First, _Is it not self-evident, that any financiering operation, which
reduces from 5 to 4, the interest of a national debt, deprives as well
the lender of the fifth part of his comforts, AS IF THE NATION HAD LOADED
HERSELF WITH TEN MILLIONS MORE, TO BE PAID ANNUALLY? (such is the present
hypothesis.)_ There stands, therefore, between the two cases no other
difference, but the _palpable_ justice and necessity of the one, and I
believe we may say, the _unsuspected_ inutility and injustice of the
other.
Secondly, We have already seen that the loss of the lender, in all cases,
flows essentially from the nature of his capital; that it is inseparable
from the advance of prices, whether _that advance_ originates from an
accession of wealth, or is produced by taxes, or brought on by monopoly;
and that besides, by lending to the State, with the certainty that the
State could not pay the interest of the loan without the assistance
of an import, he has beforehand submitted to the effects of an impost
_indispensable_ to his main object.
Thirdly, If we except a poll-tax, which we should suppose _laid by Divine
Justice_, and which, in the present hypothesis, should wrest from the
lender only a twelfth part of his enjoyments, where is the system, which,
_in the supposition of a tax of ten millions, being now necessary in
England_, would not deprive him of a fifth part of those enjoyments?—We
shall see presently that a _compound-tax_ would perhaps prove still less
favourable; but how much has he to dread, in all cases, from the indirect
taxation of the _monopoly_, which it is impossible duly to estimate!
_Effects of Compound Taxation._
The system of taxation, which may be called general, is composed of
the four different kinds of taxes which I have just mentioned:—First,
some kind of _poll-tax_, under that or any other name;—secondly, a
_land-tax_;—thirdly, an impost on the consumption of the rich, or
_luxury_;—and fourthly, in fine, the freedom taken with _the consumption
of the poor_, or general consumption; for the sun of reason forces its
way through the darkness of prejudices; these only serve to retard the
progress of nature wherever light first began to shine. It would be
easier to stifle truth at first, than entirely to escape its effects.
No country in the world can be guarded against the injustice inseparable
from the _two first parts_ of the system of a compound-taxation, whatever
may be in that respect the wisdom of the legislature, and its tenderness
in the manner of collecting the impost; no country can be free from that
other kind of injustice which results from the general prejudice in
favour of the tax on luxury, which constitutes the _third part_ of the
system under examination; but the _ensemble_—the whole together, does not
produce every where the same effects on the prices.
In _France_, from the beginning of the present century down to the time
when Mons. _Turgot_ was intrusted with the department of the finances,
the sum of what I can collect from the _French_ mode of taxation, is,
that without any determined system, without any other rule than the
immediate want of money, and the facility of procuring that money by
means of a loan, at any interest whatever, they had successively taxed
whatever came first to hand, or occurred to the imagination of the
comptroller general for the time being; nothing was spared, in order that
no one should complain; landed estates, employments, money, individuals,
the one because he was industrious, the other because he had no industry
and _that he might acquire some_; this man, because he had a _title_;
that other, because he had none; a third, on account of what he consumed;
a fourth, for that consumption to which he was doomed,—(_an expedient
which, together with the galleys, was devised by the farmers general,
as an admirable stroke upon smuggling_). No sin more venial, than to
take some liberties with a compound of such motley pieces; nothing more
severe than the reflexions thrown out against it on the other side of the
channel; and nothing can more forcibly prove that _France_ was planning
some reform on the subject, than the orders given most minutely to
enquire into the principles and effects of the various modes of taxation
adopted in other parts of _Europe_. I think, in regard to all those parts
of _French_ taxation, which I have alluded to, as every intelligent man
does in _France_ and _England_: nevertheless, if one cannot positively
affirm, that the result of such a chaos of strange regulations, has
been, that every one perceiving the burden to be general, nobody ever
thought of easing himself at the expence of others who appeared to have
been loaded in the same manner, yet it cannot be contradicted, that,
notwithstanding the want of true principles on the part of the _taxator_
in _France_, the price of every thing might have continued to this day,
without material alteration, had it not been for an event, of which
I shall speak in the sequel; and if it were true, as some very deep
politicians will have it, that _the more depreciated commodities are in
a country, the quicker that nation advances towards opulence, because,
in such a case, the national manufacturer has it in his power to favour
the foreigner by underselling all other countries in the world_; if this
principle were not at least questionable, as I hope to prove it by and
by, every one would admit that the _compound-taxation_, EVEN COMPOUNDED,
as I have just described it, does not appear totally destitute of some
advantages.
