Part 4

But the intelligence which has introduced harmony into the movements of the heavenly bodies, has implanted it also in the internal mechanism of society. We shall see the economic advantages of the invention when it has ceased to be individual property, and has become for ever the common patrimony of the masses.

At length the invention comes to be known. Guttemberg is no longer the only printer; others imitate him. Their profits' at first are large. They are thus rewarded for having been the first to imitate the invention; and it is right that it should be so, for this higher remuneration was necessary to induce them to concur in the grand definite result which is approaching. They gain a great deal, but they gain less than the inventor, for _competition_ now begins its work. The price of books goes on falling. The profit of imitators goes on diminishing in proportion as the invention becomes of older date; that is to say, in proportion as the imitation becomes less meritorious.....

* The author, here and elsewhere, uses the French word _profits_; but it is clear from the context that he does not refer to the returns from capital, in which sense alone the English economists employ the term _profits_. We have therefore substituted the words _earnings or wages_.-- Translator,

The new branch of industry at length reaches its normal state; in other words, the remuneration of printers ceases to be exceptionally high, and comes, like that of the copyist, to be _regulated by the ordinary rate of earnings_. Here we have production, as such, brought back to the point from which it started. And yet the invention is not the less an acquisition; the saving of time, of labour, of effort to produce a given result, that is, to produce a determinate number of copies, is not the less realized. But how does it show itself? In the cheapness of books. And to whose profit? To the profit of the consumer, of society, of the human race. The printers, who have thenceforth no exceptional merit, no longer receive exceptional remuneration. As men, as consumers, they undoubtedly participate in the advantages which the invention has conferred upon the community. But that is all. As printers, as producers, they have returned to the ordinary condition of the other producers of the country. Society pays them for their labour, and not for the utility of the invention. The latter has become the common and gratuitous heritage of mankind at large.

I confess that the wisdom and the beauty of these laws call forth my admiration and respect. I see in them Saint-Simonianism:

_To each according to his capacity; to each capacity according to its works_. I see in them, communism; that is, the tendency of products to become the _common_ heritage of men; but a Saint-Simonianism, a communism, regulated by infinite prescience, and not abandoned to the frailties, the passions, and the arbitrary will of men.

What I have said of the art of printing, may be affirmed of all the instruments of labour, from the nail and the hammer to the locomotive and the electric telegraph. Society becomes possessed of all through its more abundant consumption, and _it enjoys all gratuitously_, for the effect of inventions and discoveries is to reduce the price of commodities; and all that part of the price which has been annihilated, and which represents the share invention has in production, evidently renders the product gratuitous to that extent. All that remains to be paid for is the human labour, the immediate labour, /and it is paid for without reference to the result of the invention, at least when that invention has passed through the cycle I have just described--the cycle which it is designed to pass through. I send for a tradesman to my house; he comes and brings his saw with him; I pay him two shillings for his day's work, and he saws me twenty-five boards. Had the saw not been invented, he would probably not have made out to furnish me with one, and I should have had to pay him the same wages for his day's work. The _utility_ produced by the saw is then, as far as I am concerned, a gratuitous gift of nature, or rather it is a part of that inheritance which, _in common_ with all my brethren, I have received from my ancestors. I have two workmen in my field. The one handles the plough, the other the spade. The result of their labour is very different, but the day's wages are the same, because the remuneration is not proportioned to the utility produced, but to the effort, the labour, which is exacted.

I entreat the reader's patience, and beg him to believe that I have not lost sight of free trade. Let him only have the goodness to remember the conclusion at which I have arrived: _Remuneration is not in proportion to the utilities which the producer brings to market, but to his labour_.*

* It is true that labour does not receive a uniform remuneration. It may be more or less intense, dangerous, skilled, etc. Competition settles the usual or current price in each department--and this is the fluctuating price of which I speak.

I have drawn my illustrations as yet from human inventions. Let us now turn our attention to natural advantages.

In every branch of production, nature and man concur. But the portion of utility which nature contributes is always gratuitous. It is only the portion of utility which human labour contributes which forms the subject of exchange, and, consequently, of remuneration. The latter varies, no doubt, very much in proportion to the intensity of the labour, its skill, its promptitude, its suitableness, the need there is of it, the temporary absence of rivalry, etc. But it is not the less true, in principle, that the concurrence of natural laws, which are common to all, counts for nothing in the price of the product.

