The Project Gutenberg eBook, What Is Free Trade?, by Frédérick Bastiat,
Translated by Emile Walter
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Title: What Is Free Trade?
An Adaptation of Frederic Bastiat's "Sophismes Éconimiques"
Designed for the American Reader
Author: Frédérick Bastiat
Release Date: June 22, 2005 [eBook #16106]
[Date last updated: January 1, 2006]
Language: English
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WHAT IS FREE TRADE?
An Adaptation of Frederick Bastiat's "Sophismes Économiques"
Designed for the American Reader
by
EMILE WALTER
A Worker
New York:
G. P. Putnam & Son, 661 Broadway
The New York Printing Company,
81, 83, And 85 Centre Street,
New York
1867
CONTENTS.
CHAPTER I.
Plenty and Scarcity
CHAPTER II.
Obstacles to Wealth and Causes of Wealth
CHAPTER III.
Effort--Result
CHAPTER IV.
Equalizing of the Facilities of Production
CHAPTER V.
Our Productions are Overloaded with Internal Taxes
CHAPTER VI.
Balance of Trade
CHAPTER VII.
A Petition
CHAPTER VIII.
Discriminating Duties
CHAPTER IX.
A Wonderful Discovery
CHAPTER X.
Reciprocity
CHAPTER XI.
Absolute Prices
CHAPTER XII.
Does Protection raise the Rate of Wages?
CHAPTER XIII.
Theory and Practice
CHAPTER XIV.
Conflict of Principles
CHAPTER XV.
Reciprocity Again
CHAPTER XVI.
Obstructed Rivers plead for the Prohibitionists
CHAPTER XVII.
A Negative Railroad
CHAPTER XVIII.
There are no Absolute Principles
CHAPTER XIX.
National Independence
CHAPTER XX.
Human Labor--National Labor
CHAPTER XXI.
Raw Material
CHAPTER XXII.
Metaphors
CHAPTER XXIII.
Conclusion
INTRODUCTION.
Years ago I could not rid my mind of the notion that Free Trade meant
some cunning policy of British statesmen designed to subject the world
to British interests. Coming across Bastiat's inimitable _Sophismes
Economiques_ I learnt to my surprise that there were Frenchmen also
who advocated Free Trade, and deplored the mischiefs of the Protective
Policy. This made me examine the subject, and think a good deal upon
it; and the result of this thought was the unalterable conviction I
now hold--a conviction that harmonizes with every noble belief that
our race entertains; with Civil and Religious Freedom for All,
regardless of race or color; with the Harmony of God's works; with
Peace and Goodwill to all Mankind. That conviction is this: that to
make taxation the incident of protection to special interests, and
those engaged in them, is robbery to the rest of the community, and
subversive of National Morality and National Prosperity. I believe
that taxes are necessary for the support of government, I believe they
must be raised by levy, I even believe that some customs taxes may be
more practicable and economical than some internal taxes; but I am
entirely opposed to making anything the object of taxation but the
revenue required by government for its economical maintenance.
I do not espouse Free Trade because it is British, as some suppose it
to be. Independent of other things, that would rather set me against
it than otherwise, because generally those things which best fit
European society ill befit our society--the structure of each being so
different. Free Trade is no more British than any other kind of
freedom: indeed, Great Britain has only followed quite older examples
in adopting it, as for instance the republics of Venice and Holland,
both of which countries owed their extraordinary prosperity to the
fact of their having set the example of relaxing certain absurd
though time-honored restrictions on commerce. I espouse Free Trade
because it is just, it is unselfish, and it is profitable.
For these reasons have I, a Worker, deeply interested in the welfare
of the fellow-workers who are my countrymen, lent to Truth and Justice
what little aid I could, by adapting Bastiat's keen and cogent Essay
to the wants of readers on this side of the Atlantic.
EMILE WALTER, _the Worker_.
NEW YORK, 1866.
WHAT IS FREE TRADE?
CHAPTER I.
PLENTY AND SCARCITY.
Which is better for man and for society--abundance or scarcity?
What! Can such a question be asked? Has it ever been pretended, is it
possible to maintain, that scarcity is better than plenty?
Yes: not only has it been maintained, but it is still maintained.
Congress says so; many of the newspapers (now happily diminishing in
number) say so; a large portion of the public say so; indeed, the
_city theory_ is by far the more popular one of the two.
Has not Congress passed laws which prohibit the importation of foreign
productions by the maintenance of excessive duties? Does not the
_Tribune_ maintain that it is advantageous to limit the supply of iron
manufactures and cotton fabrics, by restraining any one from bringing
them to market, but the manufacturers in New England and Pennsylvania?
Do we not hear it complained every day: Our importations are too
large; We are buying too much from abroad? Is there not an
Association of Ladies, who, though they have not kept their promise,
still, promised each other not to wear any clothing which was
manufactured in other countries?
Now tariffs can only raise prices by diminishing the quantity of goods
offered for sale. Therefore, statesmen, editors, and the public
generally, believe that scarcity is better than abundance.
But why is this; why should men be so blind as to maintain that
scarcity is better than plenty?
Because they look at _price_, but forget _quantity_.
But let us see.
A man becomes rich in proportion to the remunerative nature of his
labor; that is to say, _in proportion as he sells his produce at a
high price_. The price of his produce is high in proportion to its
scarcity. It is plain, then, that, so far as regards him at least,
scarcity enriches him. Applying, in turn, this manner of reasoning to
each class of laborers individually, the _scarcity theory_ is deduced
from it. To put this theory into practice, and in order to favor each
class of labor, an artificial scarcity is produced in every kind of
produce by prohibitory tariffs, by restrictive laws, by monopolies,
and by other analogous measures.
In the same manner it is observed that when an article is abundant, it
brings a small price. The gains of the producer are, of course, less.
If this is the case with all produce, all producers are then poor.
Abundance, then, ruins society; and as any strong conviction will
always seek to force itself into practice, we see the laws of the
country struggling to prevent abundance.
Now, what is the defect in this argument? Something tells us that it
must be wrong; but _where_ is it wrong? Is it false? No. And yet it is
wrong? Yes. But how? _It is incomplete._
Man produces in order to consume. He is at once producer and consumer.
The argument given above, considers him only under the first point of
view. Let us look at him in the second character, and the conclusion
will be different. We may say:
The consumer is rich in proportion as he _buys_ at a low price. He
buys at a low price in proportion to the abundance of the articles in
demand; _abundance_, then, enriches him. This reasoning, extended to
all consumers, must lead to the _theory of abundance_.
Which theory is right?
Can we hesitate to say? Suppose that by following out the _scarcity
theory_, suppose that through prohibitions and restrictions we were
compelled not only to make our own iron, but to grow our own coffee;
in short, to obtain everything with difficulty and great outlay of
labor. We then take an account of stock and see what our savings are.
Afterward, to test the other theory, suppose we remove the duties on
iron, the duties on coffee, and the duties on everything else, so that
we shall obtain everything with as little difficulty and outlay of
labor as possible. If we then take an account of stock, is it not
certain that we shall find more iron in the country, more coffee, more
everything else?
Choose then, fellow-countrymen, between scarcity and abundance,
between much and little, between Protection and Free Trade. You now
know which theory is the right one, for you know the fruits they each
bear.
But, it will be answered, if we are inundated with foreign goods and
produce, our specie, our precious product of California, our dollars,
will leave the country.
Well, what of that? Man is not fed with coin. He does not dress in
gold, nor warm himself with silver. What does it matter, then, whether
there be more or less specie in the country, provided there be more
bread in the cupboard, more meat in the larder, more clothes in the
wardrobe, and more fuel in the cellar?
Again, it will be objected, if we accustom ourselves to depend upon
England for iron, what shall we do in case of a war with that country?
To this I reply, we shall then be compelled to produce iron ourselves.
But, again I am told, we will not be prepared; we will have no
furnaces in blast, no forges ready. True; neither will there be any
time when war shall occur that the country will not be already filled
with all the iron we shall want until we can make it here. Did the
Confederates in the late war lack for iron? Why, then, shall we
manufacture our own staples and bolts because we may some day or other
have a quarrel with our ironmonger!
To sum up:
A radical antagonism exists between the vender and the buyer.
The former wishes the article offered to be _scarce_, and the supply
to be small, so that the price may be high.
The latter wishes it _abundant_ and the supply to be large, so that
the price may be low.
The laws, which should at least remain neutral, take part for the
vender against the buyer; for the producer against the consumer; for
high against low prices; for scarcity against abundance; for
protection against free trade. They act, if not intentionally, at
least logically, upon the principle that _a nation is rich in
proportion as it is in want of everything_.
CHAPTER II.
OBSTACLES TO WEALTH AND CAUSES OF WEALTH.
Man is naturally in a state of entire destitution.
Between this state, and the satisfying of his wants, there exist a
number of obstacles which it is the object of labor to surmount.
I wish to make a journey of some hundred miles. But between the point
of my departure and my destination there are interposed mountains,
rivers, swamps, forests, robbers; in a word--_obstacles_. To overcome
these obstacles it is necessary that I should bestow much labor and
great efforts in opposing them; or, what is the same thing, if others
do it for me, I must pay them the value of their exertions. IT IS
EVIDENT THAT I WOULD HAVE BEEN BETTER OFF HAD THESE OBSTACLES NEVER
EXISTED. Remember this.
Through the journey of life, in the long series of days from the
cradle to the tomb, man has many difficulties to oppose him. Hunger,
thirst, sickness, heat, cold, are so many obstacles scattered along
his road. In a state of isolation he would be obliged to combat them
all by hunting, fishing, agriculture, spinning, weaving, architecture,
etc., and it is very evident that it would be better for him that
these difficulties should exist to a less degree, or even not at all.
In a state of society he is not obliged personally to struggle with
each of these obstacles, but others do it for him; and he, in turn,
must remove some one of them for the benefit of his fellow-men. This
doing one kind of labor for another, is called the division of labor.
Considering mankind as a whole, _let us remember once more that it
would be better for society that these obstacles should be as weak and
as few as possible_.
But mark how, in viewing this simple truth from a narrow point of
view, we come to believe that obstacles, instead of being a
disadvantage, are actually a source of wealth!
If we examine closely and in detail the phenomena of society and the
private interests of men _as modified by the division of labor_, we
perceive, without difficulty, how it has happened that wants have been
confounded with riches, and the obstacle with the cause.
The separation of occupations, which results from the division of
labor, causes each man, instead of struggling against _all_
surrounding obstacles, to combat only _one_; the effort being made not
for himself alone, but for the benefit of his fellows, who, in their
turn, render a similar service to him.
It hence results that this man looks upon the obstacle which he has
made it his profession to combat for the benefit of others, as the
immediate cause of his riches. The greater, the more serious, the more
stringent, may be this obstacle, the more he is remunerated for the
conquering of it, by those who are relieved by his labors.
A physician, for instance, does not busy himself in baking his bread,
or in manufacturing his clothing and his instruments; others do it
for him, and he, in return, combats the maladies with which his
patients are afflicted. The more dangerous and frequent these maladies
are, the more others are willing, the more, even, are they forced, to
work in his service. Disease, then, which is an obstacle to the
happiness of mankind, becomes to him the source of his comforts. The
reasoning of all producers is, in what concerns themselves, the same.
As the doctor draws his profits from _disease_, so does the ship-owner
from the obstacle called _distance_; the agriculturist from that named
_hunger_; the cloth manufacturer from _cold_; the schoolmaster lives
upon _ignorance_, the jeweler upon _vanity_, the lawyer upon _cupidity
and breach of faith_. Each profession has then an immediate interest
in the continuation, even in the extension, of the particular obstacle
to which its attention has been directed.
Theorists hence go on to found a system upon these individual
interests, and say: Wants are riches: Labor is riches: The obstacle to
well-being is well-being: To multiply obstacles is to give food to
industry.
Then comes the statesman; and as the developing and propagating of
obstacles is the developing and propagating of riches, what more
natural than that he should bend his efforts to that point? He says,
for instance: If we prevent a large importation of iron, we create a
difficulty in procuring it. This obstacle severely felt, obliges
individuals to pay, in order to relieve themselves from it. A certain
number of our citizens, giving themselves up to the combating of this
obstacle, will thereby make their fortunes. In proportion, too, as the
obstacle is great, and the mineral scarce, inaccessible, and of
difficult and distant transportation, in the same proportion will be
the number of laborers maintained by the various branches of this
industry.
The same reasoning will lead to the proscription of machinery.
Here are men who are at a loss how to dispose of their petroleum. This
is an obstacle which other men set about removing for them by the
manufacture of casks. It is fortunate, say our statesmen, that this
obstacle exists, since it occupies a portion of the labor of the
nation, and enriches a certain number of our citizens. But here is
presented to us an ingenious machine, which cuts down the oak, squares
it, makes it into staves, and, gathering these together, forms them
into casks. The obstacle is thus diminished, and with it the fortunes
of the coopers. We must prevent this. Let us proscribe the machine!
To sift thoroughly this sophism, it is sufficient to remember that
human labor is not an _end_ but a _means_.
_Labor is never without employment._ If one obstacle is removed, it
seizes another, and mankind is delivered from two obstacles by the
same effort which was at first necessary for one. If the labor of
coopers could become useless, it must take another direction. To
maintain that human labor can end by wanting employment, it would be
necessary to prove that mankind will cease to encounter obstacles.
CHAPTER III.
EFFORT--RESULT.
We have seen that between our wants and their gratification many
obstacles are interposed. We conquer or weaken these by the employment
of our faculties. It may be said, in general terms, that industry is
an effort followed by a result.
But by what do we measure our well-being? By our riches? By the result
of our effort, or by the effort itself? There exists always a
proportion between the effort employed and the result obtained. Does
progress consist in the relative increase of the second or of the
first term of this proportion--between effort or result?
Both propositions have been sustained, and in political economy
opinions are divided between them.
According to the first system, riches are the result of labor. They
increase in the same ratio as _the result does to the effort_.
Absolute perfection, of which God is the type, consists in the
infinite distance between these two terms in this relation, viz.,
effort none, result infinite.
The second system maintains that it is the effort itself which forms
the measure of, and constitutes, our riches. Progression is the
increase of the _proportion of the effect to the result_. Its ideal
extreme may be represented by the eternal and fruitless efforts of
Sisyphus.[A]
[Footnote A: We will therefore beg the reader to allow us in future,
for the sake of conciseness, to designate this system under the term
of _Sisyphism_, from Sisyphus, who, in punishment of his crimes, was
compelled to roll a stone up hill, which fell to the bottom as fast as
he rolled it to the top, so that his labor was interminable as well as
fruitless.]
The first system tends naturally to the encouragement of everything
which diminishes difficulties, and augments production--as powerful
machinery, which adds to the strength of man; the exchange of produce,
which allows us to profit by the various natural agents distributed in
different degrees over the surface of our globe; the intellect which
discovers, the experience which proves, and the emulation which
excites.
The second as logically inclines to everything which can augment the
difficulty and diminish the product; as, privileges, monopolies,
restrictions, prohibition, suppression of machinery, sterility, &c.
It is well to mark here that the universal practice of men is always
guided by the principle of the first system. Every _workman_, whether
agriculturist, manufacturer, merchant, soldier, writer or philosopher,
devotes the strength of his intellect to do better, to do more
quickly, more economically--in a word, _to do more with less_.
The opposite doctrine is in use with theorists, essayists, statesmen,
ministers, men whose business is to make experiments upon society. And
even of these we may observe, that in what personally concerns
themselves, they act, like everybody else, upon the principle of
obtaining from their labor the greatest possible quantity of useful
results.
It may be supposed that I exaggerate, and that there are no true
Sisyphists.
I grant that in practice the principle is not pushed to its extreme
consequences. And this must always be the case when one starts upon a
wrong principle, because the absurd and injurious results to which it
leads, cannot but check it in its progress. For this reason, practical
industry never can admit of Sisyphism. The error is too quickly
followed by its punishment to remain concealed. But in the speculative
industry of theorists and statesmen, a false principle may be for a
long time followed up, before the complication of its consequences,
only half understood, can prove its falsity; and even when all is
revealed, the opposite principle is acted upon, self is contradicted,
and justification sought, in the incomparably absurd modern axiom,
that in political economy there is no principle universally true.
Let us see, then, if the two opposite principles I have laid down do
not predominate, each in its turn; the one in practical industry, the
other in industrial legislation. When a man prefers a good plough to a
bad one; when he improves the quality of his manures; when, to loosen
his soil, he substitutes as much as possible the action of the
atmosphere for that of the hoe or the harrow; when he calls to his aid
every improvement that science and experience have revealed, he has,
and can have, but one object, viz., to _diminish the proportion of the
effort to the result_. We have indeed no other means of judging of
the success of an agriculturist or of the merits of his system, but by
observing how far he has succeeded in lessening the one, while he
increases the other; and as all the farmers in the world act upon this
principle, we may say that all mankind are seeking, no doubt for their
own advantage, to obtain at the lowest price, bread, or whatever other
article of produce they may need, always diminishing the effort
necessary for obtaining any given quantity thereof.
This incontestable tendency of human nature, once proved, would, one
might suppose, be sufficient to point out the true principle to the
legislator, and to show him how he ought to assist industry (if indeed
it is any part of his business to assist it at all), for it would be
absurd to say that the laws of men should operate in an inverse ratio
from those of Providence.
Yet we have heard members of Congress exclaim, "I do not understand
this theory of cheapness; I would rather see bread dear, and work more
abundant." And consequently these gentlemen vote in favor of
legislative measures whose effect is to shackle and impede commerce,
precisely because by so doing we are prevented from procuring
indirectly, and at low price, what direct production can only furnish
more expensively.
Now it is very evident that the system of Mr. So-and-so, the
Congressman, is directly opposed to that of Mr. So-and-so, the
agriculturist. Were he consistent with himself, he would as legislator
vote against all restriction; or else as farmer, he would practise in
his fields the same principle which he proclaims in the public
councils. We would then see him sowing his grain in his most sterile
fields, because he would thus succeed in _laboring much_, to _obtain
little_. We would see him forbidding the use of the plough, because he
could, by scratching up the soil with his nails, fully gratify his
double wish of "_dear bread_ and _abundant labor_."
Restriction has for its avowed object and acknowledged effect, the
augmentation of labor. And again, equally avowed and acknowledged, its
object and effect are, the increase of prices--a synonymous term for
scarcity of produce. Pushed then to its greatest extreme, it is pure
Sisyphism as we have defined it; _labor infinite; result nothing_.
There have been men who accused railways of _injuring shipping_; and
it is certainly true that the most perfect means of attaining an
object must always limit the use of a less perfect means. But railways
can only injure shipping by drawing from it articles of
transportation; this they can only do by transporting more cheaply;
and they can only transport more cheaply, by _diminishing the
proportion of the effort employed to the result obtained_--for it is
in this that cheapness consists. When, therefore, these men lament the
suppression of labor in attaining a given result, they maintain the
doctrine of Sisyphism. Logically, if they prefer the vessel to the
railway, they should also prefer the wagon to the vessel, the
pack-saddle to the wagon, and the sack to the pack-saddle: for this
is, of all known means of transportation, the one which requires the
greatest amount of labor, in proportion to the result obtained.
"Labor constitutes the riches of the people," say some theorists. This
was no elliptical expression, meaning that the "results of labor
constitute the riches of the people." No; these theorists intended to
say, that it is the _intensity_ of labor which measures riches; and
the proof of this is that from step to step, from restriction to
restriction, they forced on the United States (and in so doing
believed that they were doing well) to give to the procuring of, for
instance, a certain quantity of iron, double the necessary labor. In
England, iron was then at $20; in the United States it cost $40.
Supposing the day's work to be worth $2.50, it is evident that the
United States could, by barter, procure a ton of iron by eight days'
labor taken from the labor of the nation. Thanks to the restrictive
measures of these gentlemen, sixteen days' work were necessary to
procure it, by direct production. Here then we have double labor for
an identical result; therefore double riches; and riches, measured not
by the result, but by the intensity of labor. Is not this pure and
unadulterated Sisyphism?
That there may be nothing equivocal, these gentlemen carry their idea
still farther, and on the same principle that we have heard them call
the intensity of labor _riches_, we will find them calling the
abundant results of labor and the plenty of everything proper to the
satisfying of our wants, _poverty_. "Everywhere," they remark,
"machinery has pushed aside manual labor; everywhere production is
superabundant; everywhere the equilibrium is destroyed between the
power of production and that of consumption." Here then we see that,
according to these gentlemen, if the United States was in a critical
situation it was because her productions were too abundant; there was
too much intelligence, too much efficiency in her national labor. We
were too well fed, too well clothed, too well supplied with
everything; the rapid production was more than sufficient for our
wants. It was necessary to put an end to this calamity, and therefore
it became needful to force us, by restrictions, to work more in order
to produce less.
All that we could have further to hope for, would be, that human
intellect might sink and become extinct; for, while intellect exists,
it cannot but seek continually to increase the _proportion of the end
to the means; of the product to the labor_. Indeed it is in this
continuous effort, and in this alone, that intellect consists.
Sisyphism has been the doctrine of all those who have been intrusted
with the regulation of the industry of our country. It would not be
just to reproach them with this; for this principle becomes that of
our administration only because it prevails in Congress; it prevails
in Congress only because it is sent there by the voters; and the
voters are imbued with it only because public opinion is filled with
it to repletion.
