Part IV. Capital and Interest.

TRANSLATED FROM THE PARIS EDITION OF 1863.

NEW-YORK:

AMERICAN FREE TRADE LEAGUE.

1870.

Entered according to Act of Congress in the year 1869, by

THE WESTERN NEWS COMPANY,

In the Clerk's Office of the District Court of the United States, for the

Northern District of Illinois.

PREFACE.

A previous edition of this work has been published under the title of

"Essays on Political Economy, by the late M. Frederic Bastiat." When it

became necessary to issue a second edition, the Free-Trade League

offered to buy the stereotype plates and the copyright, with a view to

the publication of the book on a large scale and at a very low price.

The primary object of the League is to educate public opinion; to

convince the people of the United States of the folly and wrongfulness

of the Protective system. The methods adopted by the League for the

purpose have been the holding of public meetings and the publication of

books, pamphlets, and tracts, some of which are for sale at the cost of

publication, and others given away gratuitously.

In publishing this book the League feels that it is offering the most

effective and most popular work on political economy that has as yet

been written. M. Bastiat not only enlivens a dull subject with his wit,

but also reduces the propositions of the Protectionists to absurdities.

Free-Traders can do no better service in the cause of truth, justice,

and humanity, than by circulating this little book among their friends.

It is offered you at what it costs to print it. Will not every

Free-Trader put a copy of the book into the hands of his Protectionist

friends?

It would not be proper to close this short preface without an expression

on the part of the League of its obligation to the able translator of

the work from the French, Mr. Horace White, of Chicago.

OFFICE OF THE AMERICAN FREE-TRADE LEAGUE,

9 Nassau Street, New-York, June, 1870.

PREFACE TO FIRST EDITION.

This compilation, from the works of the late M. Bastiat, is given to the

public in the belief that the time has now come when the people,

relieved from the absorbing anxieties of the war, and the subsequent

strife on reconstruction, are prepared to give a more earnest and

thoughtful attention to economical questions than was possible during

the previous ten years. That we have retrograded in economical science

during this period, while making great strides in moral and political

advancement by the abolition of slavery and the enfranchisement of the

freedmen, seems to me incontestable. Professor Perry has described very

concisely the steps taken by the manufacturers in 1861, after the

Southern members had left their seats in Congress, to reverse the policy

of the government in reference to foreign trade.[1] He has noticed but

has not laid so much stress as he might on the fact that while there

was no considerable public opinion to favor them, there was none at all

to oppose them. Not only was the attention of the people diverted from

the tariff by the dangers then impending, but the Republican party,

which then came into power, had, in its National Convention, offered a

bribe to the State of Pennsylvania for its vote in the Presidential

election, which bribe was set forth in the following words:

"_Resolved_, That while providing revenue for the support of the

General Government by duties upon imports, sound policy requires such

an adjustment of these imposts as to encourage the development of the

industrial interests of the whole country; and we commend that policy

of national exchanges which secures to the workingmen liberal wages,

to agriculture remunerative prices, to mechanics and manufacturers an

adequate reward for their skill, labor and enterprise, and to the

nation commercial prosperity and independence."--_Chicago Convention

Platform_, 1860.

[Footnote 1: Elements of Political Economy, p. 461]

It is true that this resolution did not commit anybody to the doctrine

that the industrial interests of the whole country are promoted by taxes

levied upon imported property, however "adjusted," but it was

understood, by the Pennsylvanians at least, to be a promise that if the

Republican party were successful in the coming election, the doctrine of

protection, which had been overthrown in 1846, and had been in an

extremely languishing state ever since, should be put upon its legs

again. I am far from asserting that this overture was needed to secure

the vote of Pennsylvania for Mr. Lincoln in 1860, or that that State

was governed by less worthy motives in her political action than other

States. I only remark that her delegates in the convention thought such

a resolution would be extremely useful, and such was the anxiety to

secure her vote in the election that a much stronger resolution might

have been conceded if it had been required. I affirm, however, that

there was no agitation on the tariff question in any other quarter. New

England had united in passing the tariff of 1857, which lowered the

duties imposed by the act of 1846 about fifty per cent., i.e., one-half

of the previously existing scale. The Western States had not petitioned

Congress or the convention to disturb the tariff; nor had New York done

so, although Mr. Greeley, then as now, was invoking, more or less

frequently, the shade of Henry Clay to help re-establish what is deftly

styled the "American System."

The protective policy was restored, after its fifteen years' sleep,

under the auspices of Mr. Morrill, a Representative (now a Senator) from

Vermont. Latterly I have noticed in the speeches and votes of this

gentleman (who is, I think, one of the most conscientious, as he is one

of the most amiable, men in public life), a reluctance to follow to

their logical conclusion the principles embodied in the "Morrill tariff"

of 1861. His remarks upon the copper bill, during the recent session of

Congress, indicate that, in his opinion, those branches of American

industry which are engaged in producing articles sent abroad in exchange

for the products of foreign nations, are entitled to some consideration.

This is an important admission, but not so important as another, which

he made in his speech on the national finances, January 24, 1867, in

which, referring to the bank note circulation existing in the year 1860,

he said: "_And that was a year of as large production and as much

general prosperity as any, perhaps, in our history_."[2] If the year

immediately preceding the enactment of the Morrill tariff was a year of

as large production and as much general prosperity as any in our

history, of what use has the Morrill tariff been? We have seen that it

was not demanded by any public agitation. We now see that it has been of

no public utility.

[Footnote 2: Congressional Globe, Second Session Thirty-ninth Congress,

p. 724.]

In combating, by arguments and illustrations adapted to the

comprehension of the mass of mankind, the errors and sophisms with which

protectionists deceive themselves and others, M. Bastiat is the most

lucid and pointed of all writers on economical science with whose works

I have any acquaintance. It is not necessary to accord to him a place

among the architects of the science of political economy, although some

of his admirers rank him among the highest.[3] It is enough to count

him among the greatest of its expounders and demonstrators. His death,

which occurred at Pisa, Italy, on the 24th December, 1850, at the age of

49, was a serious loss to France and to the world. His works, though for

the most part fragmentary, and given to the public from time to time

through the columns of the _Journal des Economistes_, the _Journal des

Debats_, and the _Libre Echange_, remain a monument of a noble intellect

guided by a noble soul. They have been collected and published

(including the _Harmonies Economiques_, which the author left in

manuscript) by Guillaumin & Co., the proprietors of the _Journal des

Economistes_, in two editions of six volumes each, 8vo. and 12mo. When

we reflect that these six volumes were produced between April, 1844, and

December, 1850, by a young man of feeble constitution, who commenced

life as a clerk in a mercantile establishment, and who spent much of his

time during these six years in delivering public lectures, and laboring

in the National Assembly, to which he was chosen in 1848, our admiration

for such industry is only modified by the thought that if he had been

more saving of his strength, he might have rendered even greater

services to his country and to mankind.

[Footnote 3: Mr. Macleod (_Dictionary of Political Economy_, vol. I, p.

246) speaks of Bastiat's definition of Value as "the greatest revolution

that has been effected in any science since the days of Galileo."

See also Professor Perry's pamphlet, _Recent Phases of Thought in

Political Economy_, read before the American Social Science Association,

October, 1868, in which, it appears to me, that Bastiat's theory of

Rent, in announcing which he was anticipated by Mr. Carey, is too highly

praised.]

The _Sophismes Economiques_, which fill the larger portion of this

volume, were not expected by their author to outlast the fallacies which

they sought to overthrow. But these fallacies have lived longer and have

spread over more of the earth's surface than any one _a priori_ could

have believed possible. It is sometimes useful, in opposing doctrines

which people have been taught to believe are peculiar to their own

country and time, to show that the same doctrines have been maintained

in other countries and times, and have been exploded in other languages.

By what misuse of words the doctrine of Protection came to be

denominated the "American System," I could never understand. It

prevailed in England nearly two hundred years before our separation from

the mother country. Adam Smith directed the first formidable attack

against it in the very year that our independence was declared. It held

its ground in England until it had starved and ruined almost every

branch of industry--agriculture, manufactures, and commerce alike.[4] It

was not wholly overthrown until 1846, the same year that witnessed its

discomfiture in the United States, as already shown. It still exists in

a subdued and declining way in France, despite the powerful and

brilliant attacks of Say, Bastiat, and Chevalier, but its end cannot be

far distant in that country. The Cobden-Chevalier treaty with England

has been attended by consequences so totally at variance with the

theories and prophecies of the protectionists that it must soon succumb.

[Footnote 4: It is so often affirmed by protectionists that the

superiority of Great Britain in manufactures was attained by means of

protection, that it is worth while to dispel that illusion. The facts

are precisely the reverse. Protection had brought Great Britain in the

year 1842 to the last stages of penury and decay, and it wanted but a

year or two more of the same regimen to have precipitated the country

into a bloody revolution. I quote a paragraph from Miss Martineau's

"History of England from 1816 to 1854," Book VI, Chapter 5:

"Serious as was the task of the Minister (Sir R. Peel) in every view,

the most immediate sympathy was felt for him on account of the

fearful state of the people. The distress had now so deepened in the

manufacturing districts as to render it clearly inevitable that many

must die, and a multitude be lowered to a state of sickness and

irritability from want of food; while there seemed no chance of any

member of the manufacturing classes coming out of the struggle at

last with a vestige of property wherewith to begin the world again.

The pressure had long extended beyond the interests first affected,

and when the new Ministry came into power, there seemed to be no

class that was not threatened with ruin. In Carlisle, the Committee

of Inquiry reported that a fourth of the population was in a state

bordering on starvation--actually certain to die of famine, unless

relieved by extraordinary exertions. In the woollen districts of

Wiltshire, the allowance to the independent laborer was not

two-thirds of the minimum in the workhouse, and the large existing

population consumed only a fourth of the bread and meat required by

the much smaller population of 1820. In Stockport, more than half the

master spinners had failed before the close of 1842; dwelling houses

to the number of 3,000, were shut up; and the occupiers of many

hundreds more were unable to pay rates at all. Five thousand persons

were walking the streets in compulsory idleness, and the Burnley

guardians wrote to the Secretary of State that the distress was far

beyond their management; so that a government commissioner and

government funds were sent down without delay. At a meeting in

Manchester, where humble shopkeepers were the speakers, anecdotes

were related which told more than declamation. Rent collectors were

afraid to meet their principals, as no money could be collected.

Provision dealers were subject to incursions from a wolfish man

prowling for food for his children, or from a half frantic woman,

with her dying baby at her breast; or from parties of ten or a dozen

desperate wretches who were levying contributions along the street.

The linen draper told how new clothes had become out of the question

with his customers, and they bought only remnants and patches, to

mend the old ones. The baker was more and more surprised at the

number of people who bought half-pennyworths of bread. A provision

dealer used to throw away outside scraps; but now respectable

customers of twenty years' standing bought them in pennyworths to

moisten their potatoes. These shopkeepers contemplated nothing but

ruin from the impoverished condition of their customers. While

poor-rates were increasing beyond all precedent, their trade was only

one-half, or one-third, or even one-tenth what it had been three

years before. In that neighborhood, a gentleman, who had retired from

business in 1833, leaving a property worth £60,000 to his sons, and

who had, early in the distress, become security for them, was showing

the works for the benefit of the creditors, at a salary of £1 a week.