We do not pay for the air we breathe, although it is so _useful_ to us, that, without it, we could not live two minutes. We do not pay for it, nevertheless; because nature furnishes it to us without the aid of human labour. But if, for example, we should desire to separate one of the gases of which it is composed, to make an experiment, we must make an exertion; or if we wish another to make that exertion for us, we must sacrifice for that other an equivalent amount of exertion, although we may have embodied it in another product. Whence we see that pains, efforts, and exertions are the real subjects of exchange. It is not, indeed, the oxygen gas that I pay for, since it is at my disposal everywhere, but the labour necessary to disengage it, labour which has been saved me, and which must be recompensed. Will it be said that there is something else to be paid for, materials, apparatus, etc.? Still, in paying for these, I pay for labour. The price of the coal employed, for example, represents the labour necessary to extract it from the mine and to transport it to the place where it is to be used.

We do not pay for the light of the sim, because it is a gift of nature. But we pay for gas, tallow, oil, wax, because there is here human labour to be remunerated; and it will be remarked that, in this case, the remuneration is proportioned, not to the utility produced, but to the labour employed, so much so that it may happen that one of these kinds of artificial light, though more intense, costs us less, and for this reason, that the same amount of human labour affords us more of it.

Were the porter who carries water to my house to be paid in proportion to the _absolute utility_ of water, my whole fortune would be insufficient to remunerate him. But I pay him in proportion to the exertion he makes. If he charges more, others will do the work, or, if necessary, I will do it myself. Water, in truth, is not the subject of our bargain, but the labour of carrying it. This view of the matter is so important, and the conclusions which I am about to deduce from it throw so much light on the question of the freedom of international exchanges, that I deem it necessary to elucidate it by other examples.

The alimentary substance contained in potatoes is not very costly, because we can obtain a large amount of it with comparatively little labour. We pay more for wheat, because the production of it costs a greater amount of human labour. It is evident that if nature did for the one what it does for the other, the price of both would tend to equality. It is impossible that the producer of wheat should permanently gain much more than the producer of potatoes. The law of competition would prevent it.

If by a happy miracle the fertility of all arable lands should come to be augmented, it would not be the agriculturist, but the consumer, who would reap advantage from that phenomenon for it would resolve itself into abundance and cheapness. There would be less labour incorporated in each quarter of corn, and the cultivator could exchange it only for a smaller amount of labour worked up in some other product. If, on the other hand, the fertility of the soil came all at once to be diminished, nature's part in the process of production would be less, that of human labour would be greater, and the product dearer. I am, then, warranted in saying that it is in consumption, in the human element, that all the economic phenomena come ultimately to resolve themselves. The man who has failed to regard them in this light, to follow them out to their ultimate effects, without stopping short at _immediate_ results, and viewing them from the _producer's_ standpoint, can no more be regarded as an economist than the man who should prescribe a draught, and, instead of watching its effect on the entire system of the patient, should inquire only how it affected the mouth and throat, could be regarded as a physician.

Tropical regions are very favourably situated for the production of sugar and of coffee. This means that nature does a great part of the work, and leaves little for human labour to do. But who reaps the advantage of this liberality of nature? Not the producing countries, for competition causes the price barely to remunerate the labour. It is the human race that reaps the benefit, for the result of nature's liberality is cheapness, and cheapness benefits everybody.

Suppose a temperate region where coal and iron-ore are found on the surface of the ground, where one has only to stoop down to get them. That, in the first instance, the inhabitants would profit by this happy circumstance, I allow. But competition would soon intervene, and the price of coal and iron-ore would go on falling, till the gift of nature became free to all, and then the human labour employed would be alone remunerated according to the general rate of earnings.

Thus the liberality of nature, like improvements in the processes of production, is, or continually tends to become, under the law of competition, the common and gratuitous patrimony of consumers, of the masses, of mankind in general. Then, the countries which do not possess these advantages have everything to gain by exchanging their products with those countries which possess them, because the subject of exchange is _labour_, apart from the consideration of the natural utilities worked up with that labour; and the countries which have incorporated in a given amount of their labour the greatest amount of these _natural utilities_, are evidently the most favoured countries. Their products which represent the least amount of human labour are the least profitable; in other words, they _are cheaper_; and if the whole liberality of nature resolves itself into _cheapness_, it is evidently not the producing, but the consuming, country which reaps the benefit.

