Part 20

Independent of the advantages which would arise from a truly free and judicious system of commerce, viz. 1st, That of procuring what we have not, by means of some article which we have in abundance, and which our neighbours want;—2dly, The bartering of the superfluity of our best articles in one kind, for the superfluity of what is best in a different kind;—3dly, Not to barter what we can make cheaper than others, except for goods which would cost us more were we to manufacture them;—independent, I say, of these three, advantages, where would be the inconvenience, though our bartering should be confined merely to the innocent folly of exchanging one toy for another, or one rag for another? The great, the true, the only advantage, of an exchange of property, would not even in this case be lost to mankind; the man who is employed only in marking the game, while two persons are amusing themselves, whole days, in tossing a ball from one to the other in a tennis-court, is nevertheless supported at the expence of the players. And are not the owner of the court, his wife and children, maintained likewise at their cost? If, having considered the Exchequer metaphorically, under the type of the Keeper of the Tennis Court, we afterwards, without a metaphor, consider this Keeper as a poor man who chooses this way of subsistence, do not the players pay this tax (which they impose on themselves) in favour of the poor, with more pleasure, though the tax may be greater, than a certain other tax, which perhaps becomes necessary, only from the difficulties with which we embarrass both the game of passing from one parish to another, and the game of imports and exports, which is as innocent, and more lucrative than that of tennis?

_The nominal Value of the generality of Exports, considered in different Periods, and with respect to its Effect on foreign Correspondence._

When a manufacturer is compelled, by the general augmentation of prices, arising from taxation, to pay his workmen and materials ten _per cent._ I suppose, dearer than usual, and he exports 1000 hats, _upon each of which_ a draw-back of 6 shillings, I will suppose, is allowed him on exportation, he does not reflect on the difference of 10 _per cent._ diffused through the general run of prices, by the mechanical reaction of the total of the taxes on all that is not taxed; he remembers well the effect of this reaction in the account which he makes out for himself, to know at what rate he must in future sell his hats in foreign markets; he only considers the draw-back, the remittance of the 6 shillings duty, and concludes that it puts him in a situation to deal with foreigners on the same terms as he did previous to the taxes, which have increased every thing to the amount of 10 _per cent_. Nevertheless, the thousand hats, with which, previous to the taxes, he furnished his foreign friends for 1000_l._ I will suppose, are now raised to 1200_l._—Point out this circumstance to him, he will tell you he cannot sell his hats cheaper, and that foreigners must pay 1200_l._ instead of 1000_l._ since the foreigner wants them. “Besides, (says he) what is the sum of two hundred pounds more, divided among a thousand persons, who will purchase the hats from the merchant abroad, to whom he sells them?” The manufacturer does not want to look further; and the writer who from the nature of his subject, or his manner of considering it, wants only to reflect a little more, will only add, _Thus it is that foreigners pay our taxes, and never suspect that they do so_. This is the truth, but not the whole truth. I shall endeavour to find it out.

The general trade of _England_ with the rest of _Europe_ is not confined to some thousands of pounds sterling, to be settled once for all; it is an immense sum, _which must_ be renewed every year. Let us begin by being thoroughly convinced of this necessity, in order to submit to its consequences: we shall find moreover that these consequences are not destructive.

The annual exports of _England_ amount to about a fifth of the products of her industry, and consequently represent about a fifth of the labour of her artificers.

If the taxes, after the war of 1755, had raised the price of every thing at the rate of 10 _per cent._ (I can err but by a little more or less) the total of her exports, which, before that war, amounted, on a medium of ten years, (see Sir _Charles Whitworth_) only to a sum of 12,776,614 pounds sterling, let us say 13 millions, amounted, after the peace, to 14 millions 300 thousand.

Let us now suppose the trade of _England_ exhibiting to its foreign correspondents, in the year 1762, this total in exports of 13 millions (at the old prices) under the name of 14 millions 300 thousand pounds, (a price rendered unavoidable by the advance in the prices of all commodities, on account of the taxes); and let us suppose these correspondents to have, really and annually, no more to pay them than 13 millions of their own manufactures, indicated by this modest number, because they had not the honour to support, during seven years, a war the most brilliant and successful in the memory of man, in _Germany_, _America_, and _India_. I think one of the three following consequences must be the result:

_Either_

That the total of _English_ exports must have been reduced from 14 millions 300 thousand pounds to 13 millions, for want of means in our foreign buyers to pay the whole amount of _English_ exports at their advanced price:

_Or_,

That _England_ must have been complaisant enough to call 13 millions, in a foreign market, the amount of her exports, which the effects of her new taxes obliged her to call 14 millions 300 thousand pounds at home:

_Or_,

That _England_ must have allowed her foreign connexions to call 14 millions 300 thousand pounds the same quantity and quality of their manufactures, which, before the effect of _English_ taxation, they called only 13 millions, and which, _till then_, had made the balance of what they imported from _England_.