Before I venture to express my thoughts on the subject, I wish the reader
would form to himself an idea of what might be the effect of such a
system in _England_;—in _England_, where every man is a calculator, and
adds without ceremony, on the creditor side of his books, the number
of figures necessary to balance those which he thinks too many in the
calculation of others. They say in _England_, and there they are more
bitterly persuaded than any where else, that taxes take annually out of
the pockets of those who pay them, the whole amount of the impost; but
_there_ as every where, and _there_ much sooner than in any other part
of the world, justice and reason never fail to put into the head of each
individual, what he is to do, that the tax be not paid for a long while
out of his own pocket. I may therefore boldly say, that nothing more is
wanted on the part of _England_, to join perfectly in opinion with me,
concerning the most important point (that which concerns the national
debt), than to observe, that every one has always done as secretly and as
expeditiously as he could, for himself alone, what I insist it would be
advantageous to do openly, with equal celerity, for the general good[8].
I now resume my subject.
It would be, methinks, a difficult matter not to conclude, from such
very reasonable conflict of private calculations, that, were the
_French_ system to be adopted in _England_, it would not, in that
_land of benediction_, experience the fate of exotic plants; far from
degenerating, far from keeping the price of all things at the lowest ebb,
it would acquire from the influence of general maxims, and from universal
custom, the weight necessary to balance that multitude of private
injuries, from which it is impossible to keep it free. Now, this cannot
be effected without forcing the price of every thing up to a pitch so
much more extravagant, as each man, in such a case, is the natural judge
of the indemnity he should allow himself for the tax imposed, and for the
advantage that others derive from it; if any one should shrink on the
occasion, he finds in his _corporation_ a degree of vigour, of which he
shares the benefit. The word of the law is the only bridle in _England_;
a tax of 4_s._ on a particular article, increases its known price only
by something more; but if government gets 50,000_l._ from a tax, under
the appellation of _licence_, or any other name, which leaves the man
thus taxed, supreme judge of the rate, and at liberty to choose the means
of indemnifying himself, one may rest assured that such a tax costs
the people six times as much as it brings in to government. Let every
man candidly weigh this (I don’t say undenied, but I say) undeniable
assertion, from the circumstances of the moment; let him examine what
remains to be done by the land proprietor, that he may not be most
shamefully ransomed; let him judge in what predicament that man must
stand, whose fixed revenue in money, affords him no resource against the
effects produced by such an emulation; let him observe, above all, that
the daily labourer will not, _before the matter is brought to the last
extremity_, be paid one penny more, _because care has been charitably
taken to tax almost none of the articles of his consumption; and let him
then_, if he dares to do it, _let him bless the tax on luxury_, and any
other kind of impost, _but such as is laid on the objects of most general
consumption_.
The _real_ necessity of providing for the interest due on the debt
contracted during the last war, and the _imaginary_ advantage of the
intended reimbursement, have compelled the present Ministry (and
according to the maxims and ideas that predominate at this time, would
have compelled all possible administrations) to impose many taxes of the
very exceptionable kind; to their effects add those of the indirect tax
of corporations, premiums, prohibitions, and new obstacles thrown in the
smuggler’s way, it will not be wonderful that the million sterling for
the _imaginary_ want of a reimbursement, together with the three millions
some hundred thousands, for the _real_ want, (the interest of the debt)
and which, at the word, ought not to increase the total mass of prices
much above 8 _per cent._ actually advance them to 12, whilst in _France_
the expences of the late war will not perhaps occasion, _at first_, a
rise of more than 6 _per cent._ It will be seen in the sequel why I say,
_at first_.
But, they say in _France_—but, they say in _England_, all the articles
of consumption are already so loaded, that it is impossible to think of
increasing the weight. The _French_ Farmers General themselves tremble
when they propose to increase the duties on any article; _will not
consumption suffer by it_?—Such is every where the terrible argument
that prevents the establishment of the only unexceptionable system,
the only equitable, and the only advantageous one to the people—to the
people, on whose account they pretend to be so anxious.—That system,
it is true, would lessen by one half, _the nominal value_ of those
operations that are held in so important a light, of all those tricks of
which the contrivers themselves entertain so high an opinion; but what
ease, what leisure would not this very system procure to the Minister!
Let us then see whether the formidable argument, on which is grounded
the impossibility of doing _the best_, will bear the analysis, so
_formidable_ also in so many cases.
_Some Doubts on the supposed Impossibility of laying all Taxes on
Consumption._
The universal voice in _England_ is, that so many taxes should be laid,
as are necessary to answer the exigences. Ministry, Opposition, Subjects,
all agree in this essential point; but if we except some taxes which
bear principally on the land proprietor, who never says any thing, and
whose silence commands that of every one who shares in his burden, the
ablest man in the three kingdoms is not capable of proposing one, on any
article, which would not be followed by a petition from those very men
who do not even wait till it has received the royal sanction, in order to
derive from it an extravagant advantage, if it be within the meaning of
_licences_, and perhaps only a profit _rather above_ a reasonable one,
if it bears on an object properly specified.
