the flowers from which they emanate.
No branch of agriculture but will then exhibit a cheering development.
The same remark applies to navigation. Thousands of vessels will proceed
to the whale fishery; and, in a short time, we shall possess a navy
capable of maintaining the honour of France, and gratifying the
patriotic aspirations of your petitioners, the undersigned candlemakers
and others.
But what shall we say of the manufacture of _articles de Paris?_
Henceforth you will behold gildings, bronzes, crystals, in candlesticks,
in lamps, in lustres, in candelabra, shining forth, in spacious
warerooms, compared with which those of the present day can be regarded
but as mere shops.
No poor _resinier_ from his heights on the seacoast, no coalminer from
the depth of his sable gallery, but will rejoice in higher wages and
increased prosperity.
Only have the goodness to reflect, Gentlemen, and you will be convinced
that there is, perhaps, no Frenchman, from the wealthy coalmaster to the
humblest vender of lucifer matches, whose lot will not be ameliorated by
the success of this our petition.
We foresee your objections, Gentlemen, but we know that you can oppose
to us none but such as you have picked up from the effete works of the
partisans of free trade. We defy you to utter a single word against
us which will not instantly rebound against yourselves and your entire
policy.
You will tell us that, if we gain by the protection which we seek, the
country will lose by it, because the consumer must bear the loss.
We answer:
You have ceased to have any right to invoke the interest of the
consumer; for, whenever his interest is found opposed to that of the
producer, you sacrifice the former. You have done so for the purpose of
_encouraging labour and increasing employment_. For the same reason you
should do so again.
You have yourselves obviated this objection. When you are told that
the consumer is interested in the free importation of iron, coal, corn,
textile fabrics--yes, you reply, but the producer is interested in their
exclusion. Well, be it so;--if consumers are interested in the free
admission of natural light, the producers of artificial light are
equally interested in its prohibition.
But, again, you may say that the producer and consumer are identical. If
the manufacturer gain by protection, he will make the agriculturist
also a gainer; and if agriculture prosper, it will open a vent
to manufactures. Very well; if you confer upon us the monopoly of
furnishing light during the day,--first of all, we shall purchase
quantities of tallow, coals, oils, resinous substances, wax,
alcohol--besides silver, iron, bronze, crystal--to carry on our
manufactures; and then we, and those who furnish us with such
commodities, having become rich will consume a great deal, and impart
prosperity to all the other branches of our national industry.
If you urge that the light of the sun is a gratuitous gift of nature,
and that to reject such gifts is to reject wealth itself under pretence
of encouraging the means of acquiring it, we would caution you against
giving a death-blow to your own policy. Remember that hitherto you have
always repelled foreign products, because they approximate more nearly
than home products to the character of gratuitous gifts. To comply with
the exactions of other monopolists, you have only _half a motive_; and
to repulse us simply because we stand on a stronger vantage-ground than
others would be to adopt the equation, + x + = -; in other words, it
would be to heap _absurdity upon absurdity_.
Nature and human labour co-operate in various proportions (depending on
countries and climates) in the production of commodities. The part which
nature executes is always gratuitous; it is the part executed by human
labour which constitutes value, and is paid for.
If a Lisbon orange sells for half the price of a Paris orange, it is
because natural, and consequently gratuitous, heat does for the one,
what artificial, and therefore expensive, heat must do for the other.
When an orange comes to us from Portugal, we may conclude that it is
furnished in part gratuitously, in part for an onerous consideration;
in other words, it comes to us at _half-price_ as compared with those of
Paris.
Now, it is precisely the _gratuitous half_ (pardon the word) which we
contend should be excluded. You say, How can natural labour sustain
competition with foreign labour, when the former has all the work to do,
and the latter only does one-half, the sun supplying the remainder? But
if this half being gratuitous, determines you to exclude competition,
how should the whole, being gratuitous, induce you to admit competition?
If you were consistent, you would, while excluding as hurtful to native
industry what is half gratuitous, exclude _a fortiori_ and with double
zeal, that which is altogether gratuitous.
Once more, when products such as coal, iron, corn, or textile fabrics,
are sent us from abroad, and we can acquire them with less labour than
if we made them ourselves, the difference is a free gift conferred
upon us. The gift is more or less considerable in proportion as the
difference is more or less great. It amounts to a quarter, a half, or
three-quarters of the value of the product, when the foreigner only
asks us for three-fourths, a half, or a quarter of the price we should
otherwise pay. It is as perfect and complete as it can be, when the
donor (like the sun in furnishing us with light) asks us for nothing.
The question, and we ask it formally, is this, Do you desire for
our country the benefit of gratuitous consumption, or the pretended
advantages of onerous production? Make your choice, but be logical; for
as long as you exclude as you do, coal, iron, com, foreign fabrics, in
proportion as their price approximates to zero, what inconsistency would
it be to admit the light of the sun, the price of which is already at
_zero_ during the entire day!
VIII. DIFFERENTIAL DUTIES.
A poor vine-dresser of the Gironde had trained with fond enthusiasm a
slip of vine, which, after much fatigue and much labour, yielded him, at
length, a tun of wine; and his success made him forget that each drop
of this precious nectar had cost his brow a drop of sweat. "I shall
sell it," said he to his wife, "and with the price I shall buy stuff
sufficient to enable you to furnish a trousseau for our daughter." The
honest countryman repaired to the nearest town, and met a Belgian and an
Englishman. The Belgian said to him: "Give me your cask of wine, and
I will give you in exchange fifteen parcels of stuff." The Englishman
said: "Give me your wine, and I will give you twenty parcels of stuff;
for we English can manufacture the stuff cheaper than the Belgians." But
a Customhouse officer, who was present, interposed, and said: "My good
friend, exchange with the Belgian if you think proper, but my orders
are to prevent you from making an exchange with the Englishman." "What!"
exclaimed the countryman; "you wish me to be content with fifteen
parcels of stuff which have come from Brussels, when I can get twenty
parcels which have come from Manchester?" "Certainly; don't you see
that France would be a loser if you received twenty parcels, instead
of fifteen?" "I am at a loss to understand you," said the vine-dresser,
"And I am at a loss to explain it," rejoined the Customhouse official;
"but the thing is certain, for all our deputies, ministers, and
journalists agree in this, that the more a nation receives in exchange
for a given quantity of its products, the more it is impoverished." The
peasant found it necessary to conclude a bargain with the Belgian. The
daughter of the peasant got only three-quarters of her trousseau; and
these simple people are still asking themselves how it happens that one
is ruined by receiving four instead of three; and why a person is richer
with three dozens of towels than with four dozens.
IX. IMMENSE DISCOVERY.
At a time when everybody is bent on bringing about a saving in the
expense of transport--and when, in order to effect this saving, we are
forming roads and canals, improving our steamers, and connecting Paris
with all our frontiers by a network of railways--at a time, too, when I
believe we are ardently and sincerely seeking a solution of the problem,
_how to bring the prices of commodities, in the place where they are to
be consumed, as nearly as possible to the level of their prices in the
place where they were produced_,--I should think myself wanting to
my country, to my age, and to myself, if I kept longer secret the
marvellous discovery which I have just made.
The illusions of inventors are proverbial, but I am positively certain
that I have discovered an infallible means of bringing products from
every part of the world to France, and _vice versa_ at a considerable
reduction of cost.
Infallible, did I say? Its being infallible is only one of the
advantages of my invention.
It requires neither plans, estimates, preparatory study, engineers,
mechanists, contractors, capital, shareholders, or Government aid!
It presents no danger of shipwreck, explosion, fire, or collision!
It may be brought into operation at any time!
Moreover--and this must undoubtedly recommend it to the public--it will
not add a penny to the Budget, but the reverse. It will not increase the
staff of functionaries, but the reverse. It will interfere with no man's
liberty, but the reverse.
It is observation, not chance, which has put me in possession of this
discovery, and I will tell you what suggested it.
I had at the time this question to resolve:
"Why does an article manufactured at Brussels, for example, cost dearer
when it comes to Paris?"
I soon perceived that it proceeds from this: That between Paris and
Brussels _obstacles_ of many kinds exist. First of all, there is
_distance_, which entails loss of time, and we must either submit
to this ourselves, or pay another to submit to it. Then come rivers,
marshes, accidents, bad roads, which are so many _difficulties_ to be
surmounted. We succeed in building bridges, in forming roads, and making
them smoother by pavements, iron rails, etc. But all this is costly, and
the commodity must be made to bear the cost. Then there are robbers who
infest the roads, and a body of police must be kept up, etc.
Now, among these _obstacles_ there is one which we have ourselves set
up, and at no little cost, too, between Brussels and Paris. There are
men who lie in ambuscade along the frontier, armed to the teeth, and
whose business it is to throw _difficulties_ in the way of transporting
merchandise from the one country to the other. They are called
Customhouse officers, and they act in precisely the same way as ruts
and bad roads. They retard, they trammel commerce, they augment the
difference we have remarked between the price paid by the consumer and
the price received by the producer--that very difference, the reduction
of which, as far as possible, forms the subject of our problem.
