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Author’s Introduction to Economic Sophisms
PUBLISHING HISTORY:
Original title: No title given.
Place and date of first publication: Economic Sophisms (First Series) (1846).
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 1–5.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
In political economy there is a lot to learn and very little to do. (Bentham)2
In this small volume, I have sought to refute a few of the arguments against the deregulation of trade.
This is not a conflict that I am entering into against protectionists. It is a principle that I am attempting to instill into the minds of sincere men who hesitate because they doubt.
I am not one of those who say: “Protection is based on interests.” I believe that it is based on error or, if you prefer, on half-truths. Too many people fear freedom for this apprehension not to be sincere.
This is setting my sights high, but I must admit that I would like this small work to become in some way a manual for men called upon to decide between the two principles. When you do not possess a long-standing familiarity with the doctrine of freedom, protectionist sophisms will constantly
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come to one’s mind in one form or another. To release it from them, a long effort of analysis is required on each occasion, and not everyone has the time to carry out this task, least of all the legislators. This is why I have tried to do it all at once.
But, people will say, are the benefits of freedom so hidden that they are apparent only to professional economists?
Yes, we agree that our opponents in the debate have a clear advantage over us. They can set out a half-truth in a few words, and to show that it is a half-truth we need long and arid dissertations.
This is in the nature of things. Protection brings together in one single point all the good it does and distributes among the wider mass of people the harm it inflicts. One is visible to the naked eye, the other only to the mind’s eye.3 It is exactly the opposite for freedom.
This is so for almost all economic matters.
If you say: Here is a machine that has thrown thirty workers out into the street;
Or else: Here is a spendthrift who will stimulate all forms of industry;
Or yet again: The conquest of Algiers4 has doubled Marseilles’s trade;
Or lastly: The budget assures the livelihood of one hundred thousand families.
You will be understood by everyone, and your statements are clear, simple, and true in themselves. You may deduce the following principles from them:
Machines are harmful;
Luxury, conquest, and heavy taxes are a blessing;
And your theory will have all the more success in that you will be able to support it with irrefutable facts.
We, on the other hand, cannot stick to one cause and its immediate effect. We know that this effect itself becomes a cause in its turn. To judge a measure, it is therefore necessary for us to follow it through a sequence of results up to its final effect. And, since we must give utterance to the key word, we are reduced to reasoning.
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But right away here we are, assailed by these cries: “You are theorists, metaphysicians, ideologues, utopians, and in thrall to rigid principles,” and all the prejudices of the public are turned against us.
What are we to do, therefore? Call for patience and good faith in the reader and, if we are capable of this, cast into our deductions such vivid clarity that the truth and falsehood stand out starkly in order for victory to be won either by restriction or freedom, once and for all.
I must make an essential observation at this point.
A few extracts from this small volume have appeared in the Journal des économistes.
In a criticism that was incidentally very benevolent, published by the Vicomte de Romanet5 (see the issues of Le Moniteur industriel dated 15 and 18 May 1845),6 he assumed that I was asking for customs dues to be abolished. M. de Romanet is mistaken. What I am asking for is the abolition of the protectionist regime. We do not refuse taxes to the government; what we would like, if possible, is to dissuade those being governed from taxing each other. Napoléon said: “Customs dues ought not to be a fiscal instrument, but a means of protecting industry.”7 We plead the contrary and say: “Customs dues must not be an instrument of mutual plunder in the hands of workers, but it can be a fiscal instrument that is as good as any other.” We are so far, or
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to involve only me in the conflict, I am so far from demanding the abolition of customs dues that I see in them a lifeline for our finances.8 I believe that they are likely to produce huge revenues for the Treasury, and if my idea is to be expressed in its entirety, at the snail’s pace that sound economic doctrine takes to circulate, I am counting more on the needs of the Treasury than on the force of enlightened public opinion for trade reform to be accomplished.
But finally what are your conclusions, I am asked.
I have no need of conclusions. I am opposing sophisms, that is all.
But, people continue, it is not enough to destroy, you have to build. My view is that in the destruction of an error the truth is created.
After that, I have no hesitation in expressing my hope. I would like public opinion to be persuaded to ratify a customs law that lays down terms of approximately this order:
| Objects of prime necessity shall pay an ad valorem duty of | 5 percent |
| Objects of normal usefulness | 10 percent |
| Luxury objects | 15 or 20 percent |
Furthermore, these distinctions are taken from an order of ideas that is totally foreign to political economy as such, and I am far from thinking that they are as useful and just as they are commonly supposed to be. However, that is another story.
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PUBLISHING HISTORY:
Original title: “Abondance, disette.”
Place and date of first publication: JDE 11 (April 1845): 1–8.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 5–14.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
What is better for mankind and society, abundance or scarcity?
What, people will exclaim, is that a question to ask? Has it ever been stated or is it possible to assert that scarcity is the basis of man’s well-being?
Yes, that has been claimed; yes, it has been asserted. It is asserted every day, and I have no fear in saying that the theory of scarcity is by far the more popular. It is the subject of conversation in the journals, books, and on the rostrum, and although this may appear extraordinary, it is clear that political economy will have fulfilled its task and its practical mission when it has popularized and made irrefutable this very simple proposition: “Mankind’s wealth lies in the abundance of things.”
Do we not hear this every day: “Foreigners are going to swamp us with their products”? We therefore fear abundance.
Has M. de Saint-Cricq1 not said: “Production is too high”? He therefore feared abundance.
Do workers not smash machines? They are therefore terrified of excess production or, in other words, abundance.
Has M. Bugeaud2 not pronounced these words: “Let bread become expensive
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and farmers will be rich!”? Well, bread can become expensive only if it becomes scarce; therefore M. Bugeaud was recommending scarcity.
Has not M. d’Argout3 used the very fact of the productive capacity of the sugar industry as an argument against it? Has he not said: “Beetroot has no future, and its cultivation could not be expanded, since if just a few hectares per département were allocated to it this would meet the entire consumption needs of France.” Therefore, in his eyes, good lies in lack of production, or scarcity, and harm in fertility and abundance.
Do La Presse, Le Commerce, and the majority of daily newspapers4 not publish one or more articles each morning to demonstrate to the Chambers and the government that it would be sound policy to raise the price of everything by law through the operation of tariffs? Do the three powers of state5 not comply every day with this injunction from the regular press? Now tariffs raise the price of things only because they decrease the quantity offered in the marketplace! Therefore the papers, the Chambers, and the government put into practice the theory of scarcity, and I was right to say that this theory is by far the most popular one.
How has it come about that in the eyes of workers, political writers, and statesmen abundance is shown as something to be feared and scarcity as being advantageous? I propose to go back to the source of this illusion.
We note that men become rich to the extent that they earn a good return from their work, that is to say, from what they sell at the highest price. They sell at the highest price in proportion to the rarity, that is to say, the relative shortage, of the type of good their efforts produce. We conclude from this that, as far as they are concerned at least, scarcity makes them rich. When this reasoning is applied successively to all people who work, the theory of scarcity is thereby deduced. From this we move to its application, and in order to benefit all these people, high prices and the scarcity of all goods are provoked artificially by means of prohibition, restriction, the suppression of machines, and other similar means.
This is also true for abundance. We observe that when a product is plentiful
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it is sold at a low price and therefore producers earn less. If all producers are in this situation, they all become poor, and it is therefore abundance that ruins society. And, since all beliefs attempt to become reality, in a great many countries, we see laws made by men combating the abundance of things.
This sophism, expressed as a general statement, would perhaps have little effect; but when it is applied to a particular order of facts, to such and such a branch of production, or to a given class of workers, it is extremely specious, and this can be explained. It is a syllogism that is not false but incomplete. Now, whatever truth there is in a syllogism is always and necessarily available to cognitive inspection. But the incomplete element is a negative phenomenon, a missing component which is very possible and even very easy not to take into account.
Man produces in order to consume. He is both producer and consumer. The reasoning that I have just set out considers him only from the first of these points of view. From the second, the opposite conclusion would have been reached. Could we not say in fact:
The consumer is all the richer when he buys everything cheaply. He buys things cheaply the more abundant they are; therefore abundance makes him rich. This reasoning, when extended to all consumers, would lead to the theory of abundance!
It is the way in which the concept of trade is imperfectly understood that produces these illusions. If we look to our own personal interest, we will recognize immediately that it has a twin nature. As sellers, our interest is in things being expensive and consequently that things should be scarce; as buyers, what counts is low prices or what comes to the same thing, that things should be abundant. We cannot therefore base a line of reasoning on one or the other of these interests without having established which of the two coincides and is identified with the general and constant interest of the human race.
If man were a solitary animal,6 if he worked exclusively for himself, if he consumed the fruit of his labor directly, in a word, if he did not trade, the theory of scarcity would never have been able to infiltrate the world. It is only too obvious that abundance would be advantageous to him, from wherever it arose, either as the result of his industry or the ingenious tools or
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powerful machines that he had invented or through the fertility of the soil, the generosity of nature, or even a mysterious invasion of products which the waves brought from elsewhere and washed up on the beach. Never would a solitary man, seeking to spur on his own work or to secure some support for it, envisage breaking tools that spared him effort or neutralizing the fertility of the soil or throwing back into the sea any of the advantageous goods it had brought him. He would easily understand that work is not an aim but a means, and that it would be absurd to reject the aim for fear of damaging the means. He would understand that if he devotes two hours a day to providing for his needs, any circumstance (machine, fertility, free gift, or anything else) that spares him one hour of this work, the result remaining the same, makes this hour available to him, and that he may devote it to increasing his well-being. In a word, he would understand that sparing people work is nothing other than progress.
But trade clouds our vision of such a simple truth. In a social state, with the division of labor it generates, the production and the consumption of an object are not combined in the same individual. Each person is led to consider his work no longer as a means but as an end. With regard to each object, trade creates two interests, that of the producer and that of the consumer, and these two interests are always in direct opposition to each other.
It is essential to analyze them and study their nature.
Let us take a producer, any producer; what is his immediate interest? It lies in these two things, 1. that the smallest possible number of people should devote themselves to the same work as him; 2. that the greatest possible number of people should seek the product of this work; political economy explains this more succinctly in these terms: supply should be very restricted and demand very high, or in yet other terms: that there should be limited competition with limitless markets.
What is the immediate interest of the consumer? That the supply of the product in question should be extensive and demand restrained.
Since these two interests are contradictory, one of them has of necessity to coincide with the social or general interest while the other runs counter to it.
But which should legislation favor as being the expression of public good, if indeed it has to favor one?
To know this, you need only examine what would happen if the secret desires of men were accomplished.
As producers, it must be agreed, each of us has antisocial desires. Are we vine growers? We would be little displeased if all the vines in the world froze, except for ours: that is the theory of scarcity. Are we the owners of foundries?
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We would want there to be no other iron on the market than what we brought to it, whatever the needs of the public might be, and with the deliberate intention that this public need, keenly felt and inadequately met, would result in our receiving a high price: that is also the theory of scarcity. Are we farm workers? We would say, with M. Bugeaud, “Let bread become expensive, that is to say, scarce, and the farmers will get on with their business”: this is the same theory of scarcity.
Are we doctors? We could not stop ourselves from seeing that certain physical improvements, such as the improvement in a country’s health, the development of certain moral virtues such as moderation and temperance, the progress of enlightenment to the point that each person was able to take care of his own health, the discovery of certain simple drugs that were easy to use, would be so many mortal blows to our profession. Given that we are doctors, our secret desires are antisocial. I do not mean to say that doctors formulate such desires. I prefer to believe that they would joyfully welcome a universal panacea; but this sentiment reveals not the doctor but the man or Christian who, in self-denial, puts himself in the situation of the consumer. As one who exercises a profession and who draws his well-being from this profession, his consideration and even the means of existence of his family make it impossible for his desires, or if you prefer, his interests not to be antisocial.
Do we manufacture cotton cloth? We would like to sell it at a price most advantageous to us. We would readily agree that all rival factories should be prohibited, and while we do not dare to express this wish publicly or pursue its total achievement with any chance of success, we nevertheless succeed to a certain extent through devious means, for example, by excluding foreign fabrics in order to reduce the quantity on offer, and thus produce, through the use of force, a scarcity of clothing to our advantage.
We could go through all forms of industry in this way, and we would always find that producers as such have antisocial views. “Merchants,” says Montaigne, “do good business only when young people are led astray; farm workers when wheat is expensive; architects when houses are ruined; and officers of justice when court cases and quarrels between men occur. The very honor and practice of ministers of religion are drawn from our death and vices. No doctor takes pleasure in the health even of his friends nor soldiers in peace in the town, and so on.”7
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It follows from this that if the secret wishes of each producer were realized the world would regress rapidly into barbarism. Sail would outlaw steam, oars would outlaw sail and would soon have to give up transport in favor of carts, carts would yield to mules, and mules to human carriers of bales. Wool would exclude cotton and cotton exclude wool and so on, until a scarcity of everything had made man himself disappear from the face of the earth.
Let us suppose for a moment that legislative power and public force were put at the disposal of the Mimerel Committee,8 and that each of the members making up this association had the right to require it to propose and sanction one little law: is it very difficult to guess to what codes of production the public would be subjected?
If we now consider the immediate interest of the consumer we will find that it is in perfect harmony with the general interest and with what the well-being of humanity demands. When a buyer enters the market, he wants to find it with an abundance of products. That the seasons are propitious to all harvests, that increasingly wonderful inventions bring a greater number of products and satisfactions within reach, that time and work are saved, that distance dissolves, that a spirit of peace and justice allows the burden of taxes to be reduced, and that barriers of all sorts fall: in all this the immediate interest of the consumer runs parallel with the public interest properly understood. He may elevate his secret desires to the level of illusion or absurdity without his desires ceasing to be humanitarian. He may want bed and board, hearth and home, education and the moral code, security and peace, and strength and health to be obtained effortlessly, without work or measure, like dust in the road, water in the stream, the air or the light that surrounds us, without the achievement of such desires being contrary to the good of society.
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Perhaps people will say that if these desires were granted, the work of the producer would be increasingly restricted and would end by ceasing for lack of sustenance. Why, though? Because, in this extreme supposition, all imaginable needs and all desires would be completely satisfied. Man, like the Almighty, would create everything by a single act of will. Would someone like to tell me, on such an assumption, what would there be to complain about in productive economic activity?
I imagined just now a legislative assembly made up of workers,9 of which each member would formulate into law his secret desire as a producer, and I said that the code that would emerge from this assembly would be systematic monopoly, the theory of scarcity put into practice.
In the same way, a Chamber in which each person consults only his immediate interest as a consumer would lead to the systematic establishment of freedom, the suppression of all restrictive measures, and the overturning of all artificial barriers, in a word, the realization of the theory of abundance.
From this it follows:
That to consult the immediate interest of production alone is to consult an antisocial interest;
That to make the immediate interest of consumption the exclusive criterion is to adopt the general interest.
May I be allowed to stress this point of view once more at the risk of repeating myself?
There is radical antagonism between sellers and buyers.10
Sellers want the object of the sale to be scarce, in short supply and at a high price;
Buyers want it to be abundant, available everywhere at a low price.
The laws, which ought at least to be neutral, take the side of sellers against buyers, of producers against consumers, of high prices against low prices,11 and of scarcity against abundance.
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They act, if not intentionally, at least in terms of their logic, according to this given assumption: A nation is rich when it lacks everything.
For they say: “It is the producer we should favor by ensuring him a proper market for his product. To do this, we have to raise its price. To raise its price, the supply has to be restricted, and to restrict the supply is to create scarcity.” And look: let me suppose that right now when these laws are in full force a detailed inventory is taken, not in value but in weight, measures, volumes, and quantities of all the objects existing in France that are likely to satisfy the needs and tastes of her inhabitants, such as wheat, meat, cloth, canvas, fuel, colonial goods, etc.
Let me further suppose that on the following day all the barriers that prevent the introduction into France of foreign products are overturned.
Lastly, in order to assess the result of this reform, let me suppose that three months later, a new inventory is taken.
Is it not true that we would find in France more wheat, cattle, cloth, canvas, iron, coal, sugar, etc. on the second inventory than at the time of the first?
This is so true that our protective customs duties have no other aim than to prevent all of these things from reaching us, to restrict their supply and to prevent a decrease in their price and therefore their abundance.
Now, I ask you, are the people better fed under the empire of our laws because there is less bread, meat, and sugar in the country? Are they better clad because there is less yarn, canvas, and cloth? Are they better heated because there is less coal? Are they better assisted in their work because there is less iron and copper, fewer tools and machines?
But people will say: if foreigners swamp us with their products, they will carry off our money.
What does it matter? Men do not eat money; they do not clothe themselves with gold, nor heat themselves with silver. What does it matter if there is more or less money in the country, if there is more bread on the sideboard, more meat on the hook, more linen in the cupboards, and more wood in the woodshed?12
I will continue to confront restrictive laws with this dilemma:
Either you agree that you cause scarcity or you do not agree.
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If you agree, you are admitting by this very fact that you are doing the people as much harm as you can. If you do not agree, then you are denying that you have restricted supply and caused prices to rise, and consequently you are denying that you have favored producers.
You are either disastrous or ineffective. You cannot be useful.13
PUBLISHING HISTORY:
Original title: “Obstacle, cause.”
Place and date of first publication: JDE 11 (April 1845): 8–10.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 15–18.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
The obstacle taken for the cause—scarcity taken for abundance: this is the same sophism under another guise. It is a good thing to examine it from all sides.
Man originally lacks everything.
Between his destitution and the satisfaction of his needs there is a host of obstacles, which it is the purpose of work to overcome. It is an intriguing business trying to find how and why these same obstacles to his well-being have become in his eyes the cause of his well-being.
I need to transport myself a hundred leagues away. But between the points of departure and arrival there are mountains, rivers, marshes, impenetrable forests, evildoers, in a word, obstacles, and in order to overcome these obstacles I have to make a great deal of effort or, what comes to the same thing, others have to make a great deal of effort and have me pay the price for this. It is clear that in this respect I would have been in a better situation if these obstacles did not exist.
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To go through life and travel along the long succession of days that separates the cradle from the tomb, man needs to assimilate a prodigious quantity of food, protect himself against the inclemency of the seasons, and preserve himself from or cure himself of a host of ills. Hunger, thirst, illness, heat, and cold are so many obstacles that lie along his way. In his solitary state, he will have to combat them all by means of hunting, fishing, growing crops, spinning, weaving, and building houses, and it is clear that it would be better for him if there were fewer of these obstacles, or even none at all. In society, he does not have to confront each of these obstacles personally; others do this for him, and in return he removes one of the obstacles surrounding his fellow men.
It is also clear that, taking things as a whole, it would be better for men as a group, that is, for society, that the obstacles should be as insignificant and as few as possible.
However, if we examine social phenomena in detail, and the sentiments of men as they have been altered by trade, we soon see how they have managed to confuse needs with wealth and obstacles with causes.
The division of labor, a result of the ability to trade, has meant that each person, instead of combating on his own all the obstacles that surround him, combats only one, and this, not for himself but for the benefit of all his fellow men, who in turn render him the same service.
Now, the result of this is that this person sees the immediate cause of his wealth in the obstacle that it is his job to combat on other people’s account. The greater, more serious, more keenly felt this obstacle is, the more his fellow men will be ready to pay him for removing it, that is to say, to remove on his behalf the obstacles that stand in his way.
A doctor, for example, does not occupy himself in baking his bread, manufacturing his instruments, weaving, or making his clothes. Others do this for him, and in return he does battle with the illnesses that afflict his patients. The more numerous, severe, and recurrent these illnesses are, the more willing or even obliged people are to work for his personal advantage. From his point of view, illness, that is to say, a general obstacle to people’s well-being, is a cause of individual well-being. All producers reason in the same way with regard to things that concern them. Shipowners make their profit from the obstacle known as distance, farmers from that known as hunger, cloth manufacturers from that known as cold. Teachers live on ignorance, gem cutters on vanity, lawyers on greed, notaries on the possibility of dishonesty, just as doctors depend on the illnesses suffered by men. It is thus very true that each
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occupation has an immediate interest in the continuation or even the extension of the particular obstacle that is the object of its efforts.
Seeing this, theoreticians come along and develop a theory based on these individual sentiments. They say: “Need is wealth, work is wealth; obstacles to well-being are well-being. Increasing the number of obstacles is to give sustenance to production.”
