Frédéric Bastiat (1801-1850) was a French economist, statesman, and author. He was the leader of the free-trade movement in France from its inception in 1840 until his untimely death in 1850. The first 45 years of his life were spent in preparation for five tremendously productive years writing in favor of freedom. Bastiat was the founder of the weekly newspaper Le Libre Échange, a contributor to numerous periodicals, and the author of sundry pamphlets and speeches dealing with the pressing issues of his day. Most of his writing was done in the years directly before and after the Revolution of 1848—a time when France was rapidly embracing socialism. As a deputy in the Legislative Assembly, Bastiat fought valiantly for the private property order, but unfortunately the majority of his colleagues chose to ignore him. Frédéric Bastiat remains one of the great champions of freedom whose writings retain their relevance as we continue to confront the old adversary.

In preparing the present translation, I have had the opportunity of consulting, and have occasionally availed myself of the wording, of an earlier, unpublished version, as well as of some explanatory notes, produced by a different translator, to whom I should have been glad to give here the credit due him had he not stipulated that his name not be mentioned. The present version is based on a careful comparison with the French texts—Œuvres complètes, ed. by P. Paillotet (Paris: Guillaumin et Cie., 1854-64), vols. IV and V, and Mélanges d'économie politique (Brussels: Meline, Cans, et Cie., 1851), I, 1-232. I have sought to make the wording and style of this translation conform, so far as possible, to the terminology used in the two other works of Bastiat, Selected Essays on Political Economy and Economic Harmonies, also newly translated for this series, and to the usage customary in books on economics written in the English language. At the same time, every effort has been made to assist the reader to understand the topical and other allusions of the French text by the addition of translator's notes, wherever it has been at all possible to provide them. So labeled, these have been enclosed in brackets and placed, for convenience, at the bottom of the pages where the items to which they make reference appear. The notes of the French editor, likewise enclosed in brackets, appear at the back of the book, where they are labeled merely "Editor," together with Bastiat's own notes, which stand without brackets or label. Where the French editor has indicated a cross reference to an essay included in the volume of selected essays being published in this series, or to a chapter or passage in Economic Harmonies, the original reference to the French edition has been replaced by one directing the reader to the English translation.

What gives this work its unique quality and places it among the classics of economic literature is not only the logical rigor with which each fallacy is demolished, but the highly original and striking way in which the author uses wit, irony, satire, dialogue, and apologue to reduce erroneous ideas to patent absurdity, as, for example, in his famous and often separately translated petition of the candlemakers for protection against the competition of the sun.

It was with the aim of exposing the most influential and widespread of these economic fallacies that Bastiat began, in 1844, to contribute to the Journal des économistes the brilliant succession of essays that comprise the present volume. The first series appeared in book form in 1845; and the second series, three years later. Increasingly in the years that have elapsed since their first publication, these essays have come to be recognized as among the most cogent and persuasive refutations of the major fallacies of protectionism—fallacies that are still with us today and that will continue to crop up as long as the public remains uninstructed: "The introduction of machinery means fewer jobs"; "Protective tariffs keep domestic wages high"; "We need laws to equalize the conditions of production"; "Imports must be restricted to restore the balance of trade"; "High prices mean a high standard of living"; "There are no economic laws or absolute principles"; "We need colonies to provide markets for the products of our industry"; "Free trade places us at the mercy of our enemies in case of war"; etc., etc. The great lesson which all these essays teach, in one form or another, is the necessity of always looking at economic questions from the point of view of the consumer, rather than that of the producer.

Ever since the advent of representative government placed the ultimate power to direct the administration of public affairs in the hands of the people, the primary instrument by which the few have managed to plunder the many has been the sophistry that persuades the victims that they are being robbed for their own benefit. The public has been despoiled of a great part of its wealth and has been induced to give up more and more of its freedom of choice because it is unable to detect the error in the delusive sophisms by which protectionist demagogues, national socialists, and proponents of government planning exploit its gullibility and its ignorance of economics.

We could use more Bastiats today. We have, in fact, desperate need of them. But we have, thank Heaven, Bastiat himself, in a new translation; and the reader of these pages will not only still find them, as Cobden did, "as amusing as a novel," but astonishingly modern, for the sophisms he answers are still making their appearance, in the same form and almost in the same words, in nearly every issue of today's newspapers.

Bastiat is accused of being a propagandist and a pleader, and he was. It was unfortunate that for so long he stood alone, while other "orthodox" economists refrained from criticizing socialism or defending capitalism for fear of losing their reputations for "scientific impartiality," and so left the field entirely to the socialist and communist agitators who were less timorous in this respect.

If at least some of us see some of these truths more clearly today, we owe a large part of our clear-sightedness to Frédéric Bastiat. He was one of the earliest economists to attack the fallacies not only of protection but of socialism. He was answering socialist fallacies, in fact, long before most of his contemporaries or successors thought them even worthy of attention. I have not said much here about his refutations of socialist arguments, because these refutations occur rather in the Essays and in the Harmonies than in the Sophisms; but they constitute a very important part of his contribution.

But Bastiat had more than scintillating wit and felicity of expression. His logic, too, was powerful. Once he had grasped and explained a principle, he could put the argument in so many lights and forms as to leave no one an excuse for missing or evading it. Again and again he shows the fallacies that grow out of exclusive concern with the problems of individual producers. He keeps pointing out that consumption is the end of all economic activity, and production merely the means, and that the sacrifice of the consumer's interest to that of the producer is "the sacrifice of the end to the means."

The petition of the candlemakers is devastating. It is a flash of pure genius, a reductio ad absurdum that can never be exceeded, sufficient in itself to assure Bastiat immortal fame among economists.

But Bastiat's supreme jest was the petition of the candlemakers and their allied industries for protection against the unfair competition of the sun. The Chamber of Deputies is asked to pass a law requiring the closing of all windows, dormers, skylights, outside shutters, inside shutters, and all openings, holes, chinks, and fissures by which the light of the sun can enter houses. The blessings that will result from this, in an increased business for the candlemakers and their associates, are then all solemnly itemized, and the argument conducted according to the recognized principles of all protectionist arguments.

Are there various other proposals to discourage efficiency, in order to create more jobs? Good, says Bastiat. Let's petition the king to forbid people from using their right hands, or maybe even have them chopped off. Then it will require more than twice as many people, and twice as many jobs, to get the same work done (assuming consumption is the same).

His chief method of argument was the method of exaggeration. He was the master of the reductio ad absurdum. Someone suggests that the proposed new railroad from Paris to Madrid should have a break at Bordeaux. The argument is that if goods and passengers are forced to stop at that city, it will be profitable for boatmen, porters, hotelkeepers and others there. Good, says Bastiat. But then why not break it also at Angoulême, Poitiers, Tours, Orléans, and, in fact, at all intermediate points? The more breaks there are, the greater the amount paid for storage, porters, extra cartage. We could have a railroad consisting of nothing but such gaps—a negative railroad!

And this is no mean achievement, nothing to be treated patronizingly. Economics is pre-eminently a practical science. It does no good for its fundamental principles to be discovered unless they are applied, and they will not be applied unless they are widely understood. In spite of the hundreds of economists who have pointed out the advantages of free markets and free trade, the persistence of protectionist illusions has kept protectionist and price-fixing policies alive and flourishing even today in most countries of the world. But anyone who has ever read and understood Bastiat must be immune to the protectionist disease, or the illusions of the Welfare State, except in a very attenuated form. Bastiat killed protectionism and socialism with ridicule.

Schumpeter's judgment of Bastiat is not only ungenerous but unintelligent, and for the same reason that it is unintelligent to deride an apple tree for not bearing bananas. Bastiat was not primarily an original economic theorist. What he was, beyond all other men, was an economic pamphleteer, the greatest exposer of economic fallacies, the most powerful champion of free trade on the European Continent. Even Schumpeter (almost in a slip of the pen) concedes that if Bastiat had not written the Economic Harmonies, "his name might have gone down to posterity as the most brilliant economic journalist who ever lived." What the "might have" is doing here I do not know. It has so gone down.

It is not my purpose here to discuss the theories of the Economic Harmonies. That is done very competently by Dean Russell in the Introduction to the new translation of the Harmonies published simultaneously with this new translation of the Sophisms. But there is a germ of truth in Schumpeter's comment, and we can acknowledge this candidly and still see the much greater truth about Bastiat that Schumpeter missed. It is true that Bastiat, even in the Sophisms, made no great original contribution to abstract economic theory. His analysis of errors rested in the main on the theory he had acquired from Smith, Say, and Ricardo. The shortcomings of this theory often made his exposures of fallacies less cogent and convincing than they otherwise might have been. The discerning reader of the Sophisms will notice, for example, that Bastiat never shook off the classic cost-of-production theory of value, or even the labor theory of value, though his total argument is often inconsistent with these theories. But, then, no other economist of Bastiat's time (with the exception of the neglected German, von Thünen) had yet discovered marginal or subjective value theory. That was not to be expounded until some twenty years after Bastiat's death.

