Sophisms of the Protectionists — 06 - First Series Part 6

XI. ABSOLUTE PRICES.

If we wish to judge between freedom of trade and protection, to calculate the probable effect of any political phenomenon, we should notice how far its influence tends to the production of _abundance or scarcity_, and not simply of _cheapness or dearness_ of price.

We must beware of trusting to _absolute prices_, it would lead to inextricable confusion.

Mr. Mathieu de Dombasle, after having established the fact that protection raises prices, adds: "The augmentation of price increases the expenses of life, and consequently the price of labor, and every one finds in the increase of the price of his produce the same proportion as in the increase of his expenses.

Thus, if every body pays as consumer, every body receives also as producer."

It is evident that it would be easy to reverse the argument and say: If every body receives as producer, every body must pay as consumer.

Now, what does this prove?

Nothing whatever, unless it be that protection _transfers_ riches, uselessly and unjustly.

Robbery does the same.

Again, to prove that the complicated arrangements of this system give even simple compensation, it is necessary to adhere to the "_consequently_" of Mr. de Dombasle, and to convince one's self that the price of labor rises with that of the articles protected.

This is a question of fact, which I refer to Mr. Moreau de Jonnès, begging him to examine whether the rate of wages was found to increase with the stock of the mines of Anzin.

For my own part I do not believe in it, because I think that the price of labor, like every thing else, is governed by the proportion existing between the supply and the demand.

Now I can perfectly well understand that _restriction_ will diminish the supply of coal, and consequently raise its price; but I do not as clearly see that it increases the demand for labor, thereby raising the rate of wages.

This is the less conceivable to me, because the sum of labor required depends upon the quantity of disposable capital; and protection, while it may change the direction of capital, and transfer it from one business to another, cannot increase it one penny.

This question, which is of the highest interest, we will examine elsewhere.

I return to the discussion of _absolute prices_, and declare that there is no absurdity which cannot be rendered specious by such reasoning as that of Mr. de Dombasle.

Imagine an isolated nation possessing a given quantity of cash, and every year wantonly burning the half of its produce.

I will undertake to prove by the theory of Mr. de Dombasle that this nation will not be the less rich in consequence of such a procedure.

For, the result of the conflagration must be, that every thing would double in price.

An inventory made before this event would offer exactly the same nominal value, as one made after it.

Who then would be the loser?

If John buys his cloth dearer, he also sells his corn at a higher price; and if Peter makes a loss on the purchase of his corn, he gains it back by the sale of his cloth.

Thus "every one finds in the increase of the price of his produce, the same proportion as in the increase of his expenses; and thus if every body pays as consumer, every body also receives as producer."

All this is nonsense.

The simple truth is: that whether men destroy their corn and cloth by fire or by use, the effect is the same _as regards price_, but not _as regards riches_, for it is precisely in the enjoyment of the use, that riches--in other words, comfort, well-being--exist.

Protection may, in the same way, while it lessens the abundance of things, raise their prices, so as to leave each individual as rich, _numerically speaking_, as when unembarrassed by it.

But because we put down in an inventory three hectolitres of corn at 20 francs, or four hectolitres at 15 francs, and sum up the nominal value of each at 60 francs, does it thence follow that they are equally capable of contributing to the necessities of the community?

To this view of consumption, it will be my continual endeavor to lead the protectionists; for in this is the end of all my efforts, the solution of every problem.

I must continually repeat to them that restriction, by impeding commerce, by limiting the division of labor, by forcing it to combat difficulties of situation and temperature, must in its results diminish the quantity produced by any fixed quantum of labor.

And what can it benefit us that the smaller quantity produced under the protective system bears the same _nominal value_ as the greater quantity produced under the free trade system?

Man does not live on _nominal values_, but on real articles of produce; and the more abundant these articles are, no matter what price they may bear, the richer is he.

XII. DOES PROTECTION RAISE THE RATE OF WAGES?

Workmen, your situation is singular!

you are robbed, as I will presently prove to you....

But no; I retract the word; we must avoid an expression which is violent; perhaps indeed incorrect; inasmuch as this spoliation, wrapped in the sophisms which disguise it, is practiced, we must believe, without the intention of the spoiler, and with the consent of the spoiled.

But it is nevertheless true that you are deprived of the just compensation of your labor, while no one thinks of causing _justice_ to be rendered to you.

If you could be consoled by noisy appeals to philanthropy, to powerless charity, to degrading alms-giving, or if high-sounding words would relieve you, these indeed you can have in abundance.

But _justice_, simple _justice_--nobody thinks of rendering you this.

For would it not be _just_ that after a long day's labor, when you have received your little wages, you should be permitted to exchange them for the largest possible sum of comforts that you can obtain voluntarily from any man whatsoever upon the face of the earth?