Next, statesmen come along. They have the coercive power of the state at their disposal, and what is more natural than for them to make use of it to develop and propagate obstacles, since this is also to develop and propagate wealth? For example, they say: “If we prevent iron from coming from those places in which it is plentiful, we will create an obstacle at home to our procuring it. This obstacle will be keenly felt and will make people ready to pay to be relieved of it. A certain number of our fellow citizens will devote themselves to combating it, and this obstacle will make their fortune. The greater it is, the scarcer the mineral or the more it is inaccessible, difficult to transport, and far from the centers of consumption, the more all this activity, with all its ramifications, will employ men. Let us keep out foreign iron, therefore; let us create the obstacle in order to create the work of combating it.”
The same reasoning will lead to machines being forbidden.
People will say: “Here are men who need to store their wine. This is an obstacle; here are other men whose occupation is to remove it by manufacturing barrels. It is thus a good thing that this obstacle exists, since it supplies a part of national work and enriches a certain number of our fellow citizens. However, here comes an ingenious machine that fells oak trees, squares them and divides them into a host of staves, assembles these and transforms them into containers for wine. The obstacle has become much less and with it the wealth of coopers. Let us maintain both through a law. Let us forbid the machine.”
In order to get to the bottom of this sophism you need only say to yourself that human work is not an aim but a means. It never remains unused. If it lacks one obstacle, it turns to another, and the human race is freed from two obstacles by the same amount of work that removed a single one. If ever the work of coopers became superfluous, they would turn to something else. “But with what,” people will ask, “would it be paid?” Precisely with what it is paid right now, for when one quantity of labor becomes available following the removal of an obstacle, a corresponding quantity of money also becomes available. To say that human labor will be brought to an end for lack
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of employment you would have to prove that the human race will cease to encounter obstacles. If that happened, work would not only be impossible, it would be superfluous. We would have nothing left to do because we would be all-powerful and we would just have to utter a fiat for all our needs and desires to be satisfied.1
PUBLISHING HISTORY:
Original title: “Effort, résultat.”
Place and date of first publication: JDE 11 (April 1845): 10–16.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 19–27.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
We have just seen that there are obstacles between our needs and their satisfaction. We manage to overcome them or to reduce them by using our various faculties. In a very general way, we may say that production is an effort followed by a result.
But against what is our well-being or wealth measured? Is it on the result of the effort? Is it on the effort itself? There is always a ratio 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 relationship?
Both of these theses have been advocated; in political economy, they divide the field of opinion.
According to the first thesis, wealth is the result of output. It increases in accordance with the increase in the ratio of the result to the effort. Absolute perfection, of which the exemplar is God, consists in the infinite distancing of two terms, in this instance: effort nil; result infinite.
The second thesis claims that it is the effort itself that constitutes and measures wealth. To progress is to increase the ratio of the effort to the result.
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Its ideal may be represented by the effort, at once eternal and sterile, of Sisyphus.1,2
Naturally, the first welcomes everything that tends to decrease the difficulties involved and increase the product: the powerful machines that add to human powers, the trade that enables better advantage to be drawn from the natural resources spread to a greater or lesser extent over the face of the earth, the intelligence that makes discoveries, the experience that verifies these discoveries, the competition that stimulates production, etc.
Logically, by the same token, the second willfully summons up everything whose effect is to increase the difficulties of production and decrease the output: privileges, monopolies, restrictions, prohibitions, the banning of machines, sterility, etc.
It is fair to note that the universal practice of men is always directed by the principle of the first doctrine. Nobody has ever seen and nobody will ever see anyone working, whether he be a farmer, manufacturer, trader, artisan, soldier, writer, or scholar, who does not devote the entire force of his intelligence to doing things better, faster, and more economically, in a word, to doing more with less.
The opposite doctrine is practiced by theoreticians, deputies, journalists, statesmen, and ministers, in a word, men whose role in this world is to carry out experiments on society.
Again it should be noted that, with regard to things that concern them personally, they, like everybody else in the world, act on the principle of obtaining from work the greatest number of useful results possible.
You may think I am exaggerating, and that there are no real Sisyphists.
If you mean that, in practice, the principle is not pushed to the limit of its consequences, I would readily agree with you. Actually, this is always the case when people start from a false principle. It soon leads to results that are so absurd and harmful that one is simply forced to abandon it. For this reason, very practical productive activity never accepts Sisyphism: punishment would follow errors too closely for them not to be revealed. However, with regard to speculative theories of industrial activity, such as those developed
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by theoreticians and statesmen, a false principle may be followed for a long time before people are made aware of its falsity by complicated consequences of which moreover they are ignorant, and when at last they are revealed, and action is taken in accordance with the opposing principle, people contradict themselves and seek justification in this incomparably absurd modern axiom: in political economy there is no absolute principle.3
Let us thus see whether the two opposing principles that I have just established do not hold sway in turn, one in actual production and the other in the legislation regulating production.
I have already recalled something M. Bugeaud has said; however, in M. Bugeaud there are two men, one a farmer and the other a legislator.
As a farmer, M. Bugeaud tends to devote all his efforts to this twin aim: to save on work and to obtain bread cheaply. When he prefers a good cart to a bad one, when he improves the quality of fertilizer, when in order to break up his soil he substitutes the action of the atmosphere for that of the harrow or the hoe as far as he can, when he calls to his assistance all the procedures in which science and experiment have shown their effectiveness, he has and can have one single goal: to reduce the ratio of the effort to the result. Actually, we have no other way of recognizing the skill of the farmer and the quality of the procedure other than measuring what they have saved in effort and added to the result. And since all the farmers around the world act according to this principle, it may be said that the entire human race aspires, doubtless to its advantage, to obtaining bread or any other product more cheaply and to reducing the effort required to have a given quantity available.
Once account has been taken of this incontrovertible tendency in human beings, it ought to be enough to show legislators the real principle of the matter, that is, show them how they should be supporting productive economic activity (as far as it lies within their mission to support it), for it would be absurd to say that human laws ought to act in opposition to the laws of providence.
Nevertheless, the deputy, M. Bugeaud, has been heard to exclaim, “I do not understand the theory of low prices; I would prefer to see bread more expensive and work more plentiful.” And as a result, the deputy for the Dordogne has voted for legislative measures whose effect has been to hamper trade precisely because it indirectly procures us what direct production can supply us only at a higher cost.
Well, it is very clear that M. Bugeaud’s principle as a deputy is diametrically
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opposed to that of M. Bugeaud as a farmer. If he were consistent with himself, he would vote against any restriction in the Chamber or else he would carry onto his farm the principles he proclaims from the rostrum. He would then be seen to sow his wheat on the most infertile of his fields, since he would then succeed in working a great deal for little return. He would be seen to forbid the use of the plough, since cultivation using his nails would satisfy his double desire of making bread more expensive and work more plentiful.
The avowed aim and acknowledged effect of restriction is to increase work.
It also has the avowed aim and acknowledged effect of raising prices, which is nothing other than making products scarce. Thus, when taken to its limit, it is pure Sisyphism as we have defined it: infinite work, product nil.
Baron Charles Dupin,4 said to be a leading light among the peers in economic science, accuses the railway of harming shipping, and it is clear that it is the nature of a more perfect means to restrict the use of a means that is comparatively rougher. However, the railway can harm shipping only by diverting transport to itself; it can do so only by carrying it out more cheaply, and it can carry it out more cheaply only by reducing the ratio of the effort used to the result obtained, since this is what constitutes the lower cost. When, therefore, Baron Dupin deplores this reduction of work for a given result, he is following the lines of the doctrine of Sisyphism. Logically, since he prefers ships to rail, he ought to prefer carts to ships, packhorses to carts, and backpacks to all other known means of transport, since this is the means that requires the greatest amount of work for the least result.
“Work constitutes the wealth of a people,” said M. de Saint-Cricq, this minister of trade who imposed so many impediments to trade. It should not be believed that this was an elliptical proposition which meant: “The results of work constitute the wealth of a people.” No, this economist genuinely meant to say that it is the intensity of labor that measures wealth, and proof of this is that, from one inference to another, one restriction to another, he led France and considered he was doing a good thing in this, to devote twice as much work to acquire the same amount of iron, for example. In England, iron then cost 8 fr.; in France it cost 16 fr. If we take a day’s work to cost 1 fr., it is clear that France could, through trade, procure a quintal5 of iron for eight days taken from national work as a whole. Thanks to M. de Saint-Cricq’s
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restrictive measures, France needed sixteen days of work to obtain a quintal of iron through direct production. Double labor for identical satisfaction, therefore double wealth; here again wealth is measured not by outcomes but by the intensity of the work. Is this not Sisyphism in all its glory?
And so that there is no possible misunderstanding, the minister is careful to take his idea further, and in the same way as he has just called the intensity of labor wealth, he is heard calling the abundance resulting from production, or things likely to satisfy our needs, poverty. “Everywhere,” he says, “machines have taken the place of manpower; everywhere, there is an overabundance of production; everywhere the balance between the ability to produce and the means of consumption has been destroyed.” We see that, according to M. de Saint-Cricq, if France was in a critical situation it was because it produced too much and its production was too intelligent and fruitful. We were too well fed, too well clothed, too well provided for in every way. Production was too fast and exceeded all our desires. An end had to be put to this scourge, and to this end we had to force ourselves, through restrictions, to work more to produce less.
I have also recalled the opinion of another minister of trade, M. d’Argout. It is worth our spending a little time on it. As he wished to deliver a terrible blow to sugar beet, he said,
Growing sugar beet is doubtless useful, but its usefulness is limited. It does not involve the gigantic developments that people were happy to forecast for it. To be convinced of this, you just have to note that this crop will of necessity be restricted to the limits of consumption. Double or triple current consumption in France if you want, you will always find that a very minimal portion of the land would be enough to meet the needs of this consumption. (This is certainly a strange complaint!) Do you want proof of this? How many hectares6 were planted with sugar beet in 1828? There were 3,130, which is equivalent to 1/10540 of the cultivatable land. How many are there now that indigenous sugar7 has taken over one-third of consumption? There are 16,700 hectares, or 1/1978 of the cultivatable land, or 45 square meters [centiares] per commune. If we suppose that indigenous
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sugar had already taken over the entire consumption, we would have only 48,000 hectares planted with beetroot, or 1/680 of the cultivatable land.8,9
There are two things in this quotation: facts and doctrine. The facts tend to establish that little land, capital, and labor is needed to produce a great deal of sugar and that each commune in France would be abundantly provided with it if it devoted one hectare of its territory to its cultivation. The doctrine consists in seeing this situation as disastrous and seeing in the very power and fruitfulness of the new industry the limit of its usefulness.
I have no need to make myself the defender of sugar beet or the judge of the strange facts put forward by M. d’Argout,10 but it is worth examining in detail the doctrine of a statesman to whom France entrusted for many years the fate of its agriculture and trade.
I said at the beginning that there was a variable ratio between productive effort and its result; that absolute imperfection consists in an infinite effort with no result: that absolute perfection consists in an unlimited result with no effort; and that perfectibility consists in a gradual reduction in the effort compared to the result.
But M. d’Argout informs us that death is where we believe we are glimpsing life and that the importance of a branch of production is a direct result of its impotence. What, for example, can we expect from sugar beet? Do you not see that 48,000 hectares of land and a proportional amount of capital and manpower will be enough to provide all of France with sugar? Therefore it is an industry with limited usefulness, limited, of course, with regard to the input of labor it requires, the only way, according to the former minister,
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in which an industry can be useful. This usefulness would be much more limited still if, because of the fertility of the soil or the richness of the sugar beet, we harvested from 14,000 hectares what we could obtain only from 48,000. Oh! If twenty or a hundred times more land, capital, or labor were needed to achieve the same result, fair enough, we might build a few hopes on this new industry and it would be worthy of the full protection of the state, since it would offer a vast opportunity for national work. But to produce a lot with a little! That would be a bad example, and it is right for the law to establish order in this regard.
But what is the truth with regard to sugar cannot be a falsehood with regard to bread. If, therefore, the usefulness of an industry is to be assessed, not by the satisfaction it can provide through a given quantity of work, but on the contrary through the development of the work it requires to meet a given amount of satisfaction; what we ought obviously to want is that each hectare of land should produce little wheat and each grain of wheat little food. In other words, our territory should be infertile, since then the mass of land, capital, and labor that we would need to mobilize to feed the population would be much more in comparison. It might even be said that the market open to human labor will be in direct proportion to this infertility. The desires of MM. Bugeaud, Saint-Cricq, Dupin, and d’Argout will be granted. Bread will be expensive, work plentiful, and France will be rich, rich as these men understand the term.
What we ought to want in addition is for human intelligence to grow weaker and die out, for as long as it exists, it will constantly seek to increase the ratio of the end to the means and the product to the labor. It is actually in that, and only in that, that it consists.
Thus, Sisyphism is the doctrine of all the men who have been responsible for our economic development. It would not be just to blame them for this. This principle directs the ministers only because it holds sway in the Chambers; it holds sway in the Chambers only because it is sent there by the electorate, and the electorate is imbued with it only because public opinion is saturated with it.
I think I should repeat here that I am not accusing men such as MM. Bugeaud, Saint-Cricq, Dupin, and d’Argout of being absolutely and in all circumstances, Sisyphists. They are certainly not that in their private transactions; each one of them certainly obtains by exchange what it would cost him more to obtain through direct production. However, I say that they are Sisyphists when they prevent the country from doing the same thing.
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4. Equalizing the Conditions of Production
PUBLISHING HISTORY:
Original title: “Égaliser les conditions de production.”
Place and date of first publication: JDE 11 (July 1845): 345–56.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 27–45.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964
It is said … but, so that I am not accused of putting sophisms into the mouths of protectionists, I will let one of their most vigorous athletes speak for himself.
It has been thought that protection in our country ought to be simply a representation of the difference that exists between the cost price of a commodity that we produce and the cost price of a similar commodity produced by our neighbors.… A protective duty calculated on these bases ensures nothing more than free competition. Free competition exists only where conditions and charges are equal. In a horse race, the weight that each runner has to bear is weighed and the conditions are equalized; without this, they are no longer competitors. In matters of trade, if one of the sellers is able to deliver at lower cost, he ceases to be a competitor and becomes a monopolist. If you abolish this protection that represents the difference in cost, as soon as foreigners invade your market, they have acquired a monopoly in it.1
Each person has to want, for himself as for the others, the production of the country to be protected against foreign competition, wherever this can supply products at a lower price.2
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This argument recurs constantly in articles written by the protectionist school. I propose to examine it carefully, that is to say, I will be asking for the attention and even the patience of the reader. I will first deal with the inequalities that result from nature and then those that result from the differences in taxation.
Here, as elsewhere, we find the theoreticians of protection situated in the producers’ camp, whereas we are taking up the cause of these unfortunate consumers whom they refuse to take into account. They compare the field of industry to the race track.3 However, the race track is simultaneously the means and the end. The public takes no interest in the competition outside the competition itself. When you start your horses with the sole aim of knowing which is the best runner, I can understand that you make the weights equal. But if your aim is to ensure that a major and urgent item of news reaches the post, could you with impunity create obstacles for the one that might offer you the best conditions of speed? This is, however, what you are doing to economic production. You are forgetting the result sought, which is well-being. You leave this out of the account, and even sacrifice it through completely begging the question.
But since we cannot bring our opponents around to our point of view, let us adopt theirs and examine the question from the point of view of production.
I will seek to establish:
1. That leveling the conditions of production is to attack the very basis of trade;
2. That it is not true that production in one country is stifled by competition from more favored countries;
3. That even if this were true, protectionist duties do not make production conditions equal;
4. That freedom levels these conditions as far as they can be leveled;
5. Lastly, that it is the countries that are least favored that gain the most from trade.
I. Leveling the conditions of production is not merely hampering a few transactions; it is attacking the very principle of trade, since it is based precisely
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on this diversity, or, if you prefer, on these inequalities of fertility, aptitude, climate, or temperature that you wish to wipe out. If the Guyenne sends wine to Brittany and Brittany wheat to the Guyenne, it is because these two provinces are situated in different conditions of production.4 Is there a different law for international trade? Once again, to hold against them the inequality of conditions that motivates and accounts for their actions is to attack their very raison d’être. If the protectionists had enough logic and power on their side, they would reduce men, like snails, to total isolation. Besides, there is not one of their sophisms that, when subjected to the test of rigorous deduction, does not end in destruction and annihilation.
II. It is not true in fact that the inequality in conditions between two similar productive enterprises necessarily leads to the fall of the one that is the less well endowed. At the race track, if one runner wins the prize, the other loses it, but when two horses work to produce useful commodities, each produces to the extent of its strength, and because the stronger provides the more services, it does not follow that the weaker provides none at all. Wheat is grown in all the départements of France, although there are huge differences of fertility between them and if, by chance, there is one that does not grow wheat, it is because it is not good, even for that département, to grow it. In the same way, a similar argument tells us that, under the regime of freedom, in spite of differences like these, wheat would be produced in all the kingdoms of Europe, and if there were one which had decided to abandon this crop it would be because, in its own interest, it had found a better use for its land, capital, and labor. And why does the fertility of a département not paralyze farmers in neighboring départements that are less favored? Because economic phenomena have a flexibility, elasticity, and, so to speak, a capacity for leveling that appears to escape the grasp of the protectionist school totally. The latter accuses us of being prisoners of a system, but it is its own members who are rigid to the highest degree, if the spirit of such consists in building arguments based on a single fact rather than on a set of facts. In the example above, it is the difference in the value of the land that compensates for the difference in its fertility. Your field produces three times as much as mine. Yes, but it has cost you ten times more and I can still compete with you. This is the question in a nutshell. And note that superiority in some
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respects brings about inferiority in others. It is precisely because your land is more fruitful that it is more expensive, in such a way that it is not accidental, but necessary for a balance to be established or to tend to become established. And can it be denied that freedom is the regime that favors this trend the most?
I have quoted one branch of agriculture, but I could have quoted a branch of manufacturing just as well. There are tailors in Quimper,5 and that does not prevent there being tailors in Paris, even though rent, furnishings, workers, and food cost Paris tailors much more. But they also have a very different class of customers, and this is enough not only to restore the balance but also even to tilt it in their favor.
So when we talk about balancing the conditions of work, we have at least to examine whether freedom does not do what we are asking arbitrary rule to do.
This natural leveling out of economic phenomena is so important functionally and at the same time so worthy of our admiration for the providential wisdom that presides in the egalitarian governance of our society, that I ask your permission to dwell on it for a moment.
You protectionists say that such and such a people have the advantage of cheap coal, iron, machines, and capital over us; we cannot compete with them.
This statement will be examined from other points of view. For the present I am limiting myself to the question whether, when superiority and inferiority confront one another, they do not carry within themselves, in the latter case, a natural tendency to rise and in the former to descend, such as to bring them back to a fair balance.
Here we have two countries, A and B. A has all sorts of advantages over B. You conclude from this that labor would be concentrated in A and that B is powerless to do anything. A, you say, sells a great deal more than it purchases, while B purchases much more than it sells. I might dispute this, but I align myself with your viewpoint.
In this hypothetical circumstance, the demand for labor is high in A and it soon becomes more expensive.
Iron, coal, land, food, and capital are in high demand in A and they soon become more expensive.
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At the same time, labor, iron, coal, land, food, capital, and everything else are in very low demand in B and soon become much cheaper.
That is not all. As A still continues to sell and B continues to purchase, money passes from B to A. It is plentiful in A and scarce in B.
But where there is an abundance of money, this means that you need a great deal to buy anything else. Therefore, in A, to the high real prices which result from very active demand must be added the high nominal money prices due to the excess supply of precious metals.6
Scarcity of money means that little is needed for each purchase. Therefore in B, low nominal money prices combine with low real prices.
In these circumstances, production will have all sorts of reasons, reasons that are, if I may put it this way, raised to the fourth power, to leave A and establish itself in B.
Or, to stick to literal truth, let us say that production would not have waited up to now, that sudden moves are contrary to its nature and that, from the outset under a free regime, it would have gradually divided and distributed itself between A and B in accordance with the laws of supply and demand, that is to say, in accordance with the laws of justice and usefulness.
And when I say that, if it were possible for production to concentrate at a single point, an irresistible force for decentralization would arise within it for this very reason, I am not speaking hypothetically.