It is ironic that the work which Bastiat considered his masterpiece, the Harmonies économiques that cost him so much to write, did far more to hurt his posthumous reputation than to help it. It has even become a fashion for some economists to write about Bastiat patronizingly or derisively. This fashion reaches a high point in an almost contemptuous one-page notice of Bastiat in the late Joseph A. Schumpeter's History of Economic Analysis. "It is simply the case," writes the latter, "of the bather who enjoys himself in the shallows and then goes beyond his depth and drowns.... I do not hold that Bastiat was a bad theorist. I hold that he was no theorist."**

But the list of Bastiat's writings in this short span of six years does not begin to measure his activities. He was one of the chief organizers of the first French Free Trade Association at Bordeaux; he became secretary of a similar organization formed in Paris; he collected funds, edited a weekly journal, addressed meetings, gave lecture courses—in brief, he poured out his limited energies unsparingly in all directions. He contracted a lung infection. He could breathe and nourish himself only with difficulty. Finally, too late, his ill-health forced him to Italy, and he died at Rome, at the age of forty-nine, on Christmas Eve, 1850.

Then began the outpouring of a brilliant series of articles, pamphlets, and books that did not cease till his premature death in 1850. There came first of all the first series of Sophismes économiques, then the various essays and the second series of Sophismes, and finally, in the last year of his life, the Harmonies économiques.

Bastiat lived in a revolutionary period. He was fourteen when Napoleon was defeated at Waterloo and exiled to St. Helena. He lived through the Revolution of 1830. But what first inspired his pamphleteering activity was his interest in the work of Cobden and the English Anti-Corn-Law League against protection. In 1844 he rose to immediate prominence with the publication of his article on "The Influence of French and English Tariffs on the Future of the Two Peoples" in the Journal des économistes.

Bastiat's early life, however, was not primarily that of a scholar. At the age of seventeen he went to work in his uncle's counting-house and spent about six years there. Then he inherited his grandfather's farm at Mugron and became a farmer. He was locally active politically, becoming a juge de paix in 1831 and a member of the conseil général of the Landes in 1832.

He seems to have had a good, though not an extraordinary education, which included languages, music, and literature. He began the study of political economy at nineteen and read principally Adam Smith and Jean-Baptiste Say.

Frédéric Bastiat was born at Bayonne, France, on June 29, 1801. His father was a wholesale merchant, but Frédéric was orphaned at the age of nine and was brought up by his grandfather and his aunt.

In political economy, there is much to learn and little to do.—Bentham.

I have attempted, in this brief volume, to refute some of the arguments that are raised against the introduction of free trade.

I am not engaging here in controversy with the protectionists. Rather, I am trying to instill a principle into the minds of sincere men who hesitate to take a stand on the issue because they are in doubt.

I am not one of those who say that the advocates of protectionism are motivated by self-interest. Instead, I believe that the opposition to free trade rests upon errors, or, if you prefer, upon half-truths. The mistrust of free trade is quite sincere. Otherwise there would not be so many people who express fear of it.

I am, perhaps, aiming too high, but—I confess—I should like this brief work to become, as it were, the handbook of those who are called upon to judge between the two principles. Unless one has a long-standing familiarity with the doctrines of free trade, his ideas are continually being colored by the sophisms of protectionism in one form or another. To clear his mind of them, he must each time go through a lengthy process of analysis; and not everyone has the time to undertake this task, legislators least of all. That is why I have tried to furnish such an analysis ready-made.

But, it may be asked, are the benefits of freedom so well hidden that they are evident only to professional economists?

Yes, we must admit that our opponents in this argument have a marked advantage over us. They need only a few words to set forth a half-truth; whereas, in order to show that it is a half-truth, we have to resort to long and arid dissertations.

This situation is due to the nature of things. Protection concentrates at a single point the good that it does, while the harm that it inflicts is diffused over a wide area. The good is apparent to the outer eye; the harm reveals itself only to the inner eye of the mind. In the case of free trade, it is just the reverse.

The same is true of almost all economic questions.

You may say, "Here is a machine that has put thirty workmen out on the street."

Or, "Here is a spendthrift whose behavior encourages every branch of industry."

Or, again, "The conquest of Algiers has doubled the trade of Marseilles."

Or, finally, "Government expenditures provide a living for a hundred thousand families."

Everyone will understand you, for your propositions are lucid, simple, and self-evident. You may go further, and deduce the following principles from them:

Machinery is an evil.

Extravagance, conquests, and heavy taxes are all good.

And your theory will be all the more widely accepted because you will be able to support it with undeniable facts.

But, for our part, we cannot limit ourselves to the consideration of a single cause and its immediate effect. We know that this effect itself becomes in its turn a cause. In order to pass judgment on a measure, we must, then, trace it through the whole chain of its effects to its final result. In other words, we are reduced, quite frankly, to an appeal to reason.

But at once we find ourselves assailed by the familiar clamor: You are theorists, metaphysicians, ideologists, utopians, and doctrinaires; and all the prejudices of the public are roused against us.

What, then, are we to do? We must invoke the patience and good will of the reader, and, if we can, present our conclusions in so clear a light that truth and error show themselves plainly; so that once and for all the victory will go to either protectionism or free trade.

In this connection I have an important observation to make.

Some excerpts from this brief volume have appeared in the Journal des économistes.

In an otherwise favorable criticism that the Vicomte de Romanet published (cf. the Moniteur industriel, May 15 and 18, 1845), he alleges that I am asking for the abolition of tariffs. M. de Romanet is mistaken. What I am asking for is the abolition of the protectionist system. We do not refuse to pay taxes to the government; but, if it were possible, we should like to dissuade the governed from taxing one another. Napoleon once said: "The tariff should be, not an instrument of taxation, but a means of protecting industry." We maintain the contrary, and say: "The tariff should not be an instrument of reciprocal robbery in the hands of the workers, but it can be a mechanism for taxation as good as any other." We are so far—or, to involve only myself in this struggle, I am so far—from asking for the abolition of tariffs, that I view them as a key element of our future financial stability. I believe them capable of producing immense revenues for the treasury; and, to speak plainly, in view of the slowness with which sound economic doctrines are spreading as compared to the rapidity with which government expenditures are increasing, I rely more upon the needs of the treasury than upon the power of an enlightened public opinion for achieving commercial reform.

"But, after all," I may be asked, "what are your conclusions?"

I have no need to reach conclusions. I am only combatting sophisms; that is all.

"But," people may insist, "it is not enough to tear down; you must offer something constructive." I, for my part, think that to tear down an error is to build up the truth that stands opposed to it.

Beyond that, I have no reluctance to state what my wishes are. I should like to have public opinion persuaded to approve a tariff law framed in something like these terms:

No doubt these distinctions belong to a domain of ideas entirely foreign to political economy properly so called, and I am far from thinking them to be as useful and as just as people commonly suppose them to be. However, that is not my subject here.

Such laws are either injurious or ineffective. They cannot be useful.

If we do admit it, we thereby confess that they inflict upon the people all the harm that they can do. If we do not admit it, then we deny that they limit the supply of goods and raise their prices, and consequently they deny that they favor the producer.

Either we admit that they produce scarcity, or we do not admit it.

Well, what difference does that make? Men are not fed on cash, they do not clothe themselves with gold, nor do they heat their houses with silver. What difference does it make whether there is more or less money in the country, if there is more bread in the cupboard, more meat in the larder, more clothing in the wardrobe, and more wood is the woodshed?

But, you say, if foreigners flood us with their products, they will carry off our money!

Note, are we to believe that the people are better fed under the laws that prevail at present, because there is less bread, meat, and sugar in the country? Are they better clad, because there is less linen and woolen cloth? Are their houses better heated, because there is less coal? Is their labor made easier because there is less iron and copper, or because there are fewer tools and machines?

This is so true that our protective tariffs have no other goal than to prevent us from importing all these things, to limit their supply, to forestall a decline in their prices, and to prevent their abundance.

Is it not true that there will be in France more wheat, livestock, cloth, linen, iron, coal, sugar, etc., at the time of the second inventory than at the time of the first?

Finally, suppose that, in order to determine the consequences of this reform, a second inventory is taken three months later.

Suppose further that the following day all barriers to the importation of foreign goods into France were removed.

Just suppose that, at the present moment, when these laws are in full force, a complete inventory were taken, not in terms of monetary value, but in terms of weight, size, volume, and quantity, of all the objects existing in France that are capable of satisfying the wants and tastes of its people—meat, cloth, fuel, wheat, colonial products, etc.

For they say it is the producer who must be favored, by being assured a good market for his product. To achieve this end, it is necessary to raise its price; to raise its price, it is necessary to limit the supply; and to limit the supply is to create scarcity.

They operate, if not intentionally, at least logically, on the assumption that a nation is rich when it is lacking in everything.

Our laws, which should at least be neutral, take the side of the seller against the buyer, of the producer against the consumer, of high prices against low prices, 15* of scarcity against abundance.

The former wants the goods on the market to be scarce, in short supply, and expensive.

Allow me to emphasize this point, at the risk of repeating myself.

Hence, it follows that to consult solely the immediate self-interest of the producer is to have regard for an antisocial interest; whereas to consider as fundamental solely the immediate self-interest of the consumer is to take the general interest as the foundation of social policy.

In the same way, a Chamber of Deputies in which each member considered solely his immediate self-interest as a consumer would end by creating a system of free trade, repealing all restrictive laws, and removing all man-made commercial barriers—in short, by putting into practice the theory of abundance.

I referred just now to an imaginary legislative assembly composed of businessmen, in which each member world have the power to enact a law expressing his secret wish in his capacity as a producer; and I said that the laws emanating from such an assembly would create a system of monopoly and put into practice the theory of scarcity.