Let us examine if _injustice_ is not done to you, by the legislative limitation of the persons from whom you are allowed to buy those things which you need; as bread, meat, cotton and woolen cloths, etc. ; thus fixing (so to express myself) the artificial price which these articles must bear.

Is it true that protection, which avowedly raises prices, and thus injures you, raises proportionably the rate of wages?

On what does the rate of wages depend?

One of your own class has energetically said: "When two workmen run after a master, wages fall; when two masters run after a workman, wages rise."

Allow me, in more laconic phrase, to employ a more scientific, though perhaps a less striking expression: "The rate of wages depends upon the proportion which the supply of labor bears to the demand."

On what depends the _demand_ for labor?

On the quantity of disposable national capital.

And the law which says, "such or such an article shall be limited to home production and no longer imported from foreign countries," can it in any degree increase this capital?

Not in the least.

This law may withdraw it from one course, and transfer it to another; but cannot increase it one penny.

Then it cannot increase the demand for labor.

While we point with pride to some prosperous manufacture, can we answer, from whence comes the capital with which it is founded and maintained?

Has it fallen from the moon?

or rather is it not drawn either from agriculture, or navigation, or other industry?

We here see why, since the reign of protective tariffs, if we see more workmen in our mines and our manufacturing towns, we find also fewer sailors in our ports, and fewer laborers and vine-growers in our fields and upon our hillsides.

I could speak at great length upon this subject, but prefer illustrating my thought by an example.

A countryman had twenty acres of land, with a capital of 10,000 francs.

He divided his land into four parts, and adopted for it the following changes of crops: 1st, maize; 2d, wheat; 3d, clover; and 4th, rye.

As he needed for himself and family but a small portion of the grain, meat, and dairy-produce of the farm, he sold the surplus and bought oil, flax, wine, etc. The whole of his capital was yearly distributed in wages and payments of accounts to the workmen of the neighborhood.

This capital was, from his sales, again returned to him, and even increased from year to year.

Our countryman, being fully convinced that idle capital produces nothing, caused to circulate among the working classes this annual increase, which he devoted to the inclosing and clearing of lands, or to improvements in his farming utensils and his buildings.

He deposited some sums in reserve in the hands of a neighboring banker, who on his part did not leave these idle in his strong box, but lent them to various tradesmen, so that the whole came to be usefully employed in the payment of wages.

The countryman died, and his son, become master of the inheritance, said to himself: "It must be confessed that my father has, all his life, allowed himself to be duped.

He bought oil, and thus paid _tribute_ to Province, while our own land could, by an effort, be made to produce olives.

He bought wine, flax, and oranges, thus paying _tribute_ to Brittany, Medoc, and the Hiera islands very unnecessarily, for wine, flax and oranges may be forced to grow upon our own lands.

He paid tribute to the miller and the weaver; our own servants could very well weave our linen, and crush our wheat between two stones.

He did all he could to ruin himself, and gave to strangers what ought to have been kept for the benefit of his own household."

Full of this reasoning, our headstrong fellow determined to change the routine of his crops.

He divided his farm into twenty parts.

On one he cultivated the olive; on another the mulberry; on a third flax; he devoted the fourth to vines, the fifth to wheat, etc. , etc. Thus he succeeded in rendering himself _independent_, and furnished all his family supplies from his own farm.

He no longer received any thing from the general circulation; neither, it is true, did he cast any thing into it.

Was he the richer for this course?

No, for his land did not suit the cultivation of the vine; nor was the climate favorable to the olive.

In short, the family supply of all these articles was very inferior to what it had been during the time when the father had obtained them all by exchange of produce.

With regard to the demand for labor, it certainly was no greater than formerly.

There were, to be sure, five times as many fields to cultivate, but they were five times smaller.

If oil was raised, there was less wheat; and because there was no more flax bought, neither was there any more rye sold.

Besides, the farmer could not spend in wages more than his capital, and his capital, instead of increasing, was now constantly diminishing.

A great part of it was necessarily devoted to numerous buildings and utensils, indispensable to a person who determines to undertake every thing.

In short, the supply of labor continued the same, but the means of paying becoming less, there was, necessarily, a reduction of wages.

The result is precisely similar, when a nation isolates itself by the prohibitive system.

Its number of industrial pursuits is certainly multiplied, but their importance is diminished.

In proportion to their number, they become less productive, for the same capital and the same skill are obliged to meet a greater number of difficulties.

The fixed capital absorbs a greater part of the circulating capital; that is to say, a greater part of the funds destined to the payment of wages.

What remains, ramifies itself in vain, the quantity cannot be augmented.

It is like the water of a pond, which, distributed in a multitude of reservoirs, appears to be more abundant, because it covers a greater quantity of soil, and presents a larger surface to the sun, while we hardly perceive that, precisely on this account, it absorbs, evaporates, and loses itself the quicker.