Listen to what a manufacturer had to say in the chamber of commerce in Manchester (I am omitting the figures he used to support his demonstration):
In former times we exported fabrics, then this activity gave way to the export of yarn, which is the raw material of fabric, and then to the export of machines, which are the tools of production for yarn, and later to the export of capital, with which we built our machines, and finally to the export of our workers and our industrial genius, which are the source of our capital. All these changes in production succeeded one another in moving to where they might be exercised to greatest advantage, where the cost of living was lowest and life easier, so that now we can see in Prussia, Austria, Saxony, Switzerland, and Italy huge factories established with English capital, operated using English workers and directed by English engineers.
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You can see clearly that nature, or rather providence, which is more ingenious, wise, and farsighted than your narrow and rigid theory supposes, did not want this concentration of work, this monopoly of all the forms of superiority that you argue to be an absolute and irremediable fact, to continue. It made it possible, using means that are as simple as they are infallible, for there to be dispersion, dissemination, solidarity, and simultaneous progress, all things that your restrictive laws paralyze as far as they can, since, by isolating peoples, they tend to make their differences in living conditions much more entrenched, to prevent leveling out, obstruct intermingling, neutralize counterbalancing tendencies, and entrap nations in their respective superiority or inferiority.
III. In the third place, to say that through a protectionist duty the conditions of production are equalized is to use an inaccurate turn of phrase to put across an error. It is not true that an import duty brings the conditions of production into balance. After the imposition of an import duty, these conditions remain what they were before. All that this duty balances at most are the conditions of sale. It will perhaps be said that I am playing with words, but I will throw this accusation back at my opponents. It is for them to prove that production and sale are synonymous, and unless they do so, I am entitled to blame them, if not for playing with words, at least for mixing them up.
Let me give an example to illustrate my idea.
Let me suppose that a few Parisian speculators have the bright idea of devoting their time to the production of oranges. They know that Portuguese oranges can be sold in Paris for 10 centimes, whereas they, in view of the conservatories and greenhouses they need because of the cold that often undermines their cultivation, cannot demand less than 1 franc in order to cover their costs. They demand that oranges from Portugal should be subject to a duty of 90 centimes. Through this duty, the conditions of production, as they say, will be balanced and the Chamber when giving way as usual to this line of reasoning, adds an import duty of 90 centimes for each foreign orange to the customs tariffs.
Well then, I say that the conditions of production have not changed in the slightest. The law has removed nothing from the heat of the sun in Lisbon nor the frequency or intensity of the frosts in Paris. Oranges will continue to mature naturally on the banks of the Tagus and artificially on the banks of the Seine, that is to say, that it will require much more human work in one country than in the other. What will be balanced are the conditions of sale: the Portuguese will have to sell us their oranges at 1 franc, including 90
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centimes to pay the tax. Obviously, the tax will be paid by French consumers. And look at the oddity of the result. On each Portuguese orange consumed, our country will lose nothing, for the 90 centimes more that are paid by the consumer will go to the treasury. There will be displacement but no loss. However, on each French orange consumed, there will be 90 centimes or thereabouts of loss, since the purchaser will certainly lose this and the seller, also certainly, will not earn this since, according to the hypothesis itself, he will have earned only the cost price. I leave the protectionists to draw the right conclusion.
IV. If I have stressed this distinction between the conditions of production and the conditions of sale, one which the protectionists will doubtless find paradoxical, it is because it will lead me to afflict them once more with another paradox that is even stranger, which is this: Do you really want to balance the conditions of production? Then let trade be free.
Oh! people will say, that is too much at this time, and an abuse of intellectual games. Well then, if only through curiosity, I ask the protectionists to follow my line of argument to the bitter end. It will not take long. Let me go back to my example.
If you agree to suppose for a minute that the average, daily earnings of each Frenchman come to 1 franc, it will ineluctably follow that to produce one orange directly in France will require one day’s work or its equivalent whereas to produce the exchange value of one Portuguese orange only one-tenth of a day’s work is needed, which means nothing other than that the sun does in Lisbon what work does in Paris. Well, is it not obvious that, if I can produce an orange or what amounts to the same thing, the means to buy one, with one-tenth of a day’s work, my position with regard to this production is subject to the same conditions as the Portuguese producer himself, except for the transport costs, which I must incur? It is therefore apparent that freedom balances the direct or indirect conditions of production, as far as they can be balanced, since it leaves only one remaining inevitable difference, that of transport.
I will add that freedom also balances the conditions of enjoyment, satisfaction, and consumption, which are never taken into account and which are nevertheless essential, since in the end consumption is the final aim of all our productive efforts. Through free trade we would enjoy the Portuguese sun just as Portugal herself does and the inhabitants of Le Havre, like those of London and under the same conditions, will have access to the advantages that nature has conferred on Newcastle with respect to its mineral resources.
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V. Gentlemen of the protectionist persuasion, you think me full of paradox! Well, I want to go even further. I say, and I think this quite sincerely, that if two countries are placed in unequal conditions of production, it is the one of the two which is less favored by nature that has the more to gain from free trade. To prove this, I will have to digress a little from the form this article should take. I will nevertheless do this, first of all because this is the nub of the matter and also because it will give me the opportunity of setting out a law of economics of the greatest importance which, when correctly understood, seems to me to be destined to bring back into the fold of science all the sects that these days seek in the land of illusion the social harmony that they have been unable to discover in nature. I wish to speak about the law of consumption, which the majority of economists may be blamed for having too long much neglected.
Consumption is the end, the final purpose of all economic phenomena, in which purpose consequently lies their final, definitive solution.
Nothing favorable or unfavorable can stop permanently at the producer’s door. The advantages that nature and society have heaped on him, like the disadvantages that afflict him, slide over him,7 so to speak, and tend to be unconsciously absorbed by, mingled with, the community, understood from the point of view of consumption. We have here a law that is admirable in its cause and its effects alike, and the man who succeeds in describing it properly will have, I think, the right to say, “I have not spent time on this earth without contributing something to society.”
Any circumstance that encourages production is welcomed joyfully by the producer since its immediate effect is to put him in a position to provide even more services to the community and to demand greater remuneration from it. Any circumstance that hampers production is received with disappointment by the producer since its immediate effect is to limit his services and therefore his remuneration. It was necessary for the immediate gains and losses resulting from fortunate or unfortunate circumstances to be the lot of the producer, so that he would be irresistibly drawn to seeking the former and avoiding the latter.
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In the same way, when a worker succeeds in improving his output, he receives the immediate benefit of this improvement. This was necessary for him to be motivated to work intelligently; it was proper because an effort crowned with success ought to bring its reward with it.
But I hold that these good and bad effects, although permanent in themselves, are not so for producers. If this were so, a principle of gradual and subsequently infinite inequality between men would have been introduced, and this is why these favorable and unfavorable events are soon absorbed into the general fortunes of the human race.
How does this work? I will give a few examples to help it to be understood.
Let us go back to the thirteenth century.8 The men who devoted themselves to the art of copying received for their services payment that was governed by the general level of profits. Among them, there happened to be one who sought and discovered the means to increase the copies of the same book rapidly. He invented printing.
In the first instance, one man became richer and many others grew poorer. At first glance, however marvelous the discovery was, people hesitated as to whether it was not more disastrous than useful. It seemed that it was introducing into the world, just as I said, an element of indefinite inequality. Gutenberg made money with his invention and extended his invention using this money, and did this ad infinitum until he had ruined all other copiers. As for the public, the consumers, they gained little, for Gutenberg took care to decrease the price for his books to no more than was necessary to undercut his rivals.
But the thought that put harmony into the movement of the heavenly bodies was also able to insert it into the internal mechanisms of society. We will see the economic advantages of the invention escape from one individual and become the common and eternal heritage of the masses.
In the event, the procedure ended up by becoming known. Gutenberg was no longer the only printer; others imitated him. Their profits were at first considerable. They were rewarded for being the first to go down the path of imitation, and this was still necessary in order to attract them and so that they could contribute to the great result we were approaching. They earned a great deal, but less than the inventor, since competition had begun to work. The price of books continued to decrease. The profits of the imitators decreased as
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the date of the invention receded, that is to say, as imitation became less meritorious. Soon the new industry reached its normal state, in other words, the pay given to printers was no longer exceptional and, as for scribes in former times, it was governed only by the general level of profitability. Thus production, as such, returned to what it had been at the beginning. The invention was, nevertheless, no less of a boon; the saving in time, work, and effort for a given result, for a determined number of items, was nonetheless achieved. But how does it manifest itself? Through the low price of books. And for whose benefit? For the benefit of consumers, society, and the human race. Printers, who now have no exceptional merit, no longer receive exceptional remuneration. As men and consumers, they are doubtless beneficiaries of the advantages that the invention has bestowed on the community. But that is all. As printers and as producers, they are once again subject to the common conditions governing all producers in the country. Society pays them for their work, and not for the usefulness of the invention. The invention itself has become part of the common heritage and free to the entire human race.
I admit that the wisdom and beauty of these laws have struck me with admiration and respect. I see Saint-Simonist doctrines9 in them: To each according to his capacity, to each capacity according to his work. I see communism in them, that is to say, the tendency for property to become the common heritage of men. But this is a Saint-Simonism and a communism governed by infinite farsightedness, and not in the slightest abandoned to the fragility, passions, and arbitrary rule of men.
What I have said about printing can be said about all the tools of work, from the hammer and nail to the locomotive and electric telegraph. Society benefits from everything through the abundance of the things it consumes, and benefits from these freely, for their effect is to reduce the price of objects; and the entire portion of the price that has been abolished and that represents fully the contribution of the invention in the production process obviously makes the product free to this extent. All that remains to be paid for is the human work, the work done now, and this is paid for regardless of the
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resulting benefit of the invention, at least where it has gone through the cycle I have just described and which it is destined to go through. I call a workman to my home; he arrives with a saw, I pay two francs for his day’s work, and he produces twenty-five planks. If the saw had not been invented, he would probably not have made a single plank and I would not have paid him any less for his day’s work. The usefulness produced by the saw is therefore a free gift of nature to me; or rather it is a portion of the heritage I have received, in common with all my fellows, from the intelligence of our ancestors. I have two workers in my field. One holds the handles of a plough, the other the handle of a spade. The result of their work is very different, but their day’s pay is the same since pay is not subject to the usefulness produced but to the effort or the work required.
I call upon the reader’s patience and beg him to believe that I have not lost sight of commercial freedom. Let him just remember the conclusion that I have reached: Remuneration is not in proportion to the useful contributions that the producer brings to the market but to his work.10
I have taken my examples from human inventions. Let us now talk about natural advantages.
All products incorporate a contribution from both nature and man. However, the portion of usefulness contributed by nature is always free. Only that portion of usefulness resulting from human work is subject to exchange and consequently to remuneration. This doubtless varies a great deal because of the intensity of the work, the skill required, its promptness, its relevance, the need for it, the temporary absence of competition, etc., etc. But it is no less true in principle that the contribution of natural laws, which belong to everyone, does not enter into the price of the product.
We do not pay for the air we breathe, although it is so useful to us that we would not be able to live for two minutes without it. In spite of this, we do not pay for it because nature supplies it to us without any human intervention. If, however, we wish, for example, to separate out one of the gases that make it up to carry out an experiment, we have to make a certain effort or, if we have someone else make the effort, we will have to sacrifice to him an equivalent amount of effort that we have put into another product. In this way we see that there is an exchange in pain, effort, and work. It is not really
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for oxygen that I am paying, since it is available to me everywhere, but for the effort required to separate it out, work that I have been spared and which I need to compensate. Will I be told that other things, such as expenses, materials, or apparatus, need to be paid for? Once again, it is the work contained in these things that I am paying for. The price of the coal used represents the work that has needed to be done to extract and transport it.
We do not pay for sunlight since nature lavishes it on us. But we pay for the light obtained from gas, tallow, oil, or wax because this includes human work that requires remuneration. And note that the remuneration is so closely proportioned to the work done and not to its usefulness, that it may well happen that one of these sources of light, even though it is much brighter than the others, is nevertheless less expensive. For this to happen, all that is necessary is for the same quantity of human work to produce more.
When a water carrier comes to supply my house, if I paid him according to the absolute usefulness of the water, my entire fortune would not be enough. However, I pay him according to the trouble he has taken. If he demanded more, others would take over, and in the end, if need be, I would take the trouble myself. Water is not really the subject of our bargain, but in reality the work involved in relation to the water. This point of view is so important and the consequences I am going to draw from it so illuminating, with regard to international free trade, that I feel I have to elucidate my ideas with other examples.
The quantity of nourishment contained in potatoes does not cost us very much because we obtain a great deal with very little work. We pay more for wheat because, in order to produce it, nature requires a great deal of human work. It is obvious that, if nature behaved in the same way for one as for the other, their prices would tend to level out. It is not possible for wheat producers to earn much more on a regular basis than potato producers. The law of competition prevents this.
If, by a happy miracle, the fertility of all arable land happened to increase, it would not be the farmer but the consumer who would reap the advantage of this phenomenon, because the result would be abundance and cheap prices. There would be less labor incorporated in each hectoliter of wheat11 and the farmer would be able to trade it only for less labor incorporated in another product. If, on the contrary, the fertility of the soil suddenly decreased, the contribution by nature to production would be less, the contribution
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of work more, and the product would be more expensive. I was therefore right to say that it is in consumption, in the human race, that all economic phenomena are resolved in the long run. As long as we have not followed their effects to this point, as long as we stop at the immediate effects, those that affect one man or one class of men, as producers, we are not being economists, any more than someone who, instead of monitoring the effects of a potion on the whole of the organism, merely limits himself to observing how it affects the palate or throat in order to judge it, is a doctor.12
Tropical regions are highly suited to the production of sugar and coffee. This means that nature carries out the majority of the task and leaves very little work to be done. Who then reaps the advantages of this generosity of nature? It is not at all these regions, since competition means that they receive payment only for their work; it is the human race, since the result of this generosity is called low prices, and they belong to everyone.
Here we have a temperate zone in which coal and iron ore are on the surface of the land and you have only to bend down to pick it up. In the first instance, the inhabitants benefit from this happy circumstance, I agree. But soon, competition will start and the price of coal and iron will decrease to the point where the gift of nature is free to everyone and human work alone is remunerated in accordance with the general level of profitability.
In this way, the generosity of nature, like the advances made in production processes, is or constantly tends to become the common and free heritage of consumers, the masses, and the human race, in accordance with the law of competition. Therefore the countries that do not have these advantages have everything to gain from trading with those that do, because it is work which is exchanged, setting aside the natural utilities that work encompasses; and obviously the countries that are most favored have incorporated the most of these natural utilities in a given amount of production. Their products, since they represent less work, fetch lower prices; in other words, they are cheaper, and if all the generosity of nature results in cheapness, obviously it is not the producing country but the consuming country that receives the benefit.
From this we see the immense absurdity of this consumer country if it
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rejects a product precisely because it is cheap; it is as though it were saying: “I do not want anything that nature provides. You are asking me for an effort worth two in order to give me a product that I can create only with work worth four; you can do this because in your country nature has accomplished half of the work. Well then! I for my part will reject it and I will wait until your climate has become more inclement and forces you to require work worth four from me, so that we may trade on an equal footing.”
A is a favored country. B is a country ill-treated by nature. I say that trade is beneficial to both of them and especially to B since the trade is not in utilities for utilities but in value for value. Well, A includes more utilities in the same value, since the utility of the product encompasses what nature has contributed to it as well as what work has contributed, whereas the value corresponds only to what work has contributed. Therefore, B strikes a bargain that is wholly to its advantage. In paying the producer in A simply for his work, it receives more natural utilities that it gives over and above the trade.13
Let us set out the general rule.
A trade is an exchange of values; since the value is reduced by competition to the work involved, trade is thus an exchange of equal work. What nature has provided to the products being traded is given from one to the other freely and over and above the trade, from which it strictly follows that trade with the countries most favored by nature are the most advantageous.
The theory whose lines and contours I have tried to trace in this article needs to be developed more fully. I have discussed it as it relates to my subject, commercial freedom. But perhaps an attentive reader will have perceived the fertile seed, the growth and spread of which will necessarily stifle protection, along with protectionism, Fourierism,14 Saint-Simonism, communism, and all the schools whose object is to exclude the law of COMPETITION from the governance of the world. Considered from the point of view of producers,
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competition doubtless upsets our individual and immediate interests, but if you consider it from the point of view of the general aim of all production, of universal well-being, in a word, of consumption, you will find that competition accomplishes the same role in a moral world as equilibrium does in a material one. Competition is the foundation of genuine communism, true socialism, and the equality of well-being and conditions, so longed for these days, and if so many sincere political writers, so many reformers of good faith, demand this equality from arbitrary government power, it is because they do not understand freedom.
5. Our Products Are Weighed Down with Taxes
PUBLISHING HISTORY:
Original title: “Nos produits sont grevés de taxes.”
Place and date of first publication: JDE 11 (July 1845): 356–60.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 46–52.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
This is the same sophism. People demand that foreign products be taxed in order to neutralize the effects of the taxation that burdens our national products. This too, then, is about equalizing the conditions of production. The only observation we would want to make is that tax is an artificial obstacle with exactly the same result as a natural obstacle: it forces prices to rise. If this rise reaches the point at which a greater loss is incurred in creating the product itself than there is in bringing it in from outside and creating a countervalue for it, let it happen.1 Private interest will be fully capable of choosing the lesser of two evils. I could therefore refer the reader back to the preceding argument, but the sophism that I have to combat here recurs so often in the complaints and appeals, I might almost say the pressing claims, of the protectionist school, that it is well worth discussing it separately.
If we want to discuss one of those special taxes to which certain products
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are subject, I will readily agree that it is reasonable to subject foreign products to these also. For example, it would be absurd to exempt foreign salt from tax, not that from an economic point of view France loses anything, on the contrary. Whatever we say about this, principles are constant, and France would gain, just as she will always gain from avoiding a natural or artificial obstacle. However, here the obstacle has been established with a fiscal aim. This aim has to be achieved, and if foreign salt were to be sold in our market free of duty, the treasury would not recover its hundred million and would have to exact this amount from some other form of taxation. It would quite evidently be contradictory to put in the way of a specific policy an obstacle calculated to prevent it. It would have been better to address this other tax first of all and not tax French salt.2 These are the circumstances that I accept for inflicting a duty that is not protectionist but fiscal on a foreign product.
But to claim that a nation has to protect itself through tariffs against competition from a rival because it is subject to heavier taxes than a neighboring country, this is where the sophism lies, and this is what I intend to attack.
I have said several times that I intend only to set out a theory and go back, as far as I am able, to the sources of the protectionists’ errors. If I were indulging in polemics, I would say to them, “Why are you aiming tariffs principally against England and Belgium, the countries in the world that are most burdened with taxes? Am I not entitled to see in your argument only a pretext?” However, I am not one of those who believe that people are protectionist through interest and not through conviction. Protectionist doctrine is too popular not to be sincere. If the majority had faith in freedom, we would be free. Doubtless it is private interest that causes our tariffs to weigh down on us so heavily, but this is after it has acted on our convictions. “Will,” said Pascal, “is one of the principal organs of belief.”3 However, belief is no less real for having its roots in will and in the secret inspiration of egoism.
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Let us return to the sophism derived from taxation.
The state can make good or bad use of taxes; it makes good use of them when it provides the public with services that are equivalent to the flow of revenue the public contributes to it. It makes bad use of them when it squanders these resources without giving anything in return.
In the first case, to say that taxes put the country that pays them in a less favorable position with regard to production than one that does not pay them is a sophism. We pay twenty million for law and the police,4 it is true, but we have law and the police, the security they provide us, and the time they save us, and it is highly probable that production is neither easier nor more active in those nations, if they exist, where everyone carries out law and order for himself. We pay several hundred million for roads, bridges, ports, and railways, I agree.5 But we have these railways, ports, and roads, and unless we claim that we are making a bad bargain in building them, nobody can say that they make us inferior to those peoples who, it is true, do not contribute to a budget for public works but do not have any public works either. And this explains why, while accusing taxes of being one of the causes of inferior industrial capacity, we aim our tariffs precisely against those nations that are the most taxed. It is because taxes, when used well, far from damaging them, have improved the conditions of production of these nations. So we always come to the same conclusion, that protectionist sophisms not only depart from the truth but are also contrary, are the direct opposite, to the truth.
