Part 15

Here, methinks, I hear the enthusiasts exclaim, _How! the fertility of the land is then of no advantage, but to its greedy owners!_—I am in hopes that before I conclude this Pamphlet, I shall be able to find, to the great satisfaction of all good men, how many advantages remain in the hands of the most opulent land proprietor; nay I hope to prove that in a fertile land there is nothing lost to any of its inhabitants, unless _extraordinary efforts be used to concenter within that spot the general benefit which must result from it_. I shall content myself at present with requesting the reader to compare my thoughts on the taxes, with the two following problems, so often debated both in _England_ and in _France_. How is it that _France_ has constantly retrieved her errors and her misfortunes? How comes it that _England_ has not yet sunk under the burden of her taxes? The _French_ exciseman says: _It is because the more the people are loaded, the better they walk_; and very sensible men in _England_ used to say, “_Reason and experience_ seem to prove that taxes stimulate industry, and that the poor, _to live as well as before, perform more work without demanding more for their labour_.” (_D. Hume_’s Essay VIII. on Taxes). It seems to me that the above two problems are more humanely solved by the reasons I have produced, and that those reasons destroy all idea of a miracle, or of the necessity of loading the people in order to spur their industry, and encourage them to work: on the contrary, to forward those two great points, it is necessary to increase the price of their labour in the same proportion as that of its products is raised by the taxes; and this will suffice to render evidently _null_ the burden of all taxes whatever.

_Further Considerations on the Necessity of a Correspondence between the Prices of Agriculture and those of Industry._

I have said it more than once, and beg leave to repeat it here: Let any essential object be denoted by one number or another; it is a matter of perfect indifference, provided the numbers intended to denote the _mass_ of objects corresponding thereto, do not present any ideas contrary to the proportion of labour which exists between the _essential object_, and the mass which is to form its balance. Thus then, be the value of wheat, which serves as the general standard, because it is useful to all, at all times, and which ought to be so, from another consideration almost equally powerful, namely, that it constitutes about one third of the landed revenue in _Europe_—be its value, I say, denominated 30, 50, or 25, nothing more indifferent, provided the numbers denoting the value of the other products of land and industry, keep exactly, either by more or by less, within the same proportion; it is clear that, in such a case, neither the land proprietor nor the _capitalist_ of industry, can undergo from the alteration in the numbers, any real alteration in their circumstances. But to think of nothing but the manufactures, and imagine it possible to maintain, and endeavour seriously to maintain, wheat at the same price, whilst the taxes advance by 10 _per cent._ that of the products of industry,—is to aim at the ruin of agriculture, and to oblige all the proprietors of land and money, whose employments in the State would not indemnify them for such an injustice, to go in search of another country, where the manufacturer, better acquainted with his real interest, would know, or act as if he knew, that the solidity of his wealth is inseparable from that of the land proprietor, and from the ease of the proprietor of money, and of the labouring man.

_Then_ perhaps those national manufacturers, so proud and so jealous of their exportations, so greedy of premiums, prohibitions, restrictions, encouragements of all kinds, would sue more ardently to have those nuisances suppressed, than they ever did for their establishment.