In families where the father had hitherto earned £2 per week, and

laid by a portion weekly, and where all was now gone but the sacks of

shavings they slept on, exertions were made to get 'blue milk' for

children to moisten their oatmeal with; but soon they could have it

only on alternate days; and soon water must do. At Leeds the pauper

stone-heap amounted to 150,000 tons; and the guardians offered the

paupers 6s. per week for doing nothing, rather than 7s. 6d. per week

for stone-breaking. The millwrights and other trades were offering a

premium on emigration, to induce their hands to go away. At Hinckley,

one-third of the inhabitants were paupers; more than a fifth of the

houses stood empty; and there was not work enough in the place to

employ properly one-third of the weavers. In Dorsetshire a man and

his wife had for wages 2s. 6d. per week, and three loaves; and the

ablest laborer had 6s. or 7s. In Wiltshire, the poor peasants held

open-air meetings after work--which was necessarily after dark.

There, by the light of one or two flaring tallow candles, the man or

the woman who had a story to tell stood on a chair, and related how

their children were fed and clothed in old times--poorly enough, but

so as to keep body and soul together; and now, how they could nohow

manage to do it. The bare details of the ages of their children, and

what the little things could do, and the prices of bacon and bread,

and calico and coals, had more pathos in them than any oratory heard

elsewhere."

"But all this came from the Corn Laws," is the ready reply of the

American protectionist. The Corn Laws were the doctrine of protection

applied to breadstuffs, farm products, "raw materials." But it was not

only protection for corn that vexed England in 1842, but protection for

every thing and every body, from the landlord and the mill-owner to the

kelp gatherer. Every species of manufacturing industry had asked and

obtained protection. The nation had put in force, logically and

thoroughly, the principle of denying themselves any share in the

advantages which nature or art had conferred upon other climates and

peoples, (which is the principle of protection), and with the results so

pathetically described by Miss Martineau. The prosperity of British

manufactures dates from the year 1846. That they maintained any kind of

existence prior to that time is a most striking proof of the vitality of

human industry under the persecution of bad laws.]

As these pages are going through the press, a telegram announces that

the French Government has abolished the discriminating duties levied

upon goods imported in foreign bottoms, and has asked our government to

abolish the like discrimination which our laws have created. Commercial

freedom is making rapid progress in Prussia, Austria, Italy, and even

in Spain. The United States alone, among civilized nations, hold to the

opposite principle. Our anomalous position in this respect is due, as I

think, to our anomalous condition during the past eight or nine years,

already adverted to--a condition in which the protected classes have

been restrained by no public opinion--public opinion being too intensely

preoccupied with the means of preserving the national existence to

notice what was doing with the tariff. But evidences of a reawakening

are not wanting.

There is scarcely an argument current among the protectionists of the

United States that was not current in France at the time Bastiat wrote

the _Sophismes Economiques_. Nor was there one current in his time that

is not performing its bad office among us. Hence his demonstrations of

their absurdity and falsity are equally applicable to our time and

country as to his. They may have even greater force among us if they

thoroughly dispel the notion that Protection is an "American system."

Surely they cannot do less than this.

There are one or two arguments current among the protectionists of the

United States that were not rife in France when Bastiat wrote his

_Sophismes_. It is said, for instance, that protection has failed to

achieve all the good results expected from it, because the policy of the

government has been variable. If we could have a steady course of

protection for a sufficient period of time (nobody being bold enough to

say what time would be sufficient), and could be _assured_ of having it,

we should see wonderful progress. But, inasmuch as the policy of the

government is uncertain, protection has never yet had a fair trial. This

is like saying, "if the stone which I threw in the air had staid there,

my head would not have been broken by its fall." It would not stay

there. The law of gravitation is committed against its staying there.

Its only resting-place is on the earth. They begin by violating natural

laws and natural rights--the right to exchange services for

services--and then complain because these natural laws war against them

and finally overcome them. But it is not true that protection has not

had a fair trial in the United States. The protection has been greater

at some times than at others, that is all. Prior to the late war, all

our revenue was raised from customs; and while the tariffs of 1846 and

1857 were designated "free trade tariffs," to distinguish them from

those existing before and since, they were necessarily protective to a

certain extent.

Again, it is said that there is need of diversifying our industry--- as

though industry would not diversify itself sufficiently through the

diverse tastes and predilections of individuals--as though it were

necessary to supplement the work of the Creator in this behalf, by human

enactments founded upon reciprocal rapine. The only rational object of

diversifying industry is to make people better and happier. Do men and

women become better and happier by being huddled together in mills and

factories, in a stifling atmosphere, on scanty wages, ten hours each day

and 313 days each year, than when cultivating our free and fertile

lands? Do they have equal opportunities for mental and moral

improvement? The trades-unions tell us, No. Whatever may be the

experience of other countries where the land is either owned by absentee

lords, who take all the product except what is necessary to give the

tenant a bare subsistence, or where it is cut up in parcels not larger

than an American garden patch, it is an undeniable fact that no other

class of American workingmen are so independent, so intelligent, so well

provided with comforts and leisure, or so rapidly advancing in

prosperity, as our agriculturists; and this notwithstanding they are

enormously overtaxed to maintain other branches of industry, which,

according to the protective theory, cannot support themselves. The

natural tendency of our people to flock to the cities, where their eyes

and ears are gratified at the expense of their other senses, physical

and moral, is sufficiently marked not to need the influence of

legislation to stimulate it.

It is not the purpose of this preface to anticipate the admirable

arguments of M. Bastiat; but there is another theory in vogue which

deserves a moment's consideration. Mr. H.C. Carey tells us, that a

country which exports its food, in reality exports its soil, the foreign

consumers not giving back to the land the fertilizing elements

abstracted from it. Mr. Mill has answered this argument, upon

philosophical principles, at some length, showing that whenever it

ceases to be advantageous to America to export breadstuffs, she will

cease to do so; also, that when it becomes necessary to manure her

lands, she will either import manure or make it at home.[5] A shorter

answer is, that the lands are no better manured by having the bread

consumed in Lowell, or Pittsburgh, or even in Chicago, than in

Birmingham or Lyons. But it seems to me that Mr. Carey does not take

into account the fact that the total amount of breadstuffs exported from

any country must be an exceedingly small fraction of the whole amount

taken from the soil, and scarcely appreciable as a source of manure,

even if it were practically utilized in that way. Thus, our exportation

of flour and meal, wheat and Indian corn, for the year 1860, as compared

with the total crop produced, was as follows:

TOTAL CROP.[6]

Flour and Meal, bbls. Wheat, bu. Corn, bu.

55,217,800 173,104,924 838,792,740

_Exportation._

Flour and Meal, bbls. Wheat, bu. Corn, bu.

2,845,305 4,155,153 1,314,155

_Percentage of Exportation to Total Crop._

5.15 2.40 .39

This was the result for the year preceding the enactment of the Morrill

tariff. It is true that our exports of wheat and Indian corn rose in the

three years following the enactment of the Morrill tariff, from an

average of eight million bushels to an average of forty-six million

bushels, but this is contrary to the theory that high tariffs tend to

keep breadstuffs at home, and low ones to send them abroad. There is

need of great caution in making generalizations as to the influence of

tariffs on the movement of breadstuffs. Good or bad harvests in various

countries exercise an uncontrollable influence upon their movement, far

beyond the reach of any legislation short of prohibition. The market for

breadstuffs in the world is as the number of consumers; that is, of

population. It is sometimes said in the way of reproach, (and it is a

curious travesty of Mr. Carey's manure argument,) that foreign nations

_will not_ take our breadstuffs. It is not true; but if it were, that

would not be a good reason for our passing laws to prevent them from

doing so; that is, to deprive them of the means to pay for them. Every

country must pay for its imports with its exports. It must pay for the

services which it receives with the services which it renders. If

foreign nations are not allowed to render services to us, how shall we

render them the service of bread?

[Footnote 5: Principles of Political Economy (People's Ed.), London,

1865, page 557.]

[Footnote 6: These figures are taken from the census report for the year

1860. In this report the total production of flour and meal is given,

not in barrels, but in value. The quantity is ascertained by dividing

the total value by the average price per barrel in New York during the

year, the fluctuations then being very slight. Flour being a

manufactured article, is it not a little curious that we exported under

the "free trade tariff" twice as large a percentage of breadstuffs in

that form as we did of the "raw material," wheat?]

The first series of Bastiat's _Sophismes_ were published in 1845, and

the second series in 1848. The first series were translated in 1848, by

Mrs. D.J. McCord, and published the same year by G.P. Putnam, New York.

Mrs. McCord's excellent translation has been followed (by permission of

her publisher, who holds the copyright,) in this volume, having been

first compared with the original, in the Paris edition of 1863. A very

few verbal alterations have been made, which, however, have no bearing

on the accuracy and faithfulness of her work. The translation of the

essay on "Capital and Interest" is from a duodecimo volume published in

London a year or two ago, the name of the translator being unknown to

me. The second series of the _Sophismes_, and the essay entitled

"Spoliation and Law," are, I believe, presented in English for the first

time in these pages.

H.W.

CHICAGO, August 1, 1869.

PART I.

SOPHISMS OF PROTECTION.

FIRST SERIES.

INTRODUCTION.

My object in this little volume has been to refute some of the arguments

usually advanced against Free Trade.

I am not seeking a combat with the protectionists. I merely advance a

principle which I am anxious to present clearly to the minds of sincere

men, who hesitate because they doubt.

I am not of the number of those who maintain that protection is

supported by interests. I believe that it is founded upon errors, or, if

you will, upon _incomplete truths_. Too many fear free trade, for this

apprehension to be other than sincere.

My aspirations are perhaps high; but I confess that it would give me

pleasure to hope that this little work might become, as it were, a

_manual_ for such men as may be called upon to decide between the two

principles. When one has not made oneself perfectly familiar with the

doctrines of free trade, the sophisms of protection perpetually return

to the mind under one form or another; and, on each occasion, in order

to counteract their effect, it is necessary to enter into a long and

laborious analysis. Few, and least of all legislators, have leisure for

this labor, which I would, on this account, wish to present clearly

drawn up to their hand.

But it may be said, are then the benefits of free trade so hidden as to

be perceptible only to economists by profession?

Yes; we confess it; our adversaries in the discussion have a signal

advantage over us. They can, in a few words, present an incomplete

truth; which, for us to show that it is incomplete, renders necessary

long and uninteresting dissertations.

This results from the fact that protection accumulates upon a single

point the good which it effects, while the evil inflicted is infused

throughout the mass. The one strikes the eye at a first glance, while

the other becomes perceptible only to close investigation. With regard

to free trade, precisely the reverse is the case.

It is thus with almost all questions of political economy.

If you say, for instance: There is a machine which has turned out of

employment thirty workmen;

Or again: There is a spendthrift who encourages every kind of industry;

Or: The conquest of Algiers has doubled the commerce of Marseilles;

Or, once more: The public taxes support one hundred thousand families;

You are understood at once; your propositions are clear, simple, and

true in themselves. If you deduce from them the principle that

Machines are an evil;

That sumptuous extravagance, conquest, and heavy imposts are blessings;

Your theory will have the more success, because you will be able to base

it upon indisputable facts.

But we, for our part, cannot stop at a cause and its immediate effect;

for we know that this effect may in its turn become itself a cause. To

judge of a measure, it is necessary that we should follow it from step

to step, from result to result, until through the successive links of

the chain of events we arrive at the final effect. We must, in short,

_reason_.

But here we are assailed by clamorous exclamations: You are theorists,

metaphysicians, ideologists, utopians, men of maxims! and immediately

all the prejudices of the public are against us.

What then shall we do? We must invoke the patience and candor of the

reader, giving to our deductions, if we are capable of it, sufficient

clearness to throw forward at once, without disguise or palliation, the

true and the false, in order, once for all, to determine whether the

victory should be for Restriction or Free Trade.