Perhaps people will say that, if these wishes were granted, the producer's labor would be more and more limited, and finally would cease for want of anything to occupy it. But why? Because, in this extreme hypothetical case, all imaginable wants and desires world be fully satisfied. Man, like the Almighty, would create all things by a simple act of volition. Will someone tell me what reason there would be, on this hypothesis, to deplore the end of industrial production?

If we now turn to consider the immediate self-interest of the consumer, we shall find that it is in perfect harmony with the general interest, i.e., with what the well-being of mankind requires. When the buyer goes to the market, he wants to find it abundantly supplied. He wants the seasons to be propitious for all the crops; more and more wonderful inventions to bring a greater number of products and satisfactions within his reach; time and labor to be saved; distances to be wiped out; the spirit of peace and justice to permit lessening the burden of taxes; and tariff walls of every sort to fall. In all these respects, the immediate self-interest of the consumer follows a line parallel to that of the public interest. He may extend his secret wishes to fantastic or absurd lengths; yet they will not cease to be in conformity with the interests of his fellow man. He may wish that food and shelter, roof and hearth, education and morality, security and peace, strength and health, all be his without effort, without toil, and without limit, like the dust of the roads, the water of the stream, the air that surrounds us, and the sunlight that bathes us; and yet the realization of these wishes would in no way conflict with the good of society.

Suppose for a moment that legislative power and executive authority were put at the disposal of the Mimerel Committee, and that each of the members of that association had the right to introduce and enact a favorite law. Is it very hard to imagine what sort of industrial code the public would be subjected to?

It follows that, if the secret wishes of each producer were realized, the world would speedily retrogress toward barbarism. The sail would take the place of steam, the oar would replace the sail, and it in turn would have to yield to the wagon, the latter to the mule, and the mule to the packman. Wool would ban cotton, cotton would ban wool, and so on, until the scarcity of all things made man himself disappear from the face of the earth.

In the same way, we could make a survey of all industries, and we should always find that producers, as such, have antisocial attitudes. "The merchant," says Montaigne, "prospers only by the extravagance of youth; the farmer, by the high cost of grain; the architect, by the decay of houses; officers of justice, by men's lawsuits and quarrels, Even the ministers of religion owe the honor and practice of their high calling to our death and our vices. No physician takes pleasure in the good health of even his friends; no soldier, in the peace of his country; and so it goes for the rest."

Do we make cotton textiles? We wish to sell them at the price that is most advantageous for us. We should heartily approve the proscription of all rival manufacturers; and though we do not dare to express this wish publicly or to seek its full realization with any likelihood of success, we nevertheless attain it to a certain extent by roundabout menus: for example, by excluding foreign textiles, so as to diminish the supply, and thereby to produce, by the use of force and to our profit, a scarcity of clothing.

Are we physicians? We cannot blind ourselves to the fact that certain physical improvements, such as better public sanitation, the development of such moral virtues as moderation and temperance, the progress of knowledge to the point at which everyone can take care of his own health, and the discovery of certain simple, easily applied remedies, would be just so many deadly blows struck at our profession. In so far as we are physicians, our secret wishes are antisocial. I do not mean to say that physicians actually give expression to such wishes. I like to believe that they would welcome with joy the discovery of a universal cure; but it would not be as physicians, but as men and as Christians that they would yield to such an impulse: by a laudable art of self-abnegation, they would take the point of view of the consumer. But in so far as the physician practices a profession, in so far as he owes to that profession his well-being, his prestige, and even the means of supporting his family, it is impossible for his desires—or, if you will, his interests—not to be antisocial.

In so far as we are producers, it must be admitted, each of us has hopes that are antisocial. Are we vineyardists? We should be little displeased if all the vines in the world save ours were blighted by frost: this is the theory of scarcity. Are we the owners of ironworks? We want no other iron to be on the market but our own, whatever may be the public need for it, precisely because this need, keenly felt and incompletely satisfied, brings us a high price: this too is the theory of scarcity. Are we farmers? We say, with M. Bugeaud: Let bread be costly, that is to say, scarce, and the farmers will prosper: this is still the theory of scarcity.

To know this, it suffices to discover what would happen if the secret desires of men were fulfilled.

But which one should legislation favor, as being the expression of the public weal—if, indeed, it should favor either one of them?

Since these two interests are mutually incompatible, one of them must necessarily coincide with the social or general interest, and the other must be hostile to it.

In what does the immediate self-interest of the consumer consist? That the supply of the product he wants be extensive, and the demand limited.

Take the case of any producer. In what does his immediate self-interest consist? It consists in two things: (1) that the smallest possible number of persons engage in the same kind of labor as he; and (2) that the greatest possible number of persons be in quest of the product of his labor. Political economy expresses this more succinctly in these terms: that the supply be very limited, and the demand very extensive; in still other terms: limited competition, and unlimited market.

But exchange hampers our view of so simple a truth. In society, with the division of labor that it entails, the production and the consumption of an object are not performed by the same individual. Each person comes to regard his labor no longer as a means, but as an end. Exchange creates, in relation to each object, two interests, that of its producer and that of its consumer; and these two interests are always directly opposed to each other.

If man were a solitary animal, if he worked solely for himself, if he consumed directly the fruits of his labor—in short, if he did not engage in exchange—the theory of scarcity could never have been introduced into the world. It would be all too evident, in that case, that abundance would be advantageous for him, whatever its source, whether he owed it to his industriousness, to the ingenious tools and powerful machines that he had invented, to the fertility of the soil, to the liberality of Nature, ox even to a mysterious invasion of goods that the tide had carried from abroad and left on the shore. No solitary man would ever conclude that, in order to make sure that his own labor had something to occupy it, he should break the tools that save him labor, neutralize the fertility of the soil, or return to the sea the goods it may have brought him. He would easily understand that labor is not an end in itself, but a means, and that it would be absurd to reject the end for fear of doing injury to the means. He would understand, too, that if he devotes two hours of the day to providing for his needs, any circumstance (machinery, the fertility of the soil, a gratuitous gift, no matter what) that saves him an hour of this labor, so long as the product is as great, puts that hour at his disposal, and that he can devote it to improving his well-being, He would understand, in short, that a saving in labor is nothing else than progress.

It is an imperfect understanding of the concept of exchange that produces these illusions. If we analyze the nature of our self-interest, we realize clearly that it is double. As sellers, we are interested in high prices, and, consequently, in scarcity; as buyers, we are interested in low prices, or, what amounts to the same thing, in an abundance of goods. We cannot, then, base our argument on one or the other of these two aspects of self-interest without determining beforehand which of the two coincides with and is identifiable with the general and permanent interest of the human race.

The consumer becomes richer in proportion as he buys everything more cheaply; he buys things more cheaply in proportion as they are abundant; hence, abundance enriches him; and this argument, extended to all consumers, would lead to the theory of abundance!

Man produces in order to consume. He is at once both producer and consumer. The argument that I have just set forth considers him only from the first of these points of view. From the second, the argument would lead to an opposite conclusion. Could we not say, in fact:

This sophism, phrased as a generalization, would perhaps make little impression; but, when applied to a particular set of facts—to this or that industry or to a given class of producers—it is extremely specious, and this is easily explained. It constitutes a syllogism which, although not false, is incomplete. Now, what is true in a syllogism is always and necessarily present to the mind. But what is incomplete is a negative quantity, a missing element that it is quite possible and even very easy not to take into account.

The same holds true of abundance. We observe that, when a product is plentiful, it sells at a low price; thus, the producer earns less. If all the producers are in this plight, they are all poverty-stricken; hence, it is abundance that ruins society. And, as every person holding a theory seeks to put it into practice, one sees in many countries the laws of man warring against the abundance of things.

We observe that a man acquires wealth in proportion as he puts his labor to better account, that is to say, as he sells at a higher price. He sells at a higher price in proportion to the shortage, the scarcity, of the type of commodity produced by his labor. We conclude from this that, at least so far as he is concerned, scarcity enriches him. Applying this mode of reasoning successively to all workers, we deduce from it the theory of scarcity. Thereupon we proceed to put the theory into practice, and, in order to favor all producers, we artificially raise prices and cause a scarcity of all goods by restrictive and protectionist measures, the elimination of machinery, and other analogous means.

How does it happen that in the eyes of workers, of publicists, and of statesmen, abundance seems dangerous and scarcity advantageous? I propose to trace this illusion to its source.

Do not La Presse, Le Commerce, and the majority of the daily newspapers publish one or more articles every morning to prove to the Chambers and to the government that it is sound policy to legislate higher prices for everything through manipulation of the tariff? Do not the Chambers and the government every day comply with this injunction from the press? But tariffs raise the prices of things only because they reduce their supply in the market! Thus, the newspapers, the Chambers, and the government put the theory of scarcity into practice, and I was right to say that this theory is by far the most popular of all theories.

Has not M. d'Argout based his argument against the sugar industry on its very productivity? Has he not said again and again: "The sugar beet has no future, and its cultivation cannot be extended, because just a few hectares of sugar beets in each department would be enough to supply all the consumers in France"? Thus, as he sees things, good consists in barrenness and scarcity; and evil, in fertility and abundance.

Has not M. Bugeaud uttered these words: "Let bread be dear, and the farmer will be rich"? Now, bread can be dear only because it is scarce. Thus, M. Bugeaud was extolling scarcity.

Do not the workers wreck machines? Thus, they are afraid of overproduction, or—in other words—of abundance.