In the first case, the _English_ manufactories, which furnish the exports, would have been necessarily reduced one tenth; upon which it is necessary to observe, that the tenth of the _English_ exportation makes a fiftieth of the total value of the product of her industry, and that the inutility of the fiftieth of those products, occasioned by the impossibility of their being purchased by foreigners at the price occasioned by the _English_ new taxes, must have deprived of subsistence, as well as of employment, a fiftieth of the _English_ artisans, and rendered useless a fiftieth of the capitals appropriated to exportation.

In the second case, the prices of commodities would not be perceptibly increased any where else but in _England_; the prices of her correspondents would have been, ten years after the peace, almost as they were in 1754.

In the third case, the prices would have increased, among the foreign correspondents of the _English_, nearly in the same proportion as in _England_.

The first case is evidently false, since Sir _Charles Whitworth_’s _Statements_ prove that the exports of _England_, which amounted, as we have before observed, upon a medium of 10 years before the war, only to 12 millions 776,614 pounds sterling, amounted, upon a medium of 10 years after the peace, to 14 millions 921,067 pounds sterling, and even to 15 millions 11,211 pounds sterling, if we take a medium of 12 years from the peace to 1773, at which period Sir _Charles Whitworth_’s _Statements_ conclude; (which exhibits, _independently of the nominal augmentation supposed to have been occasioned by the taxes_, a _real_ augmentation of about a 17th, notwithstanding _the real vacuum owing to the loss of those men who would have increased this exportation, if they had not perished in ~Germany~, ~India~, ~America~, and at sea_.)

The second case is more universally acknowledged to be false, since there is not a single country in _Europe_ where the price of every thing has not, upon a medium, increased at least 10 _per cent._ from 1754 to 1770;—which proves the truth of the third case:—thus it happens that foreigners have paid the old taxes of _England_, without suspecting it; as _England_ does not, in the least, suspect that those taxes are no longer paid either in _England_ or elsewhere, although their produce returns nevertheless to the public creditor.

Let us consider, however, whether this general increase of prices could finally prove prejudicial to _England_, or to her connexions abroad.

It could not prove so to _England_, because she was obliged to submit to this increase, or else to give up the manufacturing of a tenth of the commodities she exported to foreign countries (_where she exports nothing of what she can sell at home_), and because a deficiency of a 10th of her exports would have inevitably deprived a 50th of her artisans of sustenance, and rendered useless a 50th of the capitals devoted to exportation. Besides, considering this object in another light, what loss would _England_ sustain by receiving, under the denomination of 14, I suppose, the same commodities which before were furnished for 13, while she gave for the purchase, only 13 (old prices) which the effect of taxation made her call 14?

It could not prejudice her foreign connexions, because this increase of prices, which _abroad was not owing to taxation_, was only an encouragement to labour, which must in general have increased its products, always entitled to a profit over and above the price paid for that labour.

A circumstance which was necessary for _England_, without doing her the least harm, has, then, proved useful to the rest of _Europe_.⸺

But let up remark two very essential points:

The first is, that it is impossible in the nature of things, to keep up foreign consumption, _upon which depends the continuation of our exports_, without giving foreigners leave to increase the price of theirs, by so much as the commodities carried to them must be increased by our taxes;—in the same manner as it is impossible in the nature of things, to keep up interior consumption, national consumption, _upon which depends the payment of taxes_, without a general interior increase in the price of labour, as well as in the price of its products, when the wants of the State require new contributions.

The second observation which I deem equally essential, is, that such a work, (_a work of an utility which may be called universal_) has been brought about, consummated, without the Ministers of any State whatsoever being entitled to any glory from the event, except that of having facilitated the operation, if they have favoured the general liberty of communication in all articles of trade; and without their having deserved any other blame but that of retarding it, if their zeal, their greediness for the _favourable balance_, has suggested to them any _device_ to attract and overthrow it in the only country entrusted to their management. We must universally ruin Credit, Trade, Commerce, and the Banking business, if we pretend to prevent Wealth from extending itself universally, a little sooner or later. _The owner of any kind of riches whatever, has it not in his power to do any thing else, but to choose the place, the object, and the time, of giving the first motion_; all the rest is merely the effect of a stone cast into the water: observe how the undulations succeed one another, how they are renewed and extended;—can you fix the point where they shall stop?—We pretend to direct them!—_Scilicet is superûm labor est?_ ... _Istæne animia cœlestibus curæ?_—Indeed, indeed, too many cares occupy the minds of our Gods!