As for taxes that are unproductive, abolish them if you can. The strangest conceivable way of neutralizing their effects, however, is surely to add specific individual taxes to public ones. Spare us any such compensation! The state has taxed us too much, you say. Well then, all the more reason for our not taxing each other any further!
A protectionist duty is a tax aimed against a foreign product but which falls, and let us never forget this, on the national consumer. Now, the consumer
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is a taxpayer. And is it not ludicrous to say to him: “Since taxes are heavy, we are going to raise the prices of everything to you; since the state takes a part of your income, we are going to pay another part to the monopoly”?
But let us probe further a sophism so esteemed by our legislators, although it is rather extraordinary that it is precisely those who maintain unproductive taxes (the proposition I am drawing your attention to now) who are attributing our alleged industrial inferiority to them in order to make this good subsequently through other taxes and restrictions.
It appears obvious to me that, without changing its nature and effects, protection might have taken the form of a direct tax raised by the state and distributed through indemnity subsidies to privileged industries.
Let us assume that foreign iron can be sold in our market at 8 francs and no lower and French iron at 12 francs and not below this.
Under such circumstances, the state has two ways of ensuring that the national producer retains a dominant position in the market.
The first is to subject foreign iron to a duty of 5 francs. It is clear that foreign iron would be excluded since it could now be sold only at 13 francs, 8 francs being the cost price and 5 francs the tax, and that at this price it would be chased out of the market by French iron, which we have taken to cost 12 francs. In this case, the purchaser, the consumer, will have paid all the costs of this protection.
The state might also have imposed a tax of 5 francs on the public and given it as a subsidy to ironmasters. The protectionist effect would have been the same. Foreign iron would have been equally excluded, since our ironmaster would have sold at 7 francs which, with the subsidy of 5 francs, would give him his profitable price of 12 francs. However, faced with iron at 7 francs, foreigners would not be able to deliver theirs at 8.
I can see only one difference between these two systems: the principle is the same and the effect is the same, except that in one case protection is paid for by a few and in the other by all.
I admit frankly my preference for the second system. It seems to me more just, more economic, and more straightforward. More just because if society wants to give handouts to a few of its members, everyone has to contribute; more economic because it would save a great deal in collection costs and would cause a great many restrictions to disappear; and finally, more straightforward since the public would see clearly how the operation worked and what they were being made to do.
If the protectionist system had taken this form, however, would it not be rather risible to hear it said, “We pay heavy taxes for the army, navy, law and
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order, public works, the university, the national debt, etc., and this exceeds a billion.6 For this reason, it would be a good thing if the state took another billion from us to ease the situation of these poor ironmasters, these poor shareholders of Anzin,7 these unfortunate owners of forests, and these cod fishermen who are so useful.”
If you look closely, you will see that this is what the significance of the sophism I am combating is reduced to. Whatever you do, sirs, you can give money to some only by taking it from others. If you genuinely wish to drain taxpayers dry, go ahead, but at least do not mock them and say to them, “I am taking from you to compensate you for what I have already taken from you.”
We would never reach the end of it if we wished to note everything that is false in this sophism. I will limit myself to three considerations.
You win acceptance for the fact that France is burdened with taxes in order to infer that such and such an industry ought to be protected. But we have to pay these taxes in spite of protection. If therefore an industry comes forward and says, “I contribute to the payment of taxes; this raises the cost price of my products and I demand that a protectionist duty should also raise the sales price,” what else is it demanding than to discharge its tax onto the rest of the community? It claims to be recouping the increase in tax it has paid by raising the price of its products. So, as all taxes have always to be paid to the treasury, and as the masses have to bear this increase in price, they pay both their taxes and those of this industry. “But,” you will say, “everyone is being protected.” Firstly, this is impossible and, even if it were possible, where would the relief be? I am paying for you and you for me; but the tax still needs to be paid.
In this way, you are being fooled by an illusion. You want to pay taxes to have an army, a navy, a religion, a university, judges, roads, etc., and then you want to relieve of its share of taxes first one industry, then a second, and then a third, always by sharing the burden among the masses. But you are doing nothing other than creating interminable complications, with no other result than these complications themselves. Prove to me that the increase in price resulting from protection falls on foreigners, and I will be able to see something specious in your argument. But if it is true that the French public paid
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the tax before the law and that after the law it paid both the protection and the tax, then I really do not see what it gains by this.
I will even go much further; I say that the heavier our taxes are, the more we should be in a hurry to open our ports and frontiers to foreigners who are less taxed than us. Why? In order to pass on to them a greater part of our burden. Is it not an undeniable axiom in political economy that, in the long run, taxes fall on the consumer? The more our trading transactions are increased, the more foreign consumers will reimburse us the taxes included in the products we sell them, while we would have to make them in this respect only a lesser restitution, since according to our hypothesis their products are less taxed than ours.
In sum, have you never asked whether these heavy taxes that you use in argument to justify the protectionist regime are not caused by this regime itself? I would like to be told what the great standing armies and the powerful navies would be used for if trade were free8 … But this is a question for politicians,
And let us not confuse, by going too deeply,
Their business with ours.9
PUBLISHING HISTORY:
Original title: “Balance du commerce.”
Place and date of first publication: JDE 12 (October 1845): 201–4.
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First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 52–57.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
Our opponents have adopted a tactic which we cannot help feeling embarrassed about. Are we getting our views across? They accept them with the utmost respect. Are we attacking their fundamental approach? They abandon it with the best grace in the world. They ask for only one thing, which is that our views, which they hold to be true, should be relegated to books and that their approach, which they acknowledge to be faulty, should reign over the carrying out of business. Leave them the handling of tariffs and they will not dispute your having the domain of theory.
“Certainly”, said M. Gaulthier de Rumilly1 recently, “none of us wants to resurrect the old theories on the balance of trade.” Very well, but M. Gaulthier, it is not enough just to administer a slap in the face to error as you pass by; you must also desist from reasoning immediately afterward and for two hours at a time as though this error was the truth.
Talk to me about M. Lestiboudois.2 Here is someone who reasons consistently, a logician who can debate. There is nothing in his conclusions that is not in his premises: he asks nothing of practice that he cannot justify in theory. His basic ideas may be false, and that is indeed the dispute. But at least he has some basic ideas. He believes and proclaims loudly that if France pays ten to receive fifteen it is losing five, and he quite straightforwardly makes laws in this light.
“What is important,” he says, ”is that the figure for imports is constantly increasing and exceeds that for exports, that is to say, each year France purchases more foreign products and sells fewer products produced nationally. The figures are there to prove it. What do we see? In 1842, we see imports
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exceed exports by 200 million.3 These facts appear to me to prove with utter clarity that national work is not sufficiently protected, that we let foreign work take care of our needs and that competition from our rivals is beating our industry down. The law currently in force appears to sanction the fact that it is not true, contrary to what economists say, that when we buy we sell of necessity a corresponding portion of goods. It is obvious that we can buy things, not with our customary products, not with our income, not with the fruit of ongoing production but with our capital, with products that have been accumulated and saved and those used for making more, that is to say, we can spend and dissipate the profits of previous savings, that we can grow poorer and march toward our ruin and that we can consume the national capital in its entirety. This is exactly what we are doing. Each year, we give 200 million to foreigners.”
Well then, here is a man with whom we can agree. His language contains no hypocrisy. The balance of trade is set out clearly. France imports 200 million more than it exports. Therefore, France is losing 200 million a year. And the remedy? To prevent imports. The conclusion is irreproachable.
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It is therefore M. Lestiboudois whom we are going to attack, for how can we combat M. Gaulthier? If you say to him, “The balance of trade is a mistake,” he will reply to you, “That is what I have put forward in my introductory remarks.” If you exclaim, “But the balance of trade is a truth,” he will reply to you, “That is what I have stated in my conclusions.” The Economist School4 will doubtless criticize me for debating with M. Lestiboudois. Combating the balance of trade, I will be told, is like tilting at windmills.
Take care, however; the balance of trade is neither as old, nor as sick, nor as dead as M. Gaulthier wishes to tell us, for the entire Chamber, including M. Gaulthier himself, aligned themselves with M. Lestiboudois’s theory through their vote.
However, in order not to tire the reader, I will not go into this theory. I will content myself with subjecting it to the test of facts.
Our principles are constantly being accused of being correct only in theory. But tell me, sirs, do you believe that the account books of businessmen are correct in practice? It seems to me that, if there is anything in the world that has practical authority when it is a question of ascertaining profits and losses, it is commercial accounting. Apparently all the traders on earth have not agreed down the centuries to keep their books in such a fashion that profits are shown as losses and losses as profits. Truly, I would prefer to believe that M. Lestiboudois is a bad economist.
Well, when one of my friends, who is a trader, completed two operations with very contrasting results, I was curious to compare the accounts of the warehouse with those of the customs service, interpreted by M. Lestiboudois with the sanction of our six hundred legislators.
M.T. shipped from Le Havre to the United States a cargo of French goods, in the majority products known as articles de Paris,5 for an amount of 200,000 fr. This was the figure declared to the customs. When it arrived in New Orleans, it was found that the cargo had incurred 10 percent of costs and paid 30 percent in duty, which made it worth 280,000 fr. It was sold at a profit of 20 percent, or 40,000 fr., and produced a total of 320,000 fr., which the consignee converted into cotton. These cotton goods further had to bear 10 percent costs for transport, insurance, commission, etc., so that, when it entered Le Havre, the new cargo was worth 352,000 fr., and this was the figure recorded in the registers of the customs. Lastly, M.T. made another
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20 percent profit on this return shipment, or 70,400 fr.; in other words, the cotton goods were sold for 422,400 fr.
If M. Lestiboudois requires it, I will send him an excerpt from M.T.’s books. He will see there under the credits of the profit and loss account, that is to say as profits, two entries, one for 40,000, the other for 70,400 fr., and M.T. is totally convinced that in this respect his accounts are not misleading him.
However, what do the figures that the customs have recorded regarding this operation tell M. Lestiboudois? They tell him that France has exported 200,000 fr. and that it has imported 352,000 fr., from which the honorable deputy concludes “that it has spent and dissipated the profits of previous savings, that it has impoverished itself, that it is marching toward ruin, and that it has given 152,000 fr. of capital to foreigners.”
A short time afterward, M.T. shipped another cargo of nationally produced goods worth 200,000 fr. But the unfortunate ship foundered on leaving the port, and M.T. was left with no alternative but to record in his books two short entries, as follows:
Various goods debited to X for 200,000 fr. for the purchase of various articles shipped by the boat N.
Profit and loss due to various goods 200,000 fr. for the total and final loss of the cargo.
In the meantime, the customs had recorded for its part 200,000 fr. on its export table, and since it will never have anything to record on the imports table, it follows that M. Lestiboudois and the Chamber will see in this shipwreck a clear, net profit of 200,000 fr. for France.
One more consequence has to be drawn from this, which is that according to the theory of the balance of trade, France has a very simple way of doubling its capital at every moment. To do this, once it has passed it through the customs, it just has to throw it into the sea. In this case, exports will be equal to the amount of its capital; imports will be nil and even impossible, and we will gain everything that the ocean has swallowed up.
This is a joke, the protectionists will say. It is impossible for us to say such absurd things. However, you are saying them and what is more, you are doing them; you are imposing them in practice on your fellow citizens, at least as far as you are able.
The truth is that the balance of trade would have to be taken backward and national profit in foreign trade calculated through the excess of imports over exports. This excess, with costs deducted, is the genuine profit. But
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this theory, which is the correct one, leads directly to free trade. I hand this theory to you, sirs, like all the others that were the subject of the previous chapters. Exaggerate it as much as you like, it has nothing to fear from such a test. Assume, if that amuses you, that foreigners swamp us with all sorts of useful goods without asking us for anything; if our imports are infinite and our exports nil, I challenge you to prove to me that we would be the poorer for this.6
7. Petition by the Manufacturers of Candles, Etc.
PUBLISHING HISTORY:
Original title: “Pétition des fabricants de chandelles, etc.”
Place and date of first publication: JDE 12 (October 1845): 204–7.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 57–62.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
By the manufacturers of tallow candles, wax candles, lamps, candlesticks, street lamps, snuffers, extinguishers, and producers of tallow, oil, resin, alcohol, and in general everything that relates to lighting
To Honorable Members of the Chamber of Deputies
Sirs,
You are doing all right for yourselves. You are rejecting abstract theories; abundance and cheapness are of little account to you. You are concerned most of all with the fate of producers. You want them to be free from foreign competition, in a word, you want to keep the domestic market for domestic labor.
We come to offer you a wonderful opportunity to apply your … what will we call it? Your theory? No, nothing is more misleading than theory. Your doctrine? Your system? Your principles? But you do not like doctrines, you
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have a horror of systems, and as for principles, you declare that none exists in the economic life of society. We will therefore call it your practice, your practice with no theory and no principle.
We are suffering from the intolerable competition of a foreign rival whose situation with regard to the production of light, it appears, is so far superior to ours that it is flooding our national market at a price that is astonishingly low for, as soon as he comes on the scene, our sales cease, all consumers go to him, and a sector of French industry whose ramifications are countless is suddenly afflicted with total stagnation. This rival, which is none other than the sun, is waging such a bitter war against us that we suspect that it is instigated by perfidious Albion (good diplomacy in the current climate!), especially as it treats this proud island in a way which it denies us.1
We ask you to be good enough to pass a law which orders the closure of all windows, gables, shades, windbreaks, shutters, curtains, skylights, fanlights, blinds, in a word, all openings, holes, slits, and cracks through which the light of the sun is accustomed to penetrate into houses to the disadvantage of the fine industries that we flatter ourselves that we have given to the country, which cannot now abandon us to such an unequal struggle without being guilty of ingratitude.
Deputies, please do not take our request for satire and do not reject it without at least listening to the reasons we have to support us.
Firstly, if you forbid as far as possible any access to natural light, if you thus create a need for artificial light, what industry in France would not bit by bit be encouraged?
If more tallow is consumed, more cattle and sheep will be needed, and consequently we will see an increase in artificial meadows, meat, wool, leather, and, above all, fertilizer, the basis of all agricultural wealth.
If more oil is consumed, we will see an expansion in the cultivation of poppies, olive trees, and rapeseed. These rich and soil-exhausting plants will
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be just the thing to take advantage of the fertility that the rearing of animals will have contributed to our land.
Our moorlands will be covered with coniferous trees. Countless swarms of bees will gather from our mountains scented treasures which now evaporate uselessly like the flowers from which they emanate. There is thus no sector of agriculture that will not experience significant development.
The same is true for shipping. Thousands of ships will go to catch whales, and in a short time we will have a navy capable of upholding the honor of France and satisfying the patriotic susceptibility of us who petition you, the sellers of tallow candles, etc.
But what have we to say about Articles de Paris?2 You can already picture the gilt work, bronzes, and crystal in candlesticks, lamps, chandeliers, and candelabra shining in spacious stores compared with which today’s shops are nothing but boutiques.
Even the poor resin tapper on top of his sand dune or the poor miner in the depths of his black shaft would see his earnings and well-being improved.
Think about it, sirs, and you will remain convinced that perhaps there is not one Frenchman, from the wealthy shareholder of Anzin to a humble match seller, whose fate would not be improved by the success of our request.
We anticipate your objections, sirs, but you cannot put forward a single one that you have not culled from the well-thumbed books of the supporters of free trade. We dare to challenge you to say one word against us that will not be turned instantly against yourselves and the principle that governs your entire policy.
Will you tell us that if we succeed in this protection France will gain nothing, since consumers will bear its costs?
Our reply to you is this:
You no longer have the right to invoke the interests of the consumer. When the latter was in conflict with the producers, you sacrificed him on every occasion. You did this to stimulate production and to increase its domain. For the same reason, you should do this once again.
You yourselves have forestalled the objection. When you were told: “Consumers have an interest in the free introduction of iron, coal, sesame, wheat, and cloth,” you replied: “Yes, but producers have an interest in their exclusion.” Well then, if consumers have an interest in the admission of natural light, producers have one in its prohibition.
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“But,” you also said, “producers and consumers are one and the same. If manufacturers gain from protection, they will cause agriculture to gain. If agriculture prospers, it will provide markets for factories.” Well then, if you grant us the monopoly of lighting during the day, first of all we will purchase a great deal of tallow, charcoal, oil, resin, wax, alcohol, silver, iron, bronze, and crystal to fuel our industry and, what is more, once we and our countless suppliers have become rich, we will consume a great deal and spread affluence throughout the sectors of the nation’s production.
Will you say that sunlight is a free gift and that to reject free gifts would be to reject wealth itself, even under the pretext of stimulating the means of acquiring it?
Just take note that you have a fatal flaw at the heart of your policy and that up to now you have always rejected foreign products because they come close to being free gifts and all the more so to the degree that they come closer to this. You had only a half reason to accede to the demands of other monopolists; to accede to our request, you have a complete reason and to reject us precisely on the basis that we are better founded would be to advance the equation + x + = −; in other words, it would be to pile absurdity on absurdity.
Work and nature contribute in varying proportions to the production of a product, depending on the country and climate. The portion provided by nature is always free; it is the portion which labor contributes that establishes its value and is paid for.
If an orange from Lisbon is sold at half the price of an orange from Paris, it is because natural and consequently free heat gives to one what the other owes to artificial and consequently expensive heat.
Therefore, when an orange reaches us from Portugal, it can be said that it is given to us half-free and half-paid for, or in other words, at half the price compared to the one from Paris.
Well, it is precisely its being half-free (excuse the expression) that you use as an argument to exclude it. You say, “How can domestic labor withstand the competition of foreign labor when domestic labor has to do everything and foreign labor only half of the task, with the sun accomplishing the rest?” But if this matter of things being half-free persuades you to reject competition, how will things being totally free lead you to accept competition? Either you are not logicians or, in rejecting half-free products as harmful to our domestic economy, you have to reject totally free goods a fortiori and with twice as much zeal.
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Once again, when a product, coal, iron, wheat, or cloth, comes to us from abroad and if we can acquire it with less work than if we made it ourselves, the difference is a free gift bestowed on us. This gift is more or less significant depending on whether the difference is greater or lesser. It ranges from one-quarter to half or three-quarters of the value of the product if foreigners ask us only for three-quarters, half, or one-quarter of the payment. It is as total as it can be when the donor asks nothing from us, like the sun for light. The question, which we set out formally, is to know whether you want for France the benefit of free consumption or the alleged advantages of expensive production. Make your choice, but be logical, for as long as you reject, as you do, foreign coal, iron, wheat, and cloth, the closer their price gets to zero, how inconsistent would it be to accept sunlight, whose cost is zero, throughout the day?
PUBLISHING HISTORY:
Original title: “Droits différentiels.”
Place and date of first publication: JDE 12 (October 1845): 207–8.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 62–63.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
A poor farmer in the Gironde had lovingly cultivated a vine. After a lot of tiring work, he finally had the joy of producing a cask of wine, and he forgot that each drop of this precious nectar had cost his forehead one drop of sweat. “I will sell it,” he told his wife, “and with the money I will buy some yarn with which you will make our daughter’s trousseau.” The honest farmer went to town and met a Belgian and an Englishman. The Belgian said to him, “Give me your cask of wine and in exchange I will give you fifteen reels of yarn.” The Englishman said, “Give me your wine and I will give you twenty reels of yarn, for we English spin more cheaply than the Belgians.” However, a customs officer who happened to be there said, “My good man,
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trade with the Belgian if you like, but my job is to prevent you from trading with the Englishman.” “What!” said the farmer, “you want me to be content with fifteen reels of yarn from Brussels when I can have twenty from Manchester?” “Certainly, do you not see that France would be the loser if you received twenty reels instead of fifteen?” “I find it difficult to understand this,” said the wine producer. “And I to explain it,” went on the customs officer, “but this is a fact, for all the deputies, ministers, and journalists agree on this point, that the more a people receive in exchange for a given quantity of their products, the poorer they become.” He had to conclude the bargain with the Belgian. The farmer’s daughter had only three-quarters of her trousseau, and these honest people still ask themselves how it can be that you are ruined by receiving four instead of three and why you are richer with three dozen napkins than with four dozen.
PUBLISHING HISTORY:
Original title: “Immense découverte!!!”
Place and date of first publication: JDE 12 (October 1845): 208–11.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 63–67.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
At a time when all minds are occupied with searching for savings on various means of transport;
At a time when, in order to achieve these savings, we are leveling roads, canalizing rivers, improving steamships, and linking all our frontiers to Paris by an iron network, by traction systems that are atmospheric, hydraulic, pneumatic, electrical, etc.;1
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Finally, at a time when I simply have to believe that everyone is enthusiastically and sincerely seeking the solution to the following problem:
“To ensure that the price of things at their place of consumption is as close as possible to their price at their place of production.”
