Part 5

I frankly avow my predilection for the second mode. It appears to me more just, more economical, and more honourable; more just, because if society desires to give largesses to some of its members, all should contribute; more economical, because it would save much expense in collecting, and get us rid of many restrictions; more honourable, because the public would then see clearly the nature of the operation, and act accordingly.

But if the protectionist system had taken this form, it would have been laughable to hear men say, "We pay heavy taxes for the army, for the navy, for the administration of justice, for public works, for the university, the public debt, etc.--in all exceeding a milliard [£40,000,000 sterling]. For this reason, the State should take another milliard from us, to relieve these poor ironmasters, these poor shareholders in the coal-mines of Anzin, these unfortunate proprietors of forests, these useful men who supply us with cod-fish."

Look at the subject closely, and you will be satisfied that this is the true meaning and effect of the sophism we are combating. It is all in vain; you cannot _give money_ to some members of the community but by taking it from others. If you desire to ruin the tax-payer, you may do so. But at least do not banter him by saying, "In order to compensate your losses, I take from you again as much as I have taken from you already." To expose fully all that is false in this sophism would be an endless work. I shall confine myself to three observations. You assert that the country is overburdened with taxes, and on this fact you found an argument for the protection of certain branches of industry. But we have to pay these taxes in spite of protection. If, then, a particular branch of industry presents itself, and says, "I share in the payment of taxes; that raises the cost price of my products, and I demand that a protecting duty should also raise their selling price," what does such a demand amount to? It amounts simply to this, that the tax should be thrown over on the rest of the community. The object sought for is to be reimbursed the amount of the tax by a rise of prices. But as the Treasury requires to have the full amount of all the taxes, and as the masses have to pay the higher price, it follows that they have to bear not only their own share of taxation but that of the particular branch of industry which is protected. But we mean to protect everybody, you will say. I answer, in the first place, that that is impossible; and, in the next place, that if it were possible, there would be no relief. I would pay for you, and you would pay for me; but the tax must be paid all the same.

You are thus the dupes of an illusion. You wish in the first instance to pay taxes in order that you may have an army, a navy, a church, a university, judges, highways, etc., and then you wish to free from taxation first one branch of industry, then a second, then a third, always throwing back the burden upon the masses. You do nothing more than create interminable complications, without any other result than these complications themselves. Show me that a rise of price caused by protection falls upon the foreigner, and I could discover in your argument something specious. But if it be true that the public pays the tax before your law, and that after the law is passed it pays for protection and the tax into the bargain, truly I cannot see what is gained by it.

But I go further, and maintain that the heavier our taxes are, the more we should hasten to throw open our ports and our frontiers to foreigners less heavily taxed than ourselves. And why? In order to throw back upon them a greater share of our burden. Is it not an incontestable axiom in political economy that taxes ultimately fall on the consumer? The more, then, our exchanges are multiplied, the more will foreign consumers reimburse us for the taxes incorporated and worked up in the products we sell them; whilst we in this respect will have to make them a smaller restitution, seeing that their products, according to our hypothesis, are less heavily burdened than ours.

In fine, have you never asked yourselves whether these heavy burdens on which you found your argument for a prohibitory régime are not caused by that very régime? If commerce were free, what use would you have for your great standing armies and powerful navies?.... But this belongs to the domain of politics.

Et ne confondons pas, pour trop approfondir, Leurs affaires avec les nôtres.

VI. BALANCE OF TRADE.

Our adversaries have adopted tactics which are rather embarrassing. Do we establish our doctrine? They admit it with the greatest possible respect. Do we attack their principle? They abandon it with the best grace in the world. They demand only one thing--that our doctrine, which they hold to be true, should remain relegated in books, and that their principle, which they acknowledge to be vicious, should reign paramount in practical legislation. Resign to them the management of tariffs, and they will give up all dispute with you in the domain of theory.

"Assuredly," said M. Gauthier de Rumilly, on a recent occasion, "no one wishes to resuscitate the antiquated theories of the balance of trade." Very right, Monsieur Gauthier, but please to remember that it is not enough to give a passing slap to error, and immediately afterwards, and for two hours together, reason as if that error were truth.