That problem is resolved in three words: Reduce your tariff.
You will then have done what is equivalent to constructing the Northern
Railway without cost, and will immediately begin to put money in your
pocket.
In truth, I often seriously ask myself how anything so whimsical could
ever have entered into the human brain, as first of all to lay out many
millions for the purpose of removing the _natural obstacles_ which
lie between France and other countries, and then to lay out many more
millions for the purpose of substituting _artificial obstacles_, which
have exactly the same effect; so much so, indeed, that the obstacle
created and the obstacle removed neutralize each other, and leave
things as they were before, the residue of the operation being a double
expense.
A Belgian product is worth at Brussels 20 francs, and the cost of
carriage would raise the price at Paris to 30 francs. The same article
made in Paris costs 40 francs. And how do we proceed?
In the first place, we impose a duty of 10 francs on the Belgian
product, in order to raise its cost price at Paris to 40 francs; and we
pay numerous officials to see the duty stringently levied, so that, on
the road, the commodity is charged 10 francs for the carriage, and 10
francs for the tax.
Having done this, we reason thus: The carriage from Brussels to Paris,
which costs 10 francs, is very dear. Let us expend two or three hundred
millions [of francs] in railways, and we shall reduce it by one half.
Evidently, all that we gain by this is that the Belgian product would
sell in Paris for 35 francs, viz.
20 francs, its price at Brussels.
10 " duty.
5 " reduced carriage by railway.
Total, 35 francs, representing cost price at Paris.
Now, I ask, would we not have attained the same result by lowering the
tariff by 5 francs? We should then have--
20 francs, the price at Brussels.
5 " reduced duty.
10 " carriage by ordinary roads.
Total, 35 francs, representing cost price at Paris.
And by this process we should have saved the 200 millions which the
railway cost, plus the expense of Customhouse surveillance, for this
last would be reduced in proportion to the diminished encouragement held
out to smuggling.
But it will be said that the duty is necessary to protect Parisian
industry. Be it so; but then you destroy the effect of your railway.
For, if you persist in desiring that the Belgian product should cost
at Paris 40 francs, you must raise your duty to 15 francs, and then you
have--
20 francs, the price at Brussels.
15 " protecting duty.
5 " railway carriage.
Total, 40 francs, being the equalized price.
Then, I venture to ask, what, under such circumstances, is the good of
your railway?
In sober earnestness, let me ask, is it not humiliating that the
nineteenth century should make itself a laughing-stock to future ages by
such puerilities, practised with such imperturbable gravity? To be
the dupe of other people is not very pleasant, but to employ a
vast representative apparatus in order to dupe, and double dupe,
ourselves--and that, too, in an affair of arithmetic--should surely
humble the pride of this _age of enlightenment_.
X. RECIPROCITY.
We have just seen that whatever increases the expense of conveying
commodities from one country to another--in other words, whatever
renders transport more onerous--acts in the same way as a protective
duty; or if you prefer to put it in another shape, that a protective
duty acts in the same way as more onerous transport.
A tariff, then, may be regarded in the same light as a marsh, a rut,
an obstruction, a steep declivity--in a word, it is an _obstacle_, the
effect of which is to augment the difference between the price which the
producer of a commodity receives, and the price which the consumer
pays for it. In the same way, it is undoubtedly true that marshes and
quagmires are to be regarded in the same light as protective tariffs.
There are people (few in number, it is true, but there are such people)
who begin to understand that obstacles are not less obstacles because
they are artificial, and that our mercantile prospects have more to gain
from liberty than from protection, and exactly for the same reason which
makes a canal more favourable to traffic than a steep, roundabout, and
inconvenient road.
But they maintain that this liberty must be reciprocal. If we remove
the barriers we have erected against the admission of Spanish goods,
for example, Spain must remove the barriers she has erected against the
admission of ours. They are, therefore, the advocates of _commercial
treaties_, on the basis of exact reciprocity, concession for concession;
let us make the _sacrifice_ of buying, say they, to obtain the advantage
of selling.
People who reason in this way, I am sorry to say, are, whether they know
it or not, protectionists in principle; only, they are a little
more inconsistent than pure protectionists, as the latter are more
inconsistent than absolute prohibitionists.
The following apologue will demonstrate this:--
STULTA AND PUERA. There were, no matter where, two towns called Stulta
and Puera. They completed at great cost a highway from the one town to
the other. When this was done, Stulta said to herself, "See how Puera
inundates us with her products; we must see to it." In consequence,
they created and paid a body of _obstructives_, so called because their
business was to place _obstacles_ in the way of traffic coming from
Puera. Soon afterwards, Puera did the same.
At the end of some centuries, knowledge having in the interim made
great progress, the common sense of Puera enabled her to see that such
reciprocal obstacles could only be reciprocally hurtful. She therefore
sent a diplomatist to Stulta, who, laying aside official phraseology,
spoke to this effect: "We have made a highway, and now we throw
obstacles in the way of using it. This is absurd. It would have been
better to have left things as they were. We should not, in that case,
have had to pay for making the road in the first place, nor afterwards
have incurred the expense of maintaining _obstructives_. In the name of
Puera, I come to propose to you, not to give up opposing each other
all at once--that would be to act upon a principle, and we despise
principles as much as you do--but to lessen somewhat the present
obstacles, taking care to estimate equitably the respective _sacrifices_
we make for this purpose." So spoke the diplomatist. Stulta asked for
time to consider the proposal, and proceeded to consult, in succession,
her manufacturers and agriculturists. At length, after the lapse of some
years, she declared that the negotiations were broken off.
On receiving this intimation, the inhabitants of Puera held a meeting.
An old gentleman (they always suspected he had been secretly bought by
Stulta) rose and said: The obstacles created by Stulta injure our sales,
which is a misfortune. Those which we have ourselves created injure our
purchases, which is another misfortune. With reference to the first, we
are powerless; but the second rests with ourselves. Let us, at least,
get quit of one, since we cannot rid ourselves of both evils. Let us
suppress our _obstructives_ without requiring Stulta to do the same.
Some day, no doubt, she will come to know her own interests better.
A second counsellor, a practical, matter-of-fact man, guiltless of
any acquaintance with principles, and brought up in the ways of his
forefathers, replied: "Don't listen to that Utopian dreamer, that
theorist, that innovator, that economist, that _Stultomaniac_."
We shall all be undone if the stoppages of the road are not equalized,
weighed, and balanced between Stulta and Puera. There would be greater
difficulty in going than in coming, in exporting than in importing. We
should find ourselves in the same condition of inferiority relatively
to Stulta, as Havre, Nantes, Bordeaux, Lisbon, London, Hamburg, and New
Orleans, are with relation to the towns situated at the sources of the
Seine, the Loire, the Garonne, the Tagus, the Thames, the Elbe, and
the Mississippi, for it is more difficult for a ship to ascend than
to descend a river. (_A Voice_: Towns at the _embouchures_ of rivers
prosper more than towns at their source.) This is impossible. (Same
Voice: But it is so.) Well, if it be so, they have prospered _contrary
to rules_. Reasoning so conclusive convinced the assembly, and
the orator followed up his victory by talking largely of national
independence, national honour, national dignity, national labour,
inundation of products, tributes, murderous competition. In short, he
carried the vote in favour of the maintenance of obstacles; and if you
are at all curious on the subject, I can point out to you countries,
where you will see with your own eyes Road-makers and Obstructives
working together on the most friendly terms possible, under the orders
of the same legislative assembly, and at the expense of the same
taxpayers, the one set endeavouring to clear the road, and the other set
doing their utmost to render it impassible.
XI. NOMINAL PRICES.
Do you desire to be in a situation to decide between liberty and
protection? Do you desire to appreciate the bearing of an economic
phenomenon? Inquire into its effects _upon the abundance or scarcity
of commodities_, and not _upon the rise or fall of prices_. Distrust
_nominal prices_;* and they will only land you in an inextricable
labyrinth.
* I have translated the expression des prix absolus, nominal
prices, or actual money prices, because the English
economists do not, so far as I remember, make use of the
term absolute price.--See post, chap. v. of second series,
where the author employs the expression in this sense.--
Translator.
M. Matthieu de Dombasle, after having shown that protection raises
prices, adds--
"The enhancement of price increases the expense of living, and
_consequently_ the price of labour, and each man receives, in the
enhanced price of his products, compensation for the higher prices he
has been obliged to pay for the things he has occasion to buy. Thus,
if every one pays more as a consumer, every one receives more as a
producer."
It is evident that we could reverse this argument, and say--"If every
one receives more as a producer, every one pays more as a consumer."
Now, what does this prove? Nothing but this, that protection _displaces_
wealth uselessly and unjustly. In so far, it simply perpetrates
spoliation.