Let me repeat here, that I do not accuse the protectionists in
Congress of being absolutely and always Sisyphists. Very certainly
they are not such in their personal transactions; very certainly each
of them will procure for himself _by barter_, what by _direct
production_ would be attainable only at a higher price. But I maintain
that they are Sisyphists when they prevent the country from acting
upon the same principle.
CHAPTER IV.
EQUALIZING OF THE FACILITIES OF PRODUCTION.
The protectionists often use the following argument:
"It is our belief that protection should correspond to, should be the
representation of, the difference which exists between the price of an
article of home production and a similar article of foreign
production. A protective duty calculated upon such a basis does
nothing more than secure free competition; free competition can only
exist where there is an equality in the facilities of production. In a
horse-race the load which each horse carries is weighed and all
advantages equalized; otherwise there could be no competition. In
commerce, if one producer can undersell all others, he ceases to be a
competitor and becomes a monopolist. Suppress the protection which
represents the difference of price according to each, and foreign
produce must immediately inundate and obtain the monopoly of our
market. Every one ought to wish, for his own sake and for that of the
community, that the productions of the country should be protected
against foreign competition, _whenever the latter may be able to
undersell the former_."
This argument is constantly recurring in all writings of the
protectionist school. It is my intention to make a careful
investigation of its merits, and I must begin by soliciting the
attention and the patience of the reader. I will first examine into
the inequalities which depend upon natural causes, and afterwards into
those which are caused by diversity of taxes.
Here, as elsewhere, we find the theorists who favor protection taking
part with the producer. Let us consider the case of the unfortunate
consumer, who seems to have entirely escaped their attention. They
compare the field of protection to the _turf_. But on the turf, the
race is at once a _means and an end_. The public has no interest in
the struggle, independent of the struggle itself. When your horses are
started in the course with the single object of determining which is
the best runner, nothing is more natural than that their burdens
should be equalized. But if your object were to send an important and
critical piece of intelligence, could you without incongruity place
obstacles to the speed of that one whose fleetness would secure you
the best means of attaining your end? And yet this is your course in
relation to industry. You forget the end aimed at, which is the
_well-being_ of the community; you set it aside; more, you sacrifice
it by a perfect _petitio principii_.
But we cannot lead our opponents to look at things from our point of
view; let us now take theirs: let us examine the question as
producers.
I will seek to prove:
1. That equalizing the facilities of production is to attack the
foundations of mutual exchange.
2. That it is not true that the labor of one country can be crushed by
the competition of more favored climates.
3. That, even were this the case, protective duties cannot equalize
the facilities of production.
4. That freedom of trade equalizes these conditions as much as
possible; and
5. That the countries which are the least favored by nature are those
which profit most by mutual exchange.
1. _Equalizing the facilities of production is to attack the
foundations of mutual exchange._ The equalizing of the facilities of
production, is not only the shackling of certain articles of commerce,
but it is the attacking of the system of mutual exchange in its very
foundation principle. For this system is based precisely upon the very
diversities, or, if the expression be preferred, upon the inequalities
of fertility, climate, temperature, capabilities, which the
protectionists seek to render null. If New England sends its
manufactures to the West, and the West sends corn to New England, it
is because these two sections are, from different circumstances,
induced to turn their attention to the production of different
articles. Is there any other rule for international exchanges?
Again, to bring against such exchanges the very inequalities of
condition which excite and explain them, is to attack them in their
very cause of being. The protective system, closely followed up, would
bring men to live like snails, in a state of complete isolation. In
short, there is not one of its sophisms, which, if carried through by
vigorous deductions, would not end in destruction and annihilation.
2. _It is not true that the labor of one country can be crushed by the
competition of more favored climates._ The statement is not true that
the unequal facility of production, between two similar branches of
industry, should necessarily cause the destruction of the one which is
the least fortunate. On the turf, if one horse gains the prize, the
other loses it; but when two horses work to produce any useful
article, each produces in proportion to his strength; and because the
stronger is the more useful it does not follow that the weaker is good
for nothing. Wheat is cultivated in every section of the United
States, although there are great differences in the degree of
fertility existing among them. If it happens that there be one which
does not cultivate it, it is because, even to itself, such cultivation
is not useful. Analogy will show us, that under the influences of an
unshackled trade, notwithstanding similar differences, wheat would be
produced in every portion of the world; and if any nation were induced
to entirely abandon the cultivation of it, this would only be because
it would _be her interest_ to otherwise employ her lands, her capital,
and her labor. And why does not the fertility of one department
paralyze the agriculture of a neighboring and less favored one?
Because the phenomena of political economy have a suppleness, an
elasticity, and, so to speak, _a self-levelling power_, which seems to
escape the attention of the school of protectionists. They accuse us
of being theoretic, but it is themselves who are so to a supreme
degree, if the being theoretic consists in building up systems upon
the experience of a single fact, instead of profiting by the
experience of a series of facts. In the above example, it is the
difference in the value of lands which compensates for the difference
in their fertility. Your field produces three times as much as mine.
Yes. But it has cost you ten times as much, and therefore I can still
compete with you: this is the sole mystery. And observe how the
advantage on one point leads to disadvantage on the other. Precisely
because your soil is more fruitful it is more dear. It is not
_accidentally_ but _necessarily_ that the equilibrium is established,
or at least inclines to establish itself: and can it be denied that
perfect freedom in exchanges is of all systems the one which favors
this tendency?
I have cited an agricultural example; I might as easily have taken one
from any trade. There are tailors at Barnegat, but that does not
prevent tailors from being in New York also, although the latter have
to pay a much higher rent, as well as higher price for furniture,
workmen, and food. But their customers are sufficiently numerous not
only to reëstablish the balance, but also to make it lean on their
side.
When, therefore, the question is about equalizing the advantages of
labor, it would be well to consider whether the natural freedom of
exchange is not the best umpire.
This self-levelling faculty of political phenomena is so important,
and at the same time so well calculated to cause us to admire the
providential wisdom which presides over the equalizing government of
society, that I must ask permission a little longer to turn to it the
attention of the reader.
The protectionists say, Such a nation has the advantage over us, in
being able to procure cheaply, coal, iron, machinery, capital; it is
impossible for us to compete with it.
We must examine this proposition under other aspects. For the
present, I stop at the question, whether, when an advantage and a
disadvantage are placed in juxtaposition, they do not bear in
themselves, the former a descending, the latter an ascending power,
which must end by placing them in a just equilibrium?
Let us suppose the countries A and B. A has every advantage over B;
you thence conclude that labor will be concentrated upon A, while B
must be abandoned. A, you say, sells much more than it buys; B buys
much more than it sells. I might dispute this, but I will meet you
upon your own ground.
In the hypothesis, labor being in great demand in A, soon rises in
value; while labor, iron, coal, lands, food, capital, all being little
sought after in B, soon fall in price.
Again: A being always selling and B always buying, cash passes from B
to A. It is abundant in A, very scarce in B.
But where there is abundance of cash, it follows that in all purchases
a large proportion of it will be needed. Then in A, _real dearness_,
which proceeds from a very active demand, is added to _nominal
dearness_, the consequence of a superabundance of the precious metals.
Scarcity of money implies that little is necessary for each purchase.
Then in B, a _nominal cheapness_ is combined with _real cheapness_.
Under these circumstances, industry will have the strongest possible
motives for deserting A to establish itself in B.
Now, to return to what would be the true course of things. As the
progress of such events is always gradual, industry from its nature
being opposed to sudden transits, let us suppose that, without
waiting the extreme point, it will have gradually divided itself
between A and B, according to the laws of supply and demand; that is
to say, according to the laws of justice and usefulness.
_I do not advance an empty hypothesis when I say, that were it
possible that industry should concentrate itself upon a single point,
there must, from its nature, arise spontaneously, and in its midst_,
AN IRRESISTIBLE POWER OF DECENTRALIZATION.
We will quote the words of a manufacturer to the Chamber of Commerce
at Manchester (the figures brought into his demonstration being
suppressed):
"Formerly we exported goods; this exportation gave way to that of
thread for the manufacture of goods; later, instead of thread, we
exported machinery for the making of thread; then capital for the
construction of machinery; and lastly, workmen and talent, which are
the source of capital. All these elements of labor have, one after the
other, transferred themselves to other points, where their profits
were increased, and where the means of subsistence being less
difficult to obtain, life is maintained at less cost. There are at
present to be seen in Prussia, Austria, Saxony, Switzerland, and
Italy, immense manufacturing establishments, founded entirely by
English capital, worked by English labor, and directed by English
talent."
We may here perceive that Nature, with more wisdom and foresight than
the narrow and rigid system of the protectionists can suppose, does
not permit the concentration of labor, and the monopoly of advantages,
from which they draw their arguments as from an absolute and
irremediable fact. It has, by means as simple as they are infallible,
provided for dispersion, diffusion, mutual dependence, and
simultaneous progress; all of which, your restrictive laws paralyze as
much as is in their power, by their tendency towards the isolation of
nations. By this means they render much more decided the differences
existing in the conditions of production; they check the
self-levelling power of industry, prevent fusion of interests,
neutralize the counterpoise, and fence in each nation within its own
peculiar advantages and disadvantages.
3. _Even were the labor of one country crushed by the competition of
more favored climates (which is denied), protective duties cannot
equalize the facilities of production._ To say that by a protective
law the conditions of production are equalized, is to disguise an
error under false terms. It is not true that an import duty equalizes
the conditions of production. These remain after the imposition of the
duty just as they were before. The most that law can do is to equalize
the _conditions of sale_. If it should be said that I am playing upon
words, I retort the accusation upon my adversaries. It is for them to
prove that _production_ and _sale_ are synonymous terms, which if they
cannot do, I have a right to accuse them, if not of playing upon
words, at least of confounding them.
Let me be permitted to exemplify my idea.
Suppose that several New York speculators should determine to devote
themselves to the production of oranges. They know that the oranges of
Portugal can be sold in New York at one cent each, whilst on account
of the boxes, hot-houses, &c., which are necessary to ward against
the severity of our climate, it is impossible to raise them at less
than a dollar apiece. They accordingly demand a duty of ninety-nine
cents upon Portugal oranges. With the help of this duty, say they, the
_conditions of production_ will be equalized. Congress, yielding as
usual to this argument, imposes a duty of ninety-nine cents on each
foreign orange.
Now I say that the _relative conditions of production_ are in no wise
changed. The law can take nothing from the heat of the sun in Lisbon,
nor from the severity of the frosts in New York. Oranges continuing to
mature themselves _naturally_ on the banks of the Tagus, and
artificially upon those of the Hudson, must continue to require for
their production much more labor on the latter than the former. The
law can only equalize the _conditions of sale_. It is evident that
while the Portuguese sell their oranges here at a dollar apiece, the
ninety-nine cents which go to pay the tax are taken from the American
consumer. Now look at the whimsicality of the result. Upon each
Portuguese orange, the country loses nothing; for the ninety-nine
cents which the consumer pays to satisfy the impost tax, enter into
the treasury. There is improper distribution; but no loss. But upon
each American orange consumed, there will be about ninety-nine cents
lost; for while the buyer very certainly loses them, the seller just
as certainly does not gain them; for, even according to the
hypothesis, he will receive only the price of production, I will leave
it to the protectionists to draw their conclusion.
4. _But freedom of trade equalizes these conditions as much as is
possible._ I have laid some stress upon this distinction between the
conditions of production and those of sale, which perhaps the
prohibitionists may consider as paradoxical, because it leads me on to
what they will consider as a still stranger paradox. This is: If you
really wish to equalize the facilities of production, leave trade
free.
This may surprise the protectionists; but let me entreat them to
listen, if it be only through curiosity, to the end of my argument. It
shall not be long. I will now take it up where we left off.
If we suppose for the moment, that the common and daily profits of
each American amount to one dollar, it will indisputably follow that
to produce an orange by _direct_ labor in America, one day's work, or
its equivalent, will be requisite; whilst to produce the cost of a
Portuguese orange, only one-hundredth of this day's labor is required;
which means simply this, that the sun does at Lisbon what labor does
at New York. Now is it not evident, that if I can produce an orange,
or, what is the same thing, the means of buying it, with one-hundredth
of a day's labor, I am placed exactly in the same condition as the
Portuguese producer himself, excepting the expense of the
transportation? It therefore follows that freedom of commerce
equalizes the conditions of production direct or indirect, as much as
it is possible to equalize them; for it leaves but the one inevitable
difference, that of transportation.
I will add that free trade equalizes also the facilities for attaining
enjoyments, comforts, and general consumption; the last, an object
which is, it would seem, quite forgotten, and which is nevertheless
all-important; since, in fine, consumption is the main object of all
our industrial efforts. Thanks to freedom of trade, we would enjoy
here the results of the Portuguese sun, as well as Portugal itself;
and the inhabitants of New York would have in their reach, as well as
those of London, and with the same facilities, the advantages which
nature has in a mineralogical point of view conferred upon Cornwall.
5. _Countries least favored by nature (countries not yet cleared of
forests, for example) are those which profit most by mutual exchange._
The protectionists may suppose me in a paradoxical humor, for I go
further still. I say, and I sincerely believe, that if any two
countries are placed in unequal circumstances as to advantages of
production, _the one of the two which is the less favored by nature,
will gain more by freedom of commerce_. To prove this, I will be
obliged to turn somewhat aside from the form of reasoning which
belongs to this work. I will do so, however; first, because the
question in discussion turns upon this point; and again, because it
will give me the opportunity of exhibiting a law of political economy
of the highest importance, and which, well understood, seems to me to
be destined to lead back to this science all those sects which, in our
days, are seeking in the land of chimeras that social harmony which
they have been unable to discover in nature. I speak of the law of
consumption, which the majority of political economists may well be
reproached with having too much neglected.
Consumption is the _end_, the final cause of all the phenomena of
political economy, and, consequently, in it is found their final
solution.
No effect, whether favorable or unfavorable, can be vested permanently
in the producer. His advantages and disadvantages, derived from his
relations to nature and to society, both pass gradually from him; and
by an almost insensible tendency are absorbed and fused into the
community at large--the community considered as consumers. This is an
admirable law, alike in its cause and its effects; and he who shall
succeed in making it well understood, will have a right to say, "I
have not, in my passage through the world, forgotten to pay my tribute
to society."
Every circumstance which favors the work of production is of course
hailed with joy by the producer, for its _immediate effect_ is to
enable him to render greater services to the community, and to exact
from it a greater remuneration. Every circumstance which injures
production, must equally be the source of uneasiness to him; for its
_immediate effect_ is to diminish his services, and consequently his
remuneration. This is a fortunate and necessary law of nature. The
immediate good or evil of favorable or unfavorable circumstances must
fall upon the producer, in order to influence him invisibly to seek
the one and to avoid the other.
Again: when an inventor succeeds in his labor-saving machine, the
_immediate_ benefit of this success is received by him. This again is
necessary, to determine him to devote his attention to it. It is also
just; because it is just that an effort crowned with success should
bring its own reward.
But these effects, good and bad, although permanent in themselves, are
not so as regards the producer. If they had been so, a principle of
progressive and consequently infinite inequality would have been
introduced among men. This good, and this evil, both therefore pass
on, to become absorbed in the general destinies of humanity.
How does this come about? I will try to make it understood by some
examples.
Let us go back to the thirteenth century. Men who gave themselves up
to the business of copying, received for this service _a remuneration
regulated by the general rate of the profits_. Among them is found
one, who seeks and finds the means of rapidly multiplying copies of
the same work. He invents printing. The first effect of this is, that
the individual is enriched, while many more are impoverished. At the
first view, wonderful as the discovery is, one hesitates in deciding
whether it is not more injurious than useful. It seems to have
introduced into the world, as I said above, an element of infinite
inequality. Guttenberg makes large profits by this invention, and
perfects the invention by the profits, until all other copyists are
ruined. As for the public--the consumer--it gains but little, for
Guttenberg takes care to lower the price of books only just so much as
is necessary to undersell all rivals.
But the great Mind which put harmony into the movements of celestial
bodies, could also give it to the internal mechanism of society. We
will see the advantages of this invention escaping from the
individual, to become for ever the common patrimony of mankind.
The process finally becomes known. Guttenberg is no longer alone in
his art; others imitate him. Their profits are at first considerable.
They are recompensed for being the first who made the effort to
imitate the processes of the newly-invented art. This again was
necessary, in order that they might be induced to the effort, and thus
forward the great and final result to which we approach. They gain
largely; but they gain less than the inventor, for _competition_ has
commenced its work. The price of books now continually decreases. The
gains of the imitators diminish in proportion as the invention becomes
older; and in the same proportion imitation becomes less meritorious.
Soon the new object of industry attains its normal condition; in other
words, the remuneration of printers is no longer an exception to the
general rules of remuneration, and, like that of copyists formerly, it
is only regulated _by the general rate of profits_. Here then the
producer, as such, holds only the old position. The discovery,
however, has been made; the saving of time, labor, effort, for a fixed
result, for a certain number of volumes, is realized. But in what is
this manifested? In the cheap price of books. For the good of whom?
For the good of the consumer--of society--of humanity. Printers,
having no longer any peculiar merit, receive no longer a peculiar
remuneration. As men--as consumers--they no doubt participate in the
advantages which the invention confers upon the community; but that is
all. As printers, as producers, they are placed upon the ordinary
footing of all other producers. Society pays them for their labor, and
not for the usefulness of the invention. _That_ has become a
gratuitous benefit, a common heritage to mankind.
The wisdom and beauty of these laws strike me with admiration and
reverence.
What has been said of printing, can be extended to every agent for the
advancement of labor--from the nail and the mallet, up to the
locomotive and the electric telegraph. Society enjoys all, by the
abundance of its use, its consumption; and it _enjoys all
gratuitously_. For as their effect is to diminish prices, it is
evident that just so much of the price as is taken off by their
intervention, renders the production in so far _gratuitous_. There
only remains the actual labor of man to be paid for; and the
remainder, which is the result of the invention, is subtracted; at
least after the invention has run through the cycle which I have just
described as its destined course. I send for a workman; he brings a
saw with him; I pay him two dollars for his day's labor, and he saws
me twenty-five boards. If the saw had not been invented, he would
perhaps not have been able to make one board, and I would none the
less have paid him for his day's labor. The _usefulness_, then, of the
saw, is for me a gratuitous gift of nature, or rather, is a portion of
the inheritance which, _in common_ with my brother men, I have
received from the genius of my ancestors. I have two workmen in my
field; the one directs the handle of a plough, the other that of a
spade. The result of their day's labor is very different, but the
price is the same, because the remuneration is proportioned, not to
the usefulness of the result, but to the effort, the [time, and] labor
given to attain it.
I invoke the patience of the reader, and beg him to believe, that I
have not lost sight of free trade: I entreat him only to remember the
conclusion at which I have arrived: _Remuneration is not proportioned
to the usefulness of the articles brought by the producer into the
market, but to the [time and] labor required for their production._[B]
[Footnote B: It is true that [time and] labor do not receive a uniform
remuneration; because labor is more or less intense, dangerous,
skilful, &c., [and time more or less valuable.] Competition
establishes for each category a price current: and it is of this
variable price that I speak.]
I have so far taken my examples from human inventions, but will now go
on to speak of natural advantages.
In every article of production, nature and man must concur. But the
portion of nature is always gratuitous. Only so much of the usefulness
of an article as is the result of human labor becomes the object of
mutual exchange, and consequently of remuneration. The remuneration
varies much, no doubt, in proportion to the intensity of the labor, of
the skill, which it requires, of its being _à-propos_ to the demand of
the day, of the need which exists for it, of the momentary absence of
competition, &c. But it is not the less true in principle, that the
assistance received from natural laws, which belongs to all, counts
for nothing in the price.
We do not pay for the air we breathe, although so useful to us, that
we could not live two minutes without it. We do not pay for it,
because nature furnishes it without the intervention of man's labor.
But if we wish to separate one of the gases which compose it for
instance, to fill a balloon, we must take some [time and] labor; or if
another takes it for us, we must give him an equivalent in something
which will have cost us the trouble of production. From which we see
that the exchange is between efforts, [time and] labor. It is
certainly not for hydrogen gas that I pay, for this is everywhere at
my disposal, but for the work that it has been necessary to accomplish
in order to disengage it; work which I have been spared, and which I
must refund. If I am told that there are other things to pay for, as
expense, materials, apparatus, I answer, that still in these things it
is the work that I pay for. The price of the coal employed is only the
representation of the [time and] labor necessary to dig and transport
it.
We do not pay for the light of the sun, because nature alone gives it
to us. But we pay for the light of gas, tallow, oil, wax, because here
is labor to be remunerated;--and remark, that it is so entirely [time
and] labor and not utility to which remuneration is proportioned, that
it may well happen that one of these means of lighting, while it may
be much more effective than another, may still cost less. To cause
this, it is only necessary that less [time and] human labor should be
required to furnish it.
When the water-boat comes to supply my ship, were I to pay in
proportion to the _absolute utility_ of the water, my whole fortune
would not be sufficient. But I pay only for the trouble taken. If more
is required, I can get another boat to furnish it, or finally go and
get it myself. The water itself is not the subject of the bargain, but
the labor required to obtain the water. This point of view is so
important, and the consequences that I am going to draw from it so
clear, as regards the freedom of international exchanges, that I will
still elucidate my idea by a few more examples.