I wish here to make a remark of some importance.

Some extracts from this volume have appeared in the "_Journal des

Economistes_."

In an article otherwise quite complimentary published by the Viscount de

Romanet (see _Moniteur Industriel_ of the 15th and 18th of May, 1845),

he intimates that I ask for the _suppression of custom houses_. Mr. de

Romanet is mistaken. I ask for the suppression of the _protective

policy_. We do not dispute the right of _government_ to impose taxes,

but would, if possible, dissuade _producers_ from taxing one another. It

was said by Napoleon that duties should never be a fiscal instrument,

but a means of protecting industry. We plead the contrary, and say, that

duties should never be made an instrument of reciprocal rapine; but that

they may be employed as a useful fiscal machine. I am so far from asking

for the suppression of duties, that I look upon them as the anchor on

which the future salvation of our finances will depend. I believe that

they may bring immense receipts into the treasury, and, to give my

entire and undisguised opinion, I am inclined, from the slow progress of

healthy, economical doctrines, and from the magnitude of our budget, to

hope more for the cause of commercial reform from the necessities of

the Treasury than from the force of an enlightened public opinion.

I.

ABUNDANCE--SCARCITY.

Which is the best for man or for society, abundance or scarcity?

How, it may be exclaimed, can such a question be asked? Has it ever been

pretended, is it possible to maintain, that scarcity can be the basis of

a man's happiness?

Yes; this has been maintained, this is daily maintained; and I do not

hesitate to say that the _scarcity theory_ is by far the most popular of

the day. It furnishes the subject of discussions, in conversations,

journals, books, courts of justice; and extraordinary as it may appear,

it is certain that political economy will have fulfilled its task and

its practical mission, when it shall have rendered common and

irrefutable the simple proposition that "in abundance consist man's

riches."

Do we not hear it said every day, "Foreign nations are inundating us

with their productions"? Then we fear abundance.

Has not Mr. de Saint Cricq said, "Production is superabundant"? Then he

fears abundance.

Do we not see workmen destroying and breaking machinery? They are

frightened by the excess of production; in other words, they fear

abundance.

Has not Mr. Bugeaud said, "Let bread be dear and the agriculturist will

be rich"? Now bread can only be dear because it is scarce. Then Mr.

Bugeaud lauded scarcity.

Has not Mr. d'Argout produced the fruitfulness of the sugar culture as

an argument against it? Has he not said, "The beet cannot have a

permanent and extended cultivation, because a few acres given up to it

in each department, would furnish sufficient for the consumption of all

France"? Then, in his opinion, good consists in sterility and scarcity,

evil in fertility and abundance.

"_La Presse_," "_Le Commerce_," and the majority of our journals, are,

every day, publishing articles whose aim is to prove to the chambers and

to government that a wise policy should seek to raise prices by tariffs;

and do we not daily see these powers obeying these injunctions of the

press? Now, tariffs can only raise prices by diminishing the quantity of

goods offered for sale. Then, here we see newspapers, the legislature,

the ministry, all guided by the scarcity theory, and I was correct in my

statement that this theory is by far the most popular.

How then has it happened, that in the eyes at once of laborers, editors

and statesmen, abundance should appear alarming, and scarcity

advantageous? It is my intention to endeavor to show the origin of this

delusion.

A man becomes rich, in proportion to the profitableness of his labor;

that is to say, _in proportion as he sells his productions at a high

price_. The price of his productions is high in proportion to their

scarcity. It is plain then, that, as far as regards him at least,

scarcity enriches him. Applying successively this mode of reasoning to

each class of laborers individually, the _scarcity theory_ is deduced

from it. To put this theory into practice, and in order to favor each

class of labor, an artificial scarcity is forced in every kind of

production, by prohibition, restriction, suppression of machinery, and

other analogous measures.

In the same manner it is observed that when an article is abundant it

brings a small price. The gains of the producer are, of course, less. If

this is the case with all produce, all producers are then poor.

Abundance then ruins society. And as any strong conviction will always

seek to force itself into practice, we see, in many countries, the laws

aiming to prevent abundance.

This sophism, stated in a general form, would produce but a slight

impression. But when applied to any particular order of facts, to any

particular article of industry, to any one class of labor, it is

extremely specious, because it is a syllogism which is not _false_, but

_incomplete_. And what is true in a syllogism always necessarily

presents itself to the mind, while the _incomplete_, which is a negative

quality, an unknown value, is easily forgotten in the calculation.

Man produces in order to consume. He is at once producer and consumer.

The argument given above, considers him only under the first point of

view. Let us look at him in the second character and the conclusion will

be different. We may say,

The consumer is rich in proportion as he _buys_ at a low price. He buys

at a low price in proportion to the abundance of the article in demand;

abundance then enriches him. This reasoning extended to all consumers

must lead to the _theory of abundance_!

It is the imperfectly understood notion of exchange of produce which

leads to these fallacies. If we consult our individual interest, we

perceive immediately that it is double. As _sellers_ we are interested

in high prices, consequently in scarcity. As _buyers_ our advantage is

in cheapness, or what is the same thing, abundance. It is impossible

then to found a proper system of reasoning upon either the one or the

other of these separate interests before determining which of the two

coincides and identifies itself with the general and permanent interests

of mankind.

If man were a solitary animal, working exclusively for himself,

consuming the fruit of his own personal labor; if, in a word, he did not

exchange his produce, the theory of scarcity could never have introduced

itself into the world. It would be too strikingly evident, that

abundance, whencesoever derived, is advantageous to him, whether this

abundance might be the result of his own labor, of ingenious tools, or

of powerful machinery; whether due to the fertility of the soil, to the

liberality of nature, or to an _inundation_ of foreign goods, such as

the sea bringing from distant regions might cast upon his shores. Never

would the solitary man have dreamed, in order to encourage his own

labor, of destroying his instruments for facilitating his work, of

neutralizing the fertility of the soil, or of casting back into the sea

the produce of its bounty. He would understand that his labor was a

_means_ not an _end_, and that it would be absurd to reject the object,

in order to encourage the means. He would understand that if he has

required two hours per day to supply his necessities, any thing which

spares him an hour of this labor, leaving the result the same, gives him

this hour to dispose of as he pleases in adding to his comforts. In a

word, he would understand that every step in the _saving of labor_, is a

step in the improvement of his condition. But traffic clouds our vision

in the contemplation of this simple truth. In a state of society with

the division of labor to which it leads, the production and consumption

of an article no longer belong to the same individual. Each now looks

upon his labor not as a means, but as an end. The exchange of produce

creates with regard to each object two separate 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 and study the nature of each. Let us then

suppose a producer of whatever kind; what is his immediate interest? It

consists in two things: 1st, that the smallest possible number of

individuals should devote themselves to the business which he follows;

and 2dly, that the greatest possible number should seek the articles of

his produce. In the more succinct terms of Political Economy, the supply

should be small, the demand large; or yet in other words: limited

competition, unlimited consumption.

What on the other side is the immediate interest of the consumer? That

the supply should be large, the demand small.

As these two interests are immediately opposed to each other, it follows

that if one coincides with the general interest of society the other

must be adverse to it.

Which then, if either, should legislation favor as contributing most to

the good of the community?

To determine this question, it suffices to inquire in which the secret

desires of the majority of men would be accomplished.

Inasmuch as we are producers, it must be confessed that we have each of

us anti-social desires. Are we vine-growers? It would not distress _us_

were the frost to nip all the vines in the world except our own: _this

is the scarcity theory_. Are we iron-workers? We would desire (whatever

might be the public need) that the market should offer no iron but our

own; and precisely for the reason that this need, painfully felt and

imperfectly supplied, causes us to receive a high price for _our_ iron:

_again here is the theory of scarcity_. Are we agriculturists? We say

with Mr. Bugeaud, let bread be dear, that is to say scarce, and our

business goes well: _again the theory of scarcity_.

Are we physicians? We cannot but see that certain physical

ameliorations, such as the improved climate of the country, the

development of certain moral virtues, the progress of knowledge pushed

to the extent of enabling each individual to take care of his own

health, the discovery of certain simple remedies easily applied, would

be so many fatal blows to our profession. As physicians, then, our

secret desires are anti-social. I must not be understood to imply that

physicians allow themselves to form such desires. I am happy to believe

that they would hail with joy a universal panacea. But in such a

sentiment it is the man, the Christian, who manifests himself, and who

by a praiseworthy abnegation of self, takes that point of view of the

question, which belongs to the consumer. As a physician exercising his

profession, and gaining from this profession his standing in society,

his comforts, even the means of existence of his family, it is

impossible but that his desires, or if you please so to word it, his

interests, should be anti-social.

Are we manufacturers of cotton goods? We desire to sell them at the

price most advantageous to _ourselves_. We would willingly consent to

the suppression of all rival manufactories. And if we dare not publicly

express this desire, or pursue the complete realization of it with some

success, we do so, at least to a certain extent, by indirect means; as

for example, the exclusion of foreign goods, in order to diminish the

_quantity offered_, and to produce thus by forcible means, and for our

own profits, a _scarcity_ of clothing.

We might thus pass in review every business and every profession, and

should always find that the producers, _in their character of

producers_, have invariably anti-social interests. "The shop-keeper

(says Montaigne) succeeds in his business through the extravagance of

youth; the laborer by the high price of grain; the architect by the

decay of houses; officers of justice by lawsuits and quarrels. The

standing and occupation even of ministers of religion are drawn from our

death and our vices. No physician takes pleasure in the health even of

his friends; no soldier in the peace of his country; and so on with

all."

If then the secret desires of each producer were realized, the world

would rapidly retrograde towards barbarism. The sail would proscribe

steam; the oar would proscribe the sail, only in its turn to give way to

wagons, the wagon to the mule, and the mule to the foot-peddler. Wool

would exclude cotton; cotton would exclude wool; and thus on, until the

scarcity and want of every thing would cause man himself to disappear

from the face of the globe.

If we now go on to consider the immediate interest of the _consumer_, we

shall find it in perfect harmony with the public interest, and with the

well-being of humanity. When the buyer presents himself in the market,

he desires to find it abundantly furnished. He sees with pleasure

propitious seasons for harvesting; wonderful inventions putting within

his reach the largest possible quantity of produce; time and labor

saved; distances effaced; the spirit of peace and justice diminishing

the weight of taxes; every barrier to improvement cast down; and in all

this his interest runs parallel with an enlightened public interest. He

may push his secret desires to an absurd and chimerical height, but

never can they cease to be humanizing in their tendency. He may desire

that food and clothing, house and hearth, instruction and morality,

security and peace, strength and health, should come to us without limit

and without labor or effort on our part, as the water of the stream, the

air which we breathe, and the sunbeams in which we bask, but never could

the realization of his most extravagant wishes run counter to the good

of society.

It may be said, perhaps, that were these desires granted, the labor of

the producer constantly checked would end by being entirely arrested

for want of support. But why? Because in this extreme supposition every

imaginable need and desire would be completely satisfied. Man, like the

All-powerful, would create by the single act of his will. How in such an

hypothesis could laborious production be regretted?

Imagine a legislative assembly composed of producers, of whom each

member should cause to pass into a law his secret desire as a

_producer_; the code which would emanate from such an assembly could be

nothing but systematized monopoly; the scarcity theory put into

practice.

In the same manner, an assembly in which each member should consult only

his immediate interest of _consumer_ would aim at the systematizing of

free trade; the suppression of every restrictive measure; the

destruction of artificial barriers; in a word, would realize the theory

of abundance.