Again, to conclude that this vast apparatus leads to simple
compensations, we must stick to the "consequently" of M. de Dombasle,
and make sure that the price of labour will not fail to rise with the
price of the protected products. This is a question of fact which I
remit to M. Moreau de Jonnés, that he may take the trouble to find out
whether the rate of wages advances along with the price of shares in
the coal-mines of Anzin. For my own part, I do not believe that it
does; because, in my opinion, the price of labour, like the price of
everything else, is governed by the relation of supply to demand. Now,
I am convinced that _restriction_ diminishes the supply of coal, and
consequently enhances its price; but I do not see so clearly that it
increases the demand for labour, so as to enhance the rate of wages; and
that this effect should be produced is all the less likely, because
the quantity of labour demanded depends on the disposable capital. Now,
protection may indeed displace capital, and cause its transference from
one employment to another, but it can never increase it by a single
farthing.
But this question, which is one of the greatest interest and importance,
will be examined in another place.* I return to the subject of _nominal
price_; and I maintain that it is not one of those absurdities which can
be rendered specious by such reasonings as those of M. de Dombasle.
Put the case of a nation which is isolated, and possesses a given amount
of specie, and which chooses to amuse itself by burning each year one
half of all the commodities that it possesses. I undertake to prove
that, according to the theory of M. de Dombasle, it will not be less
rich.
In fact, in consequence of the fire, all things will be doubled in
price, and the inventories of property, made before and after the
destruction, will show exactly the same _nominal_ value. But then what
will the country in question have lost? If John buys his cloth dearer,
he also sells his corn at a higher price; and if Peter loses on his
purchase of corn, he retrieves his losses by the sale of his cloth.
"Each recovers, in the extra price of his products, the extra expense
of living he has been put to; and if everybody pays as a consumer,
everybody receives a corresponding amount as a producer."
All this is a jingling quibble, and not science. The truth, in plain
terms, is this: that men consume cloth and corn by fire or by using
them, and that the effect is the same _as regards price_, but not _as
regards wealth_, for it is precisely in the use of commodities that
wealth or material prosperity consists.
In the same way, restriction, while diminishing the abundance of things,
may raise their price to such an extent that each party shall be,
_pecuniarily speaking_, as rich as before. But to set down in an
inventory three measures of corn at 20s., or four measures at 15s.,
because the result is still sixty shillings,--would this, I ask, come
to the same thing with reference to the satisfaction of men's wants?
It is to this, the consumer's point of view, that I shall never cease
to recall the protectionists, for this is the end and design of all our
efforts, and the solution of all problems.**
* See _post_, ch. v., second series.--Translator.
** To this view of the subject the author frequently
reverts. It was, in his eyes, all important; and, four days
before his death, he dictated this recommendation:--"Tell M.
de F. to treat economical questions always from the
consumer's point of view, for the interest of the consumer
is identical with that of the human race."--Editor.
I shall never cease to say to them: Is it, or is it not, true that
restriction, by impeding exchanges, by limiting the division of labour,
by forcing labour to connect itself with difficulties of climate and
situation, diminishes ultimately the quantity of commodities produced by
a determinate amount of efforts? And what does this signify, it will be
said, if the smaller quantity produced under the _régime_ of protection
has the same _nominal value_ as that produced under the _régime_ of
liberty? The answer is obvious. Man does not live upon nominal values,
but upon real products, and the more products there are, whatever be
their price, the richer he is.
In writing what precedes, I never expected to meet with an
anti-economist who was enough of a logician to admit, in so many words,
that the wealth of nations depends on the value of things, apart from
the consideration of their abundance. But here is what I find in the
work of M. de Saint-Chamans (p. 210):--
"If fifteen millions' worth of commodities, sold to foreigners, are
taken from the total production, estimated at fifty millions, the
thirty-five millions' worth of commodities remaining, not being
sufficient to meet the ordinary demand, will increase in price, and rise
to the value of fifty millions. In that case the revenue of the country
will represent a value of fifteen millions additional.... There would
then be an increase of the wealth of the country to the extent of
fifteen millions, exactly the amount of specie imported."
This is a pleasant view of the matter! If a nation produces in one year,
from its agriculture and commerce, a value of fifty millions, it has
only to sell a quarter of it to the foreigner to be a quarter richer!
Then if it sells the half, it will be one-half richer! And if it should
sell the whole, to its last tuft of wool and its last grain of wheat,
it would bring up its revenue to 100 millions. Singular way of getting
rich, by producing infinite dearness by absolute scarcity!
Again, would you judge of the two doctrines? Submit them to the test of
exaggeration.
According to the doctrine of M. de Saint-Chamans, the French would
be quite as rich--that is to say, quite as well supplied with all
things--had they only a thousandth part of their annual products,
because they would be worth a thousand times more.
According to our doctrine, the French would be infinitely rich if their
annual products were infinitely abundant, and, consequently, without any
value at all.*
* See _post_, ch. v. of second series of _Sophismes_; and
ch. vi. of _Harmonies Economiques_.
XII. DOES PROTECTION RAISE THE RATE OF WAGES?
An atheist, declaiming one day against religion and priestcraft, became
so outrageous in his abuse, that one of his audience, who was not
himself very orthodox, exclaimed, "If you go on much longer in this
strain, you will make me a convert."
In the same way, when we see our beardless scribblers, our
novel-writers, reformers, fops, amateur contributors to newspapers,
redolent of musk, and saturated with champagne, stuffing their
portfolios with radical prints, or issuing under gilded covers their own
tirades against the egotism and individualism of the age--when we hear
such people declaim against the rigour of our institutions, groan over
the proletariat and the wages system, raise their eyes to Heaven, and
weep over the poverty of the working classes (poverty which they never
see but when they are paid to paint it),--we are likewise tempted to
exclaim, "If you go on longer in this strain, we shall lose all interest
in the working classes."
Affectation is the besetting sin of our times. When a serious writer,
in a spirit of philanthropy, refers to the sufferings of the working
classes, his words are caught up by these sentimentalists, twisted,
distorted, and exaggerated, _usque ad 'nauseam_. The grand, the only
remedy, it would seem, lies in the high-sounding phrases, association
and organization. The working classes are flattered--fulsomely,
servilely flattered; they are represented as in the condition of slaves,
and men of common sense will soon be ashamed publicly to espouse their
cause, for how can common sense make itself heard in the midst of all
this insipid and empty declamation?
Far from us be this cowardly indifference, which would not be justified
even by the sentimental affectation which prompts it.
Workmen! your situation is peculiar! They make merchandise of you, as I
shall show you immediately.... But no; I withdraw that expression.
Let us steer clear of strong language, which may be misapplied; for
spoliation, wrapt up in the sophistry which conceals it, may be in full
operation unknown to the spoliator, and with the blind assent of his
victim. Still, you are deprived of the just remuneration of your labour,
and no one is concerned to do you _justice_. If all that was wanted to
console you were ardent appeals to philanthropy, to impotent charity,
to degrading almsgiving; or if the grand words, organization, communism,
_phalanstère,_* were enough for you, truly they would not be spared. But
_justice_, simple justice, no one thinks of offering you. And yet, would
it not be _just_ that when, after a long day's toil, you have received
your modest wages, you should have it in your power to exchange them
for the greatest amount of satisfactions and enjoyments which you could
possibly obtain for them from any one in any part of the world?
* Allusion to a socialist work of the day.--Translator.
Some day I may have occasion also to talk to you of association and
organization, and we shall then see what you have to expect from those
chimeras which now mislead you.
In the meantime, let us inquire whether _injustice_ is not done you by
fixing legislatively the people from whom you are to purchase the things
you have need of--bread, meat, linens, or cloth; and in dictating, if
I may say so, the artificial scale of prices which you are to adopt in
your dealings.
Is it true that protection, which admittedly makes you pay dearer
for everything, and entails a loss upon you in this respect, raises
proportionally your wages?
On what does the rate of wages depend?
One of your own class has put it forcibly, thus: When two workmen run
after one master, wages fall; they rise when two masters run after one
workman.
For the sake of brevity, allow me to make use of this formula, more
scientific, although, perhaps, not quite so clear. The rate of wages
depends on the proportion which the supply of labour bears to the demand
for it.
Now, on what does the _supply_ of labour depend?
On the number of men waiting for employment; and on this first element
protection can have no effect.
On what does the _demand_ for labour depend?
On the disposable capital of the nation. But does the law which says,
We shall no longer receive such or such a product from abroad, we shall
make it at home, augment the capital? Not in the least degree. It may
force capital from one employment to another, but it does not increase
it by a single farthing. It does not then increase the demand for
labour.
We point with pride to a certain manufacture. Is it established or
maintained with capital which has fallen from the moon? No; that capital
has been withdrawn from agriculture, from shipping, from the production
of wines. And this is the reason why, under the _régime_ of protective
tariffs, there are more workmen in our mines and in our manufacturing
towns, and fewer sailors in our ports, and fewer labourers in our fields
and vineyards.
I could expatiate at length on this subject, but I prefer to explain
what I mean by an example.
