Economic Sophisms

"Shipmaster: Well, let us raise the surtaxe, and let the shipowner who now exacts 30 francs from the public for his freight, charge 40.

"A Minister: The government will make all the use they can of the beautiful mechanism of the surtaxe; but I fear that will not be sufficient.

"A Government Functionary: You are all very easily frightened. Does the tariff alone protect you? and do you lay taxation out of account? If the consumer is kind and benevolent, the taxpayer is not less so. Let us heap taxes upon him, and the shipowner will be satisfied. I propose a premium of five francs to be levied from the public taxpayers, to be handed over to the shipbuilder for each ton of iron he shall employ.

"Confused voices: Agreed! agreed! An agriculturist: Three francs premium upon the hectolitre of corn for me! A manufacturer: Two francs premium on the yard of cloth for me! etc., etc.

"The President: This then is what we have agreed upon. Our session has instituted a system of premiums, and it will be to our eternal honour. What branch of industry can possibly henceforth be a loser, since we have two means, and both so very simple, of converting our losses into gains – the tariff and the premium? The sitting is adjourned."

I really think some supernatural vision must have foreshadowed to me in a dream the near approach of the premium (who knows but I may have first suggested the idea to M. Dupin?) when six months ago I wrote these words: —

"It appears evident to me that protection, without changing its nature or the effects which it produces, might take the form of a direct tax, levied by the state, and distributed in premiums of indemnification among privileged branches of industry."

And after comparing a protective duty to a premium, I added, "I confess candidly my preference for the last system. It seems to me juster, more economical, and more fair. Juster, because if society desires to make presents to some of its members, all ought to bear the expense; more economical, because it would save a great deal in the cost of collection, and do away with many of the trammels with which trade is hampered; more fair, because the public would see clearly the nature of the operation, and act accordingly."36

Since the occasion presents itself to us so opportunely, let us study this system of plunder by premium; for all we say of it applies equally to the system of plunder by tariff; and as the latter is a little better concealed, the direct may help us to detect and expose the indirect system of cheating. The mind will thus be led from what is simple to what is more complicated.

But it may be asked, Is there not a species of theft which is more simple still? Undoubtedly; there is highway robbery, which wants only to be legalized, and made a monopoly of, or, in the language of the present day, organized.

I have been reading what follows in a book of travels: —

"When we reached the kingdom of A., all branches of industry declared themselves in a state of suffering. Agriculture groaned, manufactures complained, trade murmured, the shipping interest grumbled, and the government were at a loss what to do. First of all, the idea was to lay a pretty smart tax on all the malcontents, and afterwards to divide the proceeds among them after retaining its own quota; this would have been on the principle of the Spanish lottery. There are a thousand of you, and the State takes a piastre from each; then by sleight of hand, it conveys away 250 piastres, and divides the remaining 750 in larger and smaller proportions among the ticket-holders. The gallant Hidalgo who gets three-fourths of a piastre, forgetting that he had contributed a whole piastre, cannot conceal his delight, and rushes off to spend his fifteen reals at the alehouse. This is very much the same thing as we see taking place in France. But the government had overrated the stupidity of the population when it endeavoured to make them accept such a species of protection, and at length it lighted upon the following expedient.

"The country was covered with a network of highroads. The government had these roads accurately measured; and then it announced to the agriculturist, 'All that you can steal from travellers between these two points is yours; let that serve as a premium for your protection and encouragement.' Afterwards it assigned to each manufacturer, to each shipowner, a certain portion of road, to be made available for their profit, according to this formula: —

Dono tibi et concedo Virtutem et puissantiam Yolandi,

Pillandi,

Derobandi,

Filoutandi,

Et escroqtîïindi,

Impunè per totam istam Viam."

Now it has come to pass that the natives of the kingdom of A. have become so habituated to this system, that they take into account only what they are enabled to steal, not what is stolen from them, being so determined to regard pillage only from the standpoint of the thief, that they look upon the sum total of individual thefts as a national gain, and refuse to abandon a system of protection, without which they say no branch of industry could support itself.