I would feel guilty toward my country, my century, and myself if I kept secret any longer the marvelous discovery I have just made.
For while the inventor’s illusions may well be legendary, I am as certain as I can be that I have found an infallible means that ensures that products from around the world reach France and vice versa with a considerable reduction in their prices.
Infallible! This is just one of the advantages of my astonishing invention.
It requires neither a drawing, an estimate, nor preliminary studies, nor any engineers, machine operators, entrepreneurs, capital, shareholders, nor help from the government!
It offers no risk of shipwreck, explosion, shocks, fire, or derailment!
It can be put into practice in less than a day!
Lastly, and this will doubtless recommend it to the public, it will not cost the budget one centime, far from it. It will not increase the numbers of civil servants and the requirements of bureaucracy, far from it. It will not cost anyone his freedom, far from it.
It is not by chance that I have come about my discovery; it is through observation. I have to tell you now what led me to it.
This in fact was the question I had to solve:
“Why does something made in Brussels, for example, cost more when it reaches Paris?”
Well, it did not take me long to see that this is a result of the fact that there are several types of obstacles between Paris and Brussels. First of all, there is distance; we cannot cover this without a certain difficulty and loss of time, and we either have to subject ourselves to this or pay someone else to. Next come the rivers, the marshes, the lay of the land, and the mud; these are so many difficulties to be overcome. We do this by constructing roadways, building bridges, cutting roads, and reducing their resistance through the use
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of cobbles, iron bands, etc. But all this has a cost, and the object being carried must bear its share of these costs. There are also thieves on the roads, which necessitates a gendarmerie, a police force, etc.
Well, among these obstacles, there is one that we have set up ourselves, and at great expense, between Brussels and Paris. This is the men lying in ambush all along the frontier, armed to the teeth and responsible for placing difficulties in the way of the transport of goods from one country to the other. We call them customs officers. They act in exactly the same way as mud or ruts in the road. They delay, hinder, and contribute to the difference we have noted between the cost of production and the consumer price, a difference which it is our problem to decrease as far as possible.
And now we have solved the problem. Reduce tariffs.
You will have built the Northern railway line without it having cost you a penny. Furthermore, you will save heavy expenditure and you will begin to put capital in your pocket right from the first day.
Really, I ask myself how it was possible for enough strange ideas to have gotten into our heads that we were persuaded to pay many millions with a view to destroying the natural obstacles lying between France and foreign countries and at the same time to pay many other millions to substitute artificial obstacles for them which have exactly the same effect, so that the obstacles created counteract those destroyed, things go on as before and the result of the operation is double expenditure.
A Belgian product worth 20 fr. in Brussels fetches 30 when it reaches Paris, because of transport costs. A similar product of Parisian manufacture costs 40 fr. So what do we do about it?
First, we put a duty of at least 10 fr. on the Belgian product in order to raise its cost price in Paris to 40 fr., and we pay a host of supervisors to ensure that it does not escape this duty, with the result that during the journey 10 fr. is charged for transport and 10 fr. for tax.
Having done this, we reason thus: transport from Brussels to Paris, which costs 10 fr., is very expensive. Let us spend two or three hundred million on railways, and we will reduce it by half.2 Obviously, all that we will have obtained is that the Belgian product will be sold in Paris for 35 fr., that is to say:
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| 20 fr. | its price in Brussels |
| 10 fr. | duty |
| 5 fr. | reduced transport by rail |
| 35 fr. | total, or the cost price in Paris |
Well, would we not have achieved the same result by lowering the tariff to 5 fr.? We would then have:
| 20 fr. | its price in Brussels |
| 5 fr. | reduced duty |
| 10 fr. | transport by ordinary road |
| 35 fr. | total, or the cost price in Paris |
And this procedure would have saved us the 200 million that the railway costs, plus the cost of customs surveillance, since these are bound to decrease as the incentive to smuggle decreases.
But, people will say, the duty is necessary to protect Parisian industry. So be it, but then do not ruin the effect with your railway.
For if you persist in wanting the Belgian product to cost 40 fr. like the Parisian one, you will have to raise the duty to 15 fr. to have:
| 20 fr. | its price in Brussels |
| 15 fr. | protectionist duty |
| 5 fr. | transport by rail |
| 40 fr. | total with prices equalized. |
Then my question is, from this point of view, what is the use of the railway?
Frankly, is it not somewhat humiliating for the nineteenth century to prepare a spectacle of childishness such as this for future ages with such imperturbable seriousness? To be fooled by others is already not very pleasant, but to use the huge system of representation in order to fool yourself is to fool yourself twice over and in a matter of arithmetic, this is something to take down the pride of the century of enlightenment a peg or two.
PUBLISHING HISTORY:
Original title: “Réciprocité.”
Place and date of first publication: JDE 12 (October 1845): 211.
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First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 67–70.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
We have just seen that everything that makes transport expensive during a journey acts to encourage protection or, if you prefer, that protection acts to encourage everything that makes transport expensive.
It is therefore true to say that a tariff is a marsh, a rut or gap in the road, or a steep slope; in a word, an obstacle whose effect results in increasing the difference between the prices of consumption and production. Similarly, it is incontrovertible that marshes or bogs are genuine protective tariffs.
There are people (a few, it is true, but there are some) who are beginning to understand that obstacles are no less obstacles because they are artificial and that our well-being has more to gain from freedom than from protection, precisely for the same reason that makes a canal more favorable than a “sandy, steep and difficult track.”1
But, they say, this freedom has to be mutual. If we reduced our barriers with Spain without Spain reducing hers with us, we would obviously be stupid. Let us therefore sign commercial treaties on the basis of an equitable reciprocity, let us make concessions in return for concessions, and let us make the sacrifice of buying in order to obtain the benefit of selling.
It pains me to tell people who reason thus that, whether they realize it or not, they are thinking along protectionist lines, the only difference being that they are slightly more inconsistent than pure protectionists, just as pure protectionists are more inconsistent than absolute prohibitionists.2
I will demonstrate this through the following fable:
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STULTA AND PUERA3
Once upon a time there were, somewhere or other, two towns, Stulta and Puera. At great expense, they built a road between the two. When it was completed, Stulta said to itself, “Now Puera is flooding us with its products; we had better look into it.” As a result, it created and paid a Corps of Obstructors,4 so called because their mission was to place obstacles in the path of convoys that arrived from Puera. Soon afterward, Puera also had a Corps of Obstructors.
After several centuries had passed, and enlightenment had made considerable progress, such was the growth of Puera’s awareness that it had grasped that these reciprocal obstacles must necessarily be mutually detrimental. It sent a diplomat to Stulta, who, though his words were couched in official terms, effectively said: “We built a road and now we are obstructing it. This is absurd. It would have been better for us to have left things in their original state. First of all, we would not have had to pay for the road, and secondly for the obstacles. In the name of Puera, I have come to suggest to you, not that we suddenly abandon the setting up of mutual obstacles between us, which would be to act in accordance with a principle and we despise principles as much as you do, but to reduce these obstacles a little, taking care to balance our respective sacrifices in this respect equitably.” This was what the diplomat said. Stulta asked for time to consider this. It consulted in turn its manufacturers and its farmers. Finally, after a few years, it declared that the negotiations had broken down.
At this news, the inhabitants of Puera held a council. An old man (who had always been suspected of being secretly bribed by Stulta) stood up and said: “The obstacles created by Stulta damage our sales, and this is terrible. The ones we have created ourselves damage our purchases, and this is
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also terrible. We cannot do anything about the first situation, but the second is in our power. Let us at least free ourselves of one since we cannot get rid of both. Let us abolish our Corps of Obstructors without demanding that Stulta do the same. One day, it will doubtless learn to do its sums better.”
A second councilor, a practical man of action who had no theoretical principles and was imbued with the experience of his ancestors, replied: “Do not listen to this dreamer, this theoretician, this innovator, this utopian,5 this economist, this Stulta-lover.6 We would all be ruined if the obstacles on the road were not equal, in equitable balance between Stulta and Puera. There would be greater difficulty in going than in coming and in exporting than in importing. Compared with Stulta, we would be in the inferior position that Le Havre, Nantes, Bordeaux, Lisbon, London, Hamburg, and New Orleans are in compared with the towns situated at the sources of the Seine, the Loire, the Garonne, the Tagus, the Thames, the Elbe, and the Mississippi, for it is harder to go up rivers than to go down them.” (A voice observed that towns at the mouths of rivers were more prosperous than those at their sources.) “That is not possible.” (The same voice: But it is true.) “Well then, they have prospered contrary to the rules.” Such conclusive reasoning shook the assembly. The speaker succeeded in convincing it by referring to national independence, national honor, national dignity, national production, the flood of products, tributes, and merciless competition; in short, he carried the day for maintaining the obstacles and, if you are interested in this, I can take you to certain countries in which you will see with your own eyes the Corps of Road Builders7 and the Corps of Obstructors working with the best information available to them, in accordance with a decree issued by the same legislative assembly and at the expense of the same taxpayers, the former to clear the road and the latter to obstruct it.
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PUBLISHING HISTORY:
Original title: “Prix absolus.”
Place and date of first publication: JDE 12 (October 1845): 213–15. This chapter was originally numbered 12 in the JDE but became chapter 11 in the book version of Economic Sophisms and incorporated chapter 11, “Stulta et Puera,” from JDE 12: 211–12.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 70–74.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
Do you wish to assess the merits of freedom and protection? Do you wish to understand the effects of an economic phenomenon? Then look for its effects on the abundance or scarcity of things and not on whether prices rise or fall. Be careful of thinking only about nominal prices;1 this will lead you into an inextricable labyrinth.
After establishing that protection makes things more expensive, M. Mathieu de Dombasle adds:
“The increase in prices raises living expenses and consequently the price of labor, (but) each person is compensated for the increase in their expenses by the increase in prices for the things they produce. Thus, if everybody pays more as a consumer, everybody also receives more as a producer.”2
It is clear that this argument can be turned on its head, and we can say: “If everybody receives more as a producer, everybody pays more as a consumer.”
Well, what does that prove? Nothing other than that protection moves wealth about uselessly and unjustly. This is just what plunder does.
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Moreover, to accept that this vast apparatus results in simple mutual compensations, we have to agree with M. de Dombasle’s word “consequently” and be sure that the price of labor rises in line with the price of protected products. This is a question of fact that I pass back to M. Moreau de Jonnès;3 let him please look into whether pay rates have moved upward in line with Anzin mining shares. For my part, I do not think so, because I believe that the price of labor, like all the others, is governed by the relationship between supply and demand. Now, I can quite see that restriction decreases the supply of coal and consequently increases its price, but I see rather less clearly that it increases the demand for labor to the extent of increasing rates of pay. I see this all the less clearly in that the quantity of labor demanded depends on the capital available. Protection may well cause capital to move and shift from one industry to another, but it cannot increase it by an obole.4
Besides, this highly interesting question will be examined elsewhere. I will return to nominal prices and say that there are no absurdities that cannot be made plausible by reasoning like M. de Dombasle’s.
Imagine that an isolated nation that had a given quantity of cash took pleasure in burning half of what it produced each year, and I will take it on myself to prove, using M. de Dombasle’s theory, that it will not be a whit the less rich.
In effect, following the fire, everything will double in price and inventories taken before and after the disaster will show exactly the same nominal value. But in this case, who will have lost? If Jean buys cloth at a higher price, he will also sell his wheat at a higher price, and if Pierre loses on his purchase of wheat, he will make good on the sale of his cloth. “Each person is compensated (I say) for the increase in the amount of their expenses by the increase in the price for the things they produce; and if everybody pays more as a consumer, everybody receives more as a producer.”
All this is a tissue of confusion rather than science. The truth expressed in its simplest form is this: whether men destroy cloth and wheat by fire or through use, the effect will be the same with respect to the price but not with respect to wealth, for it is precisely in the use of things that wealth or well-being consists.
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In the same way, restriction, while decreasing the abundance of things, may increase their price so that, if you like, in purely monetary terms, each person may be just as rich. But in an inventory, does a record of three hectoliters of wheat at 20 francs or four hectoliters at 15 francs come to the same thing from the point of view of satisfying need because the result is still 60 francs?
And it is to this point of view of consumption that I will incessantly bring protectionists back, since this is the purpose of all our efforts and the solution to all problems.5 I will always say to them: “Is it not true that by hampering trade, by limiting the division of labor, and by forcing labor to grapple with the difficulties of location and temperature, restriction ultimately decreases the quantity produced by a given amount of effort?” And what does it matter that the lesser quantity produced under a protectionist regime has the same nominal value as a larger quantity produced under the regime of freedom? Man does not live by nominal values, but by real products, and the more he has of these products, at whatever price, the richer he is.
When writing the foregoing, I did not expect ever to meet an anti-economist who was sufficiently good as a logician to contend explicitly that the wealth of peoples depends on the monetary value of things irrespective of their abundance. But just look what I have found in the book by M. de Saint-Chamans (page 210):6
“If 15 million francs worth of goods sold abroad is taken from normal production, estimated to be 50 million, the remaining 35 million worth can no longer meet normal demand and will increase in price and will reach a value of 50 million. Then the revenue of the country will be 15 million more.… There will therefore be an increase in wealth of 15 million for the country, exactly the amount of the cash which is imported.”
Is that not ridiculous! If during the year a nation makes 50 million francs’ worth of harvested products and goods, it just has to sell a quarter abroad
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to be a quarter richer! Therefore, if it sold half, it would increase its fortune by half, and if it trades for cash its last wisp of wool and last grain of wheat, it would raise its wealth to 100 million! Producing infinitely high prices through absolute scarcity is a very strange way of becoming wealthier!
Anyway, do you want to assess the merits of the two doctrines? Subject them to the exaggeration test.
According to the doctrine of M. de Saint-Chamans, the French would be just as rich, that is to say, as well provided with everything with a thousandth part of their annual output, since it would be worth a thousand times more.
According to ours, the French would be infinitely rich if their annual output was infinitely abundant and consequently was of no value at all.
12. Does Protection Increase the Rate of Pay?
PUBLISHING HISTORY:
Original title: “La protection élève-t-elle le taux des salaires?”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 74–79.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
An atheist was railing against religion, against priests, and against God. “If you continue,” said one of the audience, himself not very orthodox, “you are going to reconvert me.”
Thus, when we hear our beardless scribblers, romantic writers, reformers, rose-scented and musky writers of serials, gorged on ice cream and champagne, clutching in their portfolios shares of Ganneron, Nord, and Mackenzie1 or having their tirades against the egoism and individualism of the
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century heaped with gold; when we hear them, as I say, railing against the harshness of our institutions, wailing about the wage-earners and the proletariat;2 when we see them raise to the heavens eyes that mourn the sight of the destitution of the working classes, destitution that they never visit save to conjure up lucrative pictures of it, we are tempted to say to them: “If you continue in this way, you will make me indifferent to the fate of the workers.”
Oh, such affectation! This is the sickening disease of our time! Workers, if a serious man, a sincere philanthropist, reveals a picture of your distress or writes a book that makes an impression, a rabble of reformers immediately seizes this prey in its claws. It is turned one way and another, exploited, exaggerated, and squeezed to the point of disgust and ridicule. All that you are thrown by way of a remedy are the high-sounding words, organization and association. You are flattered and fawned upon, and soon workers will be reduced by this to the situation of slaves: responsible men will be ashamed to take up their cause publicly, for how will they be able to introduce a few sensible ideas in the midst of such bland protestations?
But I refuse to adopt this cowardly indifference that is not justified by the affectation that triggers it!
Workers, your situation is strange! You are being robbed, as I will shortly be proving … No, I withdraw that word. Let us banish from our discourse all violent and perhaps misleading expressions, seeing that plunder, clad in the sophisms that conceal it, is carried out, we are expected to believe, against the will of the plunderer and with the consent of those being plundered. But when all is said and done, you are being robbed of the just remuneration for your work and nobody is concerned with achieving justice for you. Oh! If all that was needed to console you were noisy calls for philanthropy, impotent charity, and degrading alms, and if high-sounding words like organization, communism, and phalanstery3 were enough, you would have your fill. But
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nobody thinks of ensuring that justice, simple justice, is rendered to you. And yet, would it not be just for you, when you have been paid your meager salary following a long and hard day’s work, to be able to exchange it for as many forms of satisfaction as you can obtain voluntarily from any man anywhere in the world?
One day, perhaps, I too will speak to you about association and organization, and we will then see what you can expect from these illusions that have led you down the garden path.4
In the meantime, let us see whether people are doing you an injustice when they pass laws which determine from whom you are permitted to buy the things you need, such as bread, meat, linen, and cloth, and, as it were, at what artificial price you will have to pay for them.
Is it true that protection, which, it is admitted, makes you to pay a high price for everything and thus causes you harm, raises your rate of pay proportionally?
On what do rates of pay depend?
One of your people has said this forcefully: “When two workers pursue an employer, earnings decrease; when two employers pursue one worker, they rise.”5
Allow me, in short, to use this statement, which is more scientific but may be less clear: “Rates of pay depend on the ratio of the supply of and the demand for labor.”
Well, on what does the supply of labor depend?
On the number in the marketplace, and on this initial element, protection has no effect.
On what does the demand for labor depend?
On the national capital available. But has the law that says: “We will no longer receive such and such a product from abroad, we will manufacture
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it internally,” increased this capital? Not in the slightest. The law has withdrawn the product from one area to place it in another, but it has not increased the product by one obole. Therefore the law does not increase the demand for labor.
A factory is shown off with pride. Has it been established and maintained with capital from the moon? No, capital has had to be withdrawn either from agriculture, shipping, or the wine-producing industry. And this is why, while there are more workers in our mineshafts and in the suburbs of our manufacturing towns since protectionist duties became law, there are fewer sailors in our ports and fewer workers and wine producers in our fields and hills.
I could continue on this theme for a long time. I prefer to try to make you understand my thought with this example.
A farmer had twenty arpents of land,6 which he developed, with a capital of 10,000 francs. He divided his domain into four parts and established the following rotation: first, corn; second, wheat; third, clover; fourth, rye. He and his family needed only a small part of the grain, meat, and milk that the farm produced, and he sold the excess to purchase oil, flax, wine, etc. All of his capital was spent each year on wages and other payments owed to neighboring workers. This capital was returned through sales and even increased from one year to the next, and our farmer, knowing full well that capital produces nothing unless it is put to use, made the working class benefit from these annual surpluses which he used for fencing, land clearance, and improvements to his farm equipment and buildings. He even invested some savings with the banker in the neighboring town, who did not leave the money idle in his coffers but lent it to shipowners and entrepreneurs carrying out useful work, so that it continued to generate wages.
However, the farmer died, and his son, as soon as he had control of the inheritance, said: “It must be confessed that my father was a fool all his life. He purchased oil and thus paid tribute to Provence while our land could at a stretch grow olive trees. He bought wine, flax, and oranges and paid tribute to Brittany, the Médoc, and the islands of Hyères, while vines, jute, and orange trees could, more or less, provide a small crop on our land.7 He paid tribute to millers and weavers while our domestic servants could well weave
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our linen and grind our wheat between two stones. He ruined himself, and in addition he had foreigners earning the wages that were so easy for him to spread around him.”
Using this reasoning, our scatterbrain changed the rotation of the domain. He divided it into twenty small strips of land. On one he grew olive trees, on another mulberry trees, on a third flax, on a fourth vines, on a fifth wheat, etc., etc. He thus managed to provide his family with everything and become independent. He took nothing from general circulation and, it is true, paid nothing into it either. Was he any richer? No, for the land was not suitable for growing vines, the climate was not conducive to the prospering of olive trees, and in the end the family was less well provided with these things than at the time when his father obtained them through trade.
As for the workers, there was no more work for them than in the past. There were indeed five times as many strips to cultivate, but they were five times smaller. Oil was produced but less wheat; flax was no longer purchased, but rye was no longer sold. Besides, the farmer could not pay more than his capital in salaries, and his capital, far from increasing through the new distribution of land, decreased constantly. The majority of it was tied up in buildings and countless items of equipment that were essential for someone who wanted to do everything. As a result, the supply of labor remained the same, but the means to pay these workers declined and there was of necessity a decrease in wages.