It follows then,

That to consult exclusively the immediate interest of the producer, is

to consult an anti-social interest.

To take exclusively for basis the interest of the consumer, is to take

for basis the general interest.

* * * * *

Let me be permitted to insist once more upon this point of view, though

at the risk of repetition.

A radical antagonism exists between the seller and the buyer.

The former wishes the article offered to be _scarce_, supply small, and

at a high price.

The latter wishes it _abundant_, supply large, and at a low price.

The laws, which should at least remain neutral, take part for the seller

against the buyer; for the producer against the consumer; for high

against low prices; for scarcity against abundance. They act, if not

intentionally at least logically, upon the principle that _a nation is

rich in proportion as it is in want of every thing_.

For, say they, it is necessary to favor the producer by securing him a

profitable disposal of his goods. To effect this, their price must be

raised; to raise the price the supply must be diminished; and to

diminish the supply is to create scarcity.

Let us suppose that at this moment, with these laws in full action, a

complete inventory should be made, not by value, but by weight, measure

and quantity, of all articles now in France calculated to supply the

necessities and pleasures of its inhabitants; as grain, meat, woollen

and cotton goods, fuel, etc.

Let us suppose again that to-morrow every barrier to the introduction of

foreign goods should be removed.

Then, to judge of the effect of such a reform, let a new inventory be

made three months hence.

Is it not certain that at the time of the second inventory, the

quantity of grain, cattle, goods, iron, coal, sugar, etc., will be

greater than at the first?

So true is this, that the sole object of our protective tariffs is to

prevent such articles from reaching us, to diminish the supply, to

prevent low prices, or which is the same thing, the abundance of goods.

Now I ask, are the people under the action of these laws better fed

because there is _less_ bread, _less_ meat, and _less_ sugar in the

country? Are they better dressed because there are _fewer_ goods? Better

warmed because there is _less_ coal? Or do they prosper better in their

labor because iron, copper, tools and machinery are scarce?

But, it is answered, if we are inundated with foreign goods and produce,

our coin will leave the country.

Well, and what matters that? Man is not fed with coin. He does not dress

in gold, nor warm himself with silver. What difference does it make

whether there be more or less coin in the country, provided there be

more bread in the cupboard, more meat in the larder, more clothing in

the press, and more wood in the cellar?

* * * * *

To Restrictive Laws, I offer this dilemma:

Either you allow that you produce scarcity, or you do not allow it.

If you allow it, you confess at once that your end is to injure the

people as much as possible. If you do not allow it, then you deny your

power to diminish the supply, to raise the price, and consequently you

deny having favored the producer.

You are either injurious or inefficient. You can never be useful.

II.

OBSTACLE--CAUSE.

The obstacle mistaken for the cause--scarcity mistaken for abundance.

The sophism is the same. It is well to study it under every aspect.

Man naturally is in a state of entire destitution.

Between this state and the satisfying of his wants, there exists a

multitude of _obstacles_ which it is the object of labor to surmount. It

is interesting to seek how and why he could have been led to look even

upon these obstacles to his happiness as the cause of it.

I wish to take a journey of some hundred miles. But, between the point

of my departure and my destination, there are interposed, mountains,

rivers, swamps, forests, robbers--in a word, _obstacles_; and to conquer

these obstacles, it is necessary that I should bestow much labor and

great efforts in opposing them;--or, what is the same thing, if others

do it for me, I must pay them the value of their exertions. It is

evident that I should have been better off had these obstacles never

existed.

Through the journey of life, in the long series of days from the cradle

to the tomb, man has many difficulties to oppose him in his progress.

Hunger, thirst, sickness, heat, cold, are so many obstacles scattered

along his road. In a state of isolation, he would be obliged to combat

them all by hunting, fishing, agriculture, spinning, weaving,

architecture, etc., and it is very evident that it would be better for

him that these difficulties should exist to a less degree, or even not

at all. In a state of society he is not obliged, personally, to struggle

with each of these obstacles, but others do it for him; and he, in

return, must remove some one of them for the benefit of his fellow-men.

Again it is evident, that, considering mankind as a whole, it would be

better for society that these obstacles should be as weak and as few as

possible.

But if we examine closely and in detail the phenomena of society, and

the private interests of men as modified by exchange of produce, we

perceive, without difficulty, how it has happened that wants have been

confounded with riches, and the obstacle with the cause.

The separation of occupations, which results from the habits of

exchange, causes each man, instead of struggling against all surrounding

obstacles to combat only _one_; the effort being made not for himself

alone, but for the benefit of his fellows, who, in their turn, render a

similar service to him.

Now, it hence results, that this man looks upon the obstacle which he

has made it his profession to combat for the benefit of others, as the

immediate cause of his riches. The greater, the more serious, the more

stringent may be this obstacle, the more he is remunerated for the

conquering of it, by those who are relieved by his labors.

A physician, for instance, does not busy himself in baking his bread, or

in manufacturing his clothing and his instruments; others do it for him,

and he, in return, combats the maladies with which his patients are

afflicted. The more dangerous and frequent these maladies are, the more

others are willing, the more, even, are they forced, to work in his

service. Disease, then, which is an obstacle to the happiness of

mankind, becomes to him the source of his comforts. The reasoning of all

producers is, in what concerns themselves, the same. As the doctor draws

his profits from disease, so does the ship owner from the obstacle

called _distance_; the agriculturist from that named _hunger_; the cloth

manufacturer from _cold_; the schoolmaster lives upon _ignorance_, the

jeweler upon _vanity_, the lawyer upon _quarrels_, the notary upon

_breach of faith_. Each profession has then an immediate interest in

the continuation, even in the extension, of the particular obstacle to

which its attention has been directed.

Theorists hence go on to found a system upon these individual interests,

and say: Wants are riches: Labor is riches: The obstacle to well-being

is well-being: To multiply obstacles is to give food to industry.

Then comes the statesman;--and as the developing and propagating of

obstacles is the developing and propagating of riches, what more natural

than that he should bend his efforts to that point? He says, for

instance: If we prevent a large importation of iron, we create a

difficulty in procuring it. This obstacle severely felt, obliges

individuals to pay, in order to relieve themselves from it. A certain

number of our citizens, giving themselves up to the combating of this

obstacle, will thereby make their fortunes. In proportion, too, as the

obstacle is great, and the mineral scarce, inaccessible, and of

difficult and distant transportation, in the same proportion will be the

number of laborers maintained by the various branches of this industry.

The same reasoning will lead to the suppression of machinery.

Here are men who are at a loss how to dispose of their wine-harvest.

This is an obstacle which other men set about removing for them by the

manufacture of casks. It is fortunate, say our statesmen, that this

obstacle exists, since it occupies a portion of the labor of the

nation, and enriches a certain number of our citizens. But here is

presented to us an ingenious machine, which cuts down the oak, squares

it, makes it into staves, and, gathering these together, forms them into

casks. The obstacle is thus diminished, and with it the profits of the

coopers. We must prevent this. Let us proscribe the machine!

To sift thoroughly this sophism, it is sufficient to remember that human

labor is not an _end_, but a _means_. _It is never without employment._

If one obstacle is removed, it seizes another, and mankind is delivered

from two obstacles by the same effort which was at first necessary for

one. If the labor of coopers becomes useless, it must take another

direction. But with what, it may be asked, will they be remunerated?

Precisely with what they are at present remunerated. For if a certain

quantity of labor becomes free from its original occupation, to be

otherwise disposed of, a corresponding quantity of wages must thus also

become free. To maintain that human labor can end by wanting employment,

it would be necessary to prove that mankind will cease to encounter

obstacles. In such a case, labor would be not only impossible, it would

be superfluous. We should have nothing to do, because we should be

all-powerful, and our _fiat_ alone would satisfy at once our wants and

our desires.

III.

EFFORT--RESULT.

We have seen that between our wants and their gratification many

obstacles are interposed. We conquer or weaken these by the employment

of our faculties. It may be said, in general terms, that industry is an

effort followed by a result.

But by what do we measure our well-being? By the _result_ of our effort,

or by the _effort itself_? There exists always a proportion between the

effort employed and the result obtained. Does progress consist in the

relative increase of the second or of the first term of this proportion?

Both propositions have been sustained, and in political economy opinions

are divided between them.

According to the first system, riches are the result of labor. They

increase in the same ratio as _the result does to the effort_. Absolute

perfection, of which _God_ is the type, consists in the infinite

distance between these two terms in this relation, viz., effort none,

result infinite.

The second system maintains that it is the effort itself which forms the

measure of, and constitutes, our riches. Progression is the increase of

the _proportion of the effort to the result_. Its ideal extreme may be

represented by the eternal and fruitless efforts of Sisyphus.[7]

[Footnote 7: We will therefore beg the reader to allow us in future, for

the sake of conciseness, to designate this system under the term of

_Sisyphism_.]

The first system tends naturally to the encouragement of every thing

which diminishes difficulties, and augments production,--as powerful

machinery, which adds to the strength of man; the exchange of produce,

which allows us to profit by the various natural agents distributed in

different degrees over the surface of our globe; the intellect which

discovers, experience which proves, and emulation which excites.

The second as logically inclines to every thing which can augment the

difficulty and diminish the product; as privileges, monopolies,

restrictions, prohibitions, suppression of machinery, sterility, etc.

It is well to remark here that the universal practice of men is always

guided by the principle of the first system. Every _workman_, whether

agriculturist, manufacturer, merchant, soldier, writer or philosopher,

devotes the strength of his intellect to do better, to do more quickly,

more economically,--in a word, _to do more with less_.

The opposite doctrine is in use with legislators, editors, statesmen,

men whose business is to make experiments upon society. And even of

these we may observe, that in what personally concerns _themselves_,

they act, like every body else, upon the principle of obtaining from

their labor the greatest possible quantity of useful results.

It may be supposed that I exaggerate, and that there are no true

_Sisyphists_.

I grant that in practice the principle is not pushed to its extremest

consequences. And this must always be the case when one starts upon a

wrong principle, because the absurd and injurious results to which it

leads, cannot but check it in its progress. For this reason, practical

industry never can admit of _Sisyphism_. The error is too quickly

followed by its punishment to remain concealed. But in the speculative

industry of theorists and statesmen, a false principle may be for a long

time followed up, before the complication of its consequences, only half

understood, can prove its falsity; and even when all is revealed, the

opposite principle is acted upon, self is contradicted, and

justification sought, in the incomparably absurd modern axiom, that in

political economy there is no principle universally true.

Let us see then, if the two opposite principles I have laid down do not

predominate, each in its turn;--the one in practical industry, the other

in industrial legislation.

I have already quoted some words of Mr. Bugeaud; but we must look on Mr.

Bugeaud in two separate characters, the agriculturist and the

legislator.

As agriculturist, Mr. Bugeaud makes every effort to attain the double

object of sparing labor, and obtaining bread cheap. When he prefers a

good plough to a bad one, when he improves the quality of his manures;

when, to loosen his soil, he substitutes as much as possible the action

of the atmosphere for that of the hoe or the harrow; when he calls to

his aid every improvement that science and experience have revealed, he

has, and can have, but one object, viz., _to diminish the proportion of

the effort to the result_. We have indeed no other means of judging of

the success of an agriculturist, or of the merits of his system, but by

observing how far he has succeeded in lessening the one, while he

increases the other; and as all the farmers in the world act upon this

principle, we may say that all mankind are seeking, no doubt for their

own advantage, to obtain at the lowest price, bread, or whatever other

article of produce they may need, always diminishing the effort

necessary for obtaining any given quantity thereof.