I return to the grand points.

Methinks upon viewing the picture I have drawn, it is easy now to conceive, why, as I have observed in page 62, _a person, however strongly convinced of the cruel effect which ought naturally to arise from a debt of 64 millions sterling, contracted from 1754 to 1762, could not nevertheless cite in ~England~, from 1763 to 1775, a single indication of a decay in agriculture or commerce, nor any falling-off in the enjoyment of luxury, public or private, nor less insolence in the bulk of the people_. The reason is this: the two capitalists, who failed not to increase the price of every thing they were concerned in, according to the exigency of the taxes, determined also (_after a few little formalities, always necessary with regard to the people, when nothing but luxury has been taxed_) to augment the price of labour in proportion to that of its products; foreigners, on the other hand, raised the price of their goods in proportion as taxes had increased the goods of _England_ exported to them; and the old equilibrium was restored every where, as soon as the general increase of prices had made the general power of consumption, equal to the need the State was in of an exterior as well as an interior, _i. e._ of a foreign as well as a national consumption, in order that all the taxes might be productive.

But if the debt of 64 millions, contracted from 1754 to 1762, had increased, by 10 _per cent._ the nominal value of all merchandise exported from _England_ since that period, how shall we prevent the 60 millions of the last debt, from increasing, from 8 to 10 _per cent._ the nominal value of all commodities to be exported after this later period?

And if the general augmentation of prices, which has clearly followed the debt contracted in _England_ from 1754 to 1762, has proved advantageous to all _Europe_, without hurting _England_, why should not the general increase of prices, which results, and will inevitably result from the last _English_ debt, prove unprejudicial to _England_, although it will prove advantageous to all _Europe_?

But if this increase of 10 _per cent._ generally acknowledged, in the price of all merchandise in _Europe_, had extended only to the products of industry; if the price of the total of the produce of agriculture had not increased in the same proportion;—_had not Nature always silently and successfully opposed all the dreams of speculation on this head, to what a degree of misery and wretchedness would not agriculture have been reduced in all parts of our so much enlightened ~Europe~!_—It was not so.[10]

The quantity of wheat sold at _Berne_ at 69 _batz_, on a medium of five years taken from 1751 to 1755, was sold for 92⅗ _batz_ from 1766 to 1770.

The quantity of wheat sold at _Dijon_ at the lowest, 2_l._ 11_s._ 5_d._ on a medium of 5 years from 1753 to 1757, was sold at the lowest, 4_l._ 5_s._ 9_d._ on a medium of 5 years from 1766 to 1770.

The quantity of wheat sold at _Bâle_ for 9_l._ 9_s._ on a medium of 5 years from 1754 to 1758, was sold for 13_l._ 14_s._ 2_d._ on a medium of 5 years from 1766 to 1770.

The quantity of wheat sold at _Geneva_ for 27 _florins_, on a medium of 5 years from 1751 to 1755, was sold for 37 _florins_, on a medium of 5 years from 1766 to 1770, (see _Arthur Young_’s Political Arithmetic.)

We find upon the total, from 1755 to 1770, as I observed in my _Reflexions on a singular revolution in France_, about 40 _per cent._ increase in the price of wheat.—Ten _per cent._ was enough to discharge, without expence to any body, and without any attention being paid to it, the interest of the debt contracted in _England_, from 1755 to 1762; but 30 _per cent._ more was necessary, in order to come (without injuring _England_) nearly to an equality with the _English_ price, a price advantageous to the agriculture of all _Europe_; an advantageous price, which the _barriers_ and barricadoes set up in _France_, had till then prevented from extending to _Switzerland_.

The barriers having been removed, _Switzerland_ and _France_ must necessarily have been enriched, or _England_ ruined:—_France_ and _Switzerland_ were better pleased to be enriched; and so it will necessarily happen after the removal of the barriers subsisting between _England_ and _Ireland_, that the agriculture of the latter must be enriched;—unless she should choose to do herself a real prejudice by keeping to all her former low prices, in order to procure an imaginary advantage to _Irish_ industry, in hopes of prejudicing the _British_ manufacturer;—which would indeed be very strange.

But if this proportionate augmentation in the price of every thing,—as evident as it is necessary,—as general as it is useful,—as natural as it is little suspected,—in consequence of a national debt contracted by a country trading with all _Europe_,—getting rich by trading with all _Europe_,—and who cannot get rich without sharing her wealth with all _Europe_,—be also a complete demonstration of the burden being NULL, so soon as the little private interests have rendered it general, and no longer permit the supposition of its being productive of any other bad effects, but such as necessarily result from a bad system of taxation; does the point lie in rectifying the system, or in effecting a reimbursement?—At least, is a tax to be levied for the purpose of reimbursing, before we have searched deep into THE QUESTION THE MOST INTERESTING TO SOCIETY THAT EVER WAS PROPOUNDED?