You demur to this. It is not possible, you exclaim, that a whole people should be led to ascribe a redundancy of wealth to mutual robbery.

And why not? We see that this conviction pervades France, and that we are constantly organizing and improving the system of reciprocal robbery under the respectable names of premiums and protective tariffs.

We must not, however, be guilty of exaggeration. As regards the mode of levying, and other collateral circumstances, the system adopted in the kingdom of A. may be worse than ours; but we must at the same time admit that, as regards the principle and its necessary consequences, there is not an atom of difference between these two species of theft; which are both organized by law for the purpose of supplementing the profits of particular branches of industry.

Remark also, that if highway robbery presents some inconveniences in its actual perpetration, it has likewise some advantages which we do not find in robbery by tariff.

For example, it is possible to make an equitable division among all the producers. It is not so in the case of customs duties. The latter are incapable of protecting certain classes of society, such as artisans, shopkeepers, men of letters, lawyers, soldiers, labourers, etc.

It is true that the robbery by premium assumes an infinite number of shapes, and in this respect is not inferior to highway robbery; but, on the other hand, it leads frequently to results so whimsical and awkward that the natives of the kingdom of A. may well laugh at us.

What the victim of a highway robbery loses, the thief gains, and the articles stolen remain in the country. But under the system of robbery by premium, what the tax exacts from the Frenchman is conferred frequently on the Chinese, on the Hottentots, on the Caffres, etc., and here is the way in which this takes place:

A piece of cloth, we shall suppose, is worth 100 francs at Bordeaux. It cannot be sold below that price without a loss. It is impossible to sell it above that price because the competition of merchants prevents the price rising. In these circumstances, if a Frenchman desires to have the cloth, he must pay 100 francs, or want it. But if it is an Englishman who wants the cloth, the government steps in, and says to the merchant, "Sell your cloth, and we will get you 20 francs from the taxpayers." The merchant who could not get more than 100 francs for his cloth, sells it to the Englishman for 80. This sum, added to the 20 francs produced by the premium theft, makes all square. This is exactly the same case as if the taxpayers had given 20 francs to the Englishmen, upon condition of his buying French cloth at 20 francs discount, at 20 francs below the cost of production, at 20 francs below what it has cost ourselves. The robbery by premium, then, has this peculiarity, that the people robbed are resident in the country which tolerates it, while the people who profit by the robbery are scattered over the world.

Verily, it is marvellous that people should persist in maintaining that all which an individual steals from the masses is a general gain. Perpetual motion, the philosopher's stone, the quadrature of the circle, are antiquated problems; but the theory of progress by plunder is still held in honour. A priori, we should have thought that, of all imaginable puerilities, it was the least likely to survive.

Some people will say, You are partisans, then, of the laissez passer?– economists of the school of Smith and Say? You do not desire the organization of labour. Yes, gentlemen, organize labour as much as you choose, but have the goodness not to organize theft.

Another, and a more numerous, set keep repeating, premiums, tariffs, all that has been exaggerated. We should use them without abusing them. A judicious liberty, combined with a moderate protection, that is what discreet and practical men desire. Let us steer clear of fixed principles and inflexible rules.

This is precisely what the traveller tells us takes place in the kingdom of A. "Highway robbery," say the sages, "is neither good nor bad in itself; that depends upon circumstances. All we are concerned with is to weigh things, and see our functionaries well paid for the work of weighing. It may be that we have given too great latitude to pillage; perhaps we have not given enough. Let us examine and balance the accounts of each man employed in the work of pillage. To those who do not earn enough, let us assign a larger portion of the road. To those who gain too much, we must limit the days or months of pillage."

Those who talk in this way gain a great reputation for moderation, prudence, and good sense. They never aspire to the highest offices in the state.

Those who say, Repress all injustice, whether on a greater or a smaller scale, suffer no dishonesty, to however small an extent, are marked down for ideologues, idle dreamers, who keep repeating over and over again the same thing. The people, moreover, find their arguments too clear, and why should they be expected to believe what is so easily understood?