This incontestable tendency of human nature, once proved, would, one

might suppose, be sufficient to point out the true principle to the

legislator, and to show him how he ought to assist industry (if indeed

it is any part of his business to assist it at all), for it would be

absurd to say that the laws of men should operate in an inverse ratio

from those of Providence.

Yet we have heard Mr. Bugeaud in his character of legislator, exclaim,

"I do not understand this theory of cheapness; I would rather see bread

dear, and work more abundant." And consequently the deputy from Dordogne

votes in favor of legislative measures whose effect is to shackle and

impede commerce, precisely because by so doing we are prevented from

procuring by exchange, and at low price, what direct production can only

furnish more expensively.

Now it is very evident that the system of Mr. Bugeaud the deputy, is

directly opposed to that of Mr. Bugeaud the agriculturist. Were he

consistent with himself, he would as legislator vote against all

restriction; or else as farmer, he would practice in his fields the same

principle which he proclaims in the public councils. We should then see

him sowing his grain in his most sterile fields, because he would thus

succeed in _laboring much_, to _obtain little_. We should see him

forbidding the use of the plough, because he could, by scratching up the

soil with his nails, fully gratify his double wish of "_dear bread_ and

_abundant labor_."

Restriction has for its avowed object, and acknowledged effect, the

augmentation of labor. And again, equally avowed and acknowledged, its

object and effect are, the increase of prices;--a synonymous term for

scarcity of produce. Pushed then to its greatest extreme, it is pure

_Sisyphism_ as we have defined it: _labor infinite; result nothing_.

Baron Charles Dupin, who is looked upon as the oracle of the peerage in

the science of political economy, accuses railroads of _injuring

shipping_, and it is certainly true that the most perfect means of

attaining an object must always limit the use of a less perfect means.

But railways can only injure shipping by drawing from it articles of

transportation; this they can only do by transporting more cheaply; and

they can only transport more cheaply, by _diminishing the proportion of

the effort employed to the result obtained_; for it is in this that

cheapness consists. When, therefore, Baron Dupin laments the suppression

of labor in attaining a given result, he maintains the doctrine of

_Sisyphism_. Logically, if he prefers the vessel to the railway, he

should also prefer the wagon to the vessel, the pack-saddle to the

wagon, and the wallet to the pack-saddle; for this is, of all known

means of transportation, the one which requires the greatest amount of

labor, in proportion to the result obtained.

"Labor constitutes the riches of the people," said Mr. de Saint Cricq, a

minister who has laid not a few shackles upon our commerce. This was no

elliptical expression, meaning that the "results of labor constitute the

riches of the people." No,--this statesman intended to say, that it is

the _intensity_ of labor, which measures riches; and the proof of this

is, that from step to step, from restriction to restriction, he forced

on France (and in so doing believed that he was doing well) to give to

the procuring, of, for instance, a certain quantity of iron, double the

necessary labor. In England, iron was then at eight francs; in France it

cost sixteen. Supposing the day's work to be worth one franc, it is

evident that France could, by barter, procure a quintal of iron by eight

days' labor taken from the labor of the nation. Thanks to the

restrictive measures of Mr. de Saint Cricq, sixteen days' work were

necessary to procure it, by direct production. Here then we have double

labor for an identical result; therefore double riches; and riches,

measured not by the result, but by the intensity of labor. Is not this

pure and unadulterated _Sisyphism_?

That there may be nothing equivocal, the minister carries his idea still

farther, and on the same principle that we have heard him call the

intensity of labor _riches_, we will find him calling the abundant

results of labor, and the plenty of every thing proper to the satisfying

of our wants, _poverty_. "Every where," he remarks, "machinery has

pushed aside manual labor; every where production is superabundant;

every where the equilibrium is destroyed between the power of production

and that of consumption." Here then we see that, according to Mr. de

Saint Cricq, if France was in a critical situation, it was because her

productions were too abundant; there was too much intelligence, too

much efficiency in her national labor. We were too well fed, too well

clothed, too well supplied with every thing; the rapid production was

more than sufficient for our wants. It was necessary to put an end to

this calamity, and therefore it became needful to force us, by

restrictions, to work more, in order to produce less.

I also touched upon an opinion expressed by another minister of

commerce, Mr. d'Argout, which is worthy of being a little more closely

looked into. Wishing to give a death blow to the beet, he said: "The

culture of the beet is undoubtedly useful, _but this usefulness is

limited_. It is not capable of the prodigious developments which have

been predicted of it. To be convinced of this it is enough to remark

that the cultivation of it must necessarily be confined within the

limits of consumption. Double, treble if you will, the present

consumption of France, and _you will still find that a very small

portion of her soil will suffice for this consumption_. (Truly a most

singular cause of complaint!) Do you wish the proof of this? How many

hectares were planted in beets in the year 1828? 3,130, which is

1-10540th of our cultivable soil. How many are there at this time, when

our domestic sugar supplies one-third of the consumption of the country?

16,700 hectares, or 1-1978th of the cultivable soil, or 45 centiares for

each commune. Suppose that our domestic sugar should monopolize the

supply of the whole consumption, we still would have but 48,000 hectares

or 1-689th of our cultivable soil in beets."[8]

[Footnote 8: In justice to Mr. d'Argout we should say that this singular

language is given by him as the argument of the enemies of the beet. But

he made it his own, and sanctioned it by the law in justification of

which he adduced it.]

There are two things to consider in this quotation. The facts and the

doctrine. The facts go to prove that very little soil, capital, and

labor would be necessary for the production of a large quantity of

sugar; and that each commune of France would be abundantly provided with

it by giving up one hectare to its cultivation. The peculiarity of the

doctrine consists in the looking upon this facility of production as an

unfortunate circumstance, and the regarding the very fruitfulness of

this new branch of industry as a _limitation to its usefulness_.

It is not my purpose here to constitute myself the defender of the beet,

or the judge of the singular facts stated by Mr. d'Argout, but it is

worth the trouble of examining into the doctrines of a statesman, to

whose judgment France, for a long time, confided the fate of her

agriculture and her commerce.

I began by saying that a variable proportion exists in all industrial

pursuits, between the effort and the result. 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 the effort, compared with the result.

But Mr. d'Argout tells us, that where we looked for life, we shall find

only death. The importance of any object of industry is, according to

him, in direct proportion to its feebleness. What, for instance, can we

expect from the beet? Do you not see that 48,000 hectares of land, with

capital and labor in proportion, will suffice to furnish sugar to all

France? It is then an object of _limited usefulness_; limited, be it

understood, in the _work_ which it calls for; and this is the sole

measure, according to our minister, of the usefulness of any pursuit.

This usefulness would be much more limited still, if, thanks to the

fertility of the soil, or the richness of the beet, 24,000 hectares

would serve instead of 48,000. If there were only needed twenty times, a

hundred times more soil, more capital, more labor, to _attain the same

result_--Oh! then some hopes might be founded upon this article of

industry; it would be worthy of the protection of the state, for it

would open a vast field to national labor. But to produce much with

little is a bad example, and the laws ought to set things to rights.

What is true with regard to sugar, cannot be false with regard to bread.

If therefore the usefulness of an object of industry is to be

calculated, not by the comforts which it can furnish with a certain

quantum of labor, but, on the contrary, by the increase of labor which

it requires in order to furnish a certain quantity of comforts, it is

evident that we ought to desire, that each acre of land should produce

little corn, and that each grain of corn should furnish little

nutriment; in other words, that our territory should be sterile enough

to require a considerably larger proportion of soil, capital, and labor

to nourish its population. The demand for human labor could not fail to

be in direct proportion to this sterility, and then truly would the

wishes of Messrs. Bugeaud, Saint Cricq, Dupin, and d'Argout be

satisfied; bread would be dear, work abundant, and France would be

rich--rich according to the understanding of these gentlemen.

All that we could have further to hope for, would be, that human

intellect might sink and become extinct; for, while intellect exists, it

can but seek continually to increase the _proportion of the end to the

means; of the product to the labor_. Indeed it is in this continuous

effort, and in this alone, that intellect consists.

_Sisyphism_ has then been the doctrine of all those who have been

intrusted with the regulation of the industry of our country. It would

not be just to reproach them with this; for this principle becomes that

of our ministry, only because it prevails in the chambers; it prevails

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 filled with it to repletion.

Let me repeat here, that I do not accuse such men as Messrs. Bugeaud,

Dupin, Saint Cricq, and d'Argout, of being absolutely and always

_Sisyphists_. Very certainly they are not such in their personal

transactions; very certainly each one of them will procure for himself

_by barter_, what by _direct production_ would be attainable only at a

higher price. But I maintain that they are _Sisyphists_ when they

prevent the country from acting upon the same principle.

IV.

EQUALIZING OF THE FACILITIES OF PRODUCTION.

It is said ... but, for fear of being accused of manufacturing Sophisms

for the mouths of the protectionists, I will allow one of their most

able reasoners to speak for himself.

"It is our belief that protection should correspond to, should be the

representation of, the difference which exists between the price of an

article of home production and a similar article of foreign

production.... A protecting duty calculated upon such a basis does

nothing more than secure free competition; ... free competition can

only exist where there is an equality in the facilities of production.

In a horse-race the load which each horse carries is weighed and all

advantages equalized; otherwise there could be no competition. In

commerce, if one producer can undersell all others, he ceases to be a

competitor and becomes a monopolist.... Suppress the protection which

represents the difference of price according to each, and foreign

productions must immediately inundate and obtain the monopoly of our

market."[9]

[Footnote 9: M. le Vicomte de Romanet.]

"Every one ought to wish, for his own sake and for that of the

community, that the productions of the country should be protected

against foreign competition, _whenever the latter may be able to

undersell the former_."[10]

[Footnote 10: Mathieu de Dombasle.]

This argument is constantly recurring in all writings of the

protectionist school. It is my intention to make a careful investigation

of its merits, and I must begin by soliciting the attention and the

patience of the reader. I will first examine into the inequalities which

depend upon natural causes, and afterwards into those which are caused

by diversity of taxes.

Here, as elsewhere, we find the theorists who favor protection, taking

part with the producer. Let us consider the case of the unfortunate

consumer, who seems to have entirely escaped their attention. They

compare the field of production to the _turf_. But on the turf, the race

is at once a _means and an end_. The public has no interest in the

struggle, independent of the struggle itself. When your horses are

started in the course with the single object of determining which is the

best runner, nothing is more natural than that their burdens should be

equalized. But if your object were to send an important and critical

piece of intelligence, could you without incongruity place obstacles to

the speed of that one whose fleetness would secure the best means of

attaining your end? And yet this is your course in relation to industry.

You forget the end aimed at, which is the _well-being_ of the community.

But we cannot lead our opponents to look at things from our point of

view, let us now take theirs; let us examine the question as producers.

I will seek to prove

1. That equalizing the facilities of production is to attack the

foundations of all trade.

2. That it is not true that the labor of one country can be crushed by

the competition of more favored climates.

3. That, even were this the case, protective duties cannot equalize the

facilities of production.

4. That freedom of trade equalizes these conditions as much as possible;

and

5. That the countries which are the least favored by nature are those

which profit most by freedom of trade.

I. The equalizing of the facilities of production, is not only the

shackling of certain articles of commerce, but it is the attacking of

the system of mutual exchange in its very foundation principle. For this

system is based precisely upon the very diversities, or, if the

expression be preferred, upon the inequalities of fertility, climate,

temperature, capabilities, which the protectionists seek to render null.