Hence we see the enormous absurdity of consuming countries which reject products for the very reason that they are cheap. It is as if they said, "We want nothing that nature gives us. You ask me for an effort equal to two, in exchange for a product which I cannot create without an effort equal to four; you can make that effort, because in your case nature does half the work. Be it so; I reject your offer, and I shall wait until your climate, having become more inclement, will force you to demand from me an effort equal to four, in order that I may treat with you _on a footing of equality_."

A is a favoured country. B is a country to which nature has been less bountiful. I maintain that exchange benefits both, but benefits B especially; because exchange is not an exchange of _utilities for utilities_, but _of value for value_. Now A includes _a greater amount of utility in the same value_, seeing that the utility of a product includes what nature has put there, as well as what labour has put there; whilst value includes only what labour has put there. Then B makes quite an advantageous bargain. In recompensing the producer of A for his labour only, it receives into the bargain a greater amount of natural utility than it has given.

This enables us to lay down the general rule: Exchange is a barter of _values_; value under the action of competition being made to represent labour, exchange becomes a barter of equal labour. What nature has imparted to the products exchanged is on both sides given _gratuitously and into the bargain_; whence it follows necessarily that exchanges effected with countries the most favoured by nature are the most advantageous.

The theory of which in this chapter I have endeavoured to trace the outlines would require great developments. I have glanced at it only in as far as it bears upon my subject of free trade. But perhaps the attentive reader may have perceived in it the fertile germ which in the rankness of its maturity will not only smother protection, but, along with it, _Fourierisrme, Saint-Simonianisme, communisme_, and all those schools whose object it is to exclude from the government of the world the law of _competition_. Regarded from the producer's point of view, competition no doubt frequently clashes with our _immediate_ and individual interests; but if we change our point of view and extend our regards to industry in general, to universal prosperity--in a word, to _consumption_--we shall find that competition in the moral world plays the same part which equilibrium does in the material world. It lies at the root of true communism, of true socialism, of that equality of conditions and of happiness so much desired in our day; and if so many sincere publicists, and well-meaning reformers seek after the _arbitrary_, it is for this reason--that they do not understand liberty.*

* The theory sketched in this chapter, is the same which, four years afterwards, was developed in the _Harmonies Économiques_. Remuneration reserved exclusively for human labour; the gratuitous nature of natural agents; progressive conquest of these agents, to the profit of mankind, whose common property they thus become; elevation of general wellbeing and tendency to relative equalization of conditions; we recognise here the essential elements of the most important of all the works of Bastiat.--Editor.

V. OUR PRODUCTS ARE BURDENED WITH TAXES.

We have here again the same sophism. We demand that foreign products should be taxed to neutralize the effect of the taxes which weigh upon our national products. The object, then, still is to equalize the conditions of production. We have only a word to say, and it is this: that the tax is an artificial obstacle which produces exactly the same result as a natural obstacle, its effect is to enhance prices. If this enhancement reach a point which makes it a greater loss to create the product for ourselves than to procure it from abroad by producing a counter value, _laissez faire_, let well alone. Of two evils, private interest will do well to choose the least. I might, then, simply refer the reader to the preceding demonstration; but the sophism which we have here to combat recurs so frequently in the lamentations and demands, I might say in the challenges, of the protectionist school, as to merit a special discussion.

If the question relate to one of those exceptional taxes which are imposed on certain products, I grant readily that it is reasonable to impose the same duty on the foreign product. For example, it would be absurd to exempt foreign salt from duty; not that, in an economical point of view, France would lose anything by doing so, but the reverse. Let them say what they will, principles are always the same; and France would gain by the exemption as she must always gain by removing a natural or artificial obstacle. But in this instance the obstacle has been interposed for purposes of revenue. These purposes must be attained; and were foreign salt sold in our market duty free, the Treasury would lose its hundred millions of francs (four millions sterling); and must raise that sum from some other source. There would be an obvious inconsistency in creating an obstacle, and failing in the object. It might have been better to have had recourse at first to another tax than that upon French salt. But I admit that there are certain circumstances in which a tax may be laid on foreign commodities, provided it is not _protective_, but fiscal.