A countryman was possessed of twenty acres of land, which he worked with
a capital of £400. He divided his land into four parts, and established
the following rotation of crops:--1st, maize; 2d, wheat; 3d, clover;
4th, rye. He required for his own family only a moderate portion of the
grain, meat, and milk which his farm produced, and he sold the surplus
to buy oil, flax, wine, etc. His whole capital was expended each year
in wages, hires, and small payments to the working classes in his
neighbourhood. This capital was returned to him in his sales, and even
went on increasing year by year; and our countryman, knowing very well
that capital produces nothing when it is unemployed, benefited the
working classes by devoting the annual surplus to enclosing and
clearing his land, and to improving his agricultural implements and farm
buildings. He had even some savings in the neighbouring town with his
banker, who, of course, did not let the money lie idle in his till, but
lent it to shipowners and contractors for public works, so that these
savings were always resolving themselves into wages.
At length the countryman died, and his son, who succeeded him, said to
himself, "My father was a dupe all his life. He purchased oil, and so
paid _tribute_ to Provence, whilst our own land, with some pains, can
be made to grow the olive. He bought cloth, wine, and oranges, and thus
paid tribute to Brittany, Medoc, and Hyères, whilst we can cultivate
hemp, the vine, and the orange tree with more or less success. He paid
_tribute_ to the miller and the weaver, whilst our own domestics can
weave our linen and grind our wheat." In this way he ruined himself, and
spent among strangers that money which he might have spent at home.
Misled by such reasoning, the volatile youth changed his rotation of
crops. His land he divided into twenty divisions. In one he planted
olives, in another mulberry trees, in a third he sowed flax, in a fourth
he had vines, in a fifth wheat, and so on. By this means he succeeded
in supplying his family with what they required, and felt himself
independent. He no longer drew anything from the general circulation,
nor did he add anything to it. Was he the richer for this? No; for the
soil was not adapted for the cultivation of the vine, and the climate
was not fitted for the successful cultivation of the olive; and he was
not long in finding out that his family was less plentifully provided
with all the things which they wanted than in the time of his father,
who procured them by exchanging his surplus produce.
As regarded his workmen, they had no more employment than formerly.
There were five times more fields, but each field was five times
smaller; they produced oil, but they produced less wheat; he no longer
purchased linens, but he no longer sold rye. Moreover, the farmer could
expend in wages only the amount of his capital, and his capital went on
constantly diminishing. A great part of it went for buildings, and the
various implements needed for the more varied cultivation in which he
had engaged. In short, the supply of labour remained the same, but as
the means of remunerating that labour fell off, the ultimate result was
a forcible reduction of wages.
On a greater scale, this is exactly what takes place in the case of
a nation which isolates itself by adopting a prohibitive _régime_.
It multiplies its branches of industry, I grant, but they become of
diminished importance; it adopts, so to speak, a more complicated
_industrial rotation_, but it is not so prolific, because its capital
and labour have now to struggle with natural difficulties. A greater
proportion of its circulating capital, which forms the wages fund,
must be converted into fixed capital. What remains may have more varied
employment, but the total mass is not increased. It is like distributing
the water of a pond among a multitude of shallow reservoirs--it covers
more ground, and presents a greater surface to the rays of the sun,
and it is precisely for this reason that it is all the sooner absorbed,
evaporated, and lost.
The amount of capital and labour being given, they create a smaller
amount of commodities in proportion as they encounter more obstacles. It
is beyond doubt, that when international obstructions force capital
and labour into channels and localities where they meet with greater
difficulties of soil and climate, the general result must be, fewer
products created--that is to say, fewer enjoyments for consumers. Now,
when there are fewer enjoyments upon the whole, will the workman's share
of them be augmented? If it were augmented, as is asserted, then the
rich--the men who make the laws--would find their own share not only
subject to the general diminution, but that diminished share would be
still further reduced by what was added to the labourers' share. Is
this possible? Is it credible? I advise you, workmen, to reject such
suspicious generosity.*
* See _Harmonies Économiques_, ch. xiv.
XIII. THEORY, PRACTICE.
As advocates of free trade, we are accused of being theorists, and of
not taking practice sufficiently into account.
"What fearful prejudices were entertained against M. Say," says M.
Ferrier,* "by that long train of distinguished administrators, and that
imposing phalanx of authors who dissented from his opinions; and M.
Say was not unaware of it. Hear what he says:--'It has been alleged
in support of errors of long standing, that there must have been some
foundation for ideas which have been adopted by all nations. Ought
we not to distrust observations and reasonings which run counter to
opinions which have been constantly entertained down to our own time,
and which have been regarded as sound by so many men remarkable for
their enlightenment and their good intentions? This argument, I allow,
is calculated to make a profound impression, and it might have cast
doubt upon points which we deem the most incontestable, if we had not
seen, by turns, opinions the most false, and now generally acknowledged
to be false, received and professed by everybody during a long series
of ages. Not very long ago all nations, from the rudest to the most
enlightened, and all men, from the street-porter to the _savant_,
admitted the existence of four elements. No one thought of contesting
that doctrine, which, however, is false; so much so, that even the
greenest assistant in a naturalist's class-room would be ashamed to say
that he regarded earth, water, and fire as elements.'"
* De l'Administration Commerciale opposée à Oeconomie
Politique, p. 5.
On this M. Ferrier remarks:--
"If M. Say thinks to answer thus the very strong objection which he
brings forward, he is singularly mistaken. That men, otherwise well
informed, should have been mistaken for centuries on certain points of
natural history is easily understood, and proves nothing. Water, air,
earth, and fire, whether elements or not, are not the less useful to
man.... Such errors are unimportant: they lead to no popular commotions,
no uneasiness in the public mind; they run counter to no pecuniary
interest; and this is the reason why without any felt inconvenience they
may endure for a thousand years. The physical world goes on as if they
did not exist. But of errors in the moral world, can the same thing
be said? Can we conceive that a system of administration, found to be
absolutely false and therefore hurtful, should be followed out
among many nations for centuries, with the general approval of all
well-informed men? Can it be explained how such a system could coexist
with the constantly increasing prosperity of nations? M. Say admits that
the argument which he combats is fitted to make a profound impression.
Yes, indeed; and the impression remains; for M. Say has rather deepened
than done away with it."
* Might we not say, that it is a "fearful prejudice" against
MM. Ferrier and Saint-Chamans, that "_economists of all
schools_, that is to say, everybody who has studied the
question, should have arrived at the conclusion, that, after
all, liberty is better than constraint, and the laws of God
wiser than those of Colbert."
Let us hear what M. de Saint-Chamans says on the same subject:--
"It was only in the middle of the last century, of that eighteenth
century which handed over all subjects and all principles without
exception to free discussion, that these _spéculative_ purveyors of
ideas, applied by them to all things without being really applicable
to anything, began to write upon political economy. There existed
previously a system of political economy, not to be found in books, but
which had been put in _practical_ operation by governments. Colbert, it
is said, was the inventor of it, and it was adopted as a rule by all the
nations of Europe. The singular thing is, that in spite of contempt and
maledictions, in spite of all the discoveries of the modern school, it
still remains in practical operation. This system, which our authors
have called the _mercantile system_, was designed to.... impede, by
prohibitions or import duties, the entry of foreign products, which
might ruin our own manufactures by their competition. Economic writers
of all schools* have declared this system untenable, absurd, and
calculated to impoverish any country. It has been banished from all
their books, and forced to take refuge in the _practical_ legislation of
all nations. They cannot conceive why, in measures relating to national
wealth, governments should not follow the advice and opinions of learned
authors, rather than trust to their _experience_ of the tried working
of a system which has been long in operation. Above all, they cannot
conceive why the French government should in economic questions
obstinately set itself to resist the progress of enlightenment, and
maintain in its _practice_ those ancient errors, which all our economic
writers have exposed. But enough of this mercantile system, which
has nothing in its favour but _facts_, and is not defended by any
speculative writer."*
* Du Système de l'Impot, par M. le Vicomte de Saint-Chamans,
p. 11.
Such language as this would lead one to suppose that in demanding
for every one _the free disposal of his property_, economists were
propounding some new system, some new, strange, and chimerical social
order, a sort of _phalanstère_, coined in the mint of their own brain,
and without precedent in the annals of the human race. To me it would
seem that if we have here anything factitious or contingent, it is to
be found, not in liberty, but in protection; not in the free power of
exchanging, but in customs duties employed to overturn artificially the
natural course of remuneration.
But our business at present is not to compare, or pronounce between, the
two systems; but to inquire which of the two is founded on experience.
The advocates of monopoly maintain that _the facts_ are on their side,
and that we have on our side only _theory_.
They flatter themselves that this long series of public acts, this
_old experience_ of Europe, which they invoke, has presented itself as
something very formidable to the mind of M. Say; and I grant that he
has not refuted it with his wonted sagacity. For my own part, I am not
disposed to concede to the monopolists the domain of _facts_, for they
have only in their favour facts which are forced and exceptional; and we
oppose to these, facts which are universal, the free and voluntary acts
of mankind at large.
