 |
SOPHISMS
OF THE
PROTECTIONISTS.
BY THE LATE
M. FREDERIC BASTIAT,
Member of the Institute of France.
* * * * *
Part I. Sophisms of Protection—First Series. Part II. Sophisms of Protection—Second Series. Part III. Spoliation and Law. 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 L60,000 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 L1 a week. In families where the father had hitherto earned L2 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. |
|