I have perused several of these petitions; and the substance of what has
appeared to me most striking in every one of them is nearly this: “Let
every thing be taxed in _England_, nothing more equitable; let every
thing be taxed, _every thing_, except all the things that concern your
humble petitioners: you cannot tax them, without ruining their trade; and
not only their trade, but also the whole trade of the nation at large;
and not only without ruining the whole trade of the nation at large, but
without stifling that principle of liberty, that noble spirit of life,
which has so highly distinguished her above all the nations in the world.”
Were any one to infer, from the foregoing extract, that my intention is
to stigmatize the use of _petitions_,—notwithstanding the most invincible
antipathy I bear to exclamations, which, for the most part, betray either
weakness or hypocrisy, I should exclaim, O Divine Liberty, of _humbly
shewing_, to the most respectable parts of a nation, all kinds of ideas,
whether absurd or reasonable! Divine Liberty, never treated in _England_
but with that regard which is due from one man to whatever comes from
another man! Divine Liberty, who givest to the Legislator, the time,
knowledge, and often the means, necessary to prevent him from falling
into such errors as it is not beyond the power of human nature to avoid,
... be thou ever blessed, and mayest thou be worshipped wherever men are
not infallible, and wherever millions of men may suffer from a single
mistake!
In _England_, the produce of taxes on the various articles of
consumption, amounts, I suppose, to 8,000,000_l._: in order to procure
the 5 or 6 other millions required, a part of which is necessary, a part
of which is supposed to be so on account of the plan of a reimbursement,
the land continues to be taxed for 2 millions, and the other 3 or 4 are
taken from perhaps 30 different articles, one of which will bring in
150, another 100, a third 60, a fourth 30 thousand pounds, &c. with a
salvo for Government to tax half a score more articles, if it should be
robbed rather too unconscionably on the produce of the former; for, in
all countries throughout the world, this is all the conjuration in that
part of the administration of finances which relates to the collecting
of taxes; if you rob Government in one point, be sure Government will
ransom you, if required, on ten others; nothing more just, but nothing
more easy.
Now, if we lay it down for an indubitable maxim, that the most able
Administrator of finances, cannot take from an individual, more than
what he possesses, it seems to me then that it remains only to examine,
whether that very individual from whom, one way or another, out of the 20
he is possessed of, 5 may be wrested,—will be less aggrieved if the 5 be
taken out of his pocket, and he be sent to market with the remaining 15,
than he would be, were he permitted to go with the whole 20 to market,
where he would find those 15 which he used to purchase for 15, charged
with the 5 which might have been taken from him at home?
The question more to the point is yet more singular; for it goes to this
enquiry:
First, Whether the land proprietor, who is obliged to give at a fixed
period three millions in taxes for his land, windows, domestics, and
other objects more recently taxed, would think himself more injured if
those three millions were divided and laid upon some objects of his
consumption, while he should observe that by this new order of things he
would gain the convenience, not only of paying these three millions by
different and remote installments, but also of making use of the money
previous to such payment,—without injury to the trader, to whom the
interest would be one way or other repaid,—while on the other hand, a
part of the money, laid out upon his land, would furnish new resources
for augmenting the produce of the taxes, by increasing his faculties of
consumption:
Secondly, Whether those unfortunate licensed persons, and others (who so
bitterly complain of all the various taxes that produce to them three
or four times the sum which they advance to Government) would not be
_justly_, as they ought to be, relieved from the _oppression_ (that is
the word) if such taxes were taken off, and laid on articles of which
they would themselves be the consumers:
Thirdly, Whether all those extraordinary, usurious, and unjust benefits,
arising from those _oppressive_ taxes which I have been mentioning,
reduced to their proper point, by taxes that would not increase the
price of any article beyond a known degree, would not naturally reduce
the _value_ of every thing to that _necessary_ price I have spoken
of,—to that price which every thing ought to maintain, that the imaginary
_oppressed_ might not actually _oppress_ the imaginary _oppressors_,—that
all things may be preserved in a just balance, without any person
experiencing a change in his condition;—and consequently, without the
consumption of any article being diminished, unless fancy or fashion
should transfer it to another article that will indemnify for the
deficiency.[9]
From _England_ let us pass over to _France_, and always taking for
granted that a Minister of finance is not a conjurer, and that he can
take from the pockets of the people no more money than they possess; I
wish it could be examined:
Whether the 41 millions of _livres Tournois_, produced by the poll-tax,
and which should be paid no longer, when that tax should be transferred
to, and divided between all the articles _of the most general
consumption, and of course the most productive_, would diminish the
general faculties, by increasing the value of those objects, to the whole
of that sum which the contributors would gain by paying no longer the
poll-tax.