Has not M. de Saint-Cricq said: "There is overproduction"? Thus, he was afraid of abundance.

Do we not hear it said every day: "Foreigners are going to flood us with their products"? Thus, people fear abundance.

Yes, this has been suggested; yes, this has been maintained and is maintained every day, and I do not hesitate to say that the theory of scarcity is by far the most popular of all theories. It is the burden of conversations, newspaper articles, books, and political speeches; and, strange as it may seem, it is certain that political economy will not have a completed its task and performed its practical function until it has popularized and established as indisputable this very simple proposition: "Wealth consists in an abundance of commodities."

"What!" people may exclaim. "How can there be any question about it? Has anyone ever suggested, or is it possible to maintain, that scarcity is the basis of man's well-being?"

To get at the root of this sophism, one need only remind oneself that human labor is not an end, but a means. It never remains unemployed. If it removes one obstacle, it turns to another; and mankind is rid of two obstacles by the same amount of labor that used to be needed to remove only one. If the labor of coopers ever becomes useless, it will turn in another direction. But with what, people ask, would it be paid? With exactly what pays for it today; for when a certain amount of labor becomes available as a result of the removal of an obstacle, a corresponding quantity of goods also becomes available for the remuneration of labor. To maintain that the time will ever come when human labor will lack employment, it would he necessary to prove that mankind will cease to encounter obstacles. But in that case labor would not be simply impossible; it would be superfluous. We should no longer have anything to do, far we should be omnipotent; and we should only have to pronounce a fiat to have all our needs and all our desires satisfied.

Here, let us say, are some men who need to store their wine. This is an obstacle; and here are some other men whose job it is to remove the obstacle by making tuns. It is fortunate, then, that the obstacle exists, since it provides employment for a part of the domestic labor force and enriches a certain number of our fellow citizens. But then an ingenious machine is invented that fells the oak, squares it, divides it into staves, assembles them, and transforms them into wine-barrels. The obstacle is greatly diminished, and with it the affluence of coopers. Let us pass a law that will preserve both of them. Let us outlaw the machine.

Then the statesmen take over. They hold the power of the government in their hands; and what is more natural than to put it to use in increasing and spreading obstacles, since this is the same as increasing and spreading wealth? They say, for example: "If we prevent iron from coming from the places where it is abundant, we create in our own country an obstacle to obtaining it. This obstacle, when it is felt acutely, will induce people to pay in order to get rid of it. A certain number of our fellow citizens will devote themselves to struggling against it, and this obstacle will make their fortune. The greater it is, that is, the scarcer, the more inaccessible, the more difficult to transport, the more remote from the blast furnaces the ore is, the more manpower all the branches of this industry will employ. Hence, let us bar foreign iron ore; let us create the obstacle, so as to create the need for labor to struggle against it."

Seeing this, theorists attempt to found a system on the basis of these attitudes on the part of individuals and declare that need is wealth, that labor is wealth, and that the obstacle to well-being is well-being itself. To multiply obstacles is, in their eyes, to encourage industry.

A physician, for instance, does not occupy himself with baking his own bread, making ins own instruments, or weaving or tailoring his own clothes. Others do these things for him, and, in return, he treats the diseases that afflict his patients. The more frequent, severe, and numerous these diseases are, the more willing people are—indeed, the more they are obliged—to work for his personal benefit. From his point of view, illness—which is a general obstacle to human well-being—is a cause of his individual well-being. All producers, with respect to their particular field of operation, reason in the same manner. The shipowner derives his profits from the obstacle called distance; the farmer, from that called hunger; the textile manufacturer, from that called cold; the teacher lives on ignorance; the jeweler, on vanity; the lawyer, on greed; the notary, on possible bad faith, just as the physician lives on the illnesses of mankind. It is therefore quite true that each profession has an immediate interest in the continuation, even the extension, of the particular obstacle that is the object of its efforts.

Now, the result is that each man sees the immediate cause of his prosperity in the obstacle that he makes it his business to struggle against for the benefit of others. The larger the obstacle, the more important and more intensely felt it is, then the more his fellow men are disposed to pay him for having overcome it, that is, the readier they are to remove on his behalf the obstacles that stand in his way.

The division of labor, which results from the opportunity to engage in exchange, makes it possible for each man, instead of struggling on his own behalf to overcome all the obstacles that stand in his way, to struggle against only one, not solely on his own account, but for the benefit of his fellow men, who in turn perform the same service for him.

But if one scrutinizes social phenomena in detail and the attitudes of men as they have been modified by exchange, one soon sees how men have come to confuse wants with wealth and obstacle with cause.

It is also clear that, all things considered, it would be better for all mankind, or for society, if obstacles were as easy to overcome and as infrequent as possible.

To go through the long journey of life from the cradle to the grave, man must ingest a vast quantity of food, protect himself from the inclemency of the weather, and guard against or cure himself of a host of diseases. Hunger, thirst, sickness, heat, and cold are just so many obstacles strewn along his part. In a state of isolation he would have to overcome all of them by hunting, fishing, farming, spinning, weaving, and building; and it is clear that it would be better for him if these obstacles were fewer in number, and better still if they did not exist at all. In society, he does not personally attack each of these obstacles, but others do so for him; and he in turn removes one of the obstacles confronting his fellow men.

Suppose I need to travel to a point a hundred leagues away. But between the point of departure and my destination are mountains, rivers, swamps, impenetrable forests, and highwaymen—in short, obstacles; and, to surmount these obstacles, I must exert myself vigorously, or—what comes to the same thing—others must exert themselves on my behalf and charge the for doing so. Is it not clear that under these circumstances I should have been better off if these obstacles did not exist in the first place?

Between his destitution and the satisfaction of his wants there is a multitude of obstacles, which it is the goal of labor to surmount. It is curious to inquire how and why these very obstacles to his well-being have come to be mistaken for its cause.

To regard the obstacle as the cause—to mistake scarcity for abundance—is to be guilty of the same sophism in another guise. It deserves to be studied in all its forms.

I feel it my duty to repeat here that I am not accusing such men as Messrs. Bugeaud, Dupin, Saint-Cricq, or d'Argout, of being Sisyphists absolutely and under all circumstances. They are certainly not so in their private business activities; certainly each one of them obtains for himself, by way of exchange, what it would cost him much more to procure for himself by direct production. But I do say that they are Sisyphists when they keep the country from doing the same thing.

Thus, Sisyphism has been the doctrine of all those who have been entrusted with the rate of our country's industry. It would not be fair to reproach them for that. This principle guides our cabinet ministers only because it prevails among our legislators; it prevails among our legislators only because they are representative of the electorate; and the electorate is imbued with it only because public opinion is saturated with it.

What we should desire still more is that human intelligence should be enfeebled or extinguished; for, so long as it survives, it ceaselessly endeavors to increase the ratio of the end to the means and of the product to the effort. It is in this, and in this alone, that intelligence consists.

But what holds true for sugar cannot be false in regard to bread. If, therefore, the usefulness of an industry is to be judged, not by the number of needs that it is capable of satisfying with a definite amount of labor, but, on the contrary, by the increase in labor that it demands in order to satisfy a given quantity of needs, what we should wish for, clearly, is that each hectare of land produce little wheat, and that each kernel of wheat contain little sustenance—in other words, that our land should be unfruitful; for then the amount of land, capital, and labor that would be required to feed the people would be comparatively much greater; one could even say that job opportunities would be in direct proportion to this unfruitfulness. The prayers of Messrs. Bugeaud, Saint-Cricq, Dupin, and d'Argout would be answered: bread would he expensive; work, abundant; and France, rich, at least in the sense that these gentlemen give to the word.

But M. d'Argout teaches us that what we view as life is actually death, and that the importance of an industry is in direct proportion to its unproductiveness. What is to be expected, for example, from the cultivation of the sugar beet? Do you rest see that 48,000 hectares of land, with capital and labor in proportion, would be enough to supply all France with sugar? Hence, this is an industry with a limited usefulness—limited, of course, with respect to the labor it demands, for, according to the former Minister of Commerce, demanding a large quantity of labor is the only manner in which an industry can be useful. This usefulness would be still more limited if, thanks to the fertility of the soil or the vigor of the sugar beet, we were to harvest from 24,000 hectares what we can now obtain from only 48,000. Oh, how much better if it only took twenty times, one hundred times, the land, capital, and labor to achieve the same result! We might build some hopes on the new industry, and it would be worthy of the full protection of the state, for it would offer a vast field for our domestic labor force. But to produce much with little! That sets a bad example, and it is time for the law to set things to rights.

I said at the beginning that there is a variable ratio between the intensity of labor and its result; that absolute imperfection consists in an infinite effort without any result; absolute perfection, in an unlimited result without any effort; and perfectibility, in the progressive diminution of effort by comparison with the result.

I am not going to set myself up here as the defender of the sugar beet, nor do I mean to pass judgment on the strange facts advanced by M. d'Argout;24* but it is worth while to examine the doctrine of a statesman to whom France for along time entrusted the fate of its agriculture and its commerce.

There are two elements to be noted in this quotation: the facts and the doctrine. The facts tend to establish that it takes little land, capital, and manual labor to produce a great deal of sugar, and that every commune in France would provide itself with an abundant supply by devoting one hectare of its area to cultivating the sugar beet. The doctrine consists in regarding this circumstance as harmful, and in seeing in the very efficiency and productiveness of the new industry a limit to its usefulness.