Let me speak of M. Lestiboudois. Here we have a consistent reasoner, a logical disputant. There is nothing in his conclusions which is not to be found in his premises. He asks nothing in practice, but what he justifies in theory. His principle may be false; that is open to question. But, at any rate, he has a principle. He believes, and he proclaims it aloud, that if France gives ten, in order to receive fifteen, she loses five; and it follows, of course, that he supports laws which are in keeping with this view of the subject "The important thing to attend to," he says, "is that the amount of our importations goes on augmenting, and exceeds the amount of our exportations--that is to say, France every year purchases more foreign products, and sells less of her own. Figures prove this. What do we see? In 1842, imports exceeded exports by 200 millions. These facts appear to prove in the clearest manner that national industry _is not sufficiently protected_, that we depend upon foreign labour for our supplies, that the competition of our rivals _oppresses_ our industry. The present law appears to me to recognise the fact, which is not true according to the economists, that when we purchase we necessarily sell a corresponding amount of commodities. It is evident that we can purchase, not with our usual products, not with our revenue, not with the results of permanent labour, but with our capital, with products which have been accumulated and stored up, those intended for reproduction--that is to say, that we may expend, that we may dissipate, the proceeds of anterior economies, that we may impoverish ourselves, that we may proceed on the road to ruin, and consume entirely the national capital. _This is exactly what we are doing. Every year we give away 200 millions of francs to the foreigner_."

Well, here is a man with whom we can come to an understanding. There is no hypocrisy in this language. The doctrine of the balance of trade is openly avowed. France imports 200 millions more than she exports. Then we lose 200 millions a year. And what is the remedy? To place restrictions on importation. The conclusion is unexceptionable.

It is with M. Lestiboudois, then, that we must deal, for how can we argue with M. Gauthier? If you tell him that the balance of trade is an error, he replies that that was what he laid down at the beginning. If you say that the balance of trade is a truth, he will reply that that is what he proves in his conclusions.

The economist school will blame me, no doubt, for arguing with M. Lestiboudois. To attack the balance of trade, it will be said, is to fight with a windmill.

But take care. The doctrine of the balance of trade is neither so antiquated, nor so sick, nor so dead as M. Gauthier would represent it, for the entire Chamber--M. Gauthier himself included--has recognised by its votes the theory of M. Lestiboudois.

I shall not fatigue the reader by proceeding to probe that theory, but content myself with subjecting it to the test of facts.

We are constantly told that our principles do not hold good, except in theory. But tell me, gentlemen, if you regard the books of merchants as holding good in practice? It appears to me that if there is anything in the world which should have practical authority, when the question regards profit and loss, it is commercial accounts. Have all the merchants in the world come to an understanding for centuries to keep their books in such a way as to represent profits as losses, and losses as profits? It may be so, but I would much rather come to the conclusion that M. Lestiboudois is a bad economist.

Now, a merchant of my acquaintance having had two transactions, the results of which were very different, I felt curious to compare the books of the counting-house with the books of the Customhouse, as interpreted by M. Lestiboudois to the satisfaction of our six hundred legislators.

M. T. despatched a ship from Havre to the United States, with a cargo of French goods, chiefly those known as _articles de Paris_, amounting to 200,000 francs. This was the figure declared at the Customhouse. When the cargo arrived at New Orleans it was charged with 10 per cent, freight and 30 per cent, duty, making a total of 280,000 francs. It was sold with 20 per cent, profit, or 40,000 francs, and produced a total of 320,000 francs, which the consignee invested in cottons. These cottons had still for freight, insurance, commission, etc., to bear a cost of 10 per cent. so that when the new cargo arrived at Havre it had cost 352,000 francs, which was the figure entered in the Customhouse books. Finally M. T. realized upon this return cargo 20 per cent, profit, or 70,400 francs; in other words, the cottons were sold for 422,400 francs.

If M. Lestiboudois desires it, I shall send him an extract from the books of M. T. He will there see _at the credit_ of the _profit and loss_ account--that is to say, as profits--two entries, one of 40,000, another of 70,400 francs, and M. T. is very sure that his accounts are accurate.

And yet, what do the Customhouse books tell M. Lestiboudois regarding this transaction? They tell him simply that France exported 200,000 francs' worth, and imported to the extent of 352,000 francs; whence the honourable deputy concludes "_that she had expended, and dissipated the profits of her anterior economies, that she is impoverishing herself that she is on the high road to ruin, and has given away to the foreigner 152,000 francs of her capital_."

Some time afterwards, M. T. despatched another vessel with a cargo also of the value of 200,000 francs, composed of the products of our native industry. This unfortunate ship was lost in a gale of wind after leaving the harbour, and all M. T. had to do was to make two short entries in his books, to this effect:--

"_Sundry goods debtors to X_, 200,000 francs, for purchases of different commodities despatched by the ship N.