And in the supposition, that it should result from the examination, as it does from my ideas, _that there neither is, nor can be any real and lasting harm in the taxes, but that which is the consequence of a bad system of taxation_; as there is however so much more harm done, at least of a transient nature, as there are more taxes imposed, even in the best manner,—would it not be necessary to conclude, that loans bearing annuities, esteemed the most advantageous to the State, (although they always require an heavier, and sometimes a double taxation), might have proved the most pernicious and worst devised, _in any other circumstance but that of a total discredit_, if they did not now furnish the Sovereign with the means of redressing what is most oppressive in the old taxes, without imposing new ones?

_On Luxury._

_I can sum up all that I have said hitherto, by transcribing a couple of pages out of a pamphlet written in ~America~ in the year 1774, laid before the Academy of Sciences in 1778, and printed at Paris in 1781. I should certainly be excusable had I no other motive in this respect, than to prove that my opinions are neither suggested by, nor depending on circumstances. The reflexion contained in the following quotation from that pamphlet, on the war that broke out in 1779, is but a survey of the new order of things, which would not have presented itself to my mind, had it not been in my power, even then, to have published in several large volumes, that which I now comprise within three hundred and some pages, in order to render its perusal less laborious to the reader._

“All the mystery of society, consists in establishing, without the knowledge, and to the greatest advantage of the parties concerned, the most equal, the most exact, and the most equitable division that possibly can be made, between the land proprietors, who are in possession of all, and the _pilferers_ who are in possession of nothing.

“This division operates of itself, by shackling, as little as possible, the natural passions of the one, and the factitious passions of the others, that is to say, by obstructing, as little as possible, communications of all kinds.

“This division is inseparable from the greatest possible quantity of productions and consumptions, which cannot be effected but by the greatest number of _productors_ and consumers, who will always be found and attracted where the laws shall be as little prohibitory as possible.

“A prohibitory law in one country, may be, should be, and no doubt will be, instantly followed by ten others, in ten different countries, which will soon enforce the _re-establishment of the equilibrium dictated by Nature, the only one that deserves to be attended to, and the only one that must prevail at last_.

“To the present war, _a war of revolution if ever there was one_, will probably succeed the only useful and necessary war that can be waged between nations enlightened by the longest and most melancholy experience; a war essential to the happiness of mankind, since the only contest left for decision will be, who shall prove the most able to devise, or the most ready to adopt, those laws that are calculated to procure _the greatest possible consumption_, on which depends _the highest degree of public revenue_:—

“Discussions these, important at all times, dangerous for every one a few years ago, unbecoming perhaps in a private individual at a time when the true politicians of _Europe_ will find themselves compelled to make them the object of their most serious meditations;—discussions, in fine, entirely out of the way of a cultivator, who could not, without a palpable folly, suffer himself to be led into them by the examination of his blade of grass, and of a principle too evident to be contested.” (_Essai sur la culture de la canne à sucre._)

_When a man has shewn himself capable of looking upon a war as the readiest means that could conduce to a general union of interests, no one will be surprised if that very man should allow to luxury the principal honour in the accomplishment of such a prophecy. Nor would any one be surprised if he were to add, that the rage for luxury, in a discerning despot, would soon lead him to establish within his dominions the greatest freedom, from which alone he can expect the greatest display of all kinds of luxury, the choice and first fruits of which would be always at his command. Nor again would any one be surprised were the prophet to add, that wherever luxury should be at its summit, none but the idle would be at a loss for a livelihood, and that not a mean one; that even the idiot, as well as the worn-out labourer, would find there, under the designation of a ~hospital~, an asylum equal to the habitation of a King:—The habitation of the Kings of Great Britain is not comparable to some of her hospitals._

Would not the question about luxury, reduced to its elements, like those other questions which I have touched upon hitherto, present consequences diametrically opposite to those ideas which perhaps are yet too common, only because they have not been thoroughly examined? Methinks I have advanced one step towards the solution of the problem, by proving (if I have proved it) that the tax laid on that pretended monster, Luxury, is in fact the most oppressive for the people, on account of the following effects, from which the impost cannot be freed.

First, If that tax lessens the consumption of the article taxed, provision must be made, by a fresh tax, for the _deficit_ in the first, which nevertheless has already deprived of sustenance, those who derived it only from that article of consumption annihilated by the tax.