Economic Sophisms

But it is easy to understand that this economic principle of morality, which is rather virtual than formal; which is only, after all, a scientific demonstration, which would lose its efficacy if it changed its character; which addresses itself not to the heart, but to the intellect; which aims at convincing rather than persuading; which does not give advice, but furnishes proofs; whose mission is not to touch the feelings, but enlighten the judgment, which obtains over vice no other victory than that of depriving it of support; it is easy, I say, to understand why this principle of morality should be accused of being dry and prosaic.

The reproach is well founded in itself, without being just in its application. It just amounts to saying that political economy does not discuss everything, that it does not comprehend everything – that it is not, in short, universal science. But who ever claimed for it this character, or put forward on its behalf so exorbitant a pretension?

The accusation would be well founded only if political economy presented its processes as exclusive, and had the presumption, if we may so speak, to deny to philosophy and religion their own proper and peculiar means of working for the cultivation and improvement of man.

Let us admit, then, the simultaneous action of morality, properly so called, and of political economy; the one branding the injurious act in its motive, and exposing its unseemliness, the other discrediting it in our judgment, by a picture of its effects.

Let us admit even that the triumph of the religious moralist, when achieved, is more beautiful, more consoling, more fundamental But we must at the same time acknowledge that the triumph of the economist is more easy and more certain.

In a few lines, which are worth many large volumes, J. B. Say has said that, to put an end to the disorder introduced into an honourable family by hypocrisy there are only two alternatives: to reform Tartuffe, or sharpen the wits of Orgon. Molière, that great painter of the human heart, appears constantly to have regarded the second of these processes as the more efficacious.

It is the same thing in real life, and on the stage of the world.

Tell me what Cæsar did, and I will tell you what the character was of the Romans of his time.

Tell me what modern diplomacy accomplishes, and I will tell you what is the moral condition of the nations among whom it is exercised.

We should not be paying nearly two milliards [£80,000,000 sterling] of taxes, if we did not empower those who live upon them to vote them.

We should not have been landed in all the difficulties and charges to which the African question has given rise, had we had our eyes open to the fact that two and two make four, in political economy, as well as in arithmetic.

M. Guizot would not have felt himself authorized to say that France is rich enough to pay for her glory, if France had never been smitten with the love of false glory.

The same statesman would never have ventured to say that liberty is too precious a thing for France to stand higgling about its price, had France only reflected that a heavy budget and liberty are incompatible.

It is not by monopolists, but by their victims, that monopolies are maintained.

In the matter of elections, it is not because there are parties who offer bribes that there are parties open to receive them, but the contrary; and the proof of this is, that it is the parties who receive the bribes who, in the long run, defray the cost of corruption. Is it not their business to put an end to the practice?

Let the religious principle of morality, if it can, touch the hearts of the Tartuffes, the Cæsars, the planters of colonies, the sinecurists, the monopolists, etc. The clear duty of political economy is to enlighten their dupes.

Of these two processes, which exercises the more efficacious influence on social progress? I feel it almost unnecessary to say, that I believe it is the second; and I fear we can never exempt mankind from the necessity of learning first of all defensive morality.

After all I have heard and read and observed, I have never yet met with an instance of an abuse which had been in operation on a somewhat extensive scale, put an end to by the voluntary renunciation of those who profit by it.

On the other hand, I have seen many abuses put down by the determined resistance of those who suffered from them.

To expose the effects of abuses, then, is the surest means of putting an end to them. And this holds especially true of abuses like the policy of restriction, which, whilst inflicting real evils on the masses, are productive of nothing to those who imagine they profit by them but illusion and deception!

After all, can the kind of morality we are advocating of itself enable us to realize all that social perfection which the sympathetic nature of the soul of man and its noble faculties authorize us to look forward to and hope for? I am far from saying so. Assume the complete diffusion of defensive morality, it resolves itself simply into the conviction that men's interests, rightly understood, are always in accord with justice and general utility. Such a society, although certainly well ordered, would not be very attractive. There would be fewer cheats simply because there would be fewer dupes. Vice always lurking in the background, and starved, so to speak, for want of support, would revive the moment that support was restored to it.

The prudence of each would be enforced by the vigilance of all; and reform, confining itself to the regulation of external acts, and never going deeper than the skin, would fail to penetrate men's hearts and consciences. Such a society would remind us of one of those exact, rigorous, and just men, who are ready to resent the slightest invasion of their rights, and to defend themselves on all sides from attacks. You esteem them; you perhaps admire them; you would elect them as deputies; but you would never make them your friends.