If Guyenne sends its wines to Brittany, and Brittany sends corn to

Guyenne, it is because these two provinces are, from different

circumstances, induced to turn their attention to the production of

different articles. Is there any other rule for international exchanges?

Again, to bring against such exchanges the very inequalities of

condition which excite and explain them, is to attack them in their very

cause of being. The protective system, closely followed up, would bring

men to live like snails, in a state of complete isolation. In short,

there is not one of its Sophisms, which if carried through by vigorous

deductions, would not end in destruction and annihilation.

II. It is not true that the unequal facility of production, in two

similar branches of industry, should necessarily cause the destruction

of the one which is the least fortunate. On the turf, if one horse gains

the prize, the other loses it; but when two horses work to produce any

useful article, each produces in proportion to his strength; and because

the stronger is the more useful, it does not follow that the weaker is

good for nothing. Wheat is cultivated in every department of France,

although there are great differences in the degree of fertility existing

among them. If it happens that there be one which does not cultivate it,

it is because, even to itself, such cultivation is not useful. Analogy

will show us, that under the influence of an unshackled trade,

notwithstanding similar differences, wheat would be produced in every

kingdom of Europe; and if any one were induced to abandon entirely the

cultivation of it, this would only be, because it would _be her

interest_ to employ otherwise her lands, her capital, and her labor. And

why does not the fertility of one department paralyze the agriculture of

a neighboring and less favored one? Because the phenomena of political

economy have a suppleness, an elasticity, and, so to speak, _a

self-leveling power_, which seems to escape the attention of the school

of protectionists. They accuse us of being theorists, but it is

themselves who are theorists to a supreme degree, if being theoretic

consists in building up systems upon the experience of a single fact,

instead of profiting by the experience of a series of facts. In the

above example, it is the difference in the value of lands, which

compensates for the difference in their fertility. Your field produces

three times as much as mine. Yes. But it has cost you three times as

much, and therefore I can still compete with you: this is the sole

mystery. And observe how the advantage on one point leads to

disadvantage on the other. Precisely because your soil is more fruitful,

it is more dear. It is not _accidentally_ but _necessarily_ that the

equilibrium is established, or at least inclines to establish itself;

and can it be denied that perfect freedom in exchanges is, of all the

systems, the one which favors this tendency?

I have cited an agricultural example; I might as easily have taken one

from any trade. There are tailors at Quimper, but that does not prevent

tailors from being in Paris also, although the latter have to pay a much

higher rent, as well as higher price for furniture, workmen, and food.

But their customers are sufficiently numerous not only to re-establish

the balance, but also to make it lean on their side.

When therefore the question is about equalizing the advantages of labor,

it would be well to consider whether the natural freedom of exchange is

not the best umpire.

This self-leveling faculty of political phenomena is so important, and

at the same time so well calculated to cause us to admire the

providential wisdom which presides over the equalizing government of

society, that I must ask permission a little longer, to turn to it the

attention of the reader.

The protectionists say, Such a nation has the advantage over us, in

being able to procure cheaply, coal, iron, machinery, capital; it is

impossible for us to compete with it.

We must examine the proposition under other aspects. For the present, I

stop at the question, whether, when an advantage and a disadvantage are

placed in juxtaposition, they do not bear in themselves, the former a

descending, the latter an ascending power, which must end by placing

them in a just equilibrium.

Let us suppose the countries A and B. A has every advantage over B; you

thence conclude that labor will be concentrated upon A, while B must be

abandoned. A, you say, sells much more than it buys; B buys more than it

sells. I might dispute this, but I will meet you upon your own ground.

In the hypothesis, labor, being in great demand in A, soon rises in

value; while labor, iron, coal, lands, food, capital, all being little

sought after in B, soon fall in price.

Again: A being always selling and B always buying, cash passes from B to

A. It is abundant in A--very scarce in B.

But where there is abundance of cash, it follows that in all purchases a

large proportion of it will be needed. Then in A, _real dearness_, which

proceeds from a very active demand, is added to _nominal dearness_, the

consequence of a superabundance of the precious metals.

Scarcity of money implies that little is necessary for each purchase.

Then in B, a _nominal cheapness_ is combined with _real cheapness_.

Under these circumstances, industry will have the strongest possible

motives for deserting A, to establish itself in B.

Now, to return to what would be the true course of things. As the

progress of such events is always gradual, industry from its nature

being opposed to sudden transits, let us suppose that, without waiting

the extreme point, it will have gradually divided itself between A and

B, according to the laws of supply and demand; that is to say, according

to the laws of justice and usefulness.

I do not advance an empty hypothesis when I say, that were it possible

that industry should concentrate itself upon a single point, there must,

from its nature, arise spontaneously, and in its midst, an irresistible

power of decentralization.

We will quote the words of a manufacturer to the Chamber of Commerce at

Manchester (the figures brought into his demonstration are suppressed):

"Formerly we exported goods; this exportation gave way to that of thread

for the manufacture of goods; later, instead of thread, we exported

machinery for the making of thread; then capital for the construction

of machinery; and lastly, workmen and talent, which are the source of

capital. All these elements of labor have, one after the other,

transferred themselves to other points, where their profits were

increased, and where the means of subsistence being less difficult to

obtain, life is maintained at a less cost. There are at present to be

seen in Prussia, Austria, Saxony, Switzerland, and Italy, immense

manufacturing establishments, founded entirely by English capital,

worked by English labor, and directed by English talent."

We may here perceive, that Nature, or rather Providence, with more

wisdom and foresight than the narrow rigid system of the protectionists

can suppose, does not permit the concentration of labor, the monopoly of

advantages, from which they draw their arguments as from an absolute and

irremediable fact. It has, by means as simple as they are infallible,

provided for dispersion, diffusion, mutual dependence, and simultaneous

progress; all of which, your restrictive laws paralyze as much as is in

their power, by their tendency towards the isolation of nations. By this

means they render much more decided the differences existing in the

conditions of production; they check the self-leveling power of

industry, prevent fusion of interests, and fence in each nation within

its own peculiar advantages and disadvantages.

III. To say that by a protective law the conditions of production are

equalized, is to disguise an error under false terms. It is not true

that an import duty equalizes the conditions of production. These remain

after the imposition of the duty just as they were before. The most that

the law can do is to equalize the _conditions of sale_. If it should be

said that I am playing upon words, I retort the accusation upon my

adversaries. It is for them to prove that _production_ and _sale_ are

synonymous terms, which if they cannot do, I have a right to accuse

them, if not of playing upon words, at least of confounding them.

Let me be permitted to exemplify my idea.

Suppose that several Parisian speculators should determine to devote

themselves to the production of oranges. They know that the oranges of

Portugal can be sold in Paris at ten centimes, whilst on account of the

boxes, hot-houses, etc., which are necessary to ward against the

severity of our climate, it is impossible to raise them at less than a

franc apiece. They accordingly demand a duty of ninety centimes upon

Portugal oranges. With the help of this duty, say they, the _conditions

of production_ will be equalized. The legislative body, yielding as

usual to this argument, imposes a duty of ninety centimes on each

foreign orange.

Now I say that the _relative conditions of production_ are in no wise

changed. The law can take nothing from the heat of the sun in Lisbon,

nor from the severity of the frosts in Paris. Oranges continuing to

mature themselves _naturally_ on the banks of the Tagus, and

artificially upon those of the Seine, must continue to require for their

production much more labor on the latter than the former. The law can

only equalize the _conditions of sale_. It is evident that while the

Portuguese sell their oranges at a franc apiece, the ninety centimes

which go to pay the tax are taken from the French consumer. Now look at

the whimsicality of the result. Upon each Portuguese orange, the country

loses nothing; for the ninety centimes which the consumer pays to

satisfy the tax, enter into the treasury. There is improper

distribution, but no loss. Upon each French orange consumed, there will

be about ninety centimes lost; for while the buyer very certainly loses

them, the seller just as certainly does not gain them, for even

according to the hypothesis, he will receive only the price of

production. I will leave it to the protectionists to draw their

conclusion.

IV. I have laid some stress upon this distinction between the conditions

of production and those of sale, which perhaps the prohibitionists may

consider as paradoxical, because it leads me on to what they will

consider as a still stranger paradox. This is: If you really wish to

equalize the facilities of production, leave trade free.

This may surprise the protectionists; but let me entreat them to

listen, if it be only through curiosity, to the end of my argument. It

shall not be long. I will now take it up where we left off.

If we suppose for the moment, that the common and daily profits of each

Frenchman amount to one franc, it will indisputably follow that to

produce an orange by _direct_ labor in France, one day's work, or its

equivalent, will be requisite; whilst to produce the cost of a

Portuguese orange, only one-tenth of this day's labor is required; which

means simply this, that the sun does at Lisbon what labor does at Paris.

Now is it not evident, that if I can produce an orange, or, what is the

same thing, the means of buying it, with one-tenth of a day's labor, I

am placed exactly in the same condition as the Portuguese producer

himself, excepting the expense of the transportation? It is then certain

that freedom of commerce equalizes the conditions of production direct

or indirect, as much as it is possible to equalize them; for it leaves

but the one inevitable difference, that of transportation.

I will add that free trade equalizes also the facilities for attaining

enjoyments, comforts, and general consumption; the last an object which

is, it would seem, quite forgotten, and which is nevertheless all

important; since consumption is the main object of all our industrial

efforts. Thanks to freedom of trade, we would enjoy here the results of

the Portuguese sun, as well as Portugal itself; and the inhabitants of

Havre, would have in their reach, as well as those of London, and with

the same facilities, the advantages which nature has in a mineralogical

point of view conferred upon Newcastle.

The protectionists may suppose me in a paradoxical humor, for I go

farther still. I say, and I sincerely believe, that if any two countries

are placed in unequal circumstances as to advantages of production,

_that one of the two which is the least favored by nature, will gain

most by freedom of commerce_. To prove this, I shall be obliged to turn

somewhat aside from the form of reasoning which belongs to this work. I

will do so, however; first, because the question in discussion turns

upon this point; and again, because it will give me the opportunity of

exhibiting a law of political economy of the highest importance, and

which, well understood, seems to me to be destined to lead back to this

science all those sects which, in our days, are seeking in the land of

chimeras that social harmony which they have been unable to discover in

nature. I speak of the law of consumption, which the majority of

political economists may well be reproached with having too much

neglected.

Consumption is the _end_, the final cause, of all the phenomena of

political economy, and, consequently, in it is found their final

solution.

No effect, whether favorable or unfavorable, can be arrested permanently

upon the producer. The advantages and the disadvantages, which, from

his relations to nature and to society, are his, both equally pass

gradually from him, with an almost insensible tendency to be absorbed

and fused into the community at large; the community considered as

consumers. This is an admirable law, alike in its cause and its effects,

and he who shall succeed in making it well understood, will have a right

to say, "I have not, in my passage through the world, forgotten to pay

my tribute to society."

Every circumstance which favors the work of production is of course

hailed with joy by the producer, for its _immediate effect_ is to enable

him to render greater services to the community, and to exact from it a

greater remuneration. Every circumstance which injures production, must

equally be the source of uneasiness to him; for its _immediate effect_

is to diminish his services, and consequently his remuneration. This is

a fortunate and necessary law of nature. The immediate good or evil of

favorable or unfavorable circumstances must fall upon the producer, in

order to influence him invincibly to seek the one and to avoid the

other.

Again, when a workman succeeds in his labor, the _immediate_ benefit of

this success is received by him. This again is necessary, to determine

him to devote his attention to it. It is also just; because it is just

that an effort crowned with success should bring its own reward.