"_Profit and loss debtors to sundry goods_, 200,000 francs, in consequence of _definitive and total loss_ of the cargo."

At the same time, the Customhouse books bore an entry of 200.000 francs in the list of _exportations_; and as there was no corresponding entry to make in the list of _importations_, it follows that M. Lestiboudois and the Chamber will see in this shipwreck _a clear and net profit_ for France of 200,000 francs.

There is still another inference to be deduced from this, which is, that according to the theory of the balance of trade, France has a very simple means of doubling her capital at any moment. It is enough to pass them through the Customhouse, and then pitch them into the sea. In this case the exports will represent the amount of her capital, the imports will be _nil_, and even impossible, and we shall gain all that the sea swallows up.

This is a joke, the protectionists will say. It is impossible' we could give utterance to such absurdities. You do give utterance to them, however, and, what is more, you act upon them, and impose them on your fellow-citizens to the utmost of your power.

The truth is, it would be necessary to take the balance of trade _backwards [au rebours]_, and calculate the national profits from foreign trade by the excess of imports over exports. This excess, after deducting costs, constitutes the real profit. But this theory, which is true, leads directly to free trade. I make you a present of it, gentlemen, as I do of all the theories in the preceding chapters. Exaggerate it as much as you please--it has nothing to fear from that test. Suppose, if that amuses you, that the foreigner inundates us with all sorts of useful commodities without asking anything in return, that our imports are _infinite_ and exports _nil_, I defy you to prove to me that we should be poorer on that account.

VII. OF THE MANUFACTURERS

OF CANDLES, WAX-LIGHTS, LAMPS, CANDLESTICKS, STREET LAMPS, SNUFFERS, EXTINGUISHERS, AND OF THE PRODUCERS OF OIL, TALLOW, ROSIN, ALCOHOL, AND, GENERALLY, OF EVERYTHING CONNECTED WITH LIGHTING.

To Messieurs the Members of the Chamber of Deputies.

Gentlemen,--You are on the right road. You reject abstract theories, and have little consideration for cheapness and plenty Your chief care is the interest of the producer. You desire to emancipate him from external competition, and reserve the _national market for national industry_.

We are about to offer you an admirable opportunity of applying your--what shall we call it? your theory? No; nothing is more deceptive than theory; your doctrine? your system? your principle? but you dislike doctrines, you abhor systems, and as for principles, you deny that there are any in social economy: we shall say, then, your practice, your practice without theory and without principle.

We are suffering from the intolerable competition of a foreign rival, placed, it would seem, in a condition so far superior to ours for the production of light, that he absolutely _inundates our national market_ with it at a price fabulously reduced. The moment he shows himself, our trade leaves us--all consumers apply to him; and a branch of native industry, having countless ramifications, is all at once rendered completely stagnant. This rival, who is no other than the Sun, wages war to the knife against us, and we suspect that he has been raised up by _perfidious Albion_ (good policy as times go); inasmuch as he displays towards that haughty island a circumspection with which he dispenses in our case.

What we pray for is, that it may please you to pass a law ordering the shutting up of all windows, sky-lights, dormer-windows, outside and inside shutters, curtains, blinds, bull's-eyes; in a word, of all openings, holes, chinks, clefts, and fissures, by or through which the light of the sun has been in use to enter houses, to the prejudice of the meritorious manufactures with which we flatter ourselves we have accommodated our country,--a country which, in gratitude, ought not to abandon us now to a strife so unequal.

We trust, Gentlemen, that you will not regard this our request as a satire, or refuse it without at least previously hearing the reasons which we have to urge in its support.

And, first, if you shut up as much as possible all access to natural light, and create a demand for artificial light, which of our French manufactures will not be encouraged by it?

If more tallow is consumed, then there must be more oxen and sheep; and, consequently, we shall behold the multiplication of artificial meadows, meat, wool, hides, and, above all, manure, which is the basis and foundation of all agricultural wealth.

If more oil is consumed, then we shall have an extended cultivation of the poppy, of the olive, and of rape. These rich and exhausting plants will come at the right time to enable us to avail ourselves of the increased fertility which the rearing of additional cattle will impart to our lands.

Our heaths will be covered with resinous trees. Numerous swarms of bees will, on the mountains, gather perfumed treasures, now wasting their fragrance on the desert air, like the flowers from which they emanate. No branch of agriculture but will then exhibit a cheering development.

The same remark applies to navigation. Thousands of vessels will proceed to the whale fishery; and, in a short time, we shall possess a navy capable of maintaining the honour of France, and gratifying the patriotic aspirations of your petitioners, the undersigned candlemakers and others.