But the two principles of morality I have described, instead of running counter to each other, work in concert, attacking vice from opposite directions. Whilst the economists are doing their part, sharpening the wits of the Orgons, eradicating prejudices, exciting just and necessary distrust, studying and explaining the true nature of things and of actions, let the religious moralist accomplish on his side his more attractive, although more difficult, labours. Let him attack dishonesty in a hand-to-hand fight; let him pursue it into the most secret recesses of the heart; let him paint in glowing colours the charms of beneficence, of self-sacrifice, of devotion; let him open up the fountains of virtue, where we can only dry up the fountains of vice. This is his duty, and a noble duty it is. But why should he contest the utility of the duty which has devolved upon us?

In a society which, without being personally and individually virtuous, would nevertheless be well ordered through the action of the economic principle of morality (which means a knowledge of the economy of the social body), would not an opening be made for the work of the religious moralist?

Habit, it is said, is a second nature.

A country might still be unhappy, although for a long time each man may have been unused to injustice through the continued resistance of an enlightened public. But such a country, it seems to me, would be well prepared to receive a system of teaching more pure and elevated. We get a considerable way on the road to good, when we become unused to evil. Men can never remain stationary. Diverted from the path of vice, feeling that it leads only to infamy, they would feel so much the more sensibly the attractions of virtue.

Society must perhaps pass through this prosaic state of transition, in which men practise virtue from motives of prudence, in order to rise afterwards to that fairer and more poetic region where such calculating motives are no longer wanted.

III. THE TWO HATCHETS

Petition of Jacques Bonhomme, Carpenter, to M. Cunin-Gridaine, Minister of Commerce.

Monsieur le Fabricant-Ministre,

I am a carpenter to trade, as was St Joseph of old; and I handle the hatchet and adze, for your benefit.

Now, while engaged in hewing and chopping from morning to night upon the lands of our Lord the King, the idea has struck me that my labour may be regarded as national, as well as yours.

And, in these circumstances, I cannot see why protection should not visit my woodyard as well as your workshop.

For, sooth to say, if you make cloths I make roofs; and both, in their own way, shelter our customers from cold and from rain.

And yet I run after customers; and customers run after you. You have found out the way of securing them by hindering them from supplying themselves elsewhere, while mine apply to whomsoever they think proper.

What is astonishing in all this? Monsieur Cunin, the Minister of State, has not forgotten M. Cunin, the manufacturer – all quite natural. But, alas! my humble trade has not given a Minister to France, although practised, in Scripture times, by far more august personages.

And in the immortal code which I find embodied in Scripture, I cannot discover the slightest expression which could be quoted by carpenters, as authorizing them to enrich themselves at the expense of other people.

You see, then, how I am situated. I earn fifteen pence a day, when it is not Sunday or holiday. I offer you my services at the same time as a Flemish carpenter offers you his, and, because he abates a halfpenny, you give him the preference.

But I desire to clothe myself; and if a Belgian weaver presents his cloth alongside of yours, you drive him and his cloth out of the country.

So that, being forced to frequent your shop, although the dearest, my poor fifteen pence go no further in reality than fourteen.

Nay, they are not worth more than thirteen! for in place of expelling the Belgian weaver at your own cost (which was the least you could do), you, for your own ends, make me pay for the people you set at his heels.

And as a great number of your co-legislators, with whom you are on a marvellously good footing, take each a halfpenny or a penny, under pretext of protecting iron, or coal, or oil, or corn, I find, when everything is taken into account, that of my fifteen pence, I have only been able to save seven pence or eight pence from pillage.

You will no doubt tell me that these small halfpence, which pass in this way from my pocket to yours, maintain workpeople who reside around your castle, and enable you to live in a style of magnificence. To which I will only reply, that if the pence had been left with me, the person who earned them, they would have maintained workpeople in my neighbourhood.

Be this as it may, Monsieur le Ministre-fabricant, knowing that I should be but ill received by you, I have not come to require you, as I had good right to do, to withdraw the restriction which you impose on your customers. I prefer following the ordinary course, and I approach you to solicit a little bit of protection for myself.

Here, of course, you will interpose a difficulty. "My good friend," you will say, "I would protect you and your fellow-workmen with all my heart; but how can I confer customhouse favours on carpenter-work? What use would it be to prohibit the importation of houses by sea or by land?"

That would be a good joke, to be sure; but, by dint of thinking, I have discovered another mode of favouring the children of St Joseph; which you will welcome the more willingly, I hope, as it differs in nothing from that which constitutes the privilege which you vote year after year in your own favour.

The means of favouring us, which I have thus marvellously discovered, is to prohibit the use of sharp axes in this country.

I maintain that such a restriction would not be in the least more illogical or more arbitrary than the one to which you subject us in the case of your cloth.

Why do you drive away the Belgians? Because they sell cheaper than you. And why do they sell cheaper than you? Because they have a certain degree of superiority over you as manufacturers.