But these effects, good and bad, although permanent in themselves, are

not so as regards the producer. If they had been so, a principle of

progressive and consequently infinite _inequality_ would have been

introduced among men. This good, and this evil, both therefore pass on,

to become absorbed in the general destinies of humanity.

How does this come about? I will try to make it understood by some

examples.

Let us go back to the thirteenth century. Men who gave themselves up to

the business of copying, received for this service _a remuneration

regulated by the general rate of profits_. Among them is found one, who

seeks and finds the means of multiplying rapidly copies of the same

work. He invents printing. The first effect of this is, that the

individual is enriched, while many more are impoverished. At the first

view, wonderful as the discovery is, one hesitates in deciding whether

it is not more injurious than useful. It seems to have introduced into

the world, as I said above, an element of infinite inequality.

Guttenberg makes large profits by this invention, and perfects the

invention by the profits, until all other copyists are ruined. As for

the public,--the consumer,--it gains but little, for Guttenberg takes

care to lower the price of books only just so much as is necessary to

undersell all rivals.

But the great Mind which put harmony into the movements of celestial

bodies, could also give it to the internal mechanism of society. We will

see the advantages of this invention escaping from the individual, to

become forever the common patrimony of mankind.

The process finally becomes known. Guttenberg is no longer alone in his

art; others imitate him. Their profits are at first considerable. They

are recompensed for being the first who make the effort to imitate the

processes of the newly invented art. This again was necessary, in order

that they might be induced to the effort, and thus forward the great and

final result to which we approach. They gain much; but they gain less

than the inventor, for _competition_ has commenced its work. The price

of books now continually decreases. The gains of the imitators diminish

in proportion as the invention becomes older; and in the same proportion

imitation becomes less meritorious. Soon the new object of industry

attains its normal condition; in other words, the remuneration of

printers is no longer an exception to the general rules of remuneration,

and, like that of copyists formerly, it is only regulated _by the

general rate of profits_. Here then the producer, as such, holds only

the old position. The discovery, however, has been made; the saving of

time, labor, effort, for a fixed result, for a certain number of

volumes, is realized. But in what is this manifested? In the cheap price

of books. For the good of whom? For the good of the consumer,--of

society,--of humanity. Printers, having no longer any peculiar merit,

receive no longer a peculiar remuneration. As men,--as consumers,--they

no doubt participate in the advantages which the invention confers upon

the community; but that is all. As printers, as producers, they are

placed upon the ordinary footing of all other producers. Society pays

them for their labor, and not for the usefulness of the invention.

_That_ has become a gratuitous benefit, a common heritage to mankind.

What has been said of printing can be extended to every agent for the

advancement of labor; from the nail and the mallet, up to the locomotive

and the electric telegraph. Society enjoys all, by the abundance of its

use, its consumption; and it _enjoys all gratuitously_. For as their

effect is to diminish prices, it is evident that just so much of the

price as is taken off by their intervention, renders the production in

so far _gratuitous_. There only remains the actual labor of man to be

paid for; and the remainder, which is the result of the invention, is

subtracted; at least after the invention has run through the cycle which

I have just described as its destined course. I send for a workman; he

brings a saw with him; I pay him two francs for his day's labor, and he

saws me twenty-five boards. If the saw had not been invented, he would

perhaps not have been able to make one board, and I would have paid him

the same for his day's labor. The _usefulness_ then of the saw, is for

me a gratuitous gift of nature, or rather it is a portion of the

inheritance which, _in common_ with my brother men, I have received from

the genius of my ancestors. I have two workmen in my field; the one

directs the handle of a plough, the other that of a spade. The result of

their day's labor is very different, but the price is the same, because

the remuneration is proportioned, not to the usefulness of the result,

but to the effort, the labor given to attain it.

I invoke the patience of the reader, and beg him to believe, that I have

not lost sight of free trade: I entreat him only to remember the

conclusion at which I have arrived: _Remuneration is not proportioned to

the usefulness of the articles brought by the producer into the market,

but to the labor_.[11]

[Footnote 11: It is true that labor does not receive a uniform

remuneration; because labor is more or less intense, dangerous,

skillful, etc. Competition establishes for each category a price

current; and it is of this variable price that I speak.]

I have so far taken my examples from human inventions, but will now go

on to speak of natural advantages.

In every article of production, nature and man must concur. But the

portion of nature is always gratuitous. Only so much of the usefulness

of an article as is the result of human labor becomes the object of

mutual exchange, and consequently of remuneration. The remuneration

varies much, no doubt, in proportion to the intensity of the labor, of

the skill which it requires, of its being _à propos_ to the demand of

the day, of the need which exists for it, of the momentary absence of

competition, etc. But it is not the less true in principle, that the

assistance received from natural laws, which belongs to all, counts for

nothing in the price.

We do not pay for the air we breathe, although so useful to us, that we

could not live two minutes without it. We do not pay for it, because

Nature furnishes it without the intervention of man's labor. But if we

wish to separate one of the gases which compose it, for instance, to

fill a balloon, we must take some trouble and labor; or if another takes

it for us, we must give him an equivalent in something which will have

cost us the trouble of production. From which we see that the exchange

is between troubles, efforts, labors. It is certainly not for hydrogen

gas that I pay, for this is every where at my disposal, but for the work

that it has been necessary to accomplish in order to disengage it; work

which I have been spared, and which I must refund. If I am told that

there are other things to pay for; as expense, materials, apparatus; I

answer, that still in these things it is the work that I pay for. The

price of the coal employed is only the representation of the labor

necessary to dig and transport it.

We do not pay for the light of the sun, because Nature alone gives it to

us. But we pay for the light of gas, tallow, oil, wax, because here is

labor to be remunerated;--and remark, that it is so entirely labor and

not utility to which remuneration is proportioned, that it may well

happen that one of these means of lighting, while it may be much more

effective than another, may still cost less. To cause this, it is only

necessary that less human labor should be required to furnish it.

When the water-carrier comes to supply my house, were I to pay him in

proportion to the _absolute utility_ of the water, my whole fortune

would not be sufficient. But I pay him only for the trouble he has

taken. If he requires more, I can get others to furnish it, or finally

go and get it myself. The water itself is not the subject of our

bargain; but the labor taken to get the water. This point of view is so

important, and the consequences that I am going to draw from it so

clear, as regards the freedom of international exchanges, that I will

still elucidate my idea by a few more examples.

The alimentary substance contained in potatoes does not cost us very

dear, because a great deal of it is attainable with little work. We pay

more for wheat, because, to produce it Nature requires more labor from

man. It is evident that if Nature did for the latter what she does for

the former, their prices would tend to the same level. It is impossible

that the producer of wheat should permanently gain more than the

producer of potatoes. The law of competition cannot allow it.

If by a happy miracle the fertility of all arable lands were to be

increased, it would not be the agriculturist, but the consumer, who

would profit by this phenomenon; for the result of it would be,

abundance and cheapness. There would be less labor incorporated into an

acre of grain, and the agriculturist would be therefore obliged to

exchange it for a less labor incorporated into some other article. If,

on the contrary, the fertility of the soil were suddenly to deteriorate,

the share of Nature in production would be less, that of labor greater,

and the result would be higher prices. I am right then in saying that it

is in consumption, in mankind, that at length all political phenomena

find their solution. As long as we fail to follow their effects to this

point, and look only at _immediate_ effects, which act but upon

individual men or classes of men _as producers_, we know nothing more of

political economy than the quack does of medicine, when, instead of

following the effects of a prescription in its action upon the whole

system, he satisfies himself with knowing how it affects the palate and

the throat.

The tropical regions are very favorable to the production of sugar and

coffee; that is to say, Nature does most of the business and leaves but

little for labor to accomplish. But who reaps the advantage of this

liberality of Nature? Not these regions, for they are forced by

competition to receive simply remuneration for their labor. It is

mankind who is the gainer; for the result of this liberality is

_cheapness_, and cheapness belongs to the world.

Here in the temperate zone, we find coal and iron ore, on the surface of

the soil; we have but to stoop and take them. At first, I grant, the

immediate inhabitants profit by this fortunate circumstance. But soon

comes competition, and the price of coal and iron falls, until this gift

of Nature becomes gratuitous to all, and human labor is only paid

according to the general rate of profits.

Thus natural advantages, like improvements in the process of production,

are, or have a constant tendency to become, under the law of

competition, the common and _gratuitous_ patrimony of consumers, of

society, of mankind. Countries therefore which do not enjoy these

advantages, must gain by commerce with those which do; because the

exchanges of commerce are between _labor and labor_; subtraction being

made of all the natural advantages which are combined with these labors;

and it is evidently the most favored countries which can incorporate

into a given labor the largest proportion of these _natural advantages_.

Their produce representing less labor, receives less recompense; in

other words, is _cheaper_. If then all the liberality of Nature results

in cheapness, it is evidently not the producing, but the consuming

country, which profits by her benefits.

Hence we may see the enormous absurdity of the consuming country, which

rejects produce precisely because it is cheap. It is as though we should

say: "We will have nothing of that which Nature gives you. You ask of

us an effort equal to two, in order to furnish ourselves with articles

only attainable at home by an effort equal to four. You can do it

because with you Nature does half the work. But we will have nothing to

do with it; we will wait till your climate, becoming more inclement,

forces you to ask of us a labor equal to four, and then we can treat

with you _upon an equal footing_."

A is a favored country; B is maltreated by Nature. Mutual traffic then

is advantageous to both, but principally to B, because the exchange is

not between _utility_ and _utility_, but between _value_ and _value_.

Now A furnishes a greater _utility in a similar value_, because the

_utility_ of any article includes at once what Nature and what labor

have done; whereas the _value_ of it only corresponds to the portion

accomplished by labor. B then makes an entirely advantageous bargain;

for by simply paying the producer from A for his labor, it receives in

return not only the results of that labor, but in addition there is

thrown in whatever may have accrued from the superior bounty of Nature.

We will lay down the general rule.

Traffic is an exchange of _values_; and as value is reduced by

competition to the simple representation of labor, traffic is the

exchange of equal labors. Whatever Nature has done towards the

production of the articles exchanged, is given on both sides

_gratuitously_; from whence it necessarily follows, that the most

advantageous commerce is transacted with those countries which are the

most favored by Nature.

* * * * *

The theory of which I have attempted, in this chapter, to trace the

outlines, would require great developments. But perhaps the attentive

reader will have perceived in it the fruitful seed which is destined in

its future growth to smother Protection, at once with Fourierism, Saint

Simonism, Commonism, and the various other schools whose object is to

exclude the law of COMPETITION from the government of the world.

Competition, no doubt, considering man as producer, must often interfere

with his individual and _immediate_ interests. But if we consider the

great object of all labor, the universal good, in a word, _Consumption_,

we cannot fail to find that Competition is to the moral world what the

law of equilibrium is to the material one. It is the foundation of true

Commonism, of true Socialism, of the equality of comforts and condition,

so much sought after in our day; and if so many sincere reformers, so

many earnest friends to the public rights, seek to reach their end by

commercial _legislation_, it is only because they do not yet understand

_commercial freedom_.

V.

OUR PRODUCTIONS ARE OVERLOADED WITH TAXES.

This is but a new wording of the last Sophism. The demand made is, that

the foreign article should be taxed, in order to neutralize the effects

of the tax, which weighs down national produce. It is still then but the

question of equalizing the facilities of production. We have but to say

that the tax is an artificial obstacle, which has exactly the same

effect as a natural obstacle, i.e. the increasing of the price. If this

increase is so great that there is more loss in producing the article in

question than in attracting it from foreign parts by the production of

an equivalent value, let it alone. Individual interest will soon learn

to choose the lesser of two evils. I might refer the reader to the

preceding demonstration for an answer to this Sophism; but it is one

which recurs so often in the complaints and the petitions, I had almost

said the demands, of the protectionist school, that it deserves a

special discussion.