That is a picture of what happens in a nation that isolates itself through a prohibitionist regime. It increases the number of its industries, I know, but it decreases their size; it provides itself, so to say, with a rotation of industries8 that is more complicated but not more fruitful, far from it, since the same capital and workforce have to attack the job in the face of greater natural difficulties. Fixed capital absorbs a greater portion of working capital, that is to say, a greater part of the funds intended for wages. What remains of the fund for wages may well be diversified, but that does not increase the total amount. It is like the water in a lake that people thought they had made more abundant because, having been put into many reservoirs, it touches the ground on more spots and offers a greater surface to the sun. They do not
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understand that it is precisely for this reason that it is absorbed, evaporated, and lost more quickly.
With a given amount of capital and labor, a quantity of output is created that decreases in proportion to the number of obstacles it encounters. There is no doubt that, where barriers to international trade in each country force this capital and labor to overcome greater difficulties of climate and temperature, the general result is that fewer products are created or, which comes to the same thing, fewer needs of people are satisfied. Well, workers, if there is a general decrease in the number of needs satisfied, how can your share increase? I ask you, would those who are rich, those who make the law, have arranged things so that not only would they suffer their fair share of the total reduction in the needs that can be satisfied, but that even their already reduced portion would decrease still further, they say, by everything that is to be added to yours? Is that possible? Is it credible? Oh! This generosity is suspect and you would be wise to reject it.
PUBLISHING HISTORY:
Original title: “Théorie, pratique.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 79–86.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
People accuse us, advocates of free trade, of being theoreticians and not taking sufficient account of practical aspects.
“What a terrible prejudice against M. Say,”1 said M. Ferrier,2 “is this long
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line of distinguished administrators, this imposing line of writers, all of whom have seen things differently from him,” a point M. Say does not hide from himself! Listen to him:
It has been said, in support of old errors, that it is necessary to have some foundation for the ideas so generally adopted by every nation. Should we not be suspicious of observations and reasoning that overturn what has been taken to be constant up to now, what has been taken to be certain by so many leading figures to whom their enlightenment and intentions give credence? This argument, I admit, is worthy of making a profound impression and might cast doubt on the most incontrovertible points if we had not seen in turn the most erroneous opinions, now generally acknowledged to be such, accepted and professed by everyone for many centuries. It is not so long ago that every nation, from the coarsest to the most enlightened, and all men, from street porters to the most learned philosophers, recognized four elements. Nobody thought of disputing this doctrine, which is nevertheless false, to the extent that today there is no assistant biologist who would not be decried if he considered the earth, water, and fire as elements.
At which point, M. Ferrier makes the following observation:
If M. Say thinks that he has answered the strong objection put forward, he is strangely mistaken. That men, who were nevertheless highly enlightened, have been wrong for several centuries on some point of natural history is understandable and proves nothing. Were water, air, earth, and fire, whether elements or not, any the less useful to man? Errors like this are inconsequential; they do not lead to upheavals; they do not cast doubt into people’s minds and above all do not harm any interests, and for this reason they might be allowed to last for thousands of years without mishap. The physical world therefore moves forward as though they did not exist. But can this be
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so for errors that attack the moral world? Can we conceive of an administrative system that is totally false and consequently harmful being followed for several centuries and in several nations with the general consent of all educated men? Could we explain how a system like this could be allied to the increasingly great prosperity of nations? M. Say admits that the argument he is combating is worthy of making a profound impression. Yes, certainly, and this impression remains, for M. Say has argued more in its favor than destroyed it.
Let us listen to M. de Saint-Chamans:3
It was scarcely before the middle of the last century, the eighteenth century in which all subjects and every principle without exception were subject to discussion by writers, that these suppliers of speculative ideas, applied to everything without being applicable to anything, began to write on the subject of political economy. Before that, there was an unwritten system of political economy that was practiced by governments. Colbert, it was said, was its inventor, and it was the rule for all the states in Europe. The strangest thing about it is that it is still so, in spite of anathema and scorn and in spite of the discoveries of the modern school. This system, which our writers called the mercantile system, consisted in … obstructing, through prohibition or import duties, foreign products that might have ruined our factories by competing with them.… This system was declared by economist writers of all schools4 to be inept, absurd, and likely to impoverish any country; it has been banished from all books, reduced to taking refuge in the practice of all peoples, and we cannot conceive that, with regard to the wealth of nations, governments have not drawn their counsel from scholars
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rather than from the long-standing experience of a system, etc.… Above all we cannot conceive that the French government … is determined to resist the progress of enlightenment with regard to political economy and to retain the practice of old errors that all of our economist writers have pointed out.… But this is dwelling too much on this mercantile system which has only facts in its favor and which is supported by no writer!5
Hearing this, will some people not say that when economists call for each person to have the free disposal of his property, they have given birth, like the followers of Fourier, to a new social order, fanciful, strange, a sort of phalanstery that is unprecedented in the annals of the human race? It seems to me that if there is anything in all this that has been invented, contingent, it is not freedom, but protection; it is not the ability to trade but indeed the customs service, which is applied to upsetting artificially the natural order of income.
But it is not a question of comparing or judging the two systems. The question for the moment is to know which of the two is based on experience.
Thus, you monopolists claim that facts are on your side and that we have only theories to support us.
You even flatter yourselves that this long series of public acts, this old experience of Europe’s that you invoke, appeared imposing to M. Say, and I agree that he has not refuted you with his customary sagacity. For my part, I do not yield the domain of fact to you, for you have in your support only exceptional and restrained facts, while we have in opposition the universal facts, the free and voluntary acts of all men.
What are we saying and what do you say?
We say:
“It is better to purchase from others what it would cost more to produce ourselves.”
You, on the other hand, say:
“It is better to make things ourselves even though it costs less to purchase them from others.”
Well, sirs, leaving theory, demonstration, and reasoning, all things that appear to nauseate you, to one side, which of these two statements has the approval of universal practice on its side?
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Just pay a visit to fields, workshops, factories, and stores, look upward, downward, and around you, scrutinize what is being done in your own households, observe your own everyday acts, and tell us what principle is governing all these laborers, workers, entrepreneurs, and merchants. Tell us what your personal practice is.
Do farmers make their own clothes? Do tailors produce the grain they consume? Does your housekeeper not stop making bread at home as soon as she finds it cheaper to purchase it from the baker? Do you mend your own boots instead of writing, in order not to pay tribute to the cobbler? Does the entire economy of society not rest on the separation of occupations, the division of labor, in a word, on exchange? And is trade anything other than this calculation that makes us all, whatever we are, cease direct production when indirect acquisition saves us both time and trouble?
You are thus not men of practice, since you cannot show us a single man anywhere in the world who acts in accordance with your principle.
But, you will say, we have never heard of our principle being used as a rule for individual relations. We fully understand that this would disrupt social links and force men to live like snails, each in his shell. We limit ourselves to claiming that it dominates de facto the relations established between groups in the human family.
As it happens, this assertion is also false. Families, communes, cantons, départements, and provinces are so many groups which all, without exception, reject in practice your principle and have never even given it a thought. All of these obtain by means of exchange what would cost them more to obtain by production. Every nation would do likewise if you did not prevent it by force.
It is therefore we who are the men of practice and experience, for in order to combat the prohibition that you have specially placed on some international trade, we base ourselves on the practice and experience of every individual and every group of individuals whose acts are voluntary and thus can be quoted as evidence. You, however, begin by coercing and preventing and then you seize upon acts that are forced or prohibited to claim: “You see, practice justifies us!”
You rise up against our theory and even against theory in general. But when you posit a principle that is antagonistic to ours, did you ever by chance imagine that you were not indulging in theory? No, no, cross that out of your papers. You are indulging in theory, just like us, but between yours and ours there is this difference:
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Our theory consists only in observing universal facts, universal sentiments, universal calculations and procedures, and at the very most classifying them and coordinating them in order to understand them better.
It is so little opposed to practice that it is nothing other than practice explained. We watch the actions of men driven by the instinct of self-preservation and progress and what they do freely and voluntarily; it is exactly this that we call political economy or the economics of society. We constantly repeat that each man is in practice an excellent economist, producing or trading depending on whether there is more to gain from trading or producing. Each one through experience teaches himself this science, or rather, science is merely this same experience scrupulously observed and methodically set out.
You, however, make theory in the disparaging meaning of the word. You imagine and invent procedures that are not sanctioned by the practice of any living man under the heavens and then you call coercion and prohibition to your assistance. You have indeed to resort to force since, as you want men to produce what it is more advantageous to purchase, you want them to abandon an advantage and you require them to act in accordance with a doctrine that implies a contradiction even on its own terms.
Thus, I challenge you to extend, even in theory, this doctrine that you admit would be absurd in individual relationships, to transactions between families, communes, départements, or provinces. On your own admission, it is applicable only to international relations.
And this is why you are reduced to repeating each day:
“Principles are never absolute. What is good in individuals, families, communes, and provinces is bad in nations. What is good on a small scale, that is to say, purchasing rather than producing when a purchase is more advantageous than production, is the very thing that is bad on a large scale; the political economy of individuals is not that of peoples,” and more nonsense ejusdem farinae.6
And what is the reason for all this? Look closer. To prove to us that we the consumers are your property! That we belong to you, body and soul! That you have an exclusive right over our stomachs and limbs! That it is up to you to feed us and clothe us at a price set by you whatever your incompetence, rapacity, or the inferiority of your situation!
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No, you are not men of practice; you are men of abstraction … and of extortion.
PUBLISHING HISTORY:
Original title: “Conflit de principes.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 86–90.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
There is something that confuses me, and it is this:
Sincere political writers studying the economy of societies from the sole point of view of the producer have reached the following two policies:
“Governments ought to make the consumers who are subject to their laws favor national industry.”
“They ought to make foreign consumers subject to their laws in order to make them favor national industry.”
The first of these policies is called Protectionism; the second is called opening up foreign markets.
Both of them are based on the fundamental idea known as the balance of trade:
“A people grows poorer when it imports and wealthier when it exports.”
For if any purchase from abroad is tribute paid out and a loss, it is very simple to restrict and even prohibit imports.
And if any sale abroad is tribute received and a profit, it is only natural to create markets for yourself, even through force.
Protectionist systems, colonial systems: these are therefore just two aspects of the same theory. Preventing our fellow citizens from purchasing from foreigners and forcing foreigners to purchase from our fellow citizens are just two consequences of an identical principle.
Well, it is impossible not to recognize that, according to this doctrine, if
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it is true, general interest is based on monopoly, or internal plunder, and on conquest, or external plunder.
I enter one of the chalets clinging to the slopes of our Pyrénées.
The head of the household has received only a meager wage for his work. A glacial wind makes his scantily clad children shiver, the fire is out and the table empty. There is wool, wood, and corn on the other side of the mountains, but these goods are forbidden to the family of the poor journeyman, as the other side of the mountains is no longer France. Foreign pine will not cheer the chalet’s fireplace, the shepherd’s children will not learn the taste of Basque bread,1 and Navarre wool will not warm their frozen limbs. If this is what the general interest wants: fine! But let us agree that in this instance it is contrary to justice.
To command consumers by law, to force them to buy only in the national market, is to infringe on their freedom and to forbid them an activity, trade, that is in no way intrinsically immoral; in a word, it is to do them an injustice.
And yet it is necessary, people say, if we do not want national production to halt, if we do not want to deal a deathblow to public prosperity.
Writers of the protectionist school therefore reach the sorry conclusion that there is radical incompatibility between Justice and the Public Interest.
On the other hand, if every nation is interested in selling and not purchasing, a violent action and reaction will be the natural state of their mutual dealings, for each will seek to impose its products on everyone and everyone will endeavor to reject the products of everyone else.
A sale, in effect, implies a purchase, and since, according to this doctrine, selling is making a profit just as purchasing is making a loss, every international transaction implies the improvement of one nation and the deterioration of another.
On the one hand, however, men are inexorably drawn to whatever brings them a profit, while on the other they instinctively resist anything that harms them, which leads to the conclusion that every nation carries within itself a
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natural impulsion to expansion and a no less natural impulsion to resistance, both of which are equally harmful to everybody else, or in other words, antagonism and war are the natural condition of the human race.
Thus, the theory I am discussing can be summarized by these two axioms:
Public Interest is incompatible with Justice within the country.
Public Interest is incompatible with Peace abroad.
Well then! What astonishes and disconcerts me is that a political writer or a statesman, who has sincerely adopted an economic doctrine whose basic ideas are so violently contrary to other incontrovertible principles, can have even one instant of calm and peace of mind.
For my part, I think that, if I had gone into science through this particular door, if I had not clearly perceived that Freedom, Public Interest, Justice, and Peace are things that are not only compatible but closely linked with each other and, so to say, identical, I would endeavor to forget everything I had learnt and tell myself:
“How could God have wished men to achieve prosperity only through injustice and war? How could He have decreed that they should renounce war and injustice only by renouncing their well-being?
“Is the science that has led me to the horrible blasphemy implied by this alternative not misleading me with false flashes of insight, and do I dare to take it on myself to make it the basis for the legislation of a great nation? And when a long line of illustrious scholars has gathered more reassuring results from this same science, to which they have devoted their entire life, when they state that freedom and public interest can be reconciled with justice and peace; that all these great principles follow infinite parallel paths without conflicting with each other for all eternity; do they not have on their side the presumption that results from everything we know of the goodness and wisdom of God as shown in the sublime harmony of physical creation? Am I casually to believe, faced with such beliefs and on the part of so many imposing authorities, that this same God took pleasure in instilling antagonism and discord in the laws governing the moral world? No, no, before holding as certain that all social principles conflict with each other, crash into and neutralize each other, and are locked in an anarchical, eternal, and irremediable struggle; before imposing on my fellow citizens the impious system to which my reasoning has led me, I wish to review the entire chain and reassure myself that there is no point on the route at which I have gone astray.”
If, after a sincere examination, redone twenty times, I continued to reach this frightful conclusion, that we have to choose between the Right and the
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Good,2 I would reject science in my discouragement, I would sink into willful ignorance, and above all I would decline any participation in the affairs of my country, leaving men of another stamp the burden and responsibility of such a painful choice.
PUBLISHING HISTORY:
Original title: “Encore la réciprocité.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 90–92.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
As M. de Saint-Cricq said: “Are we sure that foreigners will purchase as much from us as they sell to us?”
M. de Dombasle says: “What reason have we to believe that English producers will come to us rather than any other nation in the world in search of the products they may need and products whose value is equivalent to their exports to France?”
I am amazed that men who above all call themselves practical reason in a way divorced from all practicality!
In practice, is there one trading operation in a hundred, a thousand, or perhaps even ten thousand that is a direct exchange of one product for another? Since money first came into the world, has any farmer ever said to himself: “I want to buy shoes, hats, advice, and lessons only from a shoemaker, milliner, lawyer, or teacher who will buy wheat from me for exactly the equivalent value”? And why would nations impose this obstacle on themselves?
How are things really done?
Let us imagine a nation that has no foreign trade. One man has produced
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wheat. He sells it in the national market at the highest price he can obtain and receives in exchange … what? Écus,1 that is to say, money orders, goods which can be split up indefinitely, which will permit him to take from the national market the goods which he needs or wants at a time he judges suitable and up to the amount he has at hand.2 All said and done, at the end of the operation he will have withdrawn from the total the exact equivalent of what he has put into it and in value, his consumption will be exactly the same as his production.
If this nation’s external trade is free it is no longer in the national flow of goods but in the general flow of goods that each person places his products, and it is from that flow that he withdraws his consumption. He does not have to worry whether what he puts into this general circulation is bought by a fellow citizen or a foreigner, whether the money orders he receives come from a Frenchman or an Englishman, whether the objects for which he later trades these money payments, according to his needs, have been made on this or that side of the Rhine or the Pyrénées. What remains true is that there is for each individual an exact balance between what he puts in and what he takes out of the great common reservoir, and if this is true for each individual, it is also true for the nation as a whole.
The only difference between the two cases is that, in the second, each is facing a market that is wider for his sales and purchases and has consequently more opportunity to do well on both fronts.
The following objection is made: If everyone joins forces in order not to withdraw from the circulation the products of a given individual, he will not be able to withdraw anything in turn from the overall flow. This is the same for a nation.
Reply: If this nation cannot withdraw anything from the general circulation, it will not put anything into it either; it will work for its own account. It will be forced to submit to what you wish to impose on it at the outset, that is to say, isolation.
And that will be the ideal of the prohibitionist regime.
Is it not ludicrous that you are already inflicting this regime on the nation for fear that it will run the risk of reaching it one day without you?
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16. Blocked Rivers Pleading in Favor of the Prohibitionists
PUBLISHING HISTORY:
Original title: “Les fleuves obstrués plaidant pour les prohibitionists.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 92–93.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
A few years ago I was in Madrid.1 I went to the cortès.2 They were discussing a treaty with Portugal on improving the bed of the Douro.3 A deputy stood up and said: “If the Douro is channeled, transport will cost less. Portuguese grain will be sold cheaper in Castile and will provide formidable competition for our national production. I reject the project unless the ministers undertake to raise customs duties so as to reestablish the balance.” The assembly had no answer to this argument.
Three months later I was in Lisbon. The same question was put before the Senate. A noble hidalgo4 said: “M. President, the project is absurd. You are putting guards at huge expense on the banks of the Douro to prevent the invasion of grain from Castile into Portugal and, at the same time, you want, also at huge expense, to make this invasion easier. Let the Douro be passed to our sons in the same state as our fathers left it to us.”
Later, when it was a question of improving the Garonne,5 I remembered
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the arguments of the Iberian speakers and said to myself: “If the deputies in Toulouse were as good economists as those from Palencia and the representatives of Bordeaux were as skilled logicians as those of Oporto,6 the Garonne would surely be left ‘to sleep to the pleasing sound of its tilting urn,’7 for the channeling of the Garonne would encourage the invasion of products from Toulouse to the detriment of Bordeaux and the flooding of products from Bordeaux to the detriment of Toulouse.”
PUBLISHING HISTORY:
Original title: “Un chemin de fer negative.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 93–94.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
[print edition page 82]
I have said that when, unfortunately, we took the point of view of the producers’ interest, we could not fail to clash with the general interest,1 since producers, as such, demand only effort, needs, and obstacles.
I have found a remarkable example of this in a Bordeaux journal.
M. Simiot2 asks himself this question:
Should the Paris-to-Spain railway be offered to Bordeaux with a complete fracture in the line?3
He answered it in the positive with a host of reasons that it is not my place to examine but which include the following:
The railway between Paris and Bayonne should be completely broken in two4 at Bordeaux so that goods and passengers forced to stop in the town would contribute revenue to boatmen, packmen, commission agents, shippers, hoteliers, etc.
It is clear that this is once again a case of the interest of producers being put ahead of the interest of consumers.
But if Bordeaux can be allowed to profit from this break in the line, and if this is in keeping with the public interest, Angoulême, Poitiers, Tours, Orleans, and more, all intermediary points, Ruffec, Châtellerault, etc., etc., must also demand breaks in the line in the general interest, that is of course in the
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interest of national production, since the more breaks there are, the more consignments, commissions, and transshipping there will be all along the line. With this system, we will have created a railway made up of consecutive segments, a negative railway.
Whether the protectionists want this or not, it is no less certain that the principle of trade restriction is the same as the principle of breaks in the line: the sacrifice of the consumer to the producer and of the end to the means.
18. There Are No Absolute Principles
PUBLISHING HISTORY:
Original title: “Il n’y a pas de principes absolus.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 94–97.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
You cannot be too surprised at the ease with which men resign themselves to ignoring what they need most to know, and you can be sure that they are determined to fall asleep in their ignorance once they have come to the point of proclaiming this axiom: There are no absolute principles.
You enter the legislative chamber. The question before the house is to ascertain whether the law will forbid or free up international trade.
A deputy stands up and says:
“If you allow this trade, foreigners will flood you with their products, the English with cloth, the Belgians with coal, the Spanish with wool, the Italians with silk, the Swiss with cattle, the Swedish with iron, and the Prussians with wheat, so that no industry will be possible in this country.”
Another replies:
“If you forbid this trade, the various benefits that nature has showered on each geographical region will be nonexistent for you. You will not share in the mechanical skills of the English, the richness of the Belgian mines, the fertility of Polish soil, the fruitfulness of Swiss pastures, the cheapness
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of Spanish labor, or the heat of the Italian climate, and you will have to satisfy your demand with goods produced under awkward and difficult conditions instead of with goods obtained by trading with those who can produce things more easily.”