I would have it also enquired into, whether the clergy, finding the
objects of that general consumption loaded with 11 millions more,
could be aggrieved by the sole disappointment of giving no longer
_gratuitously_ to his Majesty, those 11 millions which they are now
_compelled_ to pay; and whether they would not be left in possession of
all the faculties necessary to satisfy the first article, as soon as they
should be freed from the other.
I should also wish the _French_ to examine whether the 76 millions
_Tournois_, paid in that country for the _three twentieths_, instead of
being very often called for, _at a time when the Subject has them not_,
transferred to those objects which cannot be consumed but by means of
the money remaining after those 76 millions are discharged, would impair
the means of the contributors, although after having eased them of that
truly terrible tax, the Minister should, in a manner, juggle them out of
the whole amount of it, by another impost on consumption. Supposing even
they had some suspicion of the trick, I wish it were examined whether
they would think themselves injured by paying in the new way that amount,
by installments at their own time, and till then laying out a part of
it upon their lands, the revenues of which would of course increase in
proportion.
But above all, I wish it should be examined, whether 91 millions of
another kind of subsidy, called _la taille_, added to 7 millions and a
half more, laid out in expences for warrants and distresses, necessary
to enforce the law of the subsidy, transferred upon the consumption of
those from whose hands the _subsidy_ is directly wrested, against whom
the _warrants_ are issued, upon whose goods or body the distresses are
executed, would diminish the faculty of that poor people’s consumption,
if, by means of that consumption, by the suppression of the old
_subsidy_, of _warrants_, and _distresses_ attending the same, they
should acquire the faculty of consuming cheerfully, what they often
consume in bitterness and sorrow; and whether the department of the
finances could lose by it any thing more than the pleasure or trouble,
or rather the necessity of assessing a dreadful subsidy, issuing out
warrants, and distressing the body—when there are no goods to be
distrained.
_But in this scheme the expence is more considerable._
This is the grand objection: _The expence is more considerable!_ Reduce
the unfortunate to a bed of straw, or cast him into prison, to spare the
purse ... of whom?—For after all, supposing even that a few additional
charges ought to be compared with millions of inconveniences, injuries,
and acts of barbarity, which are inseparable from the other methods, let
it be examined whether the extra charges can produce any other effect,
than that of advancing by a few _deniers pour livrè_ the general price
of merchandise; let it be examined whether that advance is not a matter
of perfect indifference, provided that the price of the provisions sold
by the land proprietor, _who is stiled rich_, and that of the wages of
the labouring man, who _is called poor_, rise in the same proportion as
the goods of the _capitalist_ of industry, who stands equally and as
essentially in need of the ease of the _poor_, as of the opulence of the
_rich_.
In fine, Let it be examined whether there is any thing great, courageous,
just, and fair, that may not be expected from the _French_ nation, when
she shall be admitted to the honour of being heard,—or when they will be
kind enough to convince her.—A King of _France_, with the trifling help
of his provincial administrations, may do, and play with every thing: a
King of _France_ is truly a despot; not from that absurd right of giving
his _will_ for _reason_, but from that principle which is congenial to
the _French_, that the People and the King are but one, have but one
interest, and have nothing to fear but the ignorance of a Minister,
conscious of his inability, without the least thought of the resources
he has at hand in such a case, without principles to guard him against
committing those injuries which seem to him unavoidable, in order to
conceal the errors which he has been, or fears to be, guilty of; a
Minister, in fine, whose insignificant little self, wrests from the King
and People, the fruit of that _identity_ which forms the acknowledged
essence of the _French_ constitution.
What seems to be in _France_ no more than a fortunate prejudice, is
every where an irrefragable truth: in every country the strength,
power, and riches of the Prince, are but the sum of the force, power,
riches, energy, honour and _susceptibility_, which actually exist in
the mass of his subjects.—But if the Sovereign be the most powerful man
in his kingdom, only because all its strength centers in him; if in
this age, the most complaisant, the meanest Minister should not dare
even to insinuate a contrary idea before the Prince the most jealous
of his authority; how can he presume to think, or to hope, that it
will be in his power to persuade the Prince, that he, the Minister, is
the best informed man in the Empire, before he has collected all the
information that can be got on every object that does not call for an
immediate execution?—And how can he pretend to have collected every such
information, when in addition to his own ideas, he goes only by those of
the few dependents who surround him, dependents as much on their guard
before him, as he himself is circumspect before the Sovereign, when the
Sovereign, before he asks his advice, has the misfortune to let a single
word escape that betrays even the appearance of an opinion on the object
under deliberation?