X. THE TAXGATHERER

Jacques Bonhomme, a Vinedresser

M. Lasouche, Taxgatherer.

L.: You have secured twenty tuns of wine?

J.: Yes; by dint of my own skill and labour.

L.: Have the goodness to deliver up to me six of the best.

J.: Six tuns out of twenty! Good Heaven! you are going to ruin me. And, please, Sir, for what purpose do you intend them?

L.: The first will be handed over to the creditors of the State. When people have debts, the least thing they can do is to pay interest upon them.

J.: And what becomes of the capital?

L.: That is too long a story to tell you at present. One part used to be converted into cartridges, which emitted the most beautiful smoke in the world. Another went to pay the men who had got crippled in foreign wars. Then, when this expenditure brought invasion upon us, our polite friend, the enemy, was unwilling to take leave of us without carrying away some of our money as a soutenir, and this money had to be borrowed.

J.: And what benefit do I derive from this now?

L.: The satisfaction of saying —

Que je suis fier d'être Français

Quand je regarde la colonne!

J.: And the humiliation of leaving to my heirs an estate burdened with a perpetual rent-charge. Still, it is necessary to pay one's debts, whatever foolish use is made of the proceeds. So much for the disposal of one tun; but what about the five others?

L.: One goes to support the public service, the civil list, the judges who protect your property when your neighbour wishes wrongfully to appropriate it, the gendarmes who protect you from robbers when you are asleep, the cantonnier who maintains the highways, the cure who baptizes your children, the schoolmaster who educates them, and, lastly, your humble servant, who cannot be expected to work exactly for nothing.

J.: All right; service for service is quite fair, and I have nothing to say against it. I should like quite as well, no doubt, to deal directly with the rector and the schoolmaster on my own account; but I don't stand upon that. This accounts for the second tun – but we have still other four to account for.

L.: Would you consider two tuns as more than your fair contribution to the expense of the army and navy?

J.: Alas! that is a small affair, compared with what the two services have cost me already, for they have deprived me of two sons whom I dearly loved.

L.: It is necessary to maintain the balance of power.

J.: And would that balance not be quite as well maintained if the European powers were to reduce their forces by one-half or three – fourths? We should preserve our children and our money. All that is requisite is to come to a common understanding.

L.: Yes; but they don't understand one another.

J.: It is that which fills me with astonishment, for they suffer from it in common.

L.: It is partly your own doing, Jacques Bonhomme.

J.: You are joking, Mr Taxgatherer. Have I any voice in the matter?

L.: Whom did you vote for as deputy?

J.: A brave general officer, who will soon be a marshal, if God spares him.

L.: And upon what does the gallant general live?

J.: Upon my six tuns, I should think.

L.: What would happen to him if he voted a reduction of the army, and of your contingent?

J.: Instead of being made a marshal, he would be forced to retire.

L.: Do you understand now that you have yourself…

J.: Let us pass on to the fifth tun, if you please.

L.: That goes to Algeria.

J.: To Algeria! And yet they tell us that all the Mussulmans are wine-haters, barbarians as they are! I have often inquired whether it is their ignorance of claret which has made them infidels, or their infidelity which has made them ignorant of claret. And then, what service do they render me in return for this nectar which has cost me so much toil?

L.: None at all; nor is the wine destined for the Mussulman, but for good Christians who spend their lives in Barbary.

J.: And what service do they render me?

L.: They make razzias, and suffer from them in their turn; they kill and are killed; they are seized with dysentery and sent to the hospital; they make harbours and roads, build villages, and people them with Maltese, Italians, Spaniards, and Swiss, who live upon your wine; for another supply of which, I can tell you, I will soon come back to you.

J.: Good gracious! that is too much. I shall give you a flat refusal A vinedresser who could be guilty of such folly would be sent to Bicetre. To make roads over Mount Atlas – good Heavens! when I can scarcely leave my house for want of roads! To form harbours in Barbary, when the Garonne is silted up! To carry off my children whom I love, and send them to torment the Kabyles! To make me pay for houses, seed, and cattle, to be handed over to Greeks and Maltese, when we have so many poor people to provide for at home!