If the tax in question should be one of a special kind, directed against

fixed articles of production, I agree that it is perfectly reasonable

that foreign produce should be subjected to it. For instance, it would

be absurd to free foreign salt from impost duty; not that in an

economical point of view France would lose any thing by it; on the

contrary, whatever may be said, principles are invariable, and France

would gain by it, as she must always gain by avoiding an obstacle

whether natural or artificial. But here the obstacle has been raised

with a fiscal object. It is necessary that this end should be attained;

and if foreign salt were to be sold in our market free from duty, the

treasury would not receive its revenue, and would be obliged to seek it

from some thing else. There would be evident inconsistency in creating

an obstacle with a given object, and then avoiding the attainment of

that object. It would have been better at once to seek what was needed

in the other impost without taxing French salt. Such are the

circumstances under which I would allow upon any foreign article a duty,

_not protecting_ but fiscal.

But the supposition that a nation, because it is subjected to heavier

imposts than those of another neighboring nation, should protect itself

by tariffs against the competition of its rival, is a Sophism, which it

is now my purpose to attack.

I have said more than once, that I am opposing only the theory of the

protectionists, with the hope of discovering the source of their errors.

Were I disposed to enter into controversy with them, I would say: Why

direct your tariffs principally against England and Belgium, both

countries more overloaded with taxes than any in the world? Have I not

a right to look upon your argument as a mere pretext? But I am not of

the number of those who believe that prohibitionists are guided by

interest, and not by conviction. The doctrine of Protection is too

popular not to be sincere. If the majority could believe in freedom, we

would be free. Without doubt it is individual interest which weighs us

down with tariffs; but it acts upon conviction.

The State may make either a good or a bad use of taxes; it makes a good

use of them when it renders to the public services equivalent to the

value received from them; it makes a bad use of them when it expends

this value, giving nothing in return.

To say in the first case that they place the country which pays them in

more disadvantageous conditions for production, than the country which

is free from them, is a Sophism. We pay, it is true, twenty millions for

the administration of justice, and the maintenance of the police, but we

have justice and the police; we have the security which they give, the

time which they save for us; and it is most probable that production is

neither more easy nor more active among nations, where (if there be

such) each individual takes the administration of justice into his own

hands. We pay, I grant, many hundred millions for roads, bridges,

ports, railways; but we have these railways, these ports, bridges and

roads, and unless we maintain that it is a losing business to establish

them, we cannot say that they place us in a position inferior to that of

nations who have, it is true, no taxes for public works, but who

likewise have no public works. And here we see why (even while we accuse

internal taxes of being a cause of industrial inferiority) we direct our

tariffs precisely against those nations which are the most taxed. It is

because these taxes, well used, far from injuring, have ameliorated the

_conditions of production_ to these nations. Thus we again arrive at the

conclusion that the protectionist Sophisms not only wander from, but are

the contrary--the very antithesis of truth.

As to unproductive imposts, suppress them if you can; but surely it is a

most singular idea to suppose, that their evil effect is to be

neutralized by the addition of individual taxes to public taxes. Many

thanks for the compensation! The State, you say, has taxed us too much;

surely this is no reason why we should tax each other!

A protective duty is a tax directed against foreign produce, but which

returns, let us keep in mind, upon the national consumer. Is it not then

a singular argument to say to him, "Because the taxes are heavy, we will

raise prices higher for you; and because the State takes a part of your

revenue, we will give another portion of it to benefit a monopoly?"

But let us examine more closely this Sophism so accredited among our

legislators; although, strange to say, it is precisely those who keep up

the unproductive imposts (according to our present hypothesis) who

attribute to them afterwards our supposed inferiority, and seek to

re-establish the equilibrium by further imposts and new clogs.

It appears to me to be evident that protection, without any change in

its nature and effects, might have taken the form of a direct tax,

raised by the State, and distributed as a premium to privileged

industry.

Let us admit that foreign iron could be sold in our market at eight

francs, but not lower; and French iron at not lower than twelve francs.

In this hypothesis there are two ways in which the State can secure the

national market to the home producer.

The first, is to put upon foreign iron a duty of five francs. This, it

is evident, would exclude it, because it could no longer be sold at less

than thirteen francs; eight francs for the cost price, five for the tax;

and at this price it must be driven from the market by French iron,

which we have supposed to cost twelve francs. In this case the buyer,

the consumer, will have paid all the expenses of the protection given.

The second means would be to lay upon the public a tax of five francs,

and to give it as a premium to the iron manufacturer. The effect would

in either case be equally a protective measure. Foreign iron would,

according to both systems, be alike excluded; for our iron manufacturer

could sell at seven francs, what, with the five francs premium, would

thus bring him in twelve. While the price of sale being seven francs,

foreign iron could not obtain a market at eight.

In these two systems the principle is the same; the effect is the same.

There is but this single difference; in the first case the expense of

protection is paid by a part, in the second by the whole of the

community.

I frankly confess my preference for the second system, which I regard as

more just, more economical and more legal. More just, because, if

society wishes to give bounties to some of its members, the whole

community ought to contribute; more economical, because it would banish

many difficulties, and save the expenses of collection; more legal,

lastly, because the public would see clearly into the operation, and

know what was required of it.

But if the protective system had taken this form, would it not have been

laughable enough to hear it said, "We pay heavy taxes for the army, the

navy, the judiciary, the public works, the schools, the public debt,

etc. These amount to more than a thousand million. It would therefore be

desirable that the State should take another thousand million, to

relieve the poor iron manufacturers; or the suffering stockholders of

coal mines; or those unfortunate lumber dealers, or the useful

codfishery."

This, it must be perceived, by an attentive investigation, is the result

of the Sophism in question. In vain, gentlemen, are all your efforts;

you cannot _give money_ to one without taking it from another. If you

are absolutely determined to exhaust the funds of the taxable community,

well; but, at least, do not mock them; do not tell them, "We take from

you again, in order to compensate you for what we have already taken."

It would be a too tedious undertaking to endeavor to point out all the

fallacies of this Sophism. I will therefore limit myself to the

consideration of it in three points.

You argue that France is overburthened with taxes, and deduce thence the

conclusion that it is necessary to protect such and such an article of

produce. But protection does not relieve us from the payment of these

taxes. If, then, individuals devoting themselves to any one object of

industry, should advance this demand: "We, from our participation in the

payment of taxes, have our expenses of production increased, and

therefore ask for a protective duty which shall raise our price of

sale;" what is this but a demand on their part to be allowed to free

themselves from the burthen of the tax, by laying it on the rest of the

community? Their object is to balance, by the increased price of their

produce, the amount which _they_ pay in taxes. Now, as the whole amount

of these taxes must enter into the treasury, and the increase of price

must be paid by society, it follows that (where this protective duty is

imposed) society has to bear, not only the general tax, but also that

for the protection of the article in question. But it is answered, let

_every thing_ be protected. Firstly, this is impossible; and, again,

were it possible, how could such a system give relief? _I_ will pay for

you, _you_ will pay for me; but not the less, still there remains the

tax to be paid.

Thus you are the dupes of an illusion. You determine to raise taxes for

the support of an army, a navy, the church, university, judges, roads,

etc. Afterwards you seek to disburthen from its portion of the tax,

first one article of industry, then another, then a third; always adding

to the burthen of the mass of society. You thus only create interminable

complications. If you can prove that the increase of price resulting

from protection, falls upon the foreign producer, I grant something

specious in your argument. But if it be true that the French people paid

the tax before the passing of the protective duty, and afterwards that

it has paid not only the tax, but the protective duty also, truly I do

not perceive wherein it has profited.

But I go much further, and maintain that the more oppressive our taxes

are, the more anxiously ought we to open our ports and frontiers to

foreign nations, less burthened than ourselves. And why? In order that

we may share with them, as much as possible, the burthen which we bear.

Is it not an incontestable maxim in political economy, that taxes must,

in the end, fall upon the consumer? The greater then our commerce, the

greater the portion which will be reimbursed to us, of taxes

incorporated in the produce, which we will have sold to foreign

consumers; whilst we, on our part, will have made to them only a lesser

reimbursement, because (according to our hypothesis) their produce is

less taxed than ours.

Again, finally, has it ever occurred to you to ask yourself, whether

these heavy taxes which you adduce as a reason for keeping up the

prohibitive system, may not be the result of this very system itself? To

what purpose would be our great standing armies, and our powerful

navies, if commerce were free?

VI.

BALANCE OF TRADE.

Our adversaries have adopted a system of tactics, which embarrasses us

not a little. Do we prove our doctrine? They admit the truth of it in

the most respectful manner. Do we attack their principles? They abandon

them with the best possible grace. They only ask that our doctrine,

which they acknowledge to be true, should be confined to books; and that

their principles, which they allow to be false, should be established in

practice. If we will give up to them the regulation of our tariffs, they

will leave us triumphant in the domain of theory.

"Assuredly," said Mr. Gauthier de Roumilly, lately, "assuredly no one

wishes to call up from their graves the defunct theories of the balance

of trade." And yet Mr. Gauthier, after giving this passing blow to

error, goes on immediately afterwards, and for two hours consecutively,

to reason as though this error were a truth.

Give me Mr. Lestiboudois. Here we have a consistent reasoner! a logical

arguer! There is nothing in his conclusions which cannot be found in his

premises. He asks nothing in practice which he does not justify in

theory. His principles may perchance be false, and this is the point in

question. But he has a principle. He believes, he proclaims aloud, that

if France gives ten to receive fifteen, she loses five; and surely, with

such a belief, nothing is more natural than that he should make laws

consistent with it.

He says: "What it is important to remark, is, that constantly the amount

of importation is augmenting, and surpassing that of exportation. Every

year France buys more foreign produce, and sells less of its own

produce. This can be proved by figures. In 1842, we see the importation

exceed the exportation by two hundred millions. This appears to me to

prove, in the clearest manner, that national labor _is not sufficiently

protected_, that we are provided by foreign labor, and that the

competition of our rivals _oppresses_ our industry. The law in question,

appears to me to be a consecration of the fact, that our political

economists have assumed a false position in declaring, that in

proportion to produce bought, there is always a corresponding quantity

sold. It is evident that purchases may be made, not with the habitual

productions of a country, not with its revenue, not with the results of

actual labor, but with its capital, with the accumulated savings which

should serve for reproduction. A country may spend, dissipate its

profits and savings, may impoverish itself, and by the consumption of

its national capital, progress gradually to its ruin. _This is

precisely what we are doing. We give, every year, two hundred millions

to foreign nations_."

Well! here, at least, is a man whom we can understand. There is no

hypocrisy in this language. The balance of trade is here clearly

maintained and defended. France imports two hundred millions more than

she exports. Then France loses two hundred millions yearly. And the

remedy? It is to check importation. The conclusion is perfectly

consistent.

It is, then, with Mr. Lestiboudois that we will argue, for how is it

possible to do so with Mr. Gauthier? If you say to the latter, the

balance of trade is a mistake, he will answer, So I have declared it in

my exordium. If you exclaim, But it is a truth, he will say, Thus I have

classed it in my conclusions.

Political economists may blame me for arguing with Mr. Lestiboudois. To

combat the balance of trade, is, they say, neither more nor less than to

fight against a windmill.