_Recapitulation of the foregoing Thoughts on Taxes and their Effects._
The fate of the various kinds of taxes, is similar to that of political
operations, which pretty regularly bring about the very contrary of what
had been expected from them: thus if you tax the consumption of the rich,
presently the poor alone will pay the impost, and will continue to pay
it till an insurrection will make you sensible that he is brought too
low; now this insurrection is commonly the consequence of a trifling
scarcity, which, it seems, Providence sends to the unfortunate in order
to encourage his asking for justice, in the only manner that is likely
to prove successful: on the contrary, let the tax be laid on the general
consumption, without sparing that of the poor, the man who possesses,
shall be, no doubt, necessitated to pay for the man who has nothing, if
the former wishes to enjoy the labour of the latter; and on the very same
day, when the tax is laid on the consumption of the labouring man, he
will not hesitate to demand an increase of wages to the full amount....
How is he to be deceived?—If it be well to deceive the poor as long as
possible, then tax nothing but the consumption of the rich. But whatever
be the manner in which the impost is laid, as soon as its effect shall be
general, the burden will prove _null_ (SAVE THE INJURIES INSEPARABLE FROM
ALL OTHER TAXES, BUT THOSE THAT BEAR UPON CONSUMPTION): this effect is no
more than a general advance in all the prices: an advance, it is true,
already acknowledged necessary with regard to the taxed articles, but
dreaded hitherto in regard to all the rest, _where it ought to have been
wished for_; universally felt, but never justly estimated; the _nullity_
of the burden of the debt would have been determined by the estimation.
The poll-tax, _supposed to be established by Divine Justice_, would
enhance the price of labour, and of its products, but by a fraction
equal to that which the amount of the tax should be, in the mass of both
revenues, land and industry. Ten millions of a poll-tax on a revenue
of 120, would increase the prices of every thing by one twelfth; and
every man thus taxed, would evidently after the advance of prices, in
consequence of such a poll-tax, find himself in the very same state he
stood in before the tax; yet one twelfth more must be given for every
thing, but then one twelfth more would be received for every thing.
All other kinds of taxes, as well as the poll-tax, seem to affect only
the article on which they are laid; but this article comprehends the
three interests, and trebles the action of the tax when the interest of
the labouring man, that is, the price of his day’s work, constitutes,
as it does in _England_, nearly one third of the revenue.⸺How could it
be supposed that the taxing of industry in its products, was granting
to its _capitalist_ the _right_ of increasing his price by the whole
amount of the tax, without making it _necessary_ for the land proprietor
to enhance the price of his commodities at the same rate? And how could
it be supposed that the products of agriculture and industry, happening
to be, by a very just re-action, (whether it originates with the one
or the other), increased in price in the same proportion, agriculture
and industry should not be compelled to increase of course the price
of labour which procured those products? If therefore you advance by
10 millions, the prices either of all the productions of the earth, by
taxing agriculture, or of all the productions of the arts, by taxing
industry, you equally compel the untaxed part to advance its prices to
the whole amount of the 10 millions laid on the corresponding part,
_otherwise goods to the amount of 10 millions would evidently remain
unsold_. Now the influence of those new prices will enforce by degrees an
increase on the price of labour, and this increase will soon be followed
by a fresh one on the value of its products; whence it appears at last,
that after all the necessary re-actions, the same tax of 10 millions,
which by a general _equitable_ poll-tax, supposed _as equitable as it is
IMPOSSIBLE to make it so_, would only raise the prices by one twelfth,
or 8⅓ _per cent._; if laid, either on the land, or luxury, or general
consumption, would necessarily advance the prices, sooner or later, to 25
_per cent._; the very precise period whereat every one would find himself
in the exact state in which he was previous to the tax, paying, it is
true, every thing 25 _per cent._ dearer, but being himself paid 25 _per
cent._ dearer too.
Alter the proportion of the usual price of labour, by supposing a country
so far barren as to make it necessary to appropriate one half of the
revenue to the labouring people; in such case a tax of 10 millions laid
on a revenue of 60 would increase by 30 _per cent._ the price of labour,
and of its products; 30 _per cent._ would raise the revenue from 60 to 78
millions: now 39 being the half of 78, as 30 is that of 60, the burden of
the tax would then prove equally _null_, after every article should have
been raised 30 _per cent._
Alter again the proportion of the common price of labour, by supposing
that the cultivator is allowed only one fourth of the revenue; this
division may take place in a country extremely fertile; in this case, a
tax of 10 millions on a revenue of 60, would only add 20 _per cent._ to
the former prices; instead of raising the revenue of 60 millions to 75,
as in the case of three equal shares, or to 78, as in the supposition of
the revenue being divided in halves, the tax would then carry it only to
72. Now the 4th part of 72 is 18, as 15 is the 4th of 60; therefore if,
after the tax is imposed, you give 18 wherever you paid only 15 before
that period, the burden will clearly be _null_ again, since the increase
in the price of labour, must have followed the advanced price of its
products, an advance necessitated by the impost.