The alimentary substance contained in potatoes does not cost us very
dear, because a great deal of it is attainable with little work. We
pay more for wheat, because, to produce it, Nature requires more labor
from man. It is evident that if Nature did for the latter what she
does for the former, their prices would tend to the same level. It is
impossible that the producer of wheat should permanently gain more
than the producer of potatoes. The law of competition cannot allow it.
Again, if by a happy miracle the fertility of all arable lands were to
be increased, it would not be the agriculturist, but the consumer, who
would profit by this phenomenon; for the result of it would be
abundance and cheapness. There would be less labor incorporated into
an acre of grain, and the agriculturist would be therefore obliged to
exchange it for less labor incorporated into some other article. If,
on the contrary, the fertility of the soil were suddenly to
deteriorate, the share of nature in production would be less, that of
labor greater, and the result would be higher prices.
I am right then in saying that it is in consumption, in mankind, that
at length all political phenomena find their solution. As long as we
fail to follow their effects to this point, and look only at
_immediate_ effects, which act but upon individual men or classes of
men _as producers_, we know nothing more of political economy than the
quack does of medicine, when instead of following the effects of a
prescription in its action upon the whole system, he satisfies himself
with knowing how it affects the palate and the throat.
The tropical regions are very favorable to the production of sugar and
coffee; that is to say, Nature does most of the business and leaves
but little for labor to accomplish. But who reaps the advantage of
this liberality of Nature? NOT THESE REGIONS, for they are
forced by competition to receive remuneration simply for their labor.
It is MANKIND who is the gainer; for the result of this
liberality is _cheapness_, and cheapness belongs to the world.
Here in the temperate zone, we find coal and iron ore on the surface
of the soil; we have but to stoop and take them. At first, I grant,
the immediate inhabitants profit by this fortunate circumstance. But
soon comes competition, and the price of coal and iron falls, until
this gift of nature becomes gratuitous to all, and human labor is only
paid according to the general rate of profits.
Thus, natural advantages, like improvements in the process of
production, are, or have, a constant tendency to become, under the law
of competition, the common and _gratuitous_ patrimony of consumers, of
society, of mankind. Countries, therefore, which do not enjoy these
advantages, must gain by commerce with those which do; because the
exchanges of commerce are between _labor and labor_, subtraction being
made of all the natural advantages which are combined with these
labors; and it is evidently the most favored countries which can
incorporate into a given labor the largest proportion of these
_natural advantages_. Their produce representing less labor, receives
less recompense; in other words, is _cheaper_. If then all the
liberality of Nature results in cheapness, it is evidently not the
producing, but the consuming country, which profits by her benefits.
Hence we may see the enormous absurdity of the consuming country,
which rejects produce precisely because it is cheap. It is as though
we should say: "We will have nothing of that which Nature gives you.
You ask of us an effort equal to two, in order to furnish ourselves
with produce only attainable at home by an effort equal to four. You
can do it because with you Nature does half the work. But we will have
nothing to do with it; we will wait till your climate, becoming more
inclement, forces you to ask of us a labor equal to four, and then we
can treat with you _upon an equal footing_!"
A is a favored country; B is maltreated by Nature. Mutual traffic then
is advantageous to both, but principally to B, because the exchange is
not between _utility_ and _utility_, but between _value_ and _value_.
Now A furnishes a greater _utility in a similar value_, because the
utility of any article includes at once what Nature and what labor
have done; whereas the value of it only corresponds to the portion
accomplished by labor. B then makes an entirely advantageous bargain;
for by simply paying the producer from A for his labor, it receives in
return not only the results of that labor, but in addition there is
thrown in whatever may have accrued from the superior bounty of
Nature.
We will lay down the general rule.
Traffic is an exchange of _values_; and as value is reduced by
competition to the simple representation of labor, traffic is the
exchange of equal labors. Whatever Nature has done towards the
production of the articles exchanged, is given on both sides
_gratuitously_; from whence it necessarily follows, that the most
advantageous commerce is transacted with those countries which are
the least favored by Nature.
The theory of which I have attempted in this chapter to trace the
outlines, deserves a much greater elaboration. But perhaps the
attentive reader will have perceived in it the fruitful seed which is
destined in its future growth to smother Protectionism, at once with
the various other isms whose object is to exclude the law of
COMPETITION from the government of the world. Competition, no
doubt, considering man as producer, must often interfere with his
individual and _immediate_ interests. But if we consider the great
object of all labor, the universal good, in a word, Consumption, we
cannot fail to find that Competition is to the moral world what the
law of equilibrium is to the material one. It is the foundation of
true gratification, of true Liberty and Equality, of the equality of
comforts and condition, so much sought after in our day; and if so
many sincere reformers, so many earnest friends to public right, seek
to reach their end by _commercial legislation_, it is only because
they do not yet understand _commercial freedom_.
CHAPTER V.
OUR PRODUCTIONS ARE OVERLOADED WITH INTERNAL TAXES--
This is but a new wording of the Sophism before noticed. The
demand made is, that the foreign article should be taxed, in order to
neutralize the effects of the internal tax, which weighs down domestic
produce. It is still then but the question of equalizing the
facilities of production. We have but to say that the tax is an
artificial obstacle, which has exactly the same effect as a natural
obstacle, i.e. the increasing of the price. If this increase is so
great that there is more loss in producing the article in question at
home than in attracting it from foreign parts by the production of an
equivalent value of something else--_laissez faire_. Individual
interest will soon learn to choose the lesser of two evils. I might
refer the reader to the preceding demonstration for an answer to this
Sophism; but it is one which recurs so often, that it deserves a
special discussion.
I have said more than once, that I am opposing only the theory of the
protectionists, with the hope of discovering the source of their
errors. Were I disposed to enter into controversy with them, I would
say: Why direct your tariffs principally against England, a country
more overloaded with taxes than any in the world? Have I not a right
to look upon your argument as a mere pretext? But I am not of the
number of those who believe that prohibitionists are guided by
interest, and not by conviction. The doctrine of Protection is too
popular not to be sincere. If the majority could believe in freedom,
we would be free. Without doubt it is individual interest which weighs
us down with tariffs; but it acts upon conviction. "The will (said
Pascal) is one of the principal organs of belief." But belief does not
the less exist because it is rooted in the will and in the secret
inspirations of egotism.
We will return to the Sophism drawn from internal taxes.
The government may make either a good or a bad use of taxes; it makes
a good use of them when it renders to the public services equivalent
to the value received from them; it makes a bad use of them when it
expends this value, giving nothing in return. To say in the first case
that they place the country which pays them in more disadvantageous
conditions for production, than the country which is free from them,
is a Sophism. We pay, it is true, so many millions for the
administration of justice, and the maintenance of order, but we have
justice and order; we have the security which they give, the time
which they save for us; and it is most probable that production is
neither more easy nor more active among nations, where (if there be
such) each individual takes the administration of justice into his own
hands. We pay, I grant, many millions for roads, bridges, ports,
steamships; but we have these steamships, these ports, bridges, and
roads; and unless we maintain that it is a losing business to
establish them, we cannot say that they place us in a position
inferior to that of nations who have, it is true, no budget of public
works, but who likewise have no public works. And here we see why
(even while we accuse taxes of being a cause of industrial
inferiority) we direct our tariffs precisely against those nations
which are the most taxed. It is because these taxes, well used, far
from injuring, have ameliorated the _conditions of production_ to
these nations. Thus we again arrive at the conclusion that the
protectionist Sophisms not only wander from, but are the contrary--the
very antithesis--of truth.
As to unproductive taxes, suppress them if you can; but surely it is a
most singular idea to suppose, that their evil effect is to be
neutralized by the addition of individual taxes to public taxes. Many
thanks for the compensation! The State, you say, has taxed us too
much; surely this is no reason that we should tax each other!
A protective duty is a tax directed against foreign produce, but which
returns, let us keep in mind, upon the national consumer. Is it not
then a singular argument to say to him, "Because the taxes are heavy,
we will raise prices higher for you; and because the State takes a
part of your revenue, we will give another portion of it to benefit a
monopoly?"
But let us examine more closely this Sophism so accredited among our
legislators; although, strange to say, it is precisely those who keep
up the unproductive taxes (according to our present hypothesis) who
attribute to them afterwards our supposed inferiority, and seek to
re-establish the equilibrium by further taxes and new clogs.
It appears to me to be evident that protection, without any change in
its nature and effects, might have taken the form of a direct tax,
raised by the State, and distributed as a premium to privileged
industry.
Let us admit that foreign iron could be sold in our market at $16, but
not lower; and American iron at not lower than $24.
In this hypothesis there are two ways in which the State can secure
the national market to the home producer.
The first, is to put upon foreign iron a duty of $10. This, it is
evident, would exclude it, because it could no longer be sold at less
than $26; $16 for the indemnifying price, $10 for the tax; and at this
price it must be driven from the market by American iron, which we
have supposed to cost $24. In this case the buyer, the consumer, will
have paid all the expenses of the protection given.
The second means would be to lay upon the public an Internal Revenue
tax of $10, and to give it as a premium to the iron manufacturer. The
effect would in either case be equally a protective measure. Foreign
iron would, according to both systems, be alike excluded; for our iron
manufacturer could sell at $14, what, with the $10 premium, would thus
bring him in $24. While the price of sale being $14, foreign iron
could not obtain a market at $16.
In these two systems the principle is the same; the effect is the
same. There is but this single difference; in the first case the
expense of protection is paid by a part, in the second by the whole
of the community. I frankly confess my preference for the second
system, which I regard as more just, more economical, and more legal.
More just, because, if society wishes to give bounties to some of its
members, the whole community ought to contribute; more economical,
because it would banish many difficulties, and save the expenses of
collection; more legal, because the public would see clearly into the
operation, and know what was required of it.
But if the protective system had taken this form, would it not have
been laughable enough to hear it said: "We pay heavy taxes for the
army, the navy, the judiciary, the public works, the debt, &c. These
amount to more than 200 millions. It would therefore be desirable that
the State should take another 200 millions to relieve the poor iron
manufacturers."
This, it must certainly be perceived, by an attentive investigation,
is the result of the Sophism in question. In vain, gentlemen, are all
your efforts; you cannot give money to one without taking it from
another. If you are absolutely determined to exhaust the funds of the
taxable community, well; but, at least, do not mock them; do not tell
them, "We take from you again, in order to compensate you for what we
have already taken."
It would be a too tedious undertaking to endeavor to point out all the
fallacies of this Sophism. I will therefore limit myself to the
consideration of it in three points.
You argue that the United States are overburdened with taxes, and
deduce thence the conclusion that it is necessary to protect such and
such an article of produce. But protection does not relieve us from
the payment of these taxes. If, then, individuals devoting themselves
to any one object of industry, should advance this demand: "We, from
our participation in the payment of taxes, have our expenses of
production increased, and therefore ask for a protective duty which
shall raise our price of sale:" what is this but a demand on their
part to be allowed to free themselves from the burden of the tax, by
laying it on the rest of the community? Their object is to balance, by
the increased price of their produce, the amount which they pay in
taxes. Now, as the whole amount of these taxes must enter into the
Treasury, and the increase of price must be paid by society, it
follows that (where this protective duty is imposed) society has to
bear, not only the general tax, but also that for the protection of
the article in question. But, it is answered, let _everything_ be
protected. Firstly, this is impossible; and, again, were it possible,
how could such a system give relief? _I_ will pay for you, _you_ will
pay for me; but not the less still there remains the tax to be paid.
Thus you are the dupes of an illusion. You determine to raise taxes
for the support of an army, a navy, judges, roads, &c. Afterwards you
seek to disburden from its portion of the tax, first one article of
industry, then another, then a third; always adding to the burden of
the mass of society. You thus only create interminable complications.
If you can prove that the increase of price resulting from protection,
falls upon the foreign producer, I grant something specious in your
argument. But if it be true that the American people paid the tax
before the passing of the protective duty, and afterwards that it has
paid not only the tax but the protective duty also, truly I do not
perceive wherein it has profited.
But I go much further, and maintain that the more oppressive our taxes
are, the more anxiously ought we to open our ports and frontiers to
foreign nations, less burdened than ourselves. And why? _In order that
we may_ SHARE WITH THEM, _as much as possible, the burden
which we bear._ Is it not an incontestable maxim in political economy,
that taxes must, in the end, fall upon the consumer? _The greater then
our commerce, the greater the portion which will be reimbursed to us,
of taxes incorporated in the produce which we will have sold to
foreign consumers; whilst we on our part will have made to them only a
lesser reimbursement, because (according to our hypothesis) their
produce is less taxed than ours._
CHAPTER VI.
BALANCE OF TRADE.
Our adversaries have adopted a system of tactics, which
embarrasses us not a little. Do we prove our doctrine? They admit the
truth of it in the most respectful manner. Do we attack their
principles? They abandon them with the best possible grace. They only
ask that our doctrine, which they acknowledge to be true, should be
confined to books; and that their principles, which they allow to be
false, should be established in practice. If we will give up to them
the regulation of our tariffs, they will leave us triumphant in the
domain of literature.
It is constantly alleged in opposition to our principles, that they
are good only in theory. But, gentlemen, do you believe that
merchants' books are good in practice? It does appear to me, if there
is anything which can have a practical authority, when the object is
to prove profit and loss, that this must be commercial accounts. We
cannot suppose that all the merchants of the world, for centuries
back, should have so little understood their own affairs, as to have
kept their books in such a manner as to represent gains as losses, and
losses as gains. Truly it would be easier to believe that our
legislators are bad political economists. A merchant, one of my
friends, having had two business transactions, with very different
results, I have been curious to compare on this subject the accounts
of the counter with those of the custom-house, interpreted by our
legislators.
Mr. T dispatched from New Orleans a vessel freighted for France with
cotton valued at $200,000. Such was the amount entered at the
custom-house. The cargo, on its arrival at Havre, had paid ten per
cent. expenses, and was liable to thirty per cent. duties, which
raised its value to $280,000. It was sold at twenty per cent. profit
on its original value, which equalled $40,000, and the price of sale
was $320,000, which the consignee converted into merchandise,
principally Parisian goods. These goods, again, had to pay for
transportation to the sea-board, insurance, commissions, &c., ten per
cent.; so that when the return cargo arrived at New Orleans, its value
had risen to $352,000, and it was thus entered at the custom-house.
Finally, Mr. T realized again on this return cargo twenty per cent.
profits, amounting to $70,400. The goods thus sold for the sum of
$422,400.
If our legislators require it, I will send them an extract from the
books of Mr. T. They will there see, _credited_ to the account of
_profit and loss_, that is to say, set down as gained, two sums; the
one of $40,000, the other of $70,400, and Mr. T feels perfectly
certain that, as regards these, there is no mistake in his accounts.
Now what conclusion do our Congressmen draw from the sums entered into
the custom-house, in this operation? They thence learn that the United
States have exported $200,000, and imported $352,000; from whence
they conclude "_that she has spent, dissipated, the profits of her
previous savings; that she is impoverishing herself and progressing to
her ruin; and that she has squandered on a foreign nation_ $152,000
_of her capital_."
Some time after this transaction, Mr. T dispatched another vessel,
again freighted with national produce, to the amount of $200,000. But
the vessel foundered in leaving the port, and Mr. T had only further
to inscribe upon his books two little items, thus worded:
"_Sundries due to X_, $200,000, for purchase of divers articles
dispatched by vessel N."
"_Profit and loss due, to sundries_, $200,000, _for final and total
loss of cargo._"
In the meantime the custom-house inscribed $200,000 upon its list of
_exportations_, and as there can of course be nothing to balance this
entry on the list of _importations_, it hence follows that our
enlightened members of Congress must see in this wreck _a clear
profit_ to the United States of $200,000.
We may draw hence yet another conclusion, viz.: that according to the
Balance of Trade theory, the United States has an exceedingly simple
manner of constantly doubling her capital. It is only necessary, to
accomplish this, that she should, after entering into the custom-house
her articles for exportation, cause them to be thrown into the sea. By
this course, her exportations can speedily be made to equal her
capital; importations will be nothing, and our gain will be, all which
the ocean will have swallowed up.
You are joking, the protectionists will reply. You know that it is
impossible that we should utter such absurdities. Nevertheless, I
answer, you do utter them, and what is more, you give them life, you
exercise them practically upon your fellow-citizens, as much, at
least, as is in your power to do.
But lest even Mr. T's books may not be deemed of sufficient weight to
counterbalance the convictions of the Horace Greeley school of
prohibition, I shall proceed to furnish a table exhibiting various
classes of commercial transactions, embracing most of the classes
usually effected by importing and exporting houses, all of which may
result in undoubted profits to the parties engaged in them, and to the
country at large, and yet which, as they appear in the annual Commerce
and Navigation Reports issued by the government, would be made to
prove by Mr. Greeley that the result has in each case been a loss to
the country. The sums are all stated in gold:
A, represents one hundred merchants, who shipped to London beef, boots
and shoes, butter, cheese, cotton, hams and bacon, flour, Indian corn,
lard, lumber, machinery, oils, pork, staves, tallow, tobacco and
cigars, worth in New York, in the aggregate, ten millions of dollars,
gold, but worth in London plus the cost of transportation, &c., eleven
millions of dollars, gold, in bond. After being sold in London, the
proceeds (eleven millions) were invested in British goods, worth
eleven millions in London, but worth twelve millions in bond in New
York, and plus the cost of transportation, &c. After having these
goods sold in New York, a net profit of two millions was the result of
the whole transaction, a profit both to the merchants and the country;
yet, according to the Commerce and Navigation Returns, the exports
were ten millions, and the imports eleven millions (valued at the
foreign place of production as the law directs), showing, according to
Mr. Greeley's solitary point of view, a loss to the country of one
million.
B, owned a gold mine in Nevada, and had no capital with which to
develop it. He proceeded to France, sold his mine to C for a million,
which he invested in French muslin-de-laines, buttons, and glassware,
worth a million in France, but worth $1,100,000 in Philadelphia, ex
duty and plus transportation, &c. These sold, B netted an undoubted
profit of $100,000, besides getting rid of his mine; but, according to
the Commerce and Navigation Returns, the exports were nothing, and the
imports $1,000,000; showing, according to Mr. Greeley's solitary point
of view, a loss to the country of $1,000,000.
C, the French owner of the Nevada mine, had a million more with which
to develop it. Hearing that French cloths and gloves had a good sale
in Boston, he invested his million in these goods, sailed for Boston
with them, sold them there in bond and plus exportation, for
$1,100,000, which he at once invested in machinery, labor, &c.,
destined for Nevada. So far, C made a profit of $100,000, and had
$2,100,000 invested in an American gold mine; but, according to the
Commerce and Navigation Returns, the exports were nothing, and the
imports $1,000,000; according to Mr. Greeley's solitary point of view,
a loss to the country of $ 1,000,000.
D, had a rich uncle in Rio Janeiro who died and left him a million. D
ordered this sum to be invested in hides and shipped to him at Boston.
These hides were worth a million in Rio, but $1,100,000 in Natick, ex
duty and plus transportation. Upon selling them D was clearly worth
$1,100,000; yet, according to the Commerce and Navigation Reports, as
there had been no exports, but simply $1,000,000 of imports, the
transaction, from Mr. Greeley's solitary point of view, seemed a loss
to the country of $1,000,000.
E, in 1850, shipped to Cuba, wagons, carts, agricultural implements,
pianos and billiard-tables, worth $1,000,000 in Baltimore, but
$1,100,000 in Havana, ex duty and plus transportation. These he sold,
and invested the proceeds in cigars worth $1,100,000 in Havana, but in
Russia, ex duty and plus transportation, $1,210,000. Disposing of
these in turn, and investing the proceeds in Russian iron worth
$1,210,000 in Russia, but $1,331,000 in Venezuela, ex duty and plus
transportation, he shipped the iron to Venezuela, where he realized on
it, investing the proceeds this time in South American products worth
in Spain $1,464,100. He sold these products in Spain, bought olive oil
with the proceeds, shipped the same to Australia, where it was worth,
ex duty and plus charges, $1,610,510, which sum he realized in gold,
which he carried to New York in 1853. On the latter transaction he
makes no profit, but barely clears his charges. Yet on the whole he
has made a net gain of $610,510; but, according to the Commerce and
Navigation Reports, the exports have been $1,000,000 and the imports
$1,610,510, showing, from Mr. Greeley's solitary point of view, a loss
to the country of $610,510. Nay more, for Mr. Greeley balances his
trade accounts each year by itself, and as E's outward shipment was
made in 1850 and his importation in 1853, the country, according to
H.G., lost in 1853, by over importation, $1,610,500. Yet not to be
hard on H.G., and to be perfectly honest in our accounts, we will only
set down a loss to the country from his point of view of $610,510.
F, owned the 4,000 ton ship Great Republic, which cost him $160,000.
Finding her too large for profitable employment, and hearing that
large vessels were in demand in England as troop transports to the
Crimea, he sent her out in ballast and sold her in Southampton for
$200,000 cash. With this sum he went to Geneva, where he invested it
in Swiss watches worth $200,000 in Geneva, but $210,000 in New
Orleans, ex duty and plus transportation. To New Orleans he
accordingly shipped the watches, and they were sold. By these
transactions he not only got rid of his elephant, but both he and the
country clearly gained $50,000. Yet according to Mr. Greeley's single
eye the country suffered to the extent of $200,000, for in the exports
appeared nothing, but among the imports $200,000 worth of foreign
gewgaws, only fit to keep time with.