L.: The poor! Just so; they rid the country of the trop plein, and prevent a redundant population.

J.: And we are to send after them to Algeria the capital on which they could live at home!

L.: But then you are laying the foundations of a great empire, you carry civilization into Africa, thus crowning your country with immortal glory.

J.: You are a poet, Mr Taxgatherer. I am a plain vinedresser, and I refuse your demand.

L.: But think, that in the course of some thousands of years, your present advances will be recouped and repaid a hundredfold to your descendants. The men who direct the enterprise assure us that it will be so.

J.: In the meantime, in order to defray the expense, they ask me first of all for one cask of wine, then for two, then for three, and now I am taxed by the tun! I persist in my refusal.

L.: Your refusal comes too late. Your representative has stipulated for the whole quantity I demand.

J.: Too true. Cursed weakness on my part! Surely, in making him my proxy, I was guilty of a piece of folly; for what is there in common between a general officer and a poor vinedresser?

L.: Oh, yes; there is something in common, namely, the wine, which he has voted to himself in your name.

J.: You may well laugh at me, Mr Taxgatherer, for I richly deserve it. But be reasonable. Leave me at least the sixth tun. You have already secured payment of the interest of the debt, and provided for the civil list and the public service, besides perpetuating the war in Africa. What more would you have?

L.: It is needless to higgle with me. Communicate your views to Monsieur le General, your representative. For the present, he has voted away your vintage.

J.: Confound the fellow! But tell me what you intend to make of this last cask, the best of my whole stock? Stay, taste this wine. How ripe, mellow, and full-bodied it is!

L.: Excellent! delicious! It will suit Mons. D., the cloth-manufacturer, admirably.

J.: Mons. D., the cloth-manufacturer? What do you mean?

L.: That he will reap the benefit.

J.: How? What? I'll be hanged if I understand you!

L.: Don't you know that Mons. D. has set on foot a grand undertaking, which will prove most useful to the country, but which, when everything is taken into account, causes each year a considerable pecuniary loss?

J.: I am sorry to hear it, but what can I do?

L.: The Chamber has come to the conclusion that, if this state of things continues, Mons. D. will be under the necessity of either working more profitably, or of shutting up his manufacturing establishment altogether.

J.: But what have these losing speculations of Mons. D. to do with my wine?

L.: The Chamber has found out that, by making over to Mons. D. some wine taken from your cellar, some corn taken from your neighbour's granaries, some money kept off the workmen's wages, the losses of that enterprising patriot may be converted into profits.

J.: The recipe is as infallible as it is ingenious. But, zounds! it is awfully iniquitous. Mons. D., forsooth, is to make up his losses by laying hold of my wine?

L.: Not exactly of the wine, but of its price. This is what we denominate premiums of encouragement, or bounties. Don't you see the great service you are rendering to the country?

J.: You mean to Mons. D.?

L.: To the country. Mons. D. assures us that his manufacture prospers in consequence of this arrangement, and in this way he considers the country is enriched. He said so the other day in the Chamber, of which he is a member.

J.: This is a wretched quibble! A speculator enters into a losing trade, and dissipates his capital; and then he extorts from me and from my neighbours wine and corn of sufficient value, not only to repair his losses, but afford him a profit, and this is represented as a gain to the country at large.

L.: Your representative having come to this conclusion, you have nothing more to do but to deliver up to me the six tuns of wine which I demand, and sell the remaining fourteen tuns to the best advantage.

J.: That is my business.

L.: It will be unfortunate if you do not realize a large price

J.: I will think of it.

L.: The higher price will enable you to procure more of other things.

J.: I am aware of that, Sir.

L.: In the first place, if you purchase iron to renew your ploughs and your spades, the law decrees that you must pay the ironmaster double what the commodity is worth.