But what shall we say of the manufacture of _articles de Paris?_ Henceforth you will behold gildings, bronzes, crystals, in candlesticks, in lamps, in lustres, in candelabra, shining forth, in spacious warerooms, compared with which those of the present day can be regarded but as mere shops.

No poor _resinier_ from his heights on the seacoast, no coalminer from the depth of his sable gallery, but will rejoice in higher wages and increased prosperity.

Only have the goodness to reflect, Gentlemen, and you will be convinced that there is, perhaps, no Frenchman, from the wealthy coalmaster to the humblest vender of lucifer matches, whose lot will not be ameliorated by the success of this our petition.

We foresee your objections, Gentlemen, but we know that you can oppose to us none but such as you have picked up from the effete works of the partisans of free trade. We defy you to utter a single word against us which will not instantly rebound against yourselves and your entire policy.

You will tell us that, if we gain by the protection which we seek, the country will lose by it, because the consumer must bear the loss.

We answer:

You have ceased to have any right to invoke the interest of the consumer; for, whenever his interest is found opposed to that of the producer, you sacrifice the former. You have done so for the purpose of _encouraging labour and increasing employment_. For the same reason you should do so again.

You have yourselves obviated this objection. When you are told that the consumer is interested in the free importation of iron, coal, corn, textile fabrics--yes, you reply, but the producer is interested in their exclusion. Well, be it so;--if consumers are interested in the free admission of natural light, the producers of artificial light are equally interested in its prohibition.

But, again, you may say that the producer and consumer are identical. If the manufacturer gain by protection, he will make the agriculturist also a gainer; and if agriculture prosper, it will open a vent to manufactures. Very well; if you confer upon us the monopoly of furnishing light during the day,--first of all, we shall purchase quantities of tallow, coals, oils, resinous substances, wax, alcohol--besides silver, iron, bronze, crystal--to carry on our manufactures; and then we, and those who furnish us with such commodities, having become rich will consume a great deal, and impart prosperity to all the other branches of our national industry.

If you urge that the light of the sun is a gratuitous gift of nature, and that to reject such gifts is to reject wealth itself under pretence of encouraging the means of acquiring it, we would caution you against giving a death-blow to your own policy. Remember that hitherto you have always repelled foreign products, because they approximate more nearly than home products to the character of gratuitous gifts. To comply with the exactions of other monopolists, you have only _half a motive_; and to repulse us simply because we stand on a stronger vantage-ground than others would be to adopt the equation, + x + = -; in other words, it would be to heap _absurdity upon absurdity_.

Nature and human labour co-operate in various proportions (depending on countries and climates) in the production of commodities. The part which nature executes is always gratuitous; it is the part executed by human labour which constitutes value, and is paid for.

If a Lisbon orange sells for half the price of a Paris orange, it is because natural, and consequently gratuitous, heat does for the one, what artificial, and therefore expensive, heat must do for the other.

When an orange comes to us from Portugal, we may conclude that it is furnished in part gratuitously, in part for an onerous consideration; in other words, it comes to us at _half-price_ as compared with those of Paris.

Now, it is precisely the _gratuitous half_ (pardon the word) which we contend should be excluded. You say, How can natural labour sustain competition with foreign labour, when the former has all the work to do, and the latter only does one-half, the sun supplying the remainder? But if this half being gratuitous, determines you to exclude competition, how should the whole, being gratuitous, induce you to admit competition? If you were consistent, you would, while excluding as hurtful to native industry what is half gratuitous, exclude _a fortiori_ and with double zeal, that which is altogether gratuitous.

Once more, when products such as coal, iron, corn, or textile fabrics, are sent us from abroad, and we can acquire them with less labour than if we made them ourselves, the difference is a free gift conferred upon us. The gift is more or less considerable in proportion as the difference is more or less great. It amounts to a quarter, a half, or three-quarters of the value of the product, when the foreigner only asks us for three-fourths, a half, or a quarter of the price we should otherwise pay. It is as perfect and complete as it can be, when the donor (like the sun in furnishing us with light) asks us for nothing. The question, and we ask it formally, is this, Do you desire for our country the benefit of gratuitous consumption, or the pretended advantages of onerous production? Make your choice, but be logical; for as long as you exclude as you do, coal, iron, com, foreign fabrics, in proportion as their price approximates to zero, what inconsistency would it be to admit the light of the sun, the price of which is already at _zero_ during the entire day!

VIII. DIFFERENTIAL DUTIES.