Capital and labor being given, the result is, a sum of production, always the less great, in proportion as obstacles are numerous.

There can be no doubt that protective tariffs, by forcing capital and labor to struggle against greater difficulties of soil and climate, must cause the general production to be less, or, in other words, diminish the portion of comforts which would thence result to mankind.

If, then, there be a general diminution of comforts, how, workmen, can it be possible that _your_ portion should be increased?

Under such a supposition, it would be necessary to believe that the rich, those who made the law, have so arranged matters, that not only they subject themselves to their own proportion of the general loss, but taking the whole of it upon themselves, that they submit also to a further loss, in order to increase your gains.

Is this credible?

Is this possible?

It is, indeed, a most suspicious act of generosity, and if you act wisely, you will reject it.

XIII. THEORY--PRACTICE.

Partisans of free trade, we are accused of being theorists, and not relying sufficiently upon practice.

What a powerful argument against Mr. Say (says Mr. Ferrier,) is the long succession of distinguished ministers, the imposing league of writers who have all differed from him; and Mr. Say is himself conscious of this, for he says: "It has been said, in support of old errors, that there must necessarily be some foundation for ideas so generally adopted by all nations.

Ought we not, it is asked, to distrust observations and reasoning which run counter to every thing which has been looked upon as certain up to this day, and which has been regarded as undoubted by so many who were to be confided in, alike on account of their learning and of their philanthropic intentions?

This argument is, I confess, calculated to make a profound impression, and might cast a doubt upon the most incontestable facts, if the world had not seen so many opinions, now universally recognized as false, as universally maintain, during a long series of ages, their dominion over the human mind.

The day is not long passed since all nations, from the most ignorant to the most enlightened, and all men, the wisest as well as the most uninformed, admitted only four elements.

Nobody dreamed of disputing this doctrine, which is, nevertheless, false, and to-day universally decried."

Upon this passage Mr. Ferrier makes the following remarks: "Mr. Say is strangely mistaken, if he believes that he has thus answered the very strong objections which he has himself advanced.

It is natural enough that, for ages, men otherwise well informed, might mistake upon a question of natural history; this proves nothing.

Water, air, earth, and fire, elements or not, were not the less useful to man....

Such errors as this are of no importance.

They do not lead to revolutions, nor do they cause mental uneasiness; above all, they clash with no interests, and might, therefore, without inconvenience, last for millions of years.

The physical world progresses as though they did not exist.

But can it be thus with errors which affect the moral world?

Can it be conceived that a system of government absolutely false, consequently injurious, could be followed for many centuries, and among many nations, with the general consent of well-informed men?

Can it be explained how such a system could be connected with the constantly increasing prosperity of these nations?

Mr. Say confesses that the argument which he combats is calculated to make a profound impression.

Most certainly it is; and this impression remains; for Mr. Say has rather increased than diminished it."

Let us hear Mr. de Saint Chamans.

"It has been only towards the middle of the last, the eighteenth century, when every subject and every principle have without exception been given up to the discussion of book-makers, that these furnishers of _speculative_ ideas, applied to every thing and applicable to nothing, have begun to write upon the subject of political economy.

There existed previously a system of political economy, not written, but _practiced_ by governments.

Colbert was, it is said, the inventor of it; and Colbert gave the law to every state of Europe.

Strange to say, he does so still, in spite of contempt and anathemas, in spite too of the discoveries of the modern school.

This system, which has been called by our writers the _mercantile system_, consisted in ...

checking by prohibition or import duties such foreign productions as were calculated to ruin our manufactures by competition....

This system has been declared, by all writers on political economy, of every school,[12] to be weak, absurd, and calculated to impoverish the countries where it prevails.

Banished from books, it has taken refuge in _the practice_ of all nations, greatly to the surprise of those who cannot conceive that in what concerns the wealth of nations, governments should, rather than be guided by the wisdom of authors, prefer the _long experience_ of a system, etc....

It is above all inconceivable to them that the French government ...

should obstinately resist the new lights of political economy, and maintain in its _practice_ the old errors, pointed out by all our writers....

But I am devoting too much time to this mercantile system, which, unsustained by writers, _has only facts_ in its favor!"

[Footnote 12: Might we not say: It is a powerful argument against Messrs. Ferrier and de Saint Chamans, that all writers on political economy, of _every school_, that is to say, all men who have studied the question, come to this conclusion: After all, freedom is better than restriction, and the laws of God wiser than those of Mr. Colbert.

] Would it not be supposed from this language that political economists, in claiming for each individual the _free disposition of his own property_, have, like the Fourierists, stumbled upon some new, strange, and chimerical system of social government, some wild theory, without precedent in the annals of human nature?

It does appear to me, that, if in all this there is any thing doubtful, and of fanciful or theoretic origin, it is not free trade, but protection; not the operating of exchanges, but the custom-house, the duties, imposed to overturn artificially the natural order of things.