G, (an actual transaction) shipped by the Great Eastern on her last
voyage from New York, lard and other merchandise, worth in New York
$600,000, the fact of which, in the hurry of business, he failed to
report to the Custom House, and it therefore did not appear in the
exports. This lard was carried to England, where it found no sale, and
was reshipped to New York. G only escaped being charged duty on it
when it arrived, by swearing that it had been originally shipped from
here in good faith; yet it was entered as an import (free of duty),
and showed, according to Mr. Greeley's one eye, that the country was
on the road to ruin $600,000 worth.
H, lived in Brownsville, Texas, where he had a lot of arms and
gunpowder, worth $100,000. The Mexicans levied a very high import duty
on these articles, and they consequently bore a very high price in
Matamoras, just opposite, being worth in the market of that town no
less than $250,000. He accordingly conceived the idea of smuggling
them into Mexican territory, and, with the connivance of the Mexican
officials, (what rascals these foreign custom-house officials are, to
be sure!) actually succeeded in doing so, and thus realized the very
handsome profit of $150,000 in gold. The entire proceeds he invested
in Mexican indigo and cochineal, worth in Mexico $250,000, and in
Boston $275,000, in bond, plus charges. Of course, no export entry was
furnished to the customs collector at Brownsville; but Mr. Greeley
fastened his one eye on the indigo and cochineal, when it arrived in
Boston, and made up his mind that the country had lost $250,000. As
for H, he has invested $100,000 in more gunpowder and arms, and starts
for Brownsville next week, to try his luck again. With the other
$175,000 he has a notion of buying out the New York _Tribune_, and
setting it right on free trade, and other matters of the sort.
I, and his friends owned a fine fleet of merchantmen when the war
broke out. The aggregate burden of the vessels was nearly a million of
tons, and they were worth $40 a ton. When the rebel cruisers commenced
their operations, there were no United States cruisers prepared to
capture them, because our best vessels were on blockade service. This
being the case, insurance on American merchantmen rose very high--so
high that I and his friends were reluctantly compelled to sell their
vessels in Great Britain and elsewhere, and convert them into cash.
They brought $40,000,000, and this sum was invested in merchandise,
which netted a profit of ten per cent. to I and his friends. They thus
gained $4,000,000 by these transactions. The entire proceeds,
$44,000,000, they then lent to the government with which to carry on
its war of existence with the Southern insurgents. Profitable as these
transactions clearly were to I and his friends, and to the government,
Mr. Greeley, nevertheless, only sees the import of $40,000,000 worth
of foreign extravagances, and consequently wants the tariff on iron
increased in order to make water run up hill.
J, had $2,000,000 in five-twenty bonds, which cost him $1,400,000
gold. As the market price in New York was only 70 gold, while it was
72-1/4 in London, he conceived the inhuman idea of selling them in the
latter place. The cost of sending them there, including insurance,
&c., made them net him but 72, but at this price he gained a profit of
$40,000. With his capital now augmented to $1,440,000 he bought rags
in Italy, which he sold in New York for $1,584,000, ex duty and plus
transportation, a clear profit of $184,000 from the start. No export
appearing in the Commerce and Navigation Returns, and nothing but the
rags meeting his unital gaze, Mr. Greeley at once posted his national
ledger with a loss of $1,440,000, the cost of the rags in Italy.
K, was, and is still (for these are actual transactions taken from his
account books), an exchange broker, doing business in New York. He
buys notes on the banks of England, Ireland, Scotland, France and
Canada--indeed, foreign banknotes of all kinds--for which he usually
pays about ninety per cent, of their face value. By the end of last
year he had invested $200,000 in these notes brought here by
travellers. He then inclosed them in letters, and sent them to their
proper destinations to be redeemed. Redeemed they were in due time,
and the proceeds remitted in gold. In this business he earned the neat
profit of $22,222, and the country was that much richer thereby. But
Mr. Greeley, who only looked at the import of K's gold remittance,
declared the country $22,222 worse off than before, and dares us to
"come on" with the figures.
L, and some fifty thousand other skedaddlers ran off to Canada when
the war broke out, for fear they might be drafted. Together with the
colored folks who fled there, and the many travellers who went there
from time to time, they carried with them most of our silver
half-dollars, quarters, dimes, half-dimes, and three-cent pieces.
These amounted to $25,000,000, which the skedaddlers, the colored
folks, and the travellers, as with returning peace they slowly
straggled back into the country, invested in Canadian knick-knacks,
which they disposed of in the United States. The incoming goods
were duly entered at our frontier custom-houses, but the outgoing
silver was not. Mr. Greeley, unaware of this fact, detects an
over-importation of $25,000,000, and is waiting to be elected to
Congress in order to legislate the matter right.
M, (an actual transaction) had $1,000,000 in Illinois Central Railroad
bonds, for which he desired to obtain $1,000,000 worth of iron rails
to repair the road with. Not being able to effect the transaction in
the United States, he sent the bonds to Germany, where they were sold,
and the proceeds invested in English railroad iron, worth $1,000,000
in Glasgow, but $1,100,000 in Chicago, ex duty, and plus
transportation. By this transaction M, besides effecting the desired
exchange, netted a profit of $100,000. Yet, according to the Commerce
and Navigation Reports, and Mr. Greeley's one eye, as there had been
no exports and $1,000,000 of imports, the country was a sufferer by
the latter sum.
N, was a body of incorporators who owned a tract of land lying in the
bend of a river. Standing in need of water power for manufacturing
purposes, they resolved to cut a canal across the bend. As this would
essentially benefit the navigation of the river, the State agreed to
guaranty their bonds for a loan of money to the extent of $1,000,000.
Finding no purchaser for these bonds in the United States, they
remitted them to Europe, and there sold them at par. With the proceeds
they purchased army blankets for the Boston market, on which they
realized ten per cent. net profit. These sold, the avails were
invested in barrows, spades, water-wheels, wages, &c., and in good
time the canal was cut and the manufactory set a-going. Profitable as
this thing was to N, Mr. Greeley's single-barrelled telescope sees in
it only a loss to the country of $1,000,000.
O, represents the Illinois Central, Union Pacific, and other western
railroads, owning grants of land along their respective roads, to sell
which to actual settlers they open agencies in London, Havre, Antwerp,
and other European cities. The emigrants who buy these lands pay for
them in Europe, and set sail for America with their title-deeds in
their pockets, and their axes on their shoulders, ready for a conquest
over forest and prairie. The agents of the Illinois Central Railroad
(see report of the Company), who have sold 1,664,422 acres, say at an
average of ten dollars per acre, invested the proceeds, $16,644,220,
in iron rails for the road, worth that sum in England, but ten per
cent. more in Illinois, less duty and plus transportation. The road
has thus not only netted a profit of $1,664,422 on the transaction,
but sold their wild lands to actual settlers, who will soon convert
them into productive farms. But Mr. Greeley, upon seeing an import of
$16,644,220 of iron rails, declares the thing must be stopped or the
country will perish.
P, is Sir Morton Peto and other European capitalists, who, believing
that eight per cent., the average rate of interest in the United
States, is better than three per cent., the average rate in England,
invest $10,000,000 of capital in American enterprises. This capital is
sent hither in the form of merchandise, to stock our railroads, farms,
factories, etc., and is so much clear benefit to the country; but to
Mr. Greeley's solitary vision it is only a curse.
Q, and his friends are cozy old-fashioned merchants in Boston city,
who own one hundred and seventy-nine vessels (see Consular Reports,
1865), which trade between foreign ports and away from the United
States altogether. These vessels have an aggregate burden of one
million tons, are worth forty dollars, gold, per ton, and earn a net
profit per annum of ten per cent. on their cost. Although in this kind
of carrying trade we are wofully behind other nations, yet it yields,
in twelve years (the average age of the vessels engaged in it), the
neat little profit of $48,000,000, which is invested by Q in tea,
coffee, and sugar, and imported into the United States at a net profit
of ten per cent. Although an unquestionable gain to Q and the country
at large of $52,800,000, Mr. Greeley, with his contracted views, only
regards it as a dead loss on the import side of our Commerce and
Navigation Returns.
R, was a bank which had a defaulting cashier, who ran away in 1857
with $500,000 of its funds. (Sch*yl*r carried off a million of New
Haven Railroad bonds). These funds were recovered and converted into
gold, which was shipped to the United States. According to Mr.
Greeley, who could find no record of exports to counterbalance it, the
same was a dead loss to the country.
S, and his friends own 76,990 tons of whaling ships (see Commerce and
Navigation Reports, 1866), worth $40 per ton, gold, or $3,079,600.
These ships are sent annually to the Arctic regions and earn for S and
his friends ten per cent., or $307,960 net profit each year. Five
years' profits, consisting of whale oil, bone, etc., which, after an
active and profitable trade at the Sandwich Islands, they returned
with this year, were valued at $1,655,659, and were duly entered among
the imports, furnishing to Mr. Greeley an indubitable proof that the
country was losing money in this business, and that the attention of
Congress should at once be directed toward supplying a proper remedy.
T, was a South American refugee, who brought with him a million of
dollars in gold doubloons. After living here for many years, by which
time, through foreign trading, his capital had doubled, he invested
the entire avails in United States bonds, as a last and striking
evidence of his faith in our institutions, and departed to his native
country, there to rest his bones. This man clearly prospered, and so
did the country in which he settled, and on whose national faith he
lent all his fortune. Yet Mr. Greeley concludes the whole thing to
have been a bad job for us, and harps upon another over-importation of
$1,000,000.
U, is a gallant Yankee sea-captain, who picks up an abandoned vessel
at sea laden with a valuable cargo of teas, and bravely tows her into
port, receiving $200,000 of the proceeds of the sale of her cargo as
salvage for his skill and intrepidity. From Mr. Greeley's point of
view U is a traitor to his country, and suffering a merited poverty
for over-importing. But U drives his carriage about town, and has his
own opinion of Mr. Greeley's views.
V, having a debt of $300,000 due to him by a merchant in Alexandria,
requests him to invest the same in Arabian horses, as fancy stock to
improve American breeds. The horses arrive in good order, and on being
sold, yield V a net profit of $30,000, besides enriching our native
breeds of these useful animals. Mr. Greeley still holds out, and jots
the whole transaction down as an additional evidence of national
decadence.
TABULAR EXPOSE.
Official Returns of these Transactions as they would appear per
Commerce and Navigation Reports.--Sums all stated in gold.
--+------------+------------+------------+----------------|
|Exports. | Imports. | Net profit |Immediate |
|Value in the| Foreign | to the |accretion to the|
|United | value. | individual.|country's stock |
|States. | | |of productive |
| | | |wealth. |
--+------------+------------+------------+----------------|
A | $10,000,000| $11,000,000| $2,000,000 | $2,000,000 |
B | | 1,000,000| 100,000 | 1,100,000 |
C | | 1,000,000| 100,000 | 1,000,000 |
D | | 1,000,000| 1,100,000 | 1,100,000 |
E | 1,000,000| 1,610,510| 610,510 | 610,510 |
F | | 200,000| 50,000 | 50,000 |
G | | 600,000| | |
H | | 250,000| 175,000 | 175,000 |
I | | 40,000,000| 4,000,000 | 4,000,000 |
J | | 1,440,000| 184,000 | 1,584,000 |
K | | 222,222| 22,222 | 22,222 |
L | | 25,000,000| | 25,000,000 |
M | | 1,000,000| 100,000 | 1,000,000 |
N | | 1,000,000| 100,000 | 1,100,000 |
O | | 16,644,220| 1,664,422 | 18,308,642 |
P | | 10,000,000| | 10,000,000 |
Q | | 48,000,000| 52,800,000 | 52,800,000 |
R | | 500,000| 500,000 | 500,000 |
S | | 1,655,659| 1,655,659 | 1,655,659 |
T | | 1,000,000| 1,000,000 | 2,000,000 |
U | | 200,000| 200,000 | 200,000 |
V | | 300,000| 30,000 | 330,000 |
W | | | | |
X | | | | |
Y | | | | |
Z | | | | |
--+------------+------------+------------+----------------|
$11,000,000|$163,622,611|$66,391,813 |$124,736,033 |
-----------------------------------------------------------
W, X, Y, Z, represent 43,628,427,835,109 other commercial
transactions, in all of which the parties to them and the countries in
which they live make money, but which, regarded from Mr. Greeley's
solitary point of view, should be stopped at once by appropriate
legislation.
These various transactions, it will be perceived, have netted to the
individuals engaged in them a clear profit of $66,391,813, while the
country has added to its immediate stock of wealth not only this sum,
but $58,344,220 over, viz: $124,736,033; while, according to the
Balance of Trade chimera, which simply weighs the custom-house reports
of the value of the exports with that of the imports (and their values
in their respective countries of production, too), this commerce has
been a loss to the country of $163,622,611--$11,000,000: $152,622,611.
So much for _theory_ when confronted with _practice_.
The truth is, that the theory of the Balance of Trade should be
precisely _reversed_. The profits accruing to the nation from any
foreign commerce should be calculated by the overplus of the
importation above the exportation. This overplus, after the deduction
of expenses, is the real gain. Here we have the true theory, and it is
one which leads directly to freedom in trade. I now, gentlemen,
abandon you this theory, as I have done all those of the preceding
chapters. Do with it as you please, exaggerate it as you will; it has
nothing to fear. Push it to the furthest extreme; imagine, if it so
please you, that foreign nations should inundate us with useful
produce of every description, and ask nothing in return; that our
importations should be _infinite_, and our exportations _nothing_.
Imagine all this, and still I defy you to prove that we will be the
poorer in consequence.
CHAPTER VII.
A PETITION.
Petition from the Manufacturers of Candles, Wax-Lights, Lamps,
Chandeliers, Reflectors, Snuffers, Extinguishers; and from the
Producers of Tallow, Oil, Resin, Petroleum, Kerosene, Alcohol, and
generally of every thing used for lights.
"_To the Honorable the Senators and Representatives of the United
States in Congress assembled._
"GENTLEMEN:--You are in the right way: you reject abstract
theories; abundance, cheapness, concerns you little. You are entirely
occupied with the interest of the producer, whom you are anxious to
free from foreign competition. In a word, you wish to secure the
_national market_ to _national labor_.
"We come now to offer you an admirable opportunity for the application
of your--what shall we say? your theory? no, nothing is more
deceiving than theory--your doctrine? your system? your principle? But
you do not like doctrines; you hold systems in horror; and, as for
principles, you declare that there are no such things in political
economy. We will say, then, your practice; your practice without
theory, and without principle.
"We are subjected to the intolerable competition of a FOREIGN RIVAL,
who enjoys, it would seem, such superior facilities for the production
of light, that he is enabled to _inundate_ our _national market_ at so
exceedingly reduced a price, that, the moment he makes his appearance,
he draws off all custom from us; and thus an important branch of
American industry, with all its innumerable ramifications, is suddenly
reduced to a state of complete stagnation. This rival, who is no other
than the sun, carries on so bitter a war against us, that we have
every reason to believe that he has been excited to this course by our
perfidious cousins, the Britishers. (Good diplomacy this, for the
present time!) In this belief we are confirmed by the fact that in all
his transactions with their befogged island, he is much more moderate
and careful than with us.
"Our petition is, that it would please your Honorable Body to pass a
law whereby shall be directed the shutting up of all windows, dormers,
sky-lights, shutters, curtains--in a word, all openings, holes,
chinks, and fissures through which the light of the sun is used to
penetrate into our dwellings, to the prejudice of the profitable
manufactures which we flatter ourselves we have been enabled to bestow
upon the country; which country cannot, therefore, without
ingratitude, leave us now to struggle unprotected through so unequal a
contest.
"We pray your Honorable Body not to mistake our petition for a satire,
nor to repulse us without at least hearing the reasons which we have
to advance in its favor.
"And first, if, by shutting out as much as possible all access to
natural light, you thus create the necessity for artificial light, is
there in the United States an industrial pursuit which will not,
through some connection with this important object, be benefited by
it?
"If more tallow be consumed, there will arise a necessity for an
increase of cattle and sheep. Thus artificial meadows must be in
greater demand; and meat, wool, leather, and above all, manure, this
basis of agricultural riches, must become more abundant.
"If more oil be consumed, it will effect a great impetus to our
petroleum trade. Pit-Hole, Tack, and Oil Creek stock will go up
exceedingly, and an immense revenue will thereby accrue to the
numerous possessors of oil lands, who will be able to pay such a large
tax that the national debt can be paid off at once. Besides that, the
patent hermetical barrel trade, and numerous other industries
connected with the oil trade, will prosper at an unprecedented rate,
to the great benefit and glory of the country.
"Navigation would equally profit. Thousands of vessels would soon be
employed in the whale fisheries, and thence would arise a navy capable
of sustaining the honor of the United States, and of responding to the
patriotic sentiments of the undersigned petitioners, candle-merchants,
&c.
"But what words can express the magnificence which New York will then
exhibit! Cast an eye upon the future, and behold the gildings, the
bronzes, the magnificent crystal chandeliers, lamps, lusters, and
candelabras, which will glitter in the spacious stores, compared to
which the splendor of the present day will appear little and
insignificant.
"There is none, not even the poor manufacturer of resin in the midst
of his pine forests, nor the miserable miner in his dark dwelling, but
who would enjoy an increase of salary and of comforts.
"Gentlemen, if you will be pleased to reflect, you cannot fail to be
convinced that there is perhaps not one American, from the opulent
stockholder of Pit-Hole, down to the poorest vender of matches, who is
not interested in the success of our petition.
"We foresee your objections, gentlemen; but there is not one that you
can oppose to us which you will not be obliged to gather from the
works of the partisans of free trade. We dare challenge you to
pronounce one word against our petition, which is not equally opposed
to your own practice and the principle which guides your policy.
"If you tell us that, though we may gain by this protection, the
United States will not gain, because the consumer must pay the price
of it, we answer you:
"You have no longer any right to cite the interest of the consumer.
For whenever this has been found to compete with that of the producer,
you have invariably sacrificed the first. You have done this to
_encourage labor_, to _increase the demand for labor_. The same reason
should now induce you to act in the same manner.
"You have yourselves already answered the objection. When you were
told: The consumer is interested in the free introduction of iron,
coal, corn, wheat, cloths, &c., your answer was: Yes, but the producer
is interested in their exclusion. Thus, also, if the consumer is
interested in the admission of light, we, the producers, pray for its
interdiction.
"You have also said the producer and the consumer are one. If the
manufacturer gains by protection, he will cause the agriculturist to
gain also; if agriculture prospers, it opens a market for manufactured
goods. Thus we, if you confer upon us the monopoly of furnishing light
during the day, will as a first consequence buy large quantities of
tallow, coal, oil, resin, kerosene, wax, alcohol, silver, iron,
bronze, crystal, for the supply of our business; and then we and our
numerous contractors having become rich, our consumption will be
great, and will become a means of contributing to the comfort and
competency of the workers in every branch of national labor.
"Will you say that the light of the sun is a gratuitous gift, and that
to repulse gratuitous gifts is to repulse riches under pretence of
encouraging the means of obtaining them?
"Take care--you carry the death-blow to your own policy. Remember that
hitherto you have always repulsed foreign produce, _because_ it was an
approach to a gratuitous gift, and _the more in proportion_ as this
approach was more close. You have, in obeying the wishes of other
monopolists, acted only from a _half-motive_; to grant our petition
there is a much _fuller inducement_. To repulse us, precisely for the
reason that our case is a more complete one than any which have
preceded it, would be to lay down the following equation: + × + = -; in
other words, it would be to accumulate absurdity upon absurdity.
"Labor and Nature concur in different proportions, according to
country and climate, in every article of production. The portion of
Nature is always gratuitous; that of labor alone regulates the price.
"If a Lisbon orange can be sold at one hundredth the price of a New
York one, it is because a natural and gratuitous heat does for the
one, what the other only obtains from an artificial and consequently
expensive one.
"When, therefore, we purchase a Portuguese orange, we may say that we
obtain it 99/100 gratuitously and 1/100 by the right of labor; in
other words, at a mere song compared to those of New York.
"Now it is precisely on account of this 99/100 _gratuity_ (excuse the
phrase) that you argue in favor of exclusion. How, you say, could
national labor sustain the competition of foreign labor, when the
first has every thing to do, and the last is rid of nearly all the
trouble, the sun taking the rest of the business upon himself? If then
the 99/100 _gratuity_ can determine you to check competition, on what
principle can the _entire gratuity_ be alleged as a reason for
admitting it? You are no logicians if, refusing the 99/100 gratuity as
hurtful to human labor, you do not _à fortiori_, and with double zeal,
reject the full gratuity.
"Again, when any article, as coal, iron, cheese, or cloth, comes to us
from foreign countries with less labor than if we produced it
ourselves, the difference in price is a _gratuitous gift_ conferred
upon us; and the gift is more or less considerable, according as the
difference is greater or less. It is the quarter, the half, or the
three-quarters of the value of the produce, in proportion as the
foreign merchant requires the three-quarters, the half, or the
quarter of the price. It is as complete as possible when the producer
offers, as the sun does with light, the whole, in free gift. The
question is, and we put it formally, whether you wish for the United
States the benefit of gratuitous consumption, or the supposed
advantages of laborious production. Choose: but be consistent. And
does it not argue the greatest inconsistency to check, as you do, the
importation of iron-ware, dry-goods, and other foreign manufactures,
merely because, and even in proportion as, their price approaches
zero, while at the same time you freely admit, and without limitation,
the light of the sun, whose price is during the whole day _at_ zero?"
CHAPTER VIII.
DISCRIMINATING DUTIES.