It is certain that one of these deputies is wrong. But which one? It is nevertheless worthwhile taking the trouble to find out, as it is not just a matter of opinion. You are faced with two paths and you have to choose; and one inevitably leads to poverty.
To escape from this quandary, people say: There are no absolute principles.
This axiom, so fashionable today, in addition to nodding to laziness, is also suited to ambition.
If the theory of prohibition won, or else if the doctrine of freedom triumphed, a very small law would encompass our entire economic code. In the first case, it would say: All foreign trade is forbidden and in the second: All foreign trade is free, and many leading figures would lose their importance.
But if trade does not have its own proper nature, if it is not governed by any natural law, if it is capriciously useful or disastrous, if it does not find its stimulus in the good it does and its limit in the good it ceases to do, and if its effects cannot be appreciated by those who carry it out; in a word, if there are no absolute principles, oh! It would then be necessary to weigh, balance, and regulate transactions, to equalize the conditions of labor, and to set the level of profits; a colossal task, but one well suited to be given to those who enjoy high remuneration and wide influence.
On entering Paris, which I had come to visit, I said to myself: Here there are a million human beings who would all die in a few days if supplies of all sorts did not flood into this huge metropolis. The mind boggles when it tries to assess the huge variety of objects that have to enter through its gates tomorrow if the lives of its inhabitants are not to be snuffed out in convulsions of famine, uprisings, and pillage. And in the meantime everyone is asleep, without their peaceful slumber being troubled for an instant by the thought of such a frightful prospect. On the other hand, eighty departéments1 have worked today without being in concert and without agreement to supply Paris. How does it happen that every day what is needed and no more or less is brought to this gigantic market? What is thus the ingenious and secret power that presides over the astonishing regularity of such complicated movements, a regularity in which everyone has such blind faith, although well-being and life depend on it? This power is an absolute principle, the principle
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of free commerce.2 We have faith in this intimate light that Providence has placed in the hearts of all men to whom it has entrusted the indefinite preservation and progress of our species, self-interest, for we must give it its name, that is so active, vigilant, and farsighted when it is free to act. Where would you be, you inhabitants of Paris, if a minister took it into his head to substitute the arrangements he had thought up, however superior they are thought to be, for this power? Or if he took it into his head to subject this stupendous mechanism to his supreme management, to gather together all these economic activities in his own hands, to decide by whom, how, or under what conditions each object has to be produced, transported, traded, and consumed? Oh! Although there are a good many causes of suffering within your city, although destitution, despair, and perhaps starvation are causing more tears to flow than your ardent charity can stem, it is probable or, I dare to say, even certain, that the arbitrary intervention of the government would infinitely increase these sufferings and extend to you all the misfortunes that are only affecting a small number of your fellow citizens.
Well then! Why, when we have faith in a principle when it relates to domestic transactions, do we not have the same faith in this principle when it is applied to international transactions, which are certainly fewer in number and less difficult and complicated? And, if it is not necessary for the Prefecture of Paris to regulate our industries, balance our opportunities, profits, and losses, concern itself with the depletion of our money, and equalize the conditions governing our labor in domestic commerce, why is it necessary for the customs service to aspire to exercise protective action, which is beyond its fiscal mission, with regard to our foreign commerce?
PUBLISHING HISTORY:
Original title; “Indépendance nationale.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
[print edition page 86]
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 97–99.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
Among the arguments put forward in favor of protectionism, we should not forget the one based on national independence.
“What will we do in case of war,” people say, “if we are subject to England’s discretion with regard to iron and coal?”
Monopolists in England, for their part, unfailingly proclaim:
“What would become of Great Britain in time of war if she were dependent on France for her food?”
We tend to disregard one fact, which is that this type of dependence resulting from trade and commercial transactions is mutual. We cannot be dependent on foreigners without these foreigners being dependent on us. This is the very essence of society. Breaking off natural relationships does not make us independent, but isolated.
And note this well: we isolate ourselves because of an expectation of war, but the very act of isolating ourselves is the first step to war. It makes it easier, less of a burden, and, because of this, less unpopular. If nations are constant markets for each other, if their relationships cannot be broken off without inflicting on them the twin suffering of deprivation and oversupply, they will no longer need the powerful navies that are ruining them and the massive armies now crushing them, the peace of the world will not be compromised by the caprices of M. Thiers1 or Lord Palmerston,2 and war will disappear for lack of incentive, resources, reasons, pretexts, and popular favor.3
[print edition page 87]
I am fully aware that I will be blamed (for this is the current fashion) for resting fraternity between nations on self-interest, vile and prosaic interest. People would prefer fraternity to be rooted in charity and love, with even a little self-sacrifice, and in hurting men’s material well-being, to possess the merit of generous sacrifice.
When will we ever be rid of this puerile moralism? When will we finally banish hypocrisy from science? When will we drop this sickening contradiction between our writings and our actions? We boo at, we shout down self-interest, that is to say, what is useful and good (since to say that all nations are interested in a thing is to say that this thing is intrinsically good), as though self-interest was not a necessary, eternal, and indestructible motive to which Providence has entrusted human progress! As if we were all angels of disinterestedness? As if the public was not beginning to see, and with disgust, that this affected language is blackening the very pages for which the public is expected to pay so dearly? Oh, such affectation! This is really the disease of this century.
What! Because well-being and peace are closely allied, because God was pleased to establish this fine harmony in the moral world, you do not want me to admire and adore his decrees and accept with gratitude laws that make justice a condition of happiness? You do not want peace unless it is to the detriment of well-being, and freedom weighs heavy on you because it does not impose sacrifice on you? And, if self-sacrifice has such attraction for you, what stops you including it in your private actions? Society would be grateful to you if you did, for at least someone would reap the benefit from it, but to wish to impose it on humanity on principle is the height of absurdity, for the self-sacrifice of all is the sacrifice of all and constitutes misfortune raised to the status of a theory.
But thank heaven we can write and read a great number of these ranting speeches without the world ceasing to obey its driving force, which is self-interest, like it or not.
After all, it is rather strange to see sentiments of the most sublime self-denial invoked in support of plunder itself. This is what this ostentatious disinterestedness leads to! These men, who are so poetically delicate that they do not want peace itself if it is based on men’s vile self-interests, are putting their hands into other people’s pockets, especially those who are poor, for what article of the tariff protects the poor? Yes, sirs, do whatever you like with what belongs to you, but likewise let us do what we want with the fruit from the sweat of our brows, to use it ourselves or to trade it. Make speeches on self-renunciation, for that is fine, but at the same time at least be honest.
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20. Human Labor and Domestic Labor
PUBLISHING HISTORY:
Original title: “Travail humain, travail national.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 100–105.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
Smash the machines,1 reject foreign goods; these are two acts generated by the same doctrine.
We see men who clap when a great invention is revealed to the world and who nevertheless support protectionism. Such men are very inconsistent!
What is their objection to free trade? That it results in our having things made by foreigners who are more skillful or better situated than we, which otherwise we would produce ourselves. In a word, it is accused of damaging domestic labor.
By the same token, should these critics not be blaming machines for accomplishing through natural agents a production, which, without them, would fall to manual effort and consequently for damaging human labor?
Foreign workers who are better situated than French ones are veritable economic machines that crush the latter through their competition. Similarly, a machine that carries out an operation at a lower cost than a given number of hands is, with regard to this labor, a genuine foreign competitor that paralyzes them with its competition.
If therefore it is appropriate to protect domestic labor against competition from foreign labor, it is no less so to protect human labor against competition from mechanical labor.
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So, if he has an ounce of logic in his brain, anyone who supports a protectionist regime should not stop at forbidding foreign products; he ought to forbid even more the products of the shuttle and the plough.
And this is why I much prefer the logic of those men who, speaking out against the invasion of goods from far distant lands, at least have the courage to speak out as well against overproduction due to the inventive power of the human mind.
One of these is M. de Saint-Chamans. “One of the strongest arguments,” he says, “against free trade and the overuse of machines, is that many workers are deprived of work either by foreign competition that closes factories down or by equipment that takes the place of men in the workshops.” (On the Tax System, page 438.)2
M. de Saint-Chamans has accurately seen the analogy, let us go further, the identity existing between imports and machines. This is why he forbids them both; and truly, there is some pleasure in facing intrepid debaters who, even when they are wrong, take their line of reasoning to its limit.
But look at the difficulty in store for them!
While it is a priori true that the domains of invention and labor can expand only at the expense of one another, it is in those countries in which there are the most machines, for example, in Lancashire, that we ought to see the fewest workers. And if, on the contrary, we see in fact that machines and workers coexist to a greater degree in rich nations than in uncivilized ones, we have to conclude that these two forces are not mutually exclusive.
I cannot explain to myself how a thinking soul can have a moment’s rest when faced with this dilemma:
Either the inventions of man do not damage his labor, as the general facts demonstrate, since there are more of both among the English and French than among the Hurons and Cherokees, and, in this case, I have gone wrong, although I do not know either where or how I have gone astray. I would be committing treason against humanity if I introduced my mistake into the legislation of my country.
Or the discoveries of the human mind reduce manual labor, as certain facts appear to indicate, since every day I see a machine being substituted for twenty or one hundred workers, in which case I am obliged to identify a flagrant, eternal, and incurable antithesis between man’s intellectual and physical power, between his progress and his well-being. I cannot refrain
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from saying that the author of man was bound to give him the gift of either brain or brawn, either moral strength or brute force, and that in the event he has played a trick on him by conferring on him, simultaneously, mutually destructive powers.
This is a pressing difficulty. Well, do you know how to solve it? By this strange maxim:
In political economy, there are no absolute principles.
In common, intelligible parlance, this means:
“I do not know where truth or falsehood lies and am ignorant of what constitutes general good or evil. I do not let this trouble me. The immediate effect of each measure on my personal well-being is the sole law I agree to acknowledge.”
There are no principles! This is as though you were saying: “There are no facts, for principles are only formulae that sum up an entire order of well-known facts.”
Machines and imports certainly have effects. These effects are either good or bad. People can have differing opinions in this respect. But whichever one you adopt is formulated using one of these two principles: machines are good or machines are bad. Imports are advantageous or imports are harmful. But to say there are no principles is certainly the lowest degree of humiliation to which the human mind can descend, and I admit that I blush for my country when I hear such a monstrous heresy enunciated before the French Chambers with their assent, that is to say, before and with the assent of the elite of our fellow citizens, and all this to justify themselves for imposing on us laws in total ignorance.
But in the end, I will be told, destroy the sophism. Prove that machines do not damage human labor and that imports do not damage domestic labor.
In an essay of the present kind, such proofs could not be very detailed. My aim is rather to establish the difficulties than to solve them and to arouse reflection rather than to satisfy it. No convictions are ever firmly anchored in the human mind other than those that result from its own work. I will nevertheless endeavor to set it along this path.
What misleads the opponents of imports and machines is that they judge them by their immediate and transitory effects instead of going to their general and definitive consequences.3
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The immediate effect of an ingenious machine is to render a certain amount of manual labor superfluous for a given result. However, its action does not in the slightest stop there. For the very reason that this given result is achieved with less effort, it is made available to the public at a lower price, and the sum of the savings thus realized by all purchasers enables them to satisfy other wants, that is to say, to encourage manual labor in general by precisely the amount saved by those manual laborers working in the recently improved industry. In short, the level of work has not decreased, although that of satisfaction has been increased.
Let us use an example to make this set of effects clearer.
Let us imagine that 10 million hats costing 15 francs are consumed in France. This provides the hat industry with a turnover of 150 million. A machine is invented that enables the hats to be sold at 10 francs. The turnover for this industry is reduced to 100 million, assuming that consumption does not increase. However, the 50 million is not lost to human labor for all that. Having been saved by the purchasers of hats, it will be used to satisfy other needs and consequently to remunerate the entire industrial system by the same figure. With the 5 francs he has saved, Jean will buy a pair of shoes, Jacques a book, Jérôme an item of furniture, etc. The human labor, taken as a whole, will thus continue to be encouraged up to a level of 150 million; this sum will provide the same number of hats as before, plus all the other satisfactions corresponding to the 50 million that the machine will have saved. These satisfactions are the net product that France would have gained from the invention. This is a free gift, a tribute that man’s genius has imposed on nature. We do not deny that, during the transformation, a certain mass of labor will have been displaced, but we cannot agree that it has been destroyed or even diminished.
This is also true for imports. Let us return to the hypothesis.
France manufactured 10 million hats at a cost price of 15 francs. Foreigners invaded our market, supplying us with hats at 10 francs. I say that domestic labor will not be decreased in the slightest.
For it will have to produce up to 100 million to pay for 10 million hats at 10 francs.
And then each purchaser will have 5 francs left that he has saved on each hat, or a total of 50 million that he will pay for other pleasures, that is to say, for other things produced by labor.
Therefore the total amount of labor will remain the same as it was and the additional pleasures, representing the 50 million saved on the hats, will be the net profit from the imports or from free trade.
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And people must not try to terrify us with the picture of the suffering that, according to this reasoning, will accompany the displacement of labor.
For if protectionism had never occurred, labor would have rearranged itself in line with the laws of trade and no displacement would have taken place.
If, on the other hand, protectionism has led to an artificial and unproductive structure of labor, it would be this, and not freedom, that is responsible for the inevitable displacement in the transition from bad to good.
Unless it is claimed that, because an abuse cannot be destroyed without upsetting those who benefit from it, its existence for just a moment ensures that it will last forever.
PUBLISHING HISTORY:
Original title: “Matières premières.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 105–15.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
It is said: “The most profitable of all trades is the one in which manufactured goods are exchanged for raw materials. For the raw materials supply domestic labor.”
And from this the following conclusion is drawn:
That the best customs law would be the one that did the most to facilitate the importation of raw materials and which would put the greatest number of obstacles in the path of goods which had undergone some level of manufacture.1
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In political economy, there is no sophism so widespread as this one. It is the talk of not only the protectionist school but also and above all the allegedly liberal school, and this is a trying circumstance, for the worst thing for a good cause is not to be competently attacked but to be badly defended.
Commercial freedom will probably suffer the fate of all freedoms; it will be introduced into our laws only once it has gained possession of our minds. But if it is true that a reform has to be generally understood in order to be solidly established, it follows that nothing can delay it more than anything which misleads public opinion; and what is more likely to mislead it than articles that demand freedom by using the doctrines of monopoly to support them?
A few years ago, three large cities in France, Lyons, Bordeaux, and Le Havre, rose up against the protectionist regime.2 The country and the whole of Europe were moved at seeing what they took to be the flag of freedom being raised. Alas! It was still the flag of monopoly! A monopoly that was a little more sly and a lot more absurd than the one they seemed to want to overthrow. Thanks to the sophism which I will attempt to unveil, the petitioners did nothing more than reproduce the doctrine on the protection of domestic labor, while adding one more inconsistency to it.
What in fact is protectionism? Let us listen to M. de Saint-Cricq:
“Labor constitutes the wealth of a people, since it alone creates the physical things that our needs call for, and universal prosperity consists in the abundance of such things.” Such is the crux of the argument.
“But it is necessary for this abundance to be the product of the nation’s activity. If it were the product of foreign activity, national output would come to a sudden stop.” Here is the error. (See the preceding sophism.)3
“What therefore should an agricultural and manufacturing country do? Keep its market for the products of its own territory and industry.” Here is the aim.
“And to do this, restrict through duties and prohibit if necessary the products of the territory and industry of other peoples.” Here are the means.
Let us compare these arrangements with those of the petition from Bordeaux.
It divided goods into three classes.
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“The first covers foodstuffs and raw materials that are devoid of any human labor. In principle, a wise economy would require this class to be exempt from taxes.” Here, no labor, no protection.
“The second is made up of goods which have undergone some processing. This processing allows us to impose some duty on it.” Here protection starts because, according to the petitioners, here begins domestic labor.
“The third covers finished goods which cannot be used in any way in domestic production; we consider these to be the most liable to taxes.” Here labor, and protection with it, reach their peak.
As we can see, the petitioners claimed that foreign labor damages domestic labor. This is the error of the protectionist regime.
They demanded that the French market be reserved for French labor; that is the aim of the protectionist regime.
They demanded that foreign labor be subject to restrictions and taxes. That is the means of the protectionist regime.
So what difference can we therefore discern between the petitioners from Bordeaux and the leader of the protectionist chorus?
Just one: the wider or narrower range of interpretation of the meaning of the word labor.
M. de Saint-Cricq extends it to everything. He therefore wants to protect everything.
“Labor constitutes the entire wealth of a nation,” he says, “protecting agriculture, the entire agricultural sector, manufacturing, the entire manufacturing sector, this is the cry that will always echo around this Chamber.”
The petitioners consider manufacturing alone as constituting labor; for this reason they accord only this sector the favor of protection.
“Raw materials are devoid of any human labor. In principle they should not be taxed. Manufactured goods can no longer be used for further productive activity in the domestic market; we consider them to be the most proper to be subject to taxes.”
It is not a question here of examining whether protection for domestic labor is reasonable. M. de Saint-Cricq and the petitioners from Bordeaux agree on this point and we, as has been seen in previous chapters, differ from both in this respect.
The question is to know who is giving the proper meaning to the word labor, M. de Saint-Cricq or the petitioners from Bordeaux.
Well, on this terrain, it has to be said that M. de Saint-Cricq is right a thousand times, for the following is the dialogue that they might have with each other:
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M. de Saint-Cricq: “You agree that domestic labor has to be protected. You agree that no foreign products can be introduced into our market without destroying an equal amount of our domestic production. The only thing is that you claim that there are a host of products that contain value, since they sell, and which are nevertheless devoid of any human labor. And you list, among other things, wheat, flour, meat, cattle, bacon, salt, iron, copper, lead, coal, wool, skins, seed, etc.
“If you prove to me that the value of these things is not due to labor, I will agree that they do not need to be protected.
“However, if I also demonstrate to you that there is as much labor involved in one hundred francs’ worth of wool as in 100 francs’ worth of cloth, you will have to admit that protection is due as much to the one as to the other.
“Now, why is this bag of wool worth 100 francs? Is it not because that is its cost price? And is its cost price anything other than what has to be paid in wages, earnings, and the costs of manpower, labor, and interest to all the laborers and capital providers who contributed to producing the object?”
The Petitioners: “It is true that you might be right with regard to wool. But is a sack of wheat, an ingot of iron, or a quintal4 of coal the product of labor? Is it not nature that has created them?”
M. de Saint-Cricq: “There is no doubt that nature has created the elements of all these things, but it is labor that has created their value. I myself was mistaken when I said that labor creates physical objects, and this flawed expression has led me into many other errors. It is not in man’s power to create and to make something out of nothing, any more for manufacturers than for farmers; if by production we meant creation, all of our projects would be nonproductive and yours, as traders, more so than all the others, except perhaps for mine.
“A farmer, therefore, cannot claim to have created wheat, but he can claim to have created its value, by this I mean to have transformed into wheat, through his own labor and that of his servants, cow herders, and harvesters, substances which did not resemble it in the slightest. In addition, what do the millers do who convert it into flour, or the bakers who bake it into bread?
“In order for men to be able to clothe themselves in woolen cloth, a host of operations is necessary. Before any human labor intervenes, the genuine raw materials of this product are air, water, heat, gaslight, and the salts that
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have to go to making it up. There are the raw materials that are genuinely devoid of any human labor, since they have no value and I do not envisage protecting them. However, an initial act of labor converts these substances into fodder, a second into wool, a third into yarn, a fourth into cloth, and a fifth into garments. Who would dare to say that everything in this operation is not labor, from the first cut of the plough that starts it to the last stitch that terminates it?
“And because, for greater speed and perfection in the accomplishment of the final operation, a garment, the labor is divided among several classes of industrious workers,5 do you want to establish, through arbitrary distinction, that the order of carrying out of this labor is the sole basis for their importance, so that the first does not even merit the appellation of labor and the last, labor par excellence, is the only one worthy of the favors of protection?”
The Petitioners: “Yes, we are beginning to see that wheat is not, any more than wool, altogether devoid of any human labor, but at least the farmer has not, like the manufacturer, done everything himself or with the assistance of his laborers; nature has helped him and if there is labor, everything in wheat is not labor.”