Here, methinks, I hear the enthusiasts exclaim, _How! the fertility of
the land is then of no advantage, but to its greedy owners!_—I am in
hopes that before I conclude this Pamphlet, I shall be able to find,
to the great satisfaction of all good men, how many advantages remain
in the hands of the most opulent land proprietor; nay I hope to prove
that in a fertile land there is nothing lost to any of its inhabitants,
unless _extraordinary efforts be used to concenter within that spot the
general benefit which must result from it_. I shall content myself at
present with requesting the reader to compare my thoughts on the taxes,
with the two following problems, so often debated both in _England_ and
in _France_. How is it that _France_ has constantly retrieved her errors
and her misfortunes? How comes it that _England_ has not yet sunk under
the burden of her taxes? The _French_ exciseman says: _It is because the
more the people are loaded, the better they walk_; and very sensible
men in _England_ used to say, “_Reason and experience_ seem to prove
that taxes stimulate industry, and that the poor, _to live as well as
before, perform more work without demanding more for their labour_.” (_D.
Hume_’s Essay VIII. on Taxes). It seems to me that the above two problems
are more humanely solved by the reasons I have produced, and that those
reasons destroy all idea of a miracle, or of the necessity of loading
the people in order to spur their industry, and encourage them to work:
on the contrary, to forward those two great points, it is necessary to
increase the price of their labour in the same proportion as that of
its products is raised by the taxes; and this will suffice to render
evidently _null_ the burden of all taxes whatever.
_Further Considerations on the Necessity of a Correspondence between the
Prices of Agriculture and those of Industry._
I have said it more than once, and beg leave to repeat it here: Let any
essential object be denoted by one number or another; it is a matter of
perfect indifference, provided the numbers intended to denote the _mass_
of objects corresponding thereto, do not present any ideas contrary to
the proportion of labour which exists between the _essential object_,
and the mass which is to form its balance. Thus then, be the value of
wheat, which serves as the general standard, because it is useful to
all, at all times, and which ought to be so, from another consideration
almost equally powerful, namely, that it constitutes about one third
of the landed revenue in _Europe_—be its value, I say, denominated 30,
50, or 25, nothing more indifferent, provided the numbers denoting the
value of the other products of land and industry, keep exactly, either by
more or by less, within the same proportion; it is clear that, in such
a case, neither the land proprietor nor the _capitalist_ of industry,
can undergo from the alteration in the numbers, any real alteration in
their circumstances. But to think of nothing but the manufactures, and
imagine it possible to maintain, and endeavour seriously to maintain,
wheat at the same price, whilst the taxes advance by 10 _per cent._ that
of the products of industry,—is to aim at the ruin of agriculture, and to
oblige all the proprietors of land and money, whose employments in the
State would not indemnify them for such an injustice, to go in search of
another country, where the manufacturer, better acquainted with his real
interest, would know, or act as if he knew, that the solidity of his
wealth is inseparable from that of the land proprietor, and from the ease
of the proprietor of money, and of the labouring man.
_Then_ perhaps those national manufacturers, so proud and so jealous of
their exportations, so greedy of premiums, prohibitions, restrictions,
encouragements of all kinds, would sue more ardently to have those
nuisances suppressed, than they ever did for their establishment.
Nothing more admirable than those regulations to which _England_
acknowledges to be indebted for the best part of her wealth and power;
but they crept in at a time when ignorance generally prevailed, when all
the other parts of _Europe_ had almost no idea either of the principle of
commerce, or of its influence over all the other resources of society.