Between you and a Belgian, therefore, there is exactly the same difference as in my trade there would be between a blunt and a sharp axe.

And you force me, as a tradesman, to purchase from you the product of the blunt hatchet?

Regard the country at large as a workman who desires, by his labour, to procure all things he has want of, and, among others, cloth.

There are two means of effecting this.

The first is to spin and weave the wool.

The second is to produce other articles, as, for example, French clocks, paper-hangings, or wines, and exchange them with the Belgians for the cloth wanted.

Of these two processes, the one which gives the best result may be represented by the sharp axe, and the other by the blunt one.

You do not deny that at present, in France, we obtain a piece of stuff by the work of our own looms (that is the blunt axe) with more labour than by producing and exchanging wines (that is the sharp axe). So far are you from denying this, that it is precisely because of this excess of labour (in which you make wealth to consist) that you recommend, nay, that you compel the employment of the worse of the two hatchets.

Now, only be consistent, be impartial, and if you mean to be just, treat the poor carpenters as you treat yourselves.

Pass a law to this effect:

"No one shall henceforth be permitted to employ any beams or rafters, but such as are produced and fashioned by blunt hatchets."

And see what will immediately happen.

Whereas at present we give a hundred blows of the axe, we shall then give three hundred. The work which we now do in an hour will then require three hours. What a powerful encouragement will thus be given to labour! Masters, journeymen, apprentices! our sufferings are now at an end. We shall be in demand; and, therefore, well paid. Whoever shall henceforth desire to have a roof to cover him must comply with our exactions, just as at present whoever desires clothes to his back must comply with yours.

And should the theoretical advocates of free trade ever dare to call in question the utility of the measure, we know well where to seek for reasons to confute them Your Inquiry of 1834 is still to be had. With that weapon, we shall conquer; for you have there admirably pleaded the cause of restriction, and of blunt axes, which are in reality the same thing.

IV. LOWER COUNCIL OF LABOUR

What! you have the face to demand for all citizens a right to sell, buy, barter, and exchange; to render and receive service for service, and to judge for themselves, on the single condition that they do all honestly, and comply with the demands of the public treasury? Then you simply desire to deprive our workmen of employment, of wages, and of bread?"

This is what is said to us. I know very well what to think of it; but what I wish to know is, what the workmen themselves think of it.

I have at hand an excellent instrument of inquiry. Not those Upper Councils of Industry, where extensive proprietors who call themselves labourers, rich shipowners who call themselves sailors, and wealthy shareholders who pass themselves off for workmen, turn their philanthropy to account in a way which we all know.

No; it is with workmen, who are workmen in reality, that we have to do – joiners, carpenters, masons, tailors, shoemakers, dyers, blacksmiths, innkeepers, grocers, etc., etc., – and who, in my village, have founded a friendly society.

I have transformed this friendly society, at my own hand, into a Lower Council of Labour, and instituted an inquiry which will be found of great importance, although it is not crammed with figures, or inflated to the bulk of a quarto volume, printed at the expense of the State.

My object was to interrogate these plain, simple people as to the manner in which they are, or believe themselves to be, affected by the policy of protection. The president pointed out that this would be infringing to some extent on the fundamental conditions of the Association. For in France, this land of liberty, people who associate give up their right to talk politics – in other words, their right to discuss their common interests. However, after some hesitation, he agreed to include the question in the order of the day.

They divided the assembly into as many committees as there were groups of distinct trades, and delivered to each committee a schedule to be filled up after fifteen days' deliberation.

On the day fixed, the worthy president (we adopt the official style) took the chair, and there were laid upon the table (still the official style) fifteen reports, which he read in succession.

The first which was taken into consideration was that of the tailors. Here is an exact and literal copy of it: —

EFFECTS OF PROTECTION. – REPORT OF THE TAILORS

Inconveniences.

1st, In consequence of the policy of protection, we pay dearer for bread, meat, sugar, firewood, thread, needles, etc., which is equivalent in our case to a considerable reduction of wages.

2d, In consequence of the policy of 'protection, our customers also pay dearer for everything, and this leaves them less to spend upon clothing; whence it follows that we have less employment, and, consequently, smaller returns.

3d, In consequence of the policy of protection, the stuffs which we make up are dear, and people on that account wear their clothes longer, or dispense with part of them. This, again, is equivalent to a diminution of employment, and forces us to offer our services at a lower rate of remuneration.

Advantages.

None.

Note. – After all our inquiries, deliberations, and discussions, we have been quite unable to discover that in any respect whatever the policy of protection has been of advantage to our trade.

Here is another report: —

EFFECTS OF PROTECTION. – REPORT OF THE BLACKSMITHS

Inconveniences.

1st, The policy of protection imposes a tax upon us every time we eat, drink, or warm or clothe ourselves, and this tax does not go to the treasury.