Doubtless the cultivation of the sugar beet is useful, but its usefulness is limited. Its potentialities fall far short of the gigantic developments that people are fond of predicting for it. To be convinced of this, one need only note that its cultivation will of necessity be confined to the limits set by the demands of the consumers. Double, triple if you will, the present consumption of sugar in France; you will still find that a very small portion of the land will be enough to satisfy the needs of the consumers. [Now, there's a remarkable complaint!] Do you desire proof of this? How many hectares were planted in sugar beets in 1828? A total of 3,130, or 1/10,540 of the arable land. How many are there today, when native sugar supplies one third of our consumption? A total of 16,700 hectares, or 1/1,978 of the arable land, or forty-five centiares per commune. Even if we assume that native sugar were to supply the whole of our consumption, we should still have only 48,000 hectares cultivated in sugar beets, or 1/689 of the arable land.23*

I have also cited the opinion of another Minister of Commerce, M. d'Argout. It deserves our attention for a moment. In an effort to strike a blow at the sugar-beet industry, he said:

And so that there might be no mistaking his meaning, His Excellency has taken the trouble to explain his ideas more fully; and just as he has called the intensity of labor wealth, so he can be heard calling the abundance of the results of labor, or of things suitable for satisfying our wants, poverty. "Everywhere," he says, "machinery has replaced manual labor; everywhere there is overproduction; everywhere the balance between productive capacity and consumer purchasing power has been upset." It is clear, according to M. de Saint-Cricq, that if France was in a critical situation, it was because it was producing too much; its labor was too intelligent, too fruitful. We were too well fed, too well clothed, too well provided with all things; production became too rapid and outran our demands. It was necessary to put an end to this calamitous situation, and for that purpose to compel us, by restrictive measures, to work more so as to produce less.

"Labor constitutes the wealth of a nation," was the saying of M. de Saint-Cricq, the Minister of Commerce who has imposed so many fetters on commerce. It should not be supposed that this was merely an elliptical proposition meaning: "The results of labor constitute the wealth of a nation." No, this economist definitely meant to say that the intensity of labor is the measure of wealth; and the proof is that, step by step, from one restriction to another (and always with the best of intentions), he managed to get France to double the amount of labor expended in order to provide itself, for example, with the same quantity of iron. In England iron then cost eight francs; in France it cost sixteen. Assuming that one day of labor costs one franc, it is clear that France could, by way of exchange, obtain for itself a quintal of iron for eight days' labor. Thanks to the restrictive measures of M. de Saint-Cricq, France came to need sixteen days' labor in order to obtain a quintal of iron by direct production. Twice the labor to satisfy an identical need, hence twice the wealth; hence too, wealth is measured, not by the result, but by the intensity, of labor. Is this not Sisyphism in its purest form?

Baron Charles Dupin, said to be the torch of learning among the peerage in the science of economics, accuses the railroads of injuring navigation; and it is certainly natural for a swifter conveyance to lessen the use of a comparatively less efficient one. But railroads can harm shipping only by taking away its business; they can take away its business only by doing the job of transportation more cheaply; and they can transport goods more cheaply only by lowering the ratio of the effort applied to the result obtained, since this is precisely what constitutes low cost. Thus, when Baron Dupin deplores this diminution in the labor employed to obtain a given result, he is following the doctrine of Sisyphism. Logically, since he prefers the ship to the train, he ought to prefer the wagon to the ship, the packsaddle to the wagon, and the basket to every other known means of transport, for it is the one that demands the most labor for the least result.

Another of its avowed objects and acknowledged effects is to raise prices, which means nothing more nor less than a scarcity of goods. Thus, carried to its extreme, the policy of restriction is pure Sisyphism, as we have defined it: infinite labor, without any result.

The avowed object and acknowledged effect of restrictive measures is to increase the amount of labor necessary for a given result.

Now, it is quite evident that the principle of M. Bugeaud, the legislator, is diametrically opposed to that of M. Bugeaud, the farmer. To be consistent, either he would have to vote against every restrictive measure, or he would have to put into practice on his own farm the principle that he proclaims from the rostrum. He would, in the latter case, have to sow his seed in the most barren field, for in that way he would succeed in working a great deal in order to obtain little result. He would have to eschew the use of the plow, since tilling the soil by hand would satisfy his twofold desire for dearer bread and more abundant toil.

However, M. Bugeaud, the legislator, has been heard to exclaim: "I understand nothing of the theory of cheapness; I should prefer to see bread more expensive and work more abundant." And, in consequence, the deputy from the Dordogne votes for legislative measures whose effect is to hinder trade, precisely because trade procures for us indirectly what direct production can furnish us only at a higher cost.

This indisputable tendency of mankind, once its existence is verified, should suffice, it would seem, to make the correct principle clear to the legislator and show him in what way he ought to help industry (in so far as it is within his province to do so); for it would be absurd to say that the laws of man should run counter to the laws of Providence.

As a farmer, M. Bugeaud directs all his efforts toward the twofold end of saving labor and of obtaining bread cheaply. When he prefers a good plow to a poor one; when he improves his pastures; when, in order to turn over his soil, he substitutes as far as possible the action of the wind for that of the harrow or the hoe; when he summons to his aid all the processes whose power and efficacy science and experience have shown him; he has and can have only one goal: to diminish the ratio of effort to result. Indeed, we have no other way of judging the skill of the farmer and the extent of the improvement effected by his operations than to measure what they have subtracted from the effort and added to the result; and, as all the farmers in the world act in accordance with this principle, one can say that all men strive, undoubtedly to their advantage, to obtain bread and all other commodities more cheaply—that is, to lessen the effort needed to have a given quantity at their disposal.

I have already repeated a saying of M. Bugeaud; but M. Bugeaud is actually two persons, a farmer and a legislator.

Let us see, then, whether the two conflicting principles that I have just described do not prevail, by turns, the one in the practice of industry, the other in industrial legislation.

If this means that in practice no one carries the principle to its logical extreme, I willingly agree. This is always the case when one starts from a false premise. It soon leads to such absurd and injurious consequences that one is obliged to stop short. That is why it is never the practice of industry to permit Sisyphism; the penalty would follow the mistake too closely not to expose it. But in the realm of speculation, such as theorists and statesmen engage in, one can cling to a false principle for a long time before being made aware of its falsity by its complex practical consequences, especially in areas with which one is unfamiliar; and when these finally do reveal their origin, one adopts the opposite principle, thereby contradicting oneself, and seeks justification in that incomparably absurd modern axiom: In political economy there are no absolute principles.

People will perhaps think I am exaggerating, and that there are no real Sisyphists.

Yet it is notable that, with respect to their personal concerns, they act on the same principle as everyone else; that is, they seek to obtain from their labor the greatest possible quantity of useful results.

The opposite doctrine is the stock in trade of theorists, legislators, journalists, statesmen, and cabinet ministers—men, in brief, whose role in this world is to conduct experiments on the body of society.

It is well to note that the universal practice of mankind is always guided by the principle on which the first doctrine is founded. No one has ever seen, and no one ever will see, any person who works, whether he be farmer, manufacturer, merchant, artisan, soldier, writer, or scholar, who does not devote all the powers of his mind to working better, more quickly, and more economically—in short, to doing more with less.

Just as logically, the proponents of the second doctrine welcome everything that has the effect of increasing exertion and of diminishing output: privileges, monopolies, restrictions, interdictions, the suppression of machinery, infertility, etc.

Naturally, the proponents of the first doctrine welcome everything that tends to diminish exertion and to increase output: the powerful machines that add to the strength of man; exchange, which permits him to get a better share of the natural resources that are distributed in varying amounts on the face of the earth; intelligence, which makes discoveries; experience, which confirms hypotheses; competition, which stimulates production; etc.

The second contends that effort itself constitutes and measures wealth. To progress is to increase the ratio of effort to result. Its ideal may be represented by the toil of Sisyphus—at once barren and eternal.

According to the first thesis, wealth is the result of labor. It increases proportionately to the increase to the ratio of result to effort. Absolute perfection, whose archetype is God, consists in the widest possible distance between the two terms, that is, a situation in which no effort at all yields infinite results.

Both theses have had their defenders, and political economists are divided in their opinions about them.

But what constitutes the measure of our well-being, that is, of our wealth? Is it the result of the effort? Or is it the effort itself? There is always a ratio between the effort applied and the result obtained. Does progress consist in the relative increase in the first or in the second term of this ratio?

We have just seen that there are obstacles between our wants and their satisfaction. We succeed in eliminating these obstacles or in lessening them by employing our productive capacities to overcome them. Thus, it may be said, in a very general way, that industry is an effort followed by a result.

The theory whose outlines I have attempted to sketch in this chapter still stands in need of a great deal of development. I have considered it only in its bearing on the subject of free trade. But perhaps the attentive reader may have perceived in it the fertile seed that is destined, when it matures, to eradicate not only protectionism, but, along with it, Fourierism, Saint-Simonianism, communism, and all those schools of thought that aim at excluding the law of supply and demand from the governance of the world. From the point of view of the producer, competition doubtless often clashes with our immediate self-interest; but, if one considers the general aim of all labor, i.e., universal well-being—in a word, if one adopts the point of view of the consumer—one will find that competition plays the same role in the moral world as equilibrium does in the physical world. It is the basis of true communism, of true socialism, and of that equality of wealth and position so much desired in our day; and if so many sincere publicists and well-intentioned reformers demand arbitrary controls, it is because they do not understand free exchange.