What do we say; and what do they say?
We say,
"You should buy from others what you cannot make for yourself but at a
greater expense."
And they say,
"It is better to make things for yourself, although they cost you more
than, the price at which you could buy them from others."
Now, gentlemen, throwing aside theory, argument, demonstration, all
which seems to affect you with nausea, which of these two assertions has
on its side the sanction of _universal practice?_
Visit your fields, your workshops, your forges, your warehouses; look
above, below, and around you; look at what takes place in your own
houses; remark your own everyday acts; and say what is the principle
which guides these labourers, artisans, and merchants; say what is your
own personal _practice_.
Does the farmer make his own clothes? Does the tailor produce the corn
he consumes? Does your housekeeper continue to have your bread made
at home, after she finds she can buy it cheaper from the baker? Do
you resign the pen for the brush, to save your paying _tribute_ to
the shoeblack? Does the entire economy of society not rest upon the
separation of employments, the division of labour--in a word, upon
_exchange?_ And what is exchange, but a calculation which we make with
a view to discontinuing direct production in every case in which we find
that possible, and in which indirect acquisition enables us to effect a
saving in time and in effort?
It is not you, therefore, who are the men of _practice_, since you
cannot point to a single human being who acts upon your principle.
But you will say, we never intended to make our principle a rule for
individual relations. We perfectly understand that this would be to
break up the bond of society, and would force men to live like snails,
each in his own shell. All that we contend for is, that our principle
regulates _de facto_, the regulations which obtain between the different
agglomerations of the human family.
Well, I affirm that this principle is still erroneous. The family,
the commune, the canton, the department, the province, are so many
agglomerations, which all, without any exception, reject _practically_
your principle, and have never dreamt of acting on it. All procure
themselves, by means of exchange, those things which it would cost them
dearer to procure by means of production. And nations would do the same,
did you not hinder them _by force_.
We, then, are the men of practice and of experience; for we oppose
to the restriction which you have placed exceptionally on certain
international exchanges, the practice and experience of all individuals,
and of all agglomerations of individuals, whose acts are voluntary, and
can consequently be adduced as evidence. But you begin by _constraining,
by hindering_, and then you lay hold of acts which are _forced or
prohibited_, as warranting you to exclaim, "We have practice and
experience on our side!"
You inveigh against our theory, and even against theories in general.
But when you lay down a principle in opposition to ours, you perhaps
imagine you are not proceeding on theory? Clear your heads of that idea.
You in fact form a theory, as we do; but between your theory and ours
there is this difference:
Our theory consists merely in observing universal _facts_, universal
opinions; calculations and ways of proceeding which universally prevail;
and in classifying these, and rendering them Co-ordinate, with a view to
their being more easily understood.
Our theory is so little opposed to practice that it is nothing else but
_practice explained_. We observe men acting as they are moved by the
instinct of self-preservation and a desire for progress, and what
they thus do freely and voluntarily we denominate political or social
economy. We can never help repeating, that each individual man is
_practically_ an excellent economist, producing or exchanging according
as he finds it more to his interest to produce or to exchange. Each,
by experience, educates himself in this science; or rather the science
itself is only this same experience accurately observed and methodically
explained.
But on your side, you construct a _theory_ in the worst sense of the
word. You imagine, you invent, a course of proceeding which is not
sanctioned by the practice of any living man under the canopy of heaven;
and then you invoke the aid of constraint and prohibition. It is quite
necessary that you should have recourse to _force_, for you desire that
men should be made to produce those things which they find it _more
advantageous_ to buy; you desire that they should renounce this
_advantage_, and act upon a doctrine which implies a contradiction in
terms.
The doctrine which you acknowledge would be absurd in the relations
of individuals; I defy you to extend it, even in speculation, to
transaction between families, communities, or provinces. By your own
admission, it is only applicable to international relations.
This is the reason why you are forced to keep repeating:
"There are no absolute principles, no inflexible rules. What is _good_
for an individual, a family, a province, is _bad_ for a nation. What
is _good_ in detail--namely, to purchase rather than produce, when
purchasing is more advantageous than producing--that same is _bad_ in
the gross. The political economy of individuals is not that of nations;"
and other nonsense _ejusdèm farino_.
And to what does all this tend? Look at it a little closer. The
intention is to prove that we, the consumers, are your property! that
we are yours body and soul! that you have an exclusive right over our
stomachs and our limbs! that it belongs to you to feed and clothe us on
your own terms, whatever be your ignorance, incapacity, or rapacity!
No, you are not men of practice; you are men of abstraction--and of
extortion.
XIV. CONFLICT OF PRINCIPLES.
There is one thing which confounds me; and it is this: Sincere
publicists, studying the economy of society from the producer's point of
view, have laid down this double formula:--
"Governments should order the interests of consumers who are subject to
their laws, in such a way as to be favourable to national industry.
"They should bring distant consumers under subjection to their laws, for
the purpose of ordering their interests in a way favourable to national
industry."
The first of these formulas gets the name of protection; the second we
call _débouchés_, or the creating of markets, or vents, for our produce.
Both are founded on the _datum_ which we denominate the _Balance of
Trade_.
"A nation is impoverished when it imports; enriched when it exports."
For if every purchase from a foreign country is a _tribute paid_ and a
national loss, it follows, of course, that it is right to restrain, and
even prohibit, importations.
And if every sale to a foreign country is a _tribute received_, and a
national profit, it is quite right and natural to create markets for our
products even by force.
The _system of protection_ and the _colonial system_ are, then, only two
aspects of one and the same theory. To _hinder_ our fellow-citizens
from buying from foreigners, and to _force_ foreigners to buy from
our fellow-citizens, are only two consequences of one and the same
principle.
Now, it is impossible not to admit that this doctrine, if true, makes
general utility to repose on _monopoly_ or internal spoliation, and on
_conquest_ or external spoliation.
I enter a cottage on the French side of the Pyrenees.
The father of the family has received but slender wages. His half-naked
children shiver in the icy north wind; the fire is extinguished, and
there is nothing on the table. There are wool, firewood, and corn on the
other side of the mountain; but these good things are forbidden to the
poor day-labourer, for the other side of the mountain is not in France.
Foreign firewood is not allowed to warm the cottage hearth; and the
shepherd's children can never know the taste of Biscayan corn,* and the
wool of Navarre can never warm their benumbed limbs. General utility
has so ordered it. Be it so; but let us agree that all this is in direct
opposition to the first principles of justice. To dispose legislatively
of the interests of consumers, and postpone them to the supposed
interests of national industry, is to encroach upon their liberty--it is
to prohibit an act; namely, the act of exchange, which has in it
nothing contrary to good morals; in a word, it is to do them an act of
_injustice_.
* The French word employed is _méture_, probably a Spanish
word Gallicized--_mestûra_, meslin, mixed corn, as wheat and
rye.---Translator.
And yet this is necessary, we are told, unless we wish to see national
labour at a standstill, and public prosperity sustain a fatal shock.
Writers of the protectionist school, then, have arrived at the
melancholy conclusion that there is a radical incompatibility between
Justice and Utility.
On the other hand, if it be the interest of each nation to _sell_, and
not to _buy_, the natural state of their relations must consist in a
violent action and reaction, for each will seek to impose its products
on all, and all will endeavour to repel the products of each.
A sale, in fact, implies a purchase, and since, according to this
doctrine, to sell is beneficial, and to buy is the reverse, every
international transaction would imply the amelioration of one people,
and the deterioration of another.
But if men are, on the one hand, irresistibly impelled towards what is
for their profit, and if, on the other, they resist instinctively what
is hurtful, we are forced to conclude that each nation carries in its
bosom a natural force of expansion, and a not less natural force of
resistance, which forces are equally injurious to all other nations; or,
in other words, that antagonism and war are the _natural_ state of human
society.
Thus the theory we are discussing may be summed up in these two axioms:
Utility is incompatible with Justice at home.
Utility is incompatible with Peace abroad.
Now, what astonishes and confounds me is, that a publicist, a statesman,
who sincerely holds an economical doctrine which runs so violently
counter to other principles which are incontestable, should be able to
enjoy one moment of calm or peace of mind.
For my own part, it seems to me, that if I had entered the precincts of
the science by the same gate, if I had failed to perceive clearly that
Liberty, Utility, Justice, Peace, are things not only compatible, but
strictly allied with each other, and, so to speak, identical, I should
have endeavoured to forget what I had learned, and I should have asked:
"How God could have willed that men should attain prosperity only
through Injustice and War? How He could have willed that they should be
unable to avoid Injustice and War except by renouncing the possibility
of attaining prosperity?
"Dare I adopt, as the basis of the legislation of a great nation, a
science which thus misleads me by false lights, which has conducted me
to this horrible blasphemy, and landed me in so dreadful an alternative?