A poor laborer of Ohio had raised, with the greatest possible
care and attention, a nursery of vines, from which, after much labor,
he at last succeeded in producing a pipe of Catawba wine, and forgot,
in the joy of his success, that each drop of this precious nectar had
cost a drop of sweat to his brow.
"I will sell it," said he to his wife, "and with the proceeds I will
buy lace, which will serve you to make a present for our daughter."
The honest countryman, arriving in the city of Cincinnati, there met
an Englishman and a Yankee.
The Yankee said to him, "Give me your wine, and I in exchange will
give you fifteen bundles of Yankee lace."
The Englishman said, "Give it to me, and I will give you twenty
bundles of English lace, for we English can spin cheaper than the
Yankees."
But a custom-house officer standing by, said to the laborer, "My good
fellow, make your exchange, if you choose, with Brother Jonathan, but
it is my duty to prevent your doing so with the Englishman."
"What!" exclaimed the countryman, "you wish me to take fifteen bundles
of New England lace, when I can have twenty from Manchester!"
"Certainly," replied the custom-house officer; "do you not see that
the United States would be a loser if you were to receive twenty
bundles instead of fifteen?"
"I can scarcely understand this," said the laborer.
"Nor can I explain it," said the custom-house officer, "but there is
no doubt of the fact; for congressmen, ministers, and editors, all
agree that a people is impoverished in proportion as it receives a
large compensation for any given quantity of its produce."
The countryman was obliged to conclude his bargain with the Yankee.
His daughter received but three-fourths of her present; and these good
folks are still puzzling themselves to discover how it can happen that
people are ruined by receiving four instead of three; and why they are
richer with three dozen bundles of lace instead of four.
CHAPTER IX.
A WONDERFUL DISCOVERY.
At this moment, when all minds are occupied in endeavoring to
discover the most economical means of transportation; when, to put
these means into practice, we are levelling roads, improving rivers,
perfecting steamboats, establishing railroads, and attempting various
systems of traction, atmospheric, hydraulic, pneumatic, electric, &c.;
at this moment, when, I believe, every one is seeking in sincerity and
with ardor the solution of this problem--"_To bring the price of
things in their place of consumption, as near as possible to their
price in that of production_"--I would believe myself to be acting a
culpable part towards my country, towards the age in which I live, and
towards myself, if I were longer to keep secret the wonderful
discovery which I have just made.
I am well aware that the self-illusions of inventors have become
proverbial, but I have, nevertheless, the most complete certainty of
having discovered an infallible means of bringing produce from all
parts of the world into the United States, and reciprocally to
transport ours, with a very important reduction of price.
Infallible! and yet this is but a single one of the advantages of my
astonishing invention, which requires neither plans nor devices,
neither preparatory studies, nor engineers, nor machinists, nor
capital, nor stockholders, nor governmental assistance! There is no
danger of shipwrecks, of explosions, of shocks of fire, nor of
displacement of rails! It can be put into practice without preparation
almost any day we think proper!
Finally: and this will, no doubt, recommend it to the public, it will
not increase the Budget one cent; but the contrary. It will not
augment the number of office-holders, nor the exigencies of State; but
the contrary. It will put in hazard the liberty of no one; but on the
contrary, it will secure to each a greater freedom.
I have been led to this discovery, not from accident, but from
observation, and I will tell you how.
I had this question to determine:
"Why does any article made, for instance, at Montreal, bear an
increased price on its arrival at New York?"
It was immediately evident to me that this was the result of
_obstacles_ of various kinds existing between Montreal and New York.
First, there is _distance_, which cannot be overcome without trouble
and loss of time; and either we must submit to these troubles and
losses in our own person, or pay another for bearing them for us. Then
come rivers, hills, accidents, heavy and muddy roads. These are so
many _difficulties_ to be overcome; in order to do which, causeways
are constructed, bridges built, roads cut and paved, railroads
established, &c. But all this is costly, and the article transported
must bear its portion of the expense. There are robbers, too, on the
roads, sometimes, and this necessitates railway guards, a police
force, &c.
Now, among these _obstacles_, there is one which we ourselves have
lately placed, and that at no little expense, between Montreal and New
York. This consists of men planted along the frontier, armed to the
teeth, whose business it is to place _difficulties_ in the way of the
transportation of goods from one country to another. These men are
called custom-house officers, and their effect is precisely similar to
that of rutted and boggy roads. They retard and put obstacles in the
way of transportation, thus contributing to the difference which we
have remarked between the price of production and that of consumption;
to diminish which difference, as much as possible, is the problem
which we are seeking to resolve.
Here, then, we have found its solution. Let our tariff be diminished:
we will thus have constructed a Northern railway which will cost us
nothing. Nay, more, we will be saved great expenses, and will begin,
from the first day, to save capital.
Really, I cannot but ask myself, in surprise, how our brains could
have admitted so whimsical a piece of folly as to induce us to pay
many millions to destroy the _natural obstacles_ interposed between
the United States and other nations, only at the same time to pay so
many millions more in order to replace them by _artificial obstacles_,
which have exactly the same effect; so that the obstacle removed and
the obstacle created, neutralize each other, things go on as before,
and the only result of our trouble is a double expense.
An article of Canadian production is worth, at Montreal, twenty
dollars, and, from the expenses of transportation, thirty dollars at
New York. A similar article of New York manufacture costs forty
dollars. What is our course under these circumstances?
First, we impose a duty of at least ten dollars on the Canadian
article, so as to raise its price to a level with that of the New York
one--the government, withal, paying numerous officials to attend to
the levying of this duty. The article thus pays ten dollars for
transportation, and ten for the tax.
This done, we say to ourselves: Transportation between Montreal and
New York is very dear; let us spend two or three millions in railways,
and we will reduce it one-half. Evidently the result of such a course
will be to get the Canadian article at New York for thirty-five
dollars, viz.:
20 dollars--price at Montreal.
10 " duty.
5 " transportation by railway.
--
35 dollars--total, or market price at New York.
Could we not have attained the same end by lowering the tariff to five
dollars? We would then have--
20 dollars--price at Montreal.
5 " duty.
10 " transportation on the common road.
--
35 dollars--total, or market price at New York.
And this arrangement would have saved us the $2,000,000 spent upon the
railway, besides the expense saved in custom-house surveillance, which
would of course diminish in proportion as the temptation to smuggling
would become less.
But it is answered: The duty is necessary to protect New York
industry. So be it; but do not then destroy the effect of it by your
railway. For if you persist in your determination to keep the Canadian
article on a par with the New York one at forty dollars, you must
raise the duty to fifteen dollars, in order to have:--
20 dollars--price at Montreal.
15 " protective duty.
5 " transportation by railway.
--
40 dollars--total, at equalized prices.
And I now ask, of what benefit, under these circumstances, is the
railway?
Frankly, is it not humiliating to the nineteenth century, that it
should be destined to transmit to future ages the example of such
puerilities seriously and gravely practised? To be the dupe of
another, is bad enough; but to employ all the forms and ceremonies of
representation in order to cheat oneself--to doubly cheat oneself, and
that too in a mere numerical account--truly this is calculated to
lower a little the pride of this _enlightened age_.
CHAPTER X.
RECIPROCITY.
We have just seen that all which renders transportation difficult,
acts in the same manner as protection; or, if the expression be
preferred, that protection tends towards the same result as all
obstacles to transportation.
A tariff may be truly spoken of as a swamp, a rut, a steep hill; in a
word, an _obstacle_, whose effect is to augment the difference between
the price of consumption and that of production. It is equally
incontestable that a swamp, a bog, &c., are veritable protective
tariffs.
There are people (few in number, it is true, but such there are) who
begin to understand that obstacles are not the less obstacles because
they are artificially created, and that our well-being is more
advanced by freedom of trade than by protection; precisely as a canal
is more desirable than a sandy, hilly, and difficult road.
But they still say, this liberty ought to be reciprocal. If we take
off our taxes in favor of Canada, while Canada does not do the same
towards us, it is evident that we are duped. Let us, then, make
_treaties of commerce_ upon the basis of a just reciprocity; let us
yield where we are yielded to; let us make the _sacrifice_ of buying
that we may obtain the advantage of selling.
Persons who reason thus, are (I am sorry to say), whether they know it
or not, governed by the protectionist principle. They are only a
little more inconsistent than the pure protectionists, as these are
more inconsistent than the absolute prohibitionists.
I will illustrate this by a fable:
There were, it matters not where, two towns, N*w Y*rk and M*ntr**l,
which, at great expense, had a road built, which connected them with
each other. Some time after this was done, the inhabitants of N*w Y*rk
became uneasy, and said: "M*ntr**l is overwhelming us with its
productions; this must be attended to." They established, therefore, a
corps of _Obstructors_, so called, because their business was to place
obstacles in the way of the convoys which arrived from M*ntr**l. Soon
after, M*ntr**l also established a corps of Obstructors.
After some years, people having become more enlightened, the
inhabitants of M*ntr**l began to discover that these reciprocal
obstacles might possibly be reciprocal injuries. They sent, therefore,
an ambassador to N*w Y*rk, who (passing over the official phraseology)
spoke much to this effect: "We have built a road, and now we put
obstacles in the way of this road. This is absurd. It would have been
far better to have left things in their original position, for then we
would not have been put to the expense of building our road, and
afterwards of creating difficulties. In the name of M*ntr**l I come to
propose to you not to renounce at once our system of mutual obstacles,
for this would be acting according to a principle, and we despise
principles as much as you do; but to somewhat lighten these obstacles,
weighing at the same time carefully our respective _sacrifices_." The
ambassador having thus spoken, the town of N*w Y*rk asked time to
reflect; manufacturers, office-seekers, congressmen, and custom-house
officers, were consulted; and at last, after some years' deliberation,
it was declared that the negotiations were broken off.
At this news, the inhabitants of M*ntr**l held a council. An old man
(who it has always been supposed had been secretly bribed by N*w Y*rk)
rose and said: "The obstacles raised by N*w Y*rk are injurious to our
sales; this is a misfortune. Those which we ourselves create, injure
our purchases; this is a second misfortune. We have no power over the
first, but the second is entirely dependent upon ourselves. Let us
then at least get rid of one, since we cannot be delivered from both.
Let us suppress our corps of Obstructors, without waiting for N*w Y*rk
to do the same. Some day or other she will learn to better calculate
her own interests."
A second counsellor, a man of practice and of facts, uncontrolled by
principles and wise in ancestral experience, replied: "We must not
listen to this dreamer, this theorist, this innovator, this Utopian,
this political economist, this friend to N*w Y*rk. We would be
entirely ruined if the embarrassments of the road were not carefully
weighed and exactly equalized between N*w Y*rk and M*ntr**l. There
would be more difficulty in going than in coming; in exportation than
in importation. We would be with regard to N*w Y*rk, in the inferior
condition in which Havre, Nantes, Bordeaux, Lisbon, London, Hamburg,
and New Orleans, are, in relation to cities placed higher up the
rivers Seine, Loire, Garonne, Tagus, Thames, Elbe, and Mississippi;
for the difficulties of ascending must always be greater than those of
descending rivers."
"(A voice exclaims: 'But the cities near the mouths of rivers have
always prospered more than those higher up the stream.')
"This is not possible."
"(The same voice: 'But it is a fact.')
"Well, they have then prospered _contrary to rule_."
Such conclusive reasoning staggered the assembly. The orator went on
to convince them thoroughly and conclusively by speaking of national
independence, national honor, national dignity, national labor,
overwhelming importation, tributes, ruinous competition. In short, he
succeeded in determining the assembly to continue their system of
obstacles, and I can now point out a certain country where you may see
road-workers and Obstructors working with the best possible
understanding, by the decree of the same legislative assembly, paid by
the same citizens; the first to improve the road, the last to
embarrass it.
CHAPTER XI.
ABSOLUTE PRICES.
If we wish to judge between freedom of trade and protection, to
calculate the probable effect of any political phenomenon, we should
notice how far its influence tends to the production of _abundance_ or
_scarcity_, and not simply of _cheapness_ or _dearness_ of price. We
must beware of trusting to absolute prices: it would lead to
inextricable confusion.
Mr. Protectionist, after having established the fact that protection
raises prices, adds:
"The augmentation of price increases the expenses of life, and
consequently the price of labor, and every one finds in the increase
of the price of his produce the same proportion as in the increase of
his expenses. Thus, if everybody pays as consumer, everybody receives
also as producer."
It is evident that it would be easy to reverse the argument, and say:
If everybody receives as producer, everybody must pay as consumer.
Now what does this prove? Nothing whatever, unless it be that
protection _transfers_ riches, uselessly and unjustly. Spoliation does
the same.
Again, to prove that the complicated arrangements of this system give
even simple compensation, it is necessary to adhere to the
"_consequently_" of Mr. Protectionist, and to convince oneself that
the price of labor rises with that of the articles protected. This is
a question of fact. For my own part I do not believe in it, because I
think that the price of labor, like everything else, is governed by
the proportion existing between the supply and the demand. Now I can
perfectly well understand that _restriction_ will diminish the supply
of produce, and consequently raise its price; but I do not as clearly
see that it increases the demand for labor, thereby raising the rate
of wages. This is the less conceivable to me, because the sum of labor
required depends upon the quantity of disposable capital; and
protection, while it may change the direction of capital, and transfer
it from one business to another, cannot increase it one penny.
This question, which is of the highest interest, we will examine
elsewhere. I return to the discussion of _absolute prices_, and
declare that there is no absurdity which cannot be rendered specious
by such reasoning as that which is commonly resorted to by
protectionists.
Imagine an isolated nation possessing a given quantity of cash, and
every year wantonly burning the half of its produce; I will undertake
to prove by the protective theory that this nation will not be the
less rich in consequence of such a procedure. For, the result of the
conflagration must be, that everything would double in price. An
inventory made before this event, would offer exactly the same nominal
value as one made after it. Who, then, would be the loser? If John
buys his cloth dearer, he also sells his corn at a higher price; and
if Peter makes a loss on the purchase of his corn, he gains it back
by the sale of his cloth. Thus "every one finds in the increase of the
price of his produce, the same proportion as in the increase of his
expenses: and thus if everybody pays as consumer, everybody also
receives as producer."
All this is nonsense, and not science.
The simple truth is, that whether men destroy their corn and cloth by
fire, or by use, the effect is the same as regards price, but not as
regards riches, for it is precisely in the enjoyment of the use, that
riches--in other words, comfort, well-being--exist.
Restriction may in the same way, while it lessens the abundance of
things, raise their prices, so as to leave each individual as rich,
_numerically speaking_, as when unembarrassed by it. But because we
put down in an inventory three bushels of corn at $1, or four bushels
at 75 cents, and sum up the nominal value of each inventory at $3,
does it thence follow that they are equally capable of contributing to
the necessities of the community?
To this truthful and common-sense view of the phenomenon of
consumption it will be my continual endeavor to lead the
protectionists; for in this is the end of all my efforts, the solution
of every problem. I must continually repeat to them that restriction,
by impeding commerce, by limiting the division of labor, by forcing it
to combat difficulties of situation and temperature, must in its
results diminish the quantity produced by any fixed quantum of labor.
And what can it benefit us that the smaller quantity produced under
the protective system bears the same _nominal value_ as the greater
quantity produced under the free trade system? Man does not live on
_nominal values_, but on real articles of produce; and the more
abundant these articles are, no matter what price they may bear, the
richer is he.
The following passage occurs in the writings of a French
protectionist:
"If fifteen millions of merchandise sold to foreign nations, be taken
from our ordinary produce, calculated at fifty millions, the
thirty-five millions of merchandise which remain, not being sufficient
for the ordinary demand, will increase in price to the value of fifty
millions. The revenue of the country will thus represent fifteen
millions more in value.... There will then be an increase of fifteen
millions in the riches of the country; precisely the amount of the
importation of money."
This is droll enough! If a country has made in the course of the year
fifty millions of revenue in harvests and merchandise, she need but
sell one-quarter to foreign nations, in order to make herself
one-quarter richer than before! If then she sold the half, she would
increase her riches by one-half; and if the last hair of her wool, the
last grain of her wheat, were to be changed for cash, she would thus
raise her product to one hundred millions, where before it was but
fifty! A singular manner, certainly, of becoming rich. Unlimited price
produced by unlimited scarcity!
To sum up our judgment of the two systems, let us contemplate their
different effects when pushed to the most exaggerated extreme.
According to the protectionist just quoted, the French would be quite
as rich, that is to say, as well provided with everything, if they
had but a thousandth part of their annual produce, because this part
would then be worth a thousand times its natural value! So much for
looking at prices alone.
According to us, the French would be infinitely rich if their annual
produce were infinitely abundant, and consequently bearing no value at
all.
CHAPTER XII.
DOES PROTECTION RAISE THE RATE OF WAGES?
When we hear our beardless scribblers, romancers, reformers, our
perfumed magazine writers, stuffed with ices and champagne, as they
carefully place in their portfolios the sentimental scissorings which
fill the current literature of the day, or cause to be decorated with
gilded ornaments their tirades against the egotism and the
individualism of the age; when we hear them declaiming against social
abuses, and groaning over deficient wages and needy families; when we
see them raising their eyes to heaven and weeping over the
wretchedness of the laboring classes, while they never visit this
wretchedness unless it be to draw lucrative sketches of its scenes of
misery, we are tempted to say to them: The sight of you is enough to
make me sicken of attempting to teach the truth.
Affectation! Affectation! It is the nauseating disease of the day! If
a thinking man, a sincere philanthropist, takes into consideration the
condition of the working classes and endeavors to lay bare their
necessities, scarcely has his work made an impression before it is
greedily seized upon by the crowd of reformers, who turn, twist,
examine, quote, exaggerate it, until it becomes ridiculous; and then,
as sole compensation, you are overwhelmed with such big words as:
Organization, Association; you are flattered and fawned upon until
you become ashamed of publicly defending the cause of the working man;
for how can it be possible to introduce sensible ideas in the midst of
these sickening affectations?
But we must put aside this cowardly indifference, which the
affectation that provokes it is not enough to justify.
Working men, your situation is singular! You are robbed, as I will
presently prove to you. But no: I retract the word; we must avoid an
expression which is violent; perhaps, indeed, incorrect; inasmuch as
this spoliation, wrapped in the sophisms which disguise it, is
practised, we must believe, without the intention of the spoiler, and
with the consent of the spoiled. But it is nevertheless true that you
are deprived of the just remuneration of your labor, while no one
thinks of causing _justice_ to be rendered to you. If you could be
consoled by the noisy appeals of your champions to philanthropy, to
powerless charity, to degrading almsgiving, or if the high-sounding
words of Voice of the People, Rights of Labor, &c., would relieve
you--these indeed you can have in abundance. But _justice_, simple
_justice_--this nobody thinks of rendering you. For would it not be
_just_ that after a long day's labor, when you have received your
wages, you should be permitted to exchange them for the largest
possible sum of comforts you can obtain voluntarily from any man upon
the face of the earth?
I too, perhaps, may some day speak to you of the Voice of the People,
the Rights of Labor, &c., and may perhaps be able to show you what you
have to expect from the chimeras by which you allow yourselves to be
led astray.
In the meantime let us examine if _injustice_ is not done to you by
the legislative limitation of the number of persons from whom you are
allowed to buy those things which you need; as iron, coal, cotton and
woollen cloths, &c.; thus artificially fixing (so to express myself)
the price which these articles must bear.
Is it true that protection, which avowedly raises prices, and thus
injures you, proportionably raises the rate of wages?
On what does the rate of wages depend?
One of your own class has energetically said: "When two workmen run
after a boss, wages fall; when two bosses run after a workman, wages
rise."
Allow me, in similar laconic phrase, to employ a more scientific,
though perhaps a less striking expression: "The rate of wages depends
upon the proportion which the supply of labor bears to the demand."
On what depends the _demand_ for labor?
On the quantity of disposable capital seeking investment. And the law
which says, "Such or such an article shall be limited to home
production and no longer imported from foreign countries," can it in
any degree increase this capital? Not in the least. This law may
withdraw it from one course, and transfer it to another; but cannot
increase it one penny. Then it cannot increase the demand for labor.
While we point with pride to some prosperous manufacture, can we
answer, whence comes the capital with which it is founded and
maintained? Has it fallen from the moon? or rather is it not drawn
either from agriculture, or stock-breeding, or commerce? We here see
why, since the reign of protective tariffs, if we see more workmen in
our mines and our manufacturing towns, we find also fewer vessels in
our ports, fewer graziers and fewer laborers in our fields and upon
our hill-sides.
I could speak at great length upon this subject, but prefer
illustrating my thought by an example.
A countryman had twenty acres of land, with a capital of $10,000. He
divided his land into four parts, and adopted for it the following
changes of crops: 1st, maize; 2d, wheat; 3d, clover; and 4th, rye. As
he needed for himself and family but a small portion of the grain,
meat, and dairy produce of the farm, he sold the surplus and bought
iron, coal, cloths, etc. The whole of his capital was yearly
distributed in wages and payments of accounts to the workingmen of the
neighborhood. This capital was, from his sales, again returned to him,
and even increased from year to year. Our countryman, being fully
convinced that idle capital produces nothing, caused to circulate
among the working classes this annual increase, which he devoted to
the inclosing and clearing of lands, or to improvements in his farming
utensils and his buildings. He deposited some sums in reserve in the
hands of a neighboring banker, who on his part did not leave these
idle in his strong-box, but lent them to various tradesmen, so that
the whole came to be usefully employed in the payment of wages.