2d, It imposes a like tax upon all our fellow-citizens who are not of our trade, and they, being so much the poorer, have recourse to cheap substitutes for our work, which deprives us of the employment we should otherwise have had. None.

3d, It keeps up iron at so high a price, that it is not employed in the country for ploughs, grates, gates, balconies, etc.; and our trade, which might furnish employment to so many other people who are in want of it, no longer furnishes employment to ourselves.

4th, The revenue which the treasury fails to obtain from commodities which are not imported is levied upon the salt we use, postages, etc.

All the other reports (with which it is unnecessary to trouble the reader) are to the same tune. Gardeners, carpenters, shoemakers, clogmakers, boatmen, millers, all give vent to the same complaints.

I regret that there are no agricultural labourers in our association. Their report would assuredly have been very instructive.

But, alas! in our country of the Landes, the poor labourers, protected though they be, have not the means of joining an association, and, having insured their cattle, they find they cannot themselves become members of a friendly society. The boon of protection does not hinder them from being the parias of our social order. What shall I say of the vine-dressers?

What I remark, especially, is the good sense displayed by our villagers in perceiving not only the direct injury which the policy of protection does them, but the indirect injury, which, although in the first instance affecting their customers, falls back, par ricochet, upon themselves.

This is what the economists of the Moniteur Industriel do not appear to understand.

And perhaps those men whose eyes a dash of protection has fascinated, especially our agriculturists, would be willing to give it up, if they were enabled to see this side of the question.

In that case they might perhaps say to themselves, "Better far to be self-supported in the midst of a set of customers in easy circumstances, than to be protected in the midst of an impoverished clientèle."

For to desire to enrich by turns each separate branch of industry by creating a void round each in succession, is as vain an attempt as it would be for a man to try to leap over his own shadow.

V. DEARNESS-CHEAPNESS

I think it necessary to submit to the reader some theoretical remarks on the illusions to which the words dearness and cheapness give rise. At first sight, these remarks may, I feel, be regarded as subtle, but the question is not whether they are subtle or the reverse, but whether they are true. Now, I not only believe them to be perfectly true, but to be well fitted to suggest matter of reflection to men (of whom there are not a few) who have sincere faith in the efficacy of a protectionist policy.

The advocates of Liberty and the defenders of Restriction are both obliged to employ the expressions, dearness, cheapness. The former declare themselves in favour of cheapness with a view to the interest of the consumer; the latter pronounce in favour of dearness, having regard especially to the interest of the producer. Others content themselves with saying, The producer and consumer are one and the same person; which leaves undecided the question whether the law should promote cheapness or dearness.

In the midst of this conflict, it would seem that the law has only one course to follow, and that is to allow prices to settle and adjust themselves naturally. But then we are attacked by the bitter enemies of laissez faire. At all hazards they want the law to interfere, without knowing or caring in what direction. And yet it lies with those who desire to create by legal intervention an artificial dearness or an unnatural cheapness, to explain the grounds of their preference. The onus probandi rests upon them exclusively. Liberty is always esteemed good, till the contrary is proved; and to allow prices to settle and adjust themselves naturally, is liberty.

But the parties to this dispute have changed positions. The advocates of dearness have secured the triumph of their system, and it lies with the defenders of natural prices to prove the goodness of their cause. On both sides, the argument turns on two words; and it is therefore very essential to ascertain what these two words really mean.

But we must first of all notice a series of facts which are fitted to disconcert the champions of both camps.

To engender dearness, the restrictionists have obtained protective duties, and a cheapness, which is to them inexplicable, has come to deceive their hopes.

To create cheapness, the free-traders have occasionally succeeded in securing liberty, and, to their astonishment, an elevation of prices has been the consequence.

For example, in France, in order to favour agriculture, a duty of 22 per cent has been imposed on foreign wool, and it has turned out that French wool has been sold at a lower price after the measure than before it.

In England, to satisfy the consumer, they lowered, and ultimately removed, the duty on foreign wool; and it has come to pass that in that country the price of wool is higher than ever.

And these are not isolated facts; for the price of wool is governed by precisely the same laws which govern the price of everything else. The same result is produced in all analogous cases. Contrary to expectation, protection has, to some extent, brought about a fall, and competition, to some extent, a rise of prices.

When the confusion of ideas thence arising had reached its height, the protectionists began saying to their adversaries, "It is our system which brings about the cheapness of which you boast so much." To which the reply was, "It is liberty which has induced the dearness which you find so useful."27

At this rate, would it not be amusing to see cheapness become the watch-word of the Rue Hauteville, and dearness the watchword of the Rue Choiseul?

Evidently there is in all this a misconception, an illusion, which it is necessary to clear up; and this is what I shall now endeavour to do.