The question, however, is not here to compare and judge of the merits of the two systems, but simply to know which of the two is sanctioned by experience.

You, Messrs. monopolists, maintain that _facts_ are for you, and that we on our side have only _theory_.

You even flatter yourselves that this long series of public acts, this old experience of Europe which you invoke, appeared imposing to Mr. Say;

and I confess that he has not refuted you, with his habitual sagacity.

I, for my part, cannot consent to give up to you the domain of _facts_;

for while on your side you can advance only limited and special facts, _we_ can oppose to them universal facts, the free and voluntary acts of all men.

What do _we_ maintain?

and what do _you_ maintain?

We maintain that "it is best to buy from others what we ourselves can produce only at a higher price."

You maintain that "it is best to make for ourselves, even though it should cost us more than to buy from others."

Now gentlemen, putting aside theory, demonstration, reasoning, (things which seem to nauseate you,) which of these assertions is sanctioned by _universal practice_?

Visit our fields, workshops, forges, stores; look above, below, and around you; examine what is passing in your own household; observe your own actions at every moment, and say which principle it is, that directs these laborers, workmen, contractors, and merchants; say what is your own personal _practice_.

Does the agriculturist make his own clothes?

Does the tailor produce the grain which he consumes?

Does not your housekeeper cease to make her bread at home, as soon as she finds it more economical to buy it from the baker?

Do you lay down your pen to take up the blacking-brush in order to avoid paying tribute to the shoe-black?

Does not the whole economy of society depend upon a separation of occupations, a division of labor, in a word, upon mutual exchange of production, by which we, one and all, make a calculation which causes us to discontinue direct production, when indirect acquisition offers us a saving of time and labor.

You are not then sustained by _practice_, since it would be impossible, were you to search the world, to show us a single man who acts according to your principle.

You may answer that you never intended to make your principle the rule of individual relations.

You confess that it would thus destroy all social ties, and force men to the isolated life of snails.

You only contend that it governs _in fact_, the relations which are established between the agglomerations of the human family.

We say that this assertion too is erroneous.

A family, a town, county, department, province, all are so many agglomerations, which, without any exception, all _practically_ reject your principle; never, indeed, even think of it.

Each of these procures by barter, what would be more expensively procured by production.

Nations would do the same, did you not _by force_ prevent them.

We, then, are the men who are guided by practice and experience.

For to combat the interdict which you have specially put upon some international exchanges, we bring forward the practice and experience of all individuals, and of all agglomerations of individuals, whose acts being voluntary, render them proper to be given as proof in the question.

But you, on your part, begin by _forcing_, by _hindering_, and then, adducing forced or forbidden acts, you exclaim: "Look; we can prove ourselves justified by example!"

You exclaim against our _theory_, and even against _all theory_.

But are you certain, in laying down your principles, so antagonistic to ours, that you too are not building up theories?

Truly, you too have your theory; but between yours and ours there is this difference: Our theory is formed upon the observation of universal _facts_, universal sentiments, universal calculations and acts.

We do nothing more than classify and arrange these, in order to better understand them.

It is so little opposed to practice, that it is in fact only _practice explained_.

We look upon the actions of men as prompted by the instinct of self-preservation and of progress.

What they do freely, willingly,--this is what we call _Political Economy_, or economy of society.

We must repeat constantly that each man is _practically_ an excellent political economist, producing or exchanging, as his advantage dictates.

Each by experience raises himself to the science; or rather the science is nothing more than experience, scrupulously observed and methodically expounded.

But _your_ theory is _theory_ in the worst sense of the word.

You imagine procedures which are sanctioned by the experience of no living man, and then call to your aid constraint and prohibition.

You cannot avoid having recourse to force; because, wishing to make men produce what they can _more advantageously_ buy, you require them to give up an advantage, and to be led by a doctrine which implies contradiction even in its terms.

I defy you too, to take this doctrine, which by your own avowal would be absurd in individual relations, and apply it, even in speculation, to transactions between families, towns, departments, or provinces.

You yourselves confess that it is only applicable to internal relations.

Thus it is that you are daily forced to repeat: "Principles can never be universal.

What is _well_ in an individual, a family, commune, or province, is _ill_ in a nation.

What is good in detail--for instance: purchase rather than production, where purchase is more advantageous--is _bad_ in a society.

The political economy of individuals is not that of nations;" and other such stuff, _ejusdem farinæ_.

And all this for what?

To prove to us, that we consumers, we are your property!

that we belong to you, soul and body!

that you have an exclusive right on our stomachs and our limbs!

that it is your right to feed and dress us at your own price, however great your ignorance, your rapacity, or the inferiority of your work.

Truly, then, your system is one not founded upon practice; it is one of abstraction--of extortion.