The countryman died, and his son, become master of the inheritance,
said to himself: "It must be confessed that my father has, all his
life, allowed himself to be duped. He bought iron, and thus paid
_tribute_ to England, while our own land could, by an effort, be made
to produce iron as well as England. He bought coal, cloths, and
oranges, thus paying _tribute_ to New Brunswick, France, and Sicily,
very unnecessarily; for coal may be found, doeskins may be made, and
oranges may be forced to grow, within our own territory. He paid
tribute to the foreign miner and the weaver; our own servants could
very well mine our iron and get up native doeskins almost as good as
the French article. He did all he could to ruin himself, and gave to
strangers what ought to have been kept for the benefit of his own
household."
Full of this reasoning, our headstrong fellow determined to change the
routine of his crops. He divided his farm into twenty parts. On one he
dug for coal; on another he erected a cloth factory; on a third he put
a hot-house and cultivated the orange; he devoted the fourth to vines,
the fifth to wheat, &c., &c. Thus he succeeded in rendering himself
_independent_, and furnished all his family supplies from his own
farm. He no longer received anything from the general circulation;
neither, it is true, did he cast anything into it. Was he the richer
for this course? No; for his mine did not yield coal as cheaply as he
could buy it in the market, nor was the climate favorable to the
orange. In short, the family supply of these articles was very
inferior to what it had been during the time when the father had
obtained them and others by exchange of produce.
With regard to the demand for labor, it certainly was no greater than
formerly. THERE WERE, TO BE SURE, FIVE TIMES AS MANY FIELDS TO
CULTIVATE, BUT THEY WERE FIVE TIMES SMALLER. If coal was mined, there
was also less wheat; and because there were no more oranges bought,
neither was there any more rye sold. Besides, the farmer could not
spend in wages more than his capital, and his capital, instead of
increasing, was now constantly diminishing. A great part of it was
necessarily devoted to numerous buildings and utensils, indispensable
to a person who determines to undertake everything. In short, the
supply of labor continued the same, but the means of paying became
less.
The result is precisely similar when a nation isolates itself by the
prohibitive system. Its number of industrial pursuits is certainly
multiplied, but their importance is diminished. In proportion to their
number, they become less productive, for the same capital and the same
skill are obliged to meet a greater number of difficulties. The fixed
capital absorbs a greater part of the circulating capital; that is to
say, a greater part of the funds destined to the payment of wages.
What remains, ramifies itself in vain; the quantity cannot be
augmented. It is like the water of a deep pond, which, distributed
among a multitude of small reservoirs, appears to be more abundant,
because it covers a greater quantity of soil, and presents a larger
surface to the sun, while we hardly perceive that, precisely on this
account, it absorbs, evaporates, and loses itself the quicker.
Capital and labor being given, the result is, a sum of production,
always the less great in proportion as obstacles are numerous. There
can be no doubt that international barriers, by forcing capital and
labor to struggle against greater difficulties of soil and climate,
must cause the general production to be less, or, in other words,
diminish the portion of comforts which would thence result to mankind.
If, then, there be a general diminution of comforts, how, working men,
can it be possible that _your_ portion should be increased? Under such
a supposition it would be necessary to believe that the rich, those
who made the law, have so arranged matters, that not only they subject
themselves to their own proportion of the general diminution, but
taking the whole of it upon themselves, that they submit also to a
further loss in order to increase your gains. Is this credible? Is
this possible? It is, indeed, a most suspicious act of generosity; and
if you act wisely you will reject it.
CHAPTER XIII.
THEORY AND PRACTICE.
Defenders of free trade, we are accused of being mere theorists, of
not giving sufficient weight to the practical.
"What a fearful charge against you, free traders," say the
protectionists, "is this long succession of distinguished statesmen,
this imposing race of writers, who have all held opinions differing
from yours!" This we do not deny. We answer, "It is said, in support
of established errors, that 'there must be some foundation for ideas
so generally adopted by all nations. Should not one distrust opinions
and arguments which overturn that which, until now, has been held as
settled; that which is held as certain by so many persons whose
intelligence and motives make them trustworthy?'"
We confess this argument should make a profound impression, and ought
to throw doubt on the most incontestable points, if we had not seen,
one after another, opinions the most false, now generally acknowledged
to be such, received and professed by all the world during a long
succession of centuries. It is not very long since all nations, from
the most rude to the most enlightened, and all men, from the
street-porter to the most learned philosopher, believed in the four
elements. Nobody had thought of contesting this doctrine, which is,
however, false; so much so, that at this day any mere naturalist's
assistant, who should consider earth, water, and fire, elements, would
disgrace himself.
On which our opponents make this observation: "If you suppose you have
thus answered the very forcible objection you have proposed to
yourselves, you deceive yourselves strangely. Suppose that men,
otherwise intelligent, should be mistaken on any point whatever of
natural history for many centuries, that would signify or prove
nothing. Would water, air, earth, fire, be less useful to man whether
they were or were not elements? Such errors are of no consequence;
they lead to no revolutions, do not unsettle the mind; above all, they
injure no interests, so they might, without inconvenience, endure for
millions of years. The physical world would progress just as if they
did not exist. Would it be thus with errors which attack the moral
world? Can we conceive that a system of government, absolutely false,
consequently injurious, could be carried out through many centuries,
among many nations, with the general consent of educated men? Can we
explain how such a system could be reconciled with the ever-increasing
prosperity of nations? You acknowledge that the argument you combat
ought to make a profound impression. Yes, truly, and this impression
remains, for you have rather strengthened than destroyed it."
Or again, they say: "It was only in the middle of the last century,
the eighteenth century, in which all subjects, all principles, without
exception, were delivered up to public discussion, that these
furnishers of speculative ideas which are applied to everything
without being applicable to anything--commenced writing on political
economy. There existed, however, a system of political economy, not
written, but practised by governments. It is said that Colbert was its
inventor, and it was the rule of all the States of Europe. What is
more singular, it has remained so till lately, despite anathemas and
contempt, and despite the discoveries of the modern school. This
system, which our writers have called the _mercantile system_,
consists in opposing, by prohibitions and duties, such foreign
productions as might ruin our manufacturers by their competition. This
system has been pronounced futile, absurd, capable of ruining any
country, by economical writers of all schools. It has been banished
from all books, reduced to take refuge in the practice of every
people; and we do not understand why, in regard to the wealth of
nations, governments should not have yielded themselves to wise
authors rather than to _the old experience_ of a system. Above all, we
cannot conceive why, in political economy, the American government
should persist in resisting the progress of light, and in preserving,
in its practice, those old errors which all our economists of the pen
have designated. But we have said too much about this mercantile
system, which has in its favor _facts_ alone, though sustained by
scarcely a single writer of the day."
Would not one say, who listened only to this language, that we
political economists, in merely claiming for every one _the free
disposition of his own property_, had, like the Fourierists, conjured
up from our brains a new social order, chimerical and strange; a sort
of phalanstery, without precedent in the annals of the human race,
instead of merely talking plain _meum_ and _tuum_ It seems to us that
if there is in all this anything utopian, anything problematical, it
is not free trade, but protection; it is not the right to exchange,
but tariff after tariff applied to overturning the natural order of
commerce.
But it is not the point to compare and judge of these two systems by
the light of reason; the question for the moment is, to know which of
the two is founded upon experience.
So, Messrs. Monopolists, you pretend that the facts are on your side;
that we have, on our side, theories only.
You even flatter yourselves that this long series of public acts, this
old experience of the world, which you invoke, has appeared imposing
to us, and that we confess we have not as yet refuted you as fully as
we might.
But we do not cede to you the domain of facts, for you have on your
side only exceptional and contracted facts, while we have universal
ones to oppose to them; the free and voluntary acts of all men.
What do you say, and what say we?
We say:
"It is better to buy from others anything which would cost more to
make ourselves."
And on your part you say:
"It is better to make things ourselves, even though it would cost less
to purchase them from others."
Now, gentlemen, laying aside theory, demonstration, argument,
everything which appears to afflict you with nausea, which of these
assertions has in its favor the sanction of _universal practice_?
Visit the fields, work-rooms, manufactories, shops; look above,
beneath, and around you; investigate what is going on in your own
establishment; observe your own conduct at all times, and then say
which is the principle that directs these labors, these workmen, these
inventors, these merchants; say, too, which is your own individual
practice.
Does the farmer make his clothes? Does the tailor raise the wheat
which he consumes? Does not your housekeeper cease making bread at
home so soon as she finds it more economical to buy it from the baker?
Do you give up the pen for the brush in order to avoid paying tribute
to the shoe-black? Does not the whole economy of society depend on the
separation of occupations, on the division of labor; in one word, on
_exchange_? And is exchange anything else than the calculation which
leads us to discontinue, as far as we can, direct production, when
indirect acquisition spares us time and trouble?
You are not, then, men of _practice_, since you cannot show a single
man on the surface of the globe who acts in accordance with your
principle.
"But," you will say, "we have never heard our principle made the rule
of individual relations. We comprehend perfectly that this would break
the social bond, and force men to live, like snails, each one in his
own shell. We limit ourselves to asserting that it governs _in fact_
the relations which are established among the agglomerations of the
human family."
But still, this assertion is erroneous. The family, the village, the
town, the county, the state, are so many agglomerations, which all,
without any exception, _practically_ reject your principle, and have
never even thought of it. All of them procure, by means of exchange,
that which would cost them more to procure by means of production.
Nations would act in the same natural manner, if you did not prevent
it _by force_.
It is _we_, then, who are the men of practice and of experience; for,
in order to combat the interdict which you have placed exceptionally
on certain international exchanges, we appeal to the practice and
experience of all individuals, and all agglomerations of individuals
whose acts are voluntary, and consequently may be called on for
testimony. But you commence by _constraining_, by _preventing_, and
then you avail yourself of acts caused by prohibition to exclaim,
"See! practice justifies us!" You oppose our _theory_, indeed all
_theory_. But when you put a principle in antagonism with ours, do
you, by chance, fancy that you have formed no _theory_? No, no; erase
that from your plea. You form a theory as well as ourselves; but
between yours and ours there is this difference: our theory consists
merely in observing universal facts, universal sentiments, universal
calculations and proceedings, and further, in classifying them and
arranging them, in order to understand them better. It is so little
opposed to practice, that it is nothing but _practice explained_. We
observe the actions of men moved by the instinct of preservation and
of progress; and what they do freely, voluntarily, is precisely what
we call _political economy_, or the economy of society. We go on
repeating with out cessation: "Every man is _practically_ an
excellent economist, producing or exchanging, according as it is most
advantageous to him to exchange or to produce. Each one, through
experience, is educated to science; or rather, science is only that
same experience scrupulously observed and methodically set forth."
As for you, you form a theory, in the unfavorable sense of the word.
You imagine, you invent--proceedings which are not sanctioned by the
practice of any living man under the vault of heaven--and then you
call to your assistance constraint and prohibition. You need, indeed,
have recourse to _force_, since, in wishing that men should _produce_
that which it would be more advantageous to them to _buy_, you wish
them to renounce an _advantage_; you demand that they should act in
accordance with a doctrine which implies contradiction even in its
terms.
Now, this doctrine, which, you argue, would be absurd in individual
relations, we defy you to extend, even in speculation, to transactions
between families, towns, counties, states. By your own avowal, it is
applicable to international relations only.
And this is why you are obliged to repeat daily: "Principles are not
in their nature absolute. That which is _well_ in the individual, the
family, the county, the state, is _evil_ in the nation. That which is
_good_ in detail--such as, to purchase rather than to produce, when
purchase is more advantageous than production--is bad in the mass. The
political economy of individuals is not that of nations," and other
rubbish, _ejusdem farinæ_. And why all this? Look at it closely. It is
in order to prove to us that we, consumers, are your property, that
we belong to you body and soul, that you have an exclusive right to
our stomachs and limbs, and it is for you to nourish us and clothe us
at your own price, however great may be your ignorance, your rapacity,
or the inferiority of your position.
No, you are not men of practice; you are men of abstraction--and of
extraction!
CHAPTER XIV.
CONFLICT OF PRINCIPLES.
There is one thing which confounds us, and it is this:
Some sincere publicists, studying social economy from the point of
view of producers only, have arrived at this double formula:
"Governments ought to dispose of the consumers subject to the
influence of their laws, in favor of national labor."
"They should render distant consumers subject to their laws, in order
to dispose of them in favor of national labor."
The first of these formulas is termed _protection_; the latter,
_expediency_.
Both rest on the principle called Balance of Trade; the formula of
which is:
"A people impoverishes itself when it imports, and enriches itself
when it exports."
Of course, if every foreign purchase is a tribute paid, a loss, it is
perfectly evident we must restrain, even prohibit, importations.
And if all foreign sales are tribute received, profit, it is quite
natural to create channels of outlet, even by force.
Protective System--Colonial System: two aspects of the same theory. To
_hinder_ our fellow-citizens purchasing of foreigners, _to force_
foreigners to purchase from our fellow-citizens, are merely two
consequences of one identical principle. Now, it is impossible not to
recognize that according to this doctrine, general utility rests on
_monopoly_, or interior spoliation, and on _conquest_, or exterior
spoliation.
Let us enter one of the cabins among the Adirondacks. The father of
the family has received for his work only a slender salary. The icy
northern blast makes his half naked children shiver, the fire is
extinguished, and the table bare. There are wool, and wood, and coal,
just over the St. Lawrence; but these commodities are forbidden to the
family of the poor day-laborer, for the other side of the river is no
longer the United States. The foreign pine-logs may not gladden the
hearth of his cabin; his children may not know the taste of Canadian
bread, the wool of Upper Canada will not bring back warmth to their
benumbed limbs. General utility wills it so. All very well! but
acknowledge that here it contradicts justice. To dispose by
legislation of consumers, to limit them to the products of national
labor, is to encroach upon their liberty, to forbid them a resource
(exchange) in which there is nothing contrary to morality; in one
word, it is to do them injustice.
"Yet this is necessary," it is said, "under the penalty of seeing
national labor stopped, under the penalty of striking a fatal blow at
public prosperity."
The writers of the protectionist school arrive then at this sad
conclusion; that there is a radical incompatibility between justice
and utility.
On the other side, if nations are interested in selling, and not in
buying, violent action and reaction are the natural condition of
their relations, for each will seek to impose its products on all, and
all will do their utmost endeavor to reject the products of each.
As a sale, in effect, implies a purchase, and since, according to this
doctrine, to sell is to benefit, as to buy is to injure, every
international transaction implies the amelioration of one people, and
the deterioration of another.
But, on one side, men are fatally impelled towards that which profits
them: on the contrary, they resist instinctively whatever injures
them; whence we must conclude that every people bears within itself a
natural force of expansion, and a not less natural power of
resistance, which are equally prejudicial to all the others; or, in
other terms, that antagonism and war are the natural constitution of
human society!
So that the theory which we are discussing may be summed up in these
two axioms:
"Utility is incompatible with justice at home,"
"Utility is incompatible with peace abroad."
Now that which astonishes us, which confounds us, is, that a
publicist, a statesman, who has sincerely adhered to an economic
doctrine whose principle clashes so violently with other incontestable
principles, could enjoy one moment's calm and repose of mind. As for
us, it seems to us, that if we had penetrated into science by this
entrance, if we did not clearly perceive that liberty, utility,
justice, peace, are things not only compatible, but closely allied
together, so to say, identical with each other, we would try to forget
all we had learned; we would say to ourselves:
"How could God will that men shall attain prosperity only through
injustice and war? How could He will that they may remove war and
injustice only by renouncing their own well-being?"
Does not the science which has conducted us to the horrible blasphemy
which this alternative implies deceive us by false lights; and shall
we dare take on ourselves to make it the basis of legislation for a
great people? And when a long succession of illustrious philosophers
have brought together more comforting results from this same science,
to which they have consecrated their whole lives; when they affirm
that Liberty and Utility are reconciled with Justice and Peace, that
all these grand principles follow infinite parallels, without
clashing, throughout all eternity; have they not in their favor the
presumption which results from all we know of the goodness and the
wisdom of God, manifested in the sublime harmony of the material
creation? Ought we lightly to believe, against such a presumption, and
in face of so many imposing authorities, that it has pleased this same
God to introduce antagonism and a discord into the laws of the moral
world?
No, no; before taking it for granted that all social principles clash,
shock, and neutralize each other, and are in anarchical, eternal,
irremediable, conflict together; before imposing on our fellow
citizens the impious system to which such reasoning conducts us, we
had better go over the whole chain, and assure ourselves that there is
no point on the way where we may have gone astray.
And if, after a faithful examination, twenty times recommenced, we
should always return to this frightful conclusion, that we must choose
between the advantages and the good--we should thrust science away,
disheartened; we should shut ourselves up in voluntary ignorance;
above all, we should decline all participation in the affairs of our
country, leaving to the men of another time the burden and the
responsibility of a choice so difficult.
CHAPTER XV.
RECIPROCITY AGAIN.
The protectionists ask, "Are we sure that the foreigner will purchase
as much from us, as he will sell to us? What reason have we to think
that the English producer will come to us rather than to any other
nation on the globe to look for the productions he may need; and for
productions equivalent in value to his own exportations to this
country?"
We are surprised that men who call themselves peculiarly _practical_,
reason independent of all practice.
In practice, is there one exchange in a hundred, in a thousand, in ten
thousand perhaps, where there is a direct barter of product for
product? Since there has been money in the world, has any cultivator
ever said, "I wish to buy shoes, hats, advice, instruction, from that
shoemaker, hatter, lawyer, and professor only, who will purchase from
me just wheat enough to make an equivalent value?"
And why should nations impose such a restraint upon themselves?
How is the matter managed?
Suppose a nation deprived of exterior relations. A man has produced
wheat. He throws it into the widest national circulation he can find
for it, and receives in exchange, what? Some dollars; that is to say
bills, bonds, infinitely divisible, by means of which it becomes
lawful for him to withdraw from national circulation, whenever he
thinks it advisable, and by just agreement, such articles as he may
need or wish. In fine, at the end of the operation he will have
withdrawn from the mass the exact equivalent of what he threw into it,
and in value his consumption will precisely equal his production.
If the foreign exchanges of that nation are free, it is no longer into
_national_, but into _general_ circulation that each one throws his
products, and from which he draws his returns. He has not to inquire
whether what he delivers up for general circulation is purchased by a
fellow-countryman or a foreigner; whether the goods he receives came
to him from a Frenchman or an Englishman; whether the objects for
which, in accordance with his needs, he, in the end, exchanges his
bills, are made on this or that side of the Atlantic or the St.
Lawrence. With each individual there is always an exact balance
between what he puts into and what he draws out of the grand common
reservoir; and if that is true of each individual, it is true of the
nation in the aggregate. The only difference between the two cases is,
that in the latter, each one is in a more extended market for both his
sales and his purchases, and has consequently more chances of doing
well by both.
This objection is made: "If every one should agree that they would not
withdraw from circulation any of the products of a specified
individual, he in turn would sustain the misfortune of being able to
draw nothing out. The same of a nation."
ANSWER.--If the nation cannot draw out of the mass, it will
no longer contribute to it: it will work for itself. It will be
compelled to that which you would impose on it in advance: that is to
say, isolation.
And this will be the ideal of prohibitive government. Is it not
amusing that you inflict upon it, at once and already, the misfortune
of this system, in the fear that it runs the risk of getting there
some day without you?
CHAPTER XVI.
OBSTRUCTED RIVERS PLEAD FOR THE PROHIBITIONISTS.
Some years ago, when the Spanish Cortes were discussing a treaty with
Portugal on improving the course of the river Douro, a deputy rose and
said, "If the Douro is turned into a canal, transportation will be
made at a much lower price. Portuguese cereals will sell cheaper in
Castile, and will make a formidable opposition to our _national
labor_. I oppose the project unless the ministers engage to raise the
tariff in such a way as to restore the equilibrium." The assembly
found the argument unanswerable.
Three months later the same question was submitted to the Senate of
Portugal. A noble hidalgo said: "Mr. President, the project is absurd.
You post guards, at great expense, on the banks of the Douro, in order
to prevent the introduction of Castilian cereals into Portugal, while,
at the same time, you would, also, at great expense, facilitate their
introduction. This is an inconsistency with which I cannot identify
myself. Let the Douro pass on to our sons as our fathers left it to
us."
Now, when it is proposed to alter and confine the course of the
Mississippi, we recall the arguments of the Iberian orators, and say
to ourselves, if the member from St. Louis was as good an economist as
those of Valencia, and the representatives from New Orleans as
powerful logicians as those of Oporto, assuredly the Mississippi would
be left
"To sleep amid its forests dank and lone,"
for to improve the navigation of the Mississippi will favor the
introduction of New Orleans products to the injury of St. Louis, and
an inundation of the products of St. Louis to the detriment of New
Orleans.
CHAPTER XVII.
A NEGATIVE RAILROAD.
We have said that when, unfortunately, we place ourselves at the point
of view of the producer's interest, we cannot fail to clash with the
general interest, because the producer, as such, demands only
_efforts_, _wants_, _and obstacles_.
When the Atlantic and Great Western Railway is finished, the question
will arise, "Should connection be broken at Pittsburg?" This the
Pittsburgers will answer affirmatively, for a multitude of reasons,
but for this among others; the railroad from New York to St. Louis
ought to have an interruption at Pittsburg, in order that merchandise
and travellers compelled to stop in the city may leave in it fees to
the hackmen, pedlars, errand-boys, consignees, hotel-keepers, etc.