Exchange involves the bartering of values; and since competition makes value the equivalent of labor, exchange involves the bartering of equal quantities of labor. What Nature has contributed to the products in the exchange is given by both parties to the transaction free of charge and into the bargain, whence it follows necessarily that exchange carried on with the countries most favored by Nature is the most advantageous.

A is a favored country; B is a country ill-treated by Nature. I hold that exchange is advantageous for both of them, but especially for B; because what are exchanged in commercial transactions are not utilities, but values. Now, A includes a greater amount of utility in the same value, since the utility of the product includes the contributions of both Nature and human labor, whereas its value corresponds only to the contribution of labor. Therefore, the bargain is entirely to the advantage of B. By paying the producer in A simply for his labor, B receives into the bargain more natural utility than it gives.

Hence, we see how absurd it is for a consuming country to reject a product precisely because it is cheap. This is like saying: "I do not want anything that Nature gives me. You can make a product and sell it to me for only half as much of my labor as I should have to expend to make it for myself. You can do this because in your country Nature has done half the work. Very well! I, for my part, refuse to buy the product, and I shall wait until your climate, by becoming inclement, forces you to demand twice as much labor on my part; then I can deal with you on an equal footing."

Thus, as a result of the operation of the law of supply and demand, the gifts of Nature, like improvements in the processes of production, are—or continually tend to become—the common and gratuitous heritage of the consumers, the masses, mankind in general. Hence, the countries that do not possess these advantages have everything to gain by exchanging with those that do possess them, for exchange involves the products of labor, without regard to the utilities contributed to these products by Nature; clearly, the most favored countries are those that have combined with their labor the greatest number of these natural utilities in making a given product. Their products, which represent less labor, are less well remunerated; in other words, they are cheaper, and if all the gifts of Nature result in lower costs, evidently it is not the producing country, but rather the consuming country, that reaps the benefit.

In a temperate zone where coal and iron ore are at the surface, one need only stoop down to get them. At first, I readily agree, it is the inhabitants of the favored region who will profit from this lucky circumstance. But soon, as competition develops, the price of coal and iron ore will continue to fall until the gift of Nature is available free of charge to everyone, and human labor alone is remunerated in accordance with the average rate of wages.

The tropical regions are very well suited to the production of sugar and of coffee. This means that Nature does the larger portion of the work and leaves little to be done by human labor. But, then, who reaps the advantage of this liberality on the part of Nature? It is not these regions, for competition allows them to receive remuneration only for the labor expended; instead, it is mankind, for the result of this liberality is termed cheapness, and cheapness benefits everyone.

If, by a happy miracle, the fertility of all arable land happened to increase, the consumer and not the farmer would reap the advantage of this phenomenon, for it would result in abundance and therefore in low food prices. Since each hectoliter of wheat would involve less labor, the farmer could exchange the wheat only for some other product that involved a lesser quantity of labor. If, on the contrary, the fertility of the soil should suddenly diminish, the share of Nature in production would be less, and that of labor more, so that the cost of the product would be higher. Thus, I was right in saying that every economic phenomenon in the long run diffuses its effects among the consumers, i.e., all mankind. So long as you have not followed its consequences that far, so long as you stop at the immediate effects, those that concern only one man or one class of men as producers, you are not an economist; any more than you are a doctor if, instead of following the effects of a potion through the entire organism, you confine yourself to observing how it affects the palate or the throat.

The nutritive substance in potatoes does not cost us very much, because we can obtain many potatoes with little labor. We pay more for wheat because Nature demands a greater amount of human labor for its production. It is evident that, if Nature did for the latter what it does for the former, the prices of both would tend to become equal. However, the producer of wheat cannot go on forever earning much more than the producer of potatoes. The law of supply and demand stands in the way.

If, when the water carrier comes to supply my house, I paid him in proportion to the absolute utility of water, my whole fortune would not be enough. But I pay him in proportion to the pains he has taken. If he demanded more money, others would do this work for me, and, ultimately, in case of need, I should do it myself. The real object of our bargain is not the water, but rather the labor performed to obtain the water. This point is so important and the conclusions that I am going to draw from it throw so much light on the question of the freedom of international trade that I believe I ought to elucidate it with some additional examples.

We do not pay for the light of the sun, because it is a gratuitous gift of Nature. But we do pay for that of gas, of tallow, of oil, and of wax, because in these cases there is some human labor to be remunerated; and note that the remuneration is proportioned so closely to the labor, and not to the utility, that one of these illuminants, although casting a much more intense light than another, may still cost less simply because the same quantity of human labor produces more of it.

We do not pay for the air we breathe, although it is so useful to us that we could not live two minutes without it. Nevertheless we do not pay for it, because Nature furnishes it to us without the need of any human labor. But if we want to separate from it one of the gases of which it is composed—for example, in order to conduct an experiment—we have to make an effort, or, if we have someone else make the effort for us, we must give him the equivalent effort embodied in some other product. From this it is evident that exchange is concerned with exertion, effort, labor. It is not really the oxygen that I am paying for, since it is everywhere at my disposal, but the labor needed for isolating it, labor that I have been spared and that I must pay for. Will it be said that there is something else to pay for—supplies, materials, equipment? But it is still the labor connected with these things that I am paying for. The price of the coal used represents the labor needed to extract and transport it.

Every product results from the collaboration of Nature and man. But the portion of utility that Nature contributes is always free of charge. It is only the portion of utility due to human labor that becomes the object of exchange, and consequently of remuneration. The latter doubtless varies greatly in proportion to the intensity of the labor, its skill, its promptitude, its timeliness, the demand for it, the momentary absence of competition, etc., etc. But it is nonetheless true, in principle, that the contribution of the laws of Nature, though involved in all production, counts for nothing in the price of the product.

So far I have taken my examples from among human inventions. I should like now to deal with advantages conferred by Nature.

I entreat the reader's patience and beg him to believe that I have not lost sight of free trade. I hope he will be good enough to remember the conclusion I have reached: Remuneration is proportionate, not to the utility that the producer offers on the market, but to his labor.34*

What I have said of printing can be said of all the tools of production, from the nail and the hammer to the locomotive and the electric telegraph. Society possesses all of them in having an abundance of consumers' goods; and it possesses them as gratuitous gifts, since their effect is to reduce the price of commodities; and all that part of the price that has been eliminated as a result of the contribution of inventions to production clearly makes the product to that extent free of charge. All that remains to be paid for is current human labor; and it is paid without regard to the result of the invention, at any rate when the invention has gone through the inevitable cycle that I have just described. We may take the saw as an example. I summon a workman to my house, he comes with a saw, I pay him two francs a day, and he makes twenty-five boards for me. If the saw had not been invented, he would perhaps not have finished one board; yet I would have paid him no less for the day. The utility produced by the saw is thus a gratuitous gift I receive from Nature, or rather, it is a portion of the inheritance that I have received, in common with my fellow men, from the wisdom of our ancestors. The same is true of agricultural implements. I have two workmen in my field. One works with a plow, the other with a spade. The results of their work are quite different, but their daily wage is the same; for the remuneration is proportionate, not to the utility produced, but to the effort, the labor, demanded.

I confess that the wisdom and the beauty of these laws evoke my admiration and respect. In them I see Saint-Simonianism: To each according to his capacity; to each capacity according to its production. In them I see communism, that is to say, the tendency of goods to become the common heritage of men; but a Saint-Simonianism, a communism, regulated by infinite foresight, and in no way abandoned to the frailty, the passions, and the tyranny of men.

In time, the process became known. Gutenberg was no longer the only printer; others imitated him. Their profits at first were considerable. They were compensated very well for being in the vanguard of the imitators, and this extra compensation was necessary to attract them and to induce them to contribute to the great, approaching, final result. They earned a great deal, but they earned less than the inventor, for competition was beginning to operate. The price of books kept falling lower and lower, and the profits of imitators kept diminishing as the invention became less novel, that is, as imitation became less deserving of especial reward. Soon the new industry reached its normal state: the remuneration of printers no longer was exceptionally large, and, like that of scribes in earlier days, it was determined only by the average rate of wages. Thus, production itself became once more the measure of compensation. Yet the invention nonetheless constituted an advance; the saving of time, of labor, of effort to produce a given result, for a fixed number of copies, had nonetheless been realized. But how was this saving manifested? In the cheapness of books. And to whose profit? To the profit of the consumer, of society, of mankind. Printers, who henceforth had no exceptional merit, no longer received an exceptional remuneration. As men, as consumers, they doubtless shared in the advantages that the invention had conferred upon the community. But that was all. In so far as they were printers, in so far as they were producers, they had returned to the conditions that were customary for all the producers to the country. Society paid them for their labor, and not for the usefulness of the invention. That had become the common and freely available heritage of all mankind.

But God had the wisdom to introduce harmony not only into the movement of the spheres but also into the internal machinery of society. Hence, the economic advantages of this invention did not remain the exclusive possession of one individual, but instead became for all eternity the common inheritance of all mankind.

At first, one man became rich, while many others were being impoverished. However marvelous this discovery was, one might, at first sight, have hesitated to decide whether it was harmful or beneficial. Apparently it was introducing into the world, as I have said, an element of limitless inequality. Gutenberg profited by his invention and employed his profits to extend its use indefinitely, until he had ruined all the copyists. As for the public, the consumers, they gained little, for Gutenberg was careful to lower the price of his books only just enough to undersell his rivals.