M. de Saint-Cricq: “But all its value is labor. I agree that nature has contributed to the physical forming of the grain. I even agree that this is exclusively its own work, but you must admit that I have forced it to do so through my labor, and when I sell you wheat, you have to note this clearly, I am not making you pay for the labor of nature but for mine.
“And, in your opinion, manufactured goods would not be the products of labor either. Are manufacturers not assisted by nature as well? Do they not use the weight of the atmosphere through their steam engines just as I use its humidity when plowing? Have they created the laws of gravity, the transmission of force, or the nature of chemical bonding?”
The Petitioners: “Very well, we agree for wool, but coal is certainly the work and the sole work of nature. It is truly devoid of any human labor.”
M. de Saint-Cricq: “Yes, nature has made coal, but labor has created its value. Coal had no value for millions of years when it was buried and unknown one hundred feet underground. Men had to go to look for it: that is labor. It had to be taken to market: that is another form of labor, and once
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again, the price you pay for it in the market is nothing other than payment for these jobs of extraction and transport.”6
We can see that up to now M. de Saint-Cricq has won the argument; that the value of raw materials, like that of manufactured materials, represents the cost of production, that is to say, of the labor; that it is not possible to imagine an object that has value and that is devoid of any human labor; that the distinction made by the petitioners is futile in theory and that, as the basis of an unequal distribution of political favors it would be iniquitous in practice, since its result would be that one-third of French citizens who labor in factories would obtain the advantages of monopoly because they produce things through labor, while the other two-thirds, that is to say, the farming population, would be abandoned to face competition on the pretext that they produce things without laboring.
I am sure that people will insist and say that there is a greater advantage for a nation to import so-called raw materials, whether or not they are the product of labor, and export manufactured goods.
This is an opinion that is widely held.
“The more raw materials are abundant,” says the petition from Bordeaux, “the more factories will increase in number and flourish vigorously.”
“Raw materials,” it says elsewhere, “leave a limitless scope for the work of the inhabitants of those countries into which they are imported.”
“As raw materials,” says the petition from Le Havre, “are the raw elements of labor, they have to be subjected to a different regime and imported immediately at the lowest customs rate.”
This same petition wants protection for manufactured goods to be reduced not immediately, but after an undetermined period and not at the lowest rate, but at 20 percent.
“Among other articles whose low price and abundance are a necessity,” says the petition from Lyons, “manufacturers include all raw materials.”
All this is based on an illusion.
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We have seen that all value represents labor. Now, it is very true that the process of manufacturing multiplies by ten or sometimes a hundred the value of a raw product, that is to say, it spreads out ten or a hundred times more income around the nation. This being so, the reasoning goes as follows: the production of a quintal of iron earns only 15 francs for all categories of contributors. The conversion of this quintal of iron into watch springs raises their various incomes to 10,000 francs, and would you dare to say that it is not of more interest to the nation to ensure itself 10,000 francs’ worth of labor than 15 francs’ worth?
People forget that international trade does not function by weight or measure, any more than individual exchanges. You do not trade one quintal of iron for one quintal of watch springs, nor a pound of still greasy wool for a pound of cashmere wool, but a certain value of one of these things for an equal value of another. Well, to exchange equal value for equal value is to exchange equal labor for equal labor. It is therefore not true that a nation that gives 100 francs’ worth of cloth or springs makes more than one that delivers 100 francs’ worth of wool or iron.
In a country in which no law can be voted, no taxation imposed without the consent of those who are to be governed by this law or subjected to it, the public can be robbed only by being misled in the first place. Our ignorance is the raw material of any extortion that is exercised over us, and we can be certain in advance that any sophism is the herald of plunder. Good people, when you see a sophism in a petition, put your hand over your pocket, for it is certainly that which is being aimed at.
Shall we not therefore look at the secret thought that the shipowners of Bordeaux and Le Havre and the manufacturers of Lyons are hiding in this distinction between agricultural goods and manufactured goods?
“It is mainly in this first class (the one that includes raw materials, devoid of any human labor) that we find the principal maintenance of our merchant navy,” say the petitioners of Bordeaux. “In principle, a wise economy would require this class not to be taxed.… The second (goods which have undergone some processing) may be taxed. The third (goods which require no further modification) we consider to be the most taxable.”
The petitioners from Le Havre say, “Considering that it is essential to reduce the tax on raw materials immediately to the lowest rate so that manufacturing industry may successively put to work the naval forces that provide it with its primary and essential means of the employment of its labor.…”
The manufacturers could not be any less polite to the shipowners. For this
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reason, the petition from Lyon requested the free entry of raw materials “to prove,” as it said, “that the interests of manufacturing towns are not always in opposition to those of those on the coast.”
No, but it has to be said that both, understood as the petitioners understand them, are totally opposed to the interests of the countryside, agriculture, and consumers.
This, sirs, is what you wanted to say! This is the aim of your subtle economic distinctions! You want the law to prevent finished goods from crossing the ocean in order for the much more expensive transport of raw and dirty materials, including a lot of waste, to provide more cargo for your merchant navy and put your shipping to greater use. This is what you call a wise economy.
What! Why do you not also ask for Russian pines to be shipped with their branches, bark, and roots? For Mexican gold in its mineral state and leather from Buenos Aires still attached to the bones of stinking carcasses?
Soon, I expect, railway shareholders, however small their majority in the Chambers, will pass a law forbidding the production in Cognac of the brandy drunk in Paris. Would not to decree by law the transport of ten casks of wine for one cask of brandy provide the essential income for their labor to manufacturers in Paris and at the same time set the powers of our locomotives into action?
For how long more will people close their eyes to such a simple truth?
The purpose of manufacturing, of shipping, and of labor is the general good, the public good. Creating industries that serve no purpose, encouraging superfluous transport, and supporting unnecessary labor, not for the public good but at public expense, is to achieve a genuine contradiction in terms.7 It is not labor that is intrinsically desirable but consumption. Any labor that yields no output represents a loss. To pay sailors to carry useless refuse across the sea is as though they were being paid to make pebbles skip across the surface of the water.8 We therefore come to the conclusion that all
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economic sophisms, in spite of their infinite variety, have this in common: they confuse the means with the end and develop one at the expense of the other.
PUBLISHING HISTORY:
Original title: “Métaphores.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 115–19.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
Sometimes sophisms expand and penetrate the entire fabric of a long and heavy theory. More often they contract, reduce in size, and become a principle, entirely hidden in one word.
God preserve us, Paul-Louis1 said, from cunning men and metaphors! And in fact, it would be difficult to say which of the two causes the most harm to our planet. It is the devil, you say; he puts in all of us, such as we are, the spirit of plunder in our hearts. Yes, but he leaves the repression of abuses completely up to the resistance of those that suffer from them. It is sophism that paralyzes this resistance. The sword that malice places in the hands of attackers would be powerless if sophism did not shatter the shield on the arms of those under attack, and Malebranche was right in inscribing the following sentence on the frontispiece of his book: Error is the cause of human misery.2
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And look at what happens. Ambitious hypocrites have a sinister interest,3 for example, in sowing the seed of national hatred in the mind. This disastrous seed may develop and lead to general conflagration, cause civilization to stop, spill torrents of blood, and draw down the most terrible of all scourges on the country, invasion. In any case, before these events occur, these feelings of hatred diminish us in the eyes of other nations and reduce those people in France who have retained some vestige of a love of justice to blush for their country. These are certainly great evils, and in order for the public to be protected against the intrigues of those who want to run the risk of such events, it would be enough for them to have a clear view of the matter. How does it happen that this clear view is clouded? Through metaphor. The meaning of three or four words is altered, strained, and degraded, and this says it all.
Take the word invasion itself.
A French ironmaster says: “May we be preserved from an invasion of iron from England.” An English landlord exclaims: “Let us reject the invasion of wheat from France!” And they propose that the barriers between the two peoples be raised. Barriers constitute isolation, isolation leads to hatred, hatred to war, and war to invasion. “What does it matter?” say the two sophists, “is it not better to be exposed to the risk of invasion than to accept certain invasion?” And the people believe them and the barriers remain.
And yet, what analogy is there between an exchange and an invasion? What similarity can be established between a warship which comes to vomit shells, fire, and devastation on our towns and a merchant ship that comes to offer us the opportunity of exchanging goods for other goods freely and voluntarily?
I would say the same for the word flood. This word normally has a negative meaning because the common characteristics of floods are to ravage fields and crops. If nevertheless they leave greater value on the land than they remove, as do the floods of the Nile, we ought to bless and deify them, following the example of the Egyptians. Well then, before railing against the
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floods of foreign goods, before erecting obstructive and costly obstacles in their path, do people ask themselves whether these are floods that ravage or those that fertilize? What would we think of Mehemet Ali4 if, instead of raising dams across the Nile at huge expense to extend the range of its floods, he spent his piastres digging a deeper bed for it so that Egypt would no longer be soiled by this foreign silt brought down from the Mountains of the Moon?5 We are showing precisely this degree of wisdom and reason when, with the support of millions, we wish to preserve our country … from what? From the benefits with which nature has endowed other climates.
Among the metaphors that conceal an entire and disastrous theory, there are none more commonly used than the one that uses the words tribute, tributary.
These words have become so commonplace that they have become synonyms of purchase and purchaser and the two sets of words are now used indiscriminately in place of one another.
However, there is as much distance between a tribute and a purchase as between a theft and an exchange, and I would as much like to hear it said that Cartouche6 had broken into my strongbox and purchased a thousand écus, as to hear it said repeatedly to our deputies: “We have paid the tribute to Germany for a thousand horses that it has sold to us.”
For what makes the action of Cartouche not a purchase is that he has not placed in my strongbox, with my consent, an equivalent value to the one he has taken.
And what makes the payment of 500,000 francs that we have made to Germany not a tribute, is exactly that it has not received this money for no return but because it has delivered to us in exchange one thousand horses that we ourselves estimated were worth our 500,000 francs.
Should we therefore in all seriousness bring up such abuses of language
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again? Why not, since they are very seriously bandied about in both journals and books?
And let us not imagine that they slip out from a few writers whose ignorance extends to their use of language! For every one who refrains from this, I will quote you ten who indulge in it and who belong to the upper classes as well, such as Argout, Dupin, Villèle,7 and assorted peers, deputies, ministers, that is to say, all men whose word is the law and whose most shocking sophisms are used as the basis for the country’s administration.
A famous modern philosopher8 has added to the categories of Aristotle the sophism that consists in begging the question within a single word. He quotes several examples. He might have added the word tributary to his list. In effect, it is a question of knowing whether purchases made abroad are useful or harmful. They are harmful, you say. Why so? Because they make us tributaries of foreigners. This is certainly a word that begs the question under discussion.
How has this misleading trope slipped into the monopolists’ rhetoric?
Écus leave the country to satisfy the rapacity of a victorious enemy. Other écus also leave the country to pay for goods. The analogy between the two cases is established, taking account only of the circumstance that causes their resemblance and disregarding the one by which they differ.
Nevertheless this circumstance, that is to say, the nonreimbursement in the first case and the freely agreed reimbursement in the second, establishes between them a difference so great that it is actually not possible to classify them in the same category. To hand over 100 francs as a result of force to someone who has his hands around your neck or voluntarily to someone who is giving you the object of your desires are truly things that cannot be compared. It would be as true to say that throwing bread into the river is the same as eating it since the bread is in both cases destroyed. The fallacy of this reasoning, like that which is encompassed in the word tribute, would consist in establishing full similarity between two cases through their points of resemblance and disregarding what makes them differ.
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PUBLISHING HISTORY:
Original title: “Conclusion.”
Place and date of first publication: Dated Mugron, 2 November 1845. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 119–26.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
All the sophisms that I have combated up to now relate to a single matter, the protectionist system; even so, out of pity for the reader, I have left out some of the best:1 acquired rights, inconveniences, depletion of the currency, etc., etc.
But social economy is not limited to this narrow circle. Fourierist doctrine, Saint-Simonian doctrine, communism, mysticism, sentimentalism, bogus philanthropy, affected aspirations to illusionary equality and fraternity, questions relating to luxury, to wages, to machines, to the alleged tyranny of capital, to colonies, markets, conquests, population, association, emigration, taxes and loans: these have cluttered the field of science with a host of parasitic arguments, sophisms that call for the hoe and harrow of a diligent economist.
It is not that I do not acknowledge the flaw in this plan or rather the lack of a plan. To attack one by one so many incoherent sophisms that sometimes clash and most often are included in one another, is to condemn oneself to a disorganized and capricious struggle and to expose oneself to perpetual repetition.
How I would prefer to say quite simply what things are, without having to pay attention to a thousand aspects through which ignorance sees them! To present the laws according to which societies prosper or decline is virtually to destroy all sophisms at a stroke. When Laplace2 described what we are able
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to know of the movements of the heavenly bodies up to now, he dissipated without even mentioning them by name, all the astrological musings of the Egyptians, the Greeks, and the Hindus with greater surety than he could have done if he had refuted them directly in countless volumes. Truth is unitary; the book that provides an exposition of it is an imposing and durable edifice.
It defies greedy tyrants
bolder than the Pyramids
and more durable than brass.3
Error is multifarious and ephemeral by nature; the work that combats it does not carry within itself any principle signifying grandeur and longevity.
But if I have lacked the force and perhaps the opportunity to proceed in the same way as people such as Laplace and Say,4 I cannot help believing that the form I have adopted also has its modest uses.5 Above all, it seems to me to be well proportioned to the needs of the century and the fleeting moments it is able to devote to study.
A treatise doubtless has clear superiority but only on one condition, that it is to be read, reflected upon, and deepened. It addresses an elite audience only. Its mission is initially to set and then expand the circle of knowledge acquired.
The refutation of commonly held prejudices cannot have this elevated range. It aspires only to clear the way for the march of truth, to prepare men’s
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minds, redirect the public moral sense, and destroy dangerous weapons in impure hands.
It is above all in social economy that this constant struggle and these constantly reborn battles with popular error have genuine practical use.
The sciences can be divided into two categories.
Strictly speaking, the first can be known only by scholars. These are the ones whose application occupies some specialists. Ordinary people receive the fruit of these in spite of their ignorance; although they do not know about mechanics and astronomy, they still enjoy the use of a watch, they are still transported by locomotives or steamboats given their faith in engineers or pilots. We walk in accordance with the laws of equilibrium without knowing them, just as M. Jourdain6 spoke prose without knowing it.
But there are also sciences that exercise on the public an influence only in proportion to the enlightenment of the public itself, which draw their entire effectiveness not from the accumulated knowledge in a few exceptional heads but from the knowledge disseminated among the general public. They include morals, hygiene, social economy, and, in those countries in which men are their own masters, politics. It is of these sciences that Bentham might have said in particular: “What broadcasts them is more valuable than what advances them.”7 What does it matter that a great man, a God even, has promulgated the moral law, as long as men, imbued with false notions, take virtues for vices and vices for virtues? What does it matter if Smith, Say,8 and, according to M. de Saint-Chamans, the economists of all schools proclaim, with reference to commercial transactions, that freedom is superior to coercion, if those who make the laws and for whom laws are made are convinced of the contrary?
These sciences, which have been appropriately named social, also have the particular characteristic that for the very reason that they are in common use, nobody admits to knowing nothing about them. Do we need to solve a
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question of chemistry or geometry? We do not pretend to be steeped in the science; we are not ashamed to call upon M. Thénard; we have no problem in opening Legendre or Bezout.9 However, in social sciences, we acknowledge scarcely any authorities. As each of us every day acts in accordance with good or bad morals, hygiene, economy, or reasonable or absurd politics, each of us feels able to find fault with, discuss, decide, and lay down the law on these matters. Are you ill? There is no old woman who will not tell you from the outset what the cause and remedy of your ailment is: “It is because your fluids are out of sorts,” she states; “you must be purged.”10 But what are these fluids? And are there such things? This is something she does not trouble herself about. I involuntarily think of this dear old woman when I hear all the social ills being explained by these banal statements: It is the overabundance of products; it is the tyranny of capital; it is too many producers and other idiocies of which it cannot even be said verba et voces, praetereaque nihil,11 for they are just so many disastrous errors.
Two things result from what has gone before: 1. That the social sciences, more than the others, have to abound in sophisms because they are the ones in which everyone consults only his own judgment or instincts; 2. That it is in these sciences that sophism is particularly damaging because it misleads public opinion on a subject in which public opinion constitutes power and is taken as law.
Two sorts of books are therefore needed for these sciences: those that expound them and those that propagate them, those that reveal the truth and those that combat error.
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It seems to me that the inherent defect in the aesthetic form of this pamphlet, repetition, is what constitutes its principal usefulness.
In the subject I have discussed, each sophism doubtless has its own formula and range, but all have a common root, which is the overlooking of men’s interests as consumers. To show that this sophism is the originator of a thousand paths of error12 is to teach the general public to recognize it, understand it, and mistrust it in all circumstances.
After all, my intention is not exactly to lay the ground for deeply held convictions but to sow the seeds of doubt.
My hope is that when the reader puts the book down he will not exclaim, “I know”; please heaven, but that he might sincerely say, “I do not know!”
“I don’t know, because I am beginning to fear that there might be something illusory in the alleged mild effects of scarcity.” (Sophism I.)
“I am no longer so convinced of the supposed charms of obstacles to economic activity.” (Sophism II.)
“The effort which produces no result seems no longer to me to be as desirable as the result which requires no effort.” (Sophism III.)
“It could well be that the secret of commerce, unlike that of combat (according to the definition given by the fencing instructor in Le Bourgeois gentilhomme),13 does not consist in giving and not receiving.” (Sophism VI.)
“I understand that a good increases in value to the degree that it has been worked upon; but in an exchange, do two goods of equal value cease to be of equal value because one comes from a plough and the other from a Jacquard loom?”14 (Sophism XXI.)
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“I admit that I am beginning to find it strange that mankind might be improved by fetters or enriched by taxes; and frankly I would be relieved of a great burden and I would feel pure joy if it could be demonstrated to me, as the author of the Sophisms assures me, that there is no contradiction between well-being and justice, between peace and liberty, between the expansion of labor and the progress of knowledge.” (Sophisms XIV and XX.)
“Thus, without claiming to be satisfied with his arguments, which I don’t know if I should call reasons or paradoxes, I will explore further the works of the masters of economic science.”
Let us end this monograph on sophistry with a final and important thought:
The world is not sufficiently aware of the influence that sophistry exercises on it.
If I have to say what I think, when the right of the strongest was dethroned, sophistry handed empire to the right of the most subtle, and it would be difficult to say which of these two tyrants has been the most disastrous for the human race.
Men have an immoderate love for pleasure, influence, esteem, and power; in a word, for wealth.
And at the same time, they are driven by an immense urge to procure these things for themselves at the expense of others.
But these others, who are the general public, have no less an urge to keep what they have acquired, provided that they can and they know how to.
Plunder, which plays such a major role in the affairs of the world, has thus only two things which promote it: force and fraud,15 and two things which limit it: courage and enlightenment.
Force used for plunder forms the bedrock upon which the annals of human history rest. Retracing its history would be to reproduce almost entirely the history of every nation: the Assyrians, the Babylonians, the Medes, the Persians, the Egyptians, the Greeks, the Romans, the Goths, the Francs, the Huns, the Turks, the Arabs, the Mongols, and the Tartars, not to mention the Spanish in America, the English in India, the French in Africa, the Russians in Asia, etc., etc.
But at least in civilized nations, the men who produce the wealth have become sufficiently numerous and strong to defend it. Is this to say that they
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are no longer dispossessed? Not at all; they are just as dispossessed as ever and, what is more, they mutually dispossess each other.
Only the thing which promotes it has changed; it is no longer by force but by fraud that public wealth can be seized.
In order to steal from the public, it is first necessary to deceive them. To deceive them it is necessary to persuade them that they are being robbed for their own good; it is to make them accept imaginary services and often worse in exchange for their possessions. This gives rise to sophistry. Theocratic sophistry, economic sophistry, political sophistry, and financial sophistry. Therefore, ever since force has been held in check, sophistry has been not only a source of harm, it has been the very essence of harm. It must in its turn be held in check. And to do this the public must become cleverer than the clever, just as it has become stronger than the strong.
Good public, it is with this last thought in mind that I am addressing this first essay to you, although the preface has been strangely transposed and the dedication is somewhat belated.16,17
Mugron, 2 November 1845
END OF THE FIRST PART