And when a long train of illustrious philosophers have been conducted by
this science, to which they have devoted their lives, to more consoling
results--when they affirm that Liberty and Utility are perfectly
reconcilable with Justice and Peace--that all these great principles
run in infinitely extended parallels, and will do so to all eternity,
without running counter to each other,--I would ask, Have they not in
their favour that presumption which results from all that we know of the
goodness and wisdom of God, as manifested in the sublime harmony of the
material creation? In the face of such a presumption, and of so many
reliable authorities, ought I to believe lightly that God has been
pleased to implant antagonism and dissonance in the laws of the moral
world? No; before I should venture to conclude that the principles
of social order run counter to and neutralize each other, and are in
eternal and irreconcilable opposition--before I should venture to impose
on my fellow-citizens a system so impious as that to which my reasonings
would appear to lead,--I should set myself to reexamine the whole chain
of these reasonings, and assure myself that at this stage of the
journey I had not missed my way." But if, after a candid and searching
examination, twenty times repeated, I arrived always at this frightful
conclusion, that we must choose between the Bight and the Good,
discouraged, I should reject the science, and bury myself in voluntary
ignorance; above all, I should decline all participation in public
affairs, leaving to men of another temper and constitution the burden
and responsibility of a choice so painful.
XV. RECIPROCITY AGAIN.
M. de Saint-Cricq inquires, "Whether it is certain that the foreigner
will buy from us as much as he sells?"
M. de Dombasle asks, "What reason we have to believe that English
producers will take from us, rather than from some other country of the
world, the commodities they have need of, and an amount of commodities
equivalent in value to that of their exports to France?"
I wonder how so many men who call themselves _practical_ men should have
all reasoned without reference to practice!
In practice, does a single exchange take place, out of a hundred, out
of a thousand, out of ten thousand perhaps, which represents the direct
barter of commodity for commodity? Never since the introduction of money
has any agriculturist said: I want to buy shoes, hats, advice, lessons;
but only from the shoemaker, the hat-maker, the lawyer, the professor,
who will purchase from me corn to an exactly equivalent value. And why
should nations bring each other under a yoke of this kind? Practically
how are such matters transacted?
Let us suppose a people shut out from external relations. A man, we
shall suppose, produces wheat. He sends it to the _home_ market,
and offers it for the highest price he can obtain. He receives in
exchange--what? Coins, which are just so many drafts or orders, varying
very much in amount, by means of which he can draw, in his turn, from
the national stores, when he judges it proper, and subject to due
competition, everything which he may want or desire. Ultimately, and
at the end of the operation, he will have drawn from the mass the
exact equivalent of what he has contributed to it, and, in value, _his
consumption will exactly equal his production_.
If the exchanges of the supposed nation with foreigners are left free,
it is no longer to the _national_, but to the _general_, market that
each sends his contributions, and, in turn, derives his supplies for
consumption. He has no need to care whether what he sends into the
market of the world is purchased by a fellow-countryman or by a
foreigner; whether the drafts or orders he receives come from a
Frenchman or an Englishman; whether the commodities for which he
afterwards exchanges these drafts or orders are produced on this or on
the other side of the Rhine or the Pyrenees. There is always in each
individual case an exact balance between what is contributed and what is
received, between what is poured into and what is drawn out of the great
common reservoir; and if this is true of each individual, it is true of
the nation at large.
The only difference between the two cases is, that in the last each has
to face a more extended market both as regards sales and purchases, and
has consequently more chances of transacting both advantageously.
This objection may perhaps be urged: If everybody enters into a
league not to take from the general mass the commodities of a certain
individual, that individual cannot, in his turn, obtain from the mass
what he is in want of. It is the same of nations.
The reply to this is, that if a nation cannot obtain what it has need
of in the general market, it will no longer contribute anything to
that market. It will work for itself. It will be forced in that case to
submit to what you want to impose on it beforehand--_isolation_.
And this will realize the ideal of the prohibitive _régime_.
Is it not amusing to think that you inflict upon the nation, now and
beforehand, this very _régime_, from a fear that it might otherwise run
the risk of arriving at it independently of your exertions?
XVI. OBSTRUCTED NAVIGATION PLEADING FOR THE PROHIBITIONISTS.
Some years ago I happened to be at Madrid, and went to the Cortes. The
subject of debate was a proposed treaty with Portugal for improving
the navigation of the Douro. One of the deputies rose and said: "If the
navigation of the Douro is improved in the way now proposed, the traffic
will be carried on at less expense. The grain of Portugal will, in
consequence, be sold in the markets of Castile at a lower price, and
will become a formidable rival to our _national industry_. I oppose
the project, unless, indeed, our ministers will undertake to raise
the tariff of customs to the extent required to re-establish the
equilibrium." The Assembly found the argument unanswerable.
Three months afterwards I was at Lisbon. The same question was discussed
in the Senate. A noble hidalgo made a speech: "Mr President," he said,
"this project is absurd. You place guards, at great expense, along the
banks of the Douro to prevent Portugal being invaded by Castilian grain;
and at the same time you propose, also at great expense, to facilitate
that invasion. This is a piece of inconsistency to which I cannot
assent. Let us leave the Douro to our children, as it has come to us
from our fathers."
Afterwards, when the subject of improving the navigation of the Garonne
was discussed, I remembered the arguments of the Iberian orators, and I
said to myself, If the Toulouse deputies were as good economists as the
Spanish deputies, and the representatives of Bordeaux as acute logicians
as those of Oporto, assuredly they would leave the Garonne
"Dormir au bruit flatteur de son onde naissante;"
for the canalisation of the Garonne would favour the invasion of
Toulouse products, to the prejudice of Bordeaux, and the inundation of
Bordeaux products would do the same thing to the detriment of Toulouse.
XVII. A NEGATIVE RAILWAY.
I have said that when, unfortunately, one has regard to the interest of
the producer, and not to that of the consumer, it is impossible to
avoid running counter to the general interest, because the demand of the
producer, as such, is only for efforts, wants, and obstacles.
I find a remarkable illustration of this in a Bordeaux newspaper.
M. Simiot proposes this question:--
Should the proposed railway from Paris to Madrid offer a solution of
continuity at Bordeaux?
He answers the question in the affirmative, and gives a multiplicity of
reasons, which I shall not stop to examine, except this one:
The railway from Paris to Bayonne should have a break at Bordeaux, for
if goods and passengers are forced to stop at that town, profits will
accrue to bargemen, pedlars, commissionaires, hotel-keepers, etc.
Here we have clearly the interest of labour put before the interest of
consumers.
But if Bordeaux has a right to profit by a gap in the line of railway,
and if such profit is consistent with the public interest, then
Angoulème, Poitiers, Tours, Orleans, nay, more, all the intermediate
places, Ruffec, Châtellerault, etc., should also demand gaps, as being
for the general interest, and, of course, for the interest of national
industry; for the more these breaks in the line are multiplied,
the greater will be the increase of consignments, commissions,
transhipments, etc., along the whole extent of the railway. In this
way, we shall succeed in having a line of railway composed of successive
gaps, and which may be denominated a _Negative Railway_.
Let the protectionists say what they will, it is not the less certain
that _the principle of restriction_ is the very same as the _principle
of gaps_; the sacrifice of the consumer's interest to that of the
producer,--in other words, the sacrifice of the end to the means.
XVIII. THERE ARE NO ABSOLUTE PRINCIPLES.
We cannot wonder enough at the facility with which men resign themselves
to continue ignorant of what it is most important that they should know;
and we may be certain that such ignorance is incorrigible in those who
venture to proclaim this axiom: There are no absolute principles.
You enter the legislative precincts. The subject of debate is whether
the law should prohibit international exchanges, or proclaim freedom.
A deputy rises, and says:
If you tolerate these exchanges, the foreigner will inundate you with
his products: England with her textile fabrics, Belgium with coals,
Spain with wools, Italy with silks, Switzerland with cattle, Sweden
with iron, Prussia with corn; so that home industry will no longer be
possible.
Another replies:
If you prohibit international exchanges, the various bounties which
nature has lavished on different climates will be for you as if they
did not exist. You cannot participate in the mechanical skill of the
English, in the wealth of the Belgian mines, in the fertility of the
Polish soil, in the luxuriance of the Swiss pastures, in the cheapness
of Spanish labour, in the warmth of the Italian climate; and you must
obtain from a refractory and misdirected production those commodities
which, through exchange, would have been furnished to you by an easy
production.
Assuredly, one of these deputies must be wrong. But which? We must take
care to make no mistake on the subject; for this is not a matter of
abstract opinion merely. You have to choose between two roads, and one
of them leads necessarily to _poverty_.
To get rid of the dilemma, we are told that there are no absolute
principles.
This axiom, which is so much in fashion nowadays, not only countenances
indolence, but ministers to ambition.
If the theory of prohibition comes to prevail, or if the doctrine of
free trade comes to triumph, one brief enactment will constitute our
whole economic code. In the first case, the law will proclaim that _all
exchanges with foreign countries are prohibited_; in the second, that
_all exchanges with foreign countries are free_; and many grand and
distinguished personages will thereby lose their importance.