J.: Yes, this is very consolatory.

L.: Then you have need of coal, of butchers' meat, of cloth, of oil, of wool, of sugar; and for each of these commodities the law makes you pay double.

J.: It is horrible, frightful, abominable!

L.: Why should you indulge in complaints? You yourself, through your representative…

J.: Say nothing more of my representative. I am singularly represented, it is true. But they will not impose upon me a second time. I shall be represented by a good and honest peasant.

L.: Bah! you will re-elect the gallant General.

J.: Shall I re-elect him, to divide my wine among Africans and manufacturers?

L.: I tell you, you will re-elect him.

J,: This is too much. I am free to re-elect him or not, as I choose.

L.: But you will so choose.

J.: Let him come forward again, and he will find whom he has to deal with.

L.: Well, we shall see. Farewell. I carry away your six tuns of wine, to be distributed as your friend, the General, has determined.

XI. THE UTOPIAN FREE-TRADER

If I were but one of His Majesty's ministers!..

"Well, what would you do?"

"I should begin by – by – faith, by being very much at a loss. For it is clear I could only be a minister in consequence of having the majority in my favour; I could only have the majority in my favour by securing the popular suffrage; and I could attain that end, honestly at least, only by governing in accordance with public opinion. If I should attempt to carry out my own opinions, I should no longer have the majority; and if I lost the favour of the majority, I should be no longer one of His Majesty's ministers."

"But suppose yourself already a minister, and that you experience no opposition from the majority, what would you do?"

"I should inquire on what side justice lay."

"And then?"

"I should inquire on what side utility lay."

"And then?"

"I should inquire whether justice and utility were in harmony, or ran counter to one another."

"And if you found they were not in harmony?"

"Je dirais au roi Philippe:

Reprenez votre portefeuille.

La rime n'est pas riche et le style en est vieux;

Mais ne voyez-vous pas que cela vaut bien mieux,

Que ces transactions dont le bon sens murmure,

Et que l'honnêtete parle là toute pure."

"But if you found that the just and the useful were one and the same thing?"

"Then I should go straight forward."

"True; but to realize utility by means of justice, a third thing is needed."

"What?"

"Possibility."

"You granted me that."

"When?"

"Just now."

"How?"

"In assuming that I had the majority on my side."

"A most dangerous concession, I fear; for it implies that the majority see clearly what is just, see clearly what is useful, and see clearly that both are in perfect harmony."

"And if they see clearly all this, good results will work themselves out, so to speak, of their own accord."

"You always bring me back to this, that no reform is possible apart from the progress of general intelligence."

"Assuming this progress, every needed reform will infallibly follow."

"True; but this presupposed progress is a work of time. Suppose it accomplished, what would you do? I am anxious to see you actually and practically at work."

"I should begin by reducing the rate of postage to a penny."

"I have heard you speak of a halfpenny."37

"Yes, but as I have other reforms in view, I should proceed prudently, in the first instance, to avoid any risk of a deficit."

"Fine prudence, to be sure! You have already landed yourself in a deficit of 30 millions of francs."

"Then I should reduce the salt-tax to 10 francs."

"Good. Then you land yourself in a deficit of other thirty millions. You have doubtless invented a new tax?"

"Heaven forbid! And besides, I do not flatter myself with possessing an inventive genius."

"It will be very necessary, however… Ah! I see. What was I thinking of? You intend simply to reduce the expenditure. I did not think of that."

"You are not singular. I shall come to that; but for the present, that is not the resource on which I depend."

"What! you are to diminish the revenue without reducing the expenditure, and withal avoid a deficit!"

"Yes; by diminishing other taxes at the same time."

(Here the interlocutor, raising the forefinger of the right hand to his forehead, tossed his head, as if beating about for ideas.)

"By my faith! a most ingenious process. I pay over 100 francs to the Treasury; you relieve me to the extent of 5 francs upon salt, and 5 francs upon postages; and in order that the Treasury may still receive 100 francs, you relieve me to the extent of 10 francs on some other tax."