In effect, from what known point could one then start, to imagine that a
nation, who openly countenances monopoly at home, in order to encourage
her foreign trade, lays the most solid basis for the monopoly she wishes
to secure to herself every where? How was it possible to conceive that
the _Dutch_, a nation so necessary to those that are deficient in means,
and so forcibly compelled by the superabundance of their own, to make
them serviceable to those who stand in need of them, could not be shut
out from the _English_ ports, without depriving the rest of _Europe_
of the advantage, which their admittance every where was necessarily
calculated to procure to their correspondents, by securing to them, _as
well as to England_, a competition so essential to all, and fatal to
monopoly alone? _Europe_, busy at that time in search of another sort
of equilibrium, did not consider what weight commerce, carried on upon
such principles, would throw into one of the scales; how could _Europe_
then suspect that it would overthrow the balance entirely? But what is
the final result of all these projects against Nature?—The pretensions
of the Ecclesiastical State stirred up all _Europe_; _and the Pontifical
See was fixed in its proper place_. _France_ roused all _Europe_ against
the ambition of the House of _Austria_, much more formidable by its real
power; _the Imperial Throne was fixed in its proper place_, and _France_
was hailed as the founder and assertor of _European_ liberties. Soon
after the Protectress became a despot; _England_ stirred up all _Europe_
against her, and _France was, aukwardly, thrown out of her proper
place_; _England_, the principal instrument of the revolution, made an
improper use of her importance, as had been successively done by the
Ecclesiastical Power, the House of _Austria_, and by _France_;—the Armed
Neutrality appeared, and presented a code of laws unheard of before; it
was just; every nation, that had not bowed beneath the _English_ yoke,
adopted it:—there was an instant, when this armed neutrality might have
dictated both to _England_ and _France_, laws as equitable as the code
itself; and all _Europe_ would have applauded, had even _England_ and
_France_ united, at that very instant, to exterminate in concert the
whole naval force of _Europe_, then burnt the exterminating fleets, and
themselves given to all the world those very laws of equity which were
intended to be imposed upon them.
Every thing, at this moment, is in that happy state, which gives time to
reflect upon what is past, to see what is present, to look forwards to
what is to come, and to consider an _ensemble_, the very idea of which
could not be admitted during former periods. A few clouds, dispersed here
and there, do not spoil the beauty of the horizon; no body can now, for
any length of time, think it his interest to ruin and destroy; and every
body is concerned not to suffer any thing to be destroyed. I return to my
subject, if I may be said to have deviated from it.
If a diminution in the price of the necessaries of life be looked upon
as so very important, there exists a sure method of effecting it, even
in _England_, without any detriment to the land proprietor. Let us see
whether this very method would prove injurious to the true interest of
the manufacturer, who must be patronised, cherished as the fountain head
of riches; I mean that kind of riches called _money_, which could not
long subsist without the riches called _wheat_.
_Fourteenth Hypothesis._
Let us suppose, that, by the suppression of the monopoly enjoyed by the
manufacturers, and of which they are so jealous, the price of the whole
of their goods should fall one tenth; in such a case, the wheat which
the new taxes will enhance in price, I suppose, in the proportion of 40
to 44, would, upon a medium, fall back to 40; and in this case again the
produce of the manufactories would only cost industry 20 instead of 22,
at which they will be rated when wheat shall have risen from 40 to 44;
for, in the latter supposition, it will be necessary for industry to
pay finally this increase of expence, in favour of the artificers, who
would not long submit to an injustice, without presenting _petitions_ in
their own way: just as wheat must indispensably rise from 40 to 44, in
order that the land and money-proprietors be not compelled to leave their
country, to the great prejudice of the internal consumption, so essential
to the truest interest of the manufacturer.
Let it then be supposed, that wheat should fall from 44 to 40, and so
of all the rest;—I confess that the proprietor of money would thereby
become a gainer, and that the general persuasion is, that it is salutary
he should lose: but would he long support his gain? Would not the
encouragement which every thing must derive from this new order of
things, from that activity which trade would find in the new channels
that would open every day, when commerce should build on that true
principle, acknowledged to be the only unerring one, _the exchange of
commodities_, (excepting the bullion required for the five articles
before mentioned)—would not that activity, I say, that encouragement,
inspire in all parts of _Europe_ an eagerness for labour, necessarily
followed by an increase of _real_ wealth, a creation of new productions,
and by an increase of that _imaginary_ wealth, still more stimulating
than the former, because it is its proof and its pledge, but which cannot
be obtained without a general increase in all the prices?
Will it be said, that, on the first moment, the fall of prices would
affect the intellects of those who can only see, but never compare? that
the people, for instance, would lament their being reduced to 10, from
the 12 they had been accustomed for some days to receive, although they
should pay only 5 for what cost them 6 before? In this case, keep up
the prices, but without exception, and export on the true principles of
exportation: take for your guide the example set up by my countryman, the
_American_ of _Philadelphia_, in selling dearer because you are compelled
to do so; propose to buy dearer also, and this will be only an act of
justice; you will see hereafter that you would at last be just, in spite
of yourselves; be so intentionally: you cannot come down to the price of
your purchasers; raise their prices to a level with your own, they will
observe that even the first profit is not the lot of the first bidder, if
every one doing justice to himself bids in proportion: mean while, the
eagerness for labour goes on increasing, and by little and little the
benefit extends to the lowest wretch that dwells in the community; he
finds more work to do, and a greater reward for it.