But if exchange does not possess a character which is peculiar to
it,--if it is not governed by any natural law,--if, capriciously, it
be sometimes useful and sometimes detrimental,--if it does not find its
motive force in the good which it accomplishes, its limit in the good
which it ceases to accomplish,--if its consequences cannot be estimated
by those who effect exchanges;--in a word, if there be no absolute
principles, then we must proceed to weigh, balance, and regulate
transactions, we must equalize the conditions of labour, and try to find
out the average rate of profits--a colossal task, well deserving the
large emoluments and powerful influence awarded to those who undertake
it.
On entering Paris, which I had come to visit, I said to myself, Here
are a million of human beings, who would all die in a short time if
provisions of every kind ceased to flow towards this great metropolis.
Imagination is baffled when it tries to appreciate the vast multiplicity
of commodities which must enter to-morrow through the barriers in order
to preserve the inhabitants from falling a prey to the convulsions of
famine, rebellion, and pillage. And yet all sleep at this moment, and
their peaceful slumbers are not disturbed for a single instant by the
prospect of such a frightful catastrophe. On the other hand, eighty
departments have been labouring to-day, without concert, without any
mutual understanding, for the provisioning of Paris. How does each
succeeding day bring what is wanted, nothing more, nothing less, to so
gigantic a market? What, then, is the ingenious and secret power which
governs the astonishing regularity of movements so complicated, a
regularity in which everybody has implicit faith, although happiness
and life itself are at stake? That power is an _absolute principle_, the
principle of freedom in transactions. We have faith in that inward light
which Providence has placed in the heart of all men, and to which He has
confided the preservation and indefinite amelioration of our species,
namely, a regard to personal _interest_--since we must give it its right
name--a principle so active, so vigilant, so foreseeing, when it is free
in its action. In what situation, I would ask, would the inhabitants of
Paris be, if a minister should take it into his head to substitute for
this power the combinations of his own genius, however superior we might
suppose them to be--if he thought to subject to his supreme direction
this prodigious mechanism, to hold the springs of it in his hands, to
decide by whom, or in what manner, or on what conditions, everything
needed should be produced, transported, exchanged, and consumed? Truly,
there may be much suffering within the walls of Paris--poverty, despair,
perhaps starvation, causing more tears to flow than ardent charity
is able to dry up; but I affirm that it is probable, nay, that it is
certain, that the arbitrary intervention of government would multiply
infinitely those sufferings, and spread over all our fellow-citizens
those evils which at present affect only a small number of them.
This faith, then, which we repose in a principle, when the question
relates only to our home transactions, why should we not retain, when
the same principle is applied to our international transactions, which
are undoubtedly less numerous, less delicate, and less complicated?
And if it is not necessary that the _préfecture_ should regulate our
Parisian industries, weigh our chances, balance our profits and losses,
see that our circulating medium is not exhausted, and equalize the
conditions of our home labour, why should it be necessary that the
Customhouse, departing from its fiscal duties, should pretend to
exercise a protective action over our external commerce?
XIX. NATIONAL INDEPENDENCE.
Among the arguments which we hear adduced in favour of the restrictive
_régime_, we must not forget that which is founded on _national
independence_.
"What should we do in case of war," it is said, "if we are placed at the
mercy of England for iron and coal?"
English monopolists do not fail to cry out in their turn:
"What would become of Great Britain, in case of war, if she is dependent
on France for provisions?"
One thing is overlooked, which is this--that the kind of dependence
which results from exchange, from commercial transactions, is a
_reciprocal dependence_. We cannot be dependent on the foreigner without
the foreigner being dependent on us. Now, this is the very essence of
society. To break up natural relations is not to place ourselves in a
state of independence, but in a state of isolation.
Remark this: A nation isolates itself looking forward to the possibility
of war; but is not this very act of isolating itself the beginning of
war? It renders war more easy, less burdensome, and, it may be, less
unpopular. Let countries be permanent markets for each other's produce;
let their reciprocal relations be such that they cannot be broken
without inflicting on each other the double suffering of privation and
a glut of commodities; and they will no longer stand in need of naval
armaments, which ruin them, and overgrown armies, which crush them;
the peace of the world will not then be compromised by the caprice of
a Thiers or of a Palmerston; and war will disappear for want of what
supports it, for want of resources, inducements, pretexts, and popular
sympathy.
I am quite aware that I shall be reproached (it is the fashion of
the day) with basing the fraternity of nations on men's personal
interest--vile, prosaic self-interest. Better far, it may be thought,
that it should have had its basis in charity, in love, even in a little
self-abnegation, and that, interfering somewhat with men's material
comforts, it should have had the merit of a generous sacrifice.
When shall we be done with these puerile declamations? When will
_tartuferie_ be finally banished from science? When shall we cease to
exhibit this nauseous contradiction between our professions and our
practice? We hoot at and execrate personal _interest_; in other words,
we denounce what is useful and good (for to say that all men are
interested in anything is to say that the thing is good in itself), as
if personal interest were not the necessary, eternal, and indestructible
mainspring to which Providence has confided human perfectibility. Are we
not represented as being all angels of disinterestedness? And does the
thought never occur to those who say so, that the public begins to see
with disgust that this affected language disfigures the pages of those
very writers who axe most successful in filling their own pockets at
the public expense? Oh! affectation! affectation! thou art verily the
besetting sin of our times!
What! because material prosperity and peace are things correlative,
because it has pleased God to establish this beautiful harmony in the
moral world, am I not to admire, am I not to adore His ordinances, am
I not to accept with gratitude laws which make justice the condition
of happiness? You desire peace only in as far as it runs counter to
material prosperity; and liberty is rejected because it does not impose
sacrifices. If abnegation has indeed so many charms for you, why do you
fail to practise it in private life? Society will be grateful to you,
for some one, at least, will reap the fruit; but to desire to impose
it upon mankind as a principle is the very height of absurdity, for the
abnegation of all is the sacrifice of all, which is evil erected into a
theory.
But, thank Heaven, one can write or read many of these declamations
without the world ceasing on that account to obey the social motive
force, which leads us to shun evil and seek after good, and which,
whether they like it or not, we must denominate personal interest.
After all, it is singular enough to see sentiments of the most sublime
self-denial invoked in support of spoliation itself. See to what this
boasted disinterestedness tends! These men who are so fantastically
delicate as not to desire peace itself, if it is founded on the vile
interest of mankind, put their hand into the pockets of others, and
especially of the poor; for what article of the tariff protects the
poor? Be pleased, gentlemen, to dispose of what belongs to yourselves
as you think proper, but leave us the disposal of the fruit of our own
toil, to use it or exchange it as we see best. Declaim on self-sacrifice
as much as you choose, it is all very fine and very beautiful, but be at
least consistent.
XX. HUMAN LABOUR, NATIONAL LABOUR.
Machine-breaking--prohibition of foreign commodities--are two acts
founded on the same doctrine.
We see men who clap their hands when a great invention is introduced,
and who nevertheless adhere to the protectionist _régime_. Such men are
grossly inconsistent!
With what do they reproach free trade? With encouraging the production
by foreigners, more skilled or more favourably situated than we are, of
commodities which, but for free trade, would be produced at home. In a
word, they accuse free trade of being injurious to _national labour?_
For the same reason, should they not reproach machinery with
accomplishing by natural agents what otherwise would have been done by
manual labour, and so of being injurious to _human labour?_
The foreign workman, better and more favourably situated than the home
workman for the production of certain commodities, is, with reference to
the latter, a veritable _economic machine,_ crushing him by competition.
In like manner, machinery, which executes a piece of work at a lower
price than a certain number of men could do by manual labour, is, in
relation to these manual labourers, a veritable _foreign competitor_,
who paralyzes them by his rivalry.
If, then, it is politic to protect _national labour_ against the
competition of _foreign labour_, it is not less so to protect _human
labour_ against the rivalry of _mechanical labour_.
Thus, every adherent of the _régime_ of protection, if he is logical,
should not content himself with prohibiting foreign products; he should
proscribe also the products of the shuttle and the plough.
And this is the reason why I like better the logic of those men who,
declaiming against the invasion of foreign merchandise, declaim likewise
against the excess of production which is due to the inventive power of
the human mind.
Such a man is M. de Saint-Chamans. "One of the strongest arguments
against free trade," he says, "is the too extensive employment of
machinery, for many workmen are deprived of employment, either by
foreign competition, which lowers the price of our manufactured goods,
or by instruments which take the place of men in our workshops."*
* Du Système d'impôts, p. 438.
M. de Saint-Chamans has seen clearly the analogy, or, we should rather
say, the identity, which obtains between imports and machinery. For this
reason, he proscribes both; and it is really agreeable to have to do
with such intrepid reasoners, who, even when wrong, carry out their
argument to its logical conclusion.
But here is the mess in which they land themselves.
If it be true, a priori, that the domain of invention and that of labour
cannot be simultaneously extended but at each other's expense, it must
be in those countries where machinery most abounds--in Lancashire, for
example--that we should expect to find the fewest workmen. And if, on
the other hand, we establish the fact that mechanical power and manual
labour coexist, and to a greater extent, among rich nations than among
savages, the conclusion is inevitable, that these two powers do not
exclude each other.