Let its go back to the thirteenth century. The men who then practiced the art of copying received for the service they performed a remuneration determined by the average rate of wages. Among these copyists, there was one who sought and discovered the means of multiplying rapidly copies of the same work. He invented printing.

How does this process take place? I shall explain it by means of a few examples.

But, I assert that these good and bad consequences, although permanent in themselves, do not permanently remain with the producer. Otherwise, the inequalities existing among men would become ceaselessly and progressively greater, and that is why these benefits and hardships quickly become part of the general destiny of mankind.

In the same way, when a worker succeeds in improving his skill, he reaps the immediate benefit of the improvement. This is necessary to convince him to work intelligently; and it is just, for it is only fair that an effort crowned with success should bring its reward with it.

Every circumstance that favors the work of production brings pleasure to the producer, for the immediate effect is that he can render more services to the community and ask a greater remuneration from it. Every circumstance that hampers production brings pain to the producer, for the immediate effect is to limit his services and consequently his remuneration. Precisely because the immediate benefits or hardships from fortunate or unfortunate circumstances are necessarily felt first by the producer, he is irresistibly impelled to seek the former and to avoid the latter.

Nothing, whether favorable or unfavorable, has effects that touch only the producer. The advantages that Nature and society lavish upon him, as well as the disadvantages that they inflict upon him, slip away from him, so to speak, and tend insensibly to be absorbed and dissolved into the community, that is, the mass of the consumers. This is an admirable law both in its cause and in its effects; and he who succeeded in explaining it fully would, I think, have the right to say: "I have not passed through this life without paying my debt to society."

Consumption is the end, the final cause, of all economic phenomena, and it is consequently in consumption that their ultimate and definitive justification is to be found.

5. As the protectionists can see, I find myself in a paradoxical humor and am now disposed to go even farther. I contend, and I quite sincerely believe, that if two countries have unequal conditions of production, the one of the two that is the less favored by Nature has the more to gain from free trade. In order to prove this, I shall have to depart somewhat from the customary form of a work of this kind. I shall do so, nevertheless, first because the foregoing thesis expresses my whole point, and then because this digression will provide me with the opportunity to expound an economic law of the highest importance. Indeed, I think that when this law is properly understood, all those sects that in our day have been seeking in the land of fantasy the economic harmony that they have been unable to discover in Nature will be led to take a more scientific view of things. I refer to the law of consumption, which the majority of economists should perhaps be reproached for having too much neglected.

Moreover, free trade also equalizes the conditions of enjoyment, of satisfaction—in short, of consumption. People seem never to take this aspect of the matter into consideration; yet it is the crux of the whole discussion, since, after all, consumption is the ultimate goal of all our productive efforts. Under a system of free trade, we should enjoy the benefits of the Portuguese sun just as Portugal itself does; and the inhabitants of Le Havre would have just as much access to the advantages that Nature conferred upon Newcastle in the form of mineral resources, and under the same conditions, as the people of London do.

If we assume, for the moment, that the average daily income of each Frenchman is one franc, it will follow incontestably that to produce directly one orange in France will take one day's work or its equivalent; whereas to produce the exchange-value of a Portuguese orange will take only one-tenth of that day's labor, which means nothing else than that at Lisbon the sun accomplishes what at Paris can be performed only by human labor. Now, is it not evident that, if I can produce an orange, or—what comes to the same thing—enough to buy it, with one-tenth of a day's labor, the conditions of that production are for me exactly the same as those for the Portuguese producer himself, save for the transportation to Paris, the cost of which must be charged to me? Hence, it is clear that free trade equalizes the conditions of production, whether it is direct or indirect, as far as they can be equalized, because it does away with all differences save one that is inevitable, that of transportation.

"Oh!" they will say; "this is really too much. You are carrying your joke too far!" Very well! If only to satisfy their curiosity, I ask the protectionist, to follow my argument to its conclusion. It will not be long. I revert to the example I have been using.

4. If I have insisted on this distinction between the conditions of production and the conditions of sale, a distinction that the protectionists will doubtless find paradoxical, it is because I am about to use it as the basis for inflicting on them yet another, even stranger paradox: Do you want to really equalize the conditions of production? Then permit free trade.

Now, I maintain that despite this tariff the conditions of production are in no way changed. The law has taken away none of the heat from the sun at Lisbon, nor has it rendered the frosts at Paris less frequent or less bitter. The ripening of oranges will continue to be natural on the banks of the Tagus and artificial on the banks of the Seine; that is, growing oranges will require a great deal more human labor in one country than in the other. All that will be equalized are the conditions of sale: the Portuguese will have to sell us their oranges for one franc, ninety centimes of which will go to pay the tariff. This will evidently be paid by the French consumer. And see how absurd the result will be. On each Portuguese orange consumed, the country will lose nothing; for the ninety centimes extra charged the consumer will be paid into the treasury. Money will change hands, but it will not be lost. However, on each French orange consumed, ninety centimes, or nearly that much, will be lost; for the buyer will certainly lose it, and the seller just as certainly will not gain it, since, on this hypothesis, he will leave received for the orange no more than its net cost. I leave it to the protectionists to draw the conclusion.

Let us assume that some Parisian speculators decide to devote themselves to the production of oranges. They know that oranges from Portugal can be sold in Paris for ten centimes; they, on the other hand, because of the seedling-flats and greenhouses they will need and the cold weather that will often thwart their efforts, cannot ask less than a franc if they are to make any profit at all. They demand that Portuguese oranges be subject to a tariff of ninety centimes. By means of this customs duty, they say, the conditions of production will be equalized; and the Chamber, yielding as always to this kind of reasoning, imposes a duty of ninety centimes on foreign oranges.

3. In the third place, to say that a protective tariff equalizes the conditions of production is to give currency to an error by a faulty mode of expression. It is not true that an import duty equalizes the conditions of production. These are the same after the tax as they were before. At worst, all that such a duty equalizes are the conditions of sale. It may be said perhaps that I am playing on words, but I reply by making the same charge against my opponents. If they cannot prove that production and sale are synonymous, I am justified in charging them, if not with playing on words, at least with confusing them.

You see clearly that Nature, or rather Providence, which is more ingenious, more intelligent, and more discerning than your narrow and rigid theory supposes, has not permitted the existence of that concentration of labor, that monopoly of all advantages, which you argued was a positive and irremediable fact. Providence has seen to it, by means as simple as they are unfailing, that there should be simultaneous dispersion, diffusion, interdependence, and progress. All these are tendencies that your restrictive laws paralyze as much as they can; for such measures tend in their turn, by isolating communities, to perpetuate and intensify the differences in their respective conditions of production, to prevent their equalization, to bar their commingling, to neutralize countervailing forces, and to immobilize nations in their respective positions of superiority or inferiority.

Once we exported textiles; then this exportation gave place to that of yarn, which is the raw material of textiles; subsequently, to that of machines, which produce the yarn; later, to that of capital, with which we build our machines; and finally, to that of our workers and our industrial skill, which are the source of our capital. All these resources have gone, one after another, to serve where they found it most advantageous to do so—wherever the cost of living is lower and life is simpler—and so today, in Prussia, in Austria, in Saxony, in Switzerland, and in Italy, we see vast industries supported by English capital, manned by English workers, and managed by English engineers.

Let us listen to what was said by a manufacturer in addressing the Manchester Chamber of Commerce (I omit the figures with which he supported his argument):

And when I say that, if it were possible for industry to concentrate in one area, this very fact would give rise to an irresistible tendency toward decentralization, I am indulging in no idle hypothesis.

Or, to return to reality, let us say that industry would not have awaited this moment, for abrupt relocations are repugnant to its nature; from the very outset, in the absence of restrictions it would have been gradually dividing and distributing itself between A and B according to the laws of supply and demand, that is to say, according to the laws of justice and utility.

In these circumstances, industry will have all sorts of motives—motives, if I may say so, intensified to the highest degree—for deserting A and going to establish itself in B.

A scarcity of money means that little is needed for each purchase. Thus, in B a nominally low cost of living comes to be combined with a really low cost of living.

But an abundance of money means that it costs a great deal to buy anything. Thus, in A, to the really high cost of living that stems from a very active demand is added a nominally high cost of living resulting from the overabundance of precious metals.

Nor is this all. Since A is selling all the time and B is buying all the time, money passes from B to A. It abounds in A and is scarce in B.

Meanwhile labor, iron, coal, land, food, and capital all go begging in B, and soon all wages and prices fall there.

Iron, coal, land, food, and capital are all in great demand in A, and soon their prices rise.

On this hypothesis, labor is in great demand in A, and soon its wages rise.

Suppose there are two countries, A and B. A has all sorts of advantages over B. From this you infer that industry will be concentrated in A, and that B is powerless to make anything. A, you say, sells much more than it buys; B buys much more than it sells. I could dispute this, but I shall adopt your position.

I shall later examine some of the further implications of this proposition. For the present, I shall confine myself to the problem of ascertaining whether a superiority in one respect and an inferiority in another do not, in the end, counterbalance each other and thereby tend to reach a true equilibrium.

The protectionists are wont to say: "Such and such a nation has an advantage over us because its people can obtain coal, iron, machinery, and capital cheaply; we cannot compete with them."