It will be said no doubt, that this is another supposition of a general
agreement.—No, certainly not; it is enough for every one to see that
it must be so; that it will happen without any other help than the
private interest of each individual; that these private and niggardly
measures, already taken, or to be taken, in order to prevent the result
of all those personal interests, are of no use but to keep justice at a
distance; to multiply the number of injuries which daily take place, till
what must be, comes to pass; to produce a greater evil, where it might be
less; to substitute _forced_, to _necessary_ prices: but it is so evident
that wheat, and all the productions of the earth, should increase by one
tenth, as soon as the taxes, or an accession of wealth, shall increase by
one tenth the price of the products of industry, that it is necessary to
lay this principle as the basis of all regulations, _or else openly to
adopt as a maxim, that agriculture should be sacrificed to industry_.
This maxim, I set forth of the correspondence required between the
prices, together with the inconvenience of having them too much out of
proportion with those of other nations, militates, it is true, against
that monstrous system of prohibitions, corporations, &c. which is the
only burden entailed upon us by our forefathers, _the only burden_
which the present legislatures can transmit to posterity; but although
it might be an absurdity to suppose a reform as sudden as it would be
advantageous, yet would it be less absurd to suppose that, the evil
being once found out, the remedy will constantly be rejected? Would it
be less absurd to suppose, that the manufacturers, better acquainted
with their real interests, will persist in endeavouring to aggravate the
evil, instead of complying with the only means of retrieving it? Would
it be less absurd to suppose, that each of them will never perceive that
he pays for the privilege of ransoming in his branch of industry, by
the disadvantage of being himself ransomed on a thousand other objects?
_Russia_, 30 years ago, was perhaps more distant from her present state,
than the unmasking of monopoly, and the knowledge of its effects, will be
from its extirpation.
_On a Cause little suspected of high Prices._
I am not ashamed to own the prejudice I entertain against a diminution
in the price of any thing whatever, when I observe that discouragement,
at least in the part affected, would be the consequence of such a
diminution; whilst, on the contrary, a gradual, general, and proportioned
advance in the prices of every thing, is constantly followed by a
greater activity in all the branches of labour, which really increases
the quantity of its productions, in a proportion far superior to the
advance on that imaginary, _nominal_ value, acquired by fermentation;
my intention, therefore, cannot be to declaim against one of the most
potent causes of the high prices prevailing in _England_, and which
nobody, I think, has yet mentioned. This last expression shews, that I
do not mean here, that quantity of paper-money, to which many people, in
more than one kingdom, ascribe all the evil, of which the sole real part
is the work of monopoly. I think I have proved, that it is impossible
there should long remain in circulation any paper above the necessary
quantity: all would flock to the Bank to be paid in cash, had not the
Bank enough of it to discharge her notes, when presented, with such
readiness as to leave no doubt of the validity of those other notes,
which, in the natural course of things, would not be presented there to
be paid in money. The Bank would derive very little advantage from the
momentary cheat of paying off large sums in sixpences; this legerdemain
is admirable, but can suffice only to correspond to the wanton tricks
sometimes played by great politicians, to give the Bank a momentary
trouble. It is, _then_, necessary to rock those children, whom great men
make it their amusement to scare; and they must be rocked till they are
fast asleep, or till the great men are tired of making faces at them.
After the farce is over, the children wake, and do not even remember to
have been frightened; money is found wherever it is necessary, and every
thing returns to that order which it is every one’s interest to maintain.
What then is that other cause, so active, so cogent, not of that
extravagant price which monopoly alone can occasion, but of that price
rather above the _necessary_ one, which gives to every thing an increase
of vigour? It is credit. It is that prodigious talisman which realises
all that it conceives, since all that it conceives has the same advantage
as reality. How many capitals would never have existed, had not credit
supposed them several years before they did really exist? How fill up
the real chasm of capitals, which may, in an instant, suspend a hundred
manufactories in a kingdom, and, by that suspension, ruin, starve, the
trader, the merchant, the manufacturer, the mechanic, all, except the
farmer, whether proprietor or tenant, who, by the counter-blow, could not
die of hunger, but in real misery on his stacks of wheat, which he would
no longer attempt to reproduce.
That man is ignorant of his own value, who, pen in hand, weighs,
calculates, measures time, distances, expenditure, obstacles, facilities,
occurrences; and whose signature, on account of the supposed exactness
of his combinations, will soon after produce, at two or three hundred
leagues distance, and in fifty places on the road, the same effect which
would have resulted from the real possession of the object of which
this signature is the pledge. If he shares with all those whom he makes
easy, re-animates, or puts in action, the benefit which they derive from
the speed, as well as from the supposed certainty of his operations,
undoubtedly no one will dispute his title to the reward; and yet we shall
see presently, that this medal is not without its reverse, _supposing an
advance in prices to be an inconvenience_.