It is clear, that here again the interest of the agent of labor is
placed before the interest of the consumer.
But if Pittsburg ought to profit by the interruption, and if the
profit is conformable with public interest, Harrisburg, Dayton,
Indianapolis, Columbus, much more all the intermediate points, ought
to demand stoppages, and that in the general interest, in the widely
extended interest of national labor, for the more they are multiplied,
the more will consignments, commissions, transportations, be
multiplied on all points of the line. With this system we arrive at a
railroad of successive stoppages, to a _negative railroad_.
Whether the protectionists wish it or not, it is not the less certain
that the principle of restriction is the same as the principle of
gaps, the sacrifice of the consumers to the producer, of the end to
the means.
CHAPTER XVIII.
THERE ARE NO ABSOLUTE PRINCIPLES.
We cannot be too much astonished at the facility with which men resign
themselves to be ignorant of what is most important for them to know,
and we may feel sure that they have decided to go to sleep in their
ignorance when they have brought themselves to proclaim this axiom:
There are no absolute principles.
Enter the Halls of Congress. The question under discussion is whether
the law shall interdict or allow international exchanges.
Mr. C****** rises and says:
"If you tolerate these exchanges, the foreigner will inundate you with
his products, the English with cotton and iron goods, the Nova-Scotian
with coal, the Spaniard with wool, the Italian with silk, the Canadian
with cattle, the Swede with iron, the Newfoundlander with salt-fish.
Industrial pursuits will thus be destroyed."
Mr. G***** replies:
"If you prohibit these exchanges, the varied benefits which nature has
lavished on different climates will be, to you, as though they were
not. You will not participate in the mechanical skill of the English,
nor in the riches of the Nova-Scotian mines, in the abundance of
Canadian pasturage, in the cheapness of Spanish labor, in the fervor
of the Italian climate; and you will be obliged to ask through a
forced production that which you might by exchange have obtained
through a readier production."
Assuredly, one of the senators deceives himself. But which? It is well
worth while to ascertain; for we are not dealing with opinions only.
You stand at the entrance of two roads; you must choose; one of them
leads necessarily to _misery_.
To escape from this embarrassment it is said: There are no absolute
principles.
This axiom, so much in vogue in our day, not only serves laziness, it
is also in accord with ambition.
If the theory of prohibition should prevail, or again, if the doctrine
of liberty should triumph, a very small amount of law would suffice
for our economic code. In the first case it would stand--_All foreign
exchange is forbidden_; in the second, _All exchange with abroad is
free_, and many great personages would lose their importance.
But if exchange has not a nature proper to itself; if it is governed
by no natural law; if it is capriciously useful or injurious; if it
does not find its spring in the good it accomplishes, its limit when
it ceases to do good; if its effects cannot be appreciated by those
who execute them; in one word, if there are no absolute principles, we
are compelled to measure, weigh, regulate transactions, to equalize
the conditions of labor, to look for the level of profits--colossal
task, well suited to give great entertainments, and high influence to
those who undertake it.
Here in New York are a million of human beings who would all die
within a few days, if the abundant provisioning of nature were not
flowing towards this great metropolis.
Imagination takes fright in the effort to appreciate the immense
multiplicity of articles which must cross the Bay, the Hudson, the
Harlem, and the East rivers, to-morrow, if the lives of its
inhabitants are not to become the prey of famine, riot, and pillage.
Yet, as we write, all are sleeping; and their quiet slumbers are not
disturbed for a moment by the thought of so frightful a perspective.
On the other hand, forty-five States and Territories have worked
to-day, without concert, without mutual understanding, to provision
New York. How is it that every day brings in what is needed, neither
more nor less, to this gigantic market? What is the intelligent and
secret power which presides over the astonishing regularity of
movements so complicated--a regularity in which each one has a faith
so undoubting, though comfort and life are at stake.
This power is an _absolute principle_, the principle of freedom of
operation, the principle of free conduct.
We have faith in that innate light which Providence has placed in the
hearts of all men, to which he has confided the preservation and
improvement of our race-_interest_ (since we must call it by its
name), which is so active, so vigilant, so provident, when its action
is free. What would become of you, inhabitants of New York, if a
Congressional majority should take a fancy to substitute for this
power the combinations of their genius, however superior it may be
supposed to be; if they imagined they could submit this prodigious
mechanism to its supreme direction, unite all its resources in their
own hands, and decide when, where, how, and on what conditions
everything should be produced, transported, exchanged, and consumed?
Ah! though there may be much suffering within your bounds, though
misery, despair, and perhaps hungry exhaustion may cause more tears to
flow than your ardent charity can dry, it is probable, it is certain,
we dare to affirm, that the arbitrary intervention of government would
multiply these sufferings infinitely, and would extend to you all,
those evils which at present are confined to a small portion of your
number.
We all have faith in this principle where our internal transactions
are concerned; why should we not have faith in the same principle
applied to our international operations, which are, assuredly, less
numerous, less delicate, and less complicated. And if it is not
necessary that the Mayor and Common Council of New York should
regulate our industries, weigh our change, our profits, and our
losses, occupy themselves with the regulation of prices, equalize the
conditions of our labor in internal commerce--why is it necessary that
the custom-house, proceeding on its fiscal mission, should pretend to
exercise protective action upon our exterior commerce?
CHAPTER XIX.
NATIONAL INDEPENDENCE.
Among the arguments which are considered of weight in favor of the
restriction system, we must not forget that drawn from national
independence.
"What shall we do in case of war," say they, "if we have placed
ourselves at the mercy of Great Britain for iron and coal?"
English monopolists did not fail on their side to exclaim, when the
corn-laws were repealed, "What will become of Great Britain in time of
war if she depends on the United States for food?"
One thing they fail to observe: it is that this sort of dependence,
which results from exchange, from commercial operations, is a
_reciprocal_ dependence. We cannot depend on the foreigner unless the
foreigner depends on us. This is the very essence of _society_. We do
not place ourselves in a state of independence by breaking natural
relations, but in a state of isolation.
Remark also: we isolate ourselves in the anticipation of war; but the
very act of isolation is the commencement of war. It renders it more
easy, less burdensome, therefore less unpopular. Let nations become
permanent recipient customers each of the other, let the interruption
of their relations inflict upon them the double suffering of privation
and surfeit, and they will no longer require the powerful navies
which ruin them, the great armies which crush them; the peace of the
world will no longer be compromised by the caprice of a Napoleon or of
a Bismarck, and war will disappear through lack of aliment, resources,
motive, pretext, and popular sympathy.
We know well that we shall be reproached (in the cant of the day) for
proposing interest, vile and prosaic interest, as a foundation for the
fraternity of nations. It would be preferred that it should have its
foundation in charity, in love, even in self-renunciation, and that,
demolishing the material comfort of man, it should have the merit of a
generous sacrifice.
When shall we have done with such puerile talk? When shall we banish
charlatanry from science? When shall we cease to manifest this
disgusting contradiction between our writings and our conduct? We hoot
at and spit upon _interest_, that is to say, the useful, the right
(for to say that all nations are interested in a thing, is to say that
that thing is good in itself), as if interest were not the necessary,
eternal, indestructible instrument to which Providence has intrusted
human perfectibility. Would not one suppose us all angels of
disinterestedness? And is it supposed that the public does not see
with disgust that this affected language blackens precisely those
pages for which it is compelled to pay highest? Affectation is truly
the malady of this age.
What! because comfort and peace are correlative things; because it has
pleased God to establish this beautiful harmony in the moral world;
you are not willing that we should admire and adore His providence,
and accept with gratitude laws which make justice the condition of
happiness. You wish peace only so far as it is destructive to comfort;
and liberty burdens you because it imposes no sacrifices on you. If
self-renunciation has so many claims for you, who prevents your
carrying it into private life? Society will be grateful to you for it,
for some one, at least, will receive the benefit of it; but to wish to
impose it on humanity as a principle is the height of absurdity, for
the abnegation of everything is the sacrifice of everything--it is
evil set up in theory.
But, thank Heaven, men may write and read a great deal of such talk,
without causing the world to refrain on that account from rendering
obedience to its motive-power, which is, whether they will or no,
_interest_. After all, it is singular enough to see sentiments of the
most sublime abnegation invoked in favor of plunder itself. Just see
to what this ostentatious disinterestedness tends. These men, so
poetically delicate that they do not wish for peace itself, if it is
founded on the base interest of men, put their hands in the pockets of
others, and, above all, of the poor; for what section of the tariff
protects the poor?
Well, gentlemen, dispose according to your own judgment of what
belongs to yourselves, but allow us also to dispose of the fruit of
the sweat of our brows, to avail ourselves of exchange at our own
pleasure. Talk away about self-renunciation, for that is beautiful;
but at the same time practice a little honesty.
CHAPTER XX.
HUMAN LABOR--NATIONAL LABOR.
To break machines, to reject foreign merchandise--are two acts
proceeding from the same doctrine.
We see men who clap their hands when a great invention is made known
to the world, who nevertheless adhere to the protective system. Such
men are highly inconsistent.
With what do they upbraid freedom of commerce? With getting foreigners
more skilful or better situated than ourselves to produce articles,
which, but for them, we should produce ourselves. In one word, they
accuse us of damaging national labor.
Might they not as well reproach machines for accomplishing, by natural
agents, work which, without them, we could perform with our own arms,
and, in consequence, damaging human labor?
The foreign workman who is more favorably situated than the American
laborer, is, in respect to the latter, a veritable economic machine,
which injures him by competition. In the same manner, a machine which
executes a piece of work at a less price than can be done by a certain
number of arms, is, relatively to those arms, a true competing
foreigner, who paralyzes them by his rivalry.
If, then, it is needful to protect national labor against the
competition of foreign labor, it is not less so, to protect human
labor against the rivalry of mechanical labor.
So, he who adheres to the protective policy, if he has but a small
amount of logic in his brain, must not stop when he has prohibited
foreign products; he must farther proscribe the shuttle and the
plough.
And that is the reason why we prefer the logic of those men who,
declaiming against the invasion of exotic merchandise, have, at least,
the courage to declaim as well against the excess of production due to
the inventive power of the human mind.
Hear such a Conservative:--"One of the strongest arguments against
liberty of commerce, and the too great employment of machines, is,
that very many workmen are deprived of work, either by foreign
competition, which is destructive to their manufactures, or by
machines, which take the place of men in the workshops."
This gentleman perfectly sees the analogy, or rather, let us say, the
identity, existing between importations and machines; that is the
reason he proscribes both: and truly there is some pleasure in having
to do with reasonings, which, even in error, pursue an argument to the
end.
Let us look at the difficulty in the way of its soundness.
If it be true, _à priori_, that the domain of _invention_ and that of
labor cannot be extended, except at the expense of one or the other,
it is in the place where there are most machines, Lancaster or Lowell,
for example, that we shall meet with the fewest _workmen_. And if, on
the contrary, we prove _a fact_, that mechanical and hand work
co-exist in a greater degree among wealthy nations than among savages,
we must necessarily conclude that these two powers do not exclude each
other.
It is not easy to explain how a thinking being can taste repose in
presence of this dilemma:
Either--"The inventions of man do not injure labor, as general facts
attest, since there are more of both among the English and Americans
than among the Hottentots and Cherokees. In that case I have made a
false reckoning, though I know neither where nor when I got astray. I
should commit the crime of treason to humanity if I should introduce
my error into the legislation of my country."
Or else--"The discoveries of the mind limit the work of the arms, as
some particular facts seem to indicate; for I see daily a machine do
the labor of from twenty to a hundred workmen, and thus I am forced to
prove a flagrant, eternal, incurable antithesis between the
intellectual and physical ability of man; between his progress and his
comfort; and I cannot forbear saying that the Creator of man ought to
have given him either reason or arms, moral force, or brutal force,
but that he has played with him in conferring upon him opposing
faculties which destroy one another."
The difficulty is pressing. Do you know how they get rid of it? By
this singular apothegm:
"In political economy there are no absolute principles."
In intelligible and vulgar language, that means: "I do not know where
is the true nor the false; I am ignorant of what constitutes general
good or evil; I give myself no trouble about it. The only law which I
consent to recognize, is the immediate effect of each measure upon my
personal comfort."
No absolute principles! You might as well say, there are no absolute
facts; for principles are only the summing up of well proven facts.
Machines, importations, have certainly consequences. These
consequences are good or bad. On this point there may be difference of
opinion. But whichever of these we adopt, we express it in one of
these two _principles_: "machines are a benefit," or "machines are an
evil." "Importations are favorable," or "importations are injurious."
But to say "there are no principles," is the lowest degree of
abasement to which the human mind can descend; and we confess we blush
for our country when we hear so monstrous a heresy uttered in the
presence of the American people, with their consent; that is to say,
in the presence and with the consent of the greater part of our
fellow-citizens, in order to justify Congress for imposing laws on us,
in perfect ignorance of the reasons for them or against them.
But then we shall be told, "destroy _the sophism_; prove that machines
do not injure _human labor_, nor importations _national industry_."
In an essay of this nature such demonstrations cannot be complete. Our
aim is more to propose difficulties than to solve them; to excite
reflection, than to satisfy it. No conviction of the mind is well
acquired, excepting that which it gains by its own labor. We will try,
nevertheless, to place it before you.
The opponents of importations and machines are mistaken, because they
judge by immediate and transitory consequences, instead of looking at
general and final ones.
The immediate effect of an ingenious machine is to economize, towards
a given result, a certain amount of handwork. But its action does not
stop there: inasmuch as this result is obtained with less effort, it
is given to the public for a lower price; and the amount of the
savings thus realized by all the purchasers, enables them to procure
other gratifications--that is to say, to encourage handwork in
general, equal in amount to that subtracted from the special handwork
lately improved upon--so that the level of work has not fallen, though
that of gratification has risen. Let us make this connection of
consequences evident by an example.
Suppose that in the United States ten millions of hats are sold at
five dollars each: this affords to the hatters' trade an income of
fifty millions. A machine is invented which allows hats to be afforded
at three dollars each. The receipts are reduced to thirty millions,
admitting that the consumption does not increase. But, for all that,
the other twenty millions are not subtracted from _human labor_.
Economized by the purchasers of hats, they will serve them in
satisfying other needs, and by consequence will, to that amount,
remunerate collective industry. With these two dollars saved, John
will purchase a pair of shoes, James a book, William a piece of
furniture, etc. Human labor, in the general, will thus continue to be
encouraged to the amount of fifty millions; but this sum, beside
giving the same number of hats as before, will add the gratifications
obtained by the twenty millions which the machine has spared. These
gratifications are the net products which America has gained by the
invention. It is a gratuitous gift, a tax, which the genius of man has
imposed on Nature. We do not deny that, in the course of the change, a
certain amount of labor may have been _displaced_; but we cannot agree
that it has been destroyed, or even diminished. The same holds true of
importations.
We will resume the hypothesis. America makes ten millions of hats, of
which the price was five dollars each. The foreigner invaded our
market in furnishing us with hats at three dollars. We say that
national labor will be not at all diminished. For it will have to
produce to the amount of thirty millions, in order to pay for ten
millions of hats at three dollars. And then there will remain to each
purchaser two dollars saved on each hat, or a total of twenty
millions, which will compensate for other enjoyments; that is to say,
for other work. So the total of labor remains what it was; and the
supplementary enjoyments, represented by twenty millions economized on
the hats, will form the net profit of the importations, or of free
trade.
No one need attempt to horrify us by a picture of the sufferings,
which, in this hypothesis, will accompany the displacement of labor.
For if prohibition had never existed, labor would have classed itself
in accordance with the law of exchange, and no displacement would have
taken place. If, on the contrary, prohibition has brought in an
artificial and unproductive kind of work, it is prohibition, and not
free trade, which is responsible for the inevitable displacement, in
the transition from wrong to right.
Unless, indeed, it should be contended that, because an abuse cannot
be destroyed without hurting those who profit by it, its existence for
a single moment is reason enough why it should endure forever.
CHAPTER XXI.
RAW MATERIAL.
It is said that the most advantageous commerce consists in the
exchange of manufactured goods for raw material, because this raw
material is a spur to _national labor_.
And then the conclusion is drawn, that the best custom-house
regulation would be that which should give the utmost possible
facility to the entry of _raw material_, and oppose the greatest
obstacles to articles which have received their first manipulation by
labor.
No sophism of political economy is more widely spread than the
foregoing. It supports not only the protectionists, but, much more,
and above all, the pretended liberalists. This is to be regretted; for
the worst which can happen to a good cause is not to be severely
attacked, but to be badly defended.
Commercial freedom will probably have the fate of all freedom; it will
not be introduced into our laws until after it has taken possession of
our minds. But if it be true that a reform must be generally
understood, in order that it may be solidly established, it follows
that nothing can retard it so much as that which misleads public
opinion; and what is more likely to mislead it than those writings
which seem to favor freedom by upholding the doctrines of monopoly?
Several years ago, three large cities of France--Lyons, Bordeaux, and
Havre--were greatly agitated against the restrictive policy. The
nation, and indeed all Europe, was moved at seeing a banner raised,
which they supposed to be that of free trade. Alas! it was still the
banner of monopoly; of a monopoly a little more niggardly, and a great
deal more absurd, than that which they appeared to wish to overturn.
Owing to the sophism which we are about to unveil, the petitioners
merely reproduced the doctrine of _protection to national labor_,
adding to it, however, another folly.
What is, in effect, the prohibitive system? Let us listen to the
protectionist: "Labor constitutes the wealth of a people, because it
alone creates those material things which our necessities demand, and
because general comfort depends upon these."
This is the principle.
"But this abundance must be the product of _national labor_. Should it
be the product of foreign labor, national labor would stop at once."
This is the mistake. (See the close of the last chapter.)
"What shall be done, then, in an agricultural and manufacturing
country?"
This is the question.
"Restrict its market to the products of its own soil, and its own
industry."
This is the end proposed.
"And for this end, restrain by prohibitive duties the entrance of the
products of the industry of other nations."
These are the means.
Let us reconcile with this system that of the petition from Bordeaux.
It divided merchandise into three classes:
"The first includes articles of food, and _raw material free from all
human labor. A wise economy would require that this class should not
be taxed_."
Here there is no labor; consequently no protection.
"The second is composed of articles which have undergone _some
preparation_. This preparation warrants us _in charging it with some
tax_."
Here protection commences, because, according to the petitioners,
_national labor_ commences.
"The third comprises perfected articles which can in no way serve
national labor; we consider these the most taxable."
Here, labor, and with it protection, reach their maximum.
The petitioners assert that foreign labor injures national labor; this
is _the error_ of the prohibitive school.
They demanded that the French market should be restricted to French
_labor_; this is the _end_ of the prohibitive system.
They insisted that foreign labor should be subject to restriction and
taxation; these are the _means_ of the prohibitive system.
What difference, then, is it possible to discover between the
petitioners of Bordeaux and the advocate of American restriction? One
alone: the greater or less extent given to the word _labor_.
The protectionist extends it to everything--so he wishes to _protect_
everything.
"Labor constitutes _all_ the wealth of a people," says he; "to
protect national industry, _all_ national industry, manufacturing
industry, _all_ manufacturing industry, is the idea which should
always be kept before the people." The petitioners saw no labor
excepting that of manufacturers; so they would admit that alone to the
favors of protection. They said:
"Raw material is _devoid of all human labor_. For that reason we
should not tax it. Fabricated articles can no longer occupy national
labor. We consider them the most taxable."
We are not inquiring whether protection to national labor is
reasonable. The protectionist and the Bordelais agree upon this point,
and we, as has been seen in the preceding chapters, differ from both.
The question is to ascertain which of the two--the protectionists or
the raw-materialists of Bordeaux--give its just acceptation to the
word "labor."
Now, upon this ground, it must be said, the protectionist is, by all
odds, right; for observe the dialogue which might take place between
them:
The PROTECTIONIST: "You agree that national labor ought to be
protected. You agree that no foreign labor can be introduced into our
market without destroying therein an equal amount of our national
labor. Yet you assert that there is a host of merchandise possessed of
_value_ (since it sells), which is, however, free from _human labor_.
And, among other things, you name wheat, corn, meats, cattle, lard,
salt, iron, brass, lead, coal, wool, furs, seeds, etc. If you can
prove to me that the value of these things is not due to labor, I will
agree that it is useless to protect them. But, again, if I demonstrate
to you that there is as much labor in a hundred dollars' worth of
wool as in a hundred dollars' worth of cloth, you must acknowledge
that protection is as much due to the one as to the other. Now, why is
this bag of wool worth a hundred dollars? Is it not because that sum
is the price of production? And is the price of production anything
but that which it has been necessary to distribute in wages, salaries,
manual labor, interest, to all the workmen and capitalists who have
concurred in producing the article?"
The RAW-MATERIALIST: "It is true, that in regard to wool, you
may be right. But a bag of wheat, an ingot of iron, a quintal of
coal--are they the produce of labor? Did not Nature create them?"
The PROTECTIONIST: "Without doubt Nature _creates_ the
_elements_ of all things; but it is labor which produces their
_value_. I was wrong myself in saying that labor creates material
objects, and this faulty phrase has led the way to many other errors.
It does not belong to man, either manufacturer or cultivator, to
_create_, to make something out of nothing; if, by _production_, we
understand _creation_, all our labors will be unproductive; that of
merchants more so than any other, except, perhaps, that of law-makers.