This natural equalizing tendency of economic phenomena is so important to the discussion and at the same time so well suited to fill us with admiration at the providential wisdom that presides over the regulation of a society based on equal rights that I ask leave to dwell on it for a moment.

Thus, when one speaks of equalizing the conditions of production, one should at least ascertain whether free trade does not do what one seeks to accomplish by arbitrary control.

I have taken as my example a branch of agriculture, but I could just as well have cited a branch of industry. There are tailors at Quimper; but this does not prevent there being tailors in Paris, although the latter pay much more for rent, furnishings, workers, and food. But they also have a much different clientele, and this fact suffices not only to redress the balance but even to tip it to their side.

2. It is not true, in practice, that inequality in the conditions of production between two similar industries necessarily involves the failure of the less favored one. At the race track, if one of the horses wins the place, the other loses it; but when two horses work to produce something useful, each will produce an amount in proportion to his strength; and although the stronger will render the greater service, it does not follow that the weaker will render none at all. Wheat is grown in all the departments of France, although there are among them enormous differences in fertility; and if by chance there is one department in which no wheat is grown, it is because it would not pay to grow wheat even for consumption there. By analogy it is clear that under the system of free trade, despite comparable differences, wheat would be grown in every kingdom in Europe; and if there were one that decided to discontinue the cultivation of wheat, it would do so because it had found, in its interest, a better use for its land, its capital, and its manpower. And why does not the fertility of one department nullify the efforts of the farmer in a neighboring, less favored department? Because economic phenomena have a flexibility, an elasticity, and, so to speak, capacities for achieving equalization that appear to have altogether escaped the notice of the protectionist school. The protectionists accuse us of being doctrinaire; but they are the ones that are doctrinaire in the highest degree, for they build the whole edifice of their doctrine on the basis of a single fact rather than on an aggregation of facts. In the example cited above, the differences in the value of various pieces of land are what compensate for the differences in their fertility. Your land produces three times as much as mine. Yes, but it cost you ten times as much, so that I can still compete with you. There is the whole secret. And observe that superiority in some respects leads to inferiority in others. It is precisely because your land is more fertile that it is more expensive, so that it is not accidentally, but necessarily, that an equilibrium is established or tends to be established; and it cannot be denied that the system of free trade is the one that most favors this tendency.

1. To equalize the conditions of production is not only to obstruct exchange to some extent but also to attack exchange at its very foundations; for exchange is based precisely on the diversity, or, if you prefer, on the inequalities of fertility, skill, climate, and temperature, that you are seeking to eliminate. If Guienne sends wines to Brittany, and if Brittany sends wheat to Guienne, it is because these two provinces offer different conditions for production. Is international trade conducted on a different basis? Moreover, to attack the inequalities in conditions that give rise to exchange and that account for it is in effect to attack exchange itself. If the protectionists had the power to give legal effect to their convictions, they would reduce all men to the snail's life of utter isolation. A rigorously logical analysis would show, besides, that there is not one of their sophisms that would not lead to ruin and annihilation.

(1) That to equalize the conditions of production is to attack exchange at its very foundations. (2) That it is not true that job opportunities within a country may be choked off by the competition of more favored countries. (3) That, even if this were true, protective tariffs do not equalize the conditions of production. (4) That free trade equalizes these conditions as much as they can be equalized. (5) Finally, that it is the least favored countries that gain the most from exchange.

But since we cannot persuade our opponents to accept our point of view, let us adopt theirs, and examine the question in relation to production.

Here as elsewhere we find the advocates of protectionism taking the point of view of the producers; whereas we defend the cause of the unfortunate consumers, whom they absolutely refuse to take into consideration. The protectionists compare the field of industry to a race track. But at the race track, the race is at once means and end. The public takes no interest in the contest aside from the contest itself. When you spur your horses on with the single end of learning which is the fastest runner, I agree that you should equalize their weights. But if your end were getting an important and urgent piece of news to the winning post, would it be consistent for you to put obstacles in the way of the horse that had the best chance of getting there first? Yet that is what you protectionists do with respect to industry. You forget its desired result, which is man's well-being; by dint of begging the question, you disregard this result and even go so far as to sacrifice it.

This argument recurs time and again in the writings of the protectionist school. I propose to examine it carefully, and to this end I solicit the reader's attention and patience. I shall concern myself first with the inequalities that stem from the nature of things, and then with those that are derived from various taxes.

Each person ought to wish, for his own sake as well as for the sake of his fellow citizens, that the production of the country be protected against foreign competition, whenever a foreigner can furnish goods at a lower price.27*

We believe that our protective tariffs should simply represent the difference between the net cost of a commodity that we produce and the net cost of a similar commodity produced in a foreign country.... A protective tariff computed on this basis merely assures free competition;.... free competition exists only where there is equality in the costs and conditions of production. In the case of a horse race, the weight that each of the horses is to carry is ascertained, and conditions are equalized; otherwise, the horses would no longer be competitors. In the case of commerce, if one of the sellers can bring his goods to market more cheaply than the others, he ceases to be a competitor and becomes a monopolist..... If you abolish this protection, which represents the difference in net costs, the foreigner will invade your market and acquire a monopoly.26*

It has been said.... but, in order to avoid being charged with putting sophisms into the mouths of the protectionists, I prefer to let one of their most vigorous champions speak for them.

And let us not confuse, by probing too deeply, Their affairs with ours.

Finally, with respect to these heavy taxes that you are using as a justification for the protectionist system, have you ever asked yourself whether it is not the system itself that produces them? I do wish someone would tell me what would be the use of large standing armies and powerful navies if trade were free..... But that is the concern of the politicians.

But I go even further: I maintain that, the heavier our taxes on domestic products, the more quickly must we open our harbors and our frontiers to the goods of foreign countries less heavily taxed than we. And why? To shift to them a larger part of our tax burden. Is it not an incontestable axiom of political economy that taxes ultimately fall upon the consumer? Thus, the more our foreign trade expands, the more foreign consumers will reimburse us for the taxes embodied in the products we sell them; whereas we should have to make them, in this respect, a lesser repayment, since, according to our hypothesis, their products are less heavily taxed than ours.

This, you are the victims of an illusion. You pay taxes in order to have an army, a navy, a church, public schools, courts, highways, etc., and yet you want to free first one industry, then a second, then a third, from its share of taxes, in every case by distributing the burden among the public. But you do nothing but create endless complications, with no result except these complications themselves. If you could show me that a rise in prices that is due to protection falls on foreigners, I might see some plausibility in your argument. But if, before the enactment of the proposed law, the French public was paying the tax, and if, after the law is enacted, it will pay the customs duty as well as the tax, I really cannot see what will be gained by the law.

You argue that, since France is overburdened with taxes, it is necessary to protect this or that industry. But we have to pay these taxes in any case, whether or not there is protection. If, then, the spokesman of a particular industry argues: "We share in the payment of taxes; they raise our costs of production, and we demand that a protective tariff be levied so as to raise correspondingly the selling price of our product," what does such a demand amount to but that the burden of the tax be shifted onto the rest of the community? The object of the demand is to recover, by raising the price of the product, the amount of the tax paid by the industry. Now, since the total revenue from all taxes must always flow into the treasury, and since the public has to assume the burden of the rise in price, it pays not only its own share of the tax but that of this industry as well. But, you say, everyone will be protected. In the first place, that is impossible; and even if it were possible, where would be the relief? I shall pay for you, and you will pay for me; but the tax will have to be paid nonetheless.

It would be an endless task to attempt to criticize everything that is false in this sophism. I shall confine myself to three points.

One has only to examine matters closely to be convinced that this is what the sophism I am combatting amounts to. Do what you will, gentlemen; you cannot give money to some without taking it away from others. If you absolutely insist on draining the taxpayer dry, well and good; but at least do not treat him like a fool. Do not tell him: "I am taking this money from you to repay you for what I have already taken from you."

But if the protectionist system had taken this form, it would be really laughable to hear people say: "We pay heavy taxes for the army, the navy, the courts, public works, the public schools, the national debt, etc.; they amount to more than a billion francs. That is why it would be good for the state to take still another billion from us, for the relief of those poor ironmasters, those poor stockholders of the Anzin Company, those unfortunate owners of woodlands, those useful codfishers."

I frankly confess my preference for the second system. It seems to me more just, more economical, and more honest: more just, because if society wants to pay bounties to certain of its members, everybody should contribute to them; more economical, because it will save much of the cost of collection and will eliminate many restrictions; finally, more honest, because the public would then see clearly the nature of the operation and realize what it is being made to do.

Between these two systems I can see only one difference. Their principle is the same; their effect is the same: but in one case the protection is paid only by certain individuals; in the other, by everyone.

On the other hand, the state might levy a tax of five francs on the public and give the proceeds as a subsidy to the ironmaster. The protective effect would be the same. In this case too, foreign iron would be excluded from the French market; for our ironmaster would sell his product at seven francs, which with the five-franc subsidy would give him a remunerative return of twelve francs. But with domestic iron available for seven francs, the foreigner could not sell his at eight.

The first is to impose a customs duty of five francs on foreign iron. It is clear that this would definitely bar the iron from the French market, since it could no longer be sold for less than thirteen francs, that is, eight francs net price and five francs for the tax, and that at this price it would be driven from the market by French iron, which we assumed to be only twelve francs. In this case the buyer, the consumer, would bear all the costs of protection.

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