I cannot convince myself how any thinking being can enjoy a moment's
repose in presence of the following dilemma: Either the inventions of
man are not injurious to manual labour, as general facts attest, since
there are more of both in England and France than among the Hurons
and Cherokees, and that being so, I am on a wrong road, though I know
neither where nor when I missed my way; at all events, I see I am wrong,
and I should commit the crime of lese-humanity were I to introduce my
error into the legislation of my country.
Or else, the discoveries of the human mind limit the amount of manual
labour, as special facts appear to indicate; for I see every day some
machine or other superseding twenty or a hundred workmen; and then I
am forced to acknowledge a flagrant, eternal, and incurable antithesis
between the intellectual and physical powers of man--between his
progress and his present wellbeing; and in these circumstances I am
forced to say that the Creator of man might have endowed him with
reason, or with physical strength, with moral force, or with brute
force; but that He mocked him by conferring on him, at the same time,
faculties which are destructive of each other.
The difficulty is pressing and puzzling; but you contrive to find your
way out of it by adopting the strange apophthegm:
_In political economy, there are no absolute principles_.
In plain language, this means:
"I know not whether it be true or false; I am ignorant of what
constitutes general good or evil. I give myself no trouble about that.
The immediate effect of each measure upon my own personal interest is
the only law which I can consent to recognise."
There are no principles! You might as well say there are no facts; for
principles are merely formulas which classify such facts as are well
established.
Machinery, and the importation of foreign commodities, certainly
produce effects. These effects may be good or bad; on that there may be
difference of opinion. But whatever view we take of them, it is reduced
to a formula, by one of these two principles: Machinery is a good; or,
machinery is an evil: Importations of foreign produce are beneficial;
or, such importations are hurtful. But to assert that there are no
principles, certainly exhibits the lowest degree of abasement to which
the human mind can descend; and I confess that I blush for my country
when I hear such a monstrous heresy proclaimed in the French Chambers,
and with their assent; that is to say, in the face and with the assent
of the _élite_ of our fellow-citizens; and this in order to justify
their imposing laws upon us in total ignorance of the real state of the
case.
But then I am told to destroy the sophism, by proving that machinery is
not hurtful to human labour, nor the importation of foreign products to
national labour.
A work like the present cannot well include very full or complete
demonstrations. My design is rather to state difficulties than to
resolve them; to excite reflection rather than to satisfy doubts. No
conviction makes so lasting an impression on the mind as that which
it works out for itself. But I shall endeavour nevertheless to put the
reader on the right road.
What misleads the adversaries of machinery and foreign importations
is, that they judge of them by their immediate and transitory
effects, instead of following them out to their general and definitive
consequences.
The immediate effect of the invention and employment of an ingenious
machine is to render superfluous, for the attainment of a given result,
a certain amount of manual labour. But its action does not stop there.
For the very reason that the desired result is obtained with fewer
efforts, the product is handed over to the public at a lower price; and
the aggregate of savings thus realized by all purchasers, enables them
to procure other satisfactions; that is to say, to encourage manual
labour in general to exactly the extent of the manual labour which has
been saved in the special branch of industry which has been recently
improved. So that the level of labour has not fallen, while that of
enjoyments has risen.
Let us render this evident by an example.
Suppose there are used annually in this country ten millions of hats
at 15 shillings; this makes the sum which goes to the support of this
branch of industry £7,500,000 sterling. A machine is invented which
allows these hats to be manufactured and sold at 10 shillings. The sum
now wanted for the support of this industry is reduced to £5,000,000,
provided the demand is not augmented by the change. But the remaining
sum of £2,500,000 is not by this change withdrawn from the support of
_human labour_. That sum, economized by the purchasers of hats, will
enable them to satisfy other wants, and, consequently, to that extent
will go to remunerate the aggregate industry of the country. With the
five shillings saved, John will purchase a pair of shoes, James a book,
Jerome a piece of furniture, etc. Human labour, taken in the aggregate,
will continue, then, to be supported and encouraged to the extent of
£7,500,000; but this sum will yield the same number of hats, plus all
the satisfactions and enjoyments corresponding to £2,500,000 that the
employment of the machine has enabled the consumers of hats to save.
These additional enjoyments constitute the clear profit which the
country will have derived from the invention. This is a free gift, a
tribute which human genius will have derived from nature. We do not at
all dispute, that in the course of the transformation a certain amount
of labour will have been _displaced_; but we cannot allow that it has
been destroyed or diminished.
The same thing holds of the importation of foreign commodities. Let us
revert to our former hypothesis.
The country manufactures ten millions of hats, of which the cost price
was 15 shillings. The foreigner sends similar hats to our market, and
furnishes them at 10 shillings each. I maintain that the _national
labour_ will not be thereby diminished.
For it must produce to the extent of £5,000,000, to enable it to pay for
10 millions of hats at 10 shillings.
And then there remains to each purchaser five shillings saved on
each hat, or in all, £2,500,000, which will be spent on other
enjoyments--that is to say, which will go to support labour in other
departments of industry.
Then the aggregate labour of the country will remain what it was, and
the additional enjoyments represented by £2,500,000 saved upon hats,
will form the clear profit accruing from imports under the system of
free trade.
It is of no use to try to frighten us by a picture of the sufferings
which, on this hypothesis, the displacement of labour will entail.
For, if the prohibition had never been imposed, the labour would have
found its natural place under the ordinary law of exchange, and no
displacement would have taken place.
If, on the other hand, prohibition has led to an artificial and
unproductive employment of labour, it is prohibition, and not liberty,
which is to blame for a displacement which is inevitable in the
transition from what is detrimental to what is beneficial.
At all events, let no one pretend that because an abuse cannot be done
away with, without inconvenience to those who profit by it, what has
been suffered to exist for a time should be allowed to exist for ever.
XXI. RAW MATERIALS.
It is said that the most advantageous of all branches of trade is that
which supplies manufactured commodities in exchange for raw materials.
For these raw materials are the aliment and support of _national
labour_.
Hence the conclusion is drawn:
That the best law of customs is that which gives the greatest possible
facility to the importation of raw materials, and which throws most
obstacles in the way of importing finished goods.
There is no sophism in political economy more widely disseminated than
this. It is cherished not only by the protectionist school, but also,
and above all, by the school which dubs itself liberal; and it is
unfortunate that it should be so, for what can be more injurious to a
good cause than that it should be at the same time vigorously attacked
and feebly defended?
Commercial liberty is likely to have the fate of liberty in general; it
will only find a place in the statute-book after it has taken possession
of men's minds and convictions. But if it be true that a reform, in
order to be solidly established, should be generally understood, it
follows that nothing can so much retard reform as that which misleads
public opinion; and what is more calculated to mislead public opinion
than works which, in advocating freedom, invoke aid from the doctrines
of monopoly?
Some years ago three of the great towns of France--Lyons, Bordeaux, and
Havre--united in a movement against the restrictive _régime_. All Europe
was stirred on seeing raised what they took for the banner of liberty.
Alas! it proved to be also the banner of monopoly--of a monopoly a
little more niggardly and much more absurd than that of which they
seemed to desire the overthrow. By the aid of the sophism which I
have just endeavoured to expose, the petitioners did nothing more than
reproduce the doctrine of protection to national industry, tacking to it
an additional inconsistency.
It was, in fact, nothing else than the _régime_ of prohibition. Just
listen to M. de Saint-Cricq:--
"Labour constitutes the wealth of a nation, because labour alone creates
those material objects which our wants demand; and universal ease and
comfort consist in the abundance of these things." So much for the
principle.
"But this abundance must be produced by _national labour_. If it were
the result of foreign labour, national labour would be immediately
brought to a stand." Here lies the error. _(See the preceding sophism.)_
"What course should an agricultural and manufacturing country take under
such circumstances? Reserve its markets for the products of its own soil
and of its own industry." Such is the end and design.
"And for that purpose, restrain by duties, and, if necessary, prohibit
importation of the products of the soil and industry of other nations."
Such are the means.
Let us compare this system with that which the Bordeaux petition
advocates.
Commodities are there divided into three classes:--
"The first includes provisions, and _raw materials upon which no human
labour has been bestowed. In principle, a wise economy would demand
that this class should be free of duties_. Here we have no labour, no
protection.
"The second consists of products which have, _to some extent, been
prepared_. This preparation warrants such products being _charged with
a certain amount of duty_." Here protection begins, because here,
according to the petitioners, begins _national labour_.
"The third comprises goods and products in their finished and perfect
state. These contribute nothing to national labour, and we regard this
class as the most taxable." Here labour, and production along with it,
reach their maximum.
We thus see that the petitioners profess their belief in the doctrine,
that foreign labour is injurious to national labour; and this is the
_error_ of the prohibitive system.
They demand that the home market should be reserved for ho
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