The farmer has no claim to have _created_ wheat, but he may claim to
have created its _value_: he has transformed into wheat substances
which in no wise resembled it, by his own labor with that of his
ploughmen and reapers. What more does the miller effect who converts
it into flour, the baker who turns it into bread? Because man must
clothe himself in cloth, a host of operations is necessary. Before the
intervention of any human labor, the true raw materials of this
product (cloth) are air, water, gas, light, the chemical substances
which must enter into its composition. These are truly the raw
materials which are _untouched by human labor_; therefore, they are of
no _value_, and I do not think of protecting them. But a first labor
converts these substances into hay, straw, etc., a second into wool, a
third into thread, a fourth into cloth, a fifth into clothing--who
will dare to say that every step in this work is not _labor_, from the
first stroke of the plough, which begins, to the last stroke of the
needle, which terminates it? And because, in order to secure more
celerity and perfection in the accomplishment of a definite work, such
as a garment, the labors are divided among several classes of
industry, you wish, by an arbitrary distinction, that the order of
succession of these labors should be the only reason for their
importance; so much so that the first shall not deserve even the name
of labor, and that the last work pre-eminently, shall alone be worthy
of the favors of protection!"
The RAW-MATERIALIST: "Yes, we begin to see that wheat no more
than wool is entirely devoid of human labor; but, at least, the
agriculturist has not, like the manufacturer, done all by himself and
his workmen; Nature aids him, and if there is labor, it is not all
labor in the wheat."
The PROTECTIONIST: "But all its _value_ is in the labor it
has cost. I admit that Nature has assisted in the material formation
of wheat. I admit even that it may be exclusively her work; but
confess that I have controlled it by my labor; and when I sell you
some wheat, observe this well: that it is not the work of _Nature_ for
which I make you pay, but _my own_; and, on your supposition,
manufactured articles would be no more the product of labor than
agricultural ones. Does not the manufacturer, too, rely upon Nature to
second him? Does he not avail himself of the weight of the atmosphere
in aid of the steam-engine, as I avail myself of its humidity in aid
of the plough? Did he create the laws of gravitation, of correlation
of forces, of affinities?"
The RAW-MATERIALIST: "Come, let the wool go too. But coal is
assuredly the work, and the exclusive work, of Nature, _unaided by any
human labor_."
The PROTECTIONIST: "Yes, Nature made coal, but _labor_ makes
its value. Coal had no _value_ during the thousands of years during
which it was hidden, unknown, a hundred feet below the soil. It was
necessary to look for it there--that is a _labor_: it was necessary to
transport it to market; that is another _labor_: and once more, the
price which you pay for it in the market is nothing else than the
remuneration for these labors of digging and transportation."
We see that thus far the protectionist has all the advantage on his
side; that the value of raw material, as well as that of manufactured
material, represents the expense of production, that is to say, of
_labor_; that it is impossible to conceive of a material possessed of
value while totally unindebted to human labor; that the distinction
which the raw-materialists make is wholly futile, in theory; that, as
a basis for an unequal division of _favors_, it would be iniquitous in
practice; because the result would be that one-third of the people,
engaged in manufactures, would obtain the sweets of monopoly, for the
reason that they produced _by labor_, while the other two-thirds,
that is to say the agriculturists, would be abandoned to competition,
under pretext that they produced without labor.
It will be urged that it is of more advantage to a nation to import
the materials called raw, whether they are or are not the product of
labor, and to export manufactured articles.
This is a strongly accredited opinion.
"The more abundant raw materials are," said the petition from
Bordeaux, "the more manufactories are multiplied and extended." It
said again, that "raw material opens an unlimited field of labor to
the inhabitants of the country from which it is imported."
"Raw material," said the other petition, that from Havre, "being the
aliment of labor, must be submitted to a _different system_, and
admitted at once at the lowest duty." The same petition would have the
protection on manufactured articles reduced, not one after another,
but at an undetermined time; not to the lowest duty, but to twenty per
cent.
"Among other articles which necessity requires to be abundant and
cheap," said the third petition, that from Lyons, "the manufacturers
name all raw material."
This all rests on an illusion. We have seen that all _value_
represents labor. Now, it is true that labor increases ten-fold,
sometimes a hundred-fold, the value of a rough product, that is to
say, expands ten-fold, a hundred-fold, the products of a nation.
Thence it is reasoned, "The production of a bale of cotton causes
workmen of all classes to earn one hundred dollars only. The
conversion of this bale into lace collars raises their profits to ten
thousand dollars; and will you dare to say that the nation is not
more interested in encouraging labor worth ten thousand than that
worth one hundred dollars?"
We forget that international exchanges, no more than individual
exchanges, work by weight or measure. We do not exchange a bale of
cotton for a bale of lace collars, nor a pound of wool in the grease
for a pound of wool in cashmere; but a certain value of one of these
things _for an equal value_ of the other. Now to barter equal value
against equal value is to barter equal work against equal work. It is
not true, then, that the nation which gives for a hundred dollars
cashmere or collars, gains more than the nation which delivers for a
hundred dollars wool or cotton.
In a country where no law can be adopted, no impost established,
without the consent of those whom this law is to govern, the public
cannot be robbed without being first deceived. Our ignorance is the
"raw material" of all extortion which is practised upon us, and we may
be sure in advance that every sophism is the forerunner of a
spoliation. Good public, when you see a sophism, clap your hand on
your pocket; for that is certainly the point at which it aims. What
was the secret thought which the shipowners of Bordeaux and of Havre,
and the manufacturers of Lyons, conceived in this distinction between
agricultural products and manufactured articles?
"It is principally in this first class (that which comprehends raw
material _unmodified by human labor_)," said the Raw-Materialists of
Bordeaux, "that the chief aliment of our merchant marine is found. At
the outset, a wise economy would require that this class should not
be taxed. The second (articles which have received some preparation)
may be charged; the third (articles on which no more work has to be
done) we consider the most taxable."
"Consider," said those of Havre, "that it is indispensable to reduce
all raw materials one after another to the lowest rate, in order that
industry may successively bring into operation the naval forces which
will furnish to it its first and indispensable means of labor." The
manufacturers could not in exchange of politeness be behind the
ship-owners; so the petition from Lyons demanded the free introduction
of raw material, "in order to prove," said they, "that the interests
of manufacturing towns are not always opposed to those of maritime
ones!"
True; but it must be said that both interests were, understood as the
petitioners understood them, terribly opposed to the interests of the
country, of agriculture, and of consumers.
See, then, where you would come out! See the end of these subtle
economical distinctions! You would legislate against allowing
_perfected_ produce to traverse the ocean, in order that the much more
expensive transportation of rough materials, dirty, loaded with waste
matter, may offer more employment to our merchant service, and put our
naval force into wider operation. This is what these petitioners
termed _a wise economy_. Why did they not demand that the firs of
Russia should be brought to them with their branches, bark, and roots;
the gold of California in its mineral state, and the hides from Buenos
Ayres still attached to the bones of the tainted skeleton?
Industry, the navy, labor, have for their end, the general good, the
public good. To create a useless industry, in order to favor
superfluous transportation; to feed superfluous labor, not for the
good of the public, but for the expense of the public--this is to
realize a veritable begging the question. Work, in itself, is not a
desirable thing; its result is; all work without result is a loss. To
pay sailors for carrying useless waste matter across the sea is like
paying them for skipping stones across the surface of the water. So we
arrive at this result: that all economical sophisms, despite their
infinite variety, have this in common, that they confound the means
with the end, and develop one at the expense of the other.
CHAPTER XXII.
METAPHORS.
Sometimes a sophism dilates itself, and penetrates through the whole
extent of a long and heavy theory. More frequently it is compressed,
contracted, becomes a principle, and is completely covered by a word.
A good man once said: "God protect us from the devil and from
metaphors!" In truth, it would be difficult to say which of the two
creates the more evil upon our planet. It is the demon, say you; he
alone, so long as we live, puts the spirit of spoliation in our
hearts. Yes; but he does not prevent the repression of abuses by the
resistance of those who suffer from them. _Sophistry_ paralyzes this
resistance. The sword which malice puts in the assailant's hand would
be powerless, if sophistry did not break the shield upon the arm of
the assailed; and it is with good reason that Malebranche has
inscribed at the opening of his book, "Error is the cause of human
misery."
See how it comes to pass. Ambitious hypocrites will have some sinister
purpose; for example, sowing national hatred in the public mind. This
fatal germ may develop, lead to general conflagration, arrest
civilization, pour out torrents of blood, draw upon the land the most
terrible of scourges--_invasion_. In every case of indulgence in such
sentiments of hatred they lower us in the opinion of nations, and
compel those Americans, who have retained some love of justice, to
blush for their country. Certainly these are great evils; and in order
that the public should protect itself from the guidance of those who
would lead it into such risks, it is only necessary to give it a clear
view of them. How do they succeed in veiling it from them? It is by
_metaphor_. They alter, they force, they deprave the meaning of three
or four words, and all is done.
Such a word is _invasion_ itself. An owner of an American furnace
says, "Preserve us from the _invasion_ of English iron." An English
landlord exclaims, "Let us repel the _invasion_ of American wheat!"
And so they propose to erect barriers between the two nations.
Barriers constitute isolation, isolation leads to hatred, hatred to
war, and war to _invasion_. "Suppose it does," say the two sophists;
"is it not better to expose ourselves to the chance of an eventual
_invasion_, than to accept a certain one?" And the people still
believe, and the barriers still remain.
Yet what analogy is there between an exchange and an _invasion_? What
resemblance can possibly be established between a vessel of war, which
comes to pour fire, shot, and devastation into our cities, and a
merchant ship, which comes to offer to barter with us freely,
voluntarily, commodity for commodity?
As much may be said of the word _inundation_. This word is generally
taken in bad part, because _inundations_ often ravage fields and
crops. If, however, they deposit upon the soil a greater value than
that which they take from it; as is the case in the inundations of the
Nile, we might bless and deify them as the Egyptians do. Well! before
declaiming against the inundation of foreign produces, before
opposing to them restraining and costly obstacles, let us inquire if
they are the inundations which ravage or those which fertilize? What
should we think of Mehemet Ali, if, instead of building, at great
expense, dams across the Nile for the purpose of extending its field
of inundation, he should expend his money in digging for it a deeper
bed, so that Egypt should not be defiled by this _foreign_ slime,
brought down from the Mountains of the Moon? We exhibit precisely the
same amount of reason, when we wish, by the expenditure of millions,
to preserve our country--From what? The advantages with which Nature
has endowed other climates.
Among the metaphors which conceal an injurious theory, none is more
common than that embodied in the words _tribute, tributary_.
These words are so much used that they have become synonymous with the
words _purchase, purchaser_, and one is used indifferently for the
other.
Yet a _tribute_ or _tax_ differs as much from _purchase_ as a theft
from an exchange, and we should like quite as well to hear it said,
"Dick Turpin has broken open my safe, and has _purchased_ out of it a
thousand dollars," as we do to have it remarked by our sage
representatives, "We have paid to England the _tribute_ for a thousand
gross of knives which she has sold to us."
For the reason why Turpin's act is not a _purchase_ is, that he has
not paid into my safe, with my consent, value equivalent to what he
has taken from it, and the reason why the payment of five hundred
thousand dollars, which we have made to England, is not a _tribute_,
is simply because she has not received them gratuitously, but in
exchange for the delivery to us of a thousand gross of knives, which
we ourselves have judged worth five hundred thousand dollars.
But is it necessary to take up seriously such abuses of language? Why
not, when they are seriously paraded in newspapers and in books?
Do not imagine that they escape from writers who are ignorant of their
language; for one who abstains from them, we could point you to ten
who employ them, and they persons of consideration--that is to say,
men whose words are laws, and whose most shocking sophisms serve as
the basis of administration for the country.
A celebrated modern philosopher has added to the categories of
Aristotle, the sophism which consists in including in one word the
begging of the question. He cites several examples. He should have
added the word _tributary_ to his vocabulary. In effect the question
is, are purchases made abroad useful or injurious? "They are
injurious," you say. And why? "Because they make us _tributary_ to the
foreigner." Here is certainly a word which presents as a fact that
which is a question.
How is this abusive trope introduced into the rhetoric of monopolists?
Some specie _goes out of a country_ to satisfy the rapacity of a
victorious enemy--other specie, also, goes out of a country to settle
an account for merchandise. The analogy between the two cases is
established, by taking account of the one point in which they resemble
one another, and leaving out of view that in which they differ.
This circumstance, however,--that is to say, non-reimbursement
in the one case, and reimbursement freely agreed upon in the
other--establishes such a difference between them, that it is not
possible to class them under the same title. To deliver a hundred
dollars _by compulsion_ to him who says "Stand and deliver," or
_voluntarily_ to pay the same sum to him who sells you the object of
your wishes--truly, these are things which cannot be made to
assimilate. As well might you say, it is a matter of indifference
whether you throw bread into the river or eat it, because in either
case it is bread _destroyed_. The fault of this reasoning, as in that
which the word _tribute_ is made to imply, consists in founding an
exact similitude between two cases on their points of resemblance, and
omitting those of difference.
CHAPTER XXIII.
CONCLUSION.
All the sophisms we have hitherto combated are connected with one
single question: the restrictive system; and, out of pity for the
reader, we pass by acquired rights, untimeliness, misuse of the
currency, etc., etc.
But social economy is not confined to this narrow circle. Fourierism,
Saint-Simonism, communism, mysticism, sentimentalism, false
philanthropy, affected aspirations to equality and chimerical
fraternity, questions relative to luxury, to salaries, to machines, to
the pretended tyranny of capital, to distant territorial acquisitions,
to outlets, to conquests, to population, to association, to
emigration, to imposts, to loans, have encumbered the field of science
with a host of parasitical _sophisms_, which demand the hoe and the
sickle of the diligent economist. It is not because we do not
recognize the fault of this plan, or rather of this absence of plan.
To attack, one by one, so many incoherent sophisms which sometimes
clash, although more frequently one runs into the other, is to condemn
one's self to a disorderly, capricious struggle, and to expose one's
self to perpetual repetitions.
How much we should prefer to say simply how things are, without
occupying ourselves with the thousand aspects in which the ignorant
see them! To explain the laws under which societies prosper or decay,
is virtually to destroy all sophistry at once. When La Place had
described all that can, as yet, be known of the movements of the
heavenly bodies, he had dispersed, without even naming them, all the
astrological dreams of the Egyptians, Greeks, and Hindoos, much more
surely than he could have done by directly refuting them through
innumerable volumes. Truth is one; the book which exposes it is an
imposing and durable monument:
Il brave les tyrans avides,
Plus hardi que les Pyramides
Et plus durable que l'airain.
Error is manifold, and of ephemeral duration; the work which combats
it does not carry within itself a principle of greatness or of
endurance.
But if the power, and perhaps the opportunity, have failed us for
proceeding in the manner of La Place and of Say, we cannot refuse to
believe that the form which we have adopted has, also, its modest
utility. It appears to us especially well suited to the wants of the
age, to the hurried moments which it can consecrate to study.
A treatise has, doubtless, an incontestable superiority; but upon
condition that it be read, meditated upon, searched into. It addresses
itself to a select public only. Its mission is, at first, to fix, and
afterwards to enlarge, the circle of acquired knowledge.
The refutation of vulgar prejudices could not carry with it this high
bearing. It aspires only to disencumber the route before the march of
truth, to prepare the mind, to reform public opinion, to blunt
dangerous tools in improper hands. It is in social economy above all,
that these hand-to-hand struggles, these constantly recurring combats
with popular errors, have a true practical utility.
We might arrange the sciences under two classes. The one, strictly,
can be known to philosophers only. They are those whose application
demands a special occupation. The public profit by their labor,
despite their ignorance of them. They do not enjoy the use of a watch
the less, because they do not understand mechanics and astronomy. They
are not the less carried along by the locomotive and the steamboat
through their faith in the engineer and the pilot. We walk according
to the laws of equilibrium without being acquainted with them.
But there are sciences which exercise upon the public an influence
proportionate with the light of the public itself, not from knowledge
accumulated in a few exceptional heads, but from that which is
diffused through the general understanding. Such are morals, hygiene,
social economy, and in countries which men belong to themselves,
politics. It is of these sciences, above all, that Bentham might have
said: "That which spreads them is worth more than that which advances
them." Of what consequence is it that a great man, a God even, should
have promulgated moral laws, so long as men, imbued with false
notions, take virtues for vices, and vices for virtues? Of what value
is it that Smith, Say, and, according to Chamans, economists of all
schools, have proclaimed the superiority of liberty to restraint in
commercial transactions, if those who make the laws and those for
whom the laws are made, are convinced to the contrary.
These sciences, which are well named social, have this peculiarity:
that for the very reason that they are of a general application, no
one confesses himself ignorant of them. Do we wish to decide a
question in chemistry or geometry? No one pretends to have the
knowledge instinctively; we are not ashamed to consult Draper; we make
no difficulty about referring to Euclid.
But in social science authority is but little recognized. As such a
one has to do daily with morals, good or bad, with hygiene, with
economy, with politics reasonable or absurd, each one considers
himself skilled to comment, discuss, decide, and dogmatize in these
matters.
Are you ill? There is no good nurse who does not tell you, at the
first moment, the cause and cure of your malady.
"They are humors," affirms she; "you must be purged."
But what are humors? and are these humors?
She does not trouble herself about that. I involuntarily think of this
good nurse when I hear all social evils explained by these common
phrases: "It is the superabundance of products, the tyranny of
capital, industrial plethora," and other idle stories of which we
cannot even say: _verba et voces prætereaque nihil_: for they are also
fatal mistakes.
From what precedes, two things result--
1st. That the social sciences must abound in sophistry much more than
the other sciences, because in them each one consults his own judgment
or instinct alone.
2d. That in these sciences sophistry is especially injurious, because
it misleads public opinion where opinion is a power--that is, law.
Two sorts of books, then, are required by these sciences; those which
expound them, and those which propagate them; those which show the
truth, and those which combat error.
It appears to us that the inherent defect in the form of this little
Essay--_repetition_--is that which constitutes its principal value.
In the question we have treated, each sophism has, doubtless, its own
set form, and its own range, but all have one common root, which is,
"_forgetfulness of the interests of man, insomuch as they forget the
interests of consumers_." To show that the thousand roads of error
conduct to this generating sophism, is to teach the public to
recognize it, to appreciate it--to distrust it under all
circumstances.
After all, we do not aspire to arouse convictions, but doubts.
We have no expectation that in laying down the book, the reader shall
exclaim: "_I know_." Please Heaven he may be induced to say, "_I am
ignorant_."
"I am ignorant, for I begin to believe there is something delusive in
the sweets of Scarcity."
"I am no longer so much edified by the charms of Obstruction."
"Effort without Result no longer seems to me so desirable as Result
without Effort."
"It may probably be true that the secret of commerce does not consist,
as that of arms does, _in giving and not receiving_, according to the
definition which the duellist in the play gives of it."
"I consider an article is increased in value by passing through
several processes of manufacture; but, in exchange, do two equal
values cease to be equal because the one comes from the plough and the
other from the power-loom?"
"I confess that I begin to think it singular that humanity should be
ameliorated by shackles, or enriched by taxes: and, frankly, I should
be relieved of a heavy weight, I should experience a pure joy, if I
could see demonstrated, which the author assures us of, that there is
no incompatibility between comfort and justice, between peace and
liberty, between the extension of labor and the progress of
intelligence."
"So, without feeling satisfied by his arguments, to which I do not
know whether to give the name of reasoning or of objections, I will
interrogate the masters of the science."
Let us terminate by a last and important observation this monograph of
sophisms. The world does not know, as it ought, the influence which
sophistry exerts upon it. If we must say what we think, when the Right
of the Strongest was dethroned, sophistry placed the empire in the
Right of the Most Cunning; and it would be difficult to say which of
these two tyrants has been the more fatal to humanity.
Men have an immoderate love for pleasure, influence, position,
power--in one word, for wealth.
And at the same time men are impelled by a powerful impulse to procure
these things at the expense of another. But this other, which is the
public, has an inclination not less strong to keep what it has
acquired, provided it can and knows how. Spoliation, which plays so
large a part in the affairs of the world, has, then, two agents only:
Strength and Cunning; and two limits: Courage and Right.
Power applied to spoliation forms the groundwork of human savagism. To
retrace its history would be to reproduce almost entire the history of
all nations--Assyrians, Babylonians, Medes, Persians, Egyptians,
Greeks, Romans, Goths, Franks, Huns, Turks, Arabs, Moguls,
Tartars--without counting that of the Spaniards in America, the
English in India, the French in Africa, the Russians in Asia, etc.,
etc.
But, at least, among civilized nations, the men who produce wealth
have become sufficiently numerous and sufficiently strong to defend
it.
Is that to say that they are no longer despoiled? By no means; they
are robbed as much as ever, and, what is more, they despoil one
another. The agent alone is changed; it is no longer by violence, but
by stratagem, that the public wealth is seized upon.
In order to rob the public, it must be deceived. To deceive it, is to
persuade it that it is robbed for its own advantage; it is to make it
accept fictitious services, and often worse, in exchange for its
property. Hence sophistry, economical sophistry, political sophistry,
and financial sophistry--and, since force is held in check, sophistry
is not only an evil, it is the parent of other evils. So it becomes
necessary to hold it in check, _in its turn_, and for this purpose to
render the public more acute than the cunning; just as it has become
more peaceful than the strong.
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