But to pretend that a nation, because she is subjected to heavier taxes than her neighbours, should protect herself by tariffs against the competition of her rivals, in this is a sophism, and it is this sophism which I intend to attack.

I have said more than once that I propose only to explain the theory, and lay open, as far as possible, the sources of protectionist errors. Had I intended to raise a controversy, I should have asked the protectionists why they direct their tariffs chiefly against England and Belgium, the most heavily taxed countries in the world? Am I not warranted in regarding their argument only as a pretext? But I am not one of those who believe that men are prohibitionists from self-interest, and not from conviction. The doctrine of protection is too popular not to be sincere. If the majority had faith in liberty, we should be free. Undoubtedly it is self-interest which makes our tariffs so heavy; but conviction is at the root of it. "The will," says Pascal, "is one of the principal organs of belief." But the belief exists nevertheless, although it has its root in the will, and in the insidious suggestions of egotism.

Let us revert to the sophism founded on taxation.

The State may make a good or a bad use of the taxes which it levies. When it renders to the public services which are equivalent to the value it receives, it makes a good use of them. And when it dissipates its revenues without giving any service in return, it makes a bad use of them.

In the first case, to affirm that the taxes place the country which pays them under conditions of production more unfavourable than those of a country which is exempt from them, is a sophism. We pay twenty millions of francs for justice and police; but then we have them, with the security they afford us, and the time which they save us; and it is very probable that production is neither more easy nor more active in those countries, if there are any such, where the people take the business of justice and police into their own hands. We pay many hundreds of millions (of francs) for roads, bridges, harbours, and railways. Granted; but then we have the benefit of these roads, bridges, harbours, and railways; and whether we make a good or a bad bargain in constructing them, it cannot be said that they render us inferior to other nations, who do not indeed support a budget of public works, but who have no public works. And this explains why, whilst accusing taxation of being a cause of industrial inferiority, we direct our tariffs especially against those countries which are the most heavily taxed. Their taxes, well employed, far from deteriorating, have ameliorated, _the conditions of production_ in these countries. Thus we are continually arriving at the conclusion that protectionist sophisms are not only not true, but are the very reverse of true.*

* See Harmonies Économiques, ch. xvii.

If taxes are improductive, suppress them, if you can; but assuredly the strangest mode of neutralizing their effect is to add individual to public taxes. Fine compensation truly! You tell us that the State taxes are too much; and you give that as a reason why we should tax one another!

A protective duty is a tax directed against a foreign product; but we must never forget that it falls back on the home consumer. Now the consumer is the tax-payer. The agreeable language you address to him is this: "Because your taxes are heavy, we raise the price of everything you buy; because the State lays hold of one part of your income, we hand over another to the monopolist."

But let us penetrate a little deeper into this sophism, which is in such repute with our legislators, although the extraordinary thing is that it is just the very people who maintain unproductive taxes who attribute to them our industrial inferiority, and in that inferiority find an excuse for imposing other taxes and restrictions.

It appears evident to me that the nature and effects of protection would not be changed, were the State to levy a direct tax and distribute the money afterwards in premiums and indemnities to the privileged branches of industry.

Suppose that while foreign iron cannot be sold in our market below eight francs, French iron cannot be sold for less than twelve francs.

On this hypothesis, there are two modes in which the State can secure the home market to the producer.

The first mode is to lay a duty of five francs on foreign iron. It is evident that that duty would exclude it, since it could no longer be sold under thirteen francs, namely, eight francs for the cost price, and five francs for the tax, and at that price it would be driven out of the market by French iron, the price of which we suppose to be only twelve francs. In this case, the purchaser, the consumer, would be at the whole cost of the protection.

Or again, the State might levy a tax of five francs from the public, and give the proceeds as a premium to the ironmaster. The protective effect would be the same. Foreign iron would in this case be equally excluded; for our ironmaster can now sell his iron at seven francs, which, with the five francs premium, would make up to him the remunerative price of twelve francs. But with home iron at seven francs the foreigner could not sell his for eight, which by the supposition is his lowest remunerative price.

Between these two modes of going to work, I can see only one difference. The principle is the same; the effect is the same; but in the one, certain individuals pay the price of protection; in the other, it is paid for by the nation at large.