Nothing more admirable than those regulations to which _England_ acknowledges to be indebted for the best part of her wealth and power; but they crept in at a time when ignorance generally prevailed, when all the other parts of _Europe_ had almost no idea either of the principle of commerce, or of its influence over all the other resources of society. In effect, from what known point could one then start, to imagine that a nation, who openly countenances monopoly at home, in order to encourage her foreign trade, lays the most solid basis for the monopoly she wishes to secure to herself every where? How was it possible to conceive that the _Dutch_, a nation so necessary to those that are deficient in means, and so forcibly compelled by the superabundance of their own, to make them serviceable to those who stand in need of them, could not be shut out from the _English_ ports, without depriving the rest of _Europe_ of the advantage, which their admittance every where was necessarily calculated to procure to their correspondents, by securing to them, _as well as to England_, a competition so essential to all, and fatal to monopoly alone? _Europe_, busy at that time in search of another sort of equilibrium, did not consider what weight commerce, carried on upon such principles, would throw into one of the scales; how could _Europe_ then suspect that it would overthrow the balance entirely? But what is the final result of all these projects against Nature?—The pretensions of the Ecclesiastical State stirred up all _Europe_; _and the Pontifical See was fixed in its proper place_. _France_ roused all _Europe_ against the ambition of the House of _Austria_, much more formidable by its real power; _the Imperial Throne was fixed in its proper place_, and _France_ was hailed as the founder and assertor of _European_ liberties. Soon after the Protectress became a despot; _England_ stirred up all _Europe_ against her, and _France was, aukwardly, thrown out of her proper place_; _England_, the principal instrument of the revolution, made an improper use of her importance, as had been successively done by the Ecclesiastical Power, the House of _Austria_, and by _France_;—the Armed Neutrality appeared, and presented a code of laws unheard of before; it was just; every nation, that had not bowed beneath the _English_ yoke, adopted it:—there was an instant, when this armed neutrality might have dictated both to _England_ and _France_, laws as equitable as the code itself; and all _Europe_ would have applauded, had even _England_ and _France_ united, at that very instant, to exterminate in concert the whole naval force of _Europe_, then burnt the exterminating fleets, and themselves given to all the world those very laws of equity which were intended to be imposed upon them.

Every thing, at this moment, is in that happy state, which gives time to reflect upon what is past, to see what is present, to look forwards to what is to come, and to consider an _ensemble_, the very idea of which could not be admitted during former periods. A few clouds, dispersed here and there, do not spoil the beauty of the horizon; no body can now, for any length of time, think it his interest to ruin and destroy; and every body is concerned not to suffer any thing to be destroyed. I return to my subject, if I may be said to have deviated from it.

If a diminution in the price of the necessaries of life be looked upon as so very important, there exists a sure method of effecting it, even in _England_, without any detriment to the land proprietor. Let us see whether this very method would prove injurious to the true interest of the manufacturer, who must be patronised, cherished as the fountain head of riches; I mean that kind of riches called _money_, which could not long subsist without the riches called _wheat_.

_Fourteenth Hypothesis._

Let us suppose, that, by the suppression of the monopoly enjoyed by the manufacturers, and of which they are so jealous, the price of the whole of their goods should fall one tenth; in such a case, the wheat which the new taxes will enhance in price, I suppose, in the proportion of 40 to 44, would, upon a medium, fall back to 40; and in this case again the produce of the manufactories would only cost industry 20 instead of 22, at which they will be rated when wheat shall have risen from 40 to 44; for, in the latter supposition, it will be necessary for industry to pay finally this increase of expence, in favour of the artificers, who would not long submit to an injustice, without presenting _petitions_ in their own way: just as wheat must indispensably rise from 40 to 44, in order that the land and money-proprietors be not compelled to leave their country, to the great prejudice of the internal consumption, so essential to the truest interest of the manufacturer.

Let it then be supposed, that wheat should fall from 44 to 40, and so of all the rest;—I confess that the proprietor of money would thereby become a gainer, and that the general persuasion is, that it is salutary he should lose: but would he long support his gain? Would not the encouragement which every thing must derive from this new order of things, from that activity which trade would find in the new channels that would open every day, when commerce should build on that true principle, acknowledged to be the only unerring one, _the exchange of commodities_, (excepting the bullion required for the five articles before mentioned)—would not that activity, I say, that encouragement, inspire in all parts of _Europe_ an eagerness for labour, necessarily followed by an increase of _real_ wealth, a creation of new productions, and by an increase of that _imaginary_ wealth, still more stimulating than the former, because it is its proof and its pledge, but which cannot be obtained without a general increase in all the prices?

Will it be said, that, on the first moment, the fall of prices would affect the intellects of those who can only see, but never compare? that the people, for instance, would lament their being reduced to 10, from the 12 they had been accustomed for some days to receive, although they should pay only 5 for what cost them 6 before? In this case, keep up the prices, but without exception, and export on the true principles of exportation: take for your guide the example set up by my countryman, the _American_ of _Philadelphia_, in selling dearer because you are compelled to do so; propose to buy dearer also, and this will be only an act of justice; you will see hereafter that you would at last be just, in spite of yourselves; be so intentionally: you cannot come down to the price of your purchasers; raise their prices to a level with your own, they will observe that even the first profit is not the lot of the first bidder, if every one doing justice to himself bids in proportion: mean while, the eagerness for labour goes on increasing, and by little and little the benefit extends to the lowest wretch that dwells in the community; he finds more work to do, and a greater reward for it.

It will be said no doubt, that this is another supposition of a general agreement.—No, certainly not; it is enough for every one to see that it must be so; that it will happen without any other help than the private interest of each individual; that these private and niggardly measures, already taken, or to be taken, in order to prevent the result of all those personal interests, are of no use but to keep justice at a distance; to multiply the number of injuries which daily take place, till what must be, comes to pass; to produce a greater evil, where it might be less; to substitute _forced_, to _necessary_ prices: but it is so evident that wheat, and all the productions of the earth, should increase by one tenth, as soon as the taxes, or an accession of wealth, shall increase by one tenth the price of the products of industry, that it is necessary to lay this principle as the basis of all regulations, _or else openly to adopt as a maxim, that agriculture should be sacrificed to industry_.

This maxim, I set forth of the correspondence required between the prices, together with the inconvenience of having them too much out of proportion with those of other nations, militates, it is true, against that monstrous system of prohibitions, corporations, &c. which is the only burden entailed upon us by our forefathers, _the only burden_ which the present legislatures can transmit to posterity; but although it might be an absurdity to suppose a reform as sudden as it would be advantageous, yet would it be less absurd to suppose that, the evil being once found out, the remedy will constantly be rejected? Would it be less absurd to suppose, that the manufacturers, better acquainted with their real interests, will persist in endeavouring to aggravate the evil, instead of complying with the only means of retrieving it? Would it be less absurd to suppose, that each of them will never perceive that he pays for the privilege of ransoming in his branch of industry, by the disadvantage of being himself ransomed on a thousand other objects? _Russia_, 30 years ago, was perhaps more distant from her present state, than the unmasking of monopoly, and the knowledge of its effects, will be from its extirpation.

_On a Cause little suspected of high Prices._

I am not ashamed to own the prejudice I entertain against a diminution in the price of any thing whatever, when I observe that discouragement, at least in the part affected, would be the consequence of such a diminution; whilst, on the contrary, a gradual, general, and proportioned advance in the prices of every thing, is constantly followed by a greater activity in all the branches of labour, which really increases the quantity of its productions, in a proportion far superior to the advance on that imaginary, _nominal_ value, acquired by fermentation; my intention, therefore, cannot be to declaim against one of the most potent causes of the high prices prevailing in _England_, and which nobody, I think, has yet mentioned. This last expression shews, that I do not mean here, that quantity of paper-money, to which many people, in more than one kingdom, ascribe all the evil, of which the sole real part is the work of monopoly. I think I have proved, that it is impossible there should long remain in circulation any paper above the necessary quantity: all would flock to the Bank to be paid in cash, had not the Bank enough of it to discharge her notes, when presented, with such readiness as to leave no doubt of the validity of those other notes, which, in the natural course of things, would not be presented there to be paid in money. The Bank would derive very little advantage from the momentary cheat of paying off large sums in sixpences; this legerdemain is admirable, but can suffice only to correspond to the wanton tricks sometimes played by great politicians, to give the Bank a momentary trouble. It is, _then_, necessary to rock those children, whom great men make it their amusement to scare; and they must be rocked till they are fast asleep, or till the great men are tired of making faces at them. After the farce is over, the children wake, and do not even remember to have been frightened; money is found wherever it is necessary, and every thing returns to that order which it is every one’s interest to maintain.

What then is that other cause, so active, so cogent, not of that extravagant price which monopoly alone can occasion, but of that price rather above the _necessary_ one, which gives to every thing an increase of vigour? It is credit. It is that prodigious talisman which realises all that it conceives, since all that it conceives has the same advantage as reality. How many capitals would never have existed, had not credit supposed them several years before they did really exist? How fill up the real chasm of capitals, which may, in an instant, suspend a hundred manufactories in a kingdom, and, by that suspension, ruin, starve, the trader, the merchant, the manufacturer, the mechanic, all, except the farmer, whether proprietor or tenant, who, by the counter-blow, could not die of hunger, but in real misery on his stacks of wheat, which he would no longer attempt to reproduce.

That man is ignorant of his own value, who, pen in hand, weighs, calculates, measures time, distances, expenditure, obstacles, facilities, occurrences; and whose signature, on account of the supposed exactness of his combinations, will soon after produce, at two or three hundred leagues distance, and in fifty places on the road, the same effect which would have resulted from the real possession of the object of which this signature is the pledge. If he shares with all those whom he makes easy, re-animates, or puts in action, the benefit which they derive from the speed, as well as from the supposed certainty of his operations, undoubtedly no one will dispute his title to the reward; and yet we shall see presently, that this medal is not without its reverse, _supposing an advance in prices to be an inconvenience_.

I shall apply the principle to a fact very well known in _England_.

In the year 1762, about 2000_l._ sterling, carried to the island of _Grenada_, was there received with that veneration due to gold when we have been years without seeing any, and have not yet forgot its virtues.

The above sum regulated the markets; coffee was set up at eight or ten pence _per_ pound; sugars sold _per_ quintal thirty or forty shillings currency; the inhabitants were in perfect ecstacy: I shall say nothing of the device practised in order to _hook in_, by means of those 2000_l._ about thirty times the value of that sum, and yet satisfy every body: that is foreign to my subject; but I will say, with pleasure, that an honest gentleman, moved at the distressed situation of another who was dunned by merciless creditors, gave him in hard cash a trifling part of the sum he wanted, and for the remainder furnished him with his own bills of exchange on _London_, assuring him that those to whom they might be presented would take them for cash without any demur. Those bills had fully the promised effect; the same gentleman obliged several other persons; the benefactor soon met with competitors, all difficulties disappeared by means of scraps of paper on _London_, and the debtor who, on the landing of the precious metal, had deemed himself too lucky to sell his coffee at ten-pence and his sugar at 40 shillings, now offered impudently his bill on _London_, indorsed by some patron, if a creditor refused to give him 45 shillings for his sugar, and twelve-pence for his coffee.

Gold, attracted by the first homage paid to it, came in plenty, and fell in value by the establishment of credit; it afterwards took another course, and went, no doubt, somewhere else to supply the want of credit, and pave the way to it. From that moment very little money came to _Grenada_, and no one ever wished for more; but then the price of commodities was advanced, and the readiness with which goods, to the amount of several thousand pounds sterling, were delivered to such a planter as, six months before, would not have presumed to demand the sixth part of them, did not permit him to start any objection against the prices set on the goods he stood in need of, when he thought himself indemnified for the excess in those prices, by that at which his were rated, _and by the time granted him to make good his payments_. The _Grenadians_ abused this credit, as they did in _Scotland_, and unfortunately at the same period. But this is not the matter in point; the present object is, that the establishment of credit in _Grenada_ enhanced the price of every thing there, and that the encouragement and activity resulting from that increase doubled, in the space of six years, the real quantity of the products in that colony, whilst credit had, in the end, increased its nominal value hardly one tenth. In 1764 the exports of _Grenada_ amounted to 206,889_l._; in 1770, they were at 433,421_l._; two years after, they rose as high as 492,974_l._: it may be added, that in _England_, thanks to the extension of that miracle wrought by credit, the benefit arising from those new products, and the necessity of furnishing the balance thereof in merchandise, propagated, if I may be allowed the expression, from county to county, the necessary means of _consuming_, that is to say, of _realising_, that augmentation of wealth, whose price was constantly kept up by the additional consumption of all kinds which followed